Charter Hall Social Infrastructure Reit · ASX:CQE
Charter Hall Social Infrastructure Reit — FY2024 Earnings Presentation
30 slides from Charter Hall Social Infrastructure Reit's earnings presentation, Aug 14, 2024
Slide 1: Charter Hall Social Infrastructure REIT Full Year Results 2024
Charter Hall Social Infrastructure REIT Full Year Results 2024 ASX:CQE Charter Hall Social Infrastructure REIT 2024 Full Year Results
Slide 2: Agenda
Agenda 1. Key Highlights and Strategy 2. Financial Performance 3. Portfolio Update 4. Outlook and Guidance 5. Additional Information Acknowledgement of Country Charter Hall acknowledges the Traditional Custodians of the lands on which we work and gather. We pay our respects to Elders past and presen
Slide 3: Key Highlights and Strategy
1 Key Highlights and Strategy Geoscience Australia Narrabundah, ACT Charter Hall Social Infrastructure REIT 2024 Full Year Results 3
Slide 4: Key Highlights and Strategy
Key Highlights and Strategy A diversified social infrastructure property portfolio delivering essential community services Operations Balance Sheet Property Portfolio EPU / DPU NTA per Unit WALE 16.0cpu $3.82 12.4yrs Divestments1 Debt Maturity Occupancy $40.0m 3.9yrs 99.8% Acquisitions2 Drawn Debt H
Slide 5: Social Infrastructure sector has strong industry fundamentals providing future growth opportunities
Key Highlights and Strategy Social Infrastructure sector has strong industry fundamentals providing future growth opportunities Sub-Sector by % of income as at 30 June 2024 – Positive industry fundamentals Higher Education 2% providing future growth opportunities Transport 3% SI sector has strong Em
Slide 6: Properties delivering predictable and growing returns
Key Highlights and Strategy Properties delivering predictable and growing returns C l i c k Properties NNN leases1 i c o n t o 75% a 355 d d p i c t u r e Metropolitan locations Lease income with average fixed increases of 3% 83% 79% 2 Land rich portfolio with future Lease income subject to market a
Slide 7: Our Strategy
Key Highlights and Strategy Our Strategy Providing investors with secure income and capital growth through exposure to Social Infrastructure property Enhancing income Targeting stable and sustainability and Portfolio curation ongoing capital growth resilience ‒ Building a diversified social ‒ Focus
Slide 8: ESG Leadership
Key Highlights and Strategy ESG Leadership Achievements in FY24 Looking Forward Environment Achieved Net Zero carbon Clean energy Performance rating tool Scope 3 emissions Net Zero carbon emissions achieved for Installed 945kW of solar across Progressed Australia’s first Green Star Partner with tena
Slide 9: Financial Performance
2 Financial Performance Brisbane Bus Depot Eagle Farm, Qld Charter Hall Social Infrastructure REIT 2024 Full Year Results 9
Slide 10: Earnings Summary
Financial Performance Earnings Summary $m FY23 FY24 % change Net Property Income1 100.5 106.3 5.8 - Net property income increased by 5.8% driven by like-for-like rental growth of 3.4% with the Distribution Income 1.0 - - balance generated from property acquisitions, development and disposal activity
Slide 11: Balance Sheet
Financial Performance Balance Sheet $m 30 June 2023 30 June 2024 - In FY24, CQE settled a total of $44.1 million of Cash 14.5 11.6 childcare property divestments Investment Properties 2,015.9 1,970.5 - Independently valued 100%1 of the portfolio with a net property revaluation decrement Investment i
Slide 12: Capital Management
Financial Performance Capital Management Key metrics as at 30 June 20241 - Facilities refinanced in January 2024 to Debt summary Hedging summary a new unsecured platform with a weighted average debt maturity of 3.9 years Facility Limit ($m) 850.0 Debt Hedged ($m)3 625.0 - Balance sheet gearing of 33
Slide 13: Portfolio Update
3 Portfolio Update Eden Academy Elwood, Vic Charter Hall Social Infrastructure REIT 2024 Full Year Results 13
Slide 14: Portfolio Summary
Portfolio Update Portfolio Summary June 23 June 24 Portfolio metrics remain strong with 99.8% occupancy and WALE of 12.4 years Number of properties 366 355 Occupancy (%) 100 99.8 – 67% of income with annual fixed rent reviews (average 3.0%), 19% of income linked to CPI and 14% subject to market revi
Slide 15: Portfolio WALE remains strong at 12.4 years
Portfolio Update Portfolio WALE remains strong at 12.4 years – Only 2.4% of lease income expiring within the next 5 years (only 0.6% without further options) – Typical notice periods of 3 – 5 years from expiry Lease expiry profile by % of annual rent: FY25 – FY44+ WALE: 12.4 years 14 12 10 8 % 6 4 2
Slide 16: Strong rental growth potential with 48% of income subject to market reviews in next 5 years
Portfolio Update Strong rental growth potential with 48% of income subject to market reviews in next 5 years June 23 June 24 % Variance – Childcare market rent1 growth of 3.9% (CAGR) for the 10 year period to FY24 while CQE’s portfolio saw a 2.9% CAGR2 Rent per LDC($) 2,723 2,859 5.0 Net Rent to Rev
Slide 17: Portfolio Valuations
Portfolio Update Portfolio Valuations - 3531 operating assets were independently valued as at 30 Australian childcare property transaction volume and yields3 June 2024 resulting in a passing yield of 5.2% (June 2023: 5.0%) 900 7.0% - This resulted in a 2.2%, or $48.5 million decline on like-for-like
Slide 18: Outlook and Guidance
4 Outlook and Guidance Only About Children Hawthorn, Vic Charter Hall Social Infrastructure REIT 2024 Full Year Results 18
Slide 19: Outlook and Guidance
Outlook and Guidance Outlook and Guidance − Continue to execute on CQE’s strategy to actively manage the diversified social infrastructure property portfolio delivering Click essential community services icon to add pictur e − Positive industry and demographic fundamentals will continue to provide f
Slide 20: Additional Information
5 Additional Information Innovation Quarter Westmead, NSW Charter Hall Social Infrastructure REIT 2024 Full Year Results 20
Slide 21: Statutory Earnings Reconciliation
Additional Information Statutory Earnings Reconciliation FY23 FY24 ($m) ($m) Operating Earnings 59.2 59.5 Net fair value movements on investment properties (6.4) (65.8) Net movements on derivative financial instruments 1.4 (12.4) Loss on debt extinguishment - (3.5) Straight lining of rental income,
Slide 22: CQE and joint venture summary - FY24
Additional Information CQE and joint venture summary - FY24 Investment in property joint ventures – operating earnings and balance sheet breakdown $m CQE CH BBD Trust LWR GSA PFA Westmead Total Ownership interest 100.0% 50.0% 25.0% 49.9% Properties Multiple Brisbane Bus Terminal Geoscience Australia
Slide 23: CQE and joint venture summary - FY23
Additional Information CQE and joint venture summary - FY23 Investment in property joint ventures – operating earnings and balance sheet breakdown $m CQE CH BBD Trust LWR GSA PFA Westmead Total Ownership interest 100.0% 50.0% 25.0% 49.9% Properties Multiple Brisbane Bus Terminal Geoscience Australia
Slide 24: Debt Summary
Additional Information Gearing ICR Debt summary ($m) Limit Drawn Maturity (covenant) (covenant) Debt Summary Balance sheet debt Domestic bank bilateral debt facilities 260.0 260.0 Jul-27 - $0.9 billion of look through debt facilities across International bank bilateral debt facility 100.0 100.0 Jul-
Slide 25: Portfolio Overview
Additional Information Portfolio Overview As at 30 June 2024 No. Value ($m) % Portfolio Passing Yield (%) QLD 115 553.9 25.5 4.8 − Majority of leases in the portfolio are triple net VIC1 84 511.2 23.6 5.0 NSW / ACT 76 303.5 14.0 5.5 − Total land holdings of 108.4 hectares: WA 43 224.5 10.4 5.1 − 83%
Slide 26: Social Infrastructure: Properties delivering essential community services
Additional Information Social Infrastructure: Properties delivering essential community services – Strong industry and demographic trends resulting in increasing demand and future growth opportunities for social infrastructure assets – Population growth of 3.9 million people or 15% over the next 10
Slide 27: Childcare Industry
Additional Information Childcare Subsidy – Federal Government Spending1 Childcare Industry 18.0 Government funding forecast to increase to $16.0 billion 16.0 per annum1 in FY27 14.0 12.0 – Importance of sector remains crucial to Australia’s education system and 10.0 economic prosperity, driving work
Slide 28: Key Statistics
Additional Information Key Statistics Financial & Capital Management Metrics FY20 FY21 FY22 FY23 FY24 NTA ($) 2.92 3.25 4.08 4.04 3.82 NTA Growth (%) (1.4) 11.3 25.5 (1.0) (5.4) DPU (c) – Ordinary 16.0 15.7 17.2 17.2 16.0 DPU (c) – Special - 4.0 - - - DPU Growth (%) – Ordinary - (1.9) 9.6 - (7.0) Ge
Slide 29: Glossary
Additional Information Glossary ACECQA Australian Children’s Education and Care Quality Authority ASX Australian Securities Exchange Balance sheet gearing Calculated as the ratio of net drawn debt less cash to total tangible assets, less cash CPI Consumer Price Index CPU Cents per unit CQE Charter H
Slide 30: Further information
Further information Investor Relations Click icon to Tel 1300 365 585 (within Australia) add pictur e +61 2 8651 9000 (outside Australia) Email reits@charterhall.com.au Presentation authorised by the Board charterhall.com.au/cqe IMPORTANT NOTICE & DISCLAIMER Charter Hall Social Infrastructure Limite
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