Charter Hall Social Infrastructure Reit · ASX:CQE
Charter Hall Social Infrastructure Reit — H1 FY24 Earnings Presentation
30 slides from Charter Hall Social Infrastructure Reit's earnings presentation, Feb 13, 2024
Slide 1: Charter Hall Social Infrastructure REIT 2024 Half Year Results
Charter Hall Social Infrastructure REIT Charter Hall Social Infrastructure REIT 2024 Half Year Results 2024 Half Year Results
Slide 2: Agenda
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 present and recognise their continued care and contribution to Country. Agenda 1. Key Highlights and Strategy 2. Financial Performance 3. P
Slide 3: Key Highlights and Strategy
Charter CharterHall Charter 2024 2024 HallSocial Hall Half 2024Half SocialInfrastructure Social Year HalfYear InfrastructureREIT Infrastructure Results YearResults Results REIT 1 Geoscience Australia Narrabundah, ACT Key Highlights and Strategy
Slide 4: Key Highlights and Strategy
Key Highlights and Strategy Australia’s largest diversified ASX-listed social infrastructure REIT Operations Balance Sheet Property Portfolio Operating Earnings Gross Assets WALE $29.6m $2.2bn 12.8yrs NTA per Unit Debt Maturity2 Occupancy $3.93 4.3yrs 100% Divestments1 Drawn Debt Hedged WARR3 $22.3m
Slide 5: Social Infrastructure: Properties delivering essential community services
Key Highlights and Strategy 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 nex
Slide 6: 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 7: Delivering on Strategy
Key Highlights and Strategy Delivering on Strategy Focused on improving tenant quality, portfolio diversification and growing SI sectors Enhancing income sustainability and resilience – Stronger tenant covenants with 17% sourced from direct leases with externally rated Government and corporate entit
Slide 8: CQE ESG Leadership
Key highlights and strategy CQE ESG Leadership Achievements in HY24 Focus areas in FY24+ Investing in clean energy Environment Net Zero Carbon by 2025 CQE installed 0.5MW of solar, bringing Partnering with tenant customers to advance sustainability benchmarking Continued focus on rolling out clean e
Slide 9: Financial Performance
Charter CharterHall Charter 2024 2024Half 2024 HallSocial Hall HalfYear Half SocialInfrastructure Social InfrastructureREIT Infrastructure YearResults Year Results Results REIT 2 TAFE & Wise Medical Robina, Qld Financial Performance
Slide 10: Earnings Summary
Financial Performance Earnings Summary $m HY23 HY24 % change Net Property Income1 47.7 52.9 10.9 - Net property income increased by 10.9% driven by like-for-like rental growth of 3.5% with the Distribution Income 1.0 - (100.0) balance generated from property acquisitions, Operating Expenses (6.9) (6
Slide 11: Balance Sheet
Financial Performance Balance Sheet $m 30 June 2023 31 December 2023 - $24.9 million of childcare property divestments Cash 14.5 13.4 settled during the half Investment Properties 2,015.9 2,003.5 - Independently valued 100%1 of the portfolio with a net property revaluation decrement Investment in JV
Slide 12: Capital Management
Financial Performance Capital Management Key metrics as at 31 December 2023 - Facilities refinanced in January 2024 to Debt summary Hedging summary a new unsecured platform Facility Limit ($m) 850.0 Balance Sheet Debt Hedged ($m)3 600.0 - Balance sheet gearing of 32.5% within target Percentage of Ba
Slide 13: Portfolio Update
Charter CharterHall 2024 2024Half HallSocial HalfYear Half SocialInfrastructure InfrastructureREIT YearResults Year Results Results 3 Busy Bees Kensington, WA Portfolio Update
Slide 14: Portfolio Update
Portfolio Update Portfolio Summary June 23 Dec 23 Number of operating properties1 366 360 – Portfolio metrics remain strong Number of tenants 55 55 – 100% occupancy Property valuation ($m)2 2,216.9 2,191.6 – Weighted average lease expiry (WALE) of 12.8 years Passing yield (%)2,3 5.0 5.1 Occupancy (%
Slide 15: Portfolio Composition
Portfolio Update Portfolio Composition 46% of rental income subject to market Sub-Sector by % of income as at Tenant profile by % of income as at rent reviews in the next 5 years 31 December 2023 31 December 2023 – Key portfolio income metrics: Emergency Services Transport Higher Education G8 Educat
Slide 16: Portfolio Valuations
Portfolio Update Portfolio Valuations Australian childcare property transaction volume and yields2 1,000 6.5% - 100% of the operational property portfolio by gross asset value was independently valued as at 31 December 2023 at a 900 passing yield of 5.1% (June 23: 5.0%) 6.0% 800 - This resulted in a
Slide 17: Childcare Industry
Portfolio Update Childcare Industry Government funding forecast to increase by 41% over next four years to $15.0 billion per annum1 – Importance of the sector continues as an essential part of Australia’s education system and integral to Australia’s economic prosperity to increase workforce particip
Slide 18: Outlook & Guidance
Charter CharterHall Charter 2024 2024Half 2024 HallSocial Hall HalfYear Half SocialInfrastructure Social InfrastructureREIT Infrastructure YearResults Year Results Results REIT 4 Keswick, SA Outlook & Guidance Emergency Command Centre
Slide 19: Outlook & Guidance
Outlook & Guidance Outlook & Guidance − Continue to execute on CQE’s strategy to actively manage the portfolio to maintain income security and capital growth Click icon to add − Positive industry and demographic pictur e fundamentals to provide further opportunities in the social infrastructure sect
Slide 20: Additional Information
Charter CharterHall Charter 2024 2024Half 2024 HallSocial Hall HalfYear Half SocialInfrastructure Social InfrastructureREIT Infrastructure YearResults Year Results Results REIT 5 Newstead, Qld Additional Information Mater Headquarters, Stratton Street
Slide 21: Portfolio Overview
Additional Information Portfolio Overview As at 31 December 2023 No. Value ($m) % Portfolio Passing Yield (%) Qld 118 555.9 25.1 4.8 − Majority of leases in the portfolio are triple net Vic 82 497.5 22.5 4.9 NSW / ACT 80 314.3 14.2 5.3 − Total land holdings of 109.9 hectares: WA 42 225.0 10.2 4.9 −
Slide 22: Portfolio Income and Growth
Additional Information Portfolio Income and Growth CQE Annual Rent Review Schedule by Rental Income1 1% - High proportion of fixed annual rent reviews provides stable and 11% 10% 9% 14% predictable income growth with additional upside from CPI and 22% market-linked rent reviews 20% 19% 22% 20% - Com
Slide 23: Debt Summary
Additional Information Gearing ICR Debt summary ($m) Limit Drawn Maturity (covenant) (covenant) Debt Summary Balance sheet debt1 Domestic bank bilateral debt facilities 260.0 260.0 Jul-27 - $0.9 billion of look through debt facilities across International bank bilateral debt facility 100.0 100.0 Jul
Slide 24: Childcare – Regulatory Update
Additional Information Childcare – Regulatory Update – Ongoing Government reviews into childcare market to improve operation and effectiveness of the current model. Australian Competition and Consumer Commission – Price Inquiry into Childcare Services – Commenced in January 2023 with scope to hold a
Slide 25: Statutory Earnings Reconciliation
Additional Information Statutory Earnings Reconciliation HY23 HY24 ($m) ($m) Operating Earnings 29.6 29.6 Net fair value movements on investment properties 9.5 (29.3) Net movements on derivative financial instruments (0.9) (12.9) Straightlining of rental income, amortisation of lease fees and incent
Slide 26: CQE and joint venture summary - HY24
Additional Information CQE and joint venture summary - HY24 Investment in property joint ventures – operating earnings and balance sheet breakdown A$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 Australi
Slide 27: CQE and joint venture summary - HY23
Additional Information CQE and joint venture summary - HY23 Investment in property joint ventures – operating earnings and balance sheet breakdown A$m CQE CH BBD Trust LWR GSA PFA Westmead Total Ownership interest 100.0% 50.0% 25.0% 49.9% Properties Multiple Brisbane Bus Terminal Geoscience Australi
Slide 28: Key Statistics
Additional Information Key Statistics Financial & Capital Management Metrics FY19 FY20 FY21 FY22 FY23 HY24 NTA ($) 2.96 2.92 3.25 4.08 4.04 3.93 NTA Growth (%) 6.5 (1.4) 11.3 25.5 (1.0) (2.7) DPU (c) – Ordinary 16.0 16.0 15.7 17.2 17.2 8.0 DPU (c) – Special - - 4.0 - - - DPU Growth (%) – Ordinary 6.
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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