Charter Hall Social Infrastructure Reit · ASX:CQE
Charter Hall Social Infrastructure Reit — H1 FY2019 Earnings Presentation
32 slides from Charter Hall Social Infrastructure Reit's earnings presentation, Feb 13, 2019
Slide 1: Charter Hall Education Trust 2019 Half Year Results
13 February 2019 Charter Hall Education Trust 2019 Half Year Results 6 months to 31 December 2018 Northcote, VIC
Slide 2: Agenda
Charter Hall Education Trust I 2019 Half Year Results Agenda 2019 Half Year Results 1. Key Highlights 2. Financial Results & Capital Management 3. Operational Performance 4. Outlook 5. Appendices Nick Anagnostou Travis Butcher Head of Social Infrastructure General Manager Finance 2
Slide 3: 1. Key Highlights
Charter Hall Education Trust I 2019 Half Year Results Our Strategy 1. Key Highlights 3 3 Camberwell, VIC
Slide 4: Key Highlights
Charter Hall Education Trust I 2019 Half Year Results Key Highlights • Supply growth falling. Increased affordability indicators point to improved industry dynamics • 1H earnings growth impacted by asset sales and development site income, like-for-like rental growth still strong at 2.6% DRIVERS • Po
Slide 5: CQE's Performance
Charter Hall Education Trust I 2019 Half Year Results CQE’s Performance DISTRIBUTION GROWTH CPU: NTA GROWTH $ PER UNIT: FY15 – FY19 JUNE 2014 – DECEMBER 2018 CAGR – 6% CAGR – 16% 18.0 +6% 3.50 +6% +3% 16.0 / +6% 3.00 +11% / +5% 14.0 +7% +17% / 2.50 12.0 +18% / +21% / 10.0 2.00 +13% / $ CPU 8.0 1.50
Slide 6: Industry Overview
Charter Hall Education Trust I 2019 Half Year Results Industry Overview Increased Supply in 2018 is being absorbed Demand Supply • New funding changes appear to be a net positive for the industry • Supply of new centres exceeded child demand growth in 2018 by through increased overall affordability.
Slide 7: Delivering on Strategy
Charter Hall Education Trust I 2019 Half Year Results Delivering on Strategy CQE’s strategic approach to Social Infrastructure and the Early Learning Market Provide Investors with a Partner with operators with Grow the Portfolio through strong lease covenants who stable and secure income strategic a
Slide 8: 2. Financial Results & Capital Management
Charter Charter Hall Education Hall GroupTrust I 2019I 2019 Half Year Half Year Results Results 2. Financial Results & Capital Management 8 8 Hawthorn, VIC
Slide 9: Financial Results
Charter Hall Education Trust I 2019 Half Year Results Financial Results KEY FINANCIAL METRICS • Distributable income increase of $0.2m or 1.0% Income For the Half Year Ended % • EPU stable at 8.3 cpu impacted by lower income from asset 2018 2017 31 December Change divestments in 2H FY18 and developm
Slide 10: Income Statement
Charter Hall Education Trust I 2019 Half Year Results Income Statement • Distributable income of $21.2m, an increase of 1.0% on pcp 31 Dec 31 Dec • Lease income has increased by $1.6m or 5.4% on the pcp Income Statement for the Half Year Ended 2018 2017 ($m) ($m) • Property acquisitions ($1.8m), com
Slide 11: Balance Sheet
Charter Hall Education Trust I 2019 Half Year Results Balance Sheet • Strong balance sheet: Balance Sheet as at Dec 2018 June 2018 ($m) ($m) • property revaluations of $22.6m driven by yield Cash 0.1 2.3 compression and rent escalations Investment Properties – To Be Sold 1.5 4.9 • development site a
Slide 12: Capital Management – Debt & Hedging
Charter Hall Education Trust I 2019 Half Year Results Capital Management – Debt & Hedging • Debt refinance of facilities completed in August 2018 including $100m As at 31 Dec 2018 30 June 2018 7 year facility with AustralianSuper reducing bank facility limits Debt Facilities Limit ($m) 347.0 347.0 •
Slide 13: 3. Operational Performance
Charter Charter Hall Education Hall GroupTrust I 2019I 2019 Half Year Half Year Results Results 3. Operational Performance 13 13 Wyndham Vale, VIC
Slide 14: Property Portfolio – Asset Management
Charter Hall Education Trust I 2019 Half Year Results Property Portfolio – Asset Management ANNUAL RENT REVIEW PROFILE BY % OF RENT: FY19 – FY2117 100.0 • WALE of 9.5 years 90.0 • 99.7%16 occupancy 80.0 • 11 five year options renewed 70.0 60.0 • 9 market reviews achieved 7.8% increase overall 50.0 •
Slide 15: Property Portfolio - Valuations
Charter Hall Education Trust I 2019 Half Year Results Property Portfolio - Valuations • Average yield of 5.9% achieved on market transactions in the eastern Value Movement Yield Valuations No. Valued seaboard and New Zealand for CY18 with in excess of $410m of ($M) (%) (%) property transacted NSW/AC
Slide 16: HY19 Portfolio Activity
Charter Hall Education Trust I 2019 Half Year Results HY19 Portfolio Activity ACQUISITIONS AND DISPOSALS NO. OF PROPERTIES VALUATION ($m) NOTE Sale and leaseback transaction with quality operator Acquisitions 1 6.4 Nino on CQE lease terms in Mickleham, Vic (yield 6.6%) Non-core assets in Qld and NZ,
Slide 17: CQE Development Pipeline
Charter Hall Education Trust I 2019 Half Year Results CQE Development Pipeline DEVELOPMENT PIPELINE INCLUDING COST TO COMPLETE AS AT 31 DECEMBER 2018 Balwyn North VIC Armstrong Ck VIC Belmont WA Oran Park NSW Settled Contracted $76.2m Black Forest SA Fulham SA expenditure to Narre Warren VIC date an
Slide 18: Demand Update
Charter Hall Education Trust I 2019 Half Year Results Demand Update ACTUAL AND FORECAST POPULATION 0-4 YEAR OLDS: 2001 - 2038 2.0 0-4 Child Population (Millions) 1.9 • By 2029 it is forecast there will be 180,000 more pre- 1.8 school children (0-4 year olds) growing at a rate of circa 1.7 1.6 1.0% a
Slide 19: Affordability of Childcare since CCS Introduction
Charter Hall Education Trust I 2019 Half Year Results Affordability of Childcare since CCS Introduction Affordability of Childcare is reported to have improved by an average of 11% since the introduction of the CCS (July 18 – Dec 18) Childcare Consumer Price Index is an ABS composite index that take
Slide 20: Supply Update
Charter Hall Education Trust I 2019 Half Year Results Supply Update • As at December 2018 there were 7,574 Long Day Care (LDC) • Supply is expected to moderate in 2019 and beyond with higher centres in Australia, growing by 4.7% for CY18 barriers to entry becoming increasingly more difficult: • Bank
Slide 21: 4. Outlook
Charter Charter Hall Education Hall GroupTrust I 2019I 2019 Half Year Half Year Results Results 4. Outlook 21 21 East Brighton, VIC
Slide 22: Outlook
Charter Hall Education Trust I 2019 Half Year Results Outlook • Industry conditions improving with increased demand and falling supply INDUSTRY • Mid 2018’s short term occupancy softness appears to have been overcome CONDITIONS • Oversupply being absorbed by demand, new construction largely justifie
Slide 23: 5. Appendices
Charter Charter Hall Education Hall GroupTrust I 2019I 2019 Half Year Half Year Results Results 5. Appendices 23 23 Paddington, QLD
Slide 24: Portfolio Overview
Charter Hall Education Trust I 2019 Half Year Results Portfolio Overview • WALE of 9.5 years As at 31 Dec 18 No. Value % of Total Passing ($m) Property Assets Yield (%) • Majority of leases are triple net leases - net effective rents NSW/ACT 77 209.2 20.2 5.9 QLD 125 318.4 30.7 6.3 • Typical lease t
Slide 25: Key Statistics
Charter Hall Education Trust I 2019 Half Year Results Key Statistics FY15 FY16 FY17 FY18 HY19 NTA ($) 1.82 2.14 2.51 2.78 2.87 NTA Growth (Annualised) (%) 21.3 17.6 17.3 10.8 6.4 Weighted Average Passing Yield (%) 8.0 7.3 6.7 6.3 6.2 Weighted Average Lease Expiry (Years) 7.9 8.2 9.1 9.9 9.5 % Of Lea
Slide 26: Profit & NTA Contributions
Charter Hall Education Trust I 2019 Half Year Results Profit & NTA Contributions DISTRIBUTABLE INCOME: HY18 TO HY19 • Improvement in HY19 distributable income due to: 30 • organic income growth of 2.6% ($0.7m increase) 25 • increased income from acquisitions ($1.8m) / completed 20 developments ($1.4
Slide 27: Government Funding Update
Charter Hall Education Trust I 2019 Half Year Results Government Funding Update • New Government Subsidy package came into effect on 1 July • Preschool education for 3 to 4 year olds is likely to be a pivotal 2018 providing an additional $3.5bn issue in the next Federal Election • 94% of families (w
Slide 28: Childcare Regulations And Funding
Charter Hall Education Trust I 2019 Half Year Results Childcare Regulations And Funding Government Funding Structure post 1 July 2018 Activity Tested Fortnightly assessment of work / study activity determines the number of subsidised hours received as follows: • 8-16 hrs activity → up to 36 hrs subs
Slide 29: Charter Hall Sustainability Strategy – For the Future
Charter Hall Education Trust I 2019 Half Year Results Charter Hall Sustainability Strategy – For the Future ECO INNOVATION Deliver smart solutions that make a difference for our customers and the planet by: : • Developing more efficient and lower ecological footprint buildings by including: • Solar
Slide 30: Contact information
Charter Hall Education Trust I 2019 Half Year Results Contact information Additional information Nick Anagnostou Travis Butcher Lula Liossi Philip Cheetham Head of Social Infrastructure General Manager Finance Investor Relations Manager Head of Listed Investor Relations Charter Hall Charter Hall Cha
Slide 31: Disclaimer
Charter Hall Education Trust I 2019 Half Year Results Disclaimer Additional information Charter Hall Social Infrastructure Limited ACN 111 338 937; AFSL 281544 (“CHSIL”) has issued this presentation in its capacity as the responsible entity of Charter Hall Education Trust ARSN 102 955 939(“CQE). Thi
Slide 32: www.charterhall.com.au
Charter Hall Education Trust I 2019 Half Year Results Sydney Head Office Level 20, No.1 Martin Place Sydney, NSW, 2000 T: +61 2 8651 9000 Melbourne Level 12, 570 Bourke Street Melbourne VIC 3000 T: +61 3 9903 6100 Brisbane Level 22, Northbank Plaza 69 Ann Street Brisbane QLD 4000 T: +61 7 3228 2000
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