Charter Hall Social Infrastructure Reit · ASX:CQE
Charter Hall Social Infrastructure Reit — H1 FY2023 Earnings Presentation
31 slides from Charter Hall Social Infrastructure Reit's earnings presentation, Feb 14, 2023
Slide 1: Charter Hall Social Infrastructure REIT 2023 Half Year Results
Charter Charter Hall Hall Social Social Infrastructure REIT 2023 HalfInfrastructure Year Results REIT
Slide 2: Acknowledgement of Country
Acknowledgement of Country Charter Hall is proud to work with our customers and communities to invest in, develop and manage properties on land across Australia. We pay our respects to the Traditional Owners, their Elders past, present and emerging and recognise their continuing culture and contribu
Slide 3: Agenda
Agenda 1. Key Highlights and Strategy 2. Financial Performance 3. Portfolio Update 4. Outlook & Guidance 5. Additional Information Cover: Geoscience Australia, Narrabundah, ACT Left: TAFE, Robina, QLD Charter Charter Hall Hall Social Social Infrastructure Infrastructure REIT REIT 2023 2023 Half Half
Slide 4: Key Highlights and Strategy
Charter CharterHall Charter HallSocial Hall SocialInfrastructure Social InfrastructureREIT Infrastructure REIT 1 Craigieburn, VIC Key Highlights and Strategy Nino Early Learning 2023 2023Half 2023 HalfYear Half YearResults Year Results Results
Slide 5: Key Highlights and Strategy
Key Highlights and Strategy Australia’s largest diversified ASX-listed social infrastructure REIT 1H FY23 DPU of 8.6 cpu, a 2.4% increase on 1H FY22 Financial Property Portfolio Distribution per Unit Gross Assets WALE 8.6c $2.3bn 13.6yrs Increase of 2.4% on 1H FY22 Increase of 8.5% from 30 June 2022
Slide 6: Our Strategy
Key Highlights and Strategy Our Strategy Provide investors with secure income and capital growth through exposure to social infrastructure property Enhancing income sustainability and Targeting ongoing Portfolio resilience capital growth curation ‒ Improving the quality of ‒ Focus on assets with the
Slide 7: Delivering on Strategy
Key Highlights and Strategy Delivering on Strategy $186.7 million of new acquisitions in diversified social infrastructure assets Life Sciences − Acquisition of a 25% interest in the Geoscience Australia life sciences complex in Canberra with a 9.6 year remaining lease term to the Commonwealth Gover
Slide 8: Delivering on Strategy
Key Highlights and Strategy Delivering on Strategy Broadened mandate has delivered Changes in SI sub-sector composition since 30 June 2019 higher quality income for CQE across diversified social infrastructure sectors Sub-Sector by % of income as at Sub-Sector by % of income as at 30 June 2019 31 De
Slide 9: ESG Leadership
Key Highlights and Strategy ESG Leadership Achievements in 1H FY23 Focus areas in FY23+ Environment Solar rollout continuing for tenant CQE partnership with the Green Net Zero Carbon by 2025 Scope 3 emissions customers with 0.5MW of installed Building Council of Australia to pilot a Accelerating CHC
Slide 10: Financial Performance
Charter CharterHall Charter HallSocial Hall SocialInfrastructure Social InfrastructureREIT Infrastructure REIT 2 Eden Academy Elwood, VIC Financial Performance 2023 2023Half 2023 HalfYear Half YearResults Year Results Results
Slide 11: Earnings Summary
Financial Performance Earnings Summary $m 1H FY22 1H FY23 % change Net Property Income1 40.1 47.7 19.0 - Net property income increased by $7.6 million or 19.0% on the previous corresponding period Distribution Income 1.0 1.0 - (pcp) predominantly driven by: Operating Expenses (5.6) (6.9) (23.2) - Li
Slide 12: Balance Sheet
Financial Performance Balance Sheet $m 30 Jun 2022 31 Dec 2022 - $180.4 million growth in investment properties1, Cash 10.5 12.1 up 9.1% primarily driven by: Investment Properties 1,945.9 2,036.2 - $154.1 million of acquisitions settled during the period Investment in JVs 45.3 135.4 - Like-for-like
Slide 13: Capital Management
Financial Performance Debt & Hedging Summary as at 30 Jun 2022 31 Dec 2022 Capital Management Facility Limit ($m) 800.0 850.0 Debt Drawn Amount ($m) 553.0 723.0 - Facilities extended and increased to $850 million Weighted Average Debt Maturity (years) 3.9 3.5 in September 2022 Balance Sheet Gearing
Slide 14: Portfolio Update
Charter CharterHall Charter HallSocial Hall SocialInfrastructure Social InfrastructureREIT Infrastructure REIT 3 Keswick, SA Portfolio Update Emergency Command Centre 2023 2023Half 2023 HalfYear Half YearResults Year Results Results
Slide 15: Portfolio Summary
Portfolio Update Portfolio Summary Jun 2022 Dec 2022 Number of operating properties 368 373 – Property portfolio value increased 10.1% to $2.2 billion for 1H FY23 Number of tenants 41 45 – Net annual property income up by 13.2% to $104.9 million per annum Property valuation ($m)1 1,968.4 2,167.6 – W
Slide 16: Portfolio Summary
Portfolio Update Portfolio Summary Tenant profile by % of income as at 31 December 2022 46% of rental income subject to market G8 Education 8% rent reviews in the next 5 years – Key portfolio income metrics: Only About Children 8% – Metropolitan location: 82% – Eastern seaboard location: 82% Goodsta
Slide 17: Portfolio Valuations
Portfolio Update Portfolio Valuations Like-for-like portfolio valuations Assets (No.) Value ($m) Yield (%) Valuation Uplift ($m) Valuation Uplift (%) Valuation uplift of $16.3 million1 driven by income growth demonstrating 358 1,962.1 4.8% 16.3 0.8 ongoing resilience of the portfolio Australian chil
Slide 18: Childcare Industry
Portfolio Update Childcare Industry Government funding to sector forecast to increase by 44% over next four years to $14.1 billion per annum – Importance of sector continues as labour supply mechanism to Australian economy and provision of quality educational outcomes to children – Annual government
Slide 19: Outlook & Guidance
Charter CharterHall Charter HallSocial Hall SocialInfrastructure Social InfrastructureREIT Infrastructure REIT 4 Brisbane Bus Terminal Eagle Farm, QLD Outlook & Guidance 2023 2023Half 2023 HalfYear Half YearResults Year Results Results
Slide 20: Outlook & Guidance
Outlook & Guidance Outlook & Guidance − Continue to execute on diversified social infrastructure strategy Click − Actively curate the portfolio to larger scale icon to add assets with stronger tenant and property pictur e fundamentals − CQE reconfirms that based on information currently available an
Slide 21: Additional Information
Charter CharterHall Charter 2023 2023Half 2023 HallSocial Hall Half SocialInfrastructure Social HalfYear InfrastructureREIT Infrastructure YearResults Year Results Results REIT 5 Only About Children Additional Information Barkers Road, Hawthorn, VIC
Slide 22: Portfolio Overview
Additional Information Portfolio Overview Pro-forma1 No. Value ($m) % Portfolio Passing Yield (%) QLD 121 553.5 24.8 4.7 − Majority of leases in the portfolio are triple net VIC 82 485.8 21.7 4.7 NSW / ACT 84 325.1 14.5 5.1 − Combination of fixed (78%) and CPI linked (22%) annual rent reviews by lea
Slide 23: Childcare Development Pipeline
Additional Information Childcare Development Pipeline 3 developments completed in 1H FY23, providing purpose-built, high quality assets Completed Developments 1H FY23 Number 3 Valuation upon completion ($m) 26.4 Valuation uplift ($m) 5.0 Average yield on cost (%) 5.8 Ongoing Developments Number 5 Av
Slide 24: Portfolio Curation
Additional Information Portfolio Curation $746 million of acquisitions completed since CQE’s broadened investment mandate across social infrastructure Broadened social infrastructure mandate CQE property transactions1,2 – Social Infrastructure continues to be a growing asset class with long term opp
Slide 25: Social Infrastructure Overview
Additional Information Social Infrastructure Overview Spending on social infrastructure forecast to increase, providing further opportunities for CQE Childcare Education Health Transport and Communication Rising female workforce participation rate Tertiary education in Australia generates The propor
Slide 26: Statutory Profit Reconciliation
Additional Information Statutory Profit Reconciliation 1H FY22 1H FY23 Statutory Profit Reconciliation ($m) ($m) Operating Earnings 30.8 29.6 Net fair value gain on investment properties 170.4 9.5 Net movements on derivative financial instruments 4.4 (0.9) Straightlining of rental income, amortisati
Slide 27: Debt Facility Summary
Additional information Debt Facility Summary Debt summary ($m) – 31 Dec 2022 Limit Drawn Maturity Gearing (covenant) ICR (covenant) Balance sheet debt - $0.9 billion of look through debt facilities across International bank bilateral debt facility 100.0 100.0 Jan-25 CQE’s head trust and joint ventur
Slide 28: NTA Reconciliation
Additional Information NTA Reconciliation NTA per Unit: Jun 2022 to Dec 2022 - As at 31 December 2022 CQE had a NTA per unit of $4.09 reflecting an increase of 0.2% from 4.12 $4.08 as at 30 June 2022 - Increase in NTA per unit primarily driven by: 4.10 - Net property revaluation uplift of $9.5 milli
Slide 29: Key Statistics
Additional Information Key Statistics Financial & Capital Management Metrics FY18 FY19 FY20 FY21 FY22 1H FY23 NTA ($) 2.78 2.96 2.92 3.25 4.08 4.09 NTA Growth (%) 10.8 6.5 (1.4) 11.3 25.5 0.2 DPU (c) – Ordinary 15.1 16.0 16.0 15.7 17.2 8.6 DPU (c) – Special - - - 4.0 - - DPU Growth (%) – Ordinary 6.
Slide 30: 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 31: 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
Charter Hall Social Infrastructure REIT — H1 FY2023 Earnings Presentation on 6ix