Charter Hall Social Infrastructure Reit · ASX:CQE
Charter Hall Social Infrastructure Reit — FY2020 Earnings Presentation
30 slides from Charter Hall Social Infrastructure Reit's earnings presentation, Aug 11, 2020
Slide 1: Charter Hall Social Infrastructure REIT 2020 Full Year Results
Charter Hall Social Infrastructure REIT 2020 Full Year Results CQE Centre, Balwyn North, VIC 11 August 2020 Charter Hall Social Infrastructure REIT – 2020 Full Year Results
Slide 2: Agenda
1. Key Metrics and Strategy 2. Financial Results and Capital Management 3. Operational Performance 4. Childcare Industry Overview Agenda 5. Outlook 6. Appendices Travis Butcher Scott Martin Fund Manager Head of Finance - Diversified Charter Hall Social Infrastructure REIT – 2020 Full Year Results
Slide 3: Key Metrics and Strategy
Key Metrics and Strategy CQE Centre, Yeronga, QLD Charter Hall Social Infrastructure REIT – 2020 Full Year Results 3
Slide 4: Key Metrics
Key Metrics and Strategy Key Metrics Well capitalised and resilient performance through COVID-19 pandemic Earnings Per Unit Distribution Per Unit Gearing c 16.5 c 16.0 16.4% ― Liquidity of $289.6 million ― Unchanged from FY19 ― Unchanged from FY19 WALE Gross Assets1 Property Portfolio Yield 12.7yrs
Slide 5: Impact of COVID-19
Key Metrics and Strategy Impact of COVID-19 Government funding highlights essential nature of childcare ― Governments allowed childcare centres to remain operational during pandemic period with no Estimated Government funding to childcare sector3 required parent contributions 3.0 ― Increased Governm
Slide 6: Financial Impact of COVID-19
Key Metrics and Strategy Financial Impact of COVID-19 ― Rental relief provided to CQE operators as a result of COVID -19 has amounted to $5.4 million which FY20 Q4 Rental Analysis has assisted them to trade through the pandemic period ― $2.71 million of rental relief or 14% provided in Q4 Rent Abate
Slide 7: Our Strategy
Key Metrics and Strategy Our Strategy To provide investors with stable and secure income and capital growth through exposure to social infrastructure property ― Enhancing income sustainability and resilience by improving the quality of tenants and leases within a diversified social infrastructure po
Slide 8: Financial Results and Capital Management
Financial Results and Capital Management CQE Centre, Williams Landing, VIC Charter Hall Social Infrastructure REIT – 2020 Full Year Results 8
Slide 9: Financial Performance
Financial Results and Capital Management Financial Performance A$m FY19 FY20 % change ― Operating earnings of $51.1 million, an increase of 15.6% on the previous corresponding period (pcp) Net Property Income 59.6 64.3 7.9% ― Net property income increased by $4.7 million or 7.9% on the pcp driven by
Slide 10: Balance Sheet
Financial Results and Capital Management Balance Sheet ― Strong balance sheet with $289.6 million of available liquidity to participate in future $m 30 June 2019 30 June 2020 opportunities Cash 8.9 75.6 ― $94.3 million (8.6%) growth in investment properties driven by: Investment Properties – To Be S
Slide 11: Capital Management – Debt & Hedging
Financial Results and Capital Management Capital Management – Debt & Hedging Debt & Hedging Summary as at 30 June 2019 30 June 2020 Debt Facilities Limit ($m) 397.0 500.0 Debt Drawn Amount ($m) 273.5 286.0 ― Facilities increased to $500m in March 2020 providing additional capacity to fund contracted
Slide 12: Operational Performance
Operational Performance CQE Centre, Cheltenham, VIC Charter Hall Social Infrastructure REIT – 2020 Full Year Results 12
Slide 13: Portfolio Summary
Operational Performance Portfolio Summary June 2019 June 2020 ― WALE increased to 12.7 years from 9.9 years Number of operating properties 391 371 ― Agreed five new 15 and forty new 20 year leases Number of tenants 34 35 ― Agreed lease extensions of 6.2 years on 40 leases in exchange for cash flow r
Slide 14: Portfolio Summary
Operational Performance Portfolio Summary ― Fixed reviews increased from 43% to 53.6% in FY21 (predominantly due to completed Goodstart transaction on 40 leases) ― 4 market reviews completed at 3.4% ― Y-o-Y rental growth to 30 June 2020 of 2.8% ― Rent to revenue analysis confirms the CQE portfolio r
Slide 15: Portfolio Summary — Acquisitions & Disposals
Operational Performance Portfolio Summary — Acquisitions & Disposals ― 14 acquisitions during FY20 leased to quality tenants1 with strong lease covenants on Acquisitions Settled Contracted Total average lease terms of 16.2 years Existing Centre Acquisitions 11 3 14 ― 11 acquisitions ($64.8 million)
Slide 16: Childcare Property Portfolio - Valuations
Operational Performance Childcare Property Portfolio - Valuations ― 348 properties valued in 2HY20, resulting in a 5.8% increase on June 2019 Valuations No. Valued Value ($m) Yield (%) Mvmt (%) carrying values Freehold – Aust 301 941.1 5.9 6.1 ― Yield across the properties valued has remained consta
Slide 17: CQE Development Pipeline
Operational Performance CQE Development Pipeline 11 developments forecast to complete in FY21 Key development & pipeline metrics FY20 Corinda, QLD Completed Developments 5 Fulham, SA Valuation upon Completion ($m) 27.5 Middle Park, QLD Average SEIFA Rating 6 Bexley, NSW Bardon, QLD Average yield on
Slide 18: Childcare Industry Overview
Childcare Industry Overview CQE Centre, Baldivis Grove, WA Charter Hall Social Infrastructure REIT – 2020 Full Year Results 18
Slide 19: Childcare Market Demand
Childcare Industry Overview Childcare Market Demand ― Key drivers of increasing childcare demand remain: Participation rate: June 2009 – December 20192 ― Essential labour supply mechanism critical element to allowing Australians to return to 55.0 work during/post COVID-19 ― Significant learning bene
Slide 20: Childcare Market Supply
Childcare Industry Overview Childcare Market Supply ― As at 30 June 2020, there are 8,0351 LDC centres in Australia with a net increase in supply by 291 (3.8%) for FY20 ― On an overall national basis, market supply and demand growing at similar rates ― Rolling annual growth since June 2016 in LDC ce
Slide 21: Outlook
Outlook CQE Centre, Camberwell, VIC Charter Hall Social Infrastructure REIT – 2020 Full Year Results 21
Slide 22: Outlook
Outlook Outlook ― Government support for the childcare industry has demonstrated its essential nature ― Government funding is transitioning back to pre-COVID funding regime ― Attendances expected to recover as Australians return to their work places ― Continued focus on a diversified social infrastr
Slide 23: Appendices
Appendices CQE Centre, Belmont, WA Charter Hall Social Infrastructure REIT – 2020 Full Year Results
Slide 24: Portfolio Overview
Appendices Portfolio Overview ― Majority of leases are triple net leases - net effective rents As at 30 June 2020 No. Value ($m) % of Total Property Passing Yield (%) Assets ― Typical lease term from commencement; 15 years plus two five year options NSW/ACT 77 234.5 18.8 5.7 ― Most leases have a fiv
Slide 25: Sustainability
Appendices Sustainability Environment Sustainability in our developments Climate resilience New developments across our portfolio apply a range of sustainability approaches, including sustainable design assessments and built environment scorecards, with one development Climate risk exposure assessme
Slide 26: Operating earnings & NTA Contributions
Appendices Operating earnings & NTA Contributions Operating earnings: FY19 to FY20 60 ― Operating earnings of $51.1m, an increase of 15.6% on the previous corresponding period attributable to — $6.8m increase in net operating income driven by 50 — $1.6m of organic rental growth; — $4.3m increase in
Slide 27: Statutory Profit Reconciliation
Appendices Statutory Profit Reconciliation — Key reconciling items between operating earnings and statutory profit are: — Yield compression and rental growth combine to contribute $44.2m in property revaluations — Share of equity accounted non-operating profit relates to valuation uplift and movemen
Slide 28: Key Statistics
Appendices Key Statistics Financial & Capital Management Metrics FY15 FY16 FY17 FY18 FY19 FY20 NTA ($) 1.82 2.14 2.51 2.78 2.96 2.92 NTA Growth (%) 21.3 17.6 17.3 10.8 6.5 (1.4) DPU (c) 12.8 13.4 14.2 15.1 16.0 16.0 DPU Growth (%) 6.7 4.7 6.0 6.3 6.0 - Gearing (%) 29.5 26.6 27.7 29.1 22.5 16.4 Weigh
Slide 29: Contact Information
Appendices Contact Information Travis Butcher Scott Martin Lula Liossi Philip Cheetham Fund Manager Head of Finance – Diversified Investor Relations Manager Head of Listed Investor Relations Charter Hall Charter Hall Charter Hall Charter Hall T: +61 3 9903 6171 T: +61 3 9903 6169 T: +61 3 9903 6157
Slide 30: Office Locations
Sydney Head Office Melbourne Brisbane Perth Adelaide Level 20, No.1 Martin Place Level 14, 570 Bourke Street Level 22, Northbank Plaza Level 5, St Georges Square Level 2, 80 Pirie Street Sydney, NSW, 2000 Melbourne VIC 3000 69 Ann Street 225 St Georges Terrace Adelaide SA 5000 Brisbane QLD 4000 Pert
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