Charter Hall Social Infrastructure Reit · ASX:CQE
Charter Hall Social Infrastructure Reit — Investor Presentation (May 2020)
31 slides from Charter Hall Social Infrastructure Reit's investor presentation, May 4, 2020
Slide 1: Equity raising
Charter Hall Social Infrastructure REIT Equity raising Not for release to US wire services or distribution in the United States 4 May 2020 CQE Centre, East Brighton, VIC Charter Hall Social Infrastructure REIT – Equity raising CQE Centre, Camp Hill, QLD
Slide 2: Disclaimer
Disclaimer This presentation ("Presentation") has been prepared by and is the sole responsibility of Charter Hall Social Infrastructure Limited (ABN 46 111 338 937, Australian Financial Services Licence Number 281544) (the “Responsible Entity”) as the responsible entity for Charter Hall Social Infra
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) Forward-looking statements This Presentation contains certain “forward-looking statements”. Forward looking words such as expect”, “should”, “could”, “may”, “will”, “believe”, “forecast”, “estimate” and other similar expressions are intended to identify such forward-looking statem
Slide 4: Equity raising overview
Equity raising overview Equity raising • Charter Hall Social Infrastructure REIT (“CQE”) is undertaking an equity raising comprising: ‒ A fully underwritten institutional placement to raise $100 million ("Placement"); and ‒ A non-underwritten Unit Purchase Plan ("UPP") to eligible unitholders in Aus
Slide 5: COVID-19 operational update
COVID-19 operational update • As of 30 April 2020, no CQE child care centre has been closed due to the COVID-19 Tenant profile by % of annual rent2,3 pandemic • CQE received 100% of rental payments from tenants for the month of March 2020 and Other approximately 90% of rental payments from tenants f
Slide 6: Government support for the childcare sector
Government support for the childcare sector 1 2 Early Childhood Education and Care Relief Package JobKeeper payment impact • On 2 April 2020, the Australian Government announced the Early • On 30 March 2020, the Australian Government announced the Childhood Education and Care Relief Package (“ECECRP
Slide 7: Investment Highlights
Investment Highlights Attractive, long WALE • Portfolio is 99.7% occupied with a WALE of 11.6 years1 portfolio anchored by • Majority triple net leases larger tenants • Over 90% of gross rental income expiring after FY251 • Approximately 76% of rental income underpinned by top 5 tenants who are all
Slide 8: Attractive, long WALE portfolio anchored by larger tenants
Investment highlights Attractive, long WALE portfolio anchored by larger tenants1 WALE Tenant profile by % of annual rent: March 2020 11.6yrs Goodstart Early Learning 48.1% • Less than 10% by income expiring in the next five years Only About Children 10.6% G8 Education 8.2% Avenues Childcare 5.5% Oc
Slide 9: Prudent capital management
Investment highlights Prudent capital management • Post Placement pro forma balance sheet gearing reduced to 16.7% and Debt maturity profile look-through gearing reduced to 18.3% 250 • Post Placement liquidity / capacity1 increased to $292 million to withstand any unexpected cash flow and valuation
Slide 10: Proven track record of delivering on strategy
Investment highlights Proven track record of delivering on strategy • CQE’s portfolio strategy is to provide investors with stable and secure income Portfolio WALE has increased from 7.9 years to 11.6 years since FY15 and capital growth 14.0 ‒ Enhanced income sustainability and resilience by improvi
Slide 11: Positioned for future growth
Investment highlights Positioned for future growth • CQE’s social infrastructure investment mandate provides long term income sustainability and diversifies its asset base to a broader pool of activities • CQE will target ongoing capital growth by focusing on assets that exhibit: – Specialist use wi
Slide 12: Placement and UPP overview
Equity raising Placement and UPP overview • Fully underwritten institutional Placement to raise approximately $100 million representing 15.0% of pre Equity Raising units on issue – It is intended that eligible institutional unitholders who bid for up to their ‘pro rata’ share of new units under the
Slide 13: Sources and uses of funds
Equity raising Sources and uses of funds Sources and uses Uses of Proceeds • Proceeds from the Equity Raising will strengthen CQE’s balance Sources of funds $m sheet and ensure it can withstand any unexpected cash flow and Placement 100.0 valuation impacts from an extended COVID-19 pandemic Total so
Slide 14: Timetable
Equity raising Timetable Event Date 2020 Record date for UPP Friday, 1 May Trading halt and announcement of the Placement Monday, 4 May Placement executed Monday, 4 May Announcement of the outcome of the Placement Tuesday, 5 May Trading halt lifted and trading of Units recommences on the ASX Tuesday
Slide 15: Appendices
242 Exhibition Street, Melbourne, VIC Appendices Charter Hall Social Infrastructure REIT – Equity raising CQE Centre, East Brighton, Vic 15
Slide 16: Pro forma balance sheet
Appendix 1 Pro forma balance sheet Post balance Post balance Pro forma as at Pro forma as at Actual as at date capital $m date transaction 31-Dec-19 (pre Placement 31-Dec-19 (post 31-Dec-19 management adjustments1 Placement) Placement) initiatives2 Cash 4.6 35.0 80.0 119.6 119.6 Investment propertie
Slide 17: Summary of key risks
Appendix 2 Summary of key risks Key Risks You should be aware that there are risks involved with participating in the Placement and holding Units in Charter Hall Social Infrastructure REIT (CQE). Certain of these risks are specific to an investment in CQE and certain others relate generally to inves
Slide 18: Summary of key risks (cont.)
Appendix 2 Summary of key risks (cont.) Tenants and Rental Income Distributions made by CQE are largely dependent on the rents received from tenants across its portfolio and expenses incurred during operations, which may be affected by a number of factors, including overall economic condition, the f
Slide 19: Summary of key risks (cont.)
Appendix 2 Summary of key risks (cont.) Demographic structure of the Australian population As the underlying demand for early learning centres is driven by the numbers of children in the 0-4 age bracket, changes in the expected numbers of children in this bracket will have an impact on the sector. S
Slide 20: Summary of key risks (cont.)
Appendix 2 Summary of key risks (cont.) Future acquisitions CQE continues to identify new investment opportunities for potential acquisition. There is a risk that CQE will be unable to identify suitable investment opportunities that meet CQE's investment objectives. Even if such opportunities are id
Slide 21: Summary of key risks (cont.)
Appendix 2 Summary of key risks (cont.) Interest rates To the extent that interest rates are not hedged (please see the risk factor relating to derivates below for further discussion), unfavourable movements in interest rates relating to existing debt facilities could lead to increased interest expe
Slide 22: Summary of key risks (cont.)
Appendix 2 Summary of key risks (cont.) Environmental As with any property, there is a risk that one or more of the properties in CQE's portfolio may be contaminated now or in the future. Government environmental authorities may require such contamination be remediated. There is always a residual ri
Slide 23: Summary of key risks (cont.)
Appendix 2 Summary of key risks (cont.) Accounting standards The Australian Accounting Standards to which CQE adheres are set by the Australian Accounting Standards Board ("AASB") and are consequently out of the control of CQE and the Directors. Changes to accounting standards issued by AASB or chan
Slide 24: International Offer Restrictions
Appendix 3 International Offer Restrictions This document does not constitute an offer Units of CQE in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the Units may not be offered or sold in the Placement, in any country outside
Slide 25: International Offer Restrictions (cont.)
Appendix 3 International Offer Restrictions (cont.) Hong Kong WARNING: This document has not been, and will not be, authorized by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). No action has been ta
Slide 26: International Offer Restrictions (cont.)
Appendix 3 International Offer Restrictions (cont.) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services
Slide 27: Underwriting Arrangement
Appendix 4 Underwriting Arrangement J.P Morgan Securities Australia Limited will be the lead manager, bookrunner and underwriter of the Placement (Lead Manager). The Responsible Entity (the Issuer) has entered into a Placement Agreement with the Lead Manager in respect of the Placement. Key Terms of
Slide 28: Underwriting Arrangement (cont.)
Appendix 4 Underwriting Arrangement (cont.) Termination Events cont. • (change of responsible entity) the Issuer ceases to be the responsible entity of the Trust; • (Force Majeure) there is an event or occurrence, including any statute, order, rule, regulation, directive or request (including one co
Slide 29: Underwriting Arrangement (cont.)
Appendix 4 Underwriting Arrangement (cont.) Reasonableness Termination Events cont. Clause 10.3 of the Placement Agreement provides that the Lead Manager may only exercise its right to terminate its obligations listed above if, in the reasonable opinion of the Lead Manager, the event: a) has, or is
Slide 30: 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 31: Charter Hall office addresses
Sydney Head Office Melbourne Brisbane Perth Adelaide Level 20, No.1 Martin Place Level 14, 570 Bourke Street The Annex, Level 3/275 Level 5, St Georges Square Level 2, 80 Pirie Street Sydney, NSW, 2000 Melbourne VIC 3000 George Street 225 St Georges Terrace Adelaide SA 5000 Brisbane QLD 4000 Perth W
Charter Hall Social Infrastructure REIT — Investor Presentation (May 2020) on 6ix