Highlights

  • Statutory profit increased 51.6% to AUD 47.0 million for the half year.
  • FY26 distribution guidance was raised to 17.0 cents per unit.
  • CQE units fell more than 3% following the results announcement.

Shares in Charter Hall Social Infrastructure REIT (ASX:CQE) moved lower on 4 February, trading at AUD 2.86, down 3.05% on the day, following the release of the REIT’s FY26 half-year results. The pullback occurred despite higher statutory profit and operating earnings, alongside an increase in full-year distribution guidance. Market participants appeared cautious despite the positive data points outlined in the update.

Earnings and Distributions Increase

For the half year, CQE reported statutory profit of AUD 47.0 million, representing a 51.6% increase compared with the prior corresponding period. Operating earnings rose 10.2% to AUD 31.4 million, while operating earnings per unit increased to 8.5 cents.

Distributions paid during the period totalled 8.4 cents per unit, up 12.0% year on year. Net tangible assets increased by 1.0% to AUD 3.90 per unit as at 31 December 2025.

Portfolio Transactions and Leasing Activity

During the half, CQE expanded its portfolio through acquisitions totalling AUD 180.7 million at an average initial yield of 6.8%. This included the acquisition of a 50% interest in a Western Sydney University campus in Parramatta for AUD 152.0 million. The asset is fully leased and subject to fixed annual rental increases of 3.75%.

The REIT also increased its interest in the Geoscience Australia facility in Canberra, acquiring an additional 8.3% stake for AUD 28.7 million. The asset is leased to a federal government agency and includes fixed annual rent increases.

To fund portfolio repositioning, CQE divested 20 early learning assets for AUD 88.9 million, achieving a 4.6% premium to book value.

Rent Reviews and Capital Position

During the period, 58 market rent reviews were completed, resulting in average rental increases of 6.1%. Across the portfolio, weighted average rent review growth reached 4.2% over the past 12 months.

In July 2025, CQE completed refinancing of AUD 900 million in debt facilities, extending weighted average debt maturity to 4.4 years. Balance sheet gearing stood at 34.1% at the end of December, within the REIT’s target range.

Outlook and Guidance Upgrade

CQE upgraded FY26 operating earnings guidance to no less than 17.2 cents per unit. Distribution guidance for FY26 was also increased to 17.0 cents per unit, representing an 11.8% increase compared with FY25. Distributions are paid quarterly.

Charter Hall Social Infrastructure REIT delivered higher earnings, increased distributions, and upgraded FY26 guidance during the first half of the financial year. Despite these outcomes, CQE units moved lower following the release, highlighting a cautious market response to the update.

FAQ

What profit did CQE report for the half year?
CQE reported statutory profit of AUD 47.0 million for the six months ended 31 December 2025.

What is CQE’s FY26 distribution guidance?
The REIT increased FY26 distribution guidance to 17.0 cents per unit, paid quarterly.

Why did CQE shares fall after the results?
The company reported higher earnings and guidance, though the market response resulted in a decline in unit price on the day.