Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • CQE's FY25 operating earnings reached AUD 57.0 million, with distributions paid of 15.2 cents per unit.

  • Property portfolio valued at AUD 2.1 billion with 100% occupancy and a WALE of 11.6 years.

  • FY26 distribution guidance set at 16.8 cents per unit, representing a 10.5% increase.

Charter Hall Social Infrastructure REIT (ASX:CQE) has released its results for the financial year ended 30 June 2025. Operating earnings for the year totalled AUD 57.0 million, equating to 15.3 cents per unit (cpu). Distributions paid amounted to 15.2 cpu. Net Tangible Assets (NTA) increased by 1.0% to AUD 3.86 per unit, while statutory profit stood at AUD 71.0 million.

During July 2025, CQE successfully refinanced its debt facilities totalling AUD 900 million, including a new Asian Term Loan facility of AUD 450 million. This refinancing extended the weighted average debt maturity to 4.92 years and secured improved terms.

Portfolio Activity

CQE expanded its portfolio through strategic acquisitions, including a modern pathology laboratory in Perth, Western Australia for AUD 47.0 million at a 6.4% initial yield and a 22.5% interest in a university campus in Parramatta leased to Western Sydney University for AUD 68.4 million at a 6.2% yield.

The REIT divested AUD 151.1 million of early learning assets, achieving an 8.3% premium to book value with an average yield of 4.4%. The overall property portfolio is valued at AUD 2.1 billion, with a Weighted Average Lease Expiry (WALE) of 11.6 years and full occupancy. Average rent reviews for the year were 4.2%, with 69 early learning market rent reviews achieving a 10.5% increase.

Valuations and Market Reviews

All properties underwent independent valuation during FY25, resulting in a net increase of AUD 28.0 million, or 1.4%, compared to June 2024 values. As of 30 June 2025, the portfolio yield was 5.4%, up from 5.2% a year earlier.

Of the 69 market reviews conducted during the year, 50 were subject to caps of either 5% or 7.5% and achieved an average increase of 6.7%. The remaining 19 uncapped reviews saw an average increase of 17.7%. A further 149 early learning centre market rent reviews, representing 28% of total income, are scheduled over the next three years.

Capital Management

Following the July 2025 refinancing, CQE has no debt maturities until July 2029, with diversified funding sources and extended debt maturities. Balance sheet gearing was 30.5% at year-end, within the 30–40% target range.

Hedging has been expanded, with 72% of debt hedged in FY26 at an average rate of 3.0% and 51% hedged in FY27 at an average rate of 3.3%. The on-market buy-back announced in February 2025 remains active, with 2.5 million units repurchased for AUD 7.0 million.

FY26 Outlook

CQE will continue managing a portfolio of high-quality social infrastructure assets with a focus on income security and capital growth. Distribution guidance for FY26 is 16.8 cpu, a 10.5% increase from FY25. Distributions will continue to be paid quarterly.