Charter Hall Social Infra REIT Lifts FY26 EPU 13.1%

Charter Hall Social Infrastructure REIT (ASX:CQE) reported a FY26 statutory profit of $90.5 million, up 27.5 per cent on FY25, and operating earnings of $64.2 million, up 12.6 per cent. Operating earnings were 17.3 cents per unit, up 13.1 per cent on FY25, and distributions paid were 17.0 cents per unit, up 11.8 per cent. Net tangible assets were $3.93 per unit, an increase of 1.8 per cent from 30 June 2025. The $2.3 billion property portfolio had a weighted average lease expiry of 11.4 years and occupancy of 99.7 per cent, with a weighted average rent review of 3.8 per cent on like-for-like properties for FY26, including the impact of market rent reviews. An average uplift of 6.4 per cent was achieved across 91 market rent reviews completed during the year, comprising 59 reviews due in FY26 and 32 due in FY27.

CQE acquired $291.9 million of social infrastructure properties during FY26 at an average acquisition yield of 6.2 per cent. These included a 25 per cent interest in a Sonic Healthcare pathology laboratory at Bowen Hills, Brisbane, acquired in June 2026 for $111.2 million on a 5.6 per cent property yield and secured by a 20-year triple net lease, and a 50 per cent interest in the Western Sydney University campus at 1 Parramatta Square, acquired for $152.0 million on a 6.5 per cent initial yield following the 3.75 per cent annual rental increase that occurred in February 2026. The REIT contracted $136.7 million of early learning asset divestments during FY26 at an average yield of 4.4 per cent and a 4.1 per cent premium to book value; that figure includes five divestments, one contracted in July 2026, totalling $19.8 million and settling in 1H FY27. CQE independently valued 100 per cent of the portfolio by value during the year, producing a net property revaluation uplift of $19.2 million or 1.0 per cent, with the weighted average capitalisation rate at 5.5 per cent as at 30 June 2026 compared with 5.4 per cent a year earlier. Balance sheet gearing was 33.7 per cent on a pro-forma basis, weighted average debt maturity was 3.8 years with no facilities expiring until June 2029, and hedging averaged 73 per cent across FY27. Based on information currently available and barring unforeseen events, CQE expects FY27 operating earnings of no less than 18.1 cents per unit and FY27 distributions of 18.0 cents per unit.