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Charter Hall Retail REIT (ASX:CQR) Full Year 2024 Earnings Call Highlights: Record Occupancy ...

In This Article:

  • Operating Earnings Per Security: $27.4, in line with full year guidance.

  • Underlying Same-Property NPI Growth: 3.6%, up from 3.3% last year.

  • MAT Growth: 3.7% for the year.

  • Leasing Transactions: 313 completed, with positive leasing spreads of 2.7%.

  • Portfolio Occupancy: Increased to 98.8%, with total portfolio occupancy above 99%.

  • Balance Sheet Gearing: Reduced to 26.7%.

  • Net Property Income: Grew by 3.2% to $245.3 million.

  • Distribution Per Unit: $24.7, reflecting a payout ratio of 90.3%.

  • Investment Property Value: Decreased to $4.05 billion.

  • Net Tangible Assets (NTA) Per Unit: Decreased by 4.7% to $4.51.

  • Debt Collection: Over 99.3% at 30 June 2024.

  • Balance Sheet Capacity: Over $400 million available.

  • Weighted Average Cost of Debt: Increased from 3.4% in FY '23 to 4.4% in FY '24.

  • Supermarket MAT Growth: 4.3%.

  • Specialty Tenant Sales Productivity: Reached a record high of $11,077 per sqm.

  • Tenant Retention Rate: High at 82%.

Release Date: August 16, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Charter Hall Retail REIT (ASX:CQR) achieved a record high occupancy rate of 98.8% in its convenience shopping center portfolio.

  • The REIT completed 313 leasing transactions with positive leasing spreads of 2.7%, indicating strong demand and successful lease negotiations.

  • CQR's balance sheet capacity increased to over $400 million, providing significant investment flexibility.

  • The acquisition of Eastgate Shopping Center in Bondi Junction enhances the portfolio with high-quality metro centers.

  • CQR's portfolio benefits from 60% of total income growth being directly or indirectly linked to inflation, providing resilience against economic fluctuations.

Negative Points

  • Finance costs increased due to a rise in interest rates, impacting overall financial performance.

  • Net property income growth was partially offset by divestments, leading to a decrease in investment property value.

  • The weighted average cost of debt increased from 3.4% to 4.4%, reflecting higher borrowing costs.

  • The REIT's net tangible assets (NTA) decreased by 4.7% to $4.51 per unit, primarily due to valuation decreases.

  • Higher pressure on insurance, security, and cleaning costs was noted, although offset by savings in electricity.

Q & A Highlights

Q: Can you provide details on the expected CapEx for FY '25 and whether this is a consistent annual target? A: Joanne Donovan, Head of Retail Finance, stated that the CapEx for FY '25 is expected to be similar to FY '24, around $60 million. This includes pad site developments, center upgrades, and operational CapEx. Benjamin Ellis, Retail CEO, added that the amount could vary depending on opportunities to unlock further potential across properties.