- Charter Hall Retail REIT (CQR) improved its profit and operating earnings in the fiscal year 2021, however its distribution was lowered by 4.6 per cent
- CQR made a statutory profit of $291.2 million, up from $44.2 million the year before, and operating earnings of $156.2 million, up 9.5 per cent
- Operating earnings decreased 10.7 per cent to 27.30 cents per unit, despite a 16.3 per cent increase in net cash flow from operations to $154.5 million
- During the year, CQR contributed $6.7 million in COVID-19 tenant support, or 2.3 per cent of FY21 rent, with $1.8 million remaining unpaid
- Shares in CQR are down 1.44 per cent to $3.76 at 12:46 am AEST
The profit and operating earnings of Charter Hall Retail REIT (CQR) increased during the fiscal year 2021, however the distribution was cut by 4.6 per cent.
CQR recorded a statutory profit of $291.2 million, up from $44.2 million the previous year, and operational earnings of $156.2 million, up 9.5 per cent.
Operating earnings decreased 10.7 per cent to 27.30 cents per unit, despite a 16.3 per cent increase in net cash flow from operations to $154.5 million. The value of net tangible assets per unit increased by 6.9 per cent to $4.01.
The trust reported a distribution of 23.40 cents per unit, down 4.6 per cent.
Charter Hall Retail CEO Greg Chubb said FY21 demonstrated the resilience of the portfolio, with a 53.5 per cent weighting to major retailers helping ensure continuity of trading.
“In FY21 we’ve seen net operating earnings grow, portfolio occupancy improved, positive leasing spreads, valuation gains and NTA (net tangible asset) growth,” he said.
“Where COVID-19 mandated closures and restrictions have occurred, we’ve seen tenants trading rebound quickly in the period that follows. Our strategy of partnering with the leading convenience retailers gives CQR a highly defensive and resilient income stream, with 53.5% of portfolio income coming from these major retailers. The portfolio remains in a strong position to continue delivering resilient and sustainable income growth in the future.”
During the year, CQR contributed $6.7 million in COVID-19 tenant support or 2.3 per cent of FY21 rent, with $1.8 million, or 0.6 per cent of FY21 rent, remaining unpaid.
In the fourth quarter of FY20, tenant support totalled $10.7 million.
Due to COVID-19 lockout and trading limitations across several jurisdictions, 428 speciality retailers representing 10.8 per cent of the portfolio’s total monthly income or $2.6 million are temporarily non-traded as of August 17, 2021.
The weighted average lease expiry (WALE) for the whole portfolio has grown to 7.5 years, while the WALE for majors has climbed to 11.4 years.
Over the course of FY21, the portfolio was revalued externally, with net purchases of $207 million, capital expenditure of $58 million, and net valuation gains of $130 million, the REIT’s overall portfolio rose in value by $395 million.
Subject to COVID-19 lockdowns, SQR estimates supermarket and convenience retail sales to remain robust in FY22, due to customers’ inclination to buy closer to home and focus on everyday necessities.
CQR is also to announced that it is bringing forward its target for net-zero carbon emissions from 2030 to 20253
Shares in CQR down 1.57 per cent to $3.75 at 11:38 am AEST.