Charter Hall Social Infrastructure REIT 2026 Half Year Results

Earnings growth and distribution upgrade

Charter Hall Social Infrastructure REIT (ASX:CQE) today announces its half year results for the six months ending 31 December 2025 (1H FY26). Key financial and operating highlights for the half are:

Financial highlights: 

• Statutory profit of $47.0 million, up 51.6% on the prior corresponding period (“pcp”);
• Operating earnings of $31.4 million, up 10.2% on pcp;
• Operating earnings of 8.5 cents per unit (“cpu”), up 11.8% on pcp; 
• Distributions paid of 8.4 cpu, up 12.0% on pcp; 
• NTA of $3.90 per unit, an increase of 1.0% from 30 June 2025; and
• Successful refinancing in July 2025 of CQE’s debt facilities of $900¹ million on improved terms including new Asian Term Loan facilities of $450 million resulting in an extended weighted average debt maturity of 4.4² years.

Operating highlights:  

• Acquisition of a 50% interest in a university campus in Parramatta fully leased to Western Sydney University during 1H FY26³ for $152.0 million at an initial yield of 6.5%⁴;
• $88.9 million of early learning asset divestments achieving a 4.6% premium to book value and average yield of 4.3%⁵;
• $2.3 billion property portfolio with a long WALE of 11.4 years and 99.6% occupancy⁶;
• Weighted average rent reviews of 4.2%⁷ for the 12 months to 31 December 2025; and
• 6.1% increase achieved on 58 early learning market rent reviews completed during the half.

CQE continued to benefit from the completion of 58 market rent reviews with a positive 6.1% growth resulting in weighted average rent review growth of 4.2% over the last twelve months. 

CQE continues to enhance the quality of its portfolio with further acquisitions of long WALE social infrastructure assets during the half year. These properties totalled $180.7 million at an average initial yield of 6.8%.  

Western Sydney University campus (Parramatta, NSW) - $152.0 million 

During the half, CQE increased its higher education exposure through the acquisition of a 50%⁸ interest in the university campus fully leased to Western Sydney University, located at 1 Parramatta Square, Parramatta.  

The university campus is a modern, purpose-built vertical-style building completed in 2017 with NLA of approximately 26,500 sqm (80% educational uses) and offers strong ESG benefits through 5-Star Green Star and 5-star NABERS ratings.  

The asset is critical education infrastructure within Parramatta’s CBD, providing university services and benefiting from strong transport connectivity and access to a comprehensive range of civic, health and commercial amenities. 

The property is underpinned by a long-term lease of 16.1⁹ years with further option periods totalling 15 years and annual rent reviews of 3.75%. The 50% interest in the property was acquired for $152.0 million on an initial yield of 6.5%¹⁰.  

Geosciences Australia facility (Canberra, ACT) - $28.7 million 

The active divestment program, combined with recent acquisitions, continues to enhance portfolio quality, strengthen tenant covenant profiles, and support earnings and distribution growth. 

Market rent reviews 

Management has finalised 58 market reviews during the half resulting in an increase of 6.1% or $0.7 million per annum. During the period, 52 market reviews had capped increases of up to 7.5%.   

There are 81 early learning centre market rent reviews (16% of CQE’s total income) occurring through to June 2028.  

Portfolio valuations 

As at 31 December 2025, 156 properties were independently valued (61% by value) which resulted in a net $12.2 million increase or 1.1%¹¹ on June 2025 book values. 

As at 31 December 2025, CQE’s portfolio property yield was 5.5%^12,13 compared with 5.4% as at 30 June 2025. The increase in yield has been driven by a combination of portfolio curation, recycling lower yielding early learning properties into higher yielding long-WALE social infrastructure assets and strong passing rental growth in the early learning portfolio.  

Capital position 

In July 2025, the successful refinancing of CQE’s debt facilities of $900¹⁴ million was completed which included new Asian Term Loan facilities of $450 million. This has resulted in:  

• Increased diversification of CQE’s debt sources with the introduction of the Asian Term Loan facilities which are capable of extension and upsizing in the future;
• Improved terms from both a pricing and covenant perspective; and
• A weighted average debt maturity of 4.4¹⁵ years with no debt maturities until July 2029.

As at 31 December 2025, balance sheet gearing is 34.1% and look-through gearing is 34.8%, within the target range of 30 - 40%. 

CQE has 83% of its debt hedged in 2H FY26 and 63% of its debt hedged in FY27 at an average hedged rate of 3.2%. This provides CQE with a high degree of certainty in relation to its cost of debt over this period.    

Outlook and upgrade to FY26 guidance 

CQE will continue to execute on its strategy and actively manage the portfolio of high quality social infrastructure assets to maintain income security and capital growth. We expect that there will continue to be significant growth opportunities in social infrastructure assets, driven by favourable demographic trends and the essential nature of the industry. 

Based upon information currently available and barring unforeseen events, CQE is pleased to provide FY26 operating earnings guidance to be no less than 17.2 cents per unit (growth of at least 12.4% from FY25) and also advise an increased FY26 distribution guidance to 17.0 cents per unit, an 1.2% increase from previous guidance of 16.8 cents per unit. This represents 11.8% growth from FY25.  

Distributions are paid quarterly. 

^{1Facility was increased by $50 million from $850 million to $900 million as part of the refinancing
2As at 31 December 2025
3Acquired in three separate transactions during 1H FY26
4Increased from 6.2% following the annual rental increase of 3.75% which occurred in February 2026
520 divestments contracted during 1H FY26. Four divestments are due to settle in 2H FY26 amounting to $21.0 million. Excludes $21.0 million assets contracted in FY25 and settled in 1H FY26.
6Excludes one vacant early learning property which has been contracted for divestment and includes one property with Heads of Agreement signed for new lease
7Weighted average rent review on like-for-like properties for CY25 
8 Acquired in three separate transactions during 1H FY26
9 As at 31 December 2025
10 Increased from 6.2% following the annual rental increase of 3.75% which occurred in February 2026
11 Like-for-like valuation movement excludes acquisitions and disposals completed in the half, transaction costs and statutory adjustments
12 Passing yield is split between early learning assets of 5.2% and long-WALE social infrastructure assets of 6.1% on book values as at 31 December 2025. Total property passing yield is 5.4% after deducting non-recoverable outgoings of $3 million paid at portfolio level
13 Based on the CQE unit price of $2.95 at 3 February 2026 which is a discount to NTA per unit, the implied property passing yield is 6.5%
14 Facility was increased by $50 million from $850 million to $900 million as part of the refinancing
15 As at 31 December 2025} 

Announcement Authorised by the Board 

Click here to view the PDF ASX Announcement

Click here to view the PDF Results Presentation