CAQ Holdings reported an 8% drop in leasing revenue for the December 2025 quarter amid persistently high vacancy rates, yet anticipates improved rental income following new tenancy negotiations on Hainan Island.
- Leasing revenue declined 8% to AUD 238k in December quarter
- Vacancy rates remain elevated across warehouses, factories, and exhibition centre
- Active tenancy negotiations underway after Hainan Island customs changes
- Cash at bank stands at AUD 0.279 million with no related party payments
- Financing facilities total AUD 3.288 million with AUD 3.011 million drawn
Quarterly Performance Overview
CAQ Holdings Limited has reported a modest decline in its property leasing revenue for the December 2025 quarter, with receipts falling approximately 8% to AUD 238,000 compared to the previous quarter. This decrease is attributed primarily to the non-renewal of leases on several factories and warehouses, reflecting ongoing challenges in tenant retention.
Vacancy Rates and Leasing Challenges
Vacancy rates remain stubbornly high across the company’s portfolio, with warehouses at 77%, factories at 67%, and the exhibition centre at an alarming 95%. The administrative building vacancy held steady at 46%. These figures highlight the difficulty CAQ faces in filling its substantial property holdings amid a competitive leasing market.
Emerging Opportunities from Regulatory Changes
However, there is a silver lining. The recent implementation of island-wide independent customs operations on Hainan Island, effective from 18 December 2025, has invigorated leasing negotiations. CAQ is actively pursuing new tenancy agreements, particularly for the third to fifth floors of its administrative building, with hopes to finalise deals by February 2026. Similarly, the exhibition centre is seeing renewed interest, with multiple negotiations underway that could boost rental income in the coming months.
Financial Position and Liquidity
Financially, CAQ ended the quarter with AUD 0.279 million in cash at bank and reported no payments to directors or related parties, underscoring prudent governance. The company’s financing facilities total AUD 3.288 million, of which AUD 3.011 million is drawn, providing a solid liquidity buffer. Despite a negative net operating cash flow of AUD 85,000 for the quarter, the total available funding is sufficient to cover approximately 6.5 quarters of operations, offering a comfortable runway for the company to stabilise and grow its leasing income.
Looking Ahead
CAQ’s outlook hinges on the successful conversion of ongoing tenancy negotiations into signed leases, which would mark a turning point for its leasing revenue trajectory. The company’s ability to capitalise on regulatory shifts and market demand on Hainan Island will be critical to reversing the current vacancy trends and improving financial performance in 2026.
Bottom Line?
CAQ’s next moves in securing new tenants will be pivotal in transforming its high vacancy challenge into a growth opportunity.
Questions in the middle?
- Will CAQ successfully convert current tenancy negotiations into signed leases in early 2026?
- How sustainable is the anticipated rental income growth amid ongoing high vacancy rates?
- What impact will the independent customs operation on Hainan Island have on long-term leasing demand?