Charter Hall Social Infrastructure REIT reported a robust half-year profit increase to $47 million, driven by strategic acquisitions, asset sales, and a successful debt refinancing that expanded borrowing capacity.
- Statutory profit rose 52% to $47 million for H1 2026
- Operating earnings increased to $31.4 million (8.5 cents per unit)
- Distributions declared up 11% to 8.4 cents per unit
- Completed full acquisition of CH UWS Trust and increased stake in Charter Hall GSA Trust
- Refinanced $900 million debt facilities, adding $50 million borrowing capacity and new Asian term loan
Strong Financial Performance
Charter Hall Social Infrastructure REIT has delivered a solid financial performance for the half year ended 31 December 2025, reporting a statutory profit of $47.0 million. This marks a significant 52% increase compared to the $31.0 million recorded in the same period last year. Operating earnings, a key measure used internally by the REIT to assess profitability, rose to $31.4 million, or 8.5 cents per unit, up from $28.5 million (7.6 cents per unit) in the prior corresponding period.
Distributions declared to unitholders also saw an uplift, totaling $31.2 million or 8.4 cents per unit, compared with $28.0 million (7.5 cents per unit) a year earlier. The REIT’s consistent distribution growth underscores its commitment to delivering steady income streams to investors.
Portfolio and Asset Management
The REIT’s portfolio benefited from a net fair value gain of $21.6 million on investment properties, reflecting ongoing strength in its social infrastructure assets. Notably, 61% of properties not held for sale or under development were externally valued during the period, ensuring robust and transparent asset valuations.
Strategic acquisitions were a highlight, with the REIT completing the full acquisition of CH UWS Trust, which owns 50% of 169 Macquarie Street, Parramatta, NSW, fully leased to Western Sydney University. Additionally, the REIT increased its interest in Charter Hall GSA Trust to 33.3%, adding the Geoscience Australia property in Canberra to its portfolio.
On the disposal front, the REIT settled the sale of 19 early learning assets for $88.9 million and has contracted sales for a further four assets valued at $21.0 million, with settlements expected by March 2026. These moves reflect a deliberate portfolio rebalancing strategy focused on core social infrastructure assets.
Capital and Debt Refinancing
In July 2025, the REIT successfully refinanced its debt facilities, securing $900 million in total facilities. This refinancing included the introduction of a $450 million Asian term loan facility and increased overall borrowing capacity by $50 million. The new debt structure enhances financial flexibility and supports the REIT’s growth ambitions amid a challenging economic environment.
The REIT continues to manage interest rate risk prudently through hedging strategies, complemented by inflation-linked lease arrangements that provide a natural hedge against inflationary pressures.
Accounting Changes and Outlook
Charter Hall Social Infrastructure REIT has early adopted the new accounting standard AASB 18, which changes the measurement of joint ventures and associates to fair value through profit or loss. This change improves the transparency of income generated from these investments and aligns with evolving financial reporting practices.
Looking ahead, the REIT acknowledges the uncertainties posed by geopolitical events, inflation, and interest rate fluctuations. However, its diversified portfolio, inflation-linked revenues, and hedging arrangements position it well to navigate these challenges.
Bottom Line?
With strategic acquisitions, disciplined asset sales, and strengthened debt facilities, Charter Hall Social Infrastructure REIT is poised to sustain its growth trajectory amid economic headwinds.
Questions in the middle?
- How will the early adoption of AASB 18 affect future earnings comparability and investor perception?
- What impact will the contracted sales of early learning assets have on the REIT’s portfolio composition and income stability?
- How might rising interest rates and inflation influence the REIT’s valuation and distribution capacity going forward?