CQE Reports 11.8% Rise in Earnings Per Unit, Boosts Distribution Forecast

Strong Half-Year Performance

Charter Hall Social Infrastructure REIT (ASX, CQE) has delivered a solid first half for FY26, showcasing the resilience and growth potential of its diversified social infrastructure portfolio. Operating earnings per unit (EPU) rose by 11.8% to 8.5 cents, while distributions per unit (DPU) increased 12.0% to 8.4 cents, reflecting both organic rental growth and strategic portfolio management.

The REIT’s portfolio now comprises 308 properties, anchored by long-term leases and high-quality tenants predominantly in essential community service sectors such as early learning, higher education, and government services. The weighted average lease expiry (WALE) stands at a robust 11.4 years, with occupancy at an impressive 99.6%, underscoring the stability of income streams.

Portfolio Expansion and Curation

During the half, CQE invested $180.7 million in accretive property acquisitions, including a significant 50% interest in the Western Sydney University campus at Parramatta. This modern, purpose-built asset offers a long-term lease of over 16 years with annual rent reviews, enhancing the REIT’s exposure to the higher education sector and strengthening its income profile.

Simultaneously, the REIT divested $88.9 million in early learning properties, continuing its strategy to upweight investment in long-WALE social infrastructure assets. This active portfolio curation aims to balance income sustainability with capital growth potential, focusing on assets with low capital expenditure needs and strong government backing.

Financial and Capital Management

Charter Hall successfully refinanced its debt platform in July 2025, securing $900 million in facilities with improved terms, longer tenure, and enhanced pricing. The balance sheet gearing remains comfortably within the target range of 30-40%, supported by a highly hedged position with 83% of debt hedged for the second half of FY26.

Net tangible assets (NTA) per unit increased slightly to $3.90, reflecting a net property revaluation uplift of $12.2 million. The REIT’s strong financial position underpins its confidence in upgrading FY26 guidance, with EPU forecast to be no less than 17.2 cents and DPU guidance increased to 17.0 cents, representing double-digit growth over FY25.

Sustainability and ESG Leadership

Beyond financial metrics, CQE continues to lead in environmental, social, and governance (ESG) initiatives. The REIT maintains net zero Scope 1 and 2 emissions, supported by renewable energy and nature-based offsets. It holds an ‘A’ rating under the GRESB Public Disclosure and has achieved a 4-Star Green Star Performance rating for its early learning portfolio, reflecting best practice in operational sustainability.

Tenant engagement remains strong, with a Net Promoter Score of +43, and the REIT supports community outcomes through initiatives such as fee-free learning for families and enhanced supply chain responsibility. These efforts reinforce CQE’s position as a socially responsible investor in essential community infrastructure.

Outlook

Looking ahead, Charter Hall Social Infrastructure REIT is well positioned to capitalise on favourable demographic trends and government support underpinning social infrastructure demand. The REIT’s focus on long-term leases, high-quality tenants, and strategic portfolio curation provides a stable platform for ongoing earnings and distribution growth.

With upgraded guidance and a strong balance sheet, CQE signals confidence in delivering resilient income streams and capital growth for investors in FY26 and beyond.