Australian listed property trust Charter Hall Retail REIT (ASX: CQR) has announced some promising metrics today at its annual general meeting (AGM) to unit holders. The unit price of this real estate investment trust (REIT) rose by 5.5% today to $3.84 amid a broader rise in the property sector of the ASX.
Highlights of today’s AGM
Charter Hall Retail REIT reported some decent results for FY20 despite pandemic lockdowns and various restrictions. Highlights included:
- Operating earnings of $142 million, up 11.5% from the previous financial year.
- Operating earnings per unit of 30.56 cents, up 1.8%.
- Distribution per unit of 24.52 cents, up 14.7%.
- Property portfolio value of $3,325 million, up 9.1%.
The company also advised that in light of current cash collection levels, it expects the first half distribution to be approximately 10.7 cents per unit. Assuming there are no further lockdown or government imposed trading restrictions, Charter Hall expects that the second half distribution will be greater than the first half distribution
The REIT also provided a preview of its operational performance so far in FY21. It says that supermarket sales growth for the quarter increased to 8.9%, reflecting continued strength of in-home consumption. Occupancy remains stable at 97.3% as 96% of stores were still open nationally at the end of September.
What is Charter Hall Retail REIT?
Charter Hall Retail REIT owns an Australian portfolio of roughly 50 shopping centres, 225 service stations leased to the Australian arm of BP plc (NYSE: BP), and a distribution centre leased to Coles Group Ltd (ASX: COL). It also counts Woolworths Group Ltd (ASX: WOW) and Aldi as its customers. Rent is of course Charter Hall Retail REIT’s dominant revenue driver.
In July 2020, the REIT acquired a stake in a Coles distribution centre with 14 years remaining on the lease and fixed annual rental uplifts of 2.75%. Woolworths remains the company’s largest tenant, representing 18% of its income. Charter Hall Retail REIT commands around a 5% market share of Australia’s retail space shopping centres.
How has Charter Hall Retail REIT performed in 2020?
The unit price of the REIT began the year trading at $4.30 before slumping to $2.80 in March at the onset of the pandemic. It has since recovered to today’s price of $3.84, with a year-to-date decrease of 10.7%. The trust has a market capitalisation of $2.1 billion at today’s price.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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