The Charter Hall Social Infrastructure REIT (ASX: CQE) share price has been a positive performer on Thursday.
In late afternoon trade the social infrastructure-focused property company’s shares are up 3% to $3.03.
Why is the Charter Hall Social Infrastructure share price pushing higher?
Investors have been buying Charter Hall Social Infrastructure shares today following the release of a solid half year result this morning.
According to the release, for the six months ended 31 December, the company delivered a 14.1% increase in operating earnings to $29.1 million.
This was driven largely by an 8.2% increase in net property income to $34.4 million and a 9.4% reduction in operating expenses to $7.7 million.
From this, the company declared a distribution of 7.5 cents per unit for the half.
Other key metrics
At the end of the period, the company had an occupancy rate of 99.7% and a weighted average lease expiry (WALE) of 14 years. This was up 1.3 years from the end of June.
Also increasing was the number of leases on fixed rent reviews. This metric has increased to 63.3% from 53.6% at the end of June.
Finally, management advised that lease expiries within the next five years represent just 4.7% of rental income.
Charter Hall Social Infrastructure REIT’s Fund Manager, Travis Butcher, commented: “Consistent with CQE’s strategy, our focus during the period has been on enhancing income sustainability and resilience by improving the quality of tenants and leases within the portfolio.”
“This has included the extension of 58 leases to an average 20 years with CQE’s major tenant, Goodstart and the acquisition of two new social infrastructure properties with strong tenant covenants. CQE is well positioned in the current economic environment with low gearing and $130 million of investment capacity to deliver secure income and capital growth to investors,” he added.
Outlook
Management advised that it is well positioned in the current economic environment with predictable and growing income, low gearing, and $130 million of investment capacity.
It also confirmed that, barring any unforeseen events, it expects to pay shareholders a distribution ahead of its previous guidance.
Instead of 15 cents per unit, it now expects to pay shareholders 15.7 cents per unit in FY 2021. Based on the current Charter Hall Social Infrastructure share price, this represents an attractive 5.2% yield.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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