Charter Hall Retail (CQR) H2 2025 earnings summary

Executive summary

• Portfolio value increased to $4.8 billion as of June 30, 2025, following the acquisition of the HPI portfolio, adding 57 net leased convenience retail assets and a $1.3 billion portfolio with 100% occupancy and 8.9-year WALE.

• Portfolio occupancy remains high at 98.9%, with a 7.0-year WALE and strong same property net property income (NPI) growth of 2.6%.

• Record leasing spreads of 5.5% and specialty tenant retention rate of 85% achieved, with specialty tenants reaching record sales productivity of $11,356 per sq metre.

• Operating earnings per security of $25.04 and distribution per security of $24.07 delivered, both in line with guidance.

• Achieved Net Zero for Scope 1 and 2 emissions from July 1, 2025, with significant ESG recognitions and sustainability initiatives.

Financial highlights

• Net tangible assets (NTA) per unit increased by 2.9% to $4.64, driven by $151 million net valuation growth and external revaluations.

• Same property NPI growth of 2.6%, with net leased retail assets delivering 3.1% and shopping centers 2.4%.

• Operating earnings of $0.2504 per unit and distribution of $0.2407 per unit, matching prior year and guidance.

• Shopping center cap rates compressed to 6.06%, net-leased cap rates at 5.24%.

• Weighted average cost of debt rose from 4.4% to 4.9% year-over-year.

Outlook and guidance

• FY 2026 operating earnings expected to be $26.03 per unit, a 3.5% increase year-over-year, with distributions per unit forecast at $25.04, a 2.8% uplift.

• Quarterly distributions to commence from Q1 FY26.

• Strong population growth and constrained supply expected to support asset performance.

• Anticipated cap rate compression and continued valuation growth due to robust investor demand.