Charter Hall retail REIT profit down
Charter Hall’s retail real estate investment trust (REIT) (CQR) has seen its statutory profit 16.8% down to $44.2 million on FY19 primarily due to valuation movements, the company said in an announcement to the Australian Securities Exchange (ASX).
At the same time, distribution of 24.52 cpu, was down 14.7% compared to the previous corresponding period while operating earnings of $142.7 million was down 1.8% year-on-year.
The firm said that all major tenants remained open and traded positively for the year ended 30 June, 2020, but speciality moving annual total (MAT) declined, reflecting temporary store closures.
At the same time, speciality tenant trading also recovered with store re-openings and as of 30 June, 2020, footfall at the majority of centres recovered to pre-COVID-19 levels.
The pandemic forced the fund to provide $10.7 million in COVID-19 tenant support during 4th quarter FY20 and 70% of this support was provided as rent-free incentives.
Following this, CQR collected 79% of rent due in the 4th quarter, with 15% of rent provided as tenant support and 6% of rent unpaid at the end of the period.
Additionally, as at 6 August, 2020, two CQR shopping centres in Victoria were subject to stage four restrictions and two centres remain under stage three restrictions.
In the announcement, the firm said also said that 99% of the portfolio by value was externally revalued over FY20. The REIT’s total portfolio increased in value by $270 million with net acquisitions of $284 million offset by value decline of $14 million.
“As we commence FY21, our expectation is that supermarket sales will continue to be strong, driven by stay-at-home and COVID-19 factors. Visitations to CQR centres have normalised in most regions and highlight the essential need associated with convenience retail,” the fund said.
“Our strategy remains focused on partnering with non-discretionary convenience retailers and providing income resilience and growth through a continuation of our acquisition and divestment strategy.”
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