Charter Hall Retail REIT FY26 Operating Earnings Up 4%

Charter Hall Retail REIT (ASX:CQR) reported operating earnings of $153.4 million, or 26.4 cents per unit, for the year ended 30 June 2026, a 4.0% increase on FY25, and a distribution of 25.5 cents per unit, up 3.3%. Statutory profit was $389.4 million and net tangible assets rose 8.4% from 30 June 2025 to $5.03 per unit. Balance sheet gearing was 30.9% on a proforma basis for the July 2026 divestment of three metro assets for $210 million, the July 2026 acquisition of Yeppoon Central for $65 million and the post balance date refinance of the BP Australia debt facility. Like-for-like net property income growth was 3.0%, portfolio occupancy increased to 99.1% and specialty leasing spreads were positive 4.1%, comprising 271 renewals at +3.9% and 145 new leases at +4.7%. Total moving annual turnover growth was 3.2% with supermarket MAT growth of 3.6%, and specialty sales productivity reached a portfolio record of $11,748 per square metre with occupancy costs of 10.9%.

Portfolio net valuations increased $248 million or 4.9%, comprising a $147 million shopping centre uplift and $101 million of net lease valuation growth, and the portfolio weighted average capitalisation rate of 5.45% firmed 29 basis points, or 16 basis points on a like-for-like basis. During the year the REIT settled the previously disclosed $251 million acquisition of Gympie Central, Whitsunday Plaza and Armidale Central at an average yield of 6.7% and a $200 million equity investment in the CH Ampol Partnership 1 that lifted its ownership from 5% to 49.9%, and sold its interest in Retail Partnership No.6 for $80.5 million and Lansell Plaza, Bendigo for $110 million. Post balance date in July 2026 it acquired Yeppoon Central for $65.3 million at a 6.5% yield and divested Arana Hills, Kings Langley and Butler for $210 million at an average yield of 5.3%. CQR refinanced its entire debt platform during FY26, including prepayment of USPP notes, reducing average funding margins by 40 basis points to 125 basis points, and reported a weighted average debt maturity of 3.6 years and a weighted average cost of debt of 5.0%. Based upon information currently available and barring unforeseen events, CQR guided to FY27 operating earnings of no less than 27.3 cents per unit and FY27 distributions of 26.4 cents per unit, both representing growth of 3.5%.