The S&P/ASX 200 Index (ASX: XJO) is currently up 0.2%, with one ASX 200 real estate investment trust (REIT) doing a lot of the heavy lifting.
The outperforming ASX 200 REIT in question is Charter Hall Social Infrastructure REIT (ASX: CQE), which invests in childcare centres, healthcare facilities, and transport hubs.
Shares in the real estate investment trust closed yesterday trading for $2.58. At the time of writing, shares are changing hands for $2.84 apiece, up 10.1%.
Here's what's spurring investor interest.
ASX 200 real estate investment trust lifts on results
Investors are bidding up the ASX 200 REIT following the release of its half-year results for the six months ending 31 December (H1 FY 2025).
The real estate investment trust reported a 3.7% year on year decline in operating earnings of $28.5 million. That equates to 7.6 cents per share, down 5.0% from the 8.0 cents per share reported in H1 FY 2024.
On the plus side of the ledger, the REIT reported like-for-like net property income of $51.6 million, representing growth of 3.2%. Management noted this was partially offset by net divestment activity over the half.
Net tangible assets (NTA) remained unchanged year on year at $3.82 per share.
Statutory earnings came in at $31.0 million while operating earnings were down 3.7% year on year to $28.5 million.
The Charter Hall Social Infrastructure REIT has a weighted average debt maturity of 3.4 years. As at 31 December, the balance sheet gearing was reported at 31.0%, at the lower end of the REIT's targeted 30% to 40% range.
The real estate investment trust (which makes quarterly payments) paid a total of 7.5 cents in unfranked dividends for the half year, down 6.2% from H1 FY 2024.
On the operational front, the company holds a $2.1 billion property portfolio with a long weighted average lease expiry (WALE) of 11.9 years and 100% occupancy. And 43% of the ASX 200 REIT's rental income will be subject to market rent reviews in the next four years.
What did management say?
Commenting on the results lifting the ASX 200 real estate investment trust today, Charter Hall Social Infrastructure REIT's fund manager Travis Butcher noted, "Recent market rent reviews on 15 properties delivered a 16.4% increase, highlighting the under-rented nature of CQE's childcare portfolio."
Butcher added:
Active portfolio curation remains a key strategy for CQE to deliver earnings and distribution growth. The acquisition of a pathology laboratory in Western Australia leased to Clinipath Pathology at a 6.4% yield is consistent with our strategy to invest in social infrastructure property delivering essential community services.
This was funded through the divestment of 16 childcare assets throughout the half for total consideration of $84 million at an average yield of 4.6%. This highlights the ongoing demand and liquidity for childcare property.
What's ahead for the ASX 200 real estate investment trust?
Looking at what could impact the ASX 200 real estate investment trust in the months ahead, management announced their intention to conduct an on-market buyback of up to $25 million of CQE shares.
Management expects to see continued "significant growth opportunities" in social infrastructure assets, driven by favourable demographic trends and government backing.
Likely boosting investor sentiment today, the REIT increased its full-year FY 2025 dividend guidance to 15.2 cents per share, up from the prior 15.0 cents per share.
