The second week of FY 2025 earnings results has kicked off this morning, with an ASX dividend stock favourite catching investors' eyes.
The Charter Hall Retail REIT (ASX: CQR) share price is under watch at $4.06 on Monday morning.
Let's take a look at this REIT's recent performance.
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Surge in statutory profit despite rising costs
Investors will be digesting what's next for the leading owner of convenience retail property after it delivered a solid full-year result.
For the year ended 30 June, the REIT posted operating earnings of $147.5 million, or 25.4 cents per unit, compared to 26.6 cents per unit a year earlier. The decline was attributed to higher finance costs, partially offset by growth in property income.
Nevertheless, statutory profit surged to $213.8 million, a sharp increase on the $17.2 million reported last year. Investors received a distribution of 24.7 cents per unit, in line with FY24.
Backing this result, net tangible assets per unit rose 2.9% to $4.64. Balance sheet gearing was reported at 27.1% on a pro forma basis.
On the property front, like-for-like net property income grew 2.6%, with shopping centres up 2.4% and net lease retail rising 3.1%. Occupancy remains high at 98.9%.
During the year, Charter Hall Retail and its wholesale partner Hostplus also completed their acquisition of Hotel Property Investments Ltd, with the REIT's initial equity investment totalling $367.5 million.
The ASX 300 REIT's CEO, Ben Ellis, said:
CQR's portfolio continues to deliver strong operational performance. Our unique blend of convenience shopping centre and convenience net lease assets provides an attractive income growth profile with lower capital expenditure leakage. The shopping centre portfolio has achieved another all-time record in sales productivity. Our specialty tenancy renewals delivered very strong results over the year with 5.5% rent growth overall, boosted by lease renewals on retained tenants growing 4.9% and leases signed from new tenants up 7.6%. These leasing outcomes are the highest we have experienced in over a decade.
What exactly is a Retail REIT?
Charter Hall Retail REIT is a real estate investment trust that owns and manages a portfolio of convenience-focused retail properties. These include supermarket-anchored neighbourhood and subregional shopping centres, service stations, and some retail logistics properties.
More than half of the trust's rental income comes from major tenants, including Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL), Wesfarmers Ltd (ASX: WES), Aldi, Ampol Ltd (ASX: ALD), and BP. The portfolio is more seasoned than some convenience rivals, with approximately 80% of its supermarket tenants at or near thresholds for paying turnover-linked rent.
