Charter Hall Social Infrastructure REIT [ASX:CQE] is proving once again that it’s not all doom and gloom for property.
Despite the pandemic, and the lockdown, this REIT has bucked the trend. Recording not only a 25% increase in profits, but a 15.6% increase in operating earnings.
These results have helped send the share price 3.6% higher at time of writing. Proving to all the doubters that infrastructure is most definitely the place to be.
Lets take a look at CQE’s full accounts though, shall we.
Mastering the balancing act
With a statutory profit of $85.9 million for FY20, CQE has plenty to be happy about.
It’s a result that not only proves their strategy is working, but also that they’re thriving in these tough times. Backed up by the fact that operating earnings are also up — totalling $51.1 million.
Granted, the main reason for this success is because of their focus on childcare centres. An industry that has been heavily influenced by the governments generous response in making it effectively free.
A blessing that CQE is well aware of, as they note:
‘The COVID-19 pandemic has resulted in significant challenges for the childcare sector, however the Government support has demonstrated the essential nature of the sector.’
In other words, they were fortunate enough to be involved in one of the few sectors to get serious support. But that’s precisely why infrastructure as a whole is booming right now. Because it is the foundation of much of our economy.
If the government didn’t support infrastructure, the impact would be far worse than the situation we’re currently in.
CQE was also quick to remind stakeholders of their magnanimity too. Providing rental relief to several of their operators in recent months. A lifeline that amounted to $5.4 million of deferred income.
However, it’s not as if that money is gone for good. With those affected agreeing to an average extension of 6.2 years to their leases.
In other words, a little short-term pain for some long-term gain.
And, on top of all that, their total property portfolio actually increased in value. Rising by 5.8% over the 12-month period.
Which is perhaps the most remarkable result of them all.
All in all, it’s hard to find fault with CQE’s year. Whether people see them as lucky or smart, the results speak for themselves. And for investors, it is hard to ignore in the midst of our uncertain market.
Hunting down a bargain
As for other investment opportunities in the property market, things can be a bit more challenging.
Outside of childcare and infrastructure, the government support hasn’t been all that abundant. Leaving the residential sector in a teetering situation.
The lockdown and subsequent fear have certainly put certain areas on notice. With Melbourne in particular facing some serious challenges.
However, that doesn’t mean you should ignore them.
As our real estate expert Catherine Cashmore has shown, there are bargains to be found. Property deals that may be once-in-a-lifetime opportunities. The kind of investment that you’d kick yourself for passing up in a few years.
The challenge is knowing where to look, and how to find the best deals. That’s why Catherine has written a handy report to get you started.
After all, if CQE’s results can teach you anything, it’s that there is always a way to make money. Even in the midst of a worldwide health crisis…
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