Charter Hall Social Infrastructure REIT : CQE Interim Financial Report

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personalCharter Hall Social ForInfrastructure REIT

ARSN 102 955 939

Interim Financial Report

For the half year ended 31 December 2021

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personalImportant Notice

Charter Hall Social Infrastructure Limited ACN 111 338 937; AFSL 281544 (CHSIL) is the responsible entity of Charter Hall Social Infrastructure REIT ARSN 102 955 939 (REIT). CHSIL is a controlled entity of Charter Hall Limited ABN 57 113 531 150 (Charter Hall). The REIT is incorporated and domiciled in Australia. The registered office of the REIT is Level 20, No.1 Martin Place, Sydney NSW 2000.

Past performance is not a reliable indicator of future performance. Due care and attention have been exercised in the preparation of forecast information; however, forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of CHSIL. Actual results may vary from forecasts and any variation may be materially positive or negative.

This report has been prepared for general information purposes only and is not an offer or invitation for subscription or purchase of, or recommendation of, securities. It does not take into account the investment objectives, financial situation or needs of any investor. Before investing, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and

Forconsult an investment adviser if necessary.

CHSIL does not receive fees in respect of the general financial product advice it may provide; however, it will receive fees for operating the REIT which, in accordance with the REIT's constitution, are calculated by reference to the value of the assets and the performance of the REIT. Controlled entities of Charter Hall may also receive fees for managing the assets of, and providing resources to, the REIT. Charter Hall and its related entities, together with their officers and directors, may hold securities in the REIT from time to time.

© Charter Hall

Contents

For personal use only

Directors' report	4
Auditor's independence declaration	8
Consolidated statement of comprehensive income	9
Consolidated balance sheet	10
Consolidated statement of changes in equity	11
Consolidated cash flow statement	12
About this report	13
A. REIT performance	14
B. Property portfolio assets	17
C. Capital structure	20
D. Further Information	22
Directors' declaration to unitholders	23
Independent auditor's review report	24

Charter Hall Social Infrastructure REIT Directors' report

Directors' report

The Directors of Charter Hall Social Infrastructure Limited (Responsible Entity or CHSIL), the responsible entity of Charter Hall Social Infrastructure REIT, present their report together with the financial statements of Charter Hall Social Infrastructure REIT and its controlled entities (the REIT) for the half year period ended 31 December 2021.

onlyPrincipal activities

The principal activity of the REIT during the period was property investment. There were no significant changes in the nature of the REIT's activities during the period.

Directors

The following persons have held office as directors of the Responsible Entity during the half year period and up to the date of this report, unless otherwise stated:

	‒	Grant Hodgetts	‒ Chair and Non-Executive Director
use	Michael Johnstone	‒	Non-Executive Director
	‒
	‒	Kate Melrose	‒	Non-Executive Director
	‒	Sean McMahon	‒ Executive Director and Chief Investment Officer (Charter Hall Group)
	‒	Miriam Patterson	‒	Executive Director
	Distributions
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	Distributions paid or declared by the REIT to unitholders:
					31 Dec 2021			31 Dec 2020
			Number of	Cents		Number of	Cents
			units on issue	Per Unit	$'m	units on issue	Per Unit	$'m
	30 September	363,712,112	4.175	15.2	360,371,362	3.750	13.6
	31 December*	364,150,027	4.225	15.4	361,255,506	3.750	13.6
	Total distributions			8.40	30.6		7.50	27.2

*A liability has been recognised in the consolidated financial statements as the interim distribution had been declared as at the balance date.

Distribution Reinvestment Plan

The REIT has established a Distribution Reinvestment Plan (DRP) under which unitholders may elect to have all or part of their distribution entitlements satisfied by the issue of new units rather than being paid in cash.

The DRP issue price is determined at a discount of 1.5% to the daily volume weighted average price of all units traded on the ASX during the 10 business days commencing on the second business day following the distribution record date. During the eriod, 1,522,867 units were issued at an average issue price of $3.59 per unit. An additional $2.5 million was raised from the

DRP for the 31 December 2021 distribution allotted on 21 January 2022. For

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Charter Hall Social Infrastructure REIT Directors' report

Directors' report (continued)

Review and results of operations

The REIT recorded a statutory profit for the period of $207.7 million (31 December 2020: $57.3 million). Operating earnings

amounted to $30.8 million (8.5 cents per unit) for the period ended 31 December 2021 (31 December 2020: $29.1 million, 8.0 cents per unit) and a distribution of $30.6 million (8.4 cents per unit) was declared for the same period (31 December 2020: $27.2 million, 7.5 cents per unit).

	The 31 December 2021 financial results are summarised as follows:
			6 months to	6 months to
			31 Dec 2021	31 Dec 2020
	Revenue ($ millions)		48.7	45.1
only		207.7	57.3
	Net profit ($ millions)
	Basic earnings per unit (cents)		57.1	15.9
	Operating earnings ($ millions)		30.8	29.1
	Operating earnings per unit (cents)		8.5	8.0
	Distributions ($ millions)		30.6	27.2
	Distributions per unit (cents)		8.4	7.5
			31 Dec 2021	30 Jun 2021
	Total assets ($ millions)		1,977.2	1,542.0
use		600.4	363.7
personal	Total liabilities ($ millions)
Net assets ($ millions)		1,376.8	1,178.3
Units on issue (millions)		364.2	362.6
Net assets per unit ($)		3.78	3.25
Balance sheet gearing - total debt (net of cash) to total assets (net of cash)		26.5%	19.2%
Look through gearing - total debt (net of cash) to total assets (net of cash)		27.4%	20.4%
The table below sets out income and expenses that comprise operating earnings on a proportionate consolidation basis:
		6 months to	6 months to
		31 Dec 2021	31 Dec 2020
		$'m	$'m
Net property income		40.1	35.6
Distribution income		1.0	1.3
Other income		-	0.1
Fund management fees		(4.5)	(3.4)
Finance costs		(4.7)	(3.7)
Administration and other expenses		(1.1)	(0.8)
Operating earnings	A1	30.8	29.1
Operating earnings is a financial measure which represents profit under Australian Accounting Standards adjusted for net fair

value movements, non-cash accounting adjustments such as straight lining of rental income and amortisations and other unrealised one-off items that are not in the ordinary course of business or are capital in nature. Operating earnings includes the

Forental revenue recognised in respect of tenants who have been (or will be) provided with rent free incentives as a result of COVID-19. This approach is consistent with the REIT's treatment of rent free incentives provided in the ordinary course of its

perations, which are amortised over the term of the lease.

The inclusion of operating earnings as a measure of the REIT's profitability provides investors with the same basis that is used internally for evaluating operating segment performance. Operating earnings is used by the Board to make strategic decisions and as a guide to assessing an appropriate distribution to declare.

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