Arena REIT and Charter Hall send reassuring signals in dividend distribution updates
The early childhood education and care (ECEC) sector’s two largest listed real estate investment trusts, Charter Hall Social Infrastructure REIT (CQE) and Arena REIT (ARF), have confirmed their June quarter dividend distributions which in both cases were higher than expectations, a reassuring signal given concerns around the economic impact COVID-19 would have on their businesses.
Charter Hall, the larger of the two trusts, will pay a June quarter 2020 distribution of 3.475 cents per unit. This compares to 4.175 cents paid in the March quarter 2020, prior to the COVID-19 outbreak. At March distribution, the Trust was forced to withdraw its distribution and earnings guidance due to the extreme uncertainty the pandemic created.
The payment of 3.475 cents in the June quarter 2020 represents a 16.8 per cent reduction from March, but will take the overall FY 2020 dividend to 16 cents, the same as what was paid in 2019.
Given expectations for rent reductions amounting to as much as 30 per cent in the current quarter, due to tenants seeking rent relief in light of COVID-19 related challenges, Charter Hall’s commitment to payout a 3.475 cents and bring the annual dividend to 16 cents will be well received.
Arena, which went one step further than Charter Hall and deferred its March quarter dividend payment due to COVID-19, as well as suspending guidance, has confirmed that they will pay a dividend of 6.85 cents for the six months ended June 2020.
The dividend is at the upper end of the range provided by the Trust in May 2020 and actually represents an increase of 1.5 per cent compared to the same period last year, which given the concerns around COVID-19 suggests that Arena has weathered the impact of the pandemic relatively well.
The Arena REIT distribution will be paid on 6 August 2020. The Charter Hall Social Infrastructure REIT distribution will be paid on 21 July 2020.