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Edited Transcript of FET.AX earnings conference call or presentation 12-Feb-19 11:00pm GMT

Half Year 2019 Charter Hall Education Trust Earnings Call

Jul 2, 2019 (Thomson StreetEvents) -- Edited Transcript of Charter Hall Education Trust earnings conference call or presentation Tuesday, February 12, 2019 at 11:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Nicholas James Anagnostou

Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust

* Travis Scott Butcher

Charter Hall Education Trust - General Manager of Finance - Diversified for Folkestone Investment Management Limited

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Conference Call Participants

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* Benjamin J. Brayshaw

JP Morgan Chase & Co, Research Division - Analyst

* Cameron Bell

Canaccord Genuity Limited, Research Division - Senior Industrials Analyst

* Jeffrey Robert Pehl

Goldman Sachs Group Inc., Research Division - Associate

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Charter Hall Education Trust 2019 Half Year Results Briefing. (Operator Instructions) Please note that this conference is being recorded today, Wednesday, 13th of February 2019. I would now like to hand the conference over to your host today, Mr. Nick Anagnostou, head of Social Infrastructure Funds. Thank you. Sir, please go ahead.

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [2]

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Good morning, and welcome. I'm Nick Anagnostou, and I'm joined today by Travis Butcher to present CQE's half year results presentation. I'll commence the presentation with the key highlights and provide context for the results, after which Travis will provide an update on key financial metrics. I'll then return to cover the key aspects of the portfolio and investment activity, some observations on the early learning sector, followed by a summary for CQE's outlook for the remainder of FY '19.

If I can ask you all please to commence on Slide 4. The underlying performance in the 3 key disciplines, asset, portfolio and financial performance, remained strong and consistent with our investment objectives and highlight what we believe to be a very solid position for the portfolio to capture future growth. The results are reflective of their activities in previous years and mix of profitable asset sales in late FY '18 and some full-blown income from delayed development site activity has led to a lower level of income than otherwise expected. Irrespective, the underlying performance we now have for the portfolio remained strong.

For the first half, so change is a major theme for the sector as we calibrated to recognize the introduction of the government's new Child Care Subsidy scheme, new supply and how well the new CCS dealt with the cost pressures for families that lead to softening demand in mid-2018. Our active management of the portfolio with a focus on strategy rather than opportunity alone means we reshaped the portfolio to better align it with the industry change and current demand, and that should provide long-term growth for investors.

Our development and recycling program continues to land new embedded stock in an efficient manner as well as enhancing our income profile. Rental growth remained strong with 8% on market rent reviews and 2.6% on a like-for-like basis. There's continuing demand for the CQE product with 100% of new lease options exercised. Travis will address the balance sheet in greater detail. However, an extended and diversified debt facility and making some sensible gearing puts CQE in a strong position to maximize future opportunities.

Turning to Slide 5. CQE's performance remained strong with distribution growth and NTA growth averaging 6% and 16%, respectively, over the last 5 years. NTA growth was 3% for the half year, and we expect the asset value growth will be more reliant on income growth moving forward. But we believe they are components of that portfolio where value is still yet to be unlocked.

We still see the potential for yield compression is out of CQE, and that's driven by the quality of the new stock we're developing, replacing less efficient, typically smaller assets that are being sold on average with premiums to book value. And with this, the team remained disciplined in the transactions but also focusing on capturing the smaller but still cumulative gains from early development and leasing opportunity. This compound naturally our long-term triple net leases and in turn the distribution as well as NTA growth.

Turning to Slide 6 with respect to the industry overview. As seen with last year, 2018 was a year that saw recalibration by the operators and parents in response to the new Child Care Subsidy scheme that was implemented on the 2nd of July 2018. The key driver for the new funding scheme was to provide the greatest benefit to the families that need it the most and remove the barriers to entry to the workforce for many.

The ABS has recently reported an average of 11% increase in the affordability of childcare since the scheme's inception. That's not to be interpreted as a full on fee levels, which would reach an approximately 3%, but rather a full in the out-of-pocket expenses of child -- cost of childcare due to the availability of the increased subsidy for many.

It's also a positive indicator for rental income and we expect affordability increases by the parents' ability to meet the cost of childcare leading to higher occupancy. [An entire minimum suggested occupancies] of respondent by circa 2% to 3% for many operators while the impact of the scheme has arrived somewhat faster than otherwise expected. We believe that 77 Long Day Care centers closed for the year, and this is with the slowing in supply and other factors including the closure of 347 unrelated family daycare centers related to existing stability in the short term for the Long Day Care sector.

Turning to Slide 7. CQE's objectives are straight forward and delivering stable and relatively secure income and capital growth. In maintaining that consistency, the strategy requires targeted growth which is reliant on building on our operated partnerships, ensure that we really do understand industry dynamics, having access to a quality platform, expertise and research, which we invested further in this year. The Charter Hall platform enhances our abilities in every respect. The outcome of these activities is that they draw attention and opportunity to launch CQE, and this has allowed us to be ahead of the curve with respect to industry change.

I'll now pass over to Travis to address the financial results.

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Travis Scott Butcher, Charter Hall Education Trust - General Manager of Finance - Diversified for Folkestone Investment Management Limited [3]

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Thanks, Nick, and good morning to everyone. On Page 9, we have a summary of the results and key metrics for the half year ended 31 December 2018. Key points to note. Distributable income for the period was $21.2 million, up 1% on the prior period. EPU for the half was $0.083, with distributions paid for the period of $0.08, representing a payout ratio of 96.4%. Key drivers of the flat EPU for the period were the impact of divestments in the second half of FY '18 and lower income from development sites during the period.

Finally, statutory profit for the half is $42.2 million, which is down by $13.2 million. This is largely due to a $11.3 million reduction in property revaluation increments compared to the prior period and negative mark-to-market movements of hedges of $2.6 million. CQE continues to have a clean and strong balance sheet. The benefit of the property revaluations to the results is that NTA was $2.87 per unit and a gearing level of 29.9%.

Moving to Page 10. Key points to note here. Across the existing portfolio, there were 2.6% increase in lease income as a result of annual lease reviews, which comprise the mixture of CPI, fixed increases and a small number of market reviews.

Acquisitions, predominantly the premier [Avenues] portfolio, contributed $1.8 million of additional lease income, and the 8 completed developments over the previous 12 months provided an additional $1.4 million. This was partially offset by the impact of disposals, predominantly lower-quality and higher-yielding properties in FY '18, which reduced lease income by $1.4 million, and a reduction in site rental income of $0.9 million.

Site rent from development sites reduced from $1.6 million to $0.7 million due to reduced number of development sites deriving site rent during the period. This was a result of both delays in achieving planning approvals on some sites and also more recently, development site acquisitions had not been deriving at site rent during the construction period.

Moving to Page 11 and the balance sheet. During the half, total assets increased to $1.8 billion, an increase of 5.2% from 30 June 2018. This movement comprised both acquisition and development activity, which added $31 million, and secondly, property valuation movements at $22.6 million. The property valuation increment was a result of a reduction in the portfolio of the year by 10 basis points compared to the increment in the prior period, $33.9 million, where there was a reduction of 20 basis points.

Moving over to Page 12 and CQE's capital management. In August, we completed the debt refinancing of the fund's debt facilities, which include the introduction of AustralianSuper to CQE with $100 million 7-year institutional loan. These funds were utilized to repay existing bank facilities. We also extended the maturities of both the ANZ and HSBC maturities. As at 31 December 2018, the fund has a weighted average debt maturity of 4.6 years with no maturity until September 2021. This provides CQE now with diversification in its debt funding and also longer maturities consistent with the predictable income and long WALE of portfolio of 9.5 years.

CQE gearing sits at 29.9%, below the 30% to 40% target range and provides CQE with capacity for growth with $28 million currently undrawn. This undrawn component can be increased in the short period of time, and combined with the other funding sources such as proceeds from disposal of assets and funds retained from a distribution reinvestment plan, will be utilized to fund the remaining capital requirement in the existing development pipeline, which total $68.2 million. And that funding is required over the next 3 years.

CQE has a staggered hedging profile through to June 2023 with an average 52% hedged at a hedged rate of 2.9%. We're currently looking at options as part of our overall hedging strategy to reduce CQE's future hedging range.

I'll now pass back to Nick to cover the operational performance.

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [4]

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Thanks, Travis. Let's move to Slide 14. The recalibration of CQE's portfolios continued to not only affect the industry change but to rebalance towards superior real estate, a wider operator register and improved rental profile. The key metrics that continue to underpin the fund's performance are WALE of 9.5 years, near 100% occupancy, regarding the one vacant center is now being released, like-for-like rental growth of 2.6%, heading in the right direction. And we've focused heavily on moving away from CPI-based reviews.

The graph on the top right-hand corner highlights the impact of this repositioning with a grading under the fixed rent reviews in FY '20 and '21 and previously in the past. The 80% increase in the market rents, rent reviews highlights what we believe to be the underlying strength from the portfolio relative to operator's revenue.

We've continued to diversify the tenant register and we now see the operators that we continue to partner with and provide opportunity to. The lease expiry profile remains same as the last year, and we're actively addressing leases with our business partners well ahead of time to provide greater long-term security for both parties.

Turning to Slide 15. Valuation growth has continued at 3% for the 6-month period, and the portfolio now has a 6% [average] yield and overall yield of 6.2%. This is consistent with market activity where we saw average yield for sales at about 5.9%. The valuation table on the right-hand side highlights the impact of state-based factors with New South Wales, Victoria and New Zealand having tighter yields, which reflect stronger population growth, employment opportunities and higher underlying land values. The tightening in the overall yield in the portfolio is also reflected in the better quality asset base with CQE now having completed upwards of $230 million in developments and acquisitions in the last few years and which have an average yield at just under 6%.

Turning to Slide 16. We've continued with the recycling and development site program with smaller assets providing -- with selling smaller assets providing good premiums to book values and allowing CQE to focus on more profitable opportunities, in particular those ones better matched to demand from existing operators. The active development pool as at 31st of December was 27 properties with 3 having been completed in the half.

Moving to Slide 17. Our strategy of generating superior returns and better long-term investments through development is proving to be successful. The developments bring greater diversification to our operating register, better real estate and long-term growth prospects and superior income profile. During the half, we completed 3 developments and have completed 3 more since the 31st of December. These provide a yield up to 200 basis points for single assets as well as giving us a corresponding market-based development margin.

We anticipate to achieve planning approval and that aspect of the process has become increasingly harder irrespective. We're confident we'd be successful on the remainder and including one that has filed planning approval and achieving net income, WALE, superior rental profiles to the portfolio. As evidenced by the number of our new centers, they are better suited for demands of parents and operators, an environmental determinant of success on their own and an integral component of operator success.

Turning to Slide 18, demand. The key statistics for the demand remain consistent for the period. And we expect that the new CCS is a definite net positive for the sector. We addressed the metrics in August, and little has changed with the statistically available public information. However, there's a long-term upward macro trend around participation rates and population growth that continues to provide a compelling investment horizon for childcare.

Turning to Slide 19. We've already referred to the ABS's recent statistics with respect to the increased affordability of childcare. Essentially, this is the nature of change in the net cost of childcare to parents. This clearly indicated the CCS has had a significant impact on the out-of-pocket costs with Melbourne and Canberra appearing to be the latest beneficiary.

This is the third restructuring in the childcare rebate system since 2001 to increase childcare affordability for parents, which otherwise occurred in 2001 and 2010. Although the available data fits precisely with 2009 and 2010 events, what can be seen is these are the periods that follow the fastest level of demand growth for as long as the data has been collected. Accordingly, affordability increases are driven by the extent of the subsidies available, and the increase in affordability is not necessarily, in fact, it appears not to be, a function of decreased fee levels. The CPI, headline fee levels for headline rate for fee increases in the last 6 months of the last year was approximately 3%.

The affordability increases had given parents a greater opportunity to participate in childcare and the variant [evidence] appears to be periods extending from 3 days to 4 days is one example due to their greater level of affordability. And what was surprising for us was that it wasn't necessarily matched to an increase in the days of employment taken up by the existing parents already in the workforce. What seems to be very evidence of value is that the level of increased affordability has allowed parents to remain in childcare if their employment situation changes.

One of the key things that I think we highlighted earlier in the August results is that we expected the impact of the CCS to take approximately 12 months for it to flow through as parents reorganize their employment activities to better suit their childcare availability.

Turning to Slide 20. The indicators to note with respect to supply, as illustrated in the graph on the lower right-hand side, is the rapid drop off in supply over 2018. There is some seasonality that's been with operators preferring to open new centers from October to January. So that will influence the trend to some degree.

What's interesting is our analysis for closed centers with 50% of the closures being for centers less than 50 places and typically in [Sector 5] or lower demographics. You may recall that part of CQE's strategy was to focus on centers that provide the greatest prospect of profitability for operators, and this data confirms our strategy in full.

At the same time, our researchers have been able to identify less than 20 of the 77 closures as available -- currently available for lease, and that's approximately 0.2% of the existing Long Day Care center supply in Australia. We expect that the remainder will be repurposed for higher and better use.

Turning to Slide 21. The outlook for CQE remains strong. We've got a stable platform, positive industry indicators, surrounding affordability and diminishing supply. We reiterate our guidance of $0.16 -- distribution guidance of $0.16 per unit for the remainder of FY '19.

That concludes the descriptive component of our presentation, and we look forward to your questions. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Jeff Pehl from Goldman Sachs.

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Jeffrey Robert Pehl, Goldman Sachs Group Inc., Research Division - Associate [2]

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Just first going back to your comments on supply. Are there still any submarkets that's giving you concern with the increase outside of Victoria?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [3]

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Jeff, I think they're isolated markets, and we expect that they will be -- and always have been, at different points in time, the areas of oversupply. And that oversupply can also very quickly turn into undersupply clearly with demographic changes and maturity in some areas. So look, we focus pretty clearly -- going back to our strategy of areas with high population growth, serving the population growth in that 0 to 5. But certainly with the barriers to entry are also reasonably high at the same time. That gives us a level of protection. So from the viewpoint of is our strategy correct, yes, it is. We're seeing areas with some oversupply, which we're not in, so we're reasonably comfortable there. Also keeping in mind the ripple effect around oversupply, and the radius of the ripple effect around oversupply is actually very small.

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Jeffrey Robert Pehl, Goldman Sachs Group Inc., Research Division - Associate [4]

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That's helpful. And then just moving to asset valuation, just for the decline in residential house prices recently, have you seen an impact on valuation of the childcare centers?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [5]

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No, we haven't as yet. No, I don't think -- look, it certainly is in the minds of the valuer. There's no doubt about that. We have a view that the underlying land component is an attractive part of the childcare investment equation. I'm not necessarily sure it drives it, but it certainly helps to underpin it to a certain degree. And I expect -- look, we're recognizing that land values -- development site values, in particular, in the residential sector are now coming back. And that's reasonably predictable. I don't think that's flowing through to ultimately the valuations because they're not the key driver of demand for that particular asset.

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Operator [6]

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(Operator Instructions) Your next question comes from the line of Ben Brayshaw from JPMorgan.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [7]

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Just looking at that slide on #19 with childcare CPI by capital city, could you just clarify, please? In terms of fee rates, will pressure on fee rates mean that all things equal, market rents will adjust down accordingly? Or is that a bit more of a nuanced issue? How do you see all that sort of coming together?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [8]

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Yes. Look, the interpretation of this data is important. And if you first glance at it, it wouldn't be unusual for people to think our fees are falling. That's actually not the case. So the headline fee level that we're seeing across the industry has probably been a 3% to 4% increase. That means that some might have increased their fees. That means that some probably have reduced their fees. But yes, the average clearly is above the line. What this index that's been created indicates is that after parents have paid their fees, after the rebate that they have received, taking into account any income growth in those particular locations, there is now 11 -- childcare is now 11% more affordable today than it was in -- before the 30th of June last year. So what we're not seeing is -- what we see ultimately is a greater level of affordability leading to greater levels of occupancy and a maintenance of revenue for operators because ultimately, the rebate is in that sort of indirect from the viewpoint that it's really how it impacts the individual parents even the mains testing and the fees and the scales around taxation. So we see it as a -- significantly as a positive for the occupancy and therefore a positive for rental growth.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [9]

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And sorry, you mentioned in the presentation as well that a number of operators have left the market. Could you just perhaps put a conversation around what sort of profile those operators have insofar as the quality of the center, the locational characteristics, the service, the offering, the positioning of those and the margin? And how does that relate to your portfolio?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [10]

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Look, the -- it wasn't about operators leaving the market. It was more specifically around we saw 77 centers across Australia close. So we have analyzed -- and the data is not robust with respect to telling you exactly every individual asset that is closed. You actually need to search beyond the data that you're provided with. I know others -- other commentary is around 100 centers that have closed but we've seen first 23 or 24 anomalies. The real indicators were, firstly, all centers less than 50 -- sorry, 50% of them are less than 50 places in size. If you look back to our August '18 results pack, and we've very clearly indicated to the market where we saw the primary economic zone for operators is, and it is 50 or more as opposed to 50 or less. So that's no surprise, and I think that really comes down to those centers can be economic for smaller operators. But once their occupancy falls, there's a very small quantum of profitability in dollar terms as opposed to percentage terms that keeps them alive. So that's not a surprise. The second part is that they are in [Sector 5] or lower locations, which, to some extent -- does that indicate that the supply is causing that? It probably is a little bit of supply as well as potentially also a little bit of a drop in occupancy. I'm surprised. It will be interesting to see how many of the 27 centers that we understand closed the year before. What we're not seeing is that translating into childcare centers available for lease in the marketplace, which may therefore have a corresponding impact on rents, although rents in childcare are driven by the fee level that you can achieve in a particular location as opposed to the comparable rental somewhere else or just a rental somewhere else. So we're not concerned about that. In fact, what we are seeing, when you think about it in terms of demand, is 347 unrelated family daycare centers have closed. The profile of some of the Long Day Care centers that closed where everything from for-profit, not-for-profit, interestingly local government. And I think we highlighted probably 18 months ago that we thought local government would be reconsidering their options around childcare given the efforts they're making in many respects. And the purpose of which they got into it in the first place probably no longer exists.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [11]

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And just one more question on the like-for-like rental growth to December of 2.6%. I think you might have mentioned in the presentation it was partly impacted by development. Is that correct? Did I hear that correctly?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [12]

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No, that's -- the 2.6% is very clearly lease-for-lease, the like-for-like on leases. The development site rent is, in fact, [an input of] 2.6% per annum rental growth.

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Operator [13]

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(Operator Instructions) Your next question comes from the line of Cameron Bell from Canaccord.

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Cameron Bell, Canaccord Genuity Limited, Research Division - Senior Industrials Analyst [14]

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So just a couple of questions from me. The comment around vendor expectations moderating, can you give us an idea of how much they've actually moderated recently?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [15]

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Yes, it's a good one. I think vendor -- we'd probably start out by the context of that answer really is the vendor expectations were unrealistic, Cam, and radically unrealistic in some scenarios where we had people seeking -- and I can understand why they're seeking yields of 5 and below 5 for assets that we thought probably needed to have a 6 in front of them. So what we're finding is it's probably a function of 2 things. There's always that period when market sometimes soften a little bit and vendor expectations need to come back to work. I'm not necessarily sure our markets soften, but I certainly think a little bit of the hysteria that occurred mid-last year in the press around occupancy rates and really focusing on G8's blipping performance at that point in time a little bit unhelpful and exaggerated. And certainly, the occupancy numbers are showing that, that was the case. That's probably has a low (inaudible). But I think also that the auction campaign for the rental level issues created a little bit of hype at the same time, and so you can see why vendors were seeking the yields that they weren't. We're seeing transactions at the moment. What we're not seeing are the change in -- or a contraction in yields or a compression. What we're simply seeing is a lot of vendors now saying, well, [market margin].

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Cameron Bell, Canaccord Genuity Limited, Research Division - Senior Industrials Analyst [16]

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Yes, okay. And then I guess an extension of that question, are you still comfortable with that 30% to 40% target range?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [17]

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Yes, I think we set -- gearing lines actually sit just below that. Travis is probably in a better place to answer that question.

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Travis Scott Butcher, Charter Hall Education Trust - General Manager of Finance - Diversified for Folkestone Investment Management Limited [18]

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Yes, Cam. In terms of if we -- we obviously got to fund the $68.2 million, that's the remaining spend on the development pipeline. That's over the next 2 years. Just for example, if we were to fund that purely 100% debt funding, it's actually gearing in the 34%. So there's still plenty of room in there. And as I've touched on in the presentation, we're likely to supplement that debt review with proceeds from the DRP, which is the current run rate, and that's around $12 million we retain and then also sort of minor asset sales as well as sort of noncore assets. So yes, we're comfortable -- and I think reevaluation increases won't be strong as they have been in the past. But that will still be there, and that will also help around in terms of that gearing level.

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Cameron Bell, Canaccord Genuity Limited, Research Division - Senior Industrials Analyst [19]

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Great. And then on the 20 leases that run out in FY '21 and '22, when would you hope to have those finalized by?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [20]

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Look, that's a discussion that we're having -- sorry, about to have right at the moment, Cam. So we did sort of have a discussion 12 months ago that hasn't gone anywhere, but I'll -- certainly, it's good education process for everybody. So we're very, very comfortable and confident around coming to a good arrangement with our business partners.

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Cameron Bell, Canaccord Genuity Limited, Research Division - Senior Industrials Analyst [21]

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Okay. And then just finally, the comment on that outlook page about federal election may trigger a constructive revision of the CCS activity test, could you explain a bit on what you mean there and why you think that might be likely?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [22]

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Just sort of following on from the press talking about a potential change in government, and in fact, what will occur, I certainly think that if the -- if there was a change to another government that one of their focuses would be the activity test, which I know caused a little bit of apprehension when it was introduced. And that activity test does mean for parents that you either need to be working in a job, volunteering, looking for a job or studying, where previous to -- in the previous regime in childcare, you didn't need to actually achieve any of those levels of status. So all of a sudden, there have been people who have been now excluded from the subsidy regime, and I think that is -- there are commentators out there and a lot of thinking out there that, that can be detrimental, particularly for the children in disadvantaged situations. And therefore, a review of that activity test to actually widen it a little bit, you would expect, is something that would probably more -- would be a sensible review.

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Cameron Bell, Canaccord Genuity Limited, Research Division - Senior Industrials Analyst [23]

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Yes, okay. And how much yield that can be for the operators?

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [24]

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Look, I -- it's interesting. The statistics for December that came out showed that, in fact, the level of government funding for the quarter was less than what they had expected. So what we're seeing is it's probably trying to work out what that spread is, is that you've got more people coming back into the sector or using the sector -- more utility in the sector but with lower amounts of budgeting by the government. Whether they're overbudgeted or not, I don't really know. But certainly, what it's showing is there's capacity.

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Operator [25]

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(Operator Instructions) There are no further questions at this point. And I would like to hand back to your host, Mr. Nick Anagnostou, for the closing remarks. Thank you.

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Nicholas James Anagnostou, Charter Hall Education Trust - Head of Social Infrastructure & Executive Director of Charter Hall Education Trust [26]

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Thank you for your attention today. If you have any queries via our Investor Relations platform, we look forward to answering for you and potentially seeing many of you over the next couple of weeks in Melbourne and Sydney. Thank you.

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Operator [27]

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Thank you very much, sir. Ladies and gentlemen, that does conclude our teleconference for today. Thank you for participating. You may all disconnect. Thank you.