Ladies and gentlemen, on behalf of the Board of Directors, it's my pleasure to welcome you all to the 2022 annual unit holders meeting of Charter Hall Retail REIT. My name is Roger Davis, and I am the Chairman of Charter Hall Retail REIT Board of Directors. It's now 2:00 P.M., and as the necessary quorum is present, I declare this meeting properly constituted and open. I would like to commence today's presentation with an acknowledgement of country. Charter Hall is proud to work with our customers and communities to invest in and create places on lands across Australia and New Zealand. We pay our respects to the traditional owners, their elders past and present, and value their care and custodianship of these lands.
This afternoon, I will provide a brief overview of the fund strategy, some observations on our business and achievements during financial year 2021. The Retail CEO and Executive Director, Ben Ellis, on my left, will then provide an update on the operational and financial performance for the financial year 2022. We'll then move to the more formal business of the meeting and the resolution for your consideration. As there is only one resolution today, and that involves the re-election, Ms. Sue Palmer to the board, I will ask Sue to say a few words at that time, providing some personal background and reasons she believes she should be re-elected. I would now like to introduce my fellow board members, Sue Palmer, Independent Director, who is Chair of the Audit, Risk, and Compliance Committee, of which you will hear more later.
Michael Gorman, at the end of the table there, Independent Director and a member of the Audit and Risk Committee. Ben Ellis, Charter Hall Retail CEO. Mr. David Harrison, Charter Hall Managing Director and Group CEO. Also present today, and I welcome Christine Kelly, our Head of Retail Finance and Deputy Fund Manager of CQR. Mark Bryant and Rebecca Hourigan, our Company Secretaries. Ryan McMahon from our auditor, PricewaterhouseCoopers, who is online and will be available to answer any questions about the audit of the financial statements from unit holders. It's now my pleasure to address this meeting today. CQR's strategy is to be the leading owner of convenience retail property in Australasia.
We achieve this by enhancing long-term portfolio quality through regular curation of the assets we own and the active asset management and acquisition of quality assets in order to drive strong rental growth while maintaining a prudent capital position through a strong and flexible balance sheet. As a result of our strategy, we continue to deliver a high quality, resilient, and growing income stream for investors who will benefit from an increased exposure to CPI-linked rental growth and CapEx-efficient triple net leased long WALE retail convenience assets. Financial year 2022 saw a strong demonstration of the success of this strategy. Earnings increased by 4% to AUD 0.284 for the year, and distributions per unit were up AUD 0.047 to AUD 0.245.
Valuation growth across the portfolio was also strong, with the portfolio increasing in value by 13.1% or AUD 498 million, reflecting the attractive nature of the portfolio and the benefit of active portfolio curation towards higher quality assets generating higher quality income growth. This drove a significant increase in net tangible assets, up 22.4% to AUD 4.91. Despite management's endeavors and the robust health of the portfolio measured across key performance metrics, net property income, occupancy, MAT, leasing spreads, low gearing levels and high interest rate hedges, long portfolio WALE, and strong earnings and distributions growth, we are disappointed with the prevailing discount to book, which we see as a broader reflection of the macro and industry environment and the long-duration character of the sector than any specific negative commentary on CQR's performance.
We continue, however, to look at opportunities to address this discount and remain our focus on managing for performance and growth in unit holder value. Ben will talk in more detail to the financial highlights of the year in his address. The CQR portfolio remains in a strong position to deliver resilient and sustainable income and growth in the future. Central to CQR's strategy is partnering with major convenience retailers to meet their property needs. Our major tenants include market-leading businesses such as Coles, Woolworths, BP, Ampol, Gull, Wesfarmers, and Aldi. Post-balance sheet, we've also been successful in adding a portfolio of 51 Z Energy petrol stations in New Zealand to the CQR portfolio, further increasing our exposure to Ampol as part of this acquisition.
Management continues to actively manage the portfolio to increase the percentage of CQR's earnings and extend WALE with our major tenants, thereby improving the resilience and dependability of income for CQR unit holders. Supermarkets have always been and remain the cornerstone of CQR's convenience retail portfolio. They represent a significant portion of the REIT's income, and with CQR's above-average turnover levels from Coles and Woolworths drive significant footfall to our centers and support the trading potential of our specialty tenants. Five years ago, CQR had three leading convenience retailers, with Woolworths and Wesfarmers representing 98% of the REIT's major income. Along with Aldi, these three tenant customers represented approximately 50% of the REIT portfolio income, and there were no triple net leases within the CQR portfolio.
At the time, the percentage of supermarkets in turnover was a market-leading 53%, which even by 2022 standards, is still higher than our peer set. Through active portfolio curation today, the portfolio and major tenant rental growth profile looks significantly different to where it was five years ago. CQR now has 7 major convenience retailers that collectively make up 56% of portfolio rental income. When adding annual CPI rental growth associated with the long WALE convenience retail portfolio to the average supermarket rental growth, our major tenants will deliver 2.5% rental growth in financial year 2023. In addition, in the last five years, our supermarket sales have grown by 3% per annum, and the percentage of supermarkets in turnover rent has increased to a market-leading 62%, up from 53% five years ago.
The addition of long WALE convenience retail assets to the portfolio now means that 37% of our major tenants' rental income is linked to annual CPI rental reviews, and 33% of our major tenants' leases are CapEx-efficient triple net. Benefiting from the deep tenant customer relationships within the Charter Hall group, we've actively curated the portfolio to increase our exposure to these major convenience retailers, positioning CQR to deliver stronger underlying rental growth from all tenant categories. Charter Hall's ability to access off-market opportunities like BP, Ampol, Gull, and the Z Energy portfolios, and to partner with other Charter Hall funds to diversify our exposure to leading major tenants, is a clear competitive advantage.
All of CQR's acquisitions completed in financial year, including the Woolworths-developed and anchored Butler Central in Perth, the Ampol and Gull petrol station purchases, were secured off-market by Charter Hall and directly from our major tenant customers, demonstrating the value of Charter Hall's management of CQR, providing access to opportunities unavailable to other REITs. The CQR portfolio now stands apart from its peers, given the REIT's broader exposure to a more diversified pool of major convenience retailers with a lower CapEx intensity due to the exposure of triple net leases and superior long-term growth characteristics through security of our high-quality CPI-linked retail stream. The board remains focused on implementing sustainability initiatives across CQR's portfolio and consider ESG, environmental, social, and governance, as key drivers of long-term value for investor and tenant customers.
In terms of environmental actions, management continues to be focused on managing portfolios in a sustainable way that benefits both the communities in which we operate as well as unitholders by continuing to make positive progress on our commitment to net zero carbon emissions by 2025. CQR now has 21 megawatts of solar installations commissioned, including 3 megawatts installed in partnership with Coles and Woolworths, and also has commenced a battery rollout program with 7 megawatts installed, maximizing CQR's on-site utilization. CQR has also participated in Charter Hall's group-wide 7-year power purchase agreement with global renewable energy giant Engie to integrate grid-supplied renewables with on-site solar. Managing our societal impact in a positive way, especially given our strong community and convenience focus and strategy, is fundamental to our strategy.
In this regard, CQR management continues to undertake a range of localized community initiatives, and in particular, supporting the Murwillumbah community following the devastating floods by providing weekly lunches for almost 700 primary school students across six primary schools over a period of 12 weeks. We're proud to be part of Charter Hall's initiatives that support social value outcomes that build resilient, healthy, and happy communities, engaged and motivated staff, and highly satisfied customers, as measured by our regular market-leading NPS net promoter scores. Finally, good governance remains an important element of sustainability and is something your board of directors are keenly focused on. We're structured so that we have a majority of independent directors on the board whose role is to ensure management adhere to the agreed strategy of CQR and make decisions in the interests of all unitholders.
In so doing, the independent directors maintain oversight of all the services provided by the Charter Hall group to CQR, ensuring a level of service that is consistent and appropriate for the fees charged. Within this capacity, we regularly engage external consultants to benchmark these fees to ensure they are appropriate and consistent with market standards, and that CQR unitholders are receiving value for money. In so doing, the independent directors also approve all major transactions, asset purchases, related party fees, and CapEx. We also appoint the external auditors to audit the accounts and independently approve CQR's financial statements.
In fulfilling these duties, I would like to again assure unitholders that your directors are ever mindful of their responsibilities to act in the interests of all unitholders. Finally, I'd like to acknowledge that the achievements I've outlined today have all been achieved as a result of the management of the REIT by the Charter Hall group. Investors in CQR receive the benefit of the quality and experience of Charter Hall's capabilities, including opportunity identification, acquisitions, asset management, property management, development, finance, legal, and treasury services. The board remains committed to aligning with the best practice frameworks to support transparency and disclosure. Finally, I'd like to thank our unitholders for your support and continued investment in CQR. I will now hand over to Ben Ellis, Retail CEO, Charter Hall, to review the year's financial and operating performance and to discuss the outlook for 2023. Ben.
Thank you, Roger. Good afternoon, ladies and gentlemen. CQR has continued to deliver a resilient and growing income stream for our investors. The operating and financial performance of CQR remains strong throughout FY 2022. We delivered operating earnings of AUD 164.4 million, or AUD 0.284 per unit, and distributions of AUD 142.1 million, or AUD 0.245 per unit for the twelve months to 30 June 2022, reflecting growth of 4% and 4.7% respectively on the prior corresponding period. Our operating earnings payout ratio of 86.3% accounts for adjustment operating earnings for COVID-19 support and capital expenditure during the period. Absent of COVID-19 support, the payout ratio would have been 91%.
During the year, we provided our tenants with AUD 8.1 million of COVID-19 rental support, consisting of AUD 5.4 million rent-free incentives and AUD 2.7 million of deferred rental. This was a relatively modest amount of support provided given the duration of the lockdowns and speaks to the non-discretionary nature of most of CQR's tenants. Pleasingly, we have already collected over 70% of all deferred rent provided since FY 2020, as the resilience of our centers has seen tenant trading rebound strongly and tenants look to pay this back quickly. For the full year, we completed 480 leasing transactions, and we again achieved positive leasing spreads of 2.3%, up from 1.6% at June 2021.
The strong leasing activity translated into portfolio occupancy of 98.5%, up from 98.3% in June 2021. As Roger has already mentioned, valuation growth across the portfolio was strong, with the portfolio increasing in value by 13.1%, or AUD 498 million, reflecting the attractive nature of the portfolio and the benefit of active portfolio curation towards higher quality assets, generating higher quality income growth. This drove significant lift in net tangible assets, up 22.4% to AUD 4.91. Looking forward, we expect to see continued strong demand for convenience and long WALE retail assets as investors continue to see the value associated with their resilient income streams and inflation-linked rental growth as characterized in the CQR portfolio.
While some COVID-19 disruptions continued in FY 2022, the resilience of CQR's assets remain evident, and we continue to benefit from our strategy of being the leading owner of convenience retail properties. During the period, our shopping center occupancy improved from 98.3% to 98.5%. In addition, portfolio MAT growth remained positive at 0.4%, despite the impact of government-mandated store closures. This is a strong result when considering that 67% of the REIT's specialty and DDS sales are generated from Victoria and New South Wales, which were once again heavily impacted by mandated store closures between July and October of 2021. We are pleased to see retail sales continuing to rebound in Q4 FY 2022, with total portfolio sales growth of 13.8% above pre-COVID levels.
CQR's WALE remains stable at 7.4 years from the off-market acquisitions of Ampol, specialty leasing activity, and majors lease extensions. Strong valuation growth, coupled with off-market acquisitions, has seen the portfolio value increase 18% to AUD 4.3 billion. Importantly, the portfolio now has 19% of total income growth directly linked to CPI, with a further 36% of total income growth indirectly linked to inflation through turnover rent mechanisms. We have increased the diversity of our major tenant customers by adding Ampol and Gull to our portfolio and increasing our total portfolio income from major tenant customers to 56%, strengthening the resilience and certainty of CQR's income stream. This is a direct result of active portfolio curation.
As Roger has highlighted, major tenant rental growth is expected to grow at 2.5% in FY' 23, up from an average of 1.2% over the past five years, providing significant earnings benefit for CQR unit holders. Across the major supermarket providers, we remain well-balanced between Coles and Woolworths and continue to partner with Aldi to expand their footprint within the portfolio. Wesfarmers now represents 7.8% of portfolio income with their successful acquisition of API. Our exposure to any one specialty retailer remains limited, and we retain a clear bias towards everyday needs and convenience-based retail, food, and services to provide a predictable income stream to unit holders. Our long WALE convenience retail assets now represent 23% of CQR's portfolio by value and 18% of total portfolio income.
They are predominantly all triple net, meaning they are CapEx efficient and provide a true AFFO yield for CQR unit holders. These long WALE convenience retail assets complement CQR's existing convenience-based portfolio and provide valuable diversification benefits, enhanced WALE, and strong major tenant income growth profile. During FY' 22, supermarkets delivered MAT growth of 3.2%, and the number of supermarkets in turnover remains high at 62%, with a further 18% within 10% of their turnover rent threshold. In an ongoing and elevated inflationary environment, turnover rent and CQR's high percentage of stores paying more than 10% of turnover thresholds provides valuable earnings growth exposure to inflation. This is unique to CQR and not as readily available in less mature portfolios. We continue to work closely with our anchor tenants, and during the year, we completed nine new supermarket leases and term extensions.
Charter Hall's tenant customer relationship focus has also helped Coles and Woolworths to deliver click and collect and direct-to-boot facilities across their portfolio. We now have 95% coverage for these major tenant customers, and this ensures we capture online sales as part of our partnership with Coles and Woolworths. Charter Hall's focus on active asset enhancement ensures we proactively invest in our centers and maintain their position as the dominant convenience centers within their respective catchments. We do this by investing alongside our major tenant customers and aligning our capital works with their store refurbishments that in turn help secure lease extensions and once again, drive center MAT. Utilizing Charter Hall's strong tenant customer relationships, we recently replaced 8 Target stores with 10 high-quality tenants resulting in a 17% uplift in rental.
Our redevelopment of Rosebud Plaza in Victoria is now well underway to deliver a new Woolworths and Dan Murphy's as well as an improved shopping experience for the community. During the year, we completed pad site food developments with KFC at Landsdale Square and GYG at Camberwell Plaza in Victoria. We also proactively unlock additional development opportunities on surplus land or where site coverage is low and adjacent usages can generate additional income. We've also accessed the in-house childcare and early learning capabilities of the Charter Hall social infrastructure team to add our third childcare development to the portfolio, further enhancing the amenity of our assets. Again, this demonstrates the value of Charter Hall's management and its multi-sector capabilities, and our capital works program continues to future-proof our assets through sustainability and asset management initiatives that generate real benefits for our tenant customers, communities, and CQR unit holders.
Annually, we continue to engage Monash University to survey our center-based tenant customers regarding their satisfaction levels within the CQR portfolio and in their dealings with the Charter Hall team. For our annual CentreSat survey, we again achieved a market-leading 95% participation rate from our tenant customers. Our tenant customers rate us first in likely to recommend for the second consecutive year, and we achieved a high positive overall CentreSat score. Additionally, we maintained high satisfaction on all key metrics, and once again, our tenant customers told us that it's our people and the way we communicate that are our greatest strengths. Throughout the last 12 months, it's the Charter Hall team and their commitment to maintaining strong tenant customer partnerships that has been critical in the ongoing delivery of CQR's strategy. I'd like to acknowledge and thank our teams for their dedicated efforts.
CQR's strategy remains consistent and is focused on being a leading owner of convenience retail property to deliver a resilient and growing income stream for our investors. As I've outlined today, we continue to enhance the portfolio quality through curation and active asset management, and this is central to how we deliver growth. Our expectation is that strong MAT growth, positive leasing spreads, and high occupancy levels will continue. We also expect our portfolio to benefit from direct and indirect inflation-linked rental growth and the CapEx-efficient triple net lease structures, which make up 28% of our portfolio.
As a result of CQR's strong operating metrics, and barring any further unforeseen events, I'm pleased to reaffirm earnings guidance for FY' 23 of no less than AUD 0.287 per unit, representing growth of 1%, and distributions per unit of no less than AUD 0.258 per unit, representing 5.3% growth. Thank you to our unit holders for your ongoing support, and I'll hand back to Roger.
Thank you, Ben. I'll now pause to ask if there are any questions from unit holders here today. There have been no questions submitted before the meeting or none that I'm aware of. I'll now proceed to the formal business of the meeting. There's only one resolution for today's meeting. The resolution to be put to the meeting today will be decided on a poll. I now table the notice of meeting dated the tenth of October, two thousand and twenty-two, which contains the resolution for consideration today. Copies of the notice of meeting and the annual report would have been made available to you by post, email, or available to view on the webpage. Copies are also available from the registration desk. I'll take the notice of meeting as read and move to resolution one in the notice of meeting: the re-election of independent director, Mrs. Sue Palmer.
Before I open the poll, I'd like to ask Sue to say a few words detailing her background and experience for the benefit of unit holders. Sue.
Thank you, Roger. I've been on the board of Charter Hall Retail now for seven years and chaired the Audit and Risk Committee. Over that time, I've seen the company grow and strategy develop to meet the changing market conditions. I complement the board through bringing my experience as a chartered accountant and CFO, together with experience in project development. My professional experience has encompassed major CFO roles in construction, mining, and the energy sectors. I'm now a professional company director and have held board positions and chaired audit committees in the agriculture, mining, logistics, and construction sectors, as well as here. I look forward to continuing to work as part of the board to increase value for our shareholders.
Thank you, Sue. Now, as explained in the notice of meeting, only the directors or shareholders of Charter Hall Retail Management may appoint a director. Accordingly, it is noted that today's resolution is advisory only and non-binding. Notwithstanding this, directors will, of course, give due consideration to the results of the resolution. We wouldn't be having the resolution if we didn't believe how important it is to hear the views of shareholders. I now declare the poll open and ask all unit holders to cast their votes for or against the resolution by marking the box on their voting card for the resolution. This resolution is an ordinary resolution and, as you can see, is displayed on the screen. I'll now also display the respective proxy votes received on the screen in favor or against the resolution.
Can you please now mark your yellow voting card and hand your forms to the Link representative, who will take them to collate. While the final results of the resolution won't be known until after the conclusion of the meeting, it's clear from the proxies that Ms. Sue Palmer will be reelected. The results of the poll will be made available to the ASX and put up on your website later. Thank you very much. Any other votes have to go in?
Yours, yeah.
Holding back. Trying to get impact. There's a couple here. Do you wanna take those, yeah? I'll look.
Sure.
Oh, thank you. Thank you. Is that all right? Can you read that there as well? Thank you. As there's no other business to be considered, I now declare the formal business of the meeting closed. Thank you for your attendance today and your ongoing support of CQR, and please join us outside for some light refreshments. Look forward to chatting to you all, and see you again next year.