On behalf of the Board of Directors, it's my pleasure to welcome you all to the 2024 Annual Unit Holders Meeting of Charter Hall Retail REIT. My name is Roger Davis, and I am the Chair of the 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'd like to commence today's presentation with an acknowledgment of country. Charter Hall acknowledges the traditional custodians of the lands on which we work and gather. We pay our respects to elders past and present, and recognize their continued care and contribution to country.
I would now like to introduce my fellow Board of Directors: Sue Palmer, Independent Director, who is Chair of the Audit Risk and Compliance Committee. Michael Gorman, Independent Director and a member of the Risk Committee. Ben Ellis, Charter Hall Retail CEO and Fund Manager. David Harrison, who we're still waiting for, will be here in a minute, Charter Hall Managing Director and Group CEO. Also present today, and I welcome Joanne Donovan, our Head of Retail Finance. Mark Bryant and Rebekah Hourigan, our Company Secretaries. Diane Winnard from our Auditor, PricewaterhouseCoopers.
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Is this me? Is that me? Sorry, technology. From PricewaterhouseCoopers, we'll be available to answer any questions about their audit of the financial statements from unit holders. CQR's strategy is to be the leading owner of convenience retail property. This year, our portfolio of convenience retail assets has continued to demonstrate its resilience. Despite the background of a higher-for-longer interest rate environment and an uncertain rate outlook, consumer spending in convenience retail has remained incredibly resilient, and the CQR portfolio has enjoyed some of the strongest operating statistics in its history, with occupancy, leasing spreads, supermarkets in turnover, and footfall across the portfolio all performing strongly. Our portfolio of net lease and shopping centre convenience retail assets continues to deliver a highly defensive and resilient income stream.
In financial year 2024, our like-for-like net property income grew 3.6%, with shopping centre like-for-like net property income growth of 3.2% and net lease retail like-for-like growth of 5.5%. Our strong income growth is a result of a strategic focus on increasing our exposure to CPI-linked leases, with 60% of portfolio income either directly or indirectly linked to inflation. This has been a key driver of our income resilience in the current high inflation environment. As a result of higher interest costs offsetting the growth in NPI, our net operating incomes decreased 4.7% to AUD 0.274 per unit, and we paid a distribution per unit of AUD 0.247. This equated to a payout ratio of 90.3%. Our gearing at 30 June remained modest at 26.7%, giving us capacity to selectively acquire and undertake growth initiatives.
During financial year 2024, our independently valued portfolio value decreased AUD 236 million to AUD 4.05 billion as a result of AUD 315 million of asset sales offset by AUD 119 million of selective acquisitions and net devaluations of AUD 40 million. The devaluations combined with derivative movements led to a 4.7% decline in net tangible assets per security. While disappointing, we are comforted that cap rate movements were stabilizing in the second half of the financial year, and we have continued to sell assets at book values, suggesting that values should improve from here. Ben will discuss the financial highlights in more detail in his address. Active portfolio curation has been a major focus for CQR this year, divesting of five non-core regionally located assets and recycling AUD 315 million into selective accretive acquisitions and reducing debt.
These sales, with the result of unsolicited off-market offers and assets, were sold in line with prevailing book values, demonstrating the attractive nature of CQR's portfolio and the broad investment appeal of the convenience retail asset class. This year, we were also pleased to announce the purchase of a 20% interest in Eastgate Bondi Junction Shopping Centre for AUD 25 million on a 6.1% initial yield in partnership with our wholesale capital partner in RP6. shopping centre is one of only three subregional shopping centres in Sydney's eastern suburbs. It's 5 km southeast of the Sydney CBD, opposite Westfield Bondi Junction, and within 150 m of the Bondi Junction train and bus station. The center is anchored by a full-time Coles, Kmart, and Aldi.
Alongside our fund partners in Long WALE Investment Partnership No. 2, we acquired the Rye Hotel in Victoria and Endeavour Group-leased pub, further increasing our exposure to Australia's leading retail liquor and hospitality group. This asset was acquired at an attractive yield with a 15-year triple net lease and annual uncapped CPI rent reviews. We also acquired a strategic 7.5% interest in the AUD 700 million market-capitalized Hotel Property Investments, HPI, for AUD 49 million. As you would have seen, subsequent to year-end, we have made a joint takeover approach with Hostplus, our partner in the Long WALE Investment Partnership No. 2 , to acquire the remaining securities and HPI, of which we now jointly own 15%. We regard our offer as attractive relative to HPI's pre-bid security price.
HPI owns a portfolio of 57 Australian convenience hotel properties, predominantly located on the Eastern Seaboard and leased to the Queensland Venue Company and Australian Venue Company. If our bid is successful, we see this as a highly complementary addition to the CQR portfolio. Importantly, we remain disciplined. We've already declared our bid final, and if we are not successful, we continue to see other good opportunities in shopping centres and net lease retail to continue on our own ongoing portfolio curation, driving earnings growth for investors as a result. Additionally, we continue to look for opportunities to unlock further value within our existing portfolio.
During the year, we completed the Dan Murphy's pad site development at Carnes Hill in New South Wales and a nearing completion of a new Nido childcare facility at Swan View in Western Australia, and of course, the Aquatic Achievers Swim School at Arana Hills in Queensland. Moving forward, we will continue to actively manage our portfolio and unlock the low-side coverage of our assets to create further value and grow income with another 10 pad sites now actively engaged in seeking development approvals similar to those obtained at Carnes Hill and Swan View. Turning now to our ESG highlights, CQR continues to deliver on its sustainability commitments and remains on track to achieve net zero carbon emissions at Scope 1 and Scope 2 in 2025 with 100% of energy from renewable sources.
Our power purchase agreement with ENGIE commenced earlier this year, and we now have 17.5 MW of solar installed on our rooftops with 9 MWh of installed battery capacity and feasibility studies in progress for an additional five sites. Pleasingly, our performance has been recognized, with CQR achieving a ranking of first in Australia and New Zealand for listed retail entities in the 2023 GRESB report. Tenant customer engagement is equally important in driving center performance, and for the fourth year in a row, the group has received the number one net promoter score from the CentreSat's customer satisfaction survey conducted by Monash University, with a Net Promoter Score of + 32. CQR and Charter Hall team also recognize the important role our centers play in supporting the communities in which we operate.
Annually, we deliver a number of national and local initiatives within our convenience-based shopping centres, and we're deeply committed to our partnerships and our responsibility to create shared social value in our communities and across the supply chain. Finally, good governance remains an important element of sustainability, and it's something your Board of Directors are keenly focused on. We are 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 unit holders. 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 those fees to ensure that they are appropriate and consistent with market standards and that CQR unit holders are receiving value for money. In so doing, the independent directors also approve all major transactions, asset purchases, related party fees, and capital expenditure. 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 unit holders that your directors are ever mindful of their responsibilities to act in the best interests of all unit holders. I would also like to acknowledge that the achievements I have 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 best practice frameworks to support transparency and disclosure. Finally, I'd like to thank our unit holders for your support and continued investment in CQR. I will now hand over to Ben Ellis, Charter Hall Retail CEO, to review the year's financial and operating performance and to discuss the outlook for financial year 2025. Ben?
Thank you, Roger. CQR continues to deliver a resilient and growing income stream for our investors. For FY 2024, operating earnings per security was AUD 0.274, in line with our full-year guidance. Underlying same property NPI growth was 3.6%, up from 3.3% at the same time last year. This growth is driven by a unique blend of inflation-linked rental growth from our convenience net lease retail assets, turnover rent from our strong-performing supermarkets, and complemented by fixed rental increases from our specialty tenants. Underpinned by our ongoing focus on the resilient nature of non-discretionary retail, MAT growth remains strong at 3.7%. For the year, we completed 313 leasing transactions, once again achieving positive leasing spreads of 2.7%. Pleasingly, this resulted in our convenience shopping centre portfolio occupancy increasing to a portfolio record high of 98.8%, up from 98.6% at June.
When combined with our net lease retail assets, our total portfolio occupancy is above 99%. During the period, we also took advantage of significant off-market unsolicited interest in our assets and sold five non-core shopping centres. This resulted in balance sheet gearing of 26.7%. This balance sheet capacity provided CQR with the opportunity to invest alongside one of our existing wholesale capital partners in Mercer to Eastgate Shopping Centre in Bondi Junction, an outstanding addition to the CQR portfolio. This acquisition demonstrates CQR's continued commitment to asset recycling into high-quality metropolitan centers with strong investment returns and our wholesale equity partners' ongoing commitment to invest alongside CQR in acquiring premium investment-grade assets. Eastgate Shopping Centre was secured by the Charter Hall transaction team, once again demonstrating the value of Charter Hall's management of CQR. Importantly, as Roger highlighted, we will remain disciplined in any transactions we undertake.
Looking forward, we will continue to curate CQR's portfolio to deliver ongoing and resilient income growth and valuation growth for our investors and are well positioned to take advantage of attractive acquisition opportunities that may arise. Looking at the four-year valuation cycle, given this, it's interesting to look at the impact of Cap Rate expansion on CQR's portfolio and contrast it with valuation growth. Strong and high-quality income growth remains a major focus for CQR. This has been demonstrated by our active portfolio curation to high-quality assets, our market-leading number of supermarkets paying turnover rental, and our increasing exposure to CapEx-efficient net lease convenience retail benefiting from inflation-linked rental growth. Following two years of cap rate expansion, CQR's convenience shopping centre cap rates are on a like-for-like basis, sitting where they were in June 2020, four years ago. It's a similar story for our net lease convenience retail assets.
Notwithstanding this, our like-for-like asset values are on average 16.6% higher today than they were four years ago. This does not happen without the strong and resilient income growth that has been generated by the CQR portfolio over this period. The blend of higher-quality, predominantly metropolitan shopping centre assets and our net lease convenience retail portfolio will continue to drive resilient and increasingly CapEx-efficient income growth, differentiating us from our peers. During the year, our retail shopping centre portfolio occupancy increased to an all-time high of 98.8%. As noted earlier, CQR's portfolio MAT growth remains strong at 3.7%. This growth demonstrates the resilience of the non-discretionary nature of our portfolio and the strength of the REIT strategy, including our ongoing commitment to enhancing portfolio quality through curation of the assets that we own. Portfolio WALE remains stable at 7.2 years following continued strong leasing renewal activity.
Importantly, the CQR portfolio benefits from having 60% of total income growth directly or indirectly linked to inflation, with 27% of income growth linked to CPI and a further 33% of total income growth indirectly linked to inflation through turnover rent mechanisms of our supermarkets. CQR's total portfolio income from major tenant customers is now 57%. Across the major supermarket providers, we remain well-balanced between Coles and Woolworths, and we continue to partner with Aldi. Importantly, when we look at our exposure to any one specialty retailer, it remains limited, with Specsavers, our largest specialty tenant, at 1% of total portfolio income. We retain a clear bias towards everyday needs and convenience-based retail food and services. Our convenience net lease retail assets now represent 28% of CQR's total portfolio by value and 22% of total portfolio income.
These assets are all triple net lease, meaning they are free from any capital expenditure and provide true cash yield for CQR investors. Their rent review mechanisms are CPI-linked, driving meaningful income growth to the portfolio, with the convenience net lease retail major tenants delivering 4.4% like-for-like rental growth over the last year. These convenience net lease retail assets continue to complement CQR's existing convenience-based shopping centre portfolio and provide valuable diversification benefits, enhanced tenant coverage and quality, and security of income with a strong major tenant income growth profile. As previously stated, this major tenant income growth profile is unique to CQR and not as readily available in less mature or lower-quality retail portfolios. If the HPI portfolio acquisition is successful, our exposure to net lease retail assets will increase to approximately 39% of total portfolio value and further improve CQR's long-term portfolio income growth prospects.
As we look ahead to FY 2025, the strength of the underlying portfolio will continue to deliver growth in portfolio income, offset by the impact of higher interest rates over FY 2025. However, having restructured our hedge book, we now see the REIT as well-positioned for future growth. We will continue to actively curate our portfolio to deliver long-term growth, with supermarket sales expected to remain strong and our net lease convenience retail portfolios continuing to benefit from embedded CPI lease structures and strong cash flows. Our strategy remains focused on being the leading owner of convenience retail property to provide income resilience and growth through a continuation of our portfolio curation strategy. I'd like to extend our thanks to our people who manage our portfolio on a day-to-day basis. We continue to be proud of how they partner and support their tenant customers, our communities, and each other.
Finally, on behalf of the board of management and the team, we'd like to thank unit holders for their ongoing support of CQR. I'll now hand back to Roger to conduct the formal business of the meeting.
Thank you, Ben.
I'll now pause to ask if there are any questions from unit holders here today. There have been no questions. I'd now like to address questions submitted before the meeting. Ben, are there any questions we've received before?
No, I'm not.
Clean bill of health, ladies and gentlemen. I will now proceed to the formal business of the meeting. To begin, I table the notice of meeting dated the 4th of October, 2024, which contains the resolution up for consideration today. Copies of the notice of meeting and annual report would have been made available to you by post, email, or available to view on the web page. Copies are also available from the registration desk. I'll take the notice of meeting as read. The only item for consideration today is the re-election of myself as Director. As I am the only Director standing for re-election, I will now hand over the running of this item to Ms. Sue Palmer.
Thank you, Roger. As Roger explained, the only item for consideration today is the re-election of Independent Director Roger Davis, which will be decided by poll. Before I open the poll, I would like to ask Roger to say a few words detailing his background and experience for the benefit of security holders. As explained in the notice of meeting, only the shareholder of Charter Hall Retail Management Limited, being the Charter Hall Group, may appoint a director. Accordingly, it is noted that today's resolution is advisory only and non-binding. Notwithstanding this, the directors will, of course, give due consideration to the results of the resolution. Roger?
I'm delighted to stand before you today as a candidate for election to the board of directors of Charter Hall Retail and ask you all to view my candidacy positively. This is the third time I've had the honor of standing before the unit holders, and it behooves me to say I'm both delighted and excited about the prospects of serving you all as a director, especially as I look back over the last six years and see what we have achieved together. For those of you who are not familiar with my credentials, and as per the notice of meeting, prior to my joining the board, I worked for Citicorp as a managing director in Australia, Japan, and the United States before returning to Australia in 1999 when I joined ANZ as a group managing director.
Post my executive career, I've had the privilege of sitting on the boards of several major Australian companies, including Aristocrat, Bank of Queensland, Argo, Trust Company, and of course, Charter Hall Office, where I served for many years as a chairman. Today, I'm a CPA. I'm engaged as a senior advisor at Rothschild & Co, the global investment bank, and I'm looking forward to using all those skills to bring value to unit holders. Given my financial experience and broad board and executive background, I believe I bring a unique set of competencies to the company as a director, which readily complement the credentials of my fellow directors.
In particular, I believe that my broad board experience gives me invaluable insights into contemporary corporate governance standards and the increased focus it brings on the choice of strategy of being fit for purpose in what we do, of being disciplined in the search for growth, of the importance of good risk management, and the assurance that appropriate talent is in place to execute the agreed portfolio strategy. Secondly, I believe that the risk management skills that I learned as a banker, especially knowledge of financial markets, credit and operating and regulatory risk management that truly differentiate and are arguably invaluable in today's volatile investment markets, are of great benefit to the REIT. Whilst I'm passionate about real estate and successful shareholder engagement, it's the discipline of good risk processes that define the boundaries and the speed with which you deliver profitable and sustained growth in shareholder value.
I'm excited about the opportunity to continue to be actively engaged as a director of CQR, and I'm honored if you would endorse me for a further term as one of their non-executive directors. Thank you.
Thank you, Roger. 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. A representative of the registry will collect your voting cards. This resolution is an ordinary resolution, and as you can see, it is displayed on the screen. I will now display the respective proxy votes received on the screen. These are now displayed. Again, if you haven't done so already, I invite you to mark your voting card and hand it to the representative from our registry moving around the room. While the final results of the resolution won't be known until after the conclusion of the meeting, it is clear from the proxies that Mr. Roger Davis will be re-elected.
The results of the poll will be made available to the ASX and put up on our website later today. I will now hand over the meeting to Roger Davis.
Thank you, sir, and thank you, unit holders. I appreciate it. As there is no other business to be considered, I now declare the formal business of the meeting closed. I do hope some of you will stay around so we can have a chat to you if you'd like after the meeting, and again, thank you for your attendance here today. Thank you.