Arena REIT (ARF) H1 2025 earnings summary

Executive summary

• Net statutory profit for H1 FY25 was AUD 36.3 million, up 87% year-over-year, driven by revaluation gains, higher net operating profit, and strong net property income growth.

• Net operating profit (distributable income) rose 16% to AUD 35.8 million, with EPS up 5.5% to AUD 0.092 per security and distributions per security up 5% to 9.125 cents.

• Portfolio expanded with 11 operating properties (including eight new ELCs), six ELC developments completed, five ELC development sites, and one health worker accommodation property.

• Institutional placement of AUD 120 million and SPP of AUD 24 million (total $143.9 million) completed to support new investments and strengthen the balance sheet.

• High occupancy maintained at over 99%, with sector-leading WALE of 18 years.

Financial highlights

• Net operating profit increased 16% to AUD 35.8 million; statutory profit at AUD 36.3 million.

• Property income grew to AUD 50.99 million, up from AUD 47.03 million year-over-year.

• Like-for-like average rent increases were 3.2%; 95% of rent reviews in FY25 have a minimum review at CPI or market-based review.

• Distributions paid to date were AUD 0.09125 per security, in line with full-year guidance of AUD 0.1825, representing 4.9% growth.

• Asset revaluations contributed AUD 7 million to profit, offsetting a AUD 6 million asset sale.

Outlook and guidance

• Full-year distribution guidance for FY25 reaffirmed at AUD 0.1825 (18.25 cents) per security, up 4.9% from FY24, assuming no material changes in market or operating conditions.

• Positive outlook underpinned by strong demand for early learning and healthcare services, long leases with embedded income growth, and substantial balance sheet capacity with gearing under 21%.

• Guidance assumptions include a 4.3% average floating rate and 3.25% average CPI per quarter.