RAM Essential Services Property Fund (REP) H1 2025 earnings summary

Executive summary

• Portfolio delivered stable performance with 97% occupancy and a 7-year WALE, underpinned by strong leasing outcomes and a resilient tenant mix focused on essential services and healthcare.

• Ongoing strategic shift toward healthcare assets, with significant divestments of non-core retail and accretive acquisitions in healthcare, supporting long-term growth and portfolio defensiveness.

• Capital recycling program resulted in AUD 119 million of asset sales at a 5.7% yield, with proceeds redeployed into debt reduction, share buybacks, and new healthcare acquisitions.

• The stapled fund comprises retail and medical property portfolios, aiming for stable income and capital growth through defensive, high-quality assets with strong tenant profiles and sector trends.

Financial highlights

• Funds from Operations (FFO) for HY25 was AUD 10.9 million, down from AUD 12.1 million in HY24, reflecting ongoing divestments; distribution per security was 2.51c (HY24: 2.80c).

• Net tangible assets (NTA) per security at AUD 0.81 (HY24: 0.92); statutory net loss of AUD 22.9 million (HY24: 12.3 million loss) due to unrealised fair value losses on investment properties.

• Gearing at 35.4% (HY24: 35.7%), with AUD 252 million in borrowings and AUD 115 million headroom for future opportunities.

• Retail and medical funds reported statutory losses for H1 FY25, mainly due to property revaluations, but maintained high occupancy and stable distributions.

• Comparable NOI growth of 3.1% year-over-year; leasing spreads averaged +3.9% across 17 deals.

Outlook and guidance

• FY25 distribution per security guidance reaffirmed at 5.00–5.20c, with a forecast yield of 8% and 90% tax deferred.

• Management expects continued growth through accretive healthcare acquisitions, value-add developments, and further capital recycling.

• The economic outlook for Australian REITs is improving, with expectations of easing short-term interest rates and stabilising consumer confidence.