RAM Essential Services Property Fund (REP) H2 2025 earnings summary

Executive summary

• Portfolio remains healthy with strong cash flows, high occupancy at 98%, and a well-managed balance sheet, supported by strategic capital management and resilience in essential services real estate.

• Strategic shift underway to transition from a 50/50 healthcare and retail mix to a pure healthcare portfolio, with a focus on healthcare acquisitions and divestment of retail assets.

• Leasing activity robust with 34 deals completed, 3.8% spreads, and WALE extended to 7.1 years, with 97% of income from essential service tenants.

• Occupancy maintained at 98%, with enhanced tenant diversification including Ramsay Health Care.

• Capital recycling program exceeded target, with AUD 120 million in asset sales and redeployment into higher-yield healthcare assets.

Financial highlights

• Portfolio of 26 properties valued at AUD 671 million, with 70% located in Eastern States and 245 tenants.

• Comparable annual growth of 3.2% year-over-year; leasing spreads just under 4%, outpacing inflation.

• Funds From Operations (FFO) for FY25 was AUD 24.5 million or AUD 0.0489 per unit, down from AUD 28.6 million in FY24; distribution of AUD 0.05 per unit.

• Weighted average cap rate stabilized at 6.08%–6.09%; private hospitals and day surgeries at 5.77%.

• NTA at AUD 0.81 per unit as of June 30, 2025, down from AUD 0.88 in FY24.

Outlook and guidance

• FY26 distribution per security guidance of 5.00–5.20 cents, with a forecast yield of 8% and 90% tax deferred.

• Expectation of continued rate reductions and easing market pressures, supporting further capital redeployment and value-add initiatives.

• Payout ratio expected toward the higher end of the 95–100% range for FY26.