Arena REIT (ARF) H1 2025 earnings summary

Executive summary

• Net operating profit for H1 FY25 rose 16% to $36 million, with statutory net profit up 87% to $36.3 million, driven by property revaluations, rental growth, and acquisitions.

• Portfolio expanded to 289 properties, including 11 operating property acquisitions, six ELC development completions, and a key health worker accommodation in Bendigo.

• Portfolio occupancy remains above 99%, with a sector-leading WALE of 18 years.

• Achieved 100% of Sustainability Linked Loan margin discount for FY2024 targets; solar installed on 93% of the portfolio.

• Distributions per security increased 4.9% to 9.125 cents, reflecting ongoing growth in underlying earnings.

Financial highlights

• Property income increased 13% to $44.2 million; net operating profit reached $35.8 million, up 16% year-over-year.

• Statutory net profit was $36.3 million, up 87% year-over-year.

• EPS rose 5.5% to 9.20 cents; DPS up 4.9% to 9.125 cents.

• NAV per security increased to $3.44, up 0.9% from FY2024.

• Gearing reduced to 20.8%, down from 22.6% at June 2024.

Outlook and guidance

• FY2025 distribution guidance reaffirmed at 18.25 cents per security, up 4.9% year-over-year.

• Guidance assumes no material changes in market or operating conditions.

• ~95% of rent reviews for FY2025–FY2028 are CPI-linked or market reviews, supporting embedded income growth.

• Development pipeline of 19 ELC projects with $93 million capital expenditure outstanding.

• Positive outlook underpinned by strong demand for early learning and healthcare services, long leases, and substantial balance sheet capacity.