Arena REIT (ARF) H2 2024 earnings summary

Executive summary

• Net operating profit rose 5% to $62.4 million, while statutory net profit fell 22.5% to $57.5 million due to lower revaluation gains.

• Earnings per security increased 3.2% to 17.65 cents; distributions per security rose 3.6% to 17.4 cents.

• Portfolio occupancy remained high at 99.7% with a sector-leading WALE of 18.5 years.

• Solar energy installed on 90% of properties; 42% reduction in financed emissions since 2021.

• Total assets grew 3% to $1.62 billion, primarily from acquisition and development capital expenditure.

Financial highlights

• Property income grew 8% year-over-year to $80.2 million; total operating income up 8% to $80.9 million.

• Net Asset Value per security was $3.41, down 0.3% from June 2023.

• Distribution per security for FY24 was 17.4 cents, up 3.6% year-over-year.

• Investment property value grew 4% due to $63 million in developments and acquisitions.

• Gearing reduced to 19.9% post-institutional placement, providing capacity for growth.

Outlook and guidance

• FY2025 distribution per security guidance reaffirmed at 18.25 cents, up 4.9% from FY2024.

• Guidance based on forward BBSY curve (4.3% avg. floating rate) and CPI assumption of 3.25%.

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

• No material asset sales or capital deployment beyond announced pipeline assumed.

• Positive outlook supported by strong demand for childcare and healthcare services.