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

Executive summary

• Delivered stable half-year results with 97% occupancy and a 7-year WALE, supported by robust leasing and a strategic shift toward healthcare assets, including significant divestments and accretive acquisitions.

• Capital recycling program resulted in $119m of asset sales, redeployed into debt reduction, share buybacks, and new healthcare acquisitions.

• Portfolio shift underway from a 50/50 healthcare-retail mix to a pure healthcare focus, targeting an 80:20 healthcare-led portfolio for lower volatility and long-term returns.

• Recent acquisitions include Cairns Surgical Centre for $23m and over $100m in assets under exclusivity at yields above 7%.

• Share buyback program executed, scheduled to conclude by March 2025 after acquiring 18 million securities.

Financial highlights

• Occupancy maintained at 97%, with income underpinned by major retail and healthcare tenants.

• Funds from operations (FFO) for HY25 was $10.9m, with distribution per security at 2.51c; annualised DPS guidance is 5.0–5.2c for FY25.

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

• Weighted average capitalisation rate at 6.04%, with 83% of assets externally valued in the last 12 months.

• Gearing at 35.4%, with $252m in borrowings and $115m headroom for future opportunities.

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.

• Interest rate environment improving, with dynamic hedging and capital redeployment into high-quality acquisitions.