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

Executive summary

• Portfolio remains healthy with strong cash flows, resilient occupancy at 98%, and a well-managed balance sheet, supporting sustainable returns in essential services real estate.

• Strategic shift underway to transition from a 50/50 healthcare and retail mix to a pure healthcare portfolio, with recent acquisitions such as Cairns Surgical Centre and divestment of retail assets.

• Leasing activity robust with 34 deals completed, 3.8% spreads, and WALE extended to 7.1 years, a 9.2% improvement.

• Enhanced tenant diversification, including Ramsay Health Care, with 97% of income from essential service tenants.

• Achieved FY25 guidance and appointed Steven Pritchard as an independent director.

Financial highlights

• Portfolio of 26 properties valued at approximately AUD 671.5 million, with 70% located in Eastern States and 245 tenants.

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

• Funds From Operations (FFO) at AUD 24.5 million or AUD 0.0489 per unit; distribution of AUD 0.05 per unit, with a payout ratio of 102% and an 8% yield.

• Weighted average cap rate stabilized at 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, targeting an 8%+ yield, with most income 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, with a continued focus on healthcare sector growth.