US Masters Residential Property Fund (URF) H1 2025 earnings summary

Executive summary

• Portfolio appraisal for the half-year ended 30 June 2025 resulted in a 2.84% (US$9.2 million) reduction in value, mainly from the New York Premium segment, reflecting slower sales and market uncertainty.

• 86 properties sold in H1 2025 for US$119 million, with sales momentum continuing into August and year-to-date closings surpassing 2024 levels.

• Sales pipeline stood at US$176 million as of 30 June 2025, supporting a full-year target of US$200–225 million.

• Focus remains on executing the sales program, returning capital to security holders, and maximizing value through prudent capital management.

• Amendment to the Tangible Net Worth Covenant enabled repatriation of over US$51 million to Australia, facilitating distributions and buybacks.

Financial highlights

• Portfolio value decreased by US$9.2 million (2.84%) in H1 2025, with New York Premium down 4.4%, New Jersey Workforce down 1.2%, and New Jersey Premium down 1.1%.

• Net Operating Income on a same-home basis rose 8% to US$4.9 million for the 12 months to 30 June 2025, driven by rental growth on renewals.

• Funds from operations (FFO) loss of A$19.7 million for H1 2025, or adjusted loss of A$4.6 million after excluding one-off expenses and disposal costs.

• General and administrative expenses were A$5.6 million, or A$5.35 million normalized.

• Post-tax profit of $4.8 million for H1 2025, driven by a significant reduction in deferred tax liability following a tax structure change.

Outlook and guidance

• Full-year sales target of US$200–225 million remains achievable, supported by a robust pipeline and recent sales activity.

• FFO expected to remain negative as the portfolio reduces, but focus is on maximizing revenue from held properties and cost management.

• Directors will continue to assess optimal use of proceeds: distributions, buybacks, or further debt repayment.

• Monitoring market conditions and buyer sentiment, especially in New York, due to political uncertainty and cooling demand.