Arena REIT Limited (ASX:ARF) Reports $7 Million Portfolio Revaluation Increase
Portfolio Valuation Increase
Arena REIT’s portfolio valuation program anticipates a net revaluation increase of approximately $7 million for the six months ending 31 December 2024. This reflects a 0.4% rise from the previous period and has no significant impact on Net Asset Value (NAV) per security. The independent valuation covered 57 Early Learning Centre (ELC) assets and two healthcare properties, while other assets will be assessed by directors.
Healthcare Sector Performance
Arena REIT’s community-based healthcare and specialist disability accommodation portfolios are performing in line with expectations. The growing demand for Australian healthcare services bolstered by favourable macroeconomic trends encourages Arena to explore new healthcare investment opportunities.
Acquisition of Bendigo Health Property
Arena REIT has agreed to acquire a key worker accommodation property in Bendigo, Victoria, for approximately $35 million. The property, fully leased to Bendigo Health, had a triple-net lease established for 30 years and consists of 120 apartments. The agreement reflects a passing yield of 6.2% with 19 years remaining on the lease. Managing Director Rob de Vos expressed satisfaction with the acquisition, highlighting its significance for the community’s healthcare infrastructure.
Early Learning Centre Updates
The Australian childcare sector remains strong, with increased demand driven by rising female workforce participation. Recently announced federal funding will assist early childcare educational services in supporting wage increases while maintaining affordable service fees. Arena’s ELC partners have indicated a growth in average daily fees and improved rent-to-revenue ratios.
Development Pipeline and Financial Guidance
Arena has expanded its development pipeline to 19 ELC projects, anticipated to cost approximately $130 million. The average net initial yield for these developments is projected at 6.1%. Rent reviews during HY2025 led to an average like-for-like increase of 3.2%. The company reaffirmed its full-year 2025 distribution guidance of 18.25 cents per security, representing a 4.9% rise over FY2024.
Upcoming Financial Reporting
Further details regarding portfolio performance and financial results will be disclosed in the upcoming HY2025 report, scheduled for release on 12 February 2025.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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