Image: Canva, ARF.
  • Net operating profit of $56 million
  • Portfolio WALE just under 20 years
  • Total assets worth $1.52 billion

Arena REIT (ASX: ARF) has announced a doubling of its statutory net profit in the company’s full-year financial results.

Statutory net profit for Arena REIT was $334 million, up 102% on the prior year, with net operating profit (distributable income) moving up 8.4% on the previous year to $56 million.

Arena’s earnings per security (EPS) was recorded at 16.3 cents, up 7.2%, with distributions per security up 8.1% to 16 cents. Arena’s gearing increased from 19.9% to 20.2% and 100% of contract rent was collected for FY22.

Statutory net profit $334 million Up 102%
Net operating profit $56 million Up 8.4%
EPS 16.3 cents Up 7.2%
DPS 16 cents Up 8.1%
Total assets $1.52 billion Up 32%
Net asset value per security $3.37 Up 32%

Source: Arena REIT.

“The COVID-19 pandemic continued to present challenges for our tenant partners during FY22 and more  recently  a  changing  economic  environment  arising  from  inflationary  pressures,  interest  rate increases, wages pressures and staff shortages have combined to create further uncertainty,” said Arena’s managing director, Rob de Vos.

“We  acknowledge  these  challenges  and  express  our  gratitude  to  our  tenant  partners  for  their continued resilience and ability to deliver essential services to Australian communities and our team for their commitment and performance during FY22.”

Arena maintained 100% occupancy across its portfolio, with an average like for like rent review increase of 4.1%. ARF’s portfolio WALE is 19.8 years, with the portfolio seeing a revaluation uplift of $254 million, equivalent to an increase of 23% on prior year investment property value.

During FY22, Arena also acquired seven operating early learning centre (ELC) properties at an average net initial yield of 5.4% on total cost, and acquire nine new ELC development projects with forecast total cost of $56 million. Six ELC developments completed at an average net initial yield on total cost of 6.4%.

ARF said WALE was maintained at 19.8 years following the acquisition of seven operating ELC properties with an initial WALE of 24.1 years, the completion of six ELC developments that had an initial WALE of 20.8 years, and a series of leases were extended to facilitate installation of solar renewable energy systems.

Arena also divested two early learning centre properties at an average premium of 15% to book value.

As at 30 June 2022, Arena’s portfolio comprised 237 early learning centre properties, 15 early learning centre development sites, and 11 healthcare properties.

Commenting on Arena’s financial position, CFO Gareth Winter said “Arena continues to operatewell within itsbanking covenant requirements. We have expanded our liquidity while maintaining hedging discipline through the cyclewith sustained capacity to pursue investments consistent with strategy.”

Arena provided an FY23 guidance of 16.8 cents per security.

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