childcare centre
The majority of Arena’s portfolio consists of early childhood centres. Image – Canva.
  • Net operating profit increased by 11%
  • Development pipeline remains strong, especially for early learning centres
  • Distribution guidance is up by 8.1% compared to FY21

Arena REIT  (ASX: ARF) has released its half-yearly results for 2022.

The results show $27.5 million in net operating profit – an increase of 11%, with increases in distribution guidance and asset values across the board.

The REIT has $1.35 billion in total assets with a strong weighted average lease expiry of 19.8 years.  Their net asset value per security has also witnessed an increase of 18%, growth the REIT says has been caused by the attractiveness of early learning centres and healthcare property investments.

Additionally, the group says it is powering along with its solar installation program and FY22 sustainability goals.

The company is also continuing to expand its development pipeline, with consists of 19 early learning centres with a forecast total cost of $122 million.

“Arena’s balance sheet gearing and expanded debt facilities fully fund the development pipeline with capacity to deploy capital into further growth opportunities,” said Gareth Winter, Arena’s chief financial officer.

“Early learning and healthcare services are integral to improving community outcomes,” added Rob de Vos, Arena’s managing director.

“This important theme underpins Arena’s portfolio value proposition which provides long term income predictability with the prospect of income growth with inflation protection.”

Rob de Vos, Arena’s managing director

rob de vos
Rob de Vos, Arena REIT managing director. Image – Arena REIT.

Of the 256 assets across their portfolio, 245 are early learning childcare centres, with 11 in the healthcare sector. 34% of assets – by value – are located in Queensland, while early childhood provider Goodstart is their largest tenant, accounting for 27% of income.

Despite Covid disruptions, all of Arena’s properties are in operation with all contracted rent received for the first half of the fiscal year.

“I would like to acknowledge the significant efforts and achievements of our tenant partners under ongoing challenging conditions,” said Mr de Vos.

“I’d also like to express my appreciation to the Arena team for their dedication and hard work and true partnership approach in delivering positive community and investment outcomes.”

The forecast distribution guidance has increased to 16 cents per security, from 15.8. This reflects 8.1% growth compared to FY21.

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