Mortgage REIT Raises $8.9M, Lifts FY25 Distribution Guidance by 33%

Strong Financial Performance and Earnings Upgrade

360 Capital Mortgage REIT (ASX: TCF) has reported a compelling set of financial results for the half year ended 31 December 2024, underscoring its position as a leading mortgage REIT on the ASX. The Trust posted net operating earnings of $1.3 million, marking a 32.8% increase over the prior corresponding period. Earnings per unit climbed 30.3% to 31.8 cents, while distributions per unit surged 43.3% to 30.1 cents.

Reflecting this momentum, the Trust upgraded its full-year 2025 earnings and distribution guidance to 60.0 cents per unit, a 33.3% increase on FY24. This translates to a forecast distribution yield of 10.2% per annum based on the closing unit price as of December 31, 2024. The Trust has now delivered a remarkable 118% increase in distributions since 360 Capital assumed management in 2020.

Capital Raising and Market Capitalisation Growth

In December 2024, 360 Capital Mortgage REIT successfully completed a Placement and Conditional Placement, raising $8.9 million at the net asset value (NAV) price of $5.94 per unit. This capital raise increased the Trust’s market capitalization by 36.1% to $33.4 million. Notably, the Manager absorbed certain capital raising costs, ensuring no dilution to the NAV per unit.

Unitholders also approved a 10-year management agreement and an off-market liquidity mechanism at the same meeting, initiatives that have effectively closed the trading price discount to NAV. The Trust now trades within 1% of its NAV, a significant improvement in market perception and investor confidence.

Loan Portfolio and Investment Strategy

The Trust’s loan portfolio remains tightly managed and secured, comprising five loans backed by 55 individual mortgages. Senior first mortgage loans represent 95.9% of the portfolio, with a weighted average loan-to-value ratio (LVR) of 68.9% and an average interest rate of 11.6%. The average loan maturity is eight months, reflecting a focus on short-term, high-yield lending.

360 Capital’s Manager brings an eight-year track record in commercial real estate debt, having lent $400 million across 26 transactions without any capital loss or impairment. The portfolio is concentrated in NSW, with loans secured by completed properties and land subdivisions, alongside a junior loan facility for a luxury waterfront apartment development in Sydney.

Liquidity Mechanism and Future Outlook

The introduction of a semi-annual off-market buyback program, approved by unitholders, is designed to enhance liquidity and provide investors with a reliable exit mechanism. The first buyback is scheduled for June 30, 2025, with expressions of interest due by March 31, 2025.

Looking ahead, the Trust is well positioned to capitalize on a strong pipeline of real estate-backed lending opportunities. Subject to market conditions, it may pursue an entitlement and general offer during the second half of FY25 to further increase its capital base and diversify its loan book.

As one of only two ASX-listed mortgage REITs, 360 Capital Mortgage REIT offers investors a compelling alternative to traditional fixed-income products, combining attractive yields with capital preservation.