Arena REIT’s Portfolio Valuation Rises 1% with $129M Acquisitions in FY2025

Portfolio Valuation and Yield Growth

Arena REIT has announced a net $18 million increase in its portfolio valuation as at 30 June 2025, reflecting a 1.0% uplift overall. This revaluation primarily stems from its early learning centre (ELC) assets, which saw a 1.2% increase, while healthcare assets remained largely stable. The weighted average passing yield across the portfolio rose modestly by 5 basis points to 5.47%, signaling steady income returns amid a competitive market.

Strong Occupancy and Lease Profile

The REIT’s portfolio remains highly occupied at 99.3%, underpinned by a weighted average lease expiry of 18.4 years. This long lease tenure provides investors with a degree of income security and visibility. Rent reviews during FY2025 delivered an average like-for-like increase of 3.5%, including a notable 6.8% uplift from market rent reviews, further supporting income growth.

Active Growth Through Acquisitions and Developments

During FY2025, Arena acquired eleven operating properties for approximately $129 million, achieving an average initial yield of 6.1% and securing long-term leases averaging 16 years. The company’s development pipeline remains robust, with 14 early learning centre projects underway, forecasted to cost $106 million in total. Eleven of these projects are expected to complete within the financial year, delivering a net yield of 5.8% and an initial lease term averaging 20 years.

Sustainability and Capital Management

Arena continues to embed sustainability into its operations, reporting zero organisational scope 1 and 2 emissions and installing solar systems on 92% of its properties. The REIT has also made significant progress in reducing its financed emissions intensity by 39% compared to its FY2021 baseline. On the capital front, Arena extended and expanded its syndicated borrowing facility by $100 million to $600 million, maintaining a weighted average debt cost of 4.1% and ensuring ample liquidity to support ongoing growth.

Distribution and Outlook

Reflecting its solid operational performance, Arena declared a final quarter distribution of 4.5625 cents per security, bringing the total FY2025 distribution to 18.25 cents per security, a 4.9% increase over the prior year. Management expressed confidence in the REIT’s position to capitalise on new growth opportunities, supported by a strengthened management team and competitive cost of capital.