Elanor Commercial Property Fund Posts $35.4M FFO, 96.3% Occupancy in FY25

Strong FY25 Performance Despite Market Challenges

Elanor Commercial Property Fund (ECF) has announced its financial results for the year ended 30 June 2025, confirming it has achieved its earnings guidance for FY25. The fund reported Funds from Operations (FFO) of $35.4 million, equating to 9.40 cents per security, alongside distributions of 7.50 cents per security, representing an 80% payout ratio. These results underscore the resilience of ECF’s portfolio and management strategy amid a backdrop of softening capitalisation rates and broader market uncertainties.

While the fund’s net tangible assets per security declined to $0.69, reflecting a $18.8 million decrease in property valuations primarily due to rising capitalisation rates, this was partially offset by a positive 3.5% growth in market rents. Gearing remains at a manageable 38.1%, sitting at the upper end of the fund’s target range, with interest rate hedging covering nearly 77% of exposure, providing a buffer against interest rate volatility.

Leasing Momentum Drives Occupancy and Income Stability

One of the standout features of ECF’s FY25 performance was the significant leasing activity across its portfolio. The fund completed 34 leasing transactions covering nearly 12,000 square meters, boosting occupancy to a robust 96.3%. Key leases include a new five-year agreement with NBN in Perth and a seven-year heads of agreement with Open Colleges at WorkZone West, as well as renewals and new leases with notable tenants such as CBRE, NAB, and the Omnicom Group across Queensland and New South Wales.

John d’Almeida, ECF Fund Manager, highlighted that the leasing success, particularly in South-East Queensland, has not only reduced lease expiries for FY26 but also reinforced the fund’s ability to deliver stable income streams. This leasing momentum is critical in a commercial property market where tenant demand can be uneven, and it positions ECF well for the year ahead.

Outlook and Strategic Positioning for FY26

Looking forward, ECF has provided guidance for FY26 with expected FFO between 7.5 and 8.0 cents per security and distributions of at least 6.5 cents. The fund’s strategy remains focused on investing in differentiated office assets within major Australian metropolitan markets, leveraging active asset management, targeted refurbishments, and strategic leasing campaigns to enhance tenant retention and rental growth.

Management’s confidence is bolstered by the extension of the fund’s debt duration to 2.4 years and a recently agreed debt facility extension, which together with the high occupancy rate, provide a solid platform for income stability. The fund’s diversified portfolio and strong tenant demand underpin its outlook for delivering attractive risk-adjusted returns despite ongoing market challenges.

ECF’s results and outlook will be further discussed in an upcoming investor briefing, offering stakeholders a chance to engage directly with management on the fund’s performance and strategic direction.