360 Capital Mortgage REIT reported a robust half-year performance with a 40.5% increase in gross assets and a targeted 10.4% distribution yield for FY26, underpinned by disciplined lending and solid capital raising.
- Lent $24.5 million secured by registered mortgages in HY26
- Gross Asset Value rose 40.5% to $38.8 million
- Net operating earnings surged 94.2% to $2.6 million
- Raised $16.6 million at NAV price, maintaining $5.94 NAV per unit
- Targeting full-year distribution yield of 10.4% with strong pipeline
Strong Lending and Asset Growth
360 Capital Mortgage REIT (ASX – TCF) has delivered a compelling half-year result for the six months ending 31 December 2025, reinforcing its position as a leading mortgage REIT on the ASX. The Trust lent a total of $24.5 million during the period, with all loans secured by registered mortgages, reflecting a cautious yet opportunistic approach to credit risk. This lending activity contributed to a 40.5% increase in the Trust’s Gross Asset Value (GAV), which now stands at $38.8 million.
The loan portfolio remains well diversified and conservatively structured, comprising six loans backed by 33 individual mortgages. Notably, 79.2% of these loans are senior first mortgages, and the weighted average loan-to-value ratio (LVR) is a modest 49.1%, underscoring the Trust’s focus on capital preservation. The average loan term to maturity is relatively short at seven months, allowing for nimble portfolio management in a dynamic market environment.
Financial Performance and Distribution Outlook
Financially, the Trust posted net operating earnings of $2.6 million, a near doubling (94.2% increase) compared to the prior corresponding period. Earnings per unit rose slightly to 32.0 cents, while distributions for the half-year reached 31.3 cents per unit, marking a 4.0% increase year-on-year. This translates to an annualised distribution yield of 10.8% based on the closing unit price, comfortably exceeding the Trust’s target return benchmark, which is the Reserve Bank of Australia cash rate plus 4%.
Looking ahead, 360 Capital Mortgage REIT is targeting a full-year distribution of 60.0 cents per unit, equivalent to a 10.4% yield. The Trust’s stable net asset value of $5.94 per unit was maintained throughout the period, reflecting prudent capital management and the absence of dilution despite significant capital raising activities.
Capital Raising and Strategic Positioning
During HY26, the Trust successfully raised $16.6 million through a combination of a unit purchase plan, shortfall placements, and a non-renounceable entitlement offer, all priced at the NAV of $5.94 per unit. Importantly, the investment manager absorbed certain capital raising costs, ensuring no dilution to existing unitholders. This capital injection has bolstered the Trust’s cash reserves to $15 million, earmarked for deployment into identified loan investments, supporting further portfolio growth and diversification.
360 Capital’s nine-year track record in commercial real estate debt, with over $560 million lent and no capital losses or impairments, lends confidence to its disciplined underwriting approach. The Trust also co-invests alongside the 360 Capital Private Credit Fund, enabling a diversified loan portfolio through strategic selldowns to third parties.
Outlook and Market Position
As one of only two mortgage REITs listed on the ASX, 360 Capital Mortgage REIT occupies a unique niche, offering investors an alternative to traditional fixed-income products with attractive yields and a focus on capital preservation. The Trust reports strong investor interest and a robust pipeline of real estate-backed lending opportunities, positioning it well to continue growing its asset base and delivering consistent income streams.
Subject to market conditions, the Trust aims to expand and diversify its capital and assets through the remainder of FY26, maintaining its disciplined investment philosophy. This outlook suggests a steady course for investors seeking exposure to Australian real estate credit with a yield premium.
Bottom Line?
With solid asset growth and a strong yield target, 360 Capital Mortgage REIT is poised for continued momentum in FY26.
Questions in the middle?
- How will rising interest rates impact the Trust’s loan portfolio and distribution sustainability?
- What is the pipeline size and quality of upcoming lending opportunities beyond HY26?
- Could increased competition in mortgage REITs affect 360 Capital’s market positioning?