360 Capital Mortgage REIT (ASX – TCF) reported a robust HY26 with a 10.4% distribution yield and a $16.6 million capital raise, underscoring its disciplined growth and strong portfolio performance.
- HY26 distribution yield of 10.4%, targeting 60.0 cpu for FY26
- Loan portfolio predominantly senior loans with 49.1% average LVR and no arrears
- Operating profit nearly doubled to $2.6 million in HY26
- Raised $16.6 million during HY26, increasing net tangible assets by 44.2%
- Focus on diversification with plans to expand loan portfolio from 6 to 10-20 loans
Strong Yield and Distribution Growth
360 Capital Mortgage REIT (ASX – TCF) has delivered a compelling half-year performance for HY26, reporting a distribution yield of 10.4% and targeting a full-year distribution of 60.0 cents per unit (cpu). This marks a significant 126.5% increase in distributions since 360 Capital assumed management in September 2020, reflecting the Trust’s ability to generate consistent income for investors.
Robust Loan Portfolio and Risk Management
The Trust’s loan portfolio remains well diversified and conservatively structured, with 79.2% invested in senior loans secured by first mortgages over Australian real estate assets. The weighted average loan-to-value ratio (LVR) stands at a prudent 49.1%, and importantly, there were no arrears or impairments reported as of 31 December 2025. The portfolio includes a mix of commercial and residential loans, with a weighted average interest rate of 12.7%, balancing fixed and floating rates with rate floors to manage downside risk while retaining upside potential.
Financial Performance and Capital Raising
Financially, TCF’s operating profit surged 94.2% to $2.6 million compared to the prior corresponding period, driven by increased loan investments and higher interest rates. The Trust also successfully raised $16.6 million during HY26, boosting its net tangible assets by 44.2% while maintaining a stable net asset value per unit of $5.94. This capital raise is expected to enhance liquidity, support loan diversification, and improve market relevance.
Strategic Outlook and Growth Plans
Looking ahead, 360 Capital Mortgage REIT aims to expand its loan portfolio from six to between 10 and 20 loans, further diversifying by geography, asset class, and loan type. The Trust is also focused on closing the modest 2.7% trading discount to NAV through marketing initiatives and seeking additional research coverage. With a disciplined growth strategy and a conservative capital structure, TCF positions itself as a compelling option among ASX-listed mortgage REITs, offering investors attractive yield and capital preservation.
Market Position and Competitive Edge
As one of only two ASX-listed mortgage REITs, TCF stands out with its domestic focus exclusively on Australian real estate loans, eliminating foreign exchange risks. Its buyback program provides liquidity at NAV, enhancing investor flexibility. Compared to peers, TCF offers the highest distribution yield among mortgage REITs and credit funds listed on the ASX, underscoring its superior income generation capability.
Bottom Line?
With strong HY26 results and a clear growth path, 360 Capital Mortgage REIT is poised to deepen its market presence and deliver sustained value to investors.
Questions in the middle?
- How will rising interest rates impact TCF’s loan portfolio returns and risk profile?
- What is the timeline and strategy for expanding the loan portfolio to 10-20 loans?
- How effective will marketing and research coverage be in closing the NAV discount?