Why Did National Storage REIT’s Profit Fall Despite 10.8% Revenue Rise?

Revenue Growth Amid Profit Pressure

National Storage REIT (NSR) has released its half-year results for the period ending 31 December 2025, revealing a mixed financial picture. The REIT saw revenue climb by a robust 10.8% to $211.1 million, signalling strong demand or effective pricing strategies in its storage facilities sector. However, this top-line growth was accompanied by a 16.2% decline in profit after tax attributable to members, which fell to $73.7 million.

Underlying Earnings Show Operational Strength

Digging deeper, NSR’s underlying earnings; a key measure of recurring operational performance; increased by 8.2% to $84.3 million. This divergence between statutory profit and underlying earnings suggests that non-operational factors, such as restructuring costs or fair value adjustments, weighed on reported profits. The company’s financial statements, reviewed without qualification by Ernst and Young, provide reassurance on the integrity of these figures.

Dividend and Asset Backing

Reflecting confidence in its cash flow, NSR declared a fully franked interim dividend of 6.0 cents per security, payable on 20 February 2026. This represents an increase from the previous corresponding period’s distribution of 5.5 cents per unit. Meanwhile, net tangible assets per security rose modestly to $2.61 from $2.53, indicating a slight strengthening in the REIT’s asset base.

Looking Ahead

While the revenue growth and dividend increase are positive signals, the profit decline raises questions about cost pressures or one-off expenses impacting the bottom line. Investors will be watching closely for the full-year results and management commentary to understand whether the profit dip is a temporary setback or indicative of broader challenges.