360 Capital REIT reported a 63.2% rise in statutory profit to $3.1 million for H1 2026, maintaining distributions and expanding its portfolio with a $10 million Sydney apartment block investment.
- 63.2% increase in statutory profit to $3.1 million
- Operating profit up 19.9% to $3.1 million
- Stable distributions maintained at 1.5 cents per security
- Portfolio occupancy improves to 96.7%, valued at $202.4 million
- New $10 million structured preference equity investment in Sydney apartments
Strong Financial Performance
360 Capital REIT (ASX: TOT) has delivered a robust financial result for the half-year ended 31 December 2025, reporting a statutory profit of $3.1 million, a significant 63.2% increase compared to the prior corresponding period. This uplift was driven primarily by lower finance costs and improved net property income, reflecting the Fund’s effective cost management and operational performance.
Operating profit, a key measure of the Fund’s core earnings, rose by 19.9% to $3.1 million, equating to 1.4 cents per security. Despite the profit growth, the Fund maintained its distribution at 1.5 cents per security, consistent with the previous half-year, underscoring its commitment to delivering steady income to securityholders.
Portfolio Stability and Leasing Progress
The Fund’s investment property portfolio saw a modest increase in value to $202.4 million, supported by a $1.4 million uplift at 38 Sydney Avenue, Forrest ACT, following tenant incentives linked to recent leasing activity. Occupancy improved to 96.7%, with the weighted average lease expiry (WALE) holding steady at 6.3 years, reflecting the portfolio’s long-term income stability.
Post period, 360 Capital REIT secured non-binding heads of agreement to lease additional space at 510 Church Street, Cremorne VIC, reducing vacancy to just 1,332 square metres. This leasing momentum is critical as the Fund works to fully occupy its assets and enhance cash flow visibility.
Strategic Investment in Sydney Apartments
A notable highlight was the Fund’s $10 million structured preference equity investment in a new Sydney apartment block, acquired in partnership with 360 Capital Private Equity Fund 1. This investment, comprising loan notes and preference equity units, offers a fixed 16% coupon plus potential profit sharing, with a strategy to sell individual apartments over two years to maximise returns.
To support this acquisition, the Fund increased its finance facility limit from $80 million to $90 million, drawing $83.7 million as at 31 December 2025. The facility remains unhedged with a floating interest rate, reflecting confidence in the Fund’s capital management approach.
Governance and Outlook
The Fund continues to benefit from a stable management team and sound governance, with no significant changes in the state of affairs or regulatory issues reported. The Responsible Entity remains focused on executing its leasing strategy, managing the diversified portfolio, and pursuing active investment opportunities to enhance returns and close the discount between the trading price and net tangible asset value.
With a stable NTA of $0.58 per security and a modest increase in the ASX closing price to $0.4025, 360 Capital REIT appears well-positioned to navigate the evolving property market landscape while delivering consistent income to investors.
Bottom Line?
360 Capital REIT’s strong half-year performance and strategic Sydney investment set the stage for potential growth, but leasing execution and market conditions remain key watchpoints.
Questions in the middle?
- Will the Fund convert non-binding lease agreements into firm contracts to fully occupy 510 Church Street?
- How will the structured preference equity investment perform amid Sydney’s apartment market dynamics?
- What impact will rising interest rates have on the Fund’s unhedged floating rate debt and future profitability?