360 Capital Mortgage REIT Posts 70% Profit Surge with $16.7m Capital Raise
360 Capital Mortgage REIT (ASX:TCF) reported a 70% jump in profit to $5.52 million for FY26, maintaining stable distributions while expanding its loan portfolio and raising $16.7 million in fresh capital.
- Profit attributable to unitholders rose 70.2% to $5.52 million
- Distributions held steady at 62.3 cents per unit, yielding 10.9%
- Loan portfolio increased 22.3% to $46.6 million with 12.5% weighted interest rate
- Capital raised $16.7 million at NAV price, boosting net tangible assets by 44.3%
- Post-year refinancing agreement enhances liquidity and portfolio diversification
Profit Growth Outpaces Earnings Per Unit Slightly
360 Capital Mortgage REIT (ASX:TCF) has delivered a robust financial performance for the year ended 30 June 2026, with profit attributable to unitholders soaring 70.2% to $5.52 million. Despite this sharp increase in bottom-line profit, earnings per unit (EPU) dipped marginally by 0.6% to 64.4 cents, reflecting the dilution impact from a 44.3% expansion in units on issue. The Trust maintained distributions at 62.3 cents per unit, translating to a healthy 10.9% yield based on the closing share price of $5.72.
Loan Portfolio Expansion and Strong Interest Margins
The Trust’s loan portfolio grew 22.3% to $46.6 million, spread across seven loans secured by 101 registered mortgages. Notably, 82.7% of the portfolio consists of senior first mortgage loans, underpinning the Trust’s conservative risk profile. The weighted average loan-to-value ratio (LVR) stood at 59.3%, while the portfolio commanded a robust weighted average interest rate of 12.5% per annum. The average term to maturity remains short at five months, indicating active portfolio turnover and liquidity management.
During FY26, 360 Capital lent $36 million, including four new loans totaling $23 million. Loan repayments and sell-downs amounted to $27.5 million, including full repayment or sell-down of five loans valued at $20.7 million. The Trust continues to co-invest alongside the 360 Capital Private Credit Fund (PCF), enabling diversification through partial selldowns to third parties.
Capital Management Initiatives Support Growth
Capital raising was a standout feature of FY26, with $16.7 million raised through a unit purchase plan, shortfall placement, and a non-renounceable entitlement offer; all priced at the Trust’s net asset value (NAV) of $5.94 per unit. This capital injection lifted the Trust’s net tangible assets by 44.3% to $5.94 per unit, maintaining stability amid growth. The Trust also activated a distribution reinvestment plan for three months and initiated an on-market buy-back program in April 2026 to address liquidity and narrow the discount to NAV.
Post-Year Refinancing Deal Enhances Liquidity and Diversification
Shortly after the reporting period, the Trust agreed to restructure and refinance its largest borrower group’s facilities, subject to conditions and documentation. The $12.7 million senior facility will be repaid ahead of financial close, while two other loans totaling $13.4 million secured over residential developments in North-West Sydney will be refinanced into a new $48.6 million senior facility. This new facility, secured by first registered mortgages over 72 apartments and 10 land lots valued at $58.7 million, has a 12-month term and is supported by $23.8 million in presales due to settle shortly. The refinancing proceeds, combined with $2.6 million in cash, will be used to subscribe for senior and subordinated units in a 360 Capital Private Credit Fund sub trust, with the remainder taken up by third-party investors, providing the Trust with enhanced liquidity and further diversification opportunities.
Governance and Risk Management Updates
The Trust appointed Equity Trustees Limited as an independent custodian in May 2026, separating asset custody from the Responsible Entity. Additionally, Hall Chadwick (NSW) replaced Ernst & Young as auditor in June 2026. The Trust maintains a cautious approach to credit risk, with no significant deterioration observed in loan quality and all interest arrears subsequently collected in full. Market risk management includes sensitivity analyses showing that a 10% decline in investment prices would reduce profit and equity by approximately $4.7 million, underscoring the importance of ongoing portfolio monitoring.
Investor Takeaway
360 Capital Mortgage REIT’s FY26 results highlight a successful year of profit growth, portfolio expansion, and capital management without compromising distribution stability or NAV per unit. The refinancing agreement post-year-end signals strategic liquidity enhancement and portfolio diversification, positioning the Trust for continued growth. However, the short average loan maturity and concentration in a small number of loans suggest investors should watch closely how the Trust manages refinancing risks and loan pipeline development in FY27.
Bottom Line?
Stable distributions and a strengthened loan portfolio underpin 360 Capital Mortgage REIT’s growth, but refinancing execution and portfolio diversification remain key to sustaining momentum.
Questions in the middle?
- How will the Trust manage refinancing risks given the short average loan maturity?
- Will the Trust’s pipeline support further diversification beyond its current concentrated loan portfolio?
- How might rising interest rates or market volatility impact the Trust’s loan valuations and income stability?
