Internally managed Australian Real Estate Investment Trust, Arena REIT (ASX: ARF) has announced the distribution for the quarter ending 31 March 2019 of 3.375 cents per stapled security with the record date of 29 March 2019 and Payment date of 9 May 2019. As per the company’s announcement, the distribution is in line with Arena’s previously announced FY19 distribution guidance of 13.5 cents per security, which reflects a growth of 5.5% over FY18.
Further, the company’s Dividend and Distribution Reinvestment Plan (DRP) is going to operate in respect of this distribution. All the Securityholders who are participating in the DRP will be issued new securities priced at a 1.5% discount to the 15-day volume weighted average trading price during the Pricing Period. During the first half of FY 2019, the company paid a half-year distribution of 6.75 cents per security, up 5.5% on pcp.
On 19 February 2019, the company released its half-year results for FY 2019. For the half-year period, the company reported a net operating profit of $18.3 million, up 9.3% on the prior corresponding period (pcp). Further, the company reported earnings per security (EPS) of 6.77 cent which was 5.5% higher than pcp.
The company reported a Statutory net profit of $34.2 million for H1 FY19, down by 7.8% on pcp. The company’s total assets increased by 5.2% to $763.7 million in H1 FY19 as compared to pcp, driven by acquisitions, development capital expenditure and the positive revaluation of the portfolio.
Main contributors to the H1 FY19 results were rental income growth from annual rent reviews and new rental income from acquisitions and development projects completed in FY18 and HY19.
As at 31 December 2018, the company’s property portfolio included 211 ELC properties and development sites and 7 healthcare properties. All 218 properties were revalued during the first half of FY 2019, with 40 properties independently valued and the remaining 178 at directors’ valuation. A revaluation uplift of $18.6 million was recorded in H1 FY19, equivalent to an increase of 2.7%.
During the period, the company settled the acquisition of a $24 million portfolio of three specialist disability accommodation properties in metropolitan Adelaid. The properties were acquired on an initial income yield of 6 percent on the purchase price, have an initial 15-year lease term and the rent will be reviewed annually by CPI+0.5%.
During the half year period, the company raised $3.2 million of new equity capital through the DRP. Interest rate hedging over new borrowing was increased during the period; 79% of drawn debt was hedged at 31 December 2018 and the weighted average hedge was 5.3 years at an average rate of 2.42%.
In H1 FY 2019, the company increased its total debt facility limit to $280 million by establishing an additional $50 million facility post balance date. Arena’s weighted average cost of debt was stable at 3.85% per annum as at 31 December 2018.
At the time of writing, ARF’s shares are trading at $2.730 (+0.368% intraday) with a market capitalization of circa $739.71 million as on 19 March 2019 (AEST 01:15 PM).
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