Arena REIT (ARF) anticipates a net $18 million revaluation increase as of June 30, 2025, boosting its net asset value per security by approximately $0.04, according to its latest market update. The revaluation stems from independent assessments of 55 early learning center (ELC) assets and three healthcare assets, with remaining assets subject to Directors’ valuation, pending auditor review. The portfolio’s weighted average passing yield has risen by 5 basis points to 5.47% since December 31, 2024. The ELC portfolio saw a yield increase of 5 basis points to 5.41%, while the healthcare portfolio widened by 9 basis points to 6.09%.
Macroeconomic drivers continue to underpin the childcare sector. Federal government investments aim to improve childcare affordability, boost workforce participation, and promote gender equality. Arena’s ELC tenant partners reported an average daily fee of $155.29, up 9.75% year-over-year, with robust occupancy rates and a steady net rent to revenue ratio of 10.0%.
Rent reviews for FY2025 resulted in an average like-for-like increase of 3.5%, including a 6.8% increase from 30 market rent reviews. The REIT acquired eleven operating properties for $129 million at an average initial yield of 6.1% with lease terms averaging 16 years. Eleven ELC projects are slated for completion in FY2025, representing an $83 million investment at a 5.8% net yield, with lease terms averaging 20 years. The development pipeline includes 14 ELC projects, costing $106 million, with a forecast yield of 6.04%.
Arena has extended its syndicated borrowing facility by 12 months, expanding it by $100 million to a total of $600 million. As of June 30, 2025, the weighted average remaining facility term is 3.9 years. The weighted average cost of debt is 4.1%, with 72% of borrowings hedged for 2.3 years at an average rate of 2.45%. A final quarter distribution of 4.5625 cents per security has been declared, bringing the total FY2025 distribution to 18.25 cents per security, a 4.9% increase from FY2024.
