Rent reviews drive Arena REIT result

Arena REIT has reported a 12 per cent growth in net operating profit to $28.7 million thanks to income growth from annual rent reviews.

Portfolio management initiatives, development projects that were completed in FY16 and FY17 and lower relative borrowing costs were also key contributors to the positive results, the company said.

Arena’s board announced it had paid an annual distribution of 12 cents per security, which was 10 per cent on the prior year.

At the same time, total assets have grown 21 per cent, counting year-on-year, to $621.3 million.

As far as the portfolio was concerned, the company saw annual rent reviews across it to have recorded an average like-for-like rental increase of 4.3 per cent, with net valuation uplift by 12 per cent to $66.1 million resulting from “further tightening in transaction yields in the direct property market and portfolio management initiatives”.

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Also, post financial year end, Arena bought a portfolio of nine ELC properties in development for a total cost of $65 million which helped increase development pipeline to $113 million.

Arena’s head of property, Robert de Vos, said: “By undertaking projects with a range of development structure and risk and return profiles we are able to deliver earnings growth, manage our exposure to development risk and deliver assets that enhance the overall quality of the portfolio.”