Do’s and Don’ts in real estate
The companies that present opportunities and pitfalls in the current real estate sector within Australia.
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Arena REIT is an ASX300 listed group that owns, manages and develops social infrastructure properties across Australia.
Our objective is to deliver an attractive and predictable distribution to investors with earnings growth prospects over the medium to long term.
We invest in social infrastructure properties in growing sectors that are supported by favourable demographic and economic trends. Our current portfolio of over 225 social infrastructure properties are leased to a diversified tenant base in the growing childcare and healthcare sectors.
With a core focus on earnings predictability, all of Arena’s leases are long-term and include annual rent reviews. Under net lease structures, this upside is passed through to investors, with tenants responsible for the majority of outgoings, maintenance and capital expenditure.
As an active property manager, we focus on enhancing portfolio quality and mitigating risk. We value diversification and strong tenant covenants, prioritise long-term investment opportunities and actively recycle assets to optimise portfolio performance.
As an astute developer, we generate value through working with our tenants as property partners. Our experienced team have built a track record in the identification of development opportunities, management of project risk and completion of quality projects. Our collaborative approach has consistently delivered customised facilities for our tenants and attractive investment returns for our investors.
We are also a fund manager, and have successfully applied our property expertise to build a strong track record in the management of unlisted funds that invest in the healthcare property sector.
The companies that present opportunities and pitfalls in the current real estate sector within Australia.
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The Outperform rating and $4.61 target price are maintained.
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The broker retains its Neutral rating. Target rises to $4.90 from $4.89.
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Neutral retained. Target is raised to $3.23 from $3.04.
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Arena REIT's first-half result was in line with Credit Suisse's expectations in terms of operating profit and earnings per share. Neutral retained. Target is raised to $3.04 from $2.91.
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Credit Suisse revises FY21-23 estimates higher following the upgrade to FY21 distribution guidance.
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Arena REIT has undertaken a $60m equity raising. Macquarie notes the balance sheet gearing will decline to 17.6%, materially below the target range of 35-40%.
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FY19 earnings are in line with expectations. FY20 distribution guidance of 14.3c per security was reaffirmed.
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The company has settled or has exchanged contracts on, acquisitions of social infrastructure properties worth $62m. These includes three specialist disability accommodation properties, three early learning centre properties and five early learning centre developments.
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First half results were in line with Macquarie's estimates. FY19 distribution guidance has been reaffirmed.
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