Highlights

  • FY26 operating Earnings per security rose 5.7% to 19.60 cents, while net operating profit reached AUD 79 million.
  • The portfolio comprised 307 properties valued at AUD 1.96 billion as at 30 June 2026.
  • FY26 distributions totalled 19.25 cents per security, with gearing of 24.5% at year-end.
  • The latest FY27 distribution guidance is 20.0 cents per security, subject to transaction and operating assumptions.

Arena REIT develops, owns and manages Australian social infrastructure properties, principally early learning centres and healthcare facilities. Arena REIT (ASX:ARF) securities closed at AUD 2.84 on 10 November 2026. The group entered FY27 after recording higher FY26 operating earnings and distributions, while developments involving a childcare tenant brought renewed attention to Lease continuity, Portfolio Management and the assumptions underpinning distribution guidance.

FY26 Earnings and Distribution Performance

For the year ended 30 June 2026, Arena REIT (ASX:ARF) reported net operating profit of AUD 79 million, an increase of 8% on FY25. Operating earnings per security were 19.60 cents, up 5.7% year on year. Distributions per security reached 19.25 cents, representing a 5.5% increase. Operating profit and distributions measure different aspects of performance.

Average rental growth across the portfolio was 4.0% during FY26. The group attributed its earnings progression to rental growth and income from completed development projects. During FY26, Arena completed 11 early learning centre development projects, acquired three newly completed centres and divested 11 centres. These completed transactions changed the portfolio mix.

Portfolio Composition and Balance Sheet

At 30 June 2026, Arena REIT (ASX:ARF) held 307 properties: 274 early learning centres, 10 healthcare properties and 23 early learning development sites. The total property portfolio was valued at AUD 1.96 billion. Early learning represented 91% of portfolio value, leaving the trust substantially exposed to operating conditions in that sector. This concentration is relevant when assessing individual tenant difficulties and the availability of replacement operators.

The portfolio had a weighted average lease expiry of 17.5 years at the FY26 balance date, while reported occupancy was 100%, excluding one property contracted for sale. Total Assets stood at approximately AUD 2.0 billion, net asset value was AUD 3.60 per security and gearing was 24.5%. Long lease terms support contractual rental visibility but do not remove tenant credit, vacancy or re-leasing risks.

FY27 Tenant Developments and Guidance

A material issue during FY27 has been the voluntary administration of childcare operator Edge Early Learning following the FY26 year-end. Arena REIT (ASX:ARF) has been addressing the implications for affected properties, including potential Business transfers, lease assignments and selective disposals. Progress on transactions does not mean that every required approval or consent has been obtained. The timing and completion of these steps remain important to the outlook for rental income.

On 3 November 2026, Arena set FY27 distribution guidance at 20.0 cents per security, compared with 19.25 cents delivered in FY26. The guidance reflects progress with the affected portfolio and assumes announced transactions receive the necessary service approvals and lease assignment consents. It also assumes no new acquisitions and no material change in market or operating conditions. Accordingly, the 20.0-cent figure is guidance, not a completed FY27 distribution.

Arena REIT (ASX:ARF) also reported that further property sale contracts entered during October took FY27 sale proceeds under the announced transactions to AUD 23.1 million. Such sales may affect rental income and Capital allocation, subject to completion.

Key Insights

Arena REIT (ASX:ARF) combined FY26 earnings growth, high reported occupancy and a long average lease term with material concentration in early learning assets. The key FY27 variables are the completion of tenant-related transactions, continuity of rental receipts and the assumptions behind the revised distribution guidance. The FY26 Balance Sheet provides context, but does not eliminate execution or tenant risks.