This article is from the Australian Property Journal archive
ARENA REIT is expecting a $7 million value increase for the HY2025, as the group closes out the year with the acquisition of a key worker accommodation site in Bendigo, VIC.
Arena’s net revaluation increase for the six month period ending 31 December 2024 reflects a 0.4% increase from the end of June, with no material impact on NAV per security.
57 ELC and two healthcare assets were independently valued, with the remaining assets subject to internal valuation.
The increases were driven by the group’s ELC portfolio, which saw a $10 million or 0.7% increase, against a $3 million or 2.3% decline from the healthcare portfolio.
Arena currently has a $130 million ELC development pipeline of 19 projects, including the 13 projects added throughout HY2025, with a forecast average net initial yield on total cost of 6.0%.
Shortages of ELC places continue to weigh on Australian families, particularly in rural communities, with the Albanese government making the issue an election issue, promising $1 billion fund to address the country’s childcare deserts if elected.
The pipeline has around $95 million in capital expenditure outstanding and a forecast weighted average initial yield on total forecast cost for the development pipeline is 6.1%
Over HY2025, Arena completed rent reviews resulting in an average like-for-like rent increase of 3.2%
Meanwhile, Arena has agreed to terms to acquire Bendigo Health – key work accommodation for around $35 million on a passing yield of 6.2%.
The property is fully leased to the Victorian State Government entity, Bendigo Health Care Group, who provide public healthcare services to the region. 19 years are currently remaining on the lease.
“We are pleased to have agreed terms to acquire this important social infrastructure property on attractive pricing metrics, and to welcome Bendigo Health as a new tenant partner,” said Rob de Vos, managing director at Arena.
“The property plays an important role in facilitating accommodation of essential healthcare workers that support better health outcomes for the communities of greater Bendigo and Northern Victoria.”
The property was purpose-built for Bendigo Health in 2014, under a 30-year triple-net lease arrangement, comprising a 120-apartment residential village on a site 500 metres from the main Bendigo Hospital site.
“With an expanded and experienced management team, Arena is well positioned to capitalise on new growth opportunities that are consistent with our well defined strategy and investment objective of delivering an attractive and predictable distribution to investors with earnings growth prospects over the medium to long term, while delivering on our purpose of Better Communities. Together,” added de Vos.
Arena has reaffirmed a full year 2025 distribution guidance of 18.256 cents per security, reflecting growth of 4.9% over FY24.
