Morningstar | Child Care Subsidy Boosts Occupancy Rates For Arena's Tenants
We expect Arena to generate low-single-digit annual rental growth from its portfolio of Australian child care centres over the long term, supported by long-term demand growth for Australian child care services. Arena benefits from several supportive trends such as population growth and growing government subsidies in addition to attractive characteristics such as an occupancy rate of around 100%, high tenant renewal rates, triple net leases, and a relatively long weighted average lease expiry of 13 years. Child care centre valuations also tend to have a relatively high proportion of land backing due to the regulated ratios of floor space to children. Arena is internally managed which aligns management and securityholders' interests better than if it were externally managed. Arena’s seven medical centres, which are leased to ASX-listed Primary Healthcare, also benefit from government subsidies.Arena REIT No. 1 (ARF1) is a Trust. The objective of the Trust is to generate and predictable income distributors to investors with earnings growth prospects over the medium to long term. The Company is a part of the Arena REIT Stapled Group.
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