This article first appeared on GuruFocus.
Release Date: September 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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The US Masters Residential Property Fund (ASX:URF) achieved a strong sales performance with 86 properties sold in the first half of 2025, totaling $119 million USD.
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The sales pipeline remains robust, with $176 million USD in assets under contract or in the process of being listed for sale.
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The group successfully reduced its Global Atlantic facility debt by over $72 million USD, providing more financial flexibility.
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The fund repatriated over $51 million USD from the US to Australia, enhancing its capital management strategy.
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Net operating income increased by 8% to $4.9 million USD, driven by rental growth on renewal leases.
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The portfolio experienced a 2.84% reduction in value, largely due to a 4.4% decline in the New York premium segment.
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The fund recorded a funds from operations loss of $19.7 million USD for the half year, reflecting holding and sales costs.
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Buyer sentiment in New York was negatively impacted by political developments, leading to a temporary cooling in activity.
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The New Jersey workforce and premium segments saw smaller valuation decreases of 1.2% and 1.1%, respectively.
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The fund faces challenges in the Harlem-Hamilton Heights submarket, with slower transaction activity and remaining unsold properties.
Q: How did the sales perform in August, and what is the current cash and debt position? A: Kevin McAvey, from Brooksville, reported that August was a strong month, being the second largest closing month of the year with $28.5 million in sales. Year-to-date sales through the end of August reached approximately $164 million. The cash and debt positions are stable, with continued efforts to close contracts quickly.
Q: What is the current state of the rental market in your three segments? A: Kevin McAvey explained that the group is not actively participating in the rental market as they are focusing on issuing renewal increases to drive vacancy and push properties into the sales pipeline. The renewal rates are above market rates, which is part of their strategy to encourage turnover.
Q: How is the cash from sales being allocated between debt repayment, distributions, and buybacks? A: Stewart Nisbet, Independent Chair, stated that the Atlantic facility matures in May 2026, and they are meeting repayment requirements. The available cash is primarily used for additional payments under the GA facility and distributions to security holders. The group has not been active in the buyback market due to prevailing market prices.
