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US Masters Residential Property Fund (ASX:URF) - Co Head, Kevin McAvey
Co Head, Kevin McAvey
Source: US Masters Residential Property Fund
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  • In the six months to June 30, US Masters Residential Property Fund (URF) posted a net operating profit for the period of $20.99 million for the half-year
  • A favourable property valuation helped to drive profits for the company alongside income tax benefits
  • URF announced a distribution for the half-year of $3.10, bringing the total distribution to $6.25
  • Shares in URF remained unchanged at 36.5 cents at the end of the trading day

In the six months to June 30, US Masters Residential Property Fund (URF) posted a total comprehensive profit of $31.7 million for the half-year, with the fund’s portfolio value increasing by US$16.8 million (A$22.9 million).

A favourable property valuation helped to drive profits for the company after it posted a $47.7 million decline in the value of its investment properties that dot Hudson, Queens, Brooklyn and Manhattan.

The overall asset value rise for the fund throughout the period amounts to an 8.6 per cent increase in the fund’s pre-tax net asset value (NAV).

In addition to the transactions completed during the period, the fund had a further US$16.6 million (A$22.6 million) in property under contract and US$19.1 million (A$26 million) in inventory on the market for sale at the end of the quarter.

As the remaining inventory is settled, the fund will begin the process of winding down the two-year sales campaign that began in late 2019 following the change in management.

The company posted a $6.6 million profit before income tax, clocking in $14.4 million in income tax benefits, up from $7.1 million in 2020, driving profit attributable to unitholders up to $20.9 million.

During the half-year, the fund closed on the sale of US$74.8 million property at a 0.6 per cent premium to book value and continued to lower debt levels, with the fund’s total debt balance decreasing from US$425.5 million to US$375.5 million.

These recent repayments follow the refinance to Global Atlantic in late 2020 which the fund said had provided it with a cost-effective and stable long term debt solution.

URF plans to pay off its US$24.6 million (A$33.5 million) Global Atlantic Bridge Loan as a result of confidence in the funds material funds from operations (FFO) improvement and sales progression.

After normalising both periods for disposal expenses connected with the sales program, H1 2021 annualised FFO shows a 57 per cent improvement over the full year 2019 performance. The rehabilitation pipeline is complete, with the last project finished during this reporting period.

URF announced a distribution for the half-year of $3.10, bringing the total distribution to $6.25.

Shares in URF remained unchanged at 36.5 cents at the end of the trading day.

URF by the numbers
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