URF delivers half-year update and internalisation finalisation

US Masters Residential Property Group (ASX:URF) has reported 31 property sales over the 6 months to 30 June 2024, totaling US$54.32 million. The sales pipeline as of 30 June 2024 stands at US$118.27 million, with US$64.43 million under contract or with an accepted offer. The Group has directed excess cash to capital management opportunities, including the repayment of US$32.96 million of the Global Atlantic Term Loan during the half. The Board is reviewing its tax structure to ensure tax-efficient repatriations of net sales proceeds from the US to Australia. Pending the tax structure review, on-market buybacks will be limited to cash available locally, and interest rates on excess cash at the bank will be evaluated to maximize interest earned.

Executive Commentary on Asset Sales Program and Capital Management

The Internalisation of the Responsible Entity (RE) for URF was finalized at the end of the half year, with the Group's Board now comprised of three independent directors; Stuart Nisbett, Peter Shear, and Jack Lowenstein. Units in URF and URF II were stapled on a one for one basis, forming a stapled group, and effective 26 June 2024 trading is now in URF stapled securities (URF Stapled Securities). The Board continues to focus on the execution of the asset sales program in order to realize value and return capital to unitholders as quickly and efficiently as possible. The Board will begin working with the Management team at Brooksville to set the business plan and selling targets for 2025 later this year.

Summary of Half-Year Update and Outlook

US Masters Residential Property Group has delivered a half-year update, finalizing the internalisation of the Responsible Entity and focusing on executing the asset sales program. The Group reported US$54.32 million in property sales over the 6 months to 30 June 2024, with a sales pipeline of US$118.27 million. The Board is reviewing its tax structure to ensure tax-efficient repatriations of net sales proceeds from the US to Australia. The Group has set a target of US$150 million in property sales during the 2024 calendar year and aims to increase available inventory through the listing pipeline. Management is finalizing its review of the most tax-effective manner to repatriate proceeds from the US to Australia, with expectations to increase the level of repatriations from the US, creating capital return for unitholders. The Fund's trailing 1-4 family Net Operating Income (NOI) to 30 June 2024 was US$13.0 million. The Group reported a FFO loss for the half-year ended 30 June 2024 of A$3.3 million, excluding disposal costs and non-recurring items. The outlook includes the Board's focus on executing the asset sales program and setting the business plan and selling targets for 2025, aiming to realize value and return capital to unitholders efficiently.