Vicinity Centres

For FY26, Vicinity reported statutory net profit after tax of $1.391 billion, with $700 million from FFO and $691 million from statutory noncash and other items, largely net property valuation gains. FFO increased 3.9% to $700 million, and FFO per security was $0.1521, at the top end of guidance; adjusted for one-offs and lower development-related loss of rent, FFO per security increased 4.1%. Reported NPI increased 2.2%, while comparable NPI rose 4.2%; occupancy was 99.6%, leasing spreads were 4.2%, and NTA per security increased $0.19, or 7.7%, to $2.59. For FY27, management guided to FFO per security of $0.16 to $0.162 and AFFO per security of $0.139 to $0.141, and said FY27 leasing spreads are assumed at around 3%.

Peter Huddle framed FY26 as validation of Vicinity’s strategy to own and operate premium, differentiated retail assets and recycle capital out of lower-growth centers. He emphasized completed and ongoing transformation projects at Chatswood Chase, Galleria, Uptown, Chadstone, Grand Plaza and Castle Plaza, saying the portfolio has become more productive and better positioned for long-term value creation. His tone was confident but measured: he described FY27 as a “cautious confidence” year, while flagging macro uncertainty, household stress and market volatility as risks to monitor.

Adrian Chye highlighted the financial quality of the result: statutory NPAT of $1.391 billion, FFO of $700 million, and FFO per security of $0.1521 at the top end of guidance. He noted comparable NPI growth of 4.2%, net corporate overheads up only 1.6%, and net interest expense down 3.8% thanks to asset sale proceeds and the DRP. Capital management remained conservative, with gearing at 26.1% and pro forma 26.5%, $800 million of undrawn debt facilities, $732 million raised through 10-year debt capital markets transactions, and weighted average debt maturity extended to 5.1 years; the weighted average cost of debt was 4.98%.

Analysts pressed management on whether stronger Chatswood Chase yield assumptions reflected higher income or lower costs; Peter Huddle said the uplift was fundamentally driven by income and that stabilization assumptions were unchanged. Questions also focused on FY27 leasing spreads versus softer sales, with management saying the guidance embeds around 3% spreads after a weaker 4Q result of about 2% to 2.5%. On capital recycling, management said the portfolio reshaping is largely done, though Box Hill North is on the market and a few further opportunities could still arise. Analysts also asked about consumer conditions, rent relief and housing-price sensitivity; management said there was no material uplift in rent relief requests and July sales were around 3% positive comp growth.