Region Group

FY26 results included comparable supermarket MAT growth of 4.1%, portfolio occupancy of 98.1%, and comparable NOI growth of 3.3%. Statutory net profit was $268.8 million, NTA increased 4% to $2.57 per security, FFO was $0.16 per security, and AFFO was $0.141 per security. FFO per security increased 3.2% from FY25, distribution was $0.141 per security, and total securityholder return was 9.8%. Debt was 100% hedged at a weighted average cost of debt of 4.5%, and more than $1 billion of debt was refinanced. For FY27, the company guided to 3% FFO growth to $0.165 per security and 3% AFFO growth to $0.145 per security, with a 100% AFFO payout ratio and no assumed transactional activity beyond disclosed items.

Gregory Chubb positioned the business as a resilient, supermarket-led essential retail portfolio with an integrated operating model and said the company can unlock more value from assets it already owns. He emphasized proactive organic growth via active asset management, major and specialty leasing optimization, and targeted reinvestment, while also keeping selective inorganic growth available through portfolio optimization and the Metro fund partnership. His tone was confident and constructive, repeatedly framing FY27 as a year of execution rather than wholesale strategy change.

David Salmon highlighted that FFO per security rose 3.2% from FY25 to FY26, supported by comparable NOI growth of 3.3%, stronger occupancy, positive leasing spreads, and controlled operating expense growth. He said other operating income grew by close to $1 million, interest expense rose with the higher cost of debt and project funding, and statutory profit after tax reached $268.8 million after positive revaluations. On the balance sheet, he cited $5.5 billion of assets under management, pro forma gearing of 34.1%, NTA of $2.57, a 5.1% portfolio valuation increase, 11 bps of cap rate firming to 5.86%, and over $200 million of undrawn debt capacity. He also said FY27 cost of debt should be circa 4.6%, with weighted average borrowing margin around 1.4% or slightly better.

Analysts focused on what it would take to reach the top end of growth guidance, and management said the FY27 3% guidance excludes inorganic activity; if FY27 funds-management activity matched FY26, growth would be closer to 4%. Questions also centered on capital allocation, with management ranking priorities as asset enhancement projects first, buybacks second, and acquisitions third, while saying current acquisition pricing is difficult. On divestments, management said there are 16 assets below $30 million in value that could be recycled, and said capital from sales is intended to fund reinvestment into higher-return projects. Analysts also asked about lease expiries, hedging, and margins; management said reversions are running positively, hedging should stay above 50% and can rise if economics make sense, and FY27 borrowing margin should be around 1.4% or slightly better.