Vicinity Centres reported a 4.2% increase in comparable net property income for the year ended June 2026, driven by a strategic shift toward premium assets that now account for 67% of its portfolio value. The Australian retail landlord posted statutory net profit after tax of A$1.39 billion, up 38% from A$1.00 billion in the prior year, including A$691.1 million in property revaluation gains.
Funds from operations rose 3.9% to A$700.1 million, with FFO per security at 15.21 cents, matching the top end of guidance. The full-year distribution increased to 12.40 cents per security, a 3.3% rise from 12.00 cents in FY25, representing a 95.5% payout ratio of adjusted funds from operations. Net tangible assets per security climbed 7.7% to A$2.59.
The portfolio’s premium assets, which include Uptown in Brisbane and DFO Eastern Creek in Sydney, delivered 5.1% comparable net property income growth compared with 4.2% for the total portfolio. Occupancy remained near capacity at 99.6%, while leasing spreads reached a record 4.2%, up from 2.5% in FY25. Specialty retail sales growth accelerated to 4.0%, led by mini majors with a 4.6% increase.
Capital allocation focused on high-end assets, with A$2.5 billion invested in premium properties since June 2022 alongside A$1.3 billion in divestments of non-core assets. FY26 acquisitions totaled A$563 million, while divestments realized an 18.2% premium to book value. The company’s gearing stood at 26.1%, within its 25% to 35% target range, supported by A$732 million in new debt capital and A$1.2 billion in refinanced facilities.
Development activity included the completion of Chatswood Chase in Sydney, with an estimated stabilized valuation of A$1.5 billion and a projected development profit exceeding A$250 million. The Galleria in Perth is scheduled to open in November 2026 with 98% pre-leasing, targeting a stabilized yield of 6.25%. Uptown in Brisbane remains on track for early 2027, with Chadstone’s luxury brand expansions and MECCA store expansions set for completion between late 2026 and late 2027.
For FY27, Vicinity guided FFO per security to 16.0 to 16.2 cents, representing 5.3% to 6.6% growth from FY26. The company expects comparable net property income growth of 3.5% and a decline in development-related rent loss to A$18 million. Chief Executive Peter Huddle said the portfolio repositioning and disciplined capital allocation were positioning Vicinity for a step change in earnings growth.
