360 Capital REIT (ASX:TOT) released a leasing update to the Australian Securities Exchange on 10 April 2026, confirming that it has finalised and executed two new leases at its asset at 510 Church Street, Cremorne in Melbourne's inner east. The leases, with Siemens Energy and Stack Infrastructure, were originally flagged as heads of agreement at the Fund's HY26 Results release and have now been converted into fully documented long term leases on terms consistent with those heads of agreement.

The combined effect of these executions is that 360 Capital REIT is now 96.7% occupied by income, with a weighted average lease expiry (WALE) of 6.0 years by income as at 31 March 2026. The only remaining vacancy in the portfolio is a single 1,332 square metre space on Level 2 at 510 Church Street, Cremorne, which the Fund is actively marketing. Once that space is leased, the Fund would have no lease expiries until FY29, extending the runway of contracted income and providing a degree of visibility that is valuable for a listed real estate investment trust (REIT).

For investors following Australian listed property, the TOT leasing update is a concrete example of active asset management converting earlier soft commitments into hard contracted cash flows. This article unpacks the facts of the release, explains the significance of the WALE and occupancy metrics, places the update in the context of the Cremorne office market and broader Melbourne office recovery, and discusses what TOT investors should watch for in the coming months.

Key Facts

Company: 360 Capital REIT, with 360 Capital FM Limited as the responsible entity.

ASX ticker: TOT.

Announcement date: 10 April 2026.

Asset: 510 Church Street, Cremorne, VIC.

Tenant 1: Siemens Energy - 5 year lease over 1,269sqm on Level 2, commencing 1 October 2026, with fixed 3.75% annual rent reviews.

Tenant 2: Stack Infrastructure - 5 year lease over 1,039sqm on Level 6, commencing 1 July 2026, with fixed 4.0% annual rent reviews.

Space released: 5.2% of the Fund's lettable area, as previously flagged at HY26 Results.

Replacement tenant outcome: Stack Infrastructure replaces Dentsu, which was due to vacate in August 2026 following a partial surrender; the Fund will receive a lease surrender payment from Dentsu in FY27 and has no downtime or capital expenditure on that tenancy.

Occupancy: 96.7% by income as at 31 March 2026.

Weighted average lease expiry (WALE): 6.0 years by income as at 31 March 2026.

Remaining vacancy: 1,332sqm on Level 2 at 510 Church Street, Cremorne; actively being marketed.

Lease expiry profile: once remaining vacancy is leased, the Fund would have no further expiries until FY29.

Authorised for release by Glenn Butterworth, Company Secretary.

What the Announcement Says

The announcement is a Leasing Update issued by 360 Capital FM Limited, as responsible entity of the 360 Capital REIT. It confirms that the Fund has finalised terms consistent with two heads of agreement at 510 Church Street, Cremorne, that were disclosed at the HY26 Results. The two tenants referenced in the heads of agreement were Siemens Energy and Stack Infrastructure, and both have now entered into binding five year leases on those tenancies.

The Siemens Energy lease covers 1,269 square metres on Level 2 of 510 Church Street. It commences on 1 October 2026, runs for five years, and includes fixed annual rent reviews of 3.75%. Fixed reviews provide the landlord with predictable income growth regardless of inflation or market conditions, and are a common feature in the Australian office leasing market for quality assets with creditworthy tenants.

The Stack Infrastructure lease covers 1,039 square metres on Level 6. It commences on 1 July 2026, runs for five years, and includes fixed annual rent reviews of 4.0%, slightly higher than the Siemens Energy lease. Importantly, this tenancy was previously leased to Dentsu, which had partially surrendered its space and was due to vacate in August 2026. By executing the Stack Infrastructure lease with a commencement date of 1 July 2026, 360 Capital REIT will have effectively no downtime on the floor and will avoid any incremental capital expenditure required to reposition it between tenants. The Fund will also receive Dentsu's lease surrender payment in FY27, which is an additional positive for cash flow in the coming financial year.

The update also reports a consolidated view of the Fund's leasing position: 96.7% occupancy by income as at 31 March 2026, a WALE of 6.0 years by income as at the same date, and a single remaining vacancy of 1,332 square metres on Level 2 at 510 Church Street. The responsible entity states that the Fund is actively marketing this space and that, once leased, there will be no further expiries until FY29.

Why the Announcement Matters

Leasing updates are among the most important disclosures for listed REIT investors because rental income is the primary driver of distributions. By converting heads of agreement into executed leases, 360 Capital REIT has removed conditionality from its previously flagged leasing pipeline and translated it into legally binding income. This de-risks the near term earnings outlook and provides greater certainty to investors modelling the Fund's cash flow.

The specific combination of metrics disclosed in this update is noteworthy. A 96.7% occupancy ratio by income is a strong result in the current Australian office market, where many metropolitan and fringe sub-markets have been working through the effects of hybrid work and tenant downsizing. A 6.0 year WALE provides meaningful protection against near term re-leasing risk. The combination of high occupancy and long WALE is a quality combination for a REIT of TOT's size.

The announcement also matters because the Stack Infrastructure lease illustrates how proactive asset management can convert a potentially negative situation into a positive outcome. The Dentsu partial surrender created the risk of vacant space, downtime and additional capital expenditure to re-fit the floor. By securing Stack Infrastructure on a direct five year lease commencing immediately after Dentsu's exit, 360 Capital FM Limited has effectively neutralised the surrender risk and converted it into a continuation of rental income plus a surrender payment. For unit holders, this is a textbook example of active leasing strategy adding value above and beyond passive property ownership.

Detailed Investor Analysis

From an investor analysis perspective, the Siemens Energy lease is particularly interesting because Siemens Energy is a global energy technology company with a high profile in the decarbonisation and grid infrastructure space. Placing such a tenant on Level 2 of 510 Church Street, Cremorne aligns with the kind of technology-forward, amenity-rich office accommodation that Cremorne has been known for in the last decade. The fixed 3.75% annual review is slightly below the 4.0% fixed review secured on the Stack Infrastructure lease, but both are above long term Australian inflation averages and support ongoing income growth.

Stack Infrastructure is a global data centre platform, which means that 360 Capital REIT has now attracted two global names in the energy and data infrastructure ecosystems to the same Cremorne asset. Although neither tenant is a data centre operator in the traditional sense at 510 Church Street (which is an office building rather than a data centre), the inclusion of such tenants can be a positive signal about the quality and positioning of the asset, which in turn can support future leasing and capital value outcomes.

For unit holders, the key financial implications to consider (analysis - not explicitly guided by the release) include the underpinning of FY27 and FY28 distributions from the new lease income, the positive cash flow effect of the Dentsu surrender payment in FY27, and the potential incremental leasing upside from the remaining 1,332 square metre vacancy on Level 2. Modelling the direct rental impact would require reference to the Fund's financial statements and prior disclosures, which are available through the 360 Capital website and ASX announcements.

From a capital management perspective, higher occupancy and a longer WALE can support the Fund's borrowing arrangements, because lenders typically prefer longer and more certain cash flow profiles. While the release does not reference the Fund's debt facilities or gearing explicitly, investors can reasonably infer that the improved leasing position is supportive of the Fund's overall financial resilience.

Unit holders should also note that the Fund has reached 96.7% occupancy without needing to make significant trade-offs that would be visible in the release, such as offering unusually large incentives or short lease terms. The fact that the new leases are five years with fixed reviews suggests that the Fund has maintained lease quality alongside occupancy, rather than sacrificing one for the other.

Financial or Strategic Impact

While the release does not quantify the specific dollar impact of the new leases on passing rent, distributable earnings, or net tangible assets, the strategic impact is clear. The Fund now has contracted income covering the substantial majority of its lettable area, with the only remaining gap being 1,332 square metres at the 510 Church Street asset. Assuming the Fund successfully leases that space on similar terms, the portfolio would approach full occupancy, and the next expiry tail would only begin in FY29.

This matters strategically for a small to mid cap Australian REIT because it gives the board and management greater flexibility to focus on other strategic priorities. These might include additional acquisitions, active portfolio management, capital partnering, distribution policy, or balance sheet optimisation. With leasing risk reduced, the strategic conversation with investors can shift towards growth and capital return rather than defensive leasing.

The Dentsu surrender payment, while a one-off, provides a tangible benefit in FY27 and is a reminder that lease events do not always flow linearly through a REIT's income statement. Some contribute through ongoing rent, others through one-off cash receipts, and others through reduced capital expenditure obligations. The current update captures all three: continuing rent from Stack Infrastructure, a surrender payment from Dentsu, and avoided capex through the immediate backfill.

Sector and Market Context

Cremorne is one of Melbourne's most distinctive office sub-markets. Located in the inner eastern suburb of Richmond adjacent to the CBD, it has evolved from a light industrial area into a hub for technology, media, financial services and professional services tenants. Quality buildings on Church Street and adjacent streets have attracted high profile tenants and commanded rents that have historically been competitive with premium CBD locations, especially for businesses that value floorplate efficiency and character over traditional CBD amenity.

The broader Melbourne office market has been adjusting to the effects of hybrid work in recent years, with occupancy in some sub-markets softer than pre-pandemic norms. In this context, a REIT that is able to maintain a 96.7% occupancy ratio and a 6.0 year WALE is demonstrating strong asset selection and leasing execution. Investors looking across the Australian REIT sector will note that occupancy metrics can vary widely by manager, geography and building quality, and that 360 Capital REIT's update compares favourably with many peers in the office exposure category.

The composition of tenants on the asset is also worth noting. Siemens Energy and Stack Infrastructure both operate in globally growing industries: decarbonisation, electrification and data centre infrastructure. While the Cremorne building is an office rather than an industrial or data centre asset, the tenant mix is a qualitative indicator that the asset continues to be attractive to tenants serving growth sectors of the economy. This supports the asset's positioning and, by extension, its future rental and valuation trajectory.

For the Australian listed REIT market more broadly, successful leasing outcomes at quality fringe CBD assets are encouraging signals about the depth of tenant demand beyond the traditional CBD core. This is particularly relevant at a time when investors are carefully differentiating between REITs based on asset quality, tenant strength and active management capability rather than simply applying sector-wide assumptions.

Risks and Uncertainties

Despite the positive update, investors should be aware of a number of risks. The most immediate is the remaining 1,332 square metre vacancy on Level 2. Although this space is actively being marketed, its timing and terms are not guaranteed, and any extended vacancy could offset some of the benefit of the new Siemens Energy and Stack Infrastructure leases. The update does not disclose the incentives, leasing campaign length or expected rental range for this space.

A second risk relates to the broader office market. While Cremorne has historically been a strong sub-market, hybrid work patterns, tenant downsizing and economic cycles can all affect the availability of leasing demand. Even with the new leases in place, macroeconomic shocks or changes in tenant strategy could influence the Fund's outlook.

Tenant credit risk is also relevant. Although both Siemens Energy and Stack Infrastructure are well known global brands, the leases are likely to be with local operating entities and investors should refer to the Fund's audited financial statements for details about the security arrangements and any parent company guarantees. The release does not disclose the specific legal structure of the lessees.

Capital markets risk is another consideration for any listed REIT. Interest rate movements, property valuation changes and wider capital market sentiment can affect both the Fund's balance sheet and its unit price. These risks are not specific to the leasing update but form part of the broader context for any TOT investor.

Finally, execution risk remains for the ongoing marketing of the Level 2 vacancy. Investors should monitor subsequent announcements for any updates on that space as a key barometer of whether the Fund has fully realised the benefit of the current leasing momentum.

What Investors Should Watch Next

The most important near term items to watch are further updates on the remaining 1,332 square metre vacancy at 510 Church Street. Any announcement of a signed lease or heads of agreement on that space would confirm the completion of the current leasing cycle and provide a clean occupancy position ahead of the FY29 expiry tail.

Investors should also watch for the Fund's FY26 full year results, which would typically include the contribution of the new leases and the Dentsu surrender payment to the financial statements. Commentary from management on capital management, balance sheet initiatives, and distribution policy will be particularly important given the improved leasing position.

Broader indicators to monitor include independent property valuations, sector research on Melbourne office rents and incentives, and any commentary from 360 Capital about additional strategic initiatives. Movements in interest rates and capitalisation rates for quality office assets will continue to influence REIT valuations across the sector.

For investors specifically comparing TOT to other office REITs, the ongoing evolution of the Cremorne sub-market and the Fund's ability to sustain high occupancy through future market cycles will be key factors. The current update is a positive data point, but long term REIT investing requires a sustained assessment of asset quality, tenant retention and management capability.

Conclusion

The 10 April 2026 leasing update from 360 Capital REIT (ASX: TOT) is a constructive announcement that converts previously flagged heads of agreement into signed five year leases with Siemens Energy and Stack Infrastructure at 510 Church Street, Cremorne. The outcome brings the Fund to 96.7% occupancy by income and a WALE of 6.0 years, with only a single 1,332 square metre vacancy remaining at the asset.

The Stack Infrastructure lease is especially valuable because it eliminates downtime and capital expenditure that might otherwise have arisen from Dentsu's partial surrender, while also delivering a one-off surrender payment in FY27. Together with the Siemens Energy lease, this positions the Fund with strong contracted income through to FY29 and provides a meaningful degree of visibility for unit holders.

While risks remain, including the ongoing marketing of the Level 2 vacancy and broader market conditions, the current update represents a solid execution of active asset management. Investors will look forward to the next update on the remaining space and to the Fund's FY26 full year results for further confirmation of the strategic and financial benefits flowing from these leasing outcomes.