Stockland (ASX:SGP) is a diversified Australian property group operating residential communities, land Lease communities, retail centres, logistics facilities and workplace assets. FY26 delivered higher funds from operations as settlement activity increased across its development businesses. FY27 is expected to involve fewer Masterplanned Communities settlements but greater contributions from Land Lease Communities, data centres and other parts of the portfolio.

FFO Increases to A$892 Million

Post-tax funds from operations increased 10.4% to A$892 million in FY26 from A$808 million a year earlier. FFO per security rose 9.1% to 36.9 cents, reaching the upper end of Stockland’s guidance range.

Statutory profit increased 20.2% to A$994 million. The statutory result included a positive net investment-property Revaluation movement of A$202 million, meaning FFO provides a separate measure of operating performance before some valuation movements.

Distribution Remains at 25.2 Cents

Stockland maintained its full-year distribution at 25.2 cents per security.

The distribution represented a Payout Ratio of 69% of FFO, within the group’s 60%–80% target range.

AFFO per security increased 8.9% to 31.7 cents, compared with 29.1 cents in FY25. The unchanged distribution therefore resulted in a lower proportion of Earnings being distributed as FFO increased.

Development FFO Rises 17.3%

Development FFO increased 17.3% to A$540 million from A$460 million.

The increase reflected higher settlements across Masterplanned Communities and Land Lease Communities, increased development management fee income and a larger contribution from Commercial Development.

Development management fee income increased 35% to A$91 million, while Commercial Development income rose to A$35 million from A$6 million.

Masterplanned Communities Deliver 8,902 Settlements

Masterplanned Communities generated A$535 million of Development FFO, up 2.4%.

Settlements increased approximately 30% to 8,902 lots, while net sales increased 49% to 8,541.

The division ended FY26 with 3,824 contracts on hand and recorded a development Operating Margin of 21.2%.

Settlement volumes were therefore a major contributor to the FY26 development result.

Land Lease Settlements Rise to 777

Land Lease Communities generated A$100 million of Development FFO, up from A$60 million.

Home settlements increased 48% to 777, while net sales reached 1,080, up 88%.

The division ended the year with 701 contracts on hand and recorded a development operating profit margin of 20.6%.

This Business is expected to contribute a larger number of settlements during FY27.

Investment Management FFO Reaches A$606 Million

Investment Management generated A$606 million of FFO, up 2.6%, while comparable FFO growth was 3.5%.

The portfolio includes Logistics, Retail, Workplace and Communities rental assets.

These recurring-property earnings provide a different earnings profile from residential development, where settlements and project timing can create greater variation between reporting periods.

Logistics Occupancy Remains at 97.5%

The Logistics portfolio generated A$179 million of FFO.

Comparable FFO increased 8.1%, while occupancy was 97.5%. Re-leasing spreads reached 33.8% across leases negotiated during FY26.

The portfolio recorded a net valuation gain of A$117 million, equivalent to 3.4%.

Around 600,000 square metres of new leases and renewals were completed during the year.

Retail Portfolio Records Valuation Increase

Retail FFO increased to A$334 million from A$319 million.

Comparable FFO growth was 3.1%, while occupancy remained at 99.0%.

Rental growth across the stable portfolio was 3.9% on an annualised basis.

Retail Assets recorded an A$199 million valuation uplift during FY26, equivalent to approximately 4.2%.

Workplace Occupancy Is Lower

Workplace FFO increased to A$114 million, although comparable performance declined 1.0%.

Occupancy was 86.6%, below the levels reported across Stockland’s Logistics and Retail portfolios.

The Workplace portfolio also recorded a A$57 million valuation decline during the year.

Its performance remains one of the areas to monitor as Stockland progresses leasing and portfolio-management initiatives.

Data Centres Add Another Development Area

Stockland secured approximately 450MW of power for data centre development across three sites during FY26, subject to final design, documentation and customer negotiations.

The company is also progressing another four pipeline opportunities.

Management expects data centre operations to begin generating Development FFO during FY27, adding another source of earnings alongside residential and commercial development.

Capital Partnering Expands

Stockland raised approximately A$1.5 billion of third-party Capital and recycled about A$0.7 billion during FY26.

The group expanded partnerships across logistics, land lease communities, retail and data centres.

Capital partnering allows Stockland to retain operating and development involvement while sharing the Equity required for selected assets and projects.

Management fee income across the group increased 20% to A$119 million.

Gearing Ends FY26 at 22.7%

Gearing was 22.7% at 30 June 2026, within Stockland’s target range of 20%–30%.

Available Liquidity was A$3.2 billion and weighted average Debt Maturity was 5.3 years.

The average cost of debt was 5.3% during FY26 and is expected to increase to approximately 5.9% in FY27.

Higher financing costs therefore represent an earnings consideration for the coming year.

FY27 MPC Settlements Are Expected to Decline

Stockland expects 7,300–8,300 Masterplanned Communities settlements in FY27, compared with 8,902 in FY26.

The company is targeting a development operating profit margin of around 20% for the division.

Management expects earnings growth elsewhere in the group to more than offset a lower MPC FFO contribution.

The change means FY27 growth is expected to rely on a broader mix of earnings drivers.

Land Lease Activity Is Expected to Increase

Land Lease Communities settlements are expected to reach 850–950 homes in FY27, compared with 777 in FY26.

Stockland is targeting a development operating profit margin above 22%.

Existing contracts on hand and sales activity provide a base for the expected settlement increase, although final timing remains dependent on construction and customer settlements.

FY27 FFO Guidance Points to Further Growth

Stockland expects FY27 FFO per security of between 38.0 and 39.0 cents, compared with 36.9 cents in FY26.

The FY27 distribution is expected to remain at 25.2 cents per security.

The outlook assumes no material change in market conditions and incorporates lower MPC earnings alongside contributions from other development and Investment activities.

Key Risks and Areas to Watch

Residential earnings remain sensitive to buyer demand, housing finance, construction costs and settlement timing. Higher debt costs may also affect group earnings as the average financing rate rises.

Workplace occupancy, development delivery and property valuations remain additional considerations. FY27 MPC and Land Lease settlements, data centre contributions, gearing and progress toward the FFO guidance range will be key measures.