Vicinity Centres (ASX:VCX) released its results for the 12 months ended 30 June 2026 (FY26) on 20 August 2026. The ASX announcement reported statutory net profit after tax (NPAT) of $1,391.2 million, compared with $1,004.6 million in FY25, and Funds From Operations (FFO) of $700.1 million, or 15.21 cents per security. The update also covered distributions, portfolio transactions, development projects and FY27 Earnings guidance.

WHAT VICINITY CENTRES DOES

Vicinity Centres is one of Australia's leading retail property groups, with a fully integrated asset management platform. The company reports $26 billion of retail Assets under management across 49 shopping centres, which it describes as making it the second largest listed manager of Australian retail property.

The group holds a direct portfolio with interests in 48 shopping centres, including the DFO Brisbane business, and manages 25 assets on behalf of strategic partners. Vicinity is listed on the ASX under the code VCX and has approximately 19,000 securityholders. It also has European medium term notes listed on the ASX under the code VCD.

FY26 FINANCIAL AND OPERATING RESULTS

FFO per security was 15.21 cents, compared with 14.79 cents in FY25. Vicinity said this was at the top end of its guidance range and was up 4.1% on an adjusted basis, after allowing for one-off items such as transaction impacts, the Reversal of prior year waivers and provisions, and lower lost rent from developments. The Board declared a final distribution of 6.20 cents per security, bringing the full year distribution to 12.4 cents, which represents a Payout Ratio of 95.5% of adjusted FFO. Net tangible assets increased to $2.59 per security, up 19 cents or 7.7%.

On operations, comparable net property income (NPI) growth was 4.2%. Total portfolio retail sales grew 3.3% for the year, with specialty and mini majors up 4.0%. Sales grew 4.2% in the first half before moderating to 2.3% in the second half. Occupancy was 99.6%, leasing spreads were +4.2% and annual rental escalators averaged +4.8% on deals completed.

Portfolio valuation rose $293 million, or 1.8%, to $16.1 billion in the second half, which the company attributed to income growth, retail sector fundamentals and a modest tightening in Capitalisation rates. Headline gearing was 26.1% and proforma gearing was 26.5%, against a target range of 25% to 35%.

TRANSACTIONS, DEVELOPMENTS AND FY27 GUIDANCE

Vicinity completed the Acquisition of DFO Eastern Creek on 30 June 2026 for $351 million, excluding a large format retail component under contract to a nominee for $49 million. The remaining 75% interest in Uptown in Brisbane was acquired for $212 million and settled on 14 August 2026. Divestments of Gympie Central, Whitsunday Plaza, Armidale Central, Victoria Park Central and ancillary land totalled $327.2 million, an 18.2% blended premium to June 2025 book values. In August 2026 the company entered binding arrangements to sell Taigum Square for $120 million, taking total divestments to $447.2 million.

The $625 million Chatswood Chase reimagination is complete. The company said the stabilised Yield and unlevered internal rate of return have increased to approximately 6.7% and 11%, and that the asset is expected to be valued at about $1.5 billion on stabilisation, based on management forecasts and a 5.0% capitalisation rate. Planning and rezoning continue for two residential towers with about 480 apartments, with authority approval anticipated in 2027. At Chadstone, a consolidated MECCA store is expected to open for Christmas 2026, and the Galleria redevelopment in Perth is expected to open in November 2026.

For FY27, Vicinity guided to FFO per security of 16.0 to 16.2 cents, which it said represents growth of 5.3% to 6.6%, and adjusted FFO (AFFO) per security of 13.9 to 14.1 cents.

RISKS AND WHAT TO WATCH

Vicinity noted that second half sales growth of 2.3% was lower than the first half, referring to cost-of-living pressures, higher interest rates, Inflation and geopolitical uncertainty. Guidance is stated to be subject to unforeseen circumstances and material changes in operating conditions, and FY27 comparable NPI growth guidance of 3.5% is below the FY26 outcome of 4.2%.

The company said geopolitical uncertainty could add variability to the cost and Supply outlook for its development pipeline, and it described its outlook as one of cautious confidence. Development outcomes, including the Chatswood Chase returns, depend on management forecasts and assumptions.

NEXT MILESTONES

Settlement of Taigum Square and the Ellenbrook Central ancillary land is expected in September 2026. The Distribution Reinvestment Plan, with a 1% discount, remains in operation for the final distribution. The MECCA consolidation at Chadstone is expected to open by Christmas 2026 and Galleria is expected to open in November 2026. Uptown project works are planned to begin in the first half of 2027, and authority approval for the Chatswood Chase residential towers is anticipated in 2027.