Why Commercial Property Investors Should Compare GARDA (ASX:GDF) and GDI Property (ASX:GDI) Beyond the S&P/ASX 200

Both groups earned roughly the same funds from operations for every dollar of net tangible Assets in FY26, yet the market valued them very differently. That gap is why GARDA Property Group (ASX:GDF) and GDI Property Group (ASX:GDI) merit a closer look.

Each is a small stapled group outside the S&P/ASX 200, and each has moved beyond simply owning buildings. GARDA now earns about half its Revenue from lending, while GDI pairs Perth office towers with workforce accommodation in Mining regions. Comparing them shows how extra income streams change both returns and risk.

GARDA's shift from landlord to part-lender

A stapled security bundles a company share with a trust unit so that they trade as one. GARDA's FY26 results presentation, released on 30 July 2026 for the year to 30 June, describes nine Brisbane industrial properties valued at A$340 million, with a weighted average Capitalisation rate of 5.88 per cent. The cap rate is annual Net Income divided by value.

The bigger change is its Loan book. Deployed lending almost doubled to $134.1 million, about 27 per cent of group assets, with committed loans of $202 million. GARDA said loans returned an average 20.1 per cent a year, with a weighted term of about 10 months. Lending supplied 49 per cent of FY26 revenue, up from 23 per cent a year earlier.

About 68 per cent of the book carries senior-debt risk at loan-to-value ratios of up to 70 per cent, meaning the loan is at most 70 per cent of the security property's value.

What GARDA's FY26 numbers show

Funds from operations (FFO), a measure of recurring cash Earnings that excludes valuation changes, rose 54 per cent to 11.1 cents per security. Distributions rose 18 per cent to 8.5 cents, a Payout Ratio of 77 per cent, and statutory profit after tax was $23.8 million.

Net tangible assets (NTA), the Book Value of assets less liabilities excluding intangibles, rose to $1.64 per security. Gearing, a measure of Debt against assets, fell to 29.8 per cent from 42.9 per cent. Drawn debt was $162.0 million, 61.7 per cent of it hedged, and GARDA lifted its Facility limit by $20 million to $186 million in July 2026.

For FY27, GARDA guided to FFO of 10.5 cents and distributions of 9.0 cents. On the property side, a new 10-year Lease to O'Brien Glass over 6,754 square metres at Acacia Ridge began in July 2026, adding an expected $1.4 million of FY27 net property income. A $14.0 million expansion at Morningside targets a 12.2 per cent Yield on cost, which expresses the added annual income as a share of the money spent.

The first quarterly payment, 2.25 cents, goes ex on 29 September, with payment on 15 October 2026.

GDI's Perth office bet and its mining-town rooms

GDI's FY26 results presentation, released on 24 August 2026, shows a $961.3 million portfolio dominated by Perth CBD offices. Westralia Square, split across two valuations, is carried at $506.4 million and was 100 per cent leased. The Mill Green complex around 197 St Georges Terrace is the main leasing and redevelopment project. Occupancy there rose to 92 per cent from 87 per cent, and at 5 Mill Street to 93 per cent from 86 per cent, after more than 20,937 square metres of group leasing and renewals.

GDI also manages unlisted property trusts for outside investors and owns 50 per cent of a co-living joint venture. That Business runs 987 rooms in Newman, Norseman, South Hedland and Moranbah, largely housing resource-sector workers. Moranbah, bought during FY26 for $18.3 million, includes a take-or-pay arrangement with coal miner Stanmore. The venture's FFO contribution rose 44 per cent to $9.5 million.

Group FFO rose 25.0 per cent to $44.5 million, or 8.24 cents per security, while statutory net profit fell to $34.9 million from $41.6 million. Distributions were 5.0 cents, and GDI intends to seek the same for FY27, noting they may be partly paid from capital.

Balance sheets and buy-backs compared

GDI's gearing was 33.0 per cent, with $365.3 million drawn and 80.1 per cent hedged to 31 December 2027. Occupancy improved to 90.0 per cent, the weighted average lease expiry was 4.2 years against GARDA's 4.1, and NTA was $1.21 per security. Post-balance-date Liquidity was $90 million.

After balance date GDI announced an on-market buy-back of up to 5 per cent of securities, which coverage said depended partly on selling more than $100 million of non-core assets. By a 17 September notice, it had bought back 207,263 securities at 62.5 to 63.5 cents.

One yardstick, two very different discounts

By our calculation, dividing FY26 FFO per security by NTA gives GARDA 6.8 per cent (11.1 cents over $1.64) and GDI 6.8 per cent (8.24 cents over $1.21). On that measure, the two are almost identical.

Market prices tell a different story. GARDA's presentation cited a $1.055 price, a 35.7 per cent discount to NTA. GDI's investor centre showed 63.0 cents on 25 September 2026, which by our calculation is about 48 per cent below NTA. The price dates differ, so the comparison is indicative only.

The limits are important: GARDA's FFO relies on short-term loans that must be continually replaced, and GDI's co-living earnings depend on resource activity.

Where each could disappoint

GARDA's occupancy of 77.4 per cent reflects a 40,434 square metre Warehouse at Pinkenba left vacant after its lease was disclaimed in July 2026. GARDA holds a $2.3 million bank guarantee and kept the property's valuation at $34.0 million. About 32 per cent of its loan book is early-stage or higher-leverage lending, and 46 per cent is residential.

GDI is exposed to Perth office demand, where its presentation cited overall CBD vacancy of 15.4 per cent in the first half of 2026. Funds management FFO fell 39.3 per cent to $6.2 million after the Autoleague portfolio sales.

Signposts for the months ahead

For GARDA, watch loan repayments and redeployment, re-leasing at Pinkenba and progress on its Morningside expansion. For GDI, watch non-core asset sales, buy-back volumes, Mill Green leasing and co-living returns against its 20 per cent target on invested capital.