Woolworths Group alone supplies 28 per cent of Region Group's gross rent. At HomeCo Daily Needs REIT, the ten largest tenants together provide about a third of gross income, spread across neighbourhood centres, large format retail and health assets.

Both S&P/ASX 200 retail real estate Investment trusts (REITs) rest on the same idea: people keep buying groceries and filling prescriptions through the economic cycle. Their FY26 results show similar rental trends but diverging FY27 outlooks, largely because of how each has managed Debt costs.

Two routes to the weekly shop

Region Group (ASX:RGN), formerly Shopping Centres Australasia Property Group, is an internally managed stapled group of two trusts. It owned 86 retail properties valued at $4,598 million at 30 June 2026, mostly supermarket-anchored convenience centres.

HomeCo Daily Needs REIT (ASX:HDN) is a single unit trust managed externally by HMC Funds Management, part of HMC Capital (ASX:HMC), which received $27.8 million in investment management fees in FY26. Its 46 properties, valued at A$5.2 billion, earn roughly 40 per cent of income from neighbourhood centres, 40 per cent from large format retail and 20 per cent from health and wellness assets.

So Region is a concentrated supermarket play, while HomeCo spreads its "daily needs" definition across hardware, homewares and medical services as well as groceries.

What FY26 delivered for each trust

HomeCo released its FY26 results on 13 August 2026, for the year to 30 June 2026. Funds from operations (FFO), a REIT's measure of underlying Earnings that excludes property revaluations, rose to $187.1 million from $182.5 million, or 9.0 cents per unit from 8.8 cents.

Distributions were 8.6 cents and comparable net Operating Income (NOI) grew 4.0 per cent. Statutory net profit, lifted by revaluations, was $361.6 million. Net tangible Assets (NTA), the Book Value of assets less debt per unit, rose to $1.56 from $1.47. Occupancy held at 99 per cent and leasing spreads, new rents versus expiring ones, were 5.9 per cent.

Region's FY26 results, released on 18 August 2026, showed FFO of 16.0 cents per security, up 3.2 per cent, and adjusted FFO (AFFO), which also deducts maintenance capital spending and leasing incentives, of 14.1 cents. The group distributes 100 per cent of AFFO, so its distribution was also 14.1 cents. Statutory net profit after tax was $268.8 million and NTA rose 4.0 per cent to $2.57.

Region's occupancy improved to 98.1 per cent from 97.5 per cent, comparable NOI grew 3.3 per cent and leasing spreads averaged 4.0 per cent. Supermarket sales grew 4.1 per cent, and 58 per cent of its supermarkets paid turnover rent, an extra component triggered when store sales pass a threshold.

Tenant quality seen from two angles

Region's income leans heavily on the big grocers: Woolworths Group at 28 per cent of gross rent, Coles Group at 10 per cent and Wesfarmers at 4 per cent. Specialty shops and mini-majors provide about 55 per cent. Specialty occupancy was 95.7 per cent and occupancy cost, meaning rent as a share of tenant sales, was 9.7 per cent.

HomeCo says national retailers make up more than 83 per cent of its tenant base, and its top ten tenants generate around 33 per cent of gross income. Its rent reviews are 72 per cent fixed, 17 per cent linked to Inflation and 11 per cent supermarket turnover rent, with a weighted average review of 3.6 per cent.

Weighted average Lease expiry (WALE), the average time left on leases weighted by income, was 4.9 years at HomeCo and 4.6 years by gross rent at Region.

Where debt costs split the outlook

The sharpest contrast is FY27 guidance. HomeCo expects FFO to fall to 8.8 cents per unit while holding distributions at 8.6 cents, citing a higher cost of debt and a larger drawn debt balance that offset forecast comparable NOI growth of 4.0 per cent. At 30 June 2026, 68.4 per cent of its debt was hedged, its weighted average cost of debt was 5.0 per cent and gearing was 35.7 per cent.

Region guided to 3.0 per cent growth: FFO of 16.5 cents and AFFO of 14.5 cents. It reported 100 per cent of debt hedged or fixed at an average 2.9 per cent before margin, a weighted average cost of debt of 4.5 per cent and gearing of 34.3 per cent, after refinancing more than $1 billion of facilities.

By our calculation, HomeCo's FY27 distribution guidance equals about 98 per cent of guided FFO (8.6 ÷ 8.8), up from about 96 per cent in FY26 (8.6 ÷ 9.0). Region sets its payout on AFFO, a stricter measure, so its FY26 distribution equalled 88 per cent of FFO (14.1 ÷ 16.0). HomeCo does not report AFFO the same way, so this is indicative only.

A like-for-like yardstick on book value

A steadier comparison than market Yield is distribution relative to NTA. By our calculation, HomeCo's FY26 distribution of 8.6 cents equals 5.5 per cent of its $1.56 NTA, and Region's 14.1 cents equals 5.5 per cent of its $2.57 NTA.

The weighted average Capitalisation rate, the income yield valuers apply to the properties, was also close: 5.53 per cent for HomeCo and 5.86 per cent for Region.

These are book-value ratios, not market yields.

Risks and signposts for both REITs

Supermarket-anchored income is defensive but not risk-free. Region's Woolworths concentration makes that retailer's store strategy unusually important. HomeCo's large format exposure ties part of its income to household spending on bulky goods, and its management fees are set by agreement with HMC Capital.

Interest rates are the common risk. HomeCo's partly unhedged debt already weighs on FY27 FFO, while Region must eventually replace hedges set at 2.9 per cent before margin; the roll-off timing was not quantified in its results summary.

Region holds its Annual General Meeting on 20 October 2026, with votes on director elections and incentive rights for managing director Greg Chubb. It bought back 12.7 million securities for $29.2 million during FY26 and was still lodging buy-back updates in September 2026.

For HomeCo, watch delivery of its $650 million-plus development pipeline, which targets returns on invested capital of about 7 per cent or more, and whether NOI growth holds up.

Both remain S&P/ASX 200 members, per iShares IOZ holdings dated 24 September 2026.