Key Highlights

  • FY26 FFO was 36.9 cents per security, at the top of guidance, and statutory profit was $994 million, up 20.2%.
  • Gearing was 22.7%, down from 28.1% at 31 December 2025, within the 20% to 30% target range.
  • FY27 guidance is FFO of 38.0 to 39.0 cents per security and a distribution of 25.2 cents.
  • About 450 megawatts of power has been secured across three data centre sites, subject to final design and customer negotiations.

How did Stockland (ASX:SGP) deliver higher Earnings in FY26 while ending the year with lower gearing, and can that continue? The group's results on 19 August 2026 showed Funds From Operations (FFO) of 36.9 cents per security for the year to 30 June 2026, at the top of guidance, with gearing of 22.7 per cent. Management guides to 38.0 to 39.0 cents in FY27, though it expects residential settlements to fall.

What Stockland does

Stockland is an Australian diversified property group. It reports through two broad parts. Investment Management holds and manages retail, logistics and workplace property, plus rental income from communities. Development covers masterplanned communities, land Lease communities and commercial development.

Revenue and earnings drivers therefore include rent and occupancy in the investment portfolio, the number and Margin of residential lot and home settlements, fees from managing third-party capital, and development profits.

FY26 reported results

All figures are in Australian dollars for the year to 30 June 2026, from Stockland's results announcement.

Statutory profit was $994 million, up 20.2 per cent. Post-tax FFO, the group's preferred measure of underlying earnings, was $892 million, up 10.4 per cent. FFO per security was 36.9 cents, up 9.1 per cent, and adjusted FFO per security was 31.7 cents. Net tangible Assets were $4.39 per security, up 4.0 per cent.

The distribution was 25.2 cents per security, unchanged, with a Payout Ratio of 69 per cent. Management fee income was $119 million, up 20 per cent. Operating Cash Flow was $876 million. Recurring return on invested Capital was 7 per cent and development return on invested capital was 17 per cent.

Where the earnings came from

Investment Management FFO was $606 million, up 2.6 per cent. Comparable FFO growth across the segment was 3.5 per cent. Retail, a portfolio of about $5.0 billion, contributed $334 million with occupancy of 99.0 per cent and comparable growth of 3.1 per cent. Logistics, a portfolio of about $3.4 billion, contributed $179 million, with comparable growth of 8.1 per cent and re-leasing spreads of 33.8 per cent.

Workplace, by contrast, produced FFO of $114 million, comparable growth was negative 1.0 per cent, occupancy was 86.6 per cent and valuations fell $57 million (3.3 per cent). Retail valuations rose $199 million (4.2 per cent).

Communities rental income was $24 million, up 13.6 per cent. Development FFO was $540 million, up 17.3 per cent. Masterplanned Communities settled 8,902 lots, up about 30 per cent, at a 21.2 per cent margin. Net sales rose 49 per cent to 8,541, with 3,824 contracts on hand at year end. Land Lease Communities settled 777 homes, up 48 per cent, with 701 contracts on hand. Commercial development FFO was $35 million, with about $0.8 billion of projects completed and about $1.2 billion commenced. Development management fees were $91 million, up 35 per cent.

Balance sheet and capital partnering

Gearing was 22.7 per cent, down from 28.1 per cent at 31 December 2025, within the 20 to 30 per cent target range. Liquidity was $3.2 billion, weighted average Debt Maturity was 5.3 years and Moody's rating was A3 with a stable outlook; weighted average maturity was 4.6 years at June 2025, so debt tenor lengthened over the year.

The fixed hedge ratio averaged 65 per cent. The cost of debt averaged 5.3 per cent in FY26 and is expected to average 5.9 per cent in FY27.

Stockland raised about $1.5 billion of third-party capital and recycled $0.7 billion of assets in FY26. Partners included M&G in land lease and logistics, Morgan Stanley Real Estate for three convenience retail assets, and Mercer in residential rental. A 50/50 data-centre Partnership with EdgeConneX was finalised.

FY27 guidance, and the arithmetic behind it

Guidance is not a reported result. Stockland expects FFO of 38.0 to 39.0 cents per security and a distribution of 25.2 cents. For Masterplanned Communities it guides to 7,300 to 8,300 settlements at a development margin of about 20 per cent, and for Land Lease Communities 850 to 950 settlements at a margin above 22 per cent.

On our own arithmetic, the FFO range implies growth of roughly 3 to 6 per cent on FY26's 36.9 cents. The settlement range is about 7 to 18 per cent below the 8,902 lots settled in FY26, while land lease settlements would be about 9 to 22 per cent higher than 777.

Management said growth elsewhere should more than offset lower masterplanned communities FFO. Chief executive Tarun Gupta described FY26 as "a year of strong execution".

Data centres and partnerships

Stockland reported about 450 megawatts of power secured across three sites, subject to final design and customer negotiations. It expects data centres to begin contributing to FFO in FY27. The release itself shows no earnings from this yet, so it remains a development opportunity rather than a reported income stream.

One company-reported indicator is that 4,880 of its masterplanned settlements were under joint venture or project development agreements (FY25: 3,216), suggesting greater use of partner capital.

Risks and what to monitor

These are items to watch, not predictions.

Housing Demand and interest rates affect settlement volumes and margins. The guidance explicitly assumes no material change in market conditions.

Higher funding costs could weigh on earnings, as the average cost of debt is expected to rise from 5.3 per cent to 5.9 per cent.

Workplace occupancy of 86.6 per cent and falling valuations are a softer area of the portfolio.

Data-centre plans depend on design, customers and approvals, none of which are final.

Finally, the pace of capital recycling, about $1.8 billion across FY25 and FY26, will influence gearing, which management has kept within its target range after the drop from 28.1 per cent.