Waypoint REIT (ASX:WPR) owns fuel and convenience retail properties across Australia. Its 1H26 result showed growth in distributable Earnings and distributions, while statutory profit declined because property valuation gains were lower than in the prior corresponding period. Leasing outcomes, Debt hedging and rental growth remain central to the outlook as portfolio Capitalisation rates move higher.

Distributable Earnings Increase

Waypoint reported distributable earnings of A$56.1 million for the six months ended 30 June 2026, compared with A$55.6 million in 1H25. Distributable earnings per security increased 3.4% to 8.59 cents.

The first-half distribution was 8.50 cents per security, up 3.2% from 8.24 cents. Waypoint’s policy is to distribute 100% of distributable earnings over the full year.

Statutory Profit Falls on Lower Valuation Gains

Statutory net profit was A$65.8 million, down from A$137.1 million in 1H25.

The main difference was the property valuation contribution. Waypoint recorded a net valuation gain of A$10.7 million in 1H26 compared with A$96.3 million in the prior corresponding period.

This makes distributable earnings a more relevant measure for assessing recurring rental and financing performance than statutory profit alone.

Portfolio Value Reaches A$2.86 Billion

Waypoint owned 394 properties at 30 June 2026 with a combined Book Value of A$2.8627 billion.

The portfolio remained 99.9% occupied by income and had a weighted average Lease expiry of 5.9 years.

Around 92% of portfolio value was located in metropolitan and highway locations, while the portfolio remained focused solely on fuel and convenience retail properties.

Capitalisation Rate Moves Higher

The weighted average capitalisation rate increased to 5.71% from 5.61% at 31 December 2025.

Despite the 10-basis-point increase, contracted rental growth offset some valuation pressure and the portfolio still recorded a net A$10.7 million valuation uplift.

NTA increased by 0.7% over the half to A$2.92 per security.

Lease Renewals Deliver 10.3% Reversion

Waypoint resolved all FY26 lease expiries by the time of the 1H26 result.

Twenty-six of 28 leases were renewed or extended, representing a 97.2% retention rate by income.

Average rental reversion across renewals was positive 10.3%. The two non-renewed sites are being assessed for alternative uses, reletting, redevelopment or sale.

Long Lease Profile Supports Rental Visibility

Waypoint’s weighted average lease expiry was 5.9 years at 30 June 2026.

The portfolio also has contracted rental escalations across most properties.

This lease structure provides visibility over future rental income, although earnings remain exposed to tenant concentration, refinancing costs and changes in property valuations.

Convenience Conversions Continue

Nineteen convenience conversions had been completed on Waypoint properties, with the works funded by Viva Energy Australia.

The conversion program is intended to reposition selected sites toward broader convenience retail formats.

Future conversion activity will depend on tenant Investment priorities, site Economics and customer demand.

Gearing Remains at 32.4%

Waypoint reported gearing of 32.4% at 30 June 2026, compared with 32.7% at December 2025.

This remains within the group’s 30%–40% target range.

Drawn debt was A$946.7 million, while undrawn debt facilities totalled A$113.0 million.

The balance-sheet position leaves some capacity for capital management and asset recycling.

Debt Hedging Reduces Near-Term Rate Exposure

Hedge cover was 90% at 30 June 2026.

Following additional hedging activity, Waypoint said 95% of its expected 2H26 debt exposure was hedged.

Weighted average hedge Maturity was 2.5 years, while the weighted average cost of debt for 1H26 was 4.7%.

The hedging profile reduces near-term exposure to interest-rate changes but does not remove future refinancing risk.

Debt Structure Is Extended

During June 2026, Waypoint issued a new A$250 million six-year Australian medium-term note.

The proceeds were used to repay and cancel A$250 million of bank facilities.

The transaction changed the debt mix without increasing the overall Facility limit and supported the group’s effort to diversify funding sources and manage future refinancing requirements.

Asset Sales Remain Part of Capital Management

Waypoint settled the sale of its Nowra property for A$6.1 million during the first half.

Management is targeting a further A$10 million to A$20 million of non-core asset sales during 2H26, subject to market conditions.

Asset recycling can provide funding capacity while allowing the portfolio to remain focused on properties that fit the group’s operating strategy.

FY26 Guidance Is Reaffirmed

Waypoint reaffirmed FY26 DEPS guidance of 17.14 cents, representing growth of 3% from FY25.

The company expects quarterly distributions of 4.32 cents per security in each quarter of 2H26, compared with 4.25 cents in 1H26.

The outlook assumes no material change in the operating environment and reflects a 100% payout of distributable earnings.

Key Risks and Areas to Watch

Further increases in capitalisation rates could reduce property values and lift gearing. Refinancing costs may also increase as existing hedges and debt facilities mature.

Tenant concentration remains another consideration, while specialised fuel and convenience Assets may have a narrower buyer pool than broader retail property.

DEPS, lease renewals, capitalisation rates, asset sales and debt costs will remain the main indicators through the second half.