SGP +12.35%: delivered a better-than-expected FY26 result, with funds from operations (FFO) ahead of consensus and FY27 guidance pointing to further earnings growth despite an expected moderation in residential community settlements. Importantly, the broader portfolio – including land lease communities, logistics, retail and funds management – is expected to more than offset lower MPC earnings, highlighting how much more diversified SGP has become.
Key results:
- FFO of A$892m, up 10% and ~2% ahead of A$877m expected.
- FFO per security of 36.9c, ~3% ahead of 36c expected.
- Revenue of A$3.59bn, up 15%.
- Net profit of A$994m, up 20% and ~13% ahead of A$877m expected.
- Final distribution of 16.2cps.
FY26 benefited from a step-change in development delivery, with 9,679 settlements across Masterplanned Communities (MPC) and Land Lease Communities (LLC), alongside growth from logistics, retail and fee income. For FY27, SGP expects FFO per security of 38–39c, implying another 3–6% growth, and distributions of 25.2cps.
MM’s view: We like the result. SGP is no longer leveraged bet on residential development; the growing contribution from recurring property income, land lease communities and funds management is improving the quality of earnings. FY27 residential settlements will come off a very strong year, but guidance still points higher, which is exactly what we want to see. The combination of earnings growth, tangible asset backing and income makes SGP one of the more attractive diversified property exposures on the ASX.
MM is cautiously bullish toward SGP
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