360 Capital REIT (ASX:TOT) reported a 382% surge in statutory profit to $6.3 million for FY26, driven by full occupancy and a strategic $10 million structured equity investment. The Fund upgraded FY27 earnings per security to 3.8 cents and forecast a 20% distribution increase.
- Statutory profit jumps 382% to $6.3 million
- 100% occupancy achieved with no lease expiries until FY29
- Introduced $10 million structured preference equity investment
- FY27 EPS upgraded to 3.8 cents, distributions forecast up 20%
- Debt facility extended to 2031 with increased limit to $100 million
Surge in Profit Backed by Full Occupancy and Structured Equity
360 Capital REIT (ASX:TOT) posted a statutory profit of $6.3 million for the year ended 30 June 2026, marking a 382% increase from $1.3 million in the prior year. This leap was supported by a 33% rise in operating profit to $6.9 million, underpinned by a fully leased portfolio and income from a new structured preference equity investment.
The Fund’s direct property portfolio, valued at $202.4 million, reached 100% occupancy during FY26, up from 93.4% the previous year, with no lease expiries until FY29. The Weighted Average Lease Expiry (WALE) stands at a solid six years, providing stable cash flows from high-quality tenants including government agencies and ASX-listed companies.
Strategic $10 Million Structured Equity Investment Enhances Returns
In December 2025, 360 Capital REIT invested $10 million in a structured preference equity stake within a Sydney apartment block, managed by 360 Capital Private Equity Fund 1. This investment offers a 16% preferred coupon and a potential profit share, boosting the Fund’s earnings and diversifying its income streams.
As of 30 June 2026, the outstanding balance of this investment was $10.9 million, reflecting capitalised interest. The sell-down of individual apartments has commenced, with six units exchanged or sold at an average premium of 32.5%, initiating self-liquidation that will recycle capital back to the Fund over the next 12 to 18 months.
Upgraded FY27 Earnings and Distribution Guidance
Building on FY26 momentum, 360 Capital REIT upgraded its FY27 earnings per security forecast from 3.6 cents to 3.8 cents, an 18.8% increase on FY26. This upgrade reflects the full leasing of the portfolio, reduced interest margins following the extension of the debt facility, and anticipated returns from the structured equity investment.
Distributions are forecast to rise 20% to 3.6 cents per security in FY27, maintaining a payout ratio of approximately 95%, with distributions expected to be 100% tax deferred. This aligns with the Fund’s track record of providing tax-effective income to securityholders.
Debt Facility Extended and Capital Management Strengthened
In May 2026, the Fund extended its debt facility maturity to August 2031, reducing its interest margin and increasing the facility limit from $80 million to $90 million during the year, with a post-year-end increase to $100 million. The drawn debt stood at $84 million as at 30 June 2026, with gearing at 38.9%, within the Fund’s target range.
The Fund’s distribution reinvestment plan (DRP) was active for the March and June 2026 quarters, issuing over 4.3 million securities, supporting capital recycling and future structured equity investments. Gearing is forecast to reduce to 33.9% by June 2027, aided by DRP proceeds and repayments from the structured equity investment.
Portfolio Composition and Leasing Highlights
The core portfolio comprises three modern, well-rated assets: a 50% interest in 510 Church Street, Cremorne VIC (office/healthcare), and full ownership of 38 Sydney Avenue, Forrest ACT (A-grade office), and 34 Southgate Avenue, Cannon Hill QLD (high-tech industrial). All properties boast strong NABERS energy and water ratings, with tenants including the Australian National Audit Office and Michael Hill International.
Leasing activity at 510 Church Street saw Siemens Energy, Endeavour Group, and Stack Infrastructure sign new leases totaling over 3,600 sqm, ensuring no vacancy downtime and minimal capital expenditure. The Fund is also negotiating an early lease release with Dentsu for levels 7 and 8, which expire in FY30, aiming to secure new tenants promptly.
Governance and Operational Updates
360 Capital REIT appointed Equity Trustees Limited as external custodian in May 2026, enhancing asset oversight. Hall Chadwick (NSW) replaced Ernst & Young as auditor in June 2026. The Fund’s directors, including Executive Director Tony Pitt who holds over 50% of securities, remain focused on driving earnings growth and closing the discount to NTA, which stood at 29.3% as of 30 June 2026.
With net tangible assets stable at $0.58 per security and the ASX closing price modestly up to $0.41, the Fund’s strategy of combining stable direct property income with accretive structured equity investments positions it well for continued growth and income resilience.
Bottom Line?
360 Capital REIT’s FY26 results underscore the potential of blending stable property income with structured equity to drive earnings growth; the key will be execution on further structured equity deals and managing the discount to NTA.
Questions in the middle?
- Will the Fund secure new tenants early for Dentsu’s vacated space to maintain full occupancy beyond FY29?
- How quickly will the structured preference equity investment fully self-liquidate, and what new opportunities will the Fund pursue next?
- Can the Fund sustainably narrow the near 30% discount between its ASX trading price and NTA amid market volatility?