GPT Group Delivers 5% FFO Growth and $41.6 Billion AUM with Key Developments On Track

Strong Earnings Growth Anchored by Diverse Portfolio

The GPT Group (ASX:GPT) posted a 5% rise in funds from operations (FFO) to $338.8 million for the six months ending June 30, 2026, translating to 17.7 cents per security. Adjusted funds from operations (AFFO) grew by 2.3% to $263.4 million, while statutory net profit after tax surged 21.6% to $400.1 million, buoyed by a $45 million uplift in investment portfolio valuations.

The group's assets under management (AUM) expanded by $1.8 billion or 4.6% to $41.6 billion, reflecting the combined strength of its retail, office, logistics, and living sectors. Net tangible assets per security rose modestly to $5.61, supported by disciplined capital management and a stable gearing ratio of 31.5%, well within its target range.

Retail and Office Segments Drive Occupancy and Income

GPT’s retail portfolio maintained near-perfect occupancy at 99.8%, delivering 4.6% like-for-like net property income (NPI) growth. The segment completed 232 specialty lease deals with positive lease spreads of 6.6% and average lease terms of just over five years. Retail sales growth was steady, with total centre sales up 3.5% and specialty sales also rising 3.5% year-on-year.

Key development projects are progressing smoothly, with the Rouse Hill Town Centre expansion fully leased and on track for completion in late 2026. Construction has also started on the $170 million Melbourne Central expansion, signalling GPT’s commitment to enhancing its retail footprint.

In the office sector, occupancy stood at 92.1%, slightly down from previous levels but supported by a strong weighted average lease expiry (WALE) of 4.8 years. Like-for-like NPI growth was a robust 8.0%, reflecting improving market conditions and active leasing efforts. Notably, leasing progress at Grosvenor Place in Sydney continues, with occupancy at 70.6% and over 9,000 square metres leased since acquisition.

Logistics Portfolio and Development Pipeline Gain Traction

The logistics portfolio sustained near-full occupancy at 98.9%, with like-for-like NPI growth of 4.0%. Leasing activity was strong, with 100,400 square metres secured during the period, delivering exceptional average lease spreads of 38%. GPT’s logistics development pipeline, valued at around $3 billion, is advancing well, with the Kemps Creek facilities scheduled for completion in the second half of 2026 and two of three buildings already leased.

Capital Management and Fundraising Success

Capital initiatives were a highlight, with GPT Wholesale Shopping Centre Fund (GWSCF) raising $697 million through primary equity issuance and secondary transactions, surpassing targets. This fund also secured a $700 million Asian Term Loan post balance date, diversifying funding sources and extending debt maturities.

The group’s weighted average cost of debt declined by 34 basis points to 5.0%, while the weighted average debt term remained steady at 4.4 years. Liquidity stood at a healthy $1.0 billion, supporting GPT’s capacity to fund ongoing developments and strategic acquisitions.

Outlook and Guidance

Looking ahead, GPT reaffirmed its full-year 2026 guidance, targeting FFO growth of approximately 4% to 35.4 cents per security and a distribution of 24.5 cents per security. CEO Russell Proutt emphasised the group’s focus on leasing up Grosvenor Place, sustaining asset performance, and disciplined capital allocation to create long-term value.

With major projects like Rouse Hill and Melbourne Central progressing on time and budget, and a diversified portfolio delivering steady income growth, GPT appears well-positioned to navigate the evolving real estate landscape. However, the success of its development pipeline and leasing momentum at Grosvenor Place will be critical to watch in the coming months.