Garda Property Group estimates its property divestment program will generate $90.7 million in capital gains and intends to return about 10.0 cents per security through special distributions. The proposed payments would come on top of upgraded FY27 distribution guidance of 12.5 cents per security, subject to settlements, tax outcomes, cash availability and Board approval.
- $350.8 million of estimated gross sale proceeds
- 20.8 cents per security in estimated net capital gains
- Indicative special distributions of 7.3 cents and 2.7 cents
- December 2026 quarter expected to capture 74% of net gains
- Post-sale capital earmarked for lending, buybacks and property opportunities
Garda estimates 20.8 cents per security in net gains
Garda Property Group (ASX:GDF) has put a number on the payoff from selling its remaining property portfolio: $350.8 million of gross sale proceeds and an estimated $90.7 million gross capital gain. After the applicable 50% capital gains tax discount, the estimated net capital gain is 20.8 cents per security.
The estimate covers the principal portfolio transaction with a Charter Hall managed fund, together with the Heathwood and Pinkenba sales. The Heathwood disposal was previously agreed at $17.5 million, while the Pinkenba transaction was conditionally agreed at $33.25 million, as reported in the Heathwood sale agreement and Pinkenba sale agreement. Garda says the calculations remain subject to completion adjustments, transaction costs, settlement statements, tax outcomes and other post-completion matters.
Most capital gains are expected in December
Timing matters because Garda is an Attribution Managed Investment Trust. The company expects taxable capital gains to be attributed to securityholders in the financial period when the relevant properties settle.
The Charter Hall transaction and Heathwood sale are expected to settle in the quarter ending 31 December 2026, generating about 15.3 cents per security in net capital gains after the applicable discount. Pinkenba and Morningside are expected to settle in the quarter ending 31 March 2027, contributing a further 5.5 cents per security. Garda says the Morningside settlement could be delayed during construction, leaving roughly 74% of the net capital gains allocated to the December quarter and the balance to the March quarter.
Proposed distributions would total 10 cents
The Board currently intends to distribute about 7.3 cents per security in the December quarter and 2.7 cents in the March quarter, for an aggregate special distribution of approximately 10.0 cents per security. Those payments are intended to help securityholders fund the associated capital gains, while Garda retains capital for its next phase.
The special distributions would be additional to upgraded FY27 distribution guidance of 12.5 cents per security. They are not yet locked in: Garda has made them conditional on the relevant settlements, final tax calculations, available cash reserves and Board approval. Final tax components are expected to be confirmed through the annual AMMA statements in August 2027.
Debt repayment opens next capital allocation phase
After the asset sales and repayment of Group debt, Garda expects to have substantial investment capacity. Its stated priorities include expanding the real estate lending platform, continuing security buybacks, pursuing selective direct property investments and considering other capital allocation opportunities.
That creates a cleaner balance sheet, but also shifts the investment question. The property portfolio has been converted into cash and distributions; the next test is whether Garda can redeploy the retained capital into lending and property opportunities without sacrificing the risk-adjusted returns it says it is targeting.
Bottom Line?
The proposed 10.0 cents per security return is substantial, but its timing and final amount still depend on settlements, tax calculations, cash reserves and Board approval.
Questions in the middle?
- Will all four property transactions settle on the current timetable, particularly the construction-linked Morningside sale?
- How much of the post-sale capital will Garda direct to lending, buybacks and new property investments?
- What final tax components will appear in the August 2027 AMMA statements?