Q4 2026 Cromwell Property Group Earnings Call

August 27, 2026

Speaker #1: Thank you for standing by, and welcome to the Cromwell Property Group FY26 financial results briefing. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the Cromwell Property Group FY26 Financial Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Dr. Gary Weiss. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key, followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Dr. Gary Weiss. Please go ahead.

Speaker #2: Thank you, and good morning to everyone. Thank you for joining us today for Cromwell Property Group’s results for the financial year ended 30 June 2026.

Gary Weiss: Thank you, and good morning to everyone, and thank you for joining us today for Cromwell Property Group's results for the financial year ending 30 June 2026. I open today's presentation by acknowledging the traditional custodians of the land from where this call is being hosted, the Gadigal people of the Eora Nation. We pay our respects to their elders, past and present. FY26 was a year of disciplined execution against our strategic priorities. Despite a still volatile global environment, Cromwell strengthened its investment management platform, expanded institutional capital partnerships, and maintained resilient portfolio performance. The board and management team remains focused on prudent capital allocation, maintaining financial flexibility, and supporting initiatives that enhance the quality and sustainability of earnings. Our progress during the year reflects the benefits of a diversified platform and the strength of relationships we've built with our capital partners, customers, and broader stakeholders.

Speaker #2: I open today's presentation by acknowledging the traditional custodians of the land from where this call is being hosted, the Gadigal people of the Eora Nation. We pay our respects to their elders past and present.

Speaker #2: FY26 was a year of disciplined execution against our strategic priorities. Despite a still volatile global environment, Cromwell strengthened its investment management platform, expanded institutional capital partnerships, and maintained resilient portfolio performance.

Speaker #2: The board and management team remain focused on prudent capital allocation, maintaining financial flexibility, and supporting initiatives that enhance the quality and sustainability of earnings.

Speaker #2: Our progress during the year reflects the benefits of a diversified platform and the strength of relationships we have built with our capital partners, customers, and broader stakeholders.

Speaker #2: While challenges remain across parts of the property market, we believe Cromwell is well positioned to capture opportunities that align with our strategic objectives and create long-term value for security holders.

Gary Weiss: While challenges remain across parts of the property market, we believe Cromwell is well-positioned to capture opportunities that align with our strategic objectives and create long-term value for security holders. On behalf of the board, I would like to thank our people, customers, capital partners, and security holders for their continued support and commitment throughout FY26. Cromwell CEO, Jonathan Callaghan, will now take you through the results.

Speaker #2: On behalf of the Board, I would like to thank our people, customers, capital partners, and security holders for their continued support and commitment throughout FY26.

Speaker #2: Cromwell CEO Jonathan Callahan will now take you through the results.

Speaker #3: Thank you, Gary. As Gary mentioned, FY26 was a year of executing our strategy to grow our Australian investment management platform, following the completion of the sale of the European platform.

Jonathan Callaghan: Thank you, Gary. As Gary mentioned, FY26 was a year of executing our strategy to grow our Australian investment management platform, following the completion of the sale of the European platform. We've continued to deliver on our objective of building a larger, more diversified investment management platform, expanding and strengthening our income streams while maintaining the strong earnings contribution of our investment portfolio. Highlights for the year are outlined on slide 5. During the year, group funds under management grew by 11.4%, secured by AUD 748 million from new institutional investors, further broadening and diversifying our capital partner base. Importantly, this helped to drive improved financial outcomes with FFO increasing by 5%. Our investment portfolio remained resilient. With occupancy at 95.6% and no major vacancies until FY28, the investment portfolio continues to provide the business a dependable and predictable income stream and underpins the financial performance of the group.

Speaker #3: We continue to deliver on our objective of building a larger, more diversified investment management platform, expanding and strengthening our income streams, while maintaining the strong earnings contribution of our investment portfolio.

Speaker #3: Highlights for the year are outlined on Slide 5. During the year, group funds under management grew by 11.4%, secured by $748 million from new institutional investors, further broadening and diversifying our capital partner base.

Speaker #3: Importantly, this helped to drive improved financial outcomes, with FFO increasing by 5%. Our investment portfolio remained resilient, with occupancy at 95.6% and no major vacancies until FY28.

Speaker #3: The investment portfolio continues to provide the business with a dependable and predictable income stream, and underpins the financial performance of the group. Valuations are up 4.7% on FY25.

Jonathan Callaghan: Valuations are up 4.7% on FY25. This is the third consecutive six-month period of portfolio valuation increases. This performance reflects the quality of the underlying assets and the effectiveness of targeted asset management initiatives. A key milestone for the group was the acquisition of the industrial platform, which expanded our capabilities and strengthened our position in the sector, where we see attractive long-term opportunities and continued interest from capital partners. We continue to invest alongside our capital partners through targeted co-investments, including with Straits Real Estate in the Cromwell Industrial Partnership and through a new strategic venture with PAG, who have invested in a prominent office asset in Brisbane with us. These investments reinforce alignment with our capital partners and provide the opportunity for us to share in value creation with them.

Speaker #3: This is the third consecutive six-month period of portfolio valuation increases. This performance reflects the quality of the underlying assets and the effectiveness of targeted asset management initiatives.

Speaker #3: A key milestone for the group was the acquisition of the industrial platform, which expanded our capabilities and strengthened our position in a sector where we see attractive long-term opportunities and continued interest from capital partners.

Speaker #3: We continue to invest alongside our capital partners through targeted co-investments, including with Straits Real Estate in the Cromwell Industrial Partnership, and through a new strategic venture with PAG, who have invested in a prominent office asset in Brisbane with us.

Speaker #3: These investments reinforce alignment with our capital partners and provide the opportunity for us to share in value creation with them. We are encouraged by the level of engagement we continue to see from both existing and prospective capital partners across a range of investment strategies.

Jonathan Callaghan: We are encouraged by the level of engagement we continue to see from both existing and prospective capital partners across a range of investment strategies. I now turn to our operational performance highlights on slide 6. FFO increased 5%, underpinned by 11.4% growth in assets under management, while NTA rose 3.6%. Importantly, we maintained a strong balance sheet with conservative gearing and ample liquidity to support future growth. As you can see on slide 7, Cromwell's platform operates only in Australia and New Zealand with a total of AUD 4.7 billion of assets under management. Cromwell's investment management platform currently manages five direct property funds with capital sourced from retail, wholesale, and institutional partners. In addition, we manage listed security funds, have a 50% interest in the Oyster New Zealand funds management business, and manage separate mandates for two industrial developments for offshore investors.

Speaker #3: I now turn to our operational performance highlights on slide 6. FFO increased 5%, underpinned by 11.4% growth in assets under management, while NTA rose 3.6%.

Speaker #3: Importantly, we maintained a strong balance sheet, with conservative gearing and ample liquidity to support future growth. As you can see on slide 7, Cromwell's platform operates only in Australia and New Zealand, with a total of $4.7 billion of assets under management.

Speaker #3: Cromwell's investment management platform currently manages five direct property funds, with capital sourced from retail, wholesale, and institutional partners. In addition, we manage listed securities funds, have a 50% interest in the Oyster New Zealand funds management business, and manage separate mandates for two industrial developments for offshore investors.

Speaker #3: Turning to slide 8 of the results pack. During FY26, we continued to strengthen our responsible investment credentials, improving our S&P Global Corporate Sustainability Assessment score and maintaining strong external recognition through Gresham PRI.

Jonathan Callaghan: Turning to slide 8 of the results pack. During FY26, we continued to strengthen our responsible investments credentials, improving our S&P Global Corporate Sustainability Assessment Score and maintaining strong external recognition through GRESB and PRI. We also made further progress across our environmental metrics. Market-based scope 1 and scope 2 emissions have reduced by 96% from our FY22 baseline. Solar PV capacity expanded substantially due to the new industrial partnership, and we achieved improvements in both energy and water intensity. Overall, these outcomes reflect our ongoing commitment to responsible investment, operational excellence, and sustainable long-term growth, ultimately leading to increased attractiveness of our portfolio and security holder value. We have included some market data on slide 9, which reflects our belief that while market sentiment towards commercial property remains cautious, current conditions do not reflect the sector's medium-term fundamentals.

Speaker #3: We also made further progress across our environmental metrics. Market-based Scope 1 and Scope 2 emissions have reduced by 96% from our FY22 baseline. Solar PV capacity expanded substantially due to the new industrial partnership, and we achieved improvements in both energy and water intensity.

Speaker #3: Overall, these outcomes reflect our ongoing commitment to responsible investment, operational excellence, and sustainable long-term growth—ultimately leading to increased attractiveness of our portfolio and security holder value.

Speaker #3: We have included some market data on slide 9, which reflects our belief that while market sentiment towards commercial property remains cautious, current conditions do not reflect the sector's medium-term fundamentals.

Speaker #3: Transaction volume across each of the traditional sub-sectors has been resilient over 2026 year-to-date, despite elevated geopolitical disruption. As uncertainty stabilizes, we expect capital activity and investor appetite to improve.

Jonathan Callaghan: Transaction volume across each of the traditional subsectors has been resilient over 2026 year to date, despite elevated geopolitical disruption. As uncertainty stabilizes, we expect capital activity and investor appetite to improve. Demand across Australia's key markets remains resilient, while supply constraints are becoming increasingly evident. Development feasibilities are very challenged and construction cost pressures and labor shortages are unlikely to abate in the near term. This supports a favorable outlook for occupancy levels and rental growth at high-quality existing assets, where the competition for space is often greater than the broader market. Importantly, Cromwell's portfolio is concentrated in better-performing precincts, positioning us to perform well through the near term. Where we do have exposure to our higher vacancy precincts, Cromwell assets typically outperform the market, reflecting the quality of the buildings and our active management capability.

Speaker #3: Demand across Australia's key markets remains resilient, while supply constraints are becoming increasingly evident. Development feasibilities are very challenged, and construction cost pressures and labour shortages are unlikely to abate in the near term. This supports a favourable outlook for occupancy levels and rental growth at high-quality existing assets, where competition for space is often greater than the broader market.

Speaker #3: Importantly, Cromwell's portfolio is concentrated in better-performing precincts, positioning us to perform well through the near term. Where we do have exposure to higher-vacancy precincts, Cromwell assets typically outperform the market, reflecting the quality of the buildings and our active management capability.

Speaker #3: These fundamentals underpin our confidence in the long-term opportunity for both our investment portfolio performance and our strategy to grow earnings through investment management. I now pass to Michelle Dance, Cromwell's Chief Financial Officer, to talk in more detail about the financial performance of the group during FY26.

Jonathan Callaghan: These fundamentals underpin our confidence in the long-term opportunity for both our investment portfolio performance and our strategy to grow earnings through investment management. I now pass to Michelle Dance, Cromwell's Chief Financial Officer, to talk in more detail about the financial performance of the group during FY26.

Speaker #4: Thank you, Jonathan. I'll briefly cover the summary of FY26 financial results on slide 11, before stepping through the key drivers in more detail. FY26 was a solid year financially, with growth in funds from operations at 5%, to $110.3 million.

Michelle Dance: Thank you, Jonathan. I will briefly cover the summary of FY26 financial results on slide 11 before stepping through the key drivers in more detail. FY26 was a solid year financially, with growth in funds from operations of 5% to AUD 110.3 million. FFO has been adopted as the primary earnings measure for FY26, moving away from operating profit for ease of comparison with our peers. While deploying capital into accretive investments, we also maintained a strong balance sheet, with gearing of 31.6% remaining towards the lower end of our target range and significant liquidity of AUD 370.8 million. Together with our diversified debt funding and prudent hedging strategy, this positions the group well to prudently deploy capital into future growth initiatives. I will now take you through the key components of the results, starting with earnings drivers during the period on slide 12.

Speaker #4: FFO has been adopted as the primary earnings measure for FY26, moving away from operating profit for ease of comparison with our peers. While deploying capital into accretive investments, we also maintained a strong balance sheet, with gearing of 31.6% remaining toward the lower end of our target range, and significant liquidity of $370.8 million.

Speaker #4: Together with our diversified debt funding and prudent hedging strategy, this positions the Group well to prudently deploy capital into future growth initiatives. I'll now take you through the key components of the results, starting with earnings drivers during the period on Slide 12.

Speaker #4: Investment portfolio EBIT was marginally lower, due largely to a temporary vacancy at 400 George Street in Brisbane, which has been leased from the 1st of July 2026.

Michelle Dance: Investment portfolio EBIT was marginally lower, due largely to a temporary vacancy at 400 George Street in Brisbane, which has been leased from 1 July 2026. This was offset somewhat by strong growth across our investment management business and co-investments. Investment management platform EBIT grew, including investment income, reflecting contributions from our expanded industrial platform, development activities and performance fees. Following the divestment of our European platform and continuing onshore efficiency initiatives, the group lowered corporate costs. Finance costs were also down following the repayment of debt from proceeds of the transaction. Turning to the balance sheet on slide 13 now. During the year, net assets increased to just over AUD 1.5 billion, with NTA increasing to AUD 0.575 per security from AUD 0.56 per security at FY25. This was driven by positive investment portfolio valuations.

Speaker #4: This was offset somewhat by strong growth across our investment management business and co-investments. Investment management platform EBIT grew, including investment income, reflecting contributions from our expanded industrial platform, development activities, and performance fees.

Speaker #4: Following the divestment of our European platform and continuing onshore efficiency initiatives, the Group lowered corporate costs. Finance costs were also lowered, following the repayment of debt from proceeds of the transaction.

Speaker #4: Turning to the balance sheet on slide 13 now. During the year, net assets increased to just over $1.5 billion, with NTA increasing to 57.5 cents per security, from 56 cents per security at FY25.

Speaker #4: This was driven by positive investment portfolio valuations. While gearing increased following our investment in the Cromwell Industrial Partnership and continued progress at the Barton One development, it remains comfortably within our target range of 30% to 40%. Importantly, we retain substantial covenant headroom, with an LVR of 36.8% against the covenant of 60% and interest cover of 4.3 times against the covenant of 2.

Michelle Dance: While gearing increased following our investment in the Cromwell Industrial Partnership and continued progress at the Barton1 development, it remains comfortably within our target range of 30% to 40%. Importantly, we retain substantial covenant headroom with an LVR of 36.8% against a covenant of 60% and interest cover of 4.3 times against a covenant of two. Our debt profile remains well managed with 85.5% of debt hedged with a weighted average maturity of 2.3 years, reducing exposure to interest rate volatility. Overall, we believe that the balance sheet is in a strong position, providing both resilience and capacity to support the continued growth of the business. I will now hand over to Rob, our Chief Investment Officer, who will cover off activities in our investment portfolio and investment management platform.

Speaker #4: Our debt profile remains well managed, with 85.5% of debt hedged and a weighted average maturity of 2.3 years, reducing exposure to interest rate volatility.

Speaker #4: Overall, we believe that the balance sheet is in a strong position, providing both resilience and capacity to support the continued growth of the business.

Speaker #4: I'll now hand over to Rob, our Chief Investment Officer, who will cover activities in our investment portfolio and investment management platform.

Speaker #5: Thanks, Michelle. Good morning, everyone, and thank you for your time this morning. We'll start with the investment portfolio on slide 15. The underlying fundamentals remain solid throughout FY26.

Rob Percy: Thanks, Michelle. Good morning, everyone, and thank you for your time this morning. We will start with the investment portfolio on slide 15. The underlying fundamentals remained solid throughout FY2026. Our portfolio of seven stabilized assets delivered a 4.7% increase in valuation. Occupancy remained high at 95.6%, while the portfolio generated strong leasing outcomes with more than 28,000 square meters of new or renegotiated leases completed during the year. Completion of the lobby upgrade at 400 George Street, Brisbane, supported the Queensland State Government's exercise of its three-year lease option, securing 20,800 square meters of FY2027 lease expiries through to FY2030. This contributed to the asset's improved valuation and highlights the value created through targeted capital investment and active tenant engagement.

Speaker #5: Our portfolio of seven stabilized assets delivered a 4.7% increase in valuation. Occupancy remained high at 95.6%, while the portfolio generated strong leasing outcomes, with more than 28,000 square metres of new or renegotiated leases completed during the year.

Speaker #5: Completion of the lobby upgrade at 400 George Street, Brisbane supported the Queensland State Government's exercise of its three-year lease option, securing 20,800 square metres of FY27 lease expiries through to FY30.

Speaker #5: This contributed to the assets' improved valuation and highlights the value created through targeted capital investment and active tenant engagement. While like-for-like income was modestly impacted by a temporary 7,000 square metre vacancy at 400 George Street in Brisbane, the portfolio remains well positioned to capture future rental growth opportunities through lease expiries and small amounts of remaining vacancy in active markets.

Rob Percy: While like-for-like income was modestly impacted by a temporary 7,000-square-meter vacancy at 400 George Street in Brisbane, the portfolio remains well-positioned to capture future rental growth opportunities through lease expiries and small amounts of remaining vacancy in active markets. The quality of the income stream continues to be supported by a diversified tenant base, with strong government tenant exposure and a weighted average lease expiry of 4.6 years. Overall, these outcomes demonstrate that disciplined asset management continues to support portfolio performance, valuation resilience, and long-term sustainable earnings. Turning to Cromwell's investment management platform, starting on slide 16. I will begin with an overview of our platform, which is the main focus of growth for the group. Today, our platform spans funds management, development, property management, and strategic joint ventures, providing multiple avenues for earnings generation and capital deployment.

Speaker #5: The quality of the income stream continues to be supported by a diversified tenant base, with strong government tenant exposure and a weighted average lease expiry of 4.6 years.

Speaker #5: Overall, these outcomes demonstrate that disciplined asset management continues to support portfolio performance, valuation resilience, and long-term sustainable earnings. Turning to Cromwell's investment management platform, starting on slide 18.

Speaker #5: I'll begin with an overview of our platform, which is the main focus of growth for the group. Today, our platform spans funds management, development, property management, and strategic joint ventures, providing multiple avenues for earnings generation and capital deployment.

Speaker #5: We have expanded both the scale and capability of our investment management platform, increasing by 18% since FY24. This has been the turning point of the business after exiting Europe and focusing on growth in Australia.

Rob Percy: We have expanded both the scale and capability of our investment management platform, increasing the funds under management by 18% since FY2024, being the turning point of the business after exiting Europe and focusing on growth in Australia. Importantly, this growth has been achieved through targeted investments, new partnerships, and the expansion of specialist capabilities, particularly in the industrial sector. Slide 19 outlines some key achievements in the investment management platform over the last financial year. We secured AUD 748 million of new investment mandates through the establishment of the Cromwell Industrial Partnership, completed in December 2025, and the Brisbane office venture announced on 1 July 2026. We progressed three development projects during the year, including Barton1 in Canberra, with completion expected in the final quarter of FY2027 on time and on budget.

Speaker #5: Importantly, this growth has been achieved through targeted investments, new partnerships, and the expansion of specialist capabilities, particularly in the industrial sector. Slide 19 outlines some key achievements in the investment management platform over the last financial year.

Speaker #5: We secured $748 million of new investment mandates through the establishment of the Cromwell Industrial Partnership, completed in December 2025, and the Brisbane Office Venture announced on the 1st of July 2026.

Speaker #5: We progressed three development projects during the year, including Barton One in Canberra, with completion expected in the final quarter of FY27, on time and on budget.

Speaker #5: We are completing the final stage of the Kilsite Connect redevelopment and commencing stage two of Caban Connect Logistics Park, both in Adelaide, on behalf of offshore institutional investors.

Rob Percy: We are completing the final stage of the Coastside Connect redevelopment and commencing stage 2 of Cavan Connect Logistics Park, both in Adelaide on behalf of offshore institutional investors. The expansion of our industrial capability is further outlined on slide 20. Since 2018, the industrial platform has delivered or repositioned more than 140,000 square meters across more than 20 projects, demonstrating the strength and depth of market expertise that came with the industrial platform. Slide 20 provides an overview of the Cromwell Industrial Partnership. The portfolio comprises seven high-quality industrial assets valued at approximately AUD 478 million. Occupancy remains strong at 98.6%, supported by a diverse tenant base and a WALE of 4.7 years. We continue to see significant opportunity to create value through active leasing, capital investment, and asset repositioning initiatives across the portfolio.

Speaker #5: The expansion of our industrial capabilities is further outlined on slide 20. Since 2018, the industrial platform has delivered or repositioned more than 140,000 square metres across more than 20 projects, demonstrating the strength and depth of market expertise that came with the industrial platform.

Speaker #5: Slide 20 provides an overview of the Cromwell Industrial Partnership. The portfolio comprises seven high-quality industrial assets valued at approximately $478 million. Occupancy remains strong at 98.6%, supported by a diverse tenant base and a WALE of 4.7 years.

Speaker #5: We continue to see significant opportunity to create value through active leasing, capital investment, and asset repositioning initiatives across the portfolio. Our objectives remain clear: to continue to grow a diversified investment management business that delivers attractive outcomes for capital partners, while generating sustainable earnings growth for Cromwell Securityholders.

Rob Percy: Our objectives remain clear: to continue to grow a diversified investment management business that delivers attractive outcomes for capital partners while generating sustainable earnings growth for Cromwell security holders. I will now hand back to Jonathan.

Speaker #5: I'll now hand back to Jonathan.

Speaker #3: As we look ahead to FY27 on slide 24, our focus remains on disciplined execution across the business. We are well-positioned to build on the momentum achieved during FY26 by continuing to grow capital partnerships, progressing our development pipeline, and actively managing our investment portfolio.

Jonathan Callaghan: As we look ahead to FY27 on slide 24, our focus remains on disciplined execution across the business. We are well-positioned to build on the momentum achieved during FY26 by continuing to grow capital partnerships, progressing our development pipeline, and actively managing our investment portfolio. Reflecting our confidence in the business and outlook, we are targeting an increased distribution of AUD 0.031 per security for FY27. Cromwell remains committed to delivering sustainable long-term returns for our security holders. Thank you for your continued support. I want to hand back to the call operator to open the Q&A portion of this call.

Speaker #3: Reflecting our confidence in the business and outlook, we are targeting an increased distribution of 3.1 cents per security for FY27. Cromwell remains committed to delivering sustainable, long-term returns for our security holders.

Speaker #3: Thank you for your continued support. I will now hand back to the call operator to open the Q&A portion of this call.

Speaker #4: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.

Operator: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. The first question comes from the line of Connor with Eldridge. Please go ahead.

Speaker #4: If you are on a speakerphone, please pick up the handset to ask your question. The first question comes from the line of Connor with Eldridge.

Speaker #4: Please go ahead.

Speaker #6: Hi, thanks. Good morning. Just looking at the gap between the FFO and IFFO, and there's a fair bit from FY25 to FY26. Can you just give us a bit more colour on what drove that step up, and if you expect that to normalise in FY27?

Connor Eldridge: Hi, team. Good morning. Just looking at the gap between the FFO and the AFFO widened a fair bit from FY25 to FY26. Can you just give us a bit more color on what drove that step up, and if you expect that to normalize in FY27?

[Analyst 1]: Hi, team. Good morning. Just looking at the gap between the FFO and the AFFO widened a fair bit from FY25 to FY26. Can you just give us a bit more color on what drove that step up, and if you expect that to normalize in FY27?

Speaker #1: FY27, it's probably a bit of a trough here. So IFFO is likely to be so anyway. If you have a look at the lease expiry profile, that's probably your best guide for how IFFO is going to trend over the next few years.

Michelle Dance: FY27, it is probably a bit of a trough year, so AFFO is likely to be. If you have a look at the expiry profile, that is probably your best guide for how AFFO, FFO is going to trend over the next few years. I will caveat that by, it is very difficult to predict some of the key components of that in that, trying to predict when tenants are actually going to pull options, how they are going to call for them. We might be budgeting for something to be upfront, and then they change their mind, and it becomes an abatement that tracks over the lease term. Equally, we have some significant expiries coming up in 2028 and in 2032, and some of those leases are likely to be things that we engage with tenants on average.

Speaker #1: I will caveat that by saying it's very difficult to predict some of the key components of that, in that trying to predict when tenants are actually going to perform.

Speaker #1: How they're going to call for them, so we might be budgeting for something to be upfront, and then they change their mind and it becomes an abatement that tracks over the lease term.

Speaker #1: And equally, we have some significant expiries coming up in '28 and in '30 too. And some of those leases are likely to be things that we engage with tenants on early.

Speaker #3: So, the FY26 driver of IFFO deductions were effectively some repositioning of the assets that we've done at 400 George and 700 Collins in particular.

Jonathan Callaghan: The FY26 driver of our AFFO deductions were effectively some repositioning of the assets that we have done at 400 George and 700 Collins in particular. There is quite a large whack of tenant incentives, but also lifecycle CapEx, lifecycle CapEx that needs to be done in those buildings. We will still see the echoes of those deals coming out next year, so FY27. We still see a reasonably large CapEx load in the following year. Similar sorts of amounts of what you are seeing in FY26 to FY27.

Speaker #3: And so it's quite a large whack of tenant incentives, but also lifestyle capex, lifecycle capex that needs to be done in those buildings. We still see we'll still see the echoes of those deals coming out next year, so FY27.

Speaker #3: So we still see a reasonably large capex load in the following year, and so similar sorts of amounts to what you're seeing in FY26 and FY27.

Michelle Dance: Some of those things are like, there is electrification of 700 Collins Street, which is part of the negotiations with the bureau, which has helped reset that asset. It is important to look at some of that CapEx in the scheme of what it does for those assets long-term in enhancing sustainability, both from an income perspective, but also from an ESG perspective.

Speaker #1: Some of those things are like the electrification of 700 Collins Street, which is part of the negotiations with the Bureau and has helped reset that asset.

Speaker #1: I think it's important to look at some of that CapEx in the scheme of what it does for those assets in the long term, and enhancing sustainability both from an income perspective, but also from an ESG perspective.

Speaker #5: Yeah, the other thing I'll add is that some of these lifecycle works are being done as part of new lease deals—for example, in Collins Street, where we got the extension for a bond. Part of that was we would do some of the upgrades and some other upgrades.

Rob Percy: Yeah. The other thing I will add is some of these lifecycle works are being done as part of new lease deals.

Michelle Dance: Yeah.

Rob Percy: For example, in Collins Street, where we got the extension for Bond. Part of that was we would do some lift upgrades and some other upgrades. So they are largely the expenditures related to leasing.

Speaker #5: So, they're largely the expenditures related to leasing.

Speaker #6: Okay, thanks. That's very clear, guys. And just on slide 12, looking at the comment around the partial recognition of deferred consideration from the Campbell Park sale, just in co-investment income—what does this relate to, and how much did it contribute to the $6.4 million in co-investment APID?

Connor Eldridge: Okay, thanks. That is very clear, guys. On slide 12, looking at the comment around the partial recognition of deferred consideration from the Campbell Park sale, just in co-investment income, what does this relate to, and how much did it contribute to the AUD 6.4 million in co-investment EBIT?

[Analyst 1]: Okay, thanks. That is very clear, guys. On slide 12, looking at the comment around the partial recognition of deferred consideration from the Campbell Park sale, just in co-investment income, what does this relate to, and how much did it contribute to the AUD 6.4 million in co-investment EBIT?

Speaker #3: It relates to—so we sold Campbell Park a few years back. Part of the consideration for that sale was deferred, subject to certain events happening.

Jonathan Callaghan: We sold Campbell Park a few years back. Part of the consideration for that sale was deferred, subject to certain events happening. We are pretty confident that those certain events are now going to happen, so we have recognized some of that earnings or that deferred consideration in FY26. About AUD 4.3 million was recognized. Yeah.

Speaker #3: We’re sort of pretty confident that those certain events are now going to happen, so we’ve recognized some of that earnings, or that deferred consideration, in FY26.

Speaker #3: About $4.3 million was recognised.

Speaker #1: Yeah.

Speaker #6: Great, thanks for your time, guys.

Connor Eldridge: Great. Thanks for your time, guys.

[Analyst 1]: Great. Thanks for your time, guys.

Speaker #4: Next question comes from the line of Vinkitan. Good morning, sir. Please go ahead.

Operator: Next question comes from the line of Winkie Tan. Good morning, sir. Please go ahead.

Speaker #7: Hi, good morning, Jonathan and Michelle. I remember last year when you did that acquisition for TARE Property Partners, you talked about this potential further consideration based on whether you were meeting the performance hurdles.

Winkie Tan: Hi. Good morning, Jonathan and Michelle Dance. I remember last year when you did that acquisition for Terre Property Partners, you talked about this potential further consideration based on whether you are meeting the performance hurdles. Just wondering whether those performance hurdles have been met and what can we expect in FY27.

[Analyst 2]: Hi. Good morning, Jonathan and Michelle Dance. I remember last year when you did that acquisition for Terre Property Partners, you talked about this potential further consideration based on whether you are meeting the performance hurdles. Just wondering whether those performance hurdles have been met and what can we expect in FY27.

Speaker #7: Just wondering whether those performance hurdles have been met, and what can we expect in FY27?

Jonathan Callaghan: No further consideration in FY27. Deferred consideration is payable after 3 years, and it is effectively a share of profit. That happens at the end of FY27 to measure the profit that we have made from this venture, and we share some of that with Straits.

Speaker #3: No further consideration in FY27. The deferred consideration is paid last, but over three years. And that's—it’s effectively a share of profit. So, yeah, that happens at the end of FY27 to measure the profit that we've made from this venture.

Speaker #3: And we share some of that with Straits.

Speaker #7: Right, that's clear. And just the next one, can you talk about some of your key assumptions for your FY27 guidance?

Winkie Tan: Great. That is clear. Just next one, can you talk about some of your key assumptions for your FY27 guidance?

[Analyst 2]: Great. That is clear. Just next one, can you talk about some of your key assumptions for your FY27 guidance?

Speaker #3: I think at this point, Winkie, what we're confident in saying is that the distribution will be 3.1 cents. Broadly speaking, we expect a stronger performance from the investment portfolio next year, particularly as that vacancy in 400 George is filled up.

Jonathan Callaghan: I think at this point, Winkie Tan, what we are confident in saying is that the distribution will be 3.1 cents. Broadly speaking, we expect a stronger performance from the investment portfolio next year, particularly as that vacancy in 400 Georgie is filled up. Otherwise, broadly in line with what you are seeing.

Speaker #3: But otherwise, broadly in line with what you're saying.

Speaker #7: Right. And are you expecting any performance fees from your funds?

Winkie Tan: Right. Are you expecting any performance fees from your firms?

[Analyst 2]: Right. Are you expecting any performance fees from your firms?

Jonathan Callaghan: There is always a little bit of performance fee, but probably not as much as performance fees that you will see in FY26. This year, we had a good year for performance fees, particularly coming from our investment in securities funds, the Cromwell Phoenix Property Securities Fund operating platform. We are not expecting that good year to extend into FY27.

Speaker #3: There's always a little bit of performance fees, but probably not as much as the performance fees that you will see in FY26. This year we had a good year for performance fees, particularly coming from our investment in securities funds and the Phoenix operating platform.

Speaker #3: We're not expecting that good year to extend into FY27.

Speaker #7: Great. And just last one from me: What are your lease incentives for the office portfolio in FY26?

Winkie Tan: Great. Just last one from me. What is your lease incentives for the office portfolio in FY26?

[Analyst 2]: Great. Just last one from me. What is your lease incentives for the office portfolio in FY26?

Speaker #5: So the typical range for FY26 was between about 35% and 40%. Most of the leasing was done through Sydney and Brisbane, and we expect in future that Brisbane leasing will be incentivised more.

Jonathan Callaghan: They typically range. FY26 was between about 35% and 40%. Most of the leasing was done through Sydney and Brisbane, and we are expecting future Brisbane leasing to be incentivized more.

Rob Percy: They typically range. FY26 was between about 35% and 40%. Most of the leasing was done through Sydney and Brisbane, and we are expecting future Brisbane leasing to be incentivized more.

Winkie Tan: Great, thanks. That is all from me. Thank you.

[Analyst 2]: Great, thanks. That is all from me. Thank you.

Speaker #7: Great, thanks. That's all from me, thank you.

Speaker #5: Thanks, Winkie.

Jonathan Callaghan: Thanks, Winkie Tan.

Speaker #4: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Jonathan Callaghan: Sorry, on that, I thought you were

Michelle Dance: You are now offline.

Browse all earnings call transcripts

Q4 2026 Cromwell Property Group Earnings Call

Request TrialDemo

Cromwell

Earnings