Company Reports

Region increased fiscal 2026 funds from operations by 3% to AUD 16.0 cents per security. Distributions of AUD 14.1 cents, also up 3%, represent an 88% payout of FFO. Management guides to another 3% growth in FFO and distributions in fiscal 2027, to AUD 16.5 cents and AUD 14.5 cents, respectively.

Region Group aims to generate defensive, resilient cash flow by curating a portfolio of neighborhood and sub-regional centers across Australia. Anchor tenants, such as supermarkets and discount department stores, contribute half of Region’s property income. The other half is from specialty tenants, who predominantly trade in nondiscretionary categories like food and liquor, pharmacies, and healthcare.

Region Group's security price is up 3% year to date, one of the best performers in the sector and ahead of other retail REITs under our coverage.

Region Group aims to generate defensive, resilient cash flow by curating a portfolio of neighborhood and sub-regional centers across Australia. Anchor tenants, such as supermarkets and discount department stores, contribute half of Region’s property income. The other half is from specialty tenants, who predominantly trade in nondiscretionary categories like food and liquor, pharmacies, and healthcare.

In the first half, Region Group's funds from operations increased by 4% to AUD 91 million from the same period last year. Management lifted guidance slightly. The group now expects fiscal 2026 FFO of AUD 16.0 cents per security, up 3% from last year.

Region Group aims to generate defensive, resilient cash flow by curating a portfolio of neighborhood and sub-regional centers across Australia. Anchor tenants, such as supermarkets and discount department stores, contribute half of Region’s property income. The other half is from specialty tenants, who predominantly trade in nondiscretionary categories like food and liquor, pharmacies, and healthcare.

The latest numbers from the Australian Bureau of Statistics showed Australian shoppers are ready to spend. Household nondiscretionary spending rose almost 7% in October year on year, marking the strongest growth in more than two years.

Region Group aims to generate defensive, resilient cash flow by curating a portfolio of neighborhood and sub-regional centers across Australia. Anchor tenants, such as supermarkets and discount department stores, contribute half of Region’s property income. The other half is from specialty tenants, who predominantly trade in nondiscretionary categories like food and liquor, pharmacies, and healthcare.

Region Group reported funds from operations per security of AUD 15.50 cents and distributions of AUD 13.70 cents in fiscal 2025. Both are flat year on year. Anthony Mellowes, the CEO since the group's demerger from Woolworths in 2012, now intends to retire at end-May 2026.

Region Group aims to generate defensive, resilient cash flow by curating a portfolio of neighborhood and sub-regional centers across Australia. Anchor tenants, such as supermarkets and discount department stores, contribute half of Region’s property income. The other half is from specialty tenants, who predominantly trade in nondiscretionary categories like food and liquor, pharmacies, and healthcare.

We initiate coverage on Region Group, Australia's largest convenience retail REIT. The group owns a network of neighborhood shopping centers across the country.

As foreshadowed in our research report published on June 24, 2024, we cease coverage on Region. We provide analyst research and ratings on more than 1,600 companies globally and periodically adjust our coverage according to client demand, investor interest, and staffing.

We will discontinue analyst coverage of no-moat Region Group on or about July 15, 2024. Accordingly, we place Region Group under review. We provide analyst research and ratings on over 1,600 companies globally and periodically adjust our coverage according to investor interest and staffing.

Region Group (formerly Shopping Centres Australasia Property Group) owns and manages a portfolio of near 100 smaller shopping centers in Australia. Gross rental income is about evenly sourced from anchor tenants such as supermarkets and smaller specialty tenants. The REIT was created in 2012 when Woolworths sold a portfolio of its centers and leased back the supermarket sites within them. Region Group has since bought and sold various assets (including divesting its New Zealand portfolio). Woolworths remains its largest tenant, providing about a third of gross rent. Coles is about 10% and other tenants include Big W, Wesfarmers, and Aldi. Three fourths of assets (by value) are classified neighborhood and the other fourth is subregional, and most centers are in suburban or regional areas. The portfolio is relatively young, meaning just under a half of anchor tenants have hit thresholds where turnover rent becomes payable.

Region Group (formerly Shopping Centres Australasia Property Group) owns and manages a portfolio of near 100 smaller shopping centers in Australia. Gross rental income is about evenly sourced from anchor tenants such as supermarkets and smaller specialty tenants. The REIT was created in 2012 when Woolworths sold a portfolio of its centers and leased back the supermarket sites within them. Region Group has since bought and sold various assets (including divesting its New Zealand portfolio). Woolworths remains its largest tenant, providing about a third of gross rent. Coles is about 10% and other tenants include Big W, Wesfarmers, and Aldi. Three fourths of assets (by value) are classified neighborhood and the other fourth is subregional, and most centers are in suburban or regional areas. The portfolio is relatively young, meaning just under a half of anchor tenants have hit thresholds where turnover rent becomes payable.

Region Group’s fiscal half-year result revealed distributions and adjusted funds from operations, or AFFO, of AUD 6.7 cents per security. Our full-year AFFO estimate of AUD 13.7 cps remains unchanged and is in line with management guidance. AFFO is slightly below the halfway point for the full-year estimate, but second-half leasing requirements are mainly renewals, which tend to have lower capital expenditure.

The federal government’s migration review was released on Dec. 11 and it suggests high population growth remains the status quo. The review tinkers with various visa rules, but contains no major reduction in migrant numbers, suggesting high migration will persist, relative to precoronavirus levels and versus other developed countries.

Region Group (formerly Shopping Centres Australasia Property Group) owns and manages a portfolio of near 100 smaller shopping centres in Australia. Gross rental income is about evenly sourced from anchor tenants such as supermarkets and smaller specialty tenants. The REIT was created in 2012 when Woolworths sold a portfolio of its centres and leased back the supermarket sites within them. Region Group has since bought and sold various assets (including divesting its New Zealand portfolio). Woolworths remains its largest tenant, providing about a third of gross rent. Coles is about 10% and other tenants include Big W, Wesfarmers, and Aldi. Three fourths of assets (by value) are classified neighbourhood and the other fourth is subregional, and most centres are in suburban or regional areas. The portfolio is relatively young, meaning just under a half of anchor tenants have hit thresholds where turnover rent becomes payable.

No-moat Region Group’s result was in line with our expectations, and management guidance. Funds from operations fell 2.6% to AUD 16.9 cents per security, Adjusted FFO, or AFFO, and distributions, were flat at AUD 15.3 and AUD 15.2 cps, respectively.

Region Group (formerly Shopping Centres Australasia Property Group) owns and manages a portfolio of near 100 smaller shopping centres in Australia. Gross rental income is about evenly sourced from anchor tenants such as supermarkets and smaller specialty tenants. The REIT was created in 2012 when Woolworths sold a portfolio of its centres and leased back the supermarket sites within them. Region Group has since bought and sold various assets (including divesting its New Zealand portfolio). Woolworths remains its largest tenant, providing about a third of gross rent. Coles is about 10% and other tenants include Big W, Wesfarmers, and Aldi. Three fourths of assets (by value) are classified neighbourhood and the other fourth is subregional, and most centres are in suburban or regional areas. The portfolio is relatively young, meaning just under a half of anchor tenants have hit thresholds where turnover rent becomes payable.