As We Look Ahead To FY27

Vicinity Centres (' Vicinity', ASX: VCX) today released its results for the 12 months ended 30 June 2025 (' FY25'). FY25 financial and strategic highlights:


- Statutory net earnings after tax (' NPAT') of $1,004.6 m (FY24: $547.1 m).
- Funds From Operations (' FFO') up 1.4% to $673.8 m. Adjusted for one-off items1 and higher loss of rent from advancements, FFO was up 3.6%.
- At 14.8 cents, Vicinity delivered FFO per security at the top end of its assistance variety of 14.5 to 14.8 cents per security.
- Final distribution of 6.05 cps, bringing FY25 distribution to 12.00 cps (FY24: 11.75 cps), representing a payout ratio of 95.4% of Adjusted-FFO (' AFFO').
- Ongoing execution of investment method; obtaining a premium possession, Lakeside Joondalup, with strong development potential at attractive prices and divesting non-strategic assets at 5%+ above book worths.
- Opened Chadstone's revitalised fresh food and dining precinct, The marketplace Pavilion, which is trading above expectations. Chadstone's overall visitation in 4Q FY25 up 36% on 4Q FY24 and static centre2 sales up +4.4% over the same duration.
- Transformational development of Chatswood Chase to northern Sydney's style capital remains on track to begin opening in 2Q FY26; leasing now largely complete.
- Comparable Net Residential Or Commercial Property Income3 (' NPI') development of +3.7%, reflecting strength of Vicinity's portfolio metrics and continued outperformance by the premium possession portfolio. Headline NPI up 3.3%.
- Strengthening retail sales, up 2.8% in FY25 and resistant portfolio metrics supported by higher quality property portfolio, robust retailer demand and occupant remixing, amidst a tightening retail supply environment.
- Occupancy at 99.5%, renting spreads at +2.5%, typical annual escalator on new leases of +4.8% and specialized and mini majors sales in 2H FY25 up 4.7% relative to 2H FY24 (1H FY25: +2.9%).
- Coupled with strong occupancy, Vicinity's specialty tenancy cost ratio (' OCR') of 14.1% highlights possible for ongoing positive leasing tension and future lease growth.
- At 26.6%, tailoring is at lower end of the 25-35% target range, allowing financial investment in development priorities


Reflections on FY25 from CEO and Managing Director, Peter Huddle:


Strategic execution FY25 has been another crucial year for Vicinity. The strategic choices taken and financial investments made this year continue to be anchored by our strong conviction that premium, fortress-style properties found in strong trade areas that are well handled by retail residential or commercial property experts, have the potential to deliver remarkable and continual earnings and value growth. Our conviction continues to be reinforced by the emerging lack of retail Gross Lettable Area (' GLA') per capita in Australia4 emerging from population development, construction sector restrictions and limited significant occupant growth. In this context, we have continued to execute our investment technique in FY25, obtaining 50% of Lakeside Joondalup in Western Australia, a premium asset with strong growth potential at attractive pricing ($ 420 million), divesting three non-strategic properties at a blended premium to June 2024 book value of > 5%, and selectively buying essential, big scale retail advancements. Also during the year, we advanced essential and transformational retail developments at Chadstone and Chatswood Chase, with Chadstone's reimagined fresh food and dining precinct, The Market Pavilion, and brand-new, 20,000 sqm office tower, One Middle Road, effectively completed in 2H FY25. We were pleased to finish last negotiations with the LVMH Group to open at Chatswood Chase in 4Q FY26. For any high-end retail precinct, the presence of LVMH's home of brand names is critical. Formalising the extension of our close and effective partnership with the LVMH Group to include Chatswood Chase supports the effective reimagination of Chatswood Chase as northern Sydney's new style capital. Maintaining our conservative and disciplined method to handling gearing and retaining our credit ratings continues to be a guiding concept when managing and deploying capital. Importantly, we have actually had the ability to make meaningful improvements to our asset portfolio, while at the same time ensuring tailoring stays at the lower end of our 25% -35% target range, at 26.6%. Also supporting our tailoring was the 1.2%, or $175 million, uplift in overall portfolio appraisals in the second half. We are happy to report that for the 3rd consecutive six-month period, the portfolio delivered positive net residential or commercial property valuation growth in 2H FY25, underpinned by regularly strong income development and stable valuation metrics. On a complete year basis, the overall value of our portfolio increased by $349 million (1H FY25: up $174 million, 2H FY25: up $175 million). In January 2025, Vicinity developed a Distribution (' DRP') as a prospective alternate source of financing and flexibility for securityholders. The DRP functioned for the FY25 interim circulation, achieving a 9% uptake and providing Vicinity with $23 countless extra capital. The DRP remains in operation for the FY25 final distribution with a 1.0% discount to be applied. Further information were provided to the ASX today. Operating environment and portfolio performance FY25 has actually shown to be a resistant year in terms of retail sales development, taking advantage of the confluence of population growth, strong employment, the collected benefit of income tax decreases effective 1 July 2024, Federal Government initiatives to minimize the cost of living throughout FY25 (e.g., energy cost refunds), along with two interest rate decreases and the likelihood of further interest rate decreases in 2025. Following +2.0% retail sales5 development in 1H FY25, growth sped up to +3.8% in 2H FY25, providing a solid +2.8% MAT uplift for the complete year. Against this background, our portfolio metrics remained favorable and continue to support present and future year income growth. Occupancy lifted to 99.5% (Jun-24: 99.3%) and we are continuing to compose high quality leases; renting spreads stayed beneficial at +2.5% (FY24: +1.1%), average annual escalators on deals completed remain healthy at 4.8% (FY24: 4.8%) and the percentage of earnings on holdover is now at a historic low for Vicinity of 2.1% 6. At 3.7% in FY25 (FY24: 4.1%), comparable NPI development continued to be driven by exceptional portfolio metrics provided by our premium possessions. In FY25, our premium property portfolio7 provided 4.9% equivalent NPI growth, leasing spreads of +6.1%, tenancy at 99.6% and +4.3% development in mini major and specialty retail sales in 2H FY25. Notably, improving portfolio quality and strategic tenant remixing delivered by our residential or commercial property, leasing and advancement groups have actually supported 18% growth in specialty sales efficiency considering that FY19. Together with growing sales productivity and high portfolio tenancy, Vicinity's specialized occupancy expense ratio of 14.1% highlights possible for ongoing favorable leasing stress and future lease growth. Developments and mixed-use upgrade Our determination and our ability to purchase the vibrancy and quality of our asset portfolio remains an essential differentiator and a source of competitive benefit, specifically in the context of tightening up supply of retail floorspace and ongoing capacity constraints in Australia's building sector. On 27 March 2025, we opened Chadstone's revitalised fresh food and dining precinct, The Market Pavilion, which continues to trade above expectations. After a prolonged period of disruption from development activities, the opening of The Market Pavilion ushers in a new period for food and dining at Chadstone, enhancing the asset as Australia's premier location for shopping, dining and entertainment. Showcasing the favorable influence on the asset more broadly, Chadstone's total visitation in 4Q FY25 was up by 36% on 4Q FY24 and similarly, fixed centre retail sales have positively rebounded, up 4.4% over the exact same duration. In June 2025, we at Vicinity, and the Chadstone centre more broadly, were happy to officially invite Adairs' head office group to the One Middle Road workplace tower. Kmart is now fitting out its workplace area and is expected to formally open in early 2026. With One Middle Road occupied, Chadstone will gain from up to 2,000 more workplace workers during the week who will make use of the possession's unrivalled shopping, dining, leisure and home entertainment facilities, all easily situated and housed under the one roof. The Chatswood Chase major redevelopment is considerably advanced with major structural works now total and the brand-new mall reconfigurations taking shape. Notably, the pre-leasing is now mainly complete. Our strategies for a staged opening stay unchanged, with the redeveloped Ground and Level 2 on track to open in 2Q FY26, in time for Christmas. Following substantial lease settlements and an intricate fit-out procedure, the Luxury precinct on Level 1 is expected to be open and trading by 4Q FY26. The Board has authorized the commencement of the home entertainment and way of life redevelopment of Galleria in Western Australia, which will include a complete shopping mall revitalisation and introduction of a boosted dining and entertainment offer. As we expect FY27, retail development is most likely to be less transformational in nature and more concentrated on targeted, small to medium scale developments that ensure our assets continue to provide an engaging proposal for our consumers. From a broader mixed-use advancement point of view, following the NSW Government's approval of the Bankstown Rezoning Proposal in November 2024 as part of the Transport Oriented Development program, Vicinity is well placed to advance property development adjacent to our Bankstown Central property and the new Metro station, which is because of begin services in 2026. Chatswood Chase likewise presents an exciting near-term combined use development opportunity, with Vicinity owning 2 residential or commercial properties that are directly adjacent to the centre. Sites at both centres proposed for high density residential have been endorsed for addition in the Housing Development Authority's accelerated evaluation path, providing an accelerated planning process. Both Bankstown Central and Chatswood Chase represent 2 of Vicinity's the majority of tactically situated and exciting assets with possible to provide new housing in high-demand metropolitan precincts. These chances line up with government top priorities, while presenting Vicinity with the opportunity to additional densify the area surrounding essential assets. Vicinity continues to consider different operating and funding models proper for these mixed-use chances, while at the very same time, maintaining optionality in terms of how and when we open the finest threat adjusted return for Vicinity and its securityholders. Conclusion


In the context of significant developments and an active investment technique, FY26 will be another year where we stay steadfastly concentrated on driving strong and remarkable property performance while we concurrently complete and deliver Chatswood Chase, advance the redevelopment of Galleria, and cycle the short-term earnings effect from our strategic divestments to date. Importantly, our balance sheet remains a key enabler of our capability to invest in our development concerns, both organic and inorganic, that will eventually deliver sustained worth accretion for all our stakeholders. FY26 Earnings Guidance8


- FY26 FFO and Adjusted FFO per security anticipated to be within the varieties of 15.0 to 15.2 cents and 12.8 to 13.0 cents, respectively
- Vicinity anticipates its full year circulation payment to be within the target variety of 95-100% of Adjusted FFO
- Adjusting for one-off items9 and lower development-related loss of rent, FY26 FFO growth anticipated to be 2.0% - 3.5%.
- Comparable NPI development anticipated to be c. 3% in FY26. Excluding the impact of new taxes and levies, comparable NPI in FY26 would be expected to be c. 3.5%.
- Development-related loss of rent10 c.$ 25m in FY26 (FY27: c.$ 15m).
- Weighted typical expense of debt in FY26 expected to be c. 5.0% (FY25: 5.1%).
- Maintenance capital expenditure and leasing rewards of c.$ 100m.
- Investment capital investment anticipated to be in the series of $400m to $450m (FY25: c.$ 350m)


* * * This document needs to be read in combination with Vicinity's FY25 yearly results presentation and 2025 Annual Report released to the ASX today. A rundown by management elaborating on this announcement will be webcast from 10.15 am (AEST) today and can be accessed via vicinity.com.au/ investors.
1 Transactions and reversal of previous year arrangements.
2 Excludes merchants in The Market Pavilion.
3 Comparable net residential or commercial property income development omits turnaround of previous year provisions, deals and development impacts.
4 CBRE Research, Australia.
5 Sales are reported for comparable centres, which excludes divestments and development-impacted centres in accordance with Shopping center Council of Australia guidelines. Unless otherwise mentioned, sales growth is reported against the same duration a year previously.