What to expect this reporting season

Research evidence excerpt

What to expect this reporting season

Viewpoint |

05 Jul 2026 17:39:18 ET │ 32 pages

Australia Real Estate

Aug-2026 Previews: Strong fundamentals and peaking rates

CITI'S TAKE

Australia Real estate

The RBA rate cycle seems nearing its peak — but near-term earnings

pressure persists for levered AREITs as higher debt costs flow through. We Howard Penny AC

see asset value stability across most subsectors, with retail a standout +61-2-8225-4819

given structural supply shortages and rising investor demand. Our top howard.penny@citi.com

upside surprise candidates are CHC, APZ, SCG, SGP and GPT. GMG remains

our highest conviction name, underpinned by a 6.4GW power bank and Suraj Nebhani, CFA AC

$14.5bn data centre development pipeline. Residential REITs have overshot +61-2-8225-4829

to the downside — SGP and MGR now trade at trough PE multiples, suraj.nebhani@citi.com

presenting a buying opportunity. Fund managers (CHC, GPT) benefit from

Akshit Batraaccelerating capital inflows. Stocks with earnings growth — GMG, GPT,

CHC, GLF, APZ, INA, SCG — are best positioned for a broader sector re- +91-22-4277-5184

rating as the rate cycle peaks. akshit.batra@citi.com

Rate cycle seems nearing peak, but near-term pain persists — The RBA held rates

at 4.35% in June, with Citi economists forecasting one final hike to 4.6% in

November 2026, before cuts begin in 2H CY2027. While the rates cycle seems

peaking, we see near term pressure for the REIT sector with higher interest costs

flowing through earnings for most levered companies, as well as those which have

debt costs below current market. We expect this to be a key talking theme at results.

Asset value stability, with potential for upside from retail — While the rates

environment has been challenging with higher bond yields, supply-demand