Region Group Earnings: Rising Debt Costs Remain a Headwind, but Fundamentals Look Solid

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.