...produces quality accommodation, particularly rental accommodation on competitive terms. Our target market is 40% of households with income of less than $100,000 per annum, which means they need rentals at below $500 per week.

We continue to expand and deepen our management platform. Over the last 7 years, the headcount has doubled to 25 in head office, predominantly through our graduate and scholarship programs.

That enables us to embed our culture and value in everything we do. All head office employees and our property managers participate in our LTI scheme, and this fosters an ownership mentality.

Every day we come to work thinking about how we're going to add value to customers and our shareholders. The reason we target $500 rentals and below is because this is where the scarcity of housing exists in Australia.

It doesn't exist at above median rents or prices. The chart on the left shows you realestate.com.au listings for rentals a couple of weeks ago at the various rent points.

There's a couple of inflection points we want to highlight on this chart. We think the minimum economic rent for new supply in Australia is $600 per week for new production.

That will only get you a studio or 1-bedroom apartment in most CBDs, metro areas, and it might get you a small house in the regions. Clearly, that product's not suitable for a lot of renters.

The other inflection point is $1,000 a week. At these high rent points, these wealthier households have a greater propensity to own, and if they are to rent, they prefer to find better value for money, prefer lower rents.

We have wealthier households pushing down the rent curve, pushing lower-income households out of the rental market. We have no new supply coming on because the minimum cost of supply is $600 a week.

This is why Aspen likes to operate below that rent point, and our portfolio is very, very competitively positioned today, and we think will continue to go into the future. If you overlay that blue chart with the household incomes, you get the chart on the right.

Assuming a household can pay 25% of their pre-tax income on rent, the wealthiest of our target customer base, the 40th percentile household, can now afford only 10% of advertised rentals. Anyone with the bottom quartile income, 25% or below, can't afford any rental that's advertised today on realestate.com.

Clearly, we have market failure at our end of the market. What is the government doing about it?

Next. The problem is they're really contributing to the problem.

Over the last 3 decades, state governments have reduced their supply of social housing in nominal terms. Population growth's been about 40% over the period.

They've reduced the supply of social housing, and it's now down to 4% of total housing stock. Meanwhile, the private sector has delivered or accounted for 100% of the increase in rental housing in Australia.

Meanwhile, state governments have increased taxes, increased stamp duty, collected $54 billion in stamp duty and land tax alone, and spent in FY '25 only $11 billion on their social housing programs. Now we have federal government chipping in with an increased tax on private investors, the capital gains tax and negative gearing changes, and also banning self-managed super funds from gearing residential investment.

That can only lead to less supply, higher rents, and higher prices, particularly at the more affordable end of the market, particularly the rental market, which is currently trading well below new production cost. We believe our opportunities continue to grow with the recent changes, and we think our growth that are ahead of us for the next several years can be at least as strong as it has been over the past few years.

I'll hand over to Hamish for the results.

For the 12 months to 30 June 2026, Aspen delivered a 17% increase in pre-tax comprehensive income per security to 45 cents per share and a return on equity of 18%. This comprises a good mix of strong cash flows and NAV creation.

Aspen does not seek to inflate underlying EPS at the expense of NAV growth, given its strong focus on total value creation. Next.

Aspen's strong track record of growing underlying earnings, distributions, and NAV continued over FY '26. Underlying pre-tax EPS growth accelerated to 30% or 21.8 cents per share, with 23% compound growth achieved since FY '19.

Underlying EPS is cash-based and only includes realized development profits. NAV increased 13% year-on-year, with compound growth of 14% per annum achieved since FY '19.

Net rental income and development earnings have both continued their strong growth. We'll discuss the key drivers of both in coming slides.

Pleasingly, underlying earnings growth has continued to accelerate, with underlying EBITDA increasing 31% to $54.2 million. Overall, net rental income increased by 21% to $42.4 million.

An increase in the number of dwellings, rental growth, and margin expansion all contributed to this increase. A strong uplift in lifestyle development settlements, together with the purchase of the Adelaide Villas portfolio in the first half, resulted in 6% year-on-year increase in the number of dwellings.

Average gross rent, i.e., the amount paid by our customers, increased by $21 a week or 6% to $346 a week, while average net rent increased by $24 a week or 15% to $193 a week. This means that for every extra dollar our customers are paying in rent, Aspen is making more than $1 in additional EBIT.

Margins overall expanded 4 percentage points to 56%. Aspen continues to focus on keeping rent levels competitive and affordable for its customers while extracting higher net rental income through higher margins.

Since FY '20, net rents have grown at more than double the rate that gross rents have, with margins expanding from 42% to 56%, a 14 percentage point increase. We see no reason why this trend won't continue as the business's weighting to higher-margin residential and lifestyle sub-sectors continues to grow.

Looking quickly now at the key drivers within each sub-sector: Firstly with residential, despite just a 1% growth in the rental pool, net rental income increased by 8% to $14.3 million, with rental growth and margins the key driver for the uplift. Parks recorded a strong result, with net rental income increasing 26% to $21.5 million.

The continued focus of seeking the most profitable mix of rate and occupancy has enabled this, with gross rents increasing 11% while margins expanded 5 percentage points to 48%. The lifestyle division delivered the strongest net rental income growth.

Increasing lifestyle development settlements, combined with the Adelaide Villas portfolio purchase, resulted in a 28% increase in the average number of dwellings. Coupled with rent growth and further margin expansion, overall this delivered a 40% increase to net rental income for the division.

Thanks, Hamish. I'm just going to move on to the development business now.

As we highlighted last year, FY '26 was going to be a big year for the development business in terms of increasing our production. The result was considerable growth in the number of land lease homes that we delivered for our customers.

Pleasingly, the demand has exceeded our ability to supply the market. Over the year, we settled 61 land lease homes and land lots, which is a 45% increase on the prior year.

Importantly, we have settled 131 land lease homes, which is more than a 70% increase on FY '25. These sales are particularly valuable for the business, as they also provide the ongoing annuity income stream from the land rent.

Very pleasingly, this growth in sales volume was achieved while also increasing our dollar profit per sale by 18%, which led to a 71% increase in total development profit for the year to $21.7 million. Looking a little bit closer at the performance of the lifestyle development business, some key takeaways are our improving margin, which has improved 300 basis points to 34%.

This has been achieved through good cost control, steady price growth within our maturing villages, and increased demand. We think that moving forward into this year and into future years, we can continue to hold or improve these margins, as costs are now more predictable, and there remains good demand for our product offering.

We've been able to achieve this margin growth while still maintaining highly competitive price points, with an average sale price only increasing by $5,000, whereas the profit has increased by $12,000 per house. This has been achieved primarily through product mix within our developments.

It should be highlighted that our average house price is now 58% below the median Australian house price. We think this is very important to the business model generally, but also stands us in good stead in weaker market periods.

This slide is something that we would like to call out, as it highlights the two drivers for the value creation in the lifestyle business. As you can see here, we create overall $167,000 of value through the lifestyle business.

$145,000 of that is above-ground profit or development profit that goes to the P&L, and that's highlighted on how that is achieved on the left-hand side. And $22,000 is in land value, assuming our net rental income is at a 6.4% weighted average cap rate, and that goes to the balance sheet or to NAV uplift.

A further highlight here is that the total cost to produce the site is $99,000, which is the two light blue bars on the right-hand side. This amount is below the amount that we receive in profit for the sale of the home, being $145,000, the green bar on the right.

Therefore, we are truly releasing capital every time that we sell a house. Moving on to the development sales and outlook.

We started this FY with 128 contracts on hand to settle in FY '27. Many of these contracts are for homes and land sites currently under construction.

This ballast has given us good confidence to increase our FY '27 sales guidance to 240 sales. Winter is generally a slower period for sales, and that has proven to be the case this year again.

Additionally, we have very few completed or near-complete homes for sale, with many not completing until late this year or early next year, and hence we have seen a slight decrease in velocity. We don't believe there is a change in the demand, and we haven't experienced an uptick in cancellations.

On the land side, Ravenswood in WA was initially very fast and has moderated in the last couple of months, but still remains strong. Mount Barker has a more moderate sales rate, with the slightly higher-priced lots moving slower.

There have been a few cancellations due to financing and SMSF gearing ban, but we don't believe there is any cause for concern. On to this slide.

This is one of the more exciting parts of the business over the last 12 months. We've been able to achieve a number of development approvals to allow us to scale up into FY '27 and beyond.

We have had 716 sites over the last 12 months be approved, which represents about 3 years' worth of our supply based on our sales target for FY '27 of 240 sales. DA and planning in general are getting harder and more challenging to attain, despite governments' stated objectives to improve the planning pathway.

These approvals are big value-adds for the business as a result. In addition to this, we have a range of other projects currently in DA stage where we are working through with local and state governments, and we will seek to add this to the pipeline in the coming 12 months.

We're just going to call out two of the approvals that we've received in the last 12 months here, which are quite significant. One is Adelaide Caravan Park.

We received approval for this. This is a 1.5-hectare site on the northeastern fringe of Adelaide where the median house price is well over $2 million.

The approval allows us to build 74 build-to-rent apartments that are studio and 1-bedrooms and will be aimed at competitive rent points. Additionally, we have 46 townhouses that will be developed as build-to-sell and will reflect the more premium nature of the locality.

We believe that we can develop and operate the BTR at a net rental income yield of about 5% at $500 per week rents, which represents roughly a 30% uplift on the value of the land, and we intend to achieve a 30% development margin on the build-to-sell component. Australind on the right-hand side is an 18-hectare site outside of Bunbury that we purchased from Albemarle in 2024.

We converted the workers' accommodation motel rooms into 102 2-bedroom houses, and the demand for this has been excellent. We are about halfway through the construction program, with the balance to be completed by December this year.

The cost of these dwellings plus the conversion is approximately $275,000 per house. We are achieving average rents of about $600 per week thanks to some strong corporate demand for a portion of the houses.

This equates to about a 7% net rental income yield on cost. The balance of the site of approximately 10 hectares we now have an approval for to convert to a land lease community, which equates to approximately $33,000 land cost per site.

While civil costs are elevated in WA compared to the rest of Australia, we are getting more comfort on these costs thanks to civil works we have underway at Ravenswood and price discovery as a result of tendering for civil works at our site in Meadow Springs just down the road. This is an image of the sites.

Each one of these represents a 2-bedroom house of approximately 65 square meters. This is the conversion where we've converted the motel four—there were four motel rooms in these, and they're now a 2-bedroom with a living room and a kitchen as well, they remain fully self-contained.

We're pleased to announce the acquisition of the ECH portfolio for $40.5 million via a competitive sales process. The portfolio comprises 198 dwellings in good metro locations in and around Adelaide, in close proximity to Adelaide Caravan Park and the Adelaide Villas portfolio.

For this reason, we think there should be some good synergy benefits. We believe the purchase price is strongly underpinned by land value, and despite a low initial yield, there will be reversion over time, initially by leasing up the vacancies at market rents.

We believe Aspen has one of the most conservative balance sheets in the Australian listed real estate market. This will support growth initiatives as they emerge and strongly positions the group to take advantage of increasing acquisition opportunities going forward.

Aspen's interest cover increased to 6.2 times in FY '26. LTV remains conservative at 22%.

This is with the assets valued at a 7% weighted average cap rate or 6% if you exclude AKV. This is more than double the yield available on the Australian residential market.

All right. Finishing off, just starting on rental.

The long-term portion of the portfolio was starting from a very good position of the rentals being we believe at least 10% under market, and we're using a 4% to 5% growth rate on our long-term rentals. We do have two two things to call out.

Up at Mount Gravatt, that property, we have nearly completed the remediation works here, and we're expecting an increase in rental to $2.5 million per annum for this year. Secondly, Australind, which has turned out extremely well.

We have strong corporate interest here, we're expecting the rent on the annualized basis to be $1.9 million per annum, which is close to a 7% yield. The other driver for the long-term business is that we expect the lifestyle rental leases to increase by 15% to 20% by number each year.

Turning on to the short-term part of the business, there's some patchiness to it. Two things that are going well are Darwin, which has had a good peak season and is tracking for this year, this FY, above last year.

The second one to call out, which had a really good FY '26, is AKV, where we continue to get really strong corporate interest, and we've signed a number of new longer-term leases there, which supports this year. Turning on to development side, we're really well underpinned for this year.

We worked very hard to come into the year, as Patrick said, with a number of sales in place. We've got about 68% as we sit here today of this year's development income that's contracted or settled already.

We're very pleased to upgrade the settlement guidance to 240, which is 150 land lease homes and 90 land sites. Pleasingly, both dollar and percentage margins in development business are above last year.

We are working hard on trying to bring some new projects into this year, but we haven't assumed any. Really next year, FY '28, has a number of new projects that will add to the development business.

On to acquisitions and disposals. Really what we're doing here, which we've been talking about for a while, is we want to increase the quality of the portfolio and the quality of the income streams.

We have substituted with the parks a slightly higher income for residential in inner metropolitan areas. We've also sold Trigg, which is a very good area of Perth, but rents have started to get to nearly $700 a week there.

We'll continue to do that recycling, but very excited about having stronger growth in the business. There is a slight impact of those purchase and acquisitions, which we think will be about $0.7 million this year.

On the opportunity side, I think look, the reality is that we have been talking about for some time that we thought there were some balance sheets or some needs for some groups to reduce their assets and reduce gearing. We certainly are seeing that come through.

We'll continue to be disciplined on that side, but the opportunities to acquire things at attractive prices we believe will increase. Finally, on to the upgrade.

Very pleased to have 20% increase in pre-tax EPS to 26.1 cents, which is a 4.4% upgrade on the previous guidance. The dividend will increase by a cent this year to 12 cents.

All in all, very excited about this year and future years. Like to thank the team, our board, our customers, investors, and brokers for their support this year and ongoing.

On that note, I'll hand it over for any questions which people have.

Morning, guys. Thanks for your time.

Just a couple of questions for me. Just starting upgraded guidance.

Can you just talk a little bit about what actually sits in the upgraded guidance for '27? Mentioned about the negative NRI impact from the transactions.

Just wondering if that sits in the number and then if there's anything kind of subsequent that post balance date that may or may not be included.

Thanks, Andy. The majority or all the upgrade is the upgrade to 20 extra sales in the development business plus some better margin than last year in that business.

We have a little bit of sort of caution in there about the potential for cancellations, terminations given the economic environment. On the net rental side, the change has clearly been the dilution from the sale of the two parks, which is more than the income from the ECH portfolio.

Keep in mind that we're selling the parks at probably the worst time, in sort of October after the low season. You're getting close to a full year, you lose most of your park income of full year's income.

A bit there, we've been cautious on margins generally in the rental business. We're still seeing a lot of cost increases that we can't control like council rates and land tax.

We're cautious on margin in that business, and we're also cautious on short-stay tourism. We think we're just keep likely that at some point we'd expect and we always look at park income potentially falling.

They're the drivers for the upgrade, still a net upgrade despite that caution. Helpful.

Thanks, David. Just in terms of the margins, are you assuming any change in margins for this year, or within that guidance, you've got margins holding?

We talked about 3 to 5 rental growth in the long-stay business, and we've got total rental growth of 4. We've been cautious on margins this year.

Yep, yep. I see.

You talked about properties reaching greater than $600 a week and recycling. I assume that's outside of guidance if that is to occur in '27?

Apart from what we've got here, we haven't assumed any extra disposals or recycling in the numbers.

Yep. I see.

Just on the settlements on hand or contracts on hand, just interested in some color. Can you talk to what you do have on hand so far?

Obviously, are looking pretty good with 68% the way there in terms of overall profit number. Can you just step through what's kind of the contributing projects within that and what's still to go to get to the upgraded number?

Sorry, with the increase coming through in development, the main driver of the 20 additional settlements in this year is 20 additional lots at Ravenswood. That's—

Sorry, Hamish. We have 145 settlements and contracts on hand.

It's about 79 is lifestyle, 66 is resi land. Look, I think apart from that, I said on the call, I don't think we want to step through the projects, by project.

That's fine. That's fine.

The other thing I'd say, we're into the 30s on settlements. They're all lifestyle houses.

The land that we have contracted, Mount Barker will start to settle next month and Ravenswood in October. There's no land settlements just because the titles haven't been issued.

Yep. Just the last one if I might.

Just in terms of the acquisition, you mentioned some synergy benefits. Just wondering what you think you might be able to drive there synergy benefit-wise.

I guess what the plan is for the existing arrangement today. Are you expecting to convert them all to typical residential leases, or what's the thinking there?

Look, there's the first thing with the portfolio is there's about 36 which are vacant, some of which we think we can rent, a small portion we can rent straight away. The rest of them we'll do a refurb and rent.

The market rent for those, they'll have to be over 55s. We should be able to do that in the next few months.

The really nice thing about this portfolio is that a proportion of them have no payment when they leave, and another proportion has a set fee based on their ingoing. It's a very simple process compared to other DMF portfolios.

Over time, because of the locations and the fact that we have already been renting out the ECH portfolio, we know there's pretty strong demand in these good locations from over 55s for a number of reasons. Ultimately, there might be some opportunities to add some dwellings or to add some amenity to them, which increases the rents and the values over time.

Perfect. Thank you, guys.

Morning John, David, Hamish, Pat. Hamish, Pat, congratulations on the new titles.

Was hoping just as a starting point to unpack Karratha in just a little bit more detail. It looks like that one was responsible for a fair amount of growth into FY '26 and probably now a pretty decent contributor, or I suppose remains a decent contributor, to the net rental income number.

First off, how are you sort of seeing operating conditions for that asset currently? What are you expecting into FY '27?

Then could you give us a sense of, I guess, what your long-term strategic plans are for that asset, please?

Thanks, Moe. The asset obviously performing very well and it's very full.

Our ops team have done a very good job the last several months ensuring that it's underpinned into FY '27 and hopefully FY '28 in gaining some new contracts. We expect it to be pretty well underwritten the next little while.

I think the Karratha economy is showing absolutely no signs of weakness or change. It continues to diversify and grow.

I think it's becoming quite a big region and diversified. It's much more robust today than it's ever been.

We will continue to caution that it's a high fixed-cost asset and it's full. We continue to assume at some point net income will fall, which is why it's valued on a 23% cap rate.

Having said that, it's in our books for half of what it would cost to replace it. To the extent new supply is very expensive in Karratha, I think we're also pretty well protected from a supply point of view.

At the end of the day, we think ultimately this asset, even if things were to normalize and occupancy were to be lower, that it makes good net income, and therefore we're happy to hold it at that book value.

Got it. Then just on to the prospective acquisitions.

John, you obviously spoke to sort of a broad range of things that you might be looking at and in the hopes that there's a bit of balance sheet lightening activity happening elsewhere in the market that allows you to be opportunistic. I suppose what you're looking at across the market, what sorts of opportunities are you seeing or expecting?

Is it predominantly sort of built-form diamond in the rough-type assets? Are you expecting to find early-stage land acquisitions that you might be able to do something with?

What are you seeing, or what are you expecting?

Look, it's a probably a longer discussion, but yeah, look, we're still attracted to brownfield opportunities. I think we're also looking at things which have already got DAs so that we can get them more quickly to market.

As we go through and look at opportunities, we believe that a number of people have probably historically paid the wrong price for opportunities. Some of those things will have to be put on to the market or refinanced.

Look, for us, it's a lot of it is about the location and the speed that we can get the property sort of developed. We are trying to buy some more things in certain markets where they have a rental income and they're well below replacement cost.

They're some of the opportunities. We have looked at recently some partially built apartments.

Again, we'll continue to look at those if we think that we can unpick what's been done. Hopefully that sort of helps.

Thanks. Then just lastly, noting that we're obviously seeing a bit of a slow down in resi demand and activity across Australia more broadly, it'd be great to just get a few comments from you in a little bit more detail, please, on how you're experiencing inquiry and I guess how you're managing the prospect of a slowdown?

Look, on the rental side, vacancy rates are across the country 1.5% and well below that in most of our markets. Population continues to grow 1.5% per annum, and supply has just slowed down again.

We're seeing absolutely no issues with our rental book. In fact, we still get 10 to 20 people rocking up to open for inspections.

There's no slowdown. On the transactional side, look, maybe it probably has been a little bit slower over winter, as Patrick said, but it normally is a bit slower over winter, and we don't have any stock to sell.

A customer in our lifestyle business has to be thinking about selling a house 6 months from now and moving in. I think it's a bit of that.

I think our markets, places like Perth still have 14 days average on market to sell, which is extremely strong. I think the headlines are overdone.

I think, yeah, we've always said we think places like Sydney are overpriced, and the price at which people are trying to sell land in Sydney is just ridiculous. All this is already happening with higher interest rates, and the government's just really added to the problem.

Look, the top end of town I think is very problematic. The bottom end of town is very strong.

Land is the one area where we're particularly cautious where higher interest rates do affect first-home buyers, and that market could slow, which is why we were quite deliberate in going very early with our Ravenswood project. We think ultimately you can't produce, deliver, and sell land at $340,000 in many places, good places in Australia.

We think our price point will see us through the tough economic conditions.

Got it. Thank you, team.

That's all from me.

I saw Tom Macpherson.

Hi, can you hear me?

Yes. Yes, hi.

Hi. Thanks for taking my question.

Morning John, David, Patrick, Hamish. I'd just be interested in sort of maybe the opposite of some of these questions, which is, if sales continue at a decent level, what could you realistically deliver and settle in FY '27 if the demand is there?

Operationally, what's the constraint there to your settlements from that 240 on an upside scenario?

Look, I think it's more constrained this year than in other years. Couple of things.

In Coorong Quays and Alexandrina Cove project, Alexandrina Cove was our best performing project. We have still yet to get council to approve an upgrade to the sewer system.

Therefore, we're assuming council will delay us and not allow us to produce more in '27. They're two projects essentially out of action this year.

Strathalbyn, we expect to sell out this year, there's no capacity there to move that dial up. It's a bit constrained.

Maybe you can do another 20 at a pinch for FY '27, but it's not going to be more than that. It's really '28 where we really open up CQ and Alexandrina Cove again.

We start Australind lifestyle. We already have Wallaroo land sales coming in.

There's a lot more happening in '28, a lot more capacity to grow the business in '28.

Thanks. The market does like consistent growth, so that's good to hear.

Just be interested in your comments around the short-stay conditions, because you mentioned that they were mixed, but then went on to sort of suggest that I think it was Darwin was pretty strong and Karratha is going quite well. What's the offset that's not going as well in your holiday parks business?

Look, it's definitely much tougher in places like Dolphin in Moruya, and we've now contracted to sell that asset. Barlings Beach is more underpinned by longer-term income, but still a bit tougher.

Highway 1 it's definitely tougher in South Australia. Highway 1 and Adelaide Caravan Park, the short-stay tourist business.

Also at Highway 1, we are disrupting that asset. We've been moving cabins around to position for more lifestyle development.

It's partly driven by us, partly the market. Tourism's definitely softer in that part of the world.

Darwin, we were sort of a little bit lucky. It has its high season starting late May through to another month from now.

We won some good corporate business. Tourism was quite soft on the sites, people moving around large caravans with high diesel prices.

We got a bit lucky. There was a bit of a panic initially when the war broke out, but then people have sort of relaxed a bit, but sites are definitely soft.

We did up our cabins the last couple of years of that property, we have a very different product. Again, things that we've done have increased income, but the tourist demand is not strong.

It's patchy. Karratha is clearly a corporate asset rather than tourism.

That's clear. Thank you.

Then maybe just a final one from me. Where were those asset sales relative to book value?

Sorry if it's been said, I may have missed it, but yeah, where were they relative to book?

In line with book at 30 June. If you look at where they were from, say, a year ago, two of the assets were above, one was, when you factor in some capex, was marginally below.

Overall, largely in line with book a year ago as well.

Right. Thanks for your time, and you can claim lucky.

Same companies are always lucky.

Yeah. Thanks, Tom.

I saw

Tom Macpherson, I think.

I think it's to it. I'm not sure if either Ben or Monty can speak if they've been access to speak, but maybe if you guys can try.

Here's Atomic. Sorry, Tomic.

Yep, sorry, Ben. One sec.

Oh, there's Ben. Hi, Ben.

Morning, gents. You able to hear me?

Yes.

Yes.

Perfect. All right, yeah, perfect.

Firstly, just for me, just on the development margin guidance. Sorry, did I just cut out?

You did. Sorry.

Just the first question for me, just on the development margin guidance of a further improvement in FY '27, clearly a very positive outcome, especially against the cost-inflationary backdrop we've seen in construction. Just wondering if you could comment on the level of inflation you're currently seeing across new construction contracts.

Appreciate the development guidance is 2/3 covered by existing contracts, but just do you see any risk of that development margin on new contracts against these cost-inflation headwinds? Thanks.

With respect to the lifestyle houses, we feel relatively confident, probably more confident now than I have been for a number of years as to the cost pressures for that part of the business. Each time we're signing a new contract for houses, it tends to be somewhere between 2% and 5% increase on the prior, and we're trying to do larger contracts for this round, maybe more like sort of 30 to 40 houses in terms of the way that we contract in advance where we set the price in.

I feel like the price of those is pretty stable and is pretty much in line with inflation. I think probably where we're a little bit more variable is the civils, and I think we've mentioned this before where there's a bit more pressure from government infrastructure projects and other large projects which forces that a little bit more.

I've got a little bit more confidence on those now than I have probably in the last 6 to 12 months because we've gone out recently for a number of tenders or are in works at the moment, and so I have a better idea of where they are. They're probably about 10% to 15% up on where they were maybe 12 to 18 months ago, but we've factored that in, and that civil work doesn't for the land subdivision, it doesn't impact our margin.

For the land lease, that doesn't impact the margin for the development profit because that's all goes to the land. I think, and that's a bit of a convolute way to answer your question, but basically we feel like the costs are relatively under control at the moment and for the next sort of 12 months.

Awesome. That's great.

Then just on the strategy to enter FY '27 with a higher proportion of pre-sales, I'm curious whether there's any knock-on effects on the strategy going forward, particularly as we look at FY '28, or is the FY '27 strategy a little bit more of a one-off response to the current market conditions? Maybe just more broadly as well, just curious on how you're assessing the target of growing development 15% to 20% per annum against these tougher market conditions.

Thanks.

On the lifestyle business, we think we want to achieve 15% to 20% growth per annum in number of sales, and we think that gives us all a bit of confidence as to how we're going to grow our rental book out and the future cash flows out. With the approvals coming into place recently and more expected, we think we're going to have plenty of projects to be able to deliver at least that.

We're happy to just keep selling lifestyle houses as the customer comes in. We're happy to sell only 24 a year per project, which doesn't push the system at all.

I don't think anything's really changed there. That really hasn't changed the setup into this year either with a number of contracts on hand.

We did a bit of massaging to push contracts into FY '27 to set us up for this year. A lot of it's really to do with the resi land business, which we've always said that it makes economic sense to produce 40 to 50 lots per project.

It's the most economic way to bring the civils in and keep the costs down. It also makes sense to sell those before June 30 or land tax cutoff date so that we don't pay land tax on titled lots.

That will become a lumpier part of the business. As we roll out projects, you should assume we'll be looking to do call it 30 to 50 per project and clearing them out in the same year.

It really depends on where production is versus sales as to how that will look coming into the next financial year.

Great. Maybe finally, just on build-to-rent.

Great update on the Adelaide Caravan Park DA, and great to get that greenfield BTR business up and running. Just on the last call, you provided some high-level targets on the development business, and I was wondering if there are any high-level targets that you'd be willing to share for that greenfield BTR and just any indications on timeframe of how you're thinking of scaling that business as well.

Thanks.

Look, very generically, we try to look for a 6% return on capital, net rent divided by total capital employed, 6% on anything we hold day 1. We produce, we don't sell it, day 1 we hold it, we get what at least 6 yield.

Anything we sell, we want to make at least 30% profit margin day 1. Okay?

They're the two metrics. Even with Adelaide Caravan Park where we've said we might only get a 5 yield day 1, it's an inner metro location, it's a high-rise building, 6-story building, higher cost, we want that 5 yield at $500-type rents, and we're not aiming for $800 rents and 5 yield, $500 rents, 5 yield.

We think that building will value up by at least 30%. It's the same 30% whether if we hold an asset, 30% NAV uplift goes to the balance sheet, we sell an asset, 30% development profit margin goes to underlying EPS.

We want to grow our build-to-rent business like we have our lifestyle business over the last 6 years. We'll start off slow, we'll build it, we'll increase the production over time as we get to understand the market more, the customer, cost of building, etc.

We now, with the land we already own, think we've got a very good pipeline ahead of us over the next many years for build-to-rent.

Just more specifically, we're doing 12 new ones at Byford, and they're about $220,000 per, call it 50 square meter apartment. Then we've got another approval for another 9 in WA as well, plus this one for Adelaide Caravan Park, and obviously what we're doing at Australind as well.

That's probably, that's the ones that we're definitely going to do for this year. Then moving forward, we're going to try and get the approvals on the balance land in WA on the apartment sites, plus we've got projects like Ravenswood, Wallaroo, Coorong Quays, all of which have areas which we can do build-to-rent in a more greenfield process, and that's more likely to be sort of an FY '28 and beyond outlook.

Perfect. Thank you, gents.

Hi, guys. Sounds like the constraint this year won't affect FY '28 settlement growth, but I guess just on the capex this year versus last year, is sort of most of the upgrades, UMG, the parks that you've now sort of sold, is that money sort of being put into more of the Adelaide portfolio or into the sort of the new products?

Thanks.

Yeah. I think you're correct that we've done a lot of the larger-scale, I guess, remediation work in the case of UMG, and then some of the upgrade works that we did at the Black Dolphin and other sites we've completed as well.

Where we're going to be spending most of the capex is doing the refurbishments for ECH for the Adelaide Villas portfolio, and then also on doing other works. For example, David mentioned the sewer treatment upgrade for Coorong Quays and Alexandrina Lifestyle.

That's quite a large piece of work. There's also other works that we're doing across WA.

It's probably a little bit more infrastructure and build-to-rent going forward, whereas in previous years it's been more about cabin refurbs and stuff at the parks. It will now be more sort of a resi-focused capex pipeline.

Thanks, Pat.

Okay. Thank you, everyone, for joining the call and for your support.

We look forward to talking to you over the next several weeks and years ahead. Thank you.

Thanks,

guys.