As earnings season kicks off, investors are watching closely to see which ASX REITs might surprise to the upside.
Macquarie's latest review of 24 listed REITs identifies a handful of names where FY26 earnings forecasts may still be too low. In other words, these are companies that analysts at Macquarie believe could guide higher or outperform current consensus expectations in the coming months.
While this is largely a short-term view, it gives a useful read on where earnings momentum may be building.
For long-term investors however, it is not just about who beats this season. It is also about identifying which companies or REITs have durable earnings potential and valuation upside, even if they are not yet in the spotlight.
So here are five REITs Macquarie believes may surprise this earnings season.
Arena REIT (ASX: ARF)
Arena specialises primarily in early learning centres. Macquarie sees it as a steady operator that continues to deliver. It expects FY26 guidance for earnings per share to come in at 19.6 cents, slightly ahead of consensus. This forecast is based on around $95 million in development completions, and no acquisitions.
Interestingly, earnings expectations for Arena have already moved higher, with consensus estimates up 4.6% in the past three months and Macquarie thinks this will continue to rise.
Macquarie's price target sits at $3.96, which is roughly 7% above the current share price of $3.68 at the time of writing.
National Storage REIT (ASX: NSR)
Macquarie expects FY26 guidance of 13 cents per share, which would be an increase of almost 10% year-on-year.
The key driver of this expected growth is an increase in revenue per available metre (REVPAM) and the rollout of an additional 200,000 square metres of net lettable area. If leased effectively, that pipeline could add $38 million in incremental revenue.
Macquarie has a target price of $2.44 and sees the potential for 5% of further upside.
Scentre Group (ASX: SCG)
When Scentre Group reports its FY25 results, Macquarie expects management will guide for higher than expected FY26 earnings. The firm is forecasting funds from operations (FFO) per security of 24.3 cents for FY26, around 2.5% above current consensus. While that might sound incremental, in the context of a large-cap REIT where expectations are subdued, it represents a meaningful beat.
Consensus earnings forecasts have already edged slightly higher in recent months, indicating that some in the market are beginning to recognise the upside risk. Macquarie believes the positive surprise will be driven by three key factors: better than expected portfolio income growth, disciplined cost control, and a modest improvement in funding costs.
Although Macquarie maintains an Underperform rating based on valuation, it acknowledges that near-term earnings momentum could challenge the prevailing cautious view, particularly if the company's FY26 guidance confirms the fundamentals are firmer than widely assumed.
A Long-Term Opportunity: DigiCo Infrastructure REIT (ASX: DGT)
DigiCo, which focuses on digital infrastructure assets, did not make Macquarie's earnings momentum list, but Macquarie thinks it has the most compelling valuation upside.
Macquarie has an outperform rating and a price target of $4.35, compared to a current share price of just $3.25 at the time of writing. That implies over 30% upside.
Unlike more traditional REITs, DigiCo plays in a structurally growing market driven by demand for data, connectivity, and digital assets. While earnings surprises may be less likely in the next quarter, long-term cash flow visibility and capital deployment optionality make it one to watch.
The one to be cautious about: Lendlease (ASX: LLC)
On the flip side, Lendlease was flagged by Macquarie for its downside risk. Macquarie forecasts FY26 earnings guidance of 27.5 cents per share, which is 16% below consensus.
The issues are partly timing related. Last year included capital recycling gains that will not repeat, and several key development milestones, including the One Circular Quay project, which will not contribute to earnings until FY27.
Concensus forecasts have already been cut by 17.5% in recent months and may not be done yet.
Foolish takeaway
Earnings season often creates noise, but underneath it are useful signals. Analysts are slowly revising their expectations higher for several REITs and when the market realises that expectations are too low, prices can adjust quickly.
But as long-term investors, the bigger question is where sustainable growth and valuation upside intersect. That is why stocks like DigiCo, even if not flagged for short-term surprises, deserve close attention (although the risks too deserve closer inspection!).
Surprises can move the market, but long-term returns are built on businesses with real tailwinds and room to grow. Keep an eye on both.
