The ASX share market is a wonderful hunting ground to find ideas that can provide enormous dividend yields.
The passive income can be particularly attractive thanks to a combination of a low valuation, a rewarding dividend payout ratio and potentially franking credits.
I'm going to highlight two businesses that are delivering large dividend yields.
Centuria Office REIT (ASX: COF)
This business describes itself as Australia's largest listed pure play office real estate investment trust (REIT). It says it owns a portfolio of high-quality office assets situated in core submarkets throughout Australia.
Office properties are not exactly a 'hot' sector. But, I think this business is deeply undervalued.
Its FY26 third quarter update was very promising – it reported a four-year weighted average lease expiry (WALE) of four years with an occupancy rate of 90%. That means it's generating a significant level of rental income from its portfolio.
But, the most pleasing element of the ASX share's update on the rental side was that it announced 5,742sqm of lease terms agreed, with an 8.6% re-leasing spread. In other words, the new rental contracts are generating 8.6% more rental income than the old contracts. This could bode well for future rental contracts.
It also noted it had refinanced $1 billion of debt, with a 30 basis point (0.30%) reduction of debt margins, while the debt expiry was extended to 4.3 years.
For me, one of the main reasons why it has such a large dividend yield and why it looks undervalued is because it's trading at a massive discount to its reported underlying value. It reported net tangible assets (NTA) of $1.72 as at 31 December 2025 – it's trading at a 47% discount to this.
The fund manager of the REIT, Belinda Cheung, recently said:
Looking ahead, we maintain an optimistic outlook for the Australia metropolitan office markets across the medium term. Diminishing forecast supply has been further impacted by rising rates and inflation and is expected to amplify the significant disconnect between replacement costs and current valuations. The widening gap of economic rents to prevailing market rents not only prohibits feasible office development but provides ample room for current market rents to continue to grow and underpin future valuations, reinforcing the relative value of existing high-quality, well-located office assets.
It's generating real rental profit and paying large distributions with that rental income. Its FY26 annual distribution translates into a distribution yield of 11%.
GQG Partners Inc (ASX: GQG)
The other ASX share I want to highlight is the fund manager GQG, which, up until recently, had an excellent long-term track record of investment returns.
Following a 40% decline since July 2025, I think the ASX share is now very cheap with a single-digit price/earnings (P/E) ratio.
While the company is still experiencing fund outflows, that pace of the outflows have reduced and if it can deliver positive investment returns then its funds under management (FUM) could still climb, despite the headwind of outflows.
I believe the market is mispricing the potential of GQG to start achieving positive net inflows again.
The ASX share's latest quarterly dividend of AU 4.878 cents translates into a dividend yield of 3.4%. Annualised, that's a dividend yield of 13.4%. That's a huge yield! The dividend returns alone could outperform the S&P/ASX 200 Index (ASX: XJO) for the foreseeable future.
The post 2 ASX shares with dividend yields above 10% appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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