Growthpoint looks abroad to move the needle

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Growthpoint looks abroad to move the needle

Published Date: 2017-08-31 | Source: Stephen Gunnion | Author: Stephen Gunnion

Growthpoint looks abroad to move the needle

The real estate investment trust wants to bulk up earnings from offshore.

Growthpoint plans to double its offshore earnings over the next three to five years. Already, a quarter of group revenue comes from Australia. The group also took a 26.9% stake in Globalworth Real Estate Investments in December. The London-listed property fund owns 18 properties in Romania.

Excluding its stakes in Cape Town's V&A Waterfront and Globalworth, Growthpoint's South African portfolio makes up 70% of its total property portfolio by value and 83% by gross lettable area. It also has a 65.1% interest in Growthpoint Properties Australia, which owns 57 properties valued at R32.5 billion.

The company says that due to the significant growth in its balance sheet in recent years, no single initiative can move the needle for growth, so it is taking a multifaceted approach, as well as growing the international assets on its balance sheet.

Back home, vacancies improved from 5.7% a year ago to 4.4% at the end of June as Growtpoint put a strong focus on tenant retention. While there was an increase in vacancies in its retail portfolio as tenants consolidated space, this was offset by lower vacancies in the industrial and office sectors.

Gross revenue rose 9.8% to R10.6 billion, with South African revenue up 6.5%. In rand terms, Growthpoint Australia increased revenue by 21.2% to R2.6 billion and now contributes just over a quarter of revenue excluding revenue from equity investments. Net profit jumped 46% to R7.5 billion and diluted headline earnings per share gained 28% to 178.64c.

The real estate investment trust has grown its distribution per share for the year to June by 6.5% after declaring a final dividend of 100.8c, up 6.9% from last year. It had guided the market on distribution growth of between 5% and 6%.

Growthpoint's shares added 0.9% yesterday to close at R24.94.



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