Growthpoint warns of flat 2020 dividend


Growthpoint warns of flat 2020 dividend


Published Date: 2020-03-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

Growthpoint warns of flat 2020 dividend

The real estate investment trust says growth in its annual dividend will be nominal at best.

Growthpoint Properties remains at the mercy of the local weak economy, despite a growing offshore footprint as its international strategy takes shape. The real estate investment trust recently added a controlling stake in London-listed shopping centre owner Capital & Regional to its portfolio. However, it still earns three-quarter of profit before interest and tax (EBIT) in SA, while 65% of its assets by market value are here.

The real estate investment trust (REIT) has a portfolio of 441 SA properties worth R79.2 billion, including R2.7 billion in the Healthcare Fund. It holds a 62.2% interest in Growthpoint Properties Australia, which owns 58 properties valued at R42.5 billion. It now has a 51.1% interest in Capital & Region, which owns seven retail properties in the UK worth R14.8 billion. It also has a number of equity-accounted investments valued at R17.2 billion. The three largest include its 50% stake in the V&A Waterfront, 29.4% of AIM-listed Globalworth Real Estate Investments and a 19.8% interest in Growthpoint Investec Africa Property Fund.

The REIT said the macro-economic environment in SA weighed heavily on all property key performance indicators over the six months to end-December. Even the V&A Waterfront, which benefits from local and international tourism, wasn't immune to the erosion in the domestic economy. However, it said demand for office space at the Cape Town precinct was positive for its investment returns. Vacancies at the V&A reduced to 1% over the six months but the rest of its SA portfolio recorded higher vacancy levels.

First-half revenue increased by 1.5% to R5.7 billion as a rise in revenue from Growthpoint Properties Australia made up for a small decline in its home market. Operating profit declined 0.4% to R4.08 billion. Headline earnings per share fell 14% to 70.2c and it has raised its interim dividend by 0.2% to 106c per share.

Its shares fell 1.2% to R17.44 yesterday.


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