Growthpoint warns of lower payouts


Growthpoint warns of lower payouts


Published Date: 2020-07-10 | Source: Stephen Gunnion | Author: Stephen Gunnion

Growthpoint warns of lower payouts

The property group says full-year distributable earnings will be down and it is reconsidering its payout policy to shareholders.

Growthpoint Properties says its distributable income and how much it pays out to its shareholders this year will be impacted by the rental relief that it's provided to tenants, as well as rental arrears and the ongoing uncertainty of Covid-19's impact on the global economy.

In a trading statement, the property group said distributable income per share (DIPS) and its distribution per share for the year to end-June were likely to be at least 15% down from last year. It was also reconsidering its historic policy of paying out 100% of DIPS without jeopardising its status as a real estate investment trust (REIT). A decision on this would be made at a board meeting on 8 September.

In a nine-month update released last month, Growthpoint said customers were returning to its shopping centres. However, it said it would take a long time for historic shopping patterns to return. And about half of the tenants at its office properties were still working from home.

While it had been on track to deliver on its full-year guidance, the escalation of Covid-19 in March resulted in a rapid deterioration in property fundamentals, which it said would have a profoundly negative impact on its results for the final quarter of the year. In SA, the V&A Waterfront in Cape Town - which it owns a 50% stake in - had close to 100% exposure to the retail sector. Recently-acquired UK group Capital & Regional (C&R) was also fully-exposed to the sector.

Growthpoint Australia was well placed to weather the pandemic as its office and logistics portfolios were resilient with a strong tenant base of large, listed companies and government bodies. In Europe, Globalworth Real Estate Investments' collection rates had remained steady in April and May - excluding the retail spaces for which special measures were applied in Poland and Romania.

Its shares rose 0.6% to R14.17 yesterday.


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