This article is from the Australian Property Journal archive
GROWTHPOINT remains uncertain of the impact the coronavirus outbreak will have on rents across its portfolio, but is confident there is low risk to its portfolio of large, listed and government tenants.
In its quarterly update, the group said it has received rent-relief requests, which includes waivers, rental reductions and deferments, from tenants who are covered by the code of conduct, and some who are not.
Rent relief requests have primarily come from hospitality tenants and other small retail businesses, and the number is expected to increase as it works through the review process.
The group’s said income is derived primarily from rent of office and industrial properties and “we have limited development risk”.
“Tenants are predominately large, listed companies and government organisations, and small to medium enterprise tenants with revenue below $50 million contribute about 4% of the group’s portfolio income.
“We do not expect that all of these SME tenants have been severely impacted by the covid-19 pandemic.”
“We are working with tenants on a case by case basis to agree an appropriate way forward, which considers the impact of the COVID-19 pandemic on their business. It is not possible to fully quantify the financial impact for the Group until all requests have been received and reviewed, which will take some time.”
While the group has just completed development of the Botanicca 3 office building in Melbourne’s Richmond on budget and a few months ahead of schedule, it has delayed “non-essential capital projects” including the development of the 2.5 hectare logistics site at 120 Northcorp Blvd in Broadmeadows, formerly home to a Woolworths distribution centre.
“The group is reviewing this project and will decide how to proceed when the longer-term impacts of the COVID-19 pandemic become clearer,” Growthpoint said in its quarterly update.”
Growthpoint negotiated 11 leases during the quarter, representing 2.4% of portfolio income. This included the renewal of Linfox’s lease at 6-7 John Morphett Pl in Erskine Park for five years. Linfox is Growthpoint’s fifth largest tenant.
Growthpoint now has 1% of lease expiries remaining in FY20 and 5% in FY21.
Botanicca 3 was vacant on completion and Growthpoint’s portfolio occupancy decreased to 94%. It anticipated the building will be leased progressively by the end of CY21.
“The covid-19 pandemic has made leasing new property more challenging, as businesses’ decision-making processes appear to have become more prolonged in this environment.”
