Growthpoint lives up to its name

LISTED player Growthpoint Properties Australia (ASX:GOZ) has upped its FY22 FFO guidance after a strong six months, underpinned by positive revaluations in its industrial portfolio.

58% of the portfolio by value or 30 out of Growthpoint’s 58 properties have been revalued by independent external valuers as at 30 June 2022, with preliminary draft results indicating a $64.4 million or 2.2% increase on a like-for-like basis on 31 December 2021 book values.

“The preliminary results of Growthpoint’s external valuations demonstrate the resilience of the Group’s growing property portfolio, with the uplift reflecting the ongoing strength of the industrial market and leasing success across both our office and industrial portfolios,” said Timothy Collyer, managing director at GOZ.

This boost to portfolio value is anticipated to increase group NTA by 8 cps on 31 December 2021’s $4.55 per security.

17 of Growthpoint’s 31 industrial assets, or 61% of this portfolio by value, underwent external valuations indicating on a preliminary draft basis an increase of $69.8% or a 7.0% increase on a like-for-like basis over the last six months.

At the same time, the average market capitalisation rates of the industrial properties valued was down 24 basis points to 4.7%.

In the office portfolio, 13 out of 27,or 56% of assets by value, were revalued, with preliminary draft results seeing a drop of 0.3% or $5.3 million.

While the average market capitalisation rates of the office assets valued was up by 10 basis points to 5.0%.

The remaining properties in the portfolio are set to undergo either internal or director’s valuations, with the final audited valuations to be available in the group’s FY22 results on 16 August.

The group also updated its FY22 FFO guidance to at minimum 27.7 cps, up from its last guidance in December 2021 of 27.0 cps, representing a minimum growth of 7.8% on FY21.

The guidance has been upped to reflect GOZ’s settling its acquisition of 2-6 Bowes Street, Phillip, ACT, as well as its purchase of 141 Camberwell Road, Hawthorn East, VIC and Woolworths taking up its five-year lease option at the Larapinta, QLD distribution centre.

This on top of a period of successful leasing across the group’s portfolio.

Growthpoint also recently moved to acquire an A-grade government leased sustainably certified office building from Dandenong GSB Pty Ltd for $165 million, on a 5.3% initial income yield from the Grollo family.

Growthpoint also confirmed its distribution for the six months ending 30 June 2022 at 10.4 cps.