This article is from the Australian Property Journal archive
LISTED Growthpoint Properties Australia (ASX: GOZ) has met its recently upgraded funds from operations guidance of 27.7c per security for FY22 following strong revaluations of its industrial portfolio.
The 7.8% uplift in FFO per security came alongside a $459.2 million statutory profit after tax, down from last year’s $553.2 million.
Guidance for FY23 FFO is 25.0 to 26.0 cps and for FY23 distribution 21.4 cps, down from 20.8 cps, largely reliant on the group assumption of an average FY23 floating cash rate of 2.8%.
Growthpoint has a $5.1 billion portfolio of office and industrial properties following like-for-like valuation uplift of $356 million, or 7.9%, over the year, as well as acquisitions of A-grade office buildings in Sydney Olympic Park, the ACT Department of Health offices for $85 million, and in Melbourne’s Hawthorn East for $125 million. Following the period, it settled on its $165 million acquisition of a Dandenong building in south east Melbourne leased to the Victorian state government.
Net property income grew 5.1% to $247.6 million and by 2.3% on a like-for-like basis.
Its portfolio’s weighted average capitalisation rate was down 20 basis points to 5.0%, while the weighted average lease expiry inched upwards to 6.3 years.
About 234,000 sqm of leasing was completed over the year, equating to 17% of portfolio income, with occupancy maintained at 97%. Major leases were signed with Samsung, Fox Sports, Scope and Bunnings across its office portfolio, as well as Woolworths, Linfox and Eagers Automotive in its industrial portfolio. Woolworths exercised their five-year lease option for their major Queensland distribution centre, Growthpoint’s largest industrial property by value, and a further 2.5 years extension to the term was negotiated.
“The group has made strategic, accretive acquisitions over the year, including three high-quality modern office assets and additional securities in DXI (Dexus Industria REIT), further increasing our exposure to the growing industrial sector,” said Growthpoint managing director, Timothy Collyer.
It has also just announced it has entered an agreement to acquire Fortius Funds Management, marking its foray into funds management. The $45 million purchase – which has a potential further $10 million earn-out component – takes Growthpoint’s assets under management to $7.2 billion.
“We intend to grow the recently announced funds management business, targeting 10% to 20% of group EBIT, over the medium term delivering incremental growth to earnings and income stream diversification for securityholders,” Collyer said.
