This article is from the Australian Property Journal archive
GROWTHPOINT Properties Australia (ASX: GOZ) has posted another year at a loss, after devaluations across both its office and industrial portfolio.
Growthpoint posted a statutory net loss of $298.2 million in the financial year ended 30 June 2024, this follows a loss of $245.6 million in FY23. At the same time, FFO was at $180.4 million or 23.9 cents per security, exceeding the upgraded guidance.
Distribution was in line with guidance at 19.3 cents per security, with a payout ratio of 80.7%. Net tangible assets were at $3.45 per security.
“Growthpoint has delivered a solid result in FY24 against a challenging backdrop underscored by persistent high interest rates, a decrease in property values and limited transaction volumes,” said Ross Lees, CEO and managing director at Growthpoint.
“Our team has, however, increased occupancy within the portfolio and delivered earnings above upgraded guidance.”
The $2.8 billion office portfolio saw devaluations of 11.2% on a like-for-like. While office occupancy was up to 92% and a WALE of 6.1-years. Over FY24, Growthpoint completed 46,834sqm in office leasing with new lease agreements making up 73% of the total office transactions.
The $1.6 billion industrial portfolio saw declines of 1.8% on a like-for-like basis, with rental growth largely offsetting the 60 basis points expansion in capitalisation rates to 6.0%. The industrial portfolio maintained an occupancy rate of 100% and had a WALE of 4.9-years. Growthpoint also completed 60,794sqm in industrial leasing with an average leasing term of six years.
Gearing was well within the target range of 35% to 45%, at 40.7%, with its LVR covenant at 60%.
“We have a solid platform for growth, quality office, industrial and retail assets, strong tenant relationships and promising growth prospects for our funds management business,” added Lees.
“There are numerous opportunities we are focussing on progressing in the year ahead, including optimising performance, capital allocation and growing our funds under management.”
Growthpoint has provided a FY25 FFO guidance of 22.3 to 23.1 cents per security and FY25 distribution guidance of 18.2 cents per security.
“Despite the current economic landscape, we have an exciting future ahead of us. While high vacancy rates in Australian office markets persist, we are optimistic about the medium-term prospects,” said Lees.
“Strong population growth along with higher construction costs for new buildings should see supply moderate and benefit existing well leased assets.”
