Growthpoint Properties has committed to investing R1.8 billion for the year to June 2024, although this, as well as a 1.3% rise in dividends per share, was not enough to cheer up investors in the company after its share price on the JSE fell 1.2% in yesterday’s session.
The R1.8bn committed in investments for 2024 full year follows on the company sinking R1.9bn in “development and capital expenditure” for the year to June 2023, it said yesterday.
However, its shares on the JSE traded 1.2% weaker from the previous day’s close at R11.40. In the year to date comparative, Growthpoint’s share price has lost as much as 20% of its value.
The international real estate investment company – with properties in South Africa, Australia, Poland, Romania and the UK – nonetheless sprung above tough trading and financial conditions in the year under review, said its CEO, Norbet Sasse.
“Growthpoint did well to deliver a stable performance in a year that was tougher than ever,” said Sasse.
Against the backdrop of a difficult global economic framework, Growthpoint attained a dividend per share of 130.1 cents for the full year to end June 2023, which is 1.3% firmer compared to the previous contrasting period.
This was after group property assets grew over the same period by 5.3% to R179.8bn, while the foreign currency dividend income strengthened by 7.6% to R1.6bn.
The company was able to refinance its $425 million (R8bn) Euro bond, which matured in May with longer tenure EUR debt facilities, all this in a challenging financial market. The company has also secured long-dated bonds through private placements with the International Finance Corporation (IFC) and other debt investors at attractive margins, cementing its attractiveness to investors.
With about R1.7bn cash on its South African (SA) balance sheet and R6.6bn in SA un-utilised committed debt facilities in a rising interest rate environment, Growthpoint executives believe it is in a good liquidity position to pursue international expansion, optimisation of its South African portfolio and revenue enhancement for the Growthpoint Investment Partners' managed assets unit.
In South Africa, stronger letting has continued in the prime Sandton market, where the company has seen “many large users are back at the office” more frequently. This has boosted occupancies, although “businesses are still consolidating and reducing” space.
There was also improved letting in the Western Cape and KZN, with vacancies reducing. Growthpoint, taking advantage of the demand to own industrial properties, sold 20 non-core smaller assets to owner-occupiers and private investors.
The SA properties had gained 1.2% more in terms of valuation to R70.5 billion, viewed by the company as “signifying greater stability and a more positive market view on future rental growth” rates.
“Our SA business is soundly positioned with a strong balance sheet and liquidity. Encouraging improvements are being led by the industrial and retail portfolios and our offices in WC (Western Cape and KZN KwaZulu-Natal),” explained Sasse.
Growthpoint remains focused on optimising the South African portfolio though lowering exposure to offices and non-performing nodes in Gauteng while reducing reliance on the national electricity grid and fossil fuel.
During the full year period under review, Growthpoint bumped up its renewable energy generation to 27.32MW and is targeting 40MW in solar energy generating capacity by June next year.
On segmental financial performance, reported the company, Growthpoint Investment Partners, had raised its asset management fees by 44% to R98m after ending the year under review with R17.9bn in assets under management. Growthpoint Healthcare Property Holdings also raised dividends per share by 8.2%.
Growthpoint’s international investments account for 45.8% of property assets by book.
Through its 29.5% investment in LSE AIM-listed Globalworth Real Estate Investments (GWI), Growthpoint owns an interest in 72 office and industrial properties valued at R59.1bn in Romania and Poland, with the effective share from this amounting to R17.4 billion.
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