Norbert Sasse, CEO of Growthpoint Properties attributed the company’s positive performance due to occupancy levels and new income streams.
Growthpoint Properties posted distribution growth of 6,9% per share for its half-year to 30 June 2017, taking its full-year distribution growth to 6,5% per share and delivering results ahead of its market guidance.
Growthpoint increased its annual distributions 10.4%, paying R5.6bn to shareholders this financial year. It also made significant strategic progress, boosting its international exposure to 30.0% of its asset value of R122.3bn, assembling a portfolio of assets for its new Healthcare Fund and receiving income from its new Trading and Development business for the first time.
Sasse says that Growthpoint maintained high occupancy levels, achieved good leasing results, and kept its costs well contained. The overall expense ratio of its South African portfolio remained stable at 27.1%
Commenting on the results, he adds: “Growthpoint delivered distribution growth ahead of guidance in an extremely tough South African market where any growth is good growth. We are pleased to report a solid set of results that continues our 14-year track record of uninterrupted dividend growth and represents significant strategic progress in our business.”
Growthpoint is the largest South African primary listed REIT. It creates value for all its stakeholders through innovative and sustainable property solutions that provide space to thrive.
The 21st largest company in the FTSE/JSE Top 40 Index, Growthpoint is a Top 10 constituent of the FTSE EPRA/NAREIT Emerging Index. It is also in the FTSE4Good Emerging Index and has been included in the FTSE/JSE Responsible Investment Index for eight years running. It is the most liquid and tradable way to own commercial property in South Africa.
Growthpoint owns and manages a diversified portfolio of 547 property assets. This includes 471 properties in South Africa valued at R76.9bn and Growthpoint’s 50% interest in the properties at V&A Waterfront, Cape Town, valued at R8.7bn. Internationally, Growthpoint owns 57 properties in Australia valued at R32.5bn through its investment in ASX-listed Growthpoint Properties Australia (GOZ) and 18 properties in Romania valued at EUR1.0bn through its investment in LSE AIM-listed Globalworth Real Estate Investments (GWI). Its size and diversity make it strongly defensive.
Its South African balance sheet remains well capitalised. Even though Growthpoint’s gearing increased from 33.7% to 35.0% during the year, mainly to fund investment activities, it remains at conservative levels.
Growthpoint enjoys good access to funding. Its unsecured debt increased by R4.5bn during the year, of which R3.5bn is in corporate bonds following a return of liquidity in the bond markets as well as strong demand for high-quality liquid assets from banks. Some 85.6% of Growthpoint’s debt is fixed for 3.9 years on average. It decreased its weighted average cost of debt slightly from 9.3% to 9.2%. Growthpoint also raised R2.5bn in new equity through its Distribution Re-Investment Programme.
The company’s strategic initiatives – Internationalisation, Funds Management, and Trading and Development - were key focuses this year. They all reinforced Growthpoint’s emergence as a leading international property company and added new, low-risk income streams.
Sasse explains: “Growthpoint’s balance sheet has grown substantially in recent years. At this size, we recognise that no single initiative will move the needle for growth, so we are taking a multifaceted approach, as well as growing the international assets on our balance sheet.”