Growthpoint CEO Norbert Sasse
Growthpoint Properties on Wednesday reported distribution growth of 7.2% for the year ended June 30, outperforming its original forecast and delivering on higher performance prospects announced at its half-year presentation.
CEO Norbert Sasse attributed the group’s strong performance to the all-round positive show from its South African property portfolio, which was enhanced by the group’s Growthpoint Properties Australia (GOZ) investment, where a weaker rand against the Australian dollar worked in its favour.
The total return to Growthpoint-linked unitholders is 21.2% for the year, comprising capital growth of 14.7% and income yield of 6.5%. Growthpoint’s distributions are based on sustainable rental income.
“Investors can expect similar strong performance from Growthpoint in the coming year and it is likely to deliver similar distribution growth for the year to June 2014 as it did in the 2013 financial year,” said Sasse.
Growthpoint’s South African property portfolio contributed 75% to its distributable income. Despite continued tough market conditions, particularly in the office sector, vacancies remained largely stable in the South African portfolio at 4.4% overall. Portfolio arrears are the lowest in the past five years, totalling 5.8% of collectables and down from 6.4% last year. “This is a result of quality clients and exacting arrears management,” he explained.
The company owns and manages 393 properties in South Africa, 44 properties in Australia through its 65.8% investment in GOZ and a 50% interest in properties at the V&A Waterfront, in Cape Town.
For the first time, its tangible assets exceeded R60-billion during the year and at year-end, consolidated tangible assets were valued at R62.8-billion.
Growthpoint raised R4-billion in capital – R1.5-billion through two distribution reinvestment plan issues and R2.5-billion through the oversubscribed placement of new linked units. This has equipped the firm with a ‘war chest’, of available funds, which Sasse said it would use to act swiftly on investment prospects both locally and abroad.
Growthpoint became the largest South African real estate investment trust (REIT) on the JSE from July 1. It also successfully converted its capital structure from property loan stock linked units to REIT ordinary shares of no par value becoming the first to do so in South Africa.