GROWTHPOINT Properties, the largest primary JSE-listed REIT, lifted its dividend 5.1 percent to 61.5 cents a share in the six months to December 31 as it continued to reinforce liquidity, strengthen its balance sheet, optimise its local portfolio and seek new revenue streams.
Distributable income increased 17.6 percent in SA REIT funds from operations, and distributable income per share of 76.9 cents was up 5.2 percent.
Total property assets grew 7.7 percent to R164.4 billion.
Chief executive Norbert Sasse said the solid performance was due to increased contributions from V&A Waterfront, Growthpoint Properties Australia (GOZ) and improved South African finance costs due mainly to the November 2020 equity raise.
“These pleasing half-year results show the stability of our business. We are seeing encouraging signs of improvement,” although he added that the environment remained uncertain and South Africa property fundamentals were weak.
Growthpoint’s 50 percent interest in the V&A Waterfront, with its share of property assets valued at R8.9bn, reported a 62 percent rise in net property income, due to a partial recovery in international tourism.
The Growthpoint share price, which increased 4.1 percent to R13.42 early yesterday afternoon, remains undervalued compared to its SA REIT net asset value of 2 148 cents per share - the net asset value had increased by 6.2 percent by the end of the six month period.
In line with an 80 percent payout ratio. Growthpoint retained R524.6m before tax, ending the period with R515.8m cash on the SA balance sheet and R6.2bn of unused RSA committed facilities.
Growthpoint is invested in real estate across South Africa, Africa, Australia, the UK and Eastern Europe. International investments represent 43.1 percent of property assets by book value and 28 percent of earnings before interest and tax.
It owns 57 office and industrial properties in Australia through a 62.2 percent holding in GOZ.
Through its 29.4 percent investment in Globalworth Real Estate Investments, Growthpoint owns an interest in 66 office and light industrial properties worth R57.3bn in Romania and Poland, with Growthpoint’s share valued at R16.9bn.
It owns seven community shopping centres in the UK via a 60.8 percent stake in Capital & Regional (C&R).
GOZ’s dividend of AU$10.4 cents per share (R527m) increased from the prior half-year of AU$10 cents per share. Its portfolio value increased by 11.1 percent .
Globalworth’s distribution fell 13.3 percent as it focused on improving tenant spaces and growing through low-risk acquisitions and developments. It has five light logistics facilities under development in Romania and is refurbishing two mixed-use properties in Poland.
“Globalworth’s portfolio metrics continue to outperform those of our SA portfolio. With strong demand from multinational tenants and limited retail exposure, it was relatively unaffected by the pandemic. Its balance sheet is strong, but its large cash holding continues to dilute earnings, and we are seeking ways to maximise this investment,” said Sasse.
C&R planned to resume dividend payments from the second half of 2022.
Growthpoint owns and manages 407 retail, office, and industrial properties across South Africa valued at R64.7bn.
This portfolio recorded a further 0.4 percent devaluation, indicating a possible stabilisation in values. Vacancies in the South Africa portfolio reduced to 10.5 percent from 11.6 percent.
“Our SA business is well positioned with a strong balance sheet, which is critical considering the global volatility, geopolitical tensions and weak macro-environment placing ongoing pressure on domestic property fundamentals. With poor economic growth in SA, still below pre-Covid levels, our local growth prospects remain constrained,” he said.
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