Growthpoint Properties has grown its distributable income at the halfway stage of the financial year mainly due to an improved contribution from its SA operations.
Distributable income per share (DIPS) increased by 3.9% to 74c in the six months ended December from 71.2c a year ago. The dividend per share increased to 61c from 58.8c a year ago, Growthpoint said on Wednesday.
Distributable income increased by 4.3% to R2.5bn, while revenue, excluding Capital & Regional, increased 5% to R6.9bn.
Group operating profit, excluding C&R, increased 4.8% to R4.5bn.
Funds from operations per share decreased by 3.1% to 62.8c and headline earnings per share increased by 62.8% to 92.11c.
The group said there was an improved performance from the three SA sectors, including like-for-like rental growth, lower negative rent reversions and reduced vacancies in the logistics and industrial sector as well as improved expense efficiencies and recoveries.
SA net property income increased by 6.2% to R2.9bn and the V&A Waterfront (V&A) delivered a 16.6% like-for-like increase in net property income due to increased tourism and the positive impact this had on retail, hotels and attractions.
SA REIT loan to value (LTV) for the group improved to 40.8% from 42.3% the year before, with the SA LTV improving to 35.3% due to a marginal decrease in net borrowings, offset by a decrease in property assets as a result of the disposal of Capital & Regional.
Growthpoint disposed of C&R for R2.4bn, settled by way of R1.2bn cash and R1.2bn worth of NewRiver REIT Plc shares. The transaction was implemented in December.
The group disposed of 12 properties, including two office properties, for R589.4m, with a profit on book value of R7.4m, it said.
The improving perception of the SA political landscape is creating a more favourable environment for the REIT sector, and along with lower inflation, further potential interest rate relief and limited load-shedding, would positively affect all sectors, Growthpoint said.
The office sector seemed to have stabilised and was outperforming in Cape Town and Umhlanga Ridge, KwaZulu-Natal, Growthpoint said. The logistics and industrial sector, benefiting from a more balanced supply-demand dynamic, was expected to outperform other sectors.
“We also anticipate that KwaZulu-Natal and the Western Cape will continue to deliver superior performance. The V&A Waterfront's performance exceeded expectations for half year 2025, driven by increased domestic and international tourism,” it added.
The redevelopment of the Lux Mall, which started in July 2024, and the Table Bay Hotel which closed from February 2025, will have a negative effect on financial year 2025’s performance. Both redevelopments are scheduled to open towards the end of 2025.
The V&A Waterfront anticipates achieving mid-single-digit growth for full-year 2025.
“We believe that LTV ratios, linked to valuations, have stabilised. We will continue to focus on strategic initiatives to preserve liquidity and balance sheet strength in the long term. Our diversified portfolio and income streams position us defensively for FY 2025,” it said.
“Our domestic portfolio's improving performance driven by strengthening property fundamentals, the strong operational fundamentals of our international investments and the first interest rate cut in Australia since November 2020, indicate that we have reached the bottom of the property cycle,” it added.
Growthpoint expects distributable income per share to grow by between 1% and 3% for the 2025 financial year, even though interest rate movements remain uncertain.
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