Growthpoint Properties on Thursday raised its guidance for full-year earnings for a second time and now expects growth in distributable income per share of 2%-3%.
At the halfway stage the group reported distributable income per share (DIPS) growth of 3.9%, compared to the initial 2025 financial year guidance of a decrease in DIPS of 2%-5%. In March it updated its full-year 2025 guidance to DIPS growth of 1%-3%.
The group said on Thursday that the increased guidance was due to the improved performance, strengthening property fundamentals in SA, including continued outperformance by the V&A Waterfront, and lower interest rates, partially offset by lower offshore income due to the sale of Capital & Regional (C&R) in the UK.
Growthpoint disposed of its noncore investment in C&R to NewRiver Reit (real estate investment trust) for R2.4bn in December last year, settled by R1.2bn of cash and newly issued NRR shares worth R1.2bn. The cash proceeds were used to settle rand-denominated debt.
For the nine months to end-March, vacancies in the group’s SA portfolio improved from 8.7% at end-June 2024 to 8.4%, slightly above the 8.3% recorded at end-December 2024.
The marginal increase in this quarter from the December quarter is largely due to the addition of 18,768m² of vacancy from the newly completed speculative development, Arterial Industrial Park Phase 2 in Cape Town.
During the reporting period a total of 775,095m² of space was let, comprising 434,945m² of renewals and 340,150m² of new lets.
Renewal rental growth rates improved across all sectors, reducing from -6% at in the 2024 financial year to -1.8% at halfway stage of the 2025 financial year, and now stand at -1%.
However, its lease renewal success rate declined from 76.3% in the 2025 financial year to 68.8% at halfway stage of the 2025 financial year, and now stands at 67.4%.
“All three of our domestic portfolios showed improved performance. We have a strong set of initiatives — both innovative and established — in place to keep improving the quality of our portfolios and underlying operational metrics.
“GIP [Growthpoint Investment Partners] is performing as expected. The V&A continues to exceed expectations, supported by the benefits of increased tourism and consistently effective asset management that has successfully unlocked the precinct’s many opportunities,” it said.
The group’s international investments were expected to keep performing in line with guidance, it said.
Growthpoint, which is SA’s largest JSE-listed Reit, has assets in SA, the rest of Africa, Eastern Europe, Australia and the UK, with an increasing emphasis on the number of assets it holds offshore.
Growthpoint will release its full-year results on September 10.
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