1Q23 highlights
- Maintained weighted average lease expiry (WALE) of 6.3 years, with high occupancy of directly owned portfolio of 96% (97% at 30 June 2022)
- Completed circa 60,000 square metres of leasing, 2.6% of portfolio income
- Announced and completed the acquisition of Fortius Funds Management Pty Ltd (Fortius), a key strategic growth opportunity for the business
- Maintains guidance of FY23 funds from operations (FFO) of 25.0 to 26.0 cents per security (cps) and FY23 distribution of 21.4 cps
Timothy Collyer, Managing Director of Growthpoint, said, “Growthpoint has had a strong start to the financial year with continued positive leasing outcomes across our directly owned property portfolio, maintaining our portfolio WALE at 6.3 years and occupancy at 96%. During the quarter, the Group also successfully settled on the acquisition of a high quality, predominantly government leased office asset in Dandenong, Victoria and entered funds management with the acquisition of Fortius, a key growth opportunity for the business. Growthpoint is committed to operating in a sustainable way and we are pleased that GRESB has recognised the Group as a Sector Leader in the 2022 Sustainability Benchmark with a score of 81 out of 100, our highest achievement to date.
“The majority of the Group’s office markets saw positive net absorption in the quarter, while occupier activity remained robust across all industrial markets with strong rental growth persisting in the face of low vacancy. Yields softened (to various degrees) over the quarter across most office markets, with yields also softening in most industrial markets, in response to the rapidly changing macroeconomic environment.
At the end of the quarter, Growthpoint is well positioned to continue to manage the Group through the current period of higher inflation, central bank rate rises and higher interest costs. Our exposure to favoured industrial and metropolitan office markets and secure income from large corporate and government tenants provides a resilient foundation for the Group. The Group’s gearing of 35.2% is at the bottom of the target range of 35% to 45%, providing flexibility to invest in property or funds where we see value for securityholders. We intend to grow the recently announced funds management business, targeting 10% to 20% of Group EBIT, over the medium term with the aim of delivering incremental growth to earnings and income stream diversification for securityholders. Growthpoint remains committed to providing securityholders with sustainable income returns and capital appreciation over the long term.
Read the full 1Q23 investor update
