Growthpoint Properties Australia (ASX: $GOZ) 1H24 Distribution and Valuations Announcement

Growthpoint Properties Australia (ASX: $GOZ) has announced a distribution of 9.65 cents per security for the six months ending 31 December 2023 (1H24), in line with the FY24 distribution guidance of 19.3 cps. The Group also maintains its FY24 funds from operations (FFO) guidance of between 22.5 to 23.1 cps. Additionally, preliminary draft external valuations for approximately 62% of the Group's portfolio by value indicate a decrease of around $137.8 million, or 4.7% on a like-for-like basis relative to 30 June 2023 book values. The weighted average capitalisation rate of the externally valued properties has increased by approximately 36 basis points to 5.8%.

Executive Commentary on 1H24 Distribution and Valuations

Timothy Collyer, Managing Director of Growthpoint, stated, 'The Group's movement in preliminary draft external valuations reflects the increased cost of capital and higher return expectations from investors. In the industrial market, supply constraints continue to drive strong rental growth, which has largely offset yield expansion. Office markets are experiencing higher-than-average vacancies, although physical occupancy continues to increase across all markets and is anticipated to improve in 2024 as more businesses implement return-to-office policies. Despite the lower preliminary draft external valuation of the Group's properties, Growthpoint's high-quality portfolio with secure tenants on long leases continues to perform well in terms of occupancy (94%) and WALE (5.8 years), underpinning income to Securityholders.'

Summary of 1H24 Distribution and Valuations Announcement

Growthpoint Properties Australia (ASX: $GOZ) has maintained its FY24 FFO guidance and announced a distribution of 9.65 cents per security for 1H24. The preliminary draft external valuations for approximately 62% of the Group's portfolio by value indicate a decrease of around $137.8 million, or 4.7% on a like-for-like basis relative to 30 June 2023 book values. The industrial portfolio decreased by approximately $9.4 million, while the office portfolio decreased by approximately $128.4 million on a like-for-like basis. Despite these decreases, the Group's high-quality portfolio with secure tenants on long leases continues to perform well in terms of occupancy and WALE. Growthpoint's pro forma gearing as at 31 December 2023 is expected to be around 39.0%, remaining within the Group's target range of 35% to 45%. The final audited valuations for individual properties will be available as part of Growthpoint's 1H24 results, which will be released to the Australian Securities Exchange on 22 February 2024.