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Westralia Square. Source: Rhys Prka/The Market Herald
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  • GDI’s (GDI) net profit slid from $66.74 million in FY20 to $22.69 million in FY21 as the company says its net profit is subject to significant volatility
  • At least one appraisal was performed on each asset, (excluding 50 Cavill Avenue), and the uplift was $2.32 million, much less than in prior years
  • GDI will have a fully Perth-based portfolio when the sale of 50 Cavill Avenue is completed to take advantage of a recovery it believes is imminent
  • Shares in GDI closed down 0.86 per cent at $1.15 on August 23

GDI’s (GDI) net profit slid from $66.74 million in FY20 to $22.69 million in FY21 as the company says its net profit is subject to significant volatility, namely from property revaluations and leases.

At least one appraisal was performed on each asset, with the exception of 50 Cavill Avenue, and the overall valuation uplift was $2.32 million, much less than in prior years. In FY20 the uplift was $32.86 million.

During FY21 GDI’s Perth assets, in particular, were in a leasing period which also added to profit volatility, according to GDI.

There was a $14.2 million decrease in funds from operations (FFO) at Westralia Square as a result of UGL leaving, WAPOL moving from upper to lower floors, and the Department of Justice leaving. This contributed to a reduction in GDI’s FFO per security to 5.37 cents, down from 8.22 cents in FY20.

The company believes Westralia Square 1 will be fully committed during FY21.

GDI said because it paid a dividend that exceeded its adjusted funds from operations (AFFO), its net tangible assets (NTA) per security fell from $1.27 at December 31, 2020, to $1.25 at June 30, 2021, despite a small increase in the value of the company’s assets.

There was an $8 million profit on the sale of 50 Cavill Avenue, which was not included in the NTA per security.

GDI will have a fully Perth-based portfolio when the sale of 50 Cavill Avenue in Surfers Paradise is completed to take advantage of a recovery it believes is imminent.

Office vacancy rates in Perth’s CBD have decreased to 16.8 per cent, the lowest level since 2015, according to research from the Property Council’s Office Market Report.

Since June 2020, $5.1 billion in capital has been actively seeking out Perth office assets, worth about $740 million, according to a recent CBRE report.

The company said there was reason to believe that the rebound in the Perth market had begun with positive net absorption, reducing vacancies and rising lease enquiries.

During this time, GDI made headway on both its key development prospects. On the vacant site in Westralia Square, permission was given for the construction of a new 9300sqm office structure.

In Perth, plans were also authorised for a new 45,000sqm office skyscraper at 1 Mill Street. GDI said interest in the proposed new development was high and it was hoping to see substantial movement this year.

Shares in GDI closed down 0.86 per cent at $1.15 on August 23.

GDI by the numbers
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