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  • Property major GPT Group (GPT) claims consumer confidence in the retail sector is on the rise as the company says it is recovering in the wake of the pandemic
  • Total specialty sales were up 12.4 per cent for the company and total centre sales were up eight per cent, compared to the prior corresponding period with general retail and leisure leading the way
  • The company said that cinema sales continue to be impacted by reduced patronage given the lack of new product, while travel agencies are also yet to recover given the ongoing international travel restrictions
  • GPT recorded strong rent collection outcomes across their portfolio during the quarter, with 105 per cent of net billings collected
  • GPT Group shares are up 0.32 per cent, trading at $4.72 at 12:54 pm AEST

Property major GPT Group (GPT) claims consumer confidence in the retail sector is on the rise as the company says it is recovering in the wake of the pandemic.

However, the recovery isn’t being felt in the cinema and travel agency retail sectors, according to GPT.

Total specialty sales were up 12.4 per cent for the company and total centre sales were up eight per cent, compared to the prior corresponding period with general retail and leisure leading the way.

The company said that cinema sales continue to be impacted by reduced patronage given the lack of new product, while travel agencies are also yet to recover given the ongoing international travel restrictions.

“While 2020 was a challenging year for physical retailing, the recovery we have seen in visitations and sales growth demonstrates the quality and resilience of our assets and the desire for customers to return to our shopping centres,” GPT CEO Bob Johnston said.

“Record levels of household savings and buoyant consumer confidence, coupled with an increasing appetite for a return to normal activities, should continue to translate to broad-based retail sales growth across the entire portfolio over the remainder of the year,” he added.

The company said a continuation of the positive sales momentum experienced at the end of 2020 has supported leasing activity with 142 specialty leases completed during the quarter.

“However, the return of workers and visitors to the Melbourne CBD remains well below historical levels and as a result, the recovery of Melbourne Central continues to lag the balance of our portfolio,” Johnston said.

“The group has provided earnings and distribution guidance for the full year with the expectation that we will continue to see the economic recovery sustained and COVID-19 related disruptions minimised.”

“With the exception of Melbourne Central, our retail assets have seen foot traffic return to approximately 95 per cent of pre-COVID-19 levels.”

GPT recorded strong rent collection outcomes across their diversified portfolio during the quarter, with 105 per cent of net billings collected.

Occupancy rates across their logistics portfolio took a small hit, sliding to 96.8 per cent, with the company attributing this decline to multiple lease expiries.

“The group’s diversified portfolio continues to benefit from the economic recovery currently underway,” Johnston said. “In logistics, tenant demand for high-quality assets remains strong supporting the ongoing rollout of our development pipeline.”

GPT’s office portfolio occupancy fell to 91.9 per cent following the practical completion of 32 Smith, Parramatta, which is now 72 per cent committed including terms agreed, according to the company.

“Leasing activity in the office sector continues to improve as organisations position themselves for the recovering economy, and retail sales momentum has been supported by jobs growth and strong consumer confidence,” Johnston said.

In early April, GPT issued its first guidance since COVID-19, forecasting an eight per cent increase in earnings in 2021

GPT Group shares are up 0.32 per cent, trading at $4.72 at 12:54 pm AEST.

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