- Diversified property player GPT Group (GPT) sees a 24.6 per cent increase in funds from operations in H1 2021 as rent rebounds and logistics boom
- The company has decided not to issue funds from operation and distribution guidance, citing uncertain operating conditions for the balance of 2021
- GPT posted a net profit after tax of $760.5 million, an upgrade on June 2020’s net loss after tax of $520.4 million
- GPT enjoyed a 3.3 per cent portfolio re-evaluation gain of $471.7 million
- Shares in GPT are up 3.86 per cent to trade at$4.84
GPT Group (GPT) saw a 24.6 per cent increase in funds from operations in the first half of 2021.
The diversified property player said the increase is owed to a comeback in retail rent collections and increase property valuations in light of a boom in logistics.
However, the company has decided not to issue funds from operations and distribution guidance, citing uncertain operating conditions for the balance of 2021.
The company posted a net profit after tax (NPAT) of $760.5 million, an upgrade on June 2020’s net loss after tax of $520.4 million, with investment property valuation increases of $471.7 million.
GPT enjoyed a 3.3 per cent portfolio reevaluation gain and a weighted average capitalisation rate (WACR) of 4.85 per cent.
Its logistics portfolio lead the valuation rise, recording a $314.7 million or a 10.6 per cent valuation increase in the six months to 30 June 2021 and now totals $3.4 billion.
GPT CEO Bob Johnston said the logistics portfolio continued to grow through developments and acquisitions.
The company also announced today that it is in exclusive due diligence to acquire a 26 logistics and industrial assets portfolio, together with four office assets from Ascot Capital.
The logistics portfolio was 96.8 per cent occupied at the end of June 2021, with 58,900sqm of leases signed during that time.
The portfolio’s weighted average lease expiry (WALE) is 6.6 years, and rent collections for the first half of the year were 100 per cent of net billings.
Occupancy for GPT’s $5.8 billion prime grade portfolio was 88.9 per cent at June 30 2021, with recent revaluations increasing the value of the portfolio by 2.2 per cent.
During that time, 37,900sqm of leases were signed, with another 23,200sqm of heads of agreement in place. The portfolio’s (WALE) is five years.
As of June 30 2021, independent appraisals were conducted for the whole retail portfolio, resulting in a revaluation gain of $35.8 million, or 0.6 per cent.
Following the relaxation of COVID-19 limitations at the start of the term, portfolio retail sales exhibited a robust rebound.
When compared to the same time in 2019, total centre sales were up five per cent and total specialties sales were up 6.5 per cent for the six months ending June 30, 2021. At the end of June, the portfolio occupancy rate was 98.9 per cent.
In the first half, retail rent collections were 104 per cent of net billings. In July 2021, rent collection for the retail portfolio declined to 81 per cent of net billings following the implementation of lockdowns in Sydney and Melbourne.
“While the recent COVID-19 outbreaks have disrupted the economic recovery, we expect this to be transitory and that we will see a return to favourable business conditions once vaccination rates reach a level that allow restrictions to be lifted on a more sustained basis,” Mr Johnston said.
“We are confident that our high quality diversified portfolio will benefit as operating conditions improve and the Group is well placed with a strong balance sheet to execute on our strategy to grow Logistics and Funds Management.”
The group has declared a distribution for the six months to June 30 2021 of 13.3 cents per ordinary stapled security.
Shares in GPT rose 3.86 per cent to trade at $4.84 at 2:01 pm AEST.