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Botanicca 3. Source: Growthpoint
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  • Industrial and office player Growthpoint (GOZ) has doubled its statutory profit after tax to $553.2 million
  • Funds from operations (FFO) per security of 25.7 cents per security (cps) was 0.4 per cent up on the prior corresponding period
  • A 10.2 per cent increase in property values pushed the portfolio valuation out to $4.5 billion
  • Growthpoint improved the portfolio’s occupancy to 97 per cent in FY21 and maintained its weighted average lease expiry (WALE) of 6.2 years
  • Shares in GOZ are up 0.74 per cent to $4.11 at 12:32 am AEST

Industrial and office player Growthpoint (GOZ) has doubled its statutory profit after tax to $553.2 million as it delivered funds from operations (FFO) per security at the upper end of its upgraded guidance.

An FFO per security of 25.7 cents per security (cps) was 0.4 per cent up on the prior corresponding period (pcp). Net tangible assets (NTA) per security of $4.17 was up 14.2 per cent, driven primarily by significant property valuation gains.

A 10.2 per cent increase, the largest 12-month like-for-like property valuation uplift since the group’s founding, was due to yield compression and leasing performance. This pushed the portfolio valuation up to $4.5 billion.

The portfolio uplift was driven by the value of the industrial portfolio, which grew to $1.5 billion, up 15.6 per cent from 30 June, 2020, while the office portfolio grew to $3 billion, up 7.6 per cent.

The lack of contribution from the Broadmeadows asset, which was disposed of in the first half of FY21, drove down net property income (NPI) by 2.7 per cent to $235.6 million.

Growthpoint improved the portfolio’s occupancy to 97 per cent in FY21 and maintained its weighted average lease expiry (WALE) of 6.2 years.

The company negotiated a 10-year and seven-month lease with Bunnings in October for 71 per cent of Botanicca 3, the company’s new A-grade workplace.

The contract was signed in the midst of Melbourne’s protracted COVID-19 lockdown, which Growthpoint managing director Timothy Collyer said was one of the country’s major office leasing deals in FY21.

“To date, we have signed a further four leases, taking the building’s occupancy to 82% and we continue to expect to lease the remaining space by the end of the calendar year,” he said.

“We also signed a number of leases with other significant tenants in FY21. Pleasingly, we saw no significant changes to tenants’ space requirements and our tenants continued to seek long lease terms, with the average lease term being more than eight years.”

The group is happy to provide an FY22 FFO forecast of at least 26.3 cps, representing a 2.3 per cent increase over FY21.

Increased income from Botanicca 3, which Growthpoint plans to be completely leased by the end of the calendar year, and greater occupancy throughout the portfolio will support earnings growth. Growthpoint said it was searching for ways to deploy about $387 million in unspent debt.

The group announced a distribution projection of 20.6 cents per share for FY22, which represents a three per cent increase over FY21.

Shares in GOZ were up 0.74 per cent to $4.11 at 12:32 am AEST.

GOZ by the numbers
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