Growthpoint Properties Australia (GOZ) H2 2023 earnings summary

Executive summary

• FY23 FFO was 26.8 cents per security, down 3.2% YoY; distribution rose 2.9% to 21.4 cents per security.

• The portfolio remained 93% occupied with a six-year WALE; leasing activity covered more than 156,000 sq m, equal to 11.2% of portfolio income.

Financial highlights

• FFO was AUD 26.8 cents per security; higher interest costs increased by AUD 30 million, partly offset by rental growth and Fortius income.

• NPI increased, including two one-offs: a surrender payment for five Murray Rose Avenue and a AUD 6.5 million bank guarantee payment for 100 Skyring Terrace.

• NTA fell 12.3% to AUD 4 per security, driven by lower property valuations amid a higher risk-free rate.

• Like-for-like portfolio value declined 6.5% over 12 months; FY23 valuation pressure was attributed to higher capitalisation and discount rates.

Outlook and guidance

• FY24 FFO guidance is AUD 0.225–0.231 per security; distribution guidance is AUD 0.193 per security, with payout at the 75%–85% target midpoint.

• Guidance reflects higher floating-debt costs, leasing assumptions for vacant office space and the impact of FY23 rent received early through the five Murray Rose Avenue surrender.

• FY24 distribution yield at the prevailing security price was 7.3%; the portfolio is positioned to manage through the cycle with long-WALE, high-quality tenants.