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Growthpoint FY17 AGM

Growthpoint held their AGM last week with management declaring FY17 as a transformational year for Growthpoint having identified an opportunity to acquire the GPT Metro Office Property Fund (GMF) after observing a disconnect between pricing in the direct property market and the listed market. Growthpoint have since taken over GMF and fully integrated the portfolio and seen valuation gains on the GMF assets of 9% on prior valuations.

Growthpoint have also taken advantage of the opportunities to divest a number of assets either considered ‘non-core’ to the Group, or assets we believed had reached their peak value to Growthpoint. These sales and including the recent disposal of the Mulgrave property helped the Group to reduce gearing to 38.4%.

For Growthpoint these strategies have lifted funds from operations per security by 11.4% with distribution per security at 21.5 cents a growth of 4.9%.

As yields remain low and competition to acquire assets in the direct market is strong, Growthpoint will focus more on the existing portfolio and the listed market for opportunities to diversify the portfolio.

Growthpoint maintains its FY 18 distribution guidance at 22.2 cents per security. This is a 3.25% increase on FY17, providing an investment yield of 6.41% at current trading levels.

(AGM Presentation)