GPT steadies focus on Office & Logistics
GPT announced its operational update for the September 2019 quarter.
Key Operational Highlights
Office leasing of 64,982sqm completed during the quarter, with portfolio occupancy increasing to 97.7% (97.1% at 30 June 2019)
Logistics leasing of 45,815sqm completed during the quarter, with portfolio occupancy increasing to 95.6% (93.4% at 30 June 2019)
Acquired a 33.4 hectare logistics development site at Kemps Creek, Sydney, for $100 million, with settlement to occur in two tranches over 2020 and 2021
Acquired a 32.8 hectare logistics development site at Truganina, Melbourne, for $34 million, with settlement expected in 2022
Retail specialty sales of $11,546psqm, representing growth of 0.5% over the last 12 months
Retail comparable MAT growth of 0.1% (1.0% at 30 June 2019) and Combined Specialty comparable MAT growth of -0.4% (0.7% at 30 June 2019)
Maintained a leadership position in the real estate industry for delivering sustainable business outcomes, ranking 3 rd globally in the Dow Jones Sustainability Indices and achieving a GRESB survey outcome that places GPT in the top 20% of respondents
GPT’s Chief Executive Officer, Bob Johnston, said the third quarter has seen the Group deliver strong leasing outcomes across the Office and Logistics portfolio and continue to make good progress on its strategy to grow its Logistics portfolio. In addition, the Group’s Retail portfolio remains highly productive with specialty MAT sales of $11,546psqm, representing growth of 0.5% for the 12 month period.
Despite ongoing headwinds in the retail sector, the recent recovery of house prices in Sydney and Melbourne, combined with personal income tax cuts and lower interest rates, are expected to support a gradual improvement in retail conditions.
In the Funds Management division, the GPT Wholesale Office Fund has recently commenced the marketing of a new $300 million equity raising.
“Our office and logistics leasing teams have had a successful quarter, which has resulted in higher occupancy across the portfolio, securing major commitments at Darling Park 1 and Melbourne Central Tower in the Office portfolio and at Wetherill Park and Citiwest Industrial Estate in the Logistics portfolio.”
“We have also made good progress on deploying the proceeds of our recent capital raising, with the acquisition of two new logistics development sites in our core markets of Sydney and Melbourne. The addition of these sites to our development pipeline, combined with projects currently underway, provides the Group with the capacity to deliver more than 500,000 square metres of new prime logistics facilities with an estimated end value on completion in excess of $1 billion,” said Mr Johnston.
Earlier this month the NSW Government announced further details on the proposed Sydney Metro West project, which will link the Sydney CBD to Parramatta and have a projected travel time of approximately 20 minutes. The announcement confirmed that the project will include a station at Sydney Olympic Park, within GPT’s existing land holding.
The Government has advised GPT of its intention to acquire part of the Group’s town centre site to facilitate the delivery of the new station.
“We look forward to working with Sydney Metro West project team and the Sydney Olympic Park Authority to determine how the Metro West best integrates into the Masterplan for the Park and our Town Centre site. The Sydney Metro West project will not only be a significant benefit for Sydney Olympic Park and the proposed town centre, it will also reinforce Parramatta’s importance as a business centre, supporting GPT’s office investments at Eclipse Tower and 32 Smith Street,” said Mr Johnston.
The Group reaffirms its 2019 guidance of 2.5% growth for Funds From Operations per security and Distribution per security growth of 4.0%.