Growthpoint Properties Limited

For the year, Growthpoint reported distributable income of ZAR 5.2 billion, or 152 cents per share, up 4.3% year over year. The dividend was 133 cents per share, up 7.4%, supported by an 87.5% payout ratio versus 85% last year. Group assets increased 2.8% to ZAR 160 billion, NAV per share rose 3.8%, and group LTV improved to 38.7% from 40%. On the South African portfolio, like-for-like NPI grew 4.4%, vacancies fell from 8.2% to 7.2%, and valuations rose 3.3% or ZAR 2 billion. Management guided FY2027 to 1%-3% growth in distributable income and dividends, with next year expected to be held back by dilution from asset sales, offshore pressure, and higher interest rates; they also said they modeled two rate hikes in budgets.

Norbert Sasse framed the year as one of deliberate portfolio repositioning and balance-sheet strengthening, emphasizing disposals of weaker assets and reinvestment into newer, better-located, greener properties. He called office, especially Gauteng office, the group’s “Achilles heel,” while saying office in the right locations still works, as shown by the Western Cape and the V&A. His tone was confident on liquidity and capital flexibility, repeatedly stressing that the group now has capacity to fund development and opportunistic growth without resorting to equity.

José Snyders highlighted a healthier operating and financial profile, with SA like-for-like NPI up 4.4%, vacancies down to 7.2%, and distributable income at ZAR 5.2 billion. He pointed to lower interest costs of about ZAR 371 million, driven by average debt falling from ZAR 39 billion to ZAR 33 billion and the average cost of debt easing from 8.9% to 8.6%. He also noted group ICR above 2.6x, SA LTV at 30.2%, unutilized facilities of about ZAR 5.7 billion, and a ZAR 1.8 billion bond issue at 108 basis points over ZARONIA that was six times oversubscribed.

Analysts focused on the outlook, asking whether higher-for-longer rates implied further hikes and whether that was built into assumptions; management said they modeled two rate increases, mostly toward the back end. Questions also probed foreign earnings hedging and Australian currency exposure, with management saying they use progressive hedging and do not plan to change policy, though current cross-currency swaps are costing more as they reset. Another theme was the bond market: management said they are tempted to keep tapping it given strong pricing, but want to preserve diversified funding and bank relationships, and they also addressed Globalworth underperformance by saying discussions with stakeholders are ongoing and the stake is still a strategic issue.