Morningstar | Supply Additions Tilt Negotiating Power Away from Growthpoint. FVE Unchanged at AUD 3.20
There was no major news in Growthpoint Properties’ investor update for the September quarter. We’ve left our forecasts and AUD 3.20 fair value estimate unchanged, aligning with book net tangible assets of AUD 3.19 as at June 2018. At this point, no-moat-rated Growthpoint continues to screen as overvalued, currently trading around AUD 3.55, having fallen around 10% from its recent peak of AUD 3.92 on Sept. 25. The guided distribution of AUD 23 cents per security, represents a yield of 6.5%.Portfolio metrics remain sound and are largely unchanged from the June year-end. The portfolio remains heavily skewed to office at 66% of the total portfolio, the balance composed of warehouses. Overall portfolio occupancy is 98%, gearing is approximately 34% and the weighted average rent increase is 3.3%. A small amount of leasing was conducted during the September quarter, mostly for the office assets. Rents for these increased by 3.7% on average and the weighted average lease term was 5.6 years. Reflecting high occupancy, there is little leasing over fiscal 2019, but 11% of leases expire in fiscal 2020. We anticipate Growthpoint will continue to pay high incentives to fill or extend these leases as upcoming supply additions has shifted the balance of power in lease negotiations in the tenant’s favour.
Post the fiscal 2018 result in mid-August, Growthpoint has settled on the acquisition of the office tower at 836 Wellington Street, West Perth for AUD 91 million and on a yield of 6.25%. The two Sydney properties that had been slated for divestment in Sydney Olympic Park, have been taken off market as demand from developers to convert the properties to apartments was weaker than anticipated.
Growthpoint Properties Australia is engaged in property investments, focusing on Australian property in the industrial, office and retail sectors. As of June 30 2016, Co.'s industrial portfolio had 38 properties with a total lettable area of 874,156 square meters and Co.'s office portfolio had 20 properties with a total lettable area of 235,389 square meters.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.