Growthpoint Properties has announced its financial results for the six months ending 31 December 2024 (HY25), showcasing solid growth across its South African and international portfolios, with a notable improvement in key financial metrics.
The group’s distributable income per share (DIPS) increased by 3.9%, reaching 74.0 cents per share (HY24: 71.2 cps).
This growth was primarily driven by enhanced performance in the South African portfolio, including like-for-like rental growth, improved expense efficiencies, and lower vacancies in the logistics and industrial sectors.
–Net Property Income: South Africa’s net property income rose by 6.2% to R2.9 billion (HY24: R2.7 billion), reflecting continued improvements in property operations and occupancy rates.
–Dividend Growth: The company declared a 3.7% increase in its interim dividend, amounting to 61.0 cents per share.
–Loan to Value (LTV): Growthpoint’s SA REIT loan-to-value ratio improved to 40.8%, compared to 42.3% at the end of FY24.
The iconic V&A Waterfront delivered a strong 16.6% like-for-like increase in net property income, benefiting from the boost in both domestic and international tourism.
Growthpoint’s 50% share of distributable income from the V&A increased by 4.5%, to R398.2 million.
The property group said it has significantly reduced its exposure to underperforming sectors, including office properties, and is actively exiting deteriorating business districts.
During the period, the company disposed of 12 properties for R589.4 million, including two office properties, which reflects a profit of R7.4 million on the book value.
Over the last decade, Growthpoint has sold a total of R5.2 billion worth of B and C-grade office assets, with continued focus on the logistics sector.
The logistics and industrial sectors have performed particularly well, with vacancies decreasing to 3.5%, the lowest since 2018. Growthpoint’s commitment to modern logistics warehouses has also contributed to positive rent reversions of 0.9%, alongside in-force escalations of 7.4%.
The group has prioritised reducing its reliance on the national grid and addressing water supply challenges. The company completed R117.3 million in solar installations during the period, bringing the total installed solar capacity to 52.5 MWp.
Furthermore, Growthpoint has entered into a landmark power purchase agreement (PPA) with Etana Energy for the acquisition of 195 GWh of renewable energy annually, with phased implementation starting in FY26.
Despite ongoing global economic challenges, Growthpoint said it remains optimistic about its future performance, supported by its focus on high-growth sectors, including logistics and the Western Cape region.
The company anticipates further stabilisation in the South African office sector, particularly in Cape Town and Umhlanga Ridge, while the logistics sector is expected to outperform other property types.
The V&A Waterfront, which has benefitted from the tourism resurgence, is expected to continue its growth trajectory, though redevelopments in key areas may temporarily affect performance in FY25.
The group’s share price responded positively to the results on Tuesday, adding 3.5% in afternoon trade, with the group up 6% in the year-to-date and up nearly 17% over the past 52 weeks.
