Total returns from Growthpoint Properties Australia have significantly outpaced the major Australian REIT and share market indexes.
Recent total return data to 30 June 2018 published by UBS shows that the group’s total return to its investors has significantly outstripped major performance benchmarks over six months as well as over one, three and five years.
Over six months, Growthpoint Australia achieved a total return of 9.2%, more than double the achievement of the S&P/ASX A-REIT 300 Index at 3.0% and the S&P/ASX 300 at 4.3%.
For total return over one year, it delivered 22.3% in contrast to the A-REIT 300 and the ASX 300, which both showed total return of 13.2%.
When it comes to performance over three years, the group notched up a total return of 11.8% per annum compared to the A-REIT 300 at 10.0% per annum and the ASX 300 at 9.1% per annum.
And for five-year performance, the total return achieved a leading 16.2% per annum against the A-REIT 300 at 12.2% per annum and the ASX 300 at 10.0% per annum.
Norbert Sasse, Group CEO of Growthpoint, says: “GOZ continues to deliver excellent performance and has once again extended its track record of superior shareholder returns.”
Part of the group’s positive performance is driven by the Australian domestic economy, which remains favourable for commercial property. Unemployment is low and expected to decrease further, while population growth has been strong, particularly along the Eastern Seaboard of the country where Growthpoint Australia’s portfolio is concentrated.
The out performance, however, comes down to its management and strategy. The A-REIT continues its accretive recycling of capital. A number of opportunities remain for the group to continue to grow earnings and distributions to its security holders, including direct property transactions, internal development projects and expansion opportunities. The listed sector also continues to present merger and acquisition opportunities for Growthpoint Australia to grow. The group holds an 18.2% stake in the ASX-listed Industria REIT, acquired for AUD68.0 million in July 2017.
With its gearing now below 36%, it is also well positioned with good balance sheet flexibility to take advantage of future opportunities that present themselves.
Sasse confirms that growing its offshore business is the key driver for Growthpoint. “We continue to support GOZ and our investments in Globalworth Real Estate Investments (GWI) and Globalworth Poland Real Estate (GPRE) on their growth courses while also seeking new opportunities.”
Growthpoint led the SA REIT sector’s internationalisation by investing in Growthpoint Australia in 2009 and currently hold 65.5%. At 31 December 2017, Growthpoint owned 57 properties in Australia valued at R31.2bn through its investment in the group.