Johannesburg - Property investment holding
company Growthpoint Properties on Wednesday reported that its
distribution per linked unit for the year ended June 2009 was at 114.6
cents, up 7.6% from the 106.5 cents reported last year.
Revenue for the period was at R3.430bn, up from the R2.920bn reported before.
Operating profit at R2.597bn was up from the R2.184bn reported in 2008.
In spite of difficult economic conditions that prevailed since the last
quarter of 2008, Growthpoint said it had delivered growth in distributions
for the year ended June 30 2009 of 7.6%.
The group said that distribution growth was slower than it had been in
the last two years, mainly due to the impact of the global economic
recession that resulted in a slowdown in demand for new space.
Although, in general, existing tenants have continued to renew their
leases on expiry, there were a number of new developments that came on
stream over the last nine months in the office and industrial sectors, which
have proven difficult to let in the current economic environment, the group
said.
Growthpoint said at June 30 2009 it had entered into an agreement to
acquire one industrial property in Stormill for a total cost of R50m with a one-year rental guarantee at an initial yield of 11.3%. Transfer
of this property is expected by October 2009.
It said the outstanding expenditure in respect of developments in
progress reflected above, amounted to R173.6m.
It also noted that five properties were disposed of in the current
period for R122m.
Sale agreements have been entered into for the sale of a further six
properties valued at R573.7m which no longer meet Growthpoint's
investment criteria.
Looking ahead, Growthpoint said it had a large, diversified, quality
property portfolio and solid tenant base combined with conservative gearing
policies and prudent financial management that should enable the company to
continue achieving its mission of providing sustainable, growing income
streams and long-term capital appreciation.
It said since the latter half of 2008, the impact of the global economic
recession and financial crisis began to be felt quite markedly in South
Africa and it was not immune to this.
"However, it was mostly the impact of new developments that came on
stream in the last nine months in weak economic conditions that has caused
Growthpoint's distributions to grow at a slower rate than what would
otherwise have been the case," said Growthpoint.
Growthpoint's view is that economic activity would continue to be
subdued for the next year until the effects of lower short-term interest
rates and stable and slowly improving global economic conditions bring some
relief.
This, together with the impact of anticipated higher margins on the
refinancing of debt and certain non-interest-bearing liabilities becoming
repayable, could result in distributions for the year to June 30 2010 not
growing at the same rate as in 2009, it said.
"However, provided that no major unforeseen events occur, we expect to
continue showing positive growth in distributions in the next financial
year," said Growthpoint.
At 10:27, shares in Growthpoint were trading 10 cents lower at R13.75.
- I-Net Bridge