GPT's retail woe takes a toll
Diversified developer and fund manager GPT has swung its portfolio further into logistics real estate as its malls portfolio delivers weaker sales results from its tenants.
Led by Bob Johnston, GPT will also bank a windfall in years ahead with confirmation the new metro link to Parramatta will include a station at Sydney Olympic Park, within GPT’s land holding.
It’s a boon on several fronts for GPT: the government will acquire part of its holding while GPT’s proposed town centre at Sydney Olympic Park will benefit as well with its office towers at Parramatta.
Even so, concerns about its retail exposure weighed heavier for investors after the September third quarter update. The stock closed 19??, or 3.1 per cent, lower at $5.95.
Some proceeds from $800 million capital raising in June have been used to acquire new logistics development sites. GPT has capacity to deliver more than 500,000 sq m of new logistics facilities with an estimated end value of more than $1 billion.
In its malls, specialty sales growth registered negative 1.5 per cent. In June last year growth was positive 2.5 per cent.
Mr Johnston predicted a “gradual improvement in retail conditions” supported by the recovery of house prices in Sydney and Melbourne, combined with income tax cuts and lower interest rates.
Macquarie analysts noted that only two of the 10 retail assets on the GPT platform had positive growth in sales from specialty tenants.
“It is concerning assets such as Highpoint, Westfield Penrith and Melbourne Central have all seen declines,” they wrote in a client note.
