Growthpoint Properties Australia has achieved a modest lift in earnings for its 2020 financial year after collecting almost all of its rent billed.
Funds from operations, the preferred earnings measure in the property sector, rose by 2 per cent to 25.6c per security. Statutory profit after tax, which takes into account property gains and losses, fell 27.5 per cent to $272.1 million.
Led by Tim Collyer, Growthpoint paid a total distribution of 21.8?? per security for its 2020 fiscal year, 5.2 per cent lower than a year earlier.
It said its decision to retain a higher level of capital within Growthpoint was made out of prudence given the uncertainty caused by the COVID-19 pandemic.
Unusually for the sector, though, Growthpoint has forecast distributions of 20c in total for its fiscal 2021, although it has withheld guidance on earnings. The stock closed 11c, or 3.5 per cent higher, at $3.24.
With a portfolio of industrial facilities and office assets, focused in suburban locations, Growthpoint collected 97 per cent of its billed rent during the height of the pandemic shutdown.
Some 89 per cent of Growthpoint’s office holdings are in fringe or suburban markets, which could well prove a boon if major corporate tenants reconsider their reliance on occupying large CBD spaces, according to Mr Collyer.
“We believe the suburban office market could be a beneficiary,” he told The Australian Financial Review.
“We think a lot about the portfolio construction. We obviously haven’t gone into retail, which is very difficult environment.”
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