Growthpoint Properties (ASX: GOZ) announces FY22 results

• Acquired over $320 million in offices and securities
• Portfolio valued at $5.1 billion
• Funds from operation up 7.8%

Growthpoint Properties (ASX: GOZ) has today released its full year results, with the company delivering improved funds from operations and net tangible assets.

Statutory profit after tax was $459.2 million, down from the prior corresponding period ($553.2 million in FY21). The company delivered a 7.8% increase in FFO per security, with NTA up 9.4%. GOZ said the increased NTA primarily reflected strong valuation uplift across the portfolio in the first half, with more subdued growth in the second half of the year.

GOZ also refinanced $715 million of debt on improved terms and entered into new facilities of $350 million. At year end, GOZ’s average cost of drawn debt was 3.4%, FY21 was 3.3%.

The company also paid 20.8 cps in distributions for FY22, 4% higher than the prior corresponding period.

“We have a had a strong performance this year, delivering a robust set of results which reflects the successful execution of the Group’s growth strategy and underlying strength of the business,” said MD of Growthpoint, Tim Collyer.

“The Group has made strategic, accretive acquisitions over the year, including three high-quality modern office assets and additional securities in DXI, further increasing our exposure to the growing industrial sector.

“Further, the Group has also successfully settled on the acquisition of a fourth high quality, predominantly government leased office asset in Dandenong in July, and has announced it has entered an agreement to acquire Fortius Funds Management, a key growth opportunity for the business.

“The Group’s portfolio continues to be leased to predominantly government, listed or large organisations and has maintained its high occupancy of 97% and WALE of 6.3 years as at 30 June 2022. Our portfolio value has increased by 7.9% or $356 million on a like-for-like basis, with the uplift reflecting the strength of the industrial market and the Group’s leasing success across both the office and industrial portfolios in the year.”

GOZ’s acquisitions included three A-grade offices, with a blended WALE of 7.2 years and an average income yield of 5%.

The office acquisitions included 11 Murray Rose Avenue, Sydney Olympic Park, New South Wales for $52 million in August 2021, 2-6 Bowes Street, Phillip, Australian Capital Territory for $84.6 million in December 2021, and 141 Camberwell Road, Hawthorn East, Victoria for $125 million in February 2022.

Growthpoint also invested a further $60.3 million in DXI in early FY22, maintaining its holding at circa 15% and increasing its exposure to the industrial property sector.

“Going into FY23, Growthpoint is positioned to manage the business through a period of higher inflation and higher interest costs, with 61% of its debt fixed at 30 June 2022 and ample headroom to debt covenants,” said Mr Collyer.

“The Group’s gearing of 31.6% at 30 June 2022 remains below the target range of 35% to 45%, providing flexibility to invest in property or funds where we see value for securityholders.”

“We intend to grow the recently announced funds management business, targeting 10% to 20% of Group EBIT, over the medium term delivering incremental growth to earnings and income stream diversification for securityholders. Growthpoint remain committed to providing securityholders with sustainable income returns and capital appreciation over the long term.”