Small growth at Growthpoint as the rising vacancies bite

CAPE TOWN – Growthpoint Properties, South Africa’s biggest real estate investment trust (Reit), lifted its dividend only 0.2percent to 106cents in the six months to December, as weak property fundamentals and rising vacancies bit into the performance of its local assets.

Distributable income was up 2.2percent to R3.2billion for the period, mainly as a result of better international contributions. Almost all South African portfolio metrics weakened during the six months, with vacancies increasing to 7.4percent from 6.8percent.

Tenant retention was a priority. “We are driving this through various initiatives,” directors said in the results yesterday.

Chief executive Norbert Sasse said it had been an “exceptionally tough six months”, but the group was pleased with its “strategic progress.”

In the six-month period, “the considerable gains from our internationalisation strategy were erased by the under-performance from our domestic property portfolio as a result of South Africa’s economic decline, with the V&A Waterfront being an exception. Even so, Growthpoint’s growing international footprint continues to ensure that it is defensive,” said Sasse.