GPT Group upgrades its FY18 guidance on FFO and distributions

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The stock price of property giant GPT Group (ASX: GPT) surged up on upgraded guidance and the release of operational update for the quarter ended 30 September 2018. It has gone up by 1.972% to close at $5.170 today, i.e. 24 October 2018.

GPT Group has inked total of 36,017 sqm of office leases during the September 2018 quarter while the occupancy rate has moved little higher to 97.5 percent from 96.6 percent at 30 June 2018. Whereas, moving to logistics segment, Total Logistics leases of 66,776 sqm have been signed by the group during September quarter, and occupancy was 96.7 percent compared to 96.6 percent at 30 June 2018.  

Moreover, along with the disclosure of operational performance achieved in September quarter, the company has announced the upgraded guidance for full year 2018.

Bob Johnston, GPT’s Chief Executive Officer, stated that the GPT group now forecasts to deliver FFO per security growth and Distribution per security growth of 3.5 percent for the full year 2018. He added that the upgradation in the revised guidance is driven by the recent acquisition of Eclipse office tower, and the stronger contribution from the Office and Logistics portfolio.

The Eclipse Tower located at the 60 Station Street, Parramatta was purchased by GPT Group in August 2018 for the consideration of $277.6 million. This asset reflects an initial yield of 5.34 percent.

However, during the past three months ended 30 September 2018 the company and its fund management platform have completed the issuance in debt capital market.  It includes GPT’s issue of a 6-year medium term note for $200 million at a margin of 133 basis points over 3 months bank bill swap rate (BBSW). While other transaction includes a US$250 million US Private Placement (USPP) debt, issued by the GPT Wholesale Office Fund (GWOF). This issue which was for an average term of 14 years with a margin of 167 basis points over 3-month BBSW, was reportedly 10 times oversubscribed.

The Group has delivered total centre comparable MAT growth of 3.4 percent, up from 2.3 percent in June quarter while combined retail specialty comparable MAT growth was 5.4 percent, higher than June quarter’s 4.4 percent growth. As at 30 September 2018 retail specialty sales was $11,495 per square metre (psqm), $91 psqm more than the previous reported figure.

In the separate announcement to ASX today, GPT Group informed the resignation of the Head of Retail, Vanessa Orth. It has been stated that Ms. Orth is stepping down from the role of Head of Retail at GPT Group to take up the Chief Commercial Officer position at Sydney Airport Corporation (SYD). GPT stock closed at $5.170 today, 24 October 2018. Moreover, the stock has seen the performance change of +2.42% over the past one year.


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