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Real Estate Investment Trust, Growthpoint Properties Australia (ASX:GOZ) unleashed its first half-year results for Fiscal 2019. The Net Tangible Assets (NTA) per security of the company increased to $3.36 as at 31 December 2018, up from $3.19 as at 30 June 2018. However, it comes at the cost of greater financial risk to the company as Growthpointâs balance sheet gearing increased from 33.9% to 35.0% as at 31 December 2018.
With the continued focus on acquisitions, portfolio repositioning and property enhancement, the company managed to maintain the H1 FY19 Funds from Operations (FFO) per security at the constant level to 12.5 cents, same as in prior corresponding period. Further, the favourable movement of 5.3% or $0.17 in NTA per security reflects the 21 bps fall in weighted average capitalisation rate of property portfolio since 30 June 2018 to 6.04% as well as improvement in market rents contribution.
The Group declared the distribution of 11.4 cps for H1 FY19, 3.6% higher on 11.0 cps as in prior corresponding period. And for the full Fiscal Year 2019, Growthpoint reaffirmed its previous guidance of distributions of 23.0 cps and FFO of at least 24.8 cps.
During the period, Growthpoint witnessed strong valuation gains as investors demand for quality office and logistics assets remained high. Itâs like-for-like valuation increased by $163.4 million, or 4.9% since 30 June 2018 while taking 72,436 sqm of new and extended leasing since then.
Growthpointâs Managing Director, Timothy Collyer stated HY19 marks the 14th consecutive half-yearly period Growthpoint has grown its distribution payment to Securityholders, with earnings growth outpacing distributions growth over the same period.
Over the half year, the company progressed $548.3 million of acquisitions, developments and expansions, the largest of which was the acquisition of 100 Skyring Terrace, Newstead, QLD for $250.0 million in December 2018, funded in part by a $135 million Rights Offer which achieved substantial support from new and existing Securityholders.
Further, the company informed that the construction has already been commenced at Botanicca Corporate Office Park in Richmond, Victoria, and the development is tracking ahead of schedule with completion expected in the first half of 2020.
As at 31 December 2018, Groupâs total portfolio value stood at $3.9 billion, representing an increase of 15.0% on the half year ended 30 June 2018. It reflects the positive transactional evidence, and improved market rents derived by the company with valuation gains strongest in New South Wales and Victoria.
It currently owns an interest in a diversified portfolio of 59 office and industrial properties throughout Australia. Its top five industrial properties or property group by value includes Woolworths Distribution Centres, Linfox properties, Erskine Park in NSW, Melbourne Airport industrial properties in Victoria, Knoxfield industrial properties in Victoria, and Perth Airport industrial properties in Victoria.
On the balance sheet front, the Group posted a healthy balance sheet with substantial headroom to debt covenants and gearing at the bottom of the target range of 35% to 45%. Its weighted average fixed debt maturity was 5.0 years and 69% of debt fixed.
GOZ stock price has slipped by 0.988% to trade at $4.010 on 21 February 2019 (2:29 PM AEST). It is currently trading at a PE of 7.570 x with a market capitalization of $2.95 billion.
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