GPT Group lifts dividend guidance for 2021

Source: Michail Petrov, Shutterstock

Summary

  • The GPT Group has pegged Distribution per security (DPS) growth at 12% for 2021.
  • Funds From Operations (FFO) per security is estimated to grow at 8%, compared to the prior year.
  • The company sees Australia’s economy benefitting from the post COVID-19 recovery.

GPT Group (ASX: GPT), the country’s leading diversified property group, is expected to witness improvement in its earnings in the current financial year 2020-21 as the Australian economy continues to benefit from the post COVID-19 recovery.

Despite positive outcomes for the current fiscal, the GPT shares were under stress on Monday. GPT share price was quoting at A$4.770, down 0.83 per cent against previous close price of A$4.810 on the Australian Securities Exchange (ASX). The stock has declined as much as 1.05 per cent to hit a low of A$4.760 in the opening trade so far.

However, peer companies, Mirvac Group (ASX: MGR), Dexus (ASX: DXS), Charter Hall Group (ASX: CHC) were trading higher between 1-2 per cent.

The Real Estate Investment Trust expects to deliver 2021 Funds From Operations (FFO) per security growth of 8 per cent as compared to the corresponding period last year.

Dividend distribution, Image Source: Copyright © 2021 Kalkine Media Pty Ltd.

The company has also raised its Distribution per security (DPS) growth guidance for FY21 to 12 per cent, on the prior year.

GPT’s  earnings and distribution guidance assumes that  the economic recovery is sustained and there are no significant disruptions from COVID-19 related restrictions for the remainder of the year. The company said that robust trading conditions over the first quarter have provided sufficient confidence to announce earnings and distribution guidance for the full financial year 2021.

GPT, however, said that a rise in COVID-19 infections across the country and speed of recovery of its Melbourne Central Shopping Centre could impact its financial performance.

The GPT Group is set to announce its March 2021 quarter operational update on 29 April 2021.

Chief Executive Officer, Bob Johnston, said: “It is pleasing to see Australia’s economy continuing to benefit from the post COVID-19 recovery and the disruption to our operations is abating. While risks remain, including the speed of recovery of our Melbourne Central Shopping Centre and further COVID-19 related disruptions, trading conditions over the first quarter have provided us with sufficient confidence to announce earnings and distribution guidance for the 2021 full year. “

Mr Johnston also highlighted that the Group’s high-quality portfolio had proven resilient throughout the pandemic. The foot traffic at the company’s shopping centers has been on a higher side on the back of strong consumer confidence. Further he stated that the office utilisation is inching up steadily and demand for logistics assets remains strong indicating the increased economic activity.

Partnership signed, Image Source:© Rawpixelimages | Megapixl.com

Last month, GPT Group entered into a strategic partnership with QuadReal Property Group to set up a 50:50 joint venture, GPT QuadReal Logistics Trust. The objective of the new venture is to acquire and develop portfolio of Australian prime logistics assets, with an initial outlay of A$800 million.

The partnership was launched with more than 20% of the targeted investment committed across two assets, which included the acquisition of a A$137 million fund-through development at Truganina in Melbourne’s west, and a A$38 million speculative logistics development at Metroplex Place, Wacol in Brisbane.

The pact will provide an opportunity for both the companies to boost their growth of logistics assets under management.

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