Growthpoint Properties has reported solid growth in its distributable income for the six months ending December 2024, largely driven by improved performance in its South African operations. The group’s distributable income per share (DIPS) rose by 3.9% to 74 cents, while its total distributable income climbed 4.3% to R2.5 billion. The company declared a dividend of 61 cents per share, up from 58.8 cents in the previous year. This performance reflects stronger rental growth, lower negative rent reversions, and reduced vacancies in the logistics and industrial sectors. Growthpoint’s South African net property income increased 6.2% to R2.9 billion, with the V&A Waterfront recording a notable 16.6% growth due to increased tourism and improved retail and hospitality conditions.
In addition to its positive financial performance, Growthpoint’s financial stability improved, with its loan-to-value (LTV) ratio decreasing to 40.8% from 42.3%. The reduction was supported by the sale of Capital & Regional (C&R) for R2.4 billion, settled partly in cash and partly in NewRiver REIT Plc shares. The group also disposed of 12 properties, including two office sites, for R589.4 million, generating a profit of R7.4 million above book value. Growthpoint expects the stabilisation of the South African political environment, lower inflation, and reduced load-shedding to further support growth across all sectors. The office sector, particularly in Cape Town and Umhlanga Ridge, is showing signs of resilience, while the logistics and industrial segment continues to outperform thanks to improved supply-demand balance.
Despite these positive developments, Growthpoint has warned of short-term pressures stemming from ongoing redevelopment projects. The Lux Mall and Table Bay Hotel, currently under renovation, are expected to weigh on the group’s financial results until their completion later in 2025. However, Growthpoint remains confident in its long-term strategy, focusing on liquidity preservation and maintaining a robust balance sheet. With improving property fundamentals in South Africa, steady international performance, and the first Australian interest rate cut since 2020, Growthpoint is optimistic about future growth, forecasting a 1% to 3% rise in distributable income per share for the full 2025 financial year.