By David Winning
SYDNEY–GPT forecast a lower distribution in 2024 as it continues to feel the pain of elevated interest rates in Australia.
GPT projected a distribution of 24.0 Australian cents (US$0.16) per security, down from a payout of 25.0 cents in 2023. It cited the impact of higher interest rates, a reduction in the payout ratio from the GPT Wholesale Office Fund and an expected increase in lease incentives to attract tenants to its offices.
Still, it forecast a slight improvement in funds from operations this year. GPT said it expects to achieve funds from operations of approximately 32.0 Australian cents per security in the 12 months through December, up from 31.37 cents in 2023.
“The impacts of higher interest costs and elevated vacancy in our Office portfolio is expected to be offset by an increased level of trading profits in 2024 with the main contribution coming from the sale of sites at Sydney Olympic Park,” said GPT, which owns a property portfolio that spans malls, offices and warehouses.
Like other diversified property owners, GPT has felt the impact of higher interest rates which raised the cost of its debt and dragged down its funds from operations to A$600.9 million in 2023. That was illustrated in late November when S&P Global Ratings said rising interest rates had contributed to its downgrade of GPT’s credit rating.
GPT reported an annual net loss of A$240.0 million, compared to a A$469.3 million profit a year ago. The result was dragged down by negative property valuation movements of A$819.0 million, compared with a A$159.3 million decline in the previous year.
Write to David Winning at [email protected]
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