Growthpoint Properties annual income slumps 10% on high interest rates (updated)

Cushman & Wakefield

11/09/2024 08:37

(Adds detail on interest rates and outlook from paragraph 3)
       JOHANNESBURG, Sept 11 (Reuters) - South Africa's largest
listed property group Growthpoint Properties  GRTJ.J  reported a
10% fall in annual distributable income on Wednesday hurt by
high interest rates.
    Its distributable income per share (DIPS) - a primary
measure of profit for real estate investment trusts (REITs) -
fell to 141.9 South African cents per share in the year ended
June 30, from 157.6 cents.
    It warned its income would fall by 2% to 5% this year also
due to high interest rates, both locally and internationally.
    Analysts have said high interest rates in South Africa will
likely see the commercial property market soften and property
income growth come under increased pressure due to low demand
and the high cost of servicing debt.
    The central bank is expected to cut interest rates on Sept.
19 following an extended period of tight monetary policy after
consumer inflation slowed to 4.6% year on year in July, a
three-year low, from 5.1% in June.
    "The property sector is capital-intensive and any reduction
in borrowing and capital costs will be welcomed," Calvin Crick,
managing director for transaction services at Cushman &
Wakefield, said in a recent note.
    He added that interest rate cuts would help spur demand for
commercial properties.
    Growthpoint, with a portfolio of 511 physical properties
across South Africa, Australia, the United Kingdom, Poland and
Romania, said its revenue increased by 4.8% to 14.4 billion rand
($806 million).
    It declared a final dividend of 117.1 cents.
    ($1 = 17.8727 rand)

 (Reporting by Sfundo Parakozov; editing by Christopher Cushing
and Jason Neely)
 ((Sfundo.Parakozov@thomsonreuters.com;))