South Africa's Growthpoint warns its FY distributable income will fall (updated)

Growthpoint Properties Australia

13/09/2023 08:30

(Recasts with outlook)
       JOHANNESBURG, Sept 13 (Reuters) - South Africa's
Growthpoint Properties  GRTJ.J  reported a marginal rise in
distributable income for the full year on Wednesday but warned
that it would decline in the year to June 2024 given the impact
of high interest rates.
    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 to service debt.
    South Africa's largest property company said it expects 
distributable income per share (DIPS), one of the primary
measures of underlying financial performance in the listed
property sector, to decline in a range of 10% to 15% in its
financial year 2024.
    But the company will "endeavour to maintain a payout ratio
of 82.5%", to investors despite the lower income.     
    In July, South Africa's central bank decided to halt
interest rate hikes for the first time since November 2021, but
the governor was quick to add that the pause did not mean an end
to the hiking cycle.
    "We expect financial year 2024 to be another challenging
year, given the higher interest rates for the full year
impacting our domestic business and our offshore investments,"
Growthpoint said. 
    In the year to June 30, Growthpoint's distributable income
per share, rose by 1.3% to 157.6 cents from 155.6 cents a year
earlier.
    Revenue increased by 5.3% to 13.7 billion rand ($723.68
million), while South Africa revenue rose by 2.2% due to
improved letting conditions across its three domestic sectors.
Revenue in its Australian business was partly boosted by
acquisitions.
 ($1 = 18.9310 rand)

 (Reporting by Nqobile Dludla; Editing by Clarence Fernandez and
Alison Williams)
 ((nqobile.dludla@thomsonreuters.com; +27103461066;))