Growthpoint sees dips for FY26 growing by between 3% & 5%

Growthpoint Properties (JSE: GRT) has raised its guidance for FY26, forecasting distributable income per share (DIPS) growth of 3.0% to 5.0%, driven by improved performance across its South African portfolio and strategic capital management. For FY25, the group delivered DIPS of 146.3c, up 3.1% year-on-year, exceeding initial expectations of a 2.0% to 5.0% contraction. The South African portfolio, valued at R66.7bn (50.1% of total assets), contributed 51.2% of DIPS, with like-for-like net property income rising 5.9% and vacancies declining according to analysis.

Key contributors include the V&A Waterfront, which generated 16.3% of DIPS despite temporary redevelopment challenges, and the logistics sector, where like-for-like NPI increased 5.5%. The office portfolio also showed a turnaround, with like-for-like NPI growth of 6.8% and valuations rising 1.9% for the second consecutive year.

Growthpoint plans to target R3.5bn in non-core asset disposals in FY26 to fund higher-yielding opportunities, while maintaining a payout ratio of 87.5%, translating to 6.0% to 8.0% dividend growth. Balance sheet strength underpins this strategy, with a loan-to-value ratio of 40.1% and R5.6bn in liquidity (R900m cash and R4.7bn undrawn facilities) as reported.

Internationally, the group has streamlined its exposure, exiting UK investments and focusing on core assets in Australia and Central & Eastern Europe. Sustainability initiatives, including R1bn invested in solar energy, further support long-term resilience.

With lower interest rates and stronger property fundamentals, Growthpoint's diversified portfolio positions it to sustain growth in FY26, though international capital costs remain a constraint.