Growthpoint sees DPS growth of between 6% & 8% for FY26

Growthpoint Properties, a JSE-listed real estate investment trust (Reit), has confirmed its dividend per share (DPS) growth guidance for the 2026 financial year (FY26) will range between 6% and 8%. This follows a revised payout ratio of 87.5%, maintained from the second half of FY25, which prioritizes distributing earnings to shareholders while retaining capital for operational needs according to company reports. The upgrade reflects stronger-than-expected performance in its South African portfolio, reduced finance costs, and outperformance at the V&A Waterfront, a 50%-owned asset in Cape Town as reported.

For FY25, Growthpoint delivered distributable income per share (DIPS) of 146.3c, up 3.1%, and a DPS of 124.3c, a 6.1% increase, both exceeding the top end of prior guidance according to financial data. The company attributed this to improved rental income, lower debt costs (South African weighted average cost of debt at 8.9%), and strategic disposals that strengthened liquidity, with R900 million in cash and R4.7 billion in undrawn facilities as detailed in their analysis.

Looking ahead, Growthpoint forecasts DIPS growth of 3% to 5% for FY26, translating to DPS growth of 6% to 8% due to the elevated payout ratio. CEO Norbert Sasse emphasized the sustainability of the policy, noting retained earnings will cover annual maintenance capital expenditures of R500 million–R600 million according to company statements. The South African portfolio, comprising 50.1% of assets, remains a key growth driver, with like-for-like net property income rising 5.9% in FY25 according to performance metrics.

Internationally, the company streamlined its investments, exiting the UK and focusing on core assets like Growthpoint Australia and Globalworth in Central and Eastern Europe. These adjustments, combined with lower interest rates and a maturing property cycle, underpin confidence in FY26's outlook as reported.