Growthpoint really wants you back in the office
Unlock the Stock: Afrimat and Spear REIT
Afrimat’s track record is spectacular. Spear REIT is a highly respected property fund. On Unlock the Stock, you can learn about both companies.
RCL is far more than just a chicken business
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Bidvest: strong trading profit growth in every division
Bidvest closed 3.8% higher after releasing results for the six months to December 2021.
Liberty Two Degrees: reversions continue to bite
Liberty Two Degrees holds stakes in some of the most iconic properties in the country
Alviva: 20% revenue growth excl. Tarsus
After teasing the market with a trading statement, Alviva has now released all the details of the interim results for the six months ended December 2021.
PSG Group and the Great Value Unlock
This is one of the biggest news stories on the JSE that we’ve seen in a while
JSE Limited: a cash cow in a shrinking field
You may not be aware of this, but the JSE Limited is listed on the JSE. You’re right in thinking that this sounds like the financial version of the movie Inception
Capital Appreciation on the deal train
The company has announced the acquisitions of three technology companies in South Africa and a 20% stake in a company in the Netherlands.
Woolworths won’t miss 2021
as released results for the 26 weeks to 26 December 2021. The share price rallied 6% despite a fair share of negative commentary on Twitter.
Cashbuild’s negative sales momentum continues
Cashbuild released its interim results for the six months ended 26 December 2021
Growthpoint, the largest South African primary JSE-listed REIT, has released its results for the six months to December 2021. With a portfolio of 421 directly owned properties in South Africa and stakes in healthcare and student accommodation funds, it’s a great barometer for the overall property market in South Africa (other than one-bedroom flats in Fourways).
Growthpoint also has substantial investments in Australia and in London. The value split is 56.9% South Africa and 43.1% offshore.
Perhaps the most iconic investment is a 50% stake in the V&A Waterfront, which suffered a significant write-down in value in this period as Covid restrictions continued to bite. The beautiful property is highly reliant on tourism.
The overall property sector staged a huge comeback in 2021 after a terrible time during the worst of the pandemic. Office properties have continued to struggle though, with elevated vacancies that have continued to deteriorate. Growthpoint’s office portfolio vacancies increased from 19.9% to 21.2% in this period.
Growthpoint’s portfolio mix means that revenue fell by 4.8% in this interim period and headline earnings per share (HEPS) fell by 23.4%. The movement in HEPS deserved a deeper look – I discovered that this was driven by huge swings in the investment property valuations.
The better measure is probably funds from operations per share, which increased by 17.4% to 77.40 cents. This is significantly higher than HEPS of 56.55 cents. The dividend per share increased by 5.1% to 61.5 cents.
The loan to value ratio improved from 40% to 39.2% and the interest cover ratio increased from 2.9x to 3.0x.
The net asset value (NAV) per share increased by 6.2% to R21.48 per share. Yesterday’s closing price of R13.23 means that Growthpoint is trading at a discount to NAV of around 38.5%.
Growthpoint needs tourists to return to the V&A and the workforce to return to offices. I think one of those is a certainty and the other is never going to be the same again.
