Growthpoint Properties CEO expresses fears on ratings downgrade

Posted On Tuesday, 06 September 2016 14:23 Published by
Rate this item
(0 votes)

Growthpoint Properties CEO Norbert Sasse is concerned about the extent of the negative effects that a looming sovereign credit ratings downgrade will have on SA’s economy.


Growthpoint Properties CEO Norbert Sasse is concerned about the extent of the negative effects that a looming sovereign credit ratings downgrade would have on SA’s economy.

“The domestic economy is not growing and that affects our overall performance. We are pleased that we managed to keep our vacancies stable, at 5.7%, given a volatile and challenging market environment,” he said.

“The possibility of a sovereign debt downgrade occurring in December is concerning. Tenants, especially multinationals, are less likely to sign long-term leases in a volatile and uncertain market environment,” Sasse said.

He spoke at a media briefing on Thursday about the firm’s June year-end financial results.

Growthpoint, which is the largest SA-based property firm on the JSE, posted dividend growth of 6% for the year, in line with its market guidance. Growing distributions from Growthpoint’s 65.5% holding in Growthpoint Properties Australia (GOZ) improved the group’s results, amplified by slightly improved exchange rates and effective currency hedging.

A significantly improved performance from the V&A Waterfront also had a positive effect, Sasse said. “Growthpoint has delivered a positive performance in a tough year. Volatile markets, an increasing interest rate environment, depressed local and global growth, and soft property demand dynamics created an extremely difficult operating environment. Against this backdrop, we’re pleased to report results slightly ahead of budget that sustain our shareholder returns and represent significant strategic progress in our business,” he said.

Growthpoint owns and manages a diversified portfolio of 526 property assets across 6.8- million square metres. This includes 467 properties in SA valued at R73.8bn, 58 properties in Australia valued at R30.9bn through GOZ and Growthpoint’s 50% interest in the properties at V&A Waterfront in Cape Town, valued at R7.8bn.

Old Mutual’s MacroSolutions listed property manager Evan Robins said Growthpoint was still managing to grow its dividend payouts at near inflation which was positive, even if some investors may say its full-year results were pedestrian.

Source: Business Day

Last modified on Tuesday, 06 September 2016 15:05

Most Popular

Empowering women in engineering through B-BBEE

Jan 13, 2020
Andrew Yorke
Working to embrace the spirit of transformation and developmen.

Cheap cement imports crippling local industry

Jan 16, 2020
Databuild CEO Morag Evans
Local cement manufacturers are being severely undermined by cheap imports from countries…

Repo rate cut by 25 basis points

Jan 16, 2020
The Reserve Bank has reduced the repo rate by 25 basis points to 6.25% in line with…

Property in 2020 - here's what's happening

Jan 16, 2020
Carl Coetzee CEO of BetterBond
With the political, economic and social landscape in South Africa being what it is, i.e.…

The rising tide of the silver economy

Jan 16, 2020
Chris Cilliers
Whilst we may not yet have discovered the long-coveted elixir of eternal youth, the truth…

Please publish modules in offcanvas position.