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GROWTHPOINT PROPERTIES LIMITED

GRT JSE Listed
Market Cap
R61.4 Billion

DATE: 14 January 2026 TO: Investment Committee / Retail Desk FROM: Senior Equity Analyst SUBJECT: Investment Analysis – Growthpoint Properties Limited (JSE: GRT)

Step 1: Data Gathering & Source Verification

I have reviewed the most recent financial disclosures for Growthpoint Properties Limited. The analysis is based on the FY25 Annual Results (Year Ended 30 June 2025) and subsequent market data as of January 2026.

Reporting Periods & Source Documents:

  • Latest Annual Financial Statements (FY25): For the year ended 30 June 2025.

  • Source URL: Growthpoint FY25 Annual Results

  • Interim Results (HY25): For the six months ended 31 December 2024.

  • Source URL: Growthpoint HY25 Interim Results

  • SENS Announcements (L12M): Reviewed announcements from Jan 2025 – Jan 2026, specifically the "Group Audited Annual Results" (Sep 2025) and "Disposal of Capital & Regional" updates (Dec 2024).

  • Source URL: JSE SENS Feed - Growthpoint

Step 2: Metric Extraction

  • Market Cap: R61.4 Billion

  • Based on a share price of ~R17.95 and ~3.43bn shares in issue.

  • Dividend Yield (L12M): 6.9%

  • Calculation: Total Dividend Per Share (FY25) was 124.3 cents (up 6.1% YoY).

  • Math: 124.3c / 1795c = 6.92%.

  • Liquidity Check: High / Liquid

  • Metric: Average daily volume is approximately 5.41 million shares.

  • Risk Assessment: Low Risk. The stock is a Top 40 constituent and highly liquid.

  • P/E Ratio: 11.0x

  • Based on Trailing Twelve Month (TTM) earnings.

  • Net Asset Value (NAV): 1,988 cents per share (approx. R19.88)

  • Discount to NAV: The stock is currently trading at a ~9.7% discount to its Net Asset Value.

Step 3: Operational & Strategic Analysis

Business Overview Growthpoint is the largest primary listed REIT on the JSE. It owns and manages a diversified portfolio of commercial properties (Office, Retail, and Industrial) in South Africa and has significant offshore exposure, primarily through Growthpoint Properties Australia (GOZ). Recently, the group simplified its structure by disposing of its UK investment in Capital & Regional (C&R) (December 2024).

Performance Trend (FY25 vs FY24)

  • Trend: Positive / Turnaround.
  • Analysis: After a period of contraction, Growthpoint has returned to growth. FY25 Distributable Income Per Share (DIPS) increased by 3.1% to 146.3cps, exceeding initial guidance.
  • Key Drivers:
  • SA Office Recovery: Vacancies have dropped from >9% to ~8.3%, with rental renewal growth improving significantly (from -7.1% to -1.8%).
  • Cost Control: Reduced finance costs in the SA portfolio and operational efficiency improvements.
  • Guidance Upgrade: Management has shifted from "cautious" to "optimistic" and committed to maintaining a high payout ratio (87.5%) for FY26.

Sector Context

  • Macro Factor: Interest Rate Cycle. The South African Reserve Bank (SARB) easing cycle (decreasing interest rates) is a major tailwind for REITs. Lower rates reduce the cost of debt—critical for Growthpoint's geared balance sheet—and typically compress property yields, boosting valuations.

Step 4: The Verdict

Bull Case (Why Buy) The Turnaround is Real. Growthpoint has successfully pivoted from "defensive" to "growth." The structural recovery in the SA Office sector (a previous drag on earnings) combined with the strategic exit from the UK market (C&R) has simplified the investment case. With interest rates falling, the company's decision to maintain an 87.5% payout ratio signals strong management confidence in cash flow sustainability.

Bear Case (Why Sell) Valuation Risks in Australia. While the SA portfolio is recovering, the Australian market (GOZ) remains sensitive to global bond yields. Any stagnation in global rate cuts could dampen the valuation recovery of the Australian assets, which make up a significant portion of the group's NAV. Additionally, while office vacancies have improved, they remain structurally high compared to pre-pandemic levels.

Fair Value Estimate

  • Range: R19.50 – R21.00
  • Rationale: A conservative target price should align closer to the NAV of R19.88 given the improving fundamentals. As the discount to NAV closes due to the "Risk On" environment for property, the share price should re-rate upwards.

Final Rating: BUY

  • Investment Horizon: 12-18 Months.
  • Summary: Growthpoint offers a solid 6.9% yield with visible capital appreciation upside as the discount to NAV narrows. The stock is a liquid, lower-risk proxy for the SA interest rate cutting cycle.
AI Generated Analysis Last Updated: 2026-01-14