THE BOTTOM LINE
Does Sasse have it sussed, or is Growthpoint a goner?
SA property may be battling, but with a portfolio this diversified it may be premature to bail out just yet
There is clearly disappointment in the market with Growthpoint’s dividend forecast. Shares in the big daddy of SA property fell again on Wednesday and are effectively back at levels last seen in 2014.
And yet with the property market in what CEO Norbert Sasse reckons its toughest state since he started in 2003, 4.5% dividend growth may well be the new normal.
While retail vacancies remain unchanged, office and industrial vacancies have climbed, taking total SA vacancies to 5.4%. This is clearly a move in the wrong direction but Growthpoint remains below the national average in both.
The company is also cushioned to some extent from weakness in SA Inc by its investment in Cape Town’s Victoria & Alfred Waterfront, which remains a mecca for international tourists.
Growthpoint also has its long-term investment in Australia to cushion it from local weakness, although its move into central and eastern Europe still looks like a late scramble to catch up with other local players.
Still, with a portfolio this diversified it may be premature to bail out just yet.