• Earnings per Security: $0.32 for the year.
• Distributions per Security: $0.24 for the year.
• Occupancy Rate: Nearly 99% across the portfolio.
• Property Income Growth: 4% on a like-for-like basis.
• Assets Under Management: $34 billion at year-end.
• Portfolio Valuation Decline: 5.6% decline in 2024.
• Retail Portfolio Valuation Growth: 2.7% annual growth.
• Office Portfolio Valuation Decline: 16.8% decline for the year.
• Logistics Portfolio Income Growth: 5.6% like-for-like income growth.
• Funds from Operations (FFO) Increase: 2.6% to $616 million.
• Retail Portfolio Income Growth: 4% or 5% on a like-for-like basis.
• Office Portfolio Income Growth: 1.9% like-for-like growth.
• Corporate Costs Reduction: Down 4%.
• Net Gearing: 28.7%.
• Weighted Average Cost of Debt: 5% at year-end.
• Retail Sales: $12 billion in annual retail sales.
• Retail Specialty Sales Growth: 4.9% increase.
• Retail Portfolio Occupancy: 99.8%.
• Office Portfolio Occupancy: 95%.
• Logistics Portfolio Occupancy: 99.5%.
• Logistics Leasing Spread: 35% average leasing spread.
• Expected FFO for 2025: Between $0.325 and $0.331 per security.
• Expected Distribution for 2025: $0.24 per security.

• Warning! GuruFocus has detected 6 Warning Signs with GPTGF.

Release Date: February 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GPT Group (GPTGF) achieved its earnings and distributions guidance of $0.32 and $0.24 per security for the year.
• The company maintained a high occupancy rate of nearly 99% across its portfolio, indicating strong tenant demand.
• GPT Group's retail portfolio experienced a 2.7% annual valuation growth, driven by stable capitalization rates and strong operating fundamentals.
• The logistics platform delivered 5.6% like-for-like income growth, with high occupancy at 99.5% and a weighted average lease expiry of 5.1 years.
• GPT Group has a strong balance sheet with net gearing of 28.7%, providing material headroom to its 50% covenant.

Negative Points

• The office portfolio saw a significant decline in value of 16.8% for the year due to weak income fundamentals and a softening of capitalization rates.
• Overall portfolio experienced a 5.6% decline in value in 2024, primarily driven by first half valuation movements.
• AFFO decreased by 4% compared to the prior period due to higher maintenance and leasing CapEx.
• The company faced a 6% increase in finance costs, partially offsetting the 4% increase in total investment portfolio and management FFO.
• GPT Group's office portfolio has a current vacancy rate of 5%, with ongoing efforts needed to address larger long-dated forward expiries.

Q & A Highlights

Q: Can you provide details on the $24 million trading profits for 2024 and expectations for 2025? A: Merran Edwards, CFO, explained that the 2024 trading profits were mainly from Sydney Olympic Park transactions. For 2025, trading profits are expected to be about half of 2024's level.

Q: What are the assumptions for the weighted average cost of debt in 2025? A: Merran Edwards, CFO, stated that the weighted average cost of debt is assumed to be in the mid-5% range for 2025.

Q: What is the current office occupancy rate without heads of agreement? A: Matthew Brown, Head of Office, noted that the office occupancy rate without heads of agreement is approximately 92%.

Q: Can you provide insights into the capital raising plans for 2025? A: Russell Proutt, CEO, mentioned that capital raising will focus on various sectors, including opportunistic strategies in office, core and core+ in retail, and development opportunities in logistics. There is optimism about raising incremental capital this year.

Q: How are corporate costs expected to evolve in 2025? A: Merran Edwards, CFO, indicated that corporate costs are expected to remain consistent with 2024 levels, with some reallocation to align with strategic priorities.

Q: What is the outlook for office leasing incentives? A: Matthew Brown, Head of Office, expects leasing incentives to decrease over the next 12 to 24 months as market conditions improve and positive net absorption is observed.

Q: What is the expected CapEx for the Melbourne Central redevelopment? A: Chris Barnett, Head of Retail and Mixed Use, stated that the redevelopment is expected to commence in Q3 2026, with a total project cost of approximately $120 million.

Q: How is the GWOF fund modernization progressing? A: Russell Proutt, CEO, mentioned ongoing discussions with investors to find the best outcome for the fund, with a focus on the 2026 liquidity event.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.