Australian investment delivers for Growthpoint
Total returns from the Australian investment of SA’s largest real estate company, Growthpoint Properties, were the best in that country’s real estate market in the first half of this year.
Growthpoint’s early move into Australia in 2009 has worked to its advantage. It bought into what became Growthpoint Australia (GOZ), while SA was being battered by the world economic crisis.
It holds 65.5% of GOZ, which has grown significantly and now owns A$3.3bn (R32.87bn) in assets. Only one other South African fund, Investec Australia Property Fund, has managed to invest directly in the highly competitive Australian market.
Evan Robins of Old Mutual Investment Group said Growthpoint’s Australian investment helped the company maintain consistent dividend growth.
"The management team has invested carefully and patiently, which is why they are able to meet dividend forecasts. "They were fast movers out of SA and managed to enter the market when prices were at the bottom of a cycle," Robins said.
GOZ outpaced the major Australian real estate investment trust and share market indices over various periods.
"Recent total return data to June 30 2018 published by UBS shows that GOZ’s total return to its investors has significantly outstripped major performance benchmarks over six months as well as over one, three and five years," said Growthpoint group CEO, Norbert Sasse.
Between January and June, GOZ achieved a total return including capital and income growth of 9.2%, more than double the achievement of the S&P/ASX Australian-Reit (A-Reit) 300 index at 3.0% and the S&P/ASX (Australian Stock Exchange) 300 at 4.3%.
Sasse said that for a total return over one year, GOZ achieved 22.3%, compared with the A-Reit 300 and the ASX 300, both at 13.2%.
GOZ’s performance over three years was also strong.
It managed a total return of 11.8% per annum over a three-year period compared with the A-Reit 300, which delivered 10% per annum, and the ASX 300 at 9.1% per annum.
Over five years, GOZ’s total return was 16.2% per annum, outdoing the A-Reit 300’s 12.2% and the ASX 300’s 10%.
Growthpoint owns and manages 559 property assets in SA, Europe and Australia.