Growthpoint’s rental income snags on weak economy
Growthpoint said all three of its market segments were affected — the first time this has happened in its 18-year history
In another sign of the dire state of SA’s economy, Growthpoint Properties, the JSE’s largest real estate company, said rental income had dipped across its R77bn local portfolio, with potential tenants unwilling to make long-term commitments. "There is zero business confidence in SA," CEO Norbert Sasse said at the presentation of the company’s interim results on Wednesday. "Ongoing political rhetoric doesn’t help either. No-one is prepared to sign a five- or 10-year lease in this uncertain climate," he said. Just a day after one of SA’s iconic construction companies, Group Five, went into business rescue amid a lack of infrastructure spending, Growthpoint said rental growth on lease renewals was negative in all three market segments that it operated in, the first time this has happened in its 18-year history. Only its operations in Australia and Eastern Europe helped the company avoid the fate of many of its peers, which saw declines in dividends. It managed a 4.5% increase in income...