SA’s shopping centre glut puts squeeze on property firms
Growthpoint forced to look for new income streams to counter floundering economy and weak consumer spending
Sector heavyweight Growthpoint Properties last week declared dividend growth of a decent 6.5% for the year to June 30. Income payouts were boosted by the company’s recent entry into Romania as well as the inclusion of profits from its new trading and development business. However, if one looks at the underlying performance of Growthpoint’s domestic assets there is no doubt it is becoming increasingly difficult to make money on SA shopping centres, offices and industrial buildings. Growthpoint is the JSE’s largest and most diversified SA-based property counter with total assets of R122.3bn (70% local), which makes it a reliable bellwether of the general state of the SA commercial property market. Growthpoint CEO Norbert Sasse said at the annual results presentation that the SA business was operating in an "extremely tough market where any growth is good growth’’. He said as long as the local economy stayed in the doldrums, investors shouldn’t expect fireworks from Growthpoint’s SA po...
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