Company Interview / Growthpoint eyes office rebound for future gains

Key points:

Growthpoint Properties (ASX:GOZ) posts statutory net loss due to office asset devaluations Outperforms FY25 guidance with 23.3 cents earnings per security and meets distribution expectations Strategic partnerships include TPG Angelo Gordon in logistics and a new Canberra Office Trust Stable interest rates, higher office occupancy, and limited future supply seen as supportive market trends

Growthpoint Properties (ASX:GOZ) delivered funds from operations of $176 million and earnings of 23.3 cents per security for FY25, outperforming its initial guidance. Ross Lees states that, despite booking a statutory net loss of $124.6 million attributed to non-cash write-downs on office assets amid challenging macroeconomic conditions, the company’s distribution guidance has been met. Lees attributes the markdown in valuations to ongoing headwinds in the office sector, including the work-from-home trend and past interest rate rises, but highlights the relative stability in rental income from a $4.1 billion asset portfolio, consisting primarily of office and industrial properties.

Lees points to several strategic partnerships, including a logistics trust with TPG Angelo Gordon and a Canberra Office Trust, as examples of Growthpoint’s future direction. Retaining a 20% interest in both funds, Lees sees these co-investment vehicles as a way to efficiently deploy capital, drive additional returns, and take advantage of “deep value” buying opportunities, especially within government-leased property assets in Canberra.

According to Lees, interest rate cuts this year have brought stability to the office market. He anticipates an inflection point for office assets, buoyed by increasing tenant demand, declining vacancy rates, and limited future office supply. For FY26, Growthpoint projects earnings of 22.6 to 23.4 cents per security and distributions of 18.4 cents per security.