GPT Reports $616 Million FFO with 94.7% Office Occupancy in 2024

Financial Performance Amid Market Challenges

The GPT Group has announced its 2024 full-year results, reporting Funds from Operations (FFO) of $616.3 million, translating to 32.2 cents per security. Adjusted Funds from Operations (AFFO) stood at $470 million, supporting a full-year distribution of 24.0 cents per security. Despite these solid operational metrics, the company recorded a statutory loss after tax of $200.7 million, primarily due to a significant $770.7 million decline in investment property valuations.

Net tangible assets per security were reported at $5.27, with gearing maintained at a prudent 28.7%, comfortably within the company’s target range of 25% to 35%. GPT’s liquidity position remains strong, with $1.1 billion available, underpinning financial flexibility amid a challenging real estate market.

Operational Strength Across Portfolios

Operationally, GPT demonstrated resilience and growth. The retail portfolio achieved an impressive 99.8% occupancy, with comparable net property income growth of 4.9%. Leasing activity was vigorous, completing 570 lease deals with an average rental increase of 4.9% and an average lease term exceeding five years. Specialty sales productivity reached $13,217 per square metre, reflecting strong consumer engagement.

The office segment showed marked improvement, with occupancy climbing to 94.7%, the highest leasing volume in five years. GPT completed 202,200 square metres of leasing across 147 deals, nearly doubling the volume from 2022. However, this segment faced valuation headwinds, with a 16.8% decline reflecting broader market pressures.

Logistics assets maintained near-full occupancy at 99.5%, with a robust 5.6% income growth and leasing spreads averaging +35%. The logistics portfolio benefits from a substantial $3 billion development pipeline, including the imminent completion of facilities at Yiribana West, signaling continued expansion potential.

Strategic Initiatives and Growth Outlook

GPT’s management team saw key appointments in 2024, including Merran Edwards as CFO and Mark Harrison as CIO, signaling a refreshed leadership focus. The company’s strategy to grow its investment management platform gained traction with the establishment of a retail partnership with Perron Group and acquisition of a 50% interest in Cockburn Gateway and Belmont Forum for approximately $482 million.

Investor approval of the GPT Wholesale Shopping Centre Fund modernisation and the green light for the $200 million Rouse Hill Town Centre expansion underscore GPT’s commitment to asset enhancement and long-term value creation. CEO Russell Proutt highlighted these developments as foundational to future earnings growth, emphasizing the company’s confidence in its platform’s evolution.

Capital Management and Market Guidance

Capital management remains a cornerstone of GPT’s strategy, with $4.5 billion in new and refinanced debt facilities extending the weighted average debt term to 5.1 years at a cost of 5.0%. Credit ratings remain solid with S&P and Moody’s maintaining A- and A2 ratings respectively.

Looking ahead, GPT projects 2025 FFO growth of 1% to 3%, targeting between 32.5 and 33.1 cents per security, alongside a stable distribution of 24.0 cents. This guidance reflects cautious optimism as the company navigates ongoing market uncertainties while leveraging its operational momentum and strategic initiatives.