How Growthpoint Surpassed Expectations and Achieved Net Zero in FY25

Strong Financial Performance Amid Volatility

Growthpoint Properties Australia navigated a challenging 2025 financial year marked by geopolitical tensions, inflationary pressures, and evolving workplace dynamics to deliver a solid operational and financial performance. The real estate investment trust (REIT) reported funds from operations (FFO) of 23.3 cents per security, surpassing initial guidance and reflecting resilient income streams from its high-quality office and industrial portfolios.

Occupancy rates remained robust at 92% for office assets and 98% for industrial properties, supported by effective leasing strategies that saw over 23,000 square metres leased in office and more than 100,000 square metres in industrial spaces. Weighted average lease expiry (WALE) held steady around 5.5 to 5.8 years, underscoring portfolio stability.

Expanding Funds Management and Capital Discipline

Growthpoint’s funds management platform gained significant traction, adding $328 million in new assets under management through the launch of the Growthpoint Australia Logistics Partnership and the Growthpoint Canberra Office Trust. This expansion contributed to a 20% increase in funds management revenue and attracted a substantial number of new investors, with over 45% being first-time participants in Growthpoint’s platform.

Capital management remained a priority, with the company generating $335 million from asset recycling activities executed at book value, which helped reduce gearing to a conservative 39.7%. The debt maturity profile was extended, with no expiries until December 2026, and 85% of debt hedged to mitigate interest rate volatility. Growthpoint also diversified its lender base across 22 institutions, maintaining strong covenant headroom.

Sustainability Milestones and Leadership Transitions

In a notable sustainability achievement, Growthpoint reached its Net Zero emissions target on 1 July 2025, covering scope 1 and 2 emissions from directly managed office assets and corporate activities. The company’s commitment is further demonstrated by sustainability-linked loans comprising 68% of its debt book, delivering both environmental benefits and margin advantages. Growthpoint also maintained high NABERS ratings and achieved a GRESB score of 85, well above the peer average.

Leadership changes were highlighted at the AGM, with the resignation of long-serving Chief Investment Officer Michael Green and Chief Financial Officer Dion Andrews. Nick Kost’s promotion to Group Executive, Head of Property, ensures continuity in operational leadership. The board also reviewed and updated the executive remuneration framework to better align with strategic priorities and securityholder outcomes.

Outlook and Strategic Priorities for FY26

Looking ahead, Growthpoint reaffirmed its FY26 guidance with FFO expected between 22.8 and 23.6 cents per security and distributions targeted at 18.4 cents per security. The company plans to sustain leasing momentum, focusing on reducing near-term vacancies and capitalising on constrained supply in metropolitan office markets. Funds management growth remains a key pillar, alongside disciplined capital allocation and ongoing sustainability initiatives.

Growthpoint’s strategy emphasizes creating value beyond real estate by fostering long-term partnerships, leveraging co-investment opportunities, and maintaining a customer-centric approach. With a strong balance sheet, a diversified portfolio, and a clear sustainability roadmap, Growthpoint is positioned to navigate the evolving property landscape and deliver consistent returns to securityholders.