Growthpoint Properties Australia has reversed last year’s loss with a $62.6 million statutory profit for 1H26, underpinned by stronger leasing and stable portfolio values. The company also upgraded its full-year funds from operations guidance while maintaining a solid sustainability track record.
- Statutory net profit of $62.6 million for 1H26, reversing prior loss
- Funds from operations (FFO) up 3.5% to $91.9 million
- Interim distribution of 9.2 cents per security, payout ratio at 75.5%
- Office and industrial portfolios show improved occupancy and leasing
- FY26 FFO guidance raised to 23.0–23.6 cents per security
Growthpoint’s Financial Turnaround
Growthpoint Properties Australia (ASX: GOZ) has reported a significant turnaround in its financial performance for the six months ended 31 December 2025. The real estate investment trust posted a statutory net profit of $62.6 million, a marked improvement from the $98.7 million loss recorded in the same period last year. This rebound was largely driven by lower property devaluations and robust operational results.
Funds from operations (FFO), a key earnings metric for REITs that strips out non-cash and unrealised items, rose 3.5% to $91.9 million, or 12.2 cents per security. This reflects the underlying strength of Growthpoint’s property portfolio and management’s focus on sustainable income generation.
Distribution and Payout Strategy
The company declared an interim distribution of 9.2 cents per security, payable on 27 February 2026. While this represents a 17.9% decrease compared to the prior period, the reduction is primarily due to a one-off distribution in 1H25. Growthpoint’s payout ratio to FFO stood at a conservative 75.5%, down from 95.2% a year earlier, signalling a more balanced approach to capital retention and shareholder returns.
Portfolio Performance and Leasing Momentum
Growthpoint’s office and industrial portfolios both demonstrated positive momentum. The office portfolio’s occupancy increased to 94%, up from 92%, supported by 30,068 square metres of new leasing with an average lease term of 5.6 years. The industrial portfolio maintained a high occupancy of 98%, with 62,566 square metres leased during the half, averaging 4.9 years in lease term.
Capitalisation rates remained largely stable, with a slight softening in the office segment and a minor firming in industrial assets. Market rents increased modestly by 1.6% for office and 2.1% for industrial properties, contributing to portfolio value stability despite minor valuation adjustments.
Strategic Growth and Funds Management
Growthpoint expanded its assets under management (AUM) through targeted acquisitions, including a $23.6 million industrial asset in Bundamba, Queensland, and the establishment of the Growthpoint Macquarie Park Trust (GMPT). GMPT acquired a $101.3 million A-grade office asset in Macquarie Park, NSW, focusing on life sciences and technology tenants, reflecting a strategic pivot towards sectors with growth potential and resilience.
The company also continued to realise value from fund divestments, returning capital to investors while maintaining a $1.4 billion AUM base across 11 funds and 17 assets.
Sustainability Milestones and Capital Management
Growthpoint proudly achieved its Net Zero Target by 1 July 2025, covering scope 1 and 2 emissions from its directly managed office assets and corporate activities. The company maintained strong environmental credentials with a GRESB score of 85 and improved NABERS energy and indoor environment ratings.
On the capital management front, gearing increased slightly to 41.2% but remains well within the company’s target range and debt covenants. The weighted average cost of debt was steady at 5.0%, supported by a diversified debt maturity profile and substantial undrawn facilities of $165.7 million, ensuring liquidity and financial flexibility.
Outlook and Guidance
Following the strong first half leasing outcomes, Growthpoint upgraded its FY26 FFO guidance to 23.0–23.6 cents per security, up from the previous 22.8–23.6 cents range. Distribution guidance remains steady at 18.4 cents per security. Management cautions that the second half may face headwinds from lease expiries and fund terminations, but the overall outlook is positive given the portfolio’s quality and market positioning.
Bottom Line?
Growthpoint’s solid first half sets a confident tone for FY26, but watch for second-half lease expiries and market shifts.
Questions in the middle?
- How will Growthpoint manage lease expiries and fund terminations impacting 2H26 earnings?
- What opportunities exist for further expansion in high-growth sectors like life sciences and logistics?
- How might rising interest rates and capitalisation rate shifts affect portfolio valuations going forward?