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Growthpoint Properties expects growth in both Dividend Per Share (DPS) and Distributable income per share (Dips) for its 2026 financial year to the end of June, despite interest rate uncertainty globally brought on by the Middle East conflict.<\/p>\n
SA\u2019s largest locally listed property group, which also has investments in Australia, Romania, Poland and other African countries, released its latest interim results on Wednesday and remains cautiously optimistic in the wake of the geopolitical situation that has effectively taken further interest rate cuts in SA off the table.<\/p>\n
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Middle East war has \u2018sapped\u2019 confidence \u2013 SBG\u2019s Goolam Ballim
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\u201cWe expect Dips for FY2026 to grow by between 3% and 5% notwithstanding ongoing interest rate uncertainty, and DPS growth of between 6% and 8%, with a payout ratio of 87.5%,\u201d Growthpoint said.<\/p>\n
\u201cThe conflict in the Middle East has contributed to heightened global macroeconomic uncertainty, exacerbating inflationary pressures and thereby sustaining elevated interest rates across key markets.<\/p>\n
\u201cWhile increased volatility in energy and commodity prices, alongside broader financial market instability, threaten future economic growth prospects, it is not expected to significantly impact FY26 results,\u201d it added.<\/p>\n
However, the group is still optimistic about SA\u2019s economic reforms path.<\/p>\n
\u201cAlthough structural challenges persist, including high unemployment, infrastructure bottlenecks, and exposure to global trade tensions, the overall SA macro-economic environment reflects greater stability and renewed momentum compared to the prior year,\u201d it said.<\/p>\n
\u201cWith the RMB\/BER Business Confidence Index showing an improvement in Q4 2025, South Africa enters 2026 with a cautiously improving macro-economic backdrop,\u201d Growthpoint noted.<\/p>\n
Despite the change in SA\u2019s interest rate outlook since the start of March, the group highlighted the \u201cabsence of load shedding [and] easing inflation\u201d [prior to the Middle East conflict and oil price spike] has positives.<\/p>\n
\u201cStrengthening electricity availability and ongoing recovery in logistics networks are contributing to more stable operating conditions,\u201d it said.<\/p>\n
It noted that lower interest rates last year have materially supported its business operations.<\/p>\n
\u201cThe South African Reserve Bank has lowered the repo rate by a cumulative 150 basis points since FY2024. Low inflation, currently at 3.5% (FY25: 3%), is creating a more supportive environment for the property sector [in SA],\u201d it said.<\/p>\n
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The results for the six months ended 31 December 2025 (HY26), compared to the six months<\/p>\n
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ended 31 December 2024 (HY25), are set out below:<\/p>\n
\u00a0<\/p>\n
Group Highlights<\/p>\n
\u00a0<\/p>\n
\u2013\u00a0\u00a0 Dividend per share (DPS) increased by 8.5% to 66.2 cents per share (cps) (HY25: 61.0 cps)<\/p>\n
with solid growth in the SA sectors and a conservative SA Loan to value (LTV) ratio<\/p>\n
providing the platform for a measured increase in the payout ratio from 82.5% to 87.5%<\/p>\n
\u2013\u00a0\u00a0 Distributable income per share (DIPS) increased by 2.3% to 75.7 cps (HY25: 74.0 cps)<\/p>\n
\u2013\u00a0\u00a0 Distributable income increased by 2.1% to R2.6bn (HY25: R2.5bn) benefitting from lower<\/p>\n
finance expenses, an overall improvement in contribution from the three SA sectors that<\/p>\n
delivered encouraging like-for-like net property income (NPI) growth, positive renewal<\/p>\n
reversions in the Retail sector, reduced portfolio vacancies with improved expense<\/p>\n
recoveries across all three sectors, partially offset by continued negative reversions in<\/p>\n
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the Office sector<\/p>\n
\u2013\u00a0\u00a0 Total group revenue, excluding straight-line lease income adjustments and Trading &<\/p>\n
Development (T&D) revenue, increased by 2.4% to R6.6bn (HY25: R6.5bn)<\/p>\n
\u2013\u00a0\u00a0 Group Interest Cover Ratio (ICR) improved from 2.5 times at FY25 to 2.7 times, and SA<\/p>\n
ICR improved from 2.9 times at FY25 to 3.2 times<\/p>\n
\u2013\u00a0\u00a0 Net asset value (NAV) per share, based on the SA REIT definition, decreased by 2.2% to<\/p>\n
1 945 cps (30 June 2025 (FY25): 1 988 cps), driven by the acquisition of Auria Senior<\/p>\n
Living (Auria), a provider of later living accommodation, by Growthpoint Healthcare<\/p>\n
Property Holdings (RF) Limited (GHPH), lower property values in Growthpoint Properties<\/p>\n
Australia Limited (GOZ) and the stronger Rand. Group investment property valuations<\/p>\n
increased by R503.m (0.4%) from values reported at FY25.<\/p>\n
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Growthpoint share price<\/p>\n<\/p><\/div>\n