GPT profit drops 51.6 per cent during H1

Property firm GPT Group has seen net profit tumble 51.6 per cent in the first half to $352.6 million, compared to the $728.5 million earned in the prior corresponding period, while the value of its retail portfolio fell 0.6 per cent in the six months to June 30. 

Profit was hit by more modest valuation gains compared to prior periods, as well as losses across GPT’s hedge book due to the significant reduction of interest rates. 

Like-for-like income growth for the retail portfolio increased 1.4 per cent during the half.

GPT’s head of retail Chris Barnett said that while the results were positive, they reflect a reduction in turnover rent, particularly from the cinemas category which has had one of the slowest starts to the year seen in a decade. 

“The team remains focused on remixing our centres towards higher performing retailers to drive growth in specialty sales productivity, which has now increased to $11,512 per square metre across our portfolio,” Barnett said.

According to Barnett, this focus has led its centres to be more productive and more efficient, with GPT seeing specialty categories booming – particularly food, technology, leisure, beauty and lifestyle.

Retailers Harris Farm Markets, Breadtop, Craig Cook Butchers, Apple and JB Hi-Fi were named as some of the most successful in GPT’s portfolio.

“As we look forward for the remainder of the year, we remain optimistic that retail spending should benefit from the recent government tax cuts and reduction in interest rates, both measures are aimed at providing an environment of greater consumer confidence,” Barnett said.

“Our portfolio will be well positioned to benefit from these measures given we are located predominantly in the stronger markets of NSW and Victoria.”

In the second half, GPT expects its retail segment to improve, driven by a six-month contribution from the Sunshine Plaza expansion and reduced time spent empty in a number of assets, according to GPT chief executive Bob Johnston.

“Retail headwinds persist,” Johnston said. 

“But assets in the right locations are continuing to attract demand from domestic and international brands, and shopper visitations have remained resilient.”

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