CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Growthpoint share price: Where next following portfolio revaluation?

‘The preliminary results of Growthpoint's external valuations indicate the largest six-month increase on a like-for-like basis in the Group's history.’

ASX-listed REIT, Growthpoint Properties (ticker: GOZ) on Monday announced that its industrial and office property portfolio had increased firmly in value since December 31, 2020. This follows a independent revaluation recently sought by the company.

Summarising these developments, Growthpoint’s Managing Director, Timothy Collyer, said:

'The preliminary results of Growthpoint's external valuations indicate the largest six-month increase on a like-for-like basis in the Group's history.

These gains were primarily driven by renewed investor demand following the coronavirus pandemic, which saw investors retreat from almost every asset class, including property.

'The significant uplift reflects the substantial re-rating that has occurred across the industrial sector, driven by continued strong domestic and offshore investors' demand for industrial assets, as well as leasing success across both our office and industrial portfolios’ – Mr Collyer added.

In response to this news, the Growthpoint share price opened firmly higher, at $4.10 per share, before falling ~3% within the first half-hour of trade. Even after that dip, the stock remains up about 20% for the year.

By the afternoon session GOZ traded at $3.95 per share.

Want access to a best in class trading platform – that’s competitive on both costs and doesn’t sacrifice on features?

IG Australia was recently awarded three 5-star ratings from Canstar, across the Active Investor, Casual Investor and Trader categories.

Find out what sets us apart from the rest here.

Valuation, valuation, valuation

An asset is only as valuable as what someone is willing to pay for it. In the world of property, valuation can be a murky business. Indeed, long have many skeptics labelled Australia’s property market a dangerous bubble, arguing that valuations have stretched well beyond anything reasonable.

Despite that, property prices in Australia haven’t crashed, nor does such an occurrence look likely. Rather, they have continued to run higher, posting consistent gains out of the pandemic. In May, Sydney dwelling values increased 2.97%, Melbourne values gained 1.75%, and the 5-city capital aggregate increased 2.29% – according to CoreLogic.

What Growthpoint’s market release showed us is that the growth experienced in Australia’s residential property market is also present in the industrial and office spaces.

Looking at the specifics, Growthpoint said it had hired an independent expert to re-value a significant portion – some 77% – of the company's property portfolio, across both its industrial and office property holdings.

Overall, Growthpoint told the market that, on a like-for-like basis, its property portfolio had increased 7.7% or by $251 million, from 31 December 2020.

Looking first at the company’s industrial property portfolio, draft valuations have seen the value of the industrial portfolio increase 10.9% or $146 million, since December 31 2020.

Off the back of that revaluation, Growthpoint’s total industrial portfolio is now valued at $1.5 billion.

While Growthpoint’s entire industrial portfolio was revalued, only part – 14 out of 24 of its office portfolio assets – were revalued. As a result, the office portfolio has been upwardly revised by 5.4% or $105 million.

Investors should be aware, management noted that 'the valuations are subject to finalisation and audit and could be revised up or down.'

Tangible consequences

With this positive revision the company said it expected to see its net tangible assets increase by around $0.33 on a per security basis. For reference, at the close of the December half net tangibles per securities stood at $3.82 per share.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.