Property owner GPT Group has issued a positive outlook for the Australian property sector and says it expects strong profit growth this financial year following the sale of its underperforming assets.
The owner of Australian retail, office and industrial real estate posted a net profit of $145.2 million for the six months to June 30, up from a $1.195 billion loss in the previous corresponding period.
The first half result is also up on $124.9 million profit recorded in the second half of 2009.First half realised operating income, which takes out non-cash items, was $205.8 million, up 12.5 per cent from the previous corresponding period’s $183 million.
GPT expects at least a similar performance in the second half of 2010, forecasting full year realised operating income to exceed $400 million.
Chief executive Michael Cameron issued a positive outlook for the Australian property sector on the back of economic recovery and improving investor confidence.
‘‘Recent property transactions indicate that valuations have stabilised,’’ he said. ‘‘From a retail perspective rental growth is expected to improve, but not until 2011, off the back of improving retail sales.
‘‘In office and industrial, we see demand improving with supply constraints expected to continue.’’
GPT, which was hit hard by the global financial crisis, focused on its Australian retail, office and industrial properties by selling what it deemed non-core assets.
The ‘‘clean-up and stabilisation’’ process was now complete, Mr Cameron said.
At June 30, GPT’s total assets were worth $9.48 billion, up from $9.16 billion six months earlier.
Income from each segment of its property portfolio grew by low single-digit percentages in the half, due to high occupancy and structured rent increases, GPT said.
The group announced it had secured three new bank facilities worth $800 million, ranging from seven year to five-year terms.
The new facilities improve GPT’s funding position and extend the average duration of its debt facilities, chief financial officer Michael O’Brien said.
GPT declared a cash distribution of 7.6 cents and forecast a full year distribution of 15.9 cents.
GPT securities were up 11 cents at $3.02.
AAP