Landlords feeling pinch in lockdown

DIVERSIFIED property trust the GPT Group has sounded a warning for big landlords as it pulled its earnings guidance in the face of Sydney’s lockdown.

The group owns major retail assets in Sydney, including Rouse Hill Town Centre and a stake in Westfield Penrith, while other landlords such as Scentre Group, which runs the Westfield empire, and Vicinity Centres, are also exposed to the lockdowns.

GPT was down by 11c to $4.64 in early trade on Monday and trusts that specialise in big malls are down about 10 per cent over a month.

Mirvac also has an exposure to inner city retail assets such as Sydney’s Broadway Shopping Centre and Stockland’s town centres in Sydney are also affected by lockdowns.

GPT blamed uncertainty over the duration and impacts of measures to suppress the spread of Covid-19 in Sydney and in Melbourne, where it owns Highpoint Shopping Centre.

The company said it would withdraw its funds from operations and distribution guidance for calendar 2021 in a nod to expectations that Sydney lockdowns could last until midSeptember.

GPT chief executive Bob Johnston (pictured) said that in line with strengthening economic conditions, the company had seen a strong recovery across its retail portfolio during the course of the first six months of this year.

“However, given the recent restrictions in both Sydney and Melbourne and the uncertainty as to when these restrictions will be lifted and the ongoing risk of additional measures, we believe it is prudent to withdraw FFO and distribution guidance for the full year,” Mr Johnston said.

GPT said its diversified portfolio, which also includes offices and logistics assets, and exceptionally strong balance sheet and liquidity position, meant that it expects to see a recovery once normal trading conditions resume.