Hefty hit to GPT as pandemic takes toll

COMMERCIAL property giant GPT has incurred a more than half a billion dollar financial haemorrhage, as the coronavirus pandemic has significantly slashed the value of its property portfolio.

The ASX-listed real estate investment trust posted an interim net loss of $519.1m for the six months ending June 30, a 247.2 per cent plummet compared with the previous interim result in 2019.

GPT said the profit dent was due to the economic recession causing a total property portfolio devaluation of $711.3m.

Its funds from operations, largely from tenant rental income, fell 23.3 per cent over the period to $244.5m.

Despite significant financial woes induced by the virus, GPT has issued an interim dividend distribution of 9.3 cents per security. The distribution represents 100 per cent of free cash flow.

GPT said the pandemic had placed “unprecedented” pressure upon property markets — particularly the retail sector, which came to a standstill in April and early May.

The company noted it would not be providing earnings guidance for the last six months of its financial period, as ongoing stage four restrictions in Victoria were fuelling further uncertainty.

GPT chief executive Bob Johnston said the company had all its assets independently revalued in both May and June due to rapidly changing market conditions.

“The independent valuers have made allowances for both the near-term impacts of the pandemic and also the effects that it is expected to have on the broader economy,” he said.

“It is clearly a very challenging time for Australia, in particular Victorians, and we are doing what we can to support our people.”