The point right now is to look for more growth

Financial Mail - Investors Monthly - - Analysis -

Growth­point has re­tained its dom­i­nance as the JSE’s largest SA-based prop­erty stock by more than dou­bling its as­set base over the past five years — from un­der R50bn in 2011 to R112.5bn. But it hasn’t quite lived up to ex­pec­ta­tions on the share price and div­i­dend growth front.

Ear­lier this month, Growth­point de­clared div­i­dend growth of 6% for the year to end June 2016, down from 7.5% in the 2015 fi­nan­cial year and the low­est level in five years. While 6% was in line with mar­ket guid­ance, it seems pedes­trian com­pared to the dou­ble-digit div­i­dend growth achieved by other sec­tor heavy­weights such as Re­silient Reit, Hyprop In­vest­ments and Fortress In­come Fund.

Growth­point’s share price tends to be more volatile than that of its peers as it is one of the most liq­uid real es­tate coun­ters on the JSE. How­ever, over one, two and three years it has shown hardly any share price growth.

One rea­son for Growth­point’s sub­dued per­for­mance could be that it hasn’t moved as ag­gres­sively over­seas in re­cent years as some other listed prop­erty play­ers who now re­ceive a big por­tion of their earn­ings in dol­lars, pounds and eu­ros. Meago As­set Man­agers direc­tor Jay Pa­day­atchi de­scribes Growth­point’s per­for­mance over the past few years as “lack­lus­tre, given the im­pres­sive earn­ings

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