The point right now is to look for more growth
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