GPT Group (ASX: GPT), the Sydney-based real estate and fund management company, released its full year 2012 results this morning, with net profits clocking in 141% higher than 2011 levels on rising asset values and strong operational performance. In all, net profit totaled $594.5 million while realised operating income came in at $456.4 million, 4% higher than last year's result.
Key developments in the property portfolio
Rising rents and high occupancy rates led the company's portfolio of office, retail and other commercial space to deliver income growth of 3.2%. The total portfolio return exceeded 8%.
These results reflect the company's recent rebalancing of its property portfolio, a shift that has GPT reducing its concentration in the challenged retail sector and moving toward higher-return office and other commercial spaces. During the year, GPT sold off some $650 million worth of retail space and redeployed the capital into $140 million of logistics assets.
GPT also completed $760 million worth of developments during the year, including the 111 Eagle Street in Brisbane and 5 Murray Rose Avenue (of Sydney Olympic Park) properties. Looking forward, the company has said it will achieve growth through further developments, asset acquisitions and through its wholesale funds business.
What to look for in 2013
Calling its outlook "cautiously optimistic," GPT Group is guiding to no less than 5% earnings-per-share growth in the coming year. The company has said its longer term strategic objective is to become "Australia's best performing property company," a field that includes Australand Property Group (ASX: ALZ) and Mirvac Group (ASX: MGR) as well as homebuilders such as Devine Limited (ASX: DVN) and Stockland (ASX: SGP).
Now, a word about cash
Income-minded investors take note: GPT Group shareholders can expect a cash distribution worth 19.3 cents a share, an increase of 8% over 2011, and the company is targeting an 80% payout of realised operating income in 2013.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Catherine Baab-Muguira does not own shares in any of the companies mentioned here.
