GPT Retail Assets Take $477m Hit

Falling valuations and deteriorating retail conditions have forced a $476.7 million fall in the value of seven GPT-owned shopping centres, a nearly 9 per cent reduction on the assets’ book value.

The ASX-listed fund manager received revaluations at the end of May for seven of its directly-held retail assets. Darwin’s largest shopping centre, Casuarina Square, took a 16.6 per cent hit, while the values of Charlestown Square in Newcastle and Highpoint in Maribyrnong were lowered by close to 14 per cent.

The wholly-owned assets are held across GPT’s Wholesale Office Fund—which recorded a negative revaluation of $34 million—and its Wholesale Shopping Centre Fund, which registered a $137.6 million decline.

GPT chief executive Bob Johnston said that the negative revaluations reflect the impact of Covid-19 and social restrictions on the group’s portfolio.

“[Covid-19] has generally been reflected in lower market rental growth rates, increased vacancy and abatement allowances and some softening in investment metrics.”

Related: Lower Valuations a Challenge for Developers

Johnston said that foot traffic across the group’s regional centres had returned to about 85 per cent of pre-Covid-19 levels.

The return in foot traffic at its regional malls was not enough to stave off reductions at the group’s Sunshine Plaza and Westfield Penrith, with both declining 10.9 per cent—and registering a 25 basis point lift in cap rates.

The latest announcement made no mention of the group’s suspended development plans for Rouse Hill Town Centre and at Melbourne Central.

Johnston told shareholders in May that it was not possible to confirm when the projects would resume.

GPT said it has amended its distribution payout policy to target 95 to 105 per cent free cashflow from adjusted funds from operations.

The developer withdrew its earnings and distribution guidance for the year in March.

GPT Group’s shares closed up 7 per cent at $4.57 on Tuesday.