Will GPT now turn its attention to making a firm, higher offer for the investment, commercial and industrial property assets of Singapore-controlled Australand after selling its half share in the Erina Fair shopping mall on the NSW central Coast for $397 million?
2018 guidance has been reaffirmed for growth in FFO of 3%. Macquarie had expected an upgrade to 2018 earnings growth estimates because the sale of Wollongong Central was not proceeding. However, this was not the case.
GPT has redeemed its exchangeable securities issued to GIC and has funded the cost through a $325m raising and $50m SPP. Given the securities paid a coupon of 10%, the raising is earnings accretive, the broker notes. The group now has a strong balance sheet and will likely be an M&A player.
Macquarie has completed a review of GPT and believes the stock offers double digit shareholder returns on the back of its forecasts. Should growth in FY15 be guided at around 6% the broker expects this will be a positive catalyst for the share price.