What is Happening to the Share Price of GPT Group?

What does GPT Group do?

GPT Group [ASX:GPT] owns some of Australia’s most recognisable real estate and is the nation’s oldest real estate investment trust (REIT). Their portfolio includes the MLC Centre and Australia Square in Sydney, as well as Melbourne Central and Highpoint shopping centres in Melbourne.

What’s moving the GPT share price?

Positive news is moving the GPT share price. The company released their 2015 results on 18 February.

Some highlights:

  • Net profit of $868 million, up 34%;
  • Funds from operations (FFO) of $502 million, up 11%;
  • Funds from operations per security growth of 5.5%;
  • Net tangible assets per security of $4.17, up 5.8%.

The portfolio of shopping centres delivered strong growth driven by increased consumer spending. Specialty retail sales delivered 6.5% growth. This indicates some consumer confidence in the economy.

The office portfolio also performed well, with 6.3% income growth. Occupancy rates increased 4.6%, to 96%. Again, this not indicative of a weakening economy. You would expect vacancy rates to fall in such a scenario.

The GPT share price is slightly up in Thursday trade, and continues to punch around seven-year highs.

What now for GPT shares?

Broadly speaking, the longer term trend for Real Estate Investment Trusts looks positive. GPT Group has been one of the best performers among Australian REITs.

With dividends yields hovering around 5% on average, and the positive outlook for capital growth, it suggests that it may be a favourable time to be looking at this sector.

REITs have been performing well compared to the broader market, recovering quickly from recent market panics. Property related stocks are worth studying during this time of volatility in global equity markets.
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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