GPT Group reported first half funds from operations well ahead of Ord Minnett's forecast due to higher retail net operating income and fewer abatements and land tax rebates than a year ago.
2023 guidance is at the top end of the previous range, implying an in-line second half, as rising debt costs start to have an impact and will be a bigger headwind for earnings, the broker notes.
The office portfolio remains a challenge, with plenty of expiry in difficult leasing markets, and gearing is at the middle to end of the target range ahead of a likely devaluation cycle, suggesting asset sales are likely needed to fund developments.
Lighten retained, target rises to $4.75 from $4.60.
Sector: Real Estate.
Target price is $4.75.Current Price is $4.46. Difference: $0.29 - (brackets indicate current price is over target). If GPT meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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