Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
More pain, no gains for GPT
GPT Group (ASX:GPT) announced a massive fall in profits, falling to a net loss of $519.1 million for the 2020 financial year.
The majority of the reduction was the result of independent reviews of the company’s various property assets, with the total value falling $711.3 million. (In FY20, GPT’s property values rose by $130.8 million).
The retail assets were the hardest hit, falling 10.5% due to the impacts of rent waivers and uncertainty on rent collections. The portfolio includes the well-known Melbourne Central and Highpoint Shopping Centres.
Funds from operations, or FFO – which is equivalent to rental payments – plunged 23.3% for the year, to $244.5 million, with 99% of it paid out to investors through a 9.3 cents-per-unit distribution, a 30% cut on 2019.
Despite the result, management was upbeat, highlighting great occupancy in their office and logistics assets, along with $164 million in recent acquisitions in the latter. Capitalisation rates, which are used to assess the value of each asset, remained flat, at 4.85% for offices, 5.29% for Logistics and 5.04% for retail.
We would suggest, however, that the retail rate is likely to blow out post COVID-19 should vacancies increase.
