Trade Idea: Growthpoint Properties
The bulk of Growthpoint’s assets are situated in major metropolitan areas with strong economic growth. The group is geographically diversified with exposure to South Africa, Australia, South Eastern Europe (SEE) as well as Central and Eastern European (CEE) markets through its investment in Globalworth. The share is trading at a slight premium (1.7%) to its NAV of 2 518 cps. However, developments like cannibalisation and the adoption of e-commerce are expected to place further pressure on rental growth. Escalations for the retail sector poses a significant risk for Growthpoint, given that retail assets make up 38.4% of the group’s portfolio.
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