GPT’s Wholesale Funds Valuations Drop6 April 2020
GPT have issued advice today that the values of their wholesale fund investments has been written back as a result of the COVID19 issues.
GPT are the first group to quantify the extent of the impacts currently envisaged by external valuers. As expected their Shopping Centre holdings are facing the biggest impact with values dropping -11% whilst it Office holdings have dropped -2%.
The GPT Group confirmed that all of its properties in the GPT Wholesale Office Fund (GWOF) and the GPT Wholesale Shopping Centre Fund (GWSCF) were independently revalued as at 31 March 2020.
The -2% impact on the Office Fund (of which GPT owns 22.9%) represents approximately a loss in value of -$183 million and reflects the effects of COVID-19 and was largely driven by lower near term rental growth assumptions.
The more significant impact in its Shopping Centre wholesale fund (of which GPT owns 28.5%) represents a fall of -$511 million and is largely the result of a softening in the assumptions for market rental growth, restricted trading conditions and vacancy downtime.
GPT have not given any further details on what those assumptions look like, the cap rates used nor the qualifications that the valuers have given to their results. It would be difficult for a valuer to confirm that there would be a market for those assets at those valuation numbers during the current climate of uncertainty.
GPT’s Chief Executive Officer Bob Johnston said: “The asset revaluations recorded by GWOF and GWSCF reflect the independent valuers’ assessment of the effects that COVID-19 and the measures being implemented by Federal and State governments are having on economic activity.”
GPT intends to have all Group investment properties independently valued as at 30 June 2020.