March 2023 Quarter Operational Update

10 May 2023

The GPT Group released its operational update for the quarter ended 31 March 2023 revealing earnings remain on track despite ongoing issues in the Office sector.

GPT’s Chief Executive Officer, Bob Johnston, said: “The Group has made solid progress during the period with occupancy across the diversified portfolio maintained at 97.6% and strong cash collections. The Group remains on track to deliver on its earnings and distribution guidance for 2023.

“We continue to see good momentum across our Retail portfolio, with high occupancy and sales productivity driving performance. While elevated interest rates and inflationary pressures are expected to moderate retail sales growth over the course of 2023, GPT’s portfolio is well placed given positive leasing demand and structured rental increases.

“The office market remains challenging, with elevated vacancy and relatively subdued leasing demand, however we continue to see the flight to quality as a driver of new leasing activity and Office portfolio occupancy has been maintained at 88% during the period.

“Our Logistics portfolio continues to deliver strong results with the portfolio benefiting from substantial occupier demand, low vacancy rates and limited new supply. Two new developments have also been completed year to date and an additional three projects are currently underway. Rents are continuing to escalate in the sector and we expect that we will benefit from this through both our existing portfolio and the development pipeline.

“The Group’s balance sheet remains in a healthy position, with the proceeds from the sale of the Camellia and Citiport assets received in the period. The Group will also have 100% of its investment portfolio independently revalued at 30 June 2023. GPT recently commenced a marketing campaign for the potential sale of its 50% interest in Australia Square. The proposed divestment is consistent with the Group’s longer term capital allocation objectives and will provide further balance sheet flexibility for the future.”


The retail trading environment remains resilient, with ABS retail sales growth for the three months to 31 March 2023 up 6.4% year on year.

The Group recorded strong sales performance across the portfolio during the period, with Total Centre sales up 16.5% and Total Specialty sales up 15.4%, against the same period in 2022. Strong results were seen from supermarkets and travel which continues to benefit from the ongoing normalisation of tourism spend. Specialty Moving Annual Turnover (MAT) improved to $12,599 per square metre (sqm) at 31 March 2023 (December 2022: $12,259 per sqm).

During the quarter, leasing activity totalled 39,400sqm with 215 deals completed. Total Specialty leasing spreads of positive 4.0% (December 2022: -2.8%) were achieved with fixed base rents, annual average increases of 4.7% and an average lease term of 4.9 years. Retail portfolio occupancy remains strong at 99.4% as at 31 March 2023 (December 2022: 99.4%).

The return of students and office workers to Melbourne’s CBD continues to drive sales momentum at Melbourne Central, delivering Total Centre sales for the quarter up 35.4% on the prior corresponding period (pcp) and MAT of $554.7 million. Total Specialty MAT is now $14,628 per sqm (December 2022: $13,836 per sqm).

Highpoint Shopping Centre’s Total Centre sales for the quarter are up 15.2% on pcp, with MAT now at $1.21 billion. Total Specialty sales productivity remains high with MAT of $13,684 per sqm at 31 March 2023 (December 2022: $13,685 per sqm).


Despite ongoing challenging conditions in the office market, the flight to quality thematic remains a key feature of tenant enquiry, with prime quality buildings offering leading sustainability credentials and superior amenity the most keenly sought.

Total leasing of 33,400sqm including Heads of Agreement (HoA) has been achieved as at 30 April 2023. Office portfolio occupancy has been maintained at 88.0% as at 31 March 2023 (December 2022: 87.9%), with the weighted average lease expiry (WALE) at 4.7 years. Including HoA, portfolio occupancy is 88.6%. With leasing achieved to date, the Group remains on track to achieve its target of greater than 90% Office portfolio occupancy by the end of the year.

While the office leasing market remains competitive, GPT’s differentiated space offering continues to appeal to a broad range of tenants. Since the beginning of the year, leasing of 6,200sqm has been achieved across the Group’s turn-key product, DesignSuites by GPT, including signed leases and HoA. In addition, GPT continues to expand its space-on- demand product offering Space&Co., with a new 3,000sqm facility opening at 550 Bourke Street, Melbourne in February.


The Logistics market continues to display positive fundamentals, with very low levels of vacancy and pent-up tenant demand driving strong market rental growth. The Group is seeing high levels of leasing enquiry, particularly in Melbourne and Sydney, with occupiers competing to secure the limited uncommitted supply being delivered in 2023.

In the year to date, leasing activity totalled 57,500sqm including HoA. The portfolio remains under-rented, with positive leasing spreads averaging 32% (December 2022: 15%) achieved during the period. Logistics portfolio occupancy was 99.5% at 31 March 2023 (December 2022: 99.2%) with a portfolio WALE of 5.9 years.

The Group is making good progress on the delivery of the development pipeline. The 22,800sqm facility held within the GPT QuadReal Logistics Trust (GQLT) in Keysborough, Melbourne reached completion in February and is fully leased to three occupiers. In Brisbane, the GQLT’s 17,500sqm development at Wacol will reach completion in May, with a HoA in place for a five year lease across 100% of the facility. Two further projects are underway, with the GQLT’s 11,600sqm development at Bundamba, Brisbane due to reach completion in mid-2023, and GPT’s 31,600sqm development at Truganina, Melbourne expected to complete in Q4 2023.

Capital Management

GPT continues to maintain a strong balance sheet position with $1.2 billion of liquidity, which fully funds commitments and debt maturities until mid-2025. The Group has interest rate hedging in place of 78% for the remainder of 2023. Following the reduction in market swap rates in March, the Group extended its hedge profile to 3.2 years (December 2022: 2.8 years).

2023 Guidance

GPT continues to expect to deliver 2023 Funds From Operations of approximately 31.3 cents per security and a distribution of 25.0 cents per security.