GPT lifts on commercial property comeback

GPT Group chief executive Russell Proutt flagged more investment partnerships

GPT has signalled it will keep pushing into investment partnerships, with the group looking to bring in partners for Sydney’s landmark Grosvenor Place once more leasing deals are struck.

The move is in keeping with its bullish take on the top end of the office market, as it fills up both that landmark tower and its other office buildings that were once viewed as a risk by investors. That sentiment has now turned and the company says it is more bullish on offices as larger tenants are coming to the market and seeking to take longer leases after deciding on their strategies in the wake of the pandemic.

The group is also backing the recovery of city retail – even in the beaten-down Victorian capital – and it will revamp the Melbourne Central complex by adding two levels of retail space.

The diversified property giant showed that commercial property is coming back with a healthy net profit after tax for the full year of $981m. It generated adjusted funds from operations of $494.4m, a measure of property earnings, and a full-year distribution of 24c per security.

The company benefited from an investment portfolio valuation uplift of $308.5m and launched new logistics and value-add funds, as well taking a 50 per cent stake in Sydney’s Grosvenor Place in late 2025.

GPT chief executive Russell Proutt said the company had advanced its position as a top diversified property investment manager, which had made the company a more significant player in real estate plays ranging from logistics development to large malls.

GPT has 20,000sq m of new inquiry in train for space in Grosvenor Place, which had high vacancy when it was bought. Chief investment office Mark Harrison said Grosvenor Place – which had been about 30 per cent vacant – was leasing up well.

“At the right time we would look to bring investment partners into that investment opportunity,” he said.

GPT expects to deliver fiscal 2026 funds from operations of about 35.4c per security, representing about 4 per cent growth on last year. It forecast a fiscal 2026 distribution of 24.5c per ­security.

Jarden analysts said GPT’s guidance had come in “a shade below consensus” but it was high quality. “GPT assets under management is heading in the right direction and the group has demonstrated ability with mandate wins, however, we expect executing on capital-light strategy will take time,” they said.