Sydney’s office market and its tourism investments remain key concerns for General Property Trust as it enters the second half of the financial period.
During 2005, GPT leased a total of 108,000 sqm across its office the portfolio and it started the first quarter of 2006 with leases totaling 29,500 sqm leased with terms agreed over a further 15,800 sqm across its office investments.
GPT’s total office occupancy during the first three months of 2006 increased slightly to 95.2% — this excludes Darling Park 3.
However, while demand has been positive in all capital cities during the first quarter of 2006 conditions across Australia’s office markets are varied, according to GPT.
In Sydney, GPT’s continues its offices blues.
GPT has experienced softer positive net absorption of 45,600 sqm against a December 2005 quarter of 93,900 sqm, with the property group’s Sydney vacancy rate increasing from 10.4% to 10.9%.
The first quarter of 2006, according to GPT also saw inbound tourism weaken – down 2% compared to the previous corresponding period, with the UK and Japan in particular under performing – despite the Commonwealth Games and other major events around Australia.
“This reduced inbound demand has impacted the Portfolio’s performance with the major assets displaying a slow down in the strong growth achieved in 2005.”
However, the performance of GPT’s core portfolio remains solid and further progress in investing within the joint venture with Babcock & Brown has been made over the first months of 2006.
GPT remains on track to deliver on the forecasts for distribution of 27.5 cps for the year ending 31
December 2006.
The March quarter distribution, of 6.7 cents per security, will be paid on 25 May 2006.
GPT’s current gearing is 39.5%.
By Adam Parsons
