In our last Growthpoint report, we argued that its distributable earnings figure was not a realistic number. Our forecasted DIPs for Growthpoint is in line with their SA REIT FFO.
Our Resilient DIPs is slightly behind management’s guidance, mainly as we think their European assets will underperform, and as a large portion of the income from Europe is ‘interest’ based, it is not necessarily representative of the actual distributable earnings.
For Fortress and Hyprop, the estimated DIPs are slightly ahead of guidance. We are forecasting FFB ahead of guidance due to buying more NRP shares combined with building fewer new developments. Fortress has also been willing to sell vacant offices, which is earnings accretive. We think that the reduction in new developments will result in less short-term earnings destruction.
With Hyprop, we expect continued solid performance and growth from Eastern Europe and Table Bay. Renting of some of the office in JHB will also help earnings. In our view, management is generally conservative and said they expect to be at the top end of guidance.