GPT Group

Overview Key strengths Key risks Recurring and stable cash flows from a diversified portfolio of high-quality Australian retail, office, and industrial property assets.Portfolio scale and diversity to improve over time. Metrics pressured despite gearing remaining within the group's 25%-35% target range. Potential structural changes in demand for office space and leasing requirements post the COVID-19 pandemic. Favorable market position for the majority of assets. Susceptibility of retail assets to subdued discretionary consumer spending and sales leakage to e-commerce platforms. Addition of high-quality assets with a long-weighted average lease maturity will bolster GPT Group's competitive position. Ongoing refurbishment and development capital requirements. GPT's acquisition of Ascot has weakened the group's cash flow adequacy such that its ratio of adjusted funds from

...GPT Group's credit metrics have weakened following its debt-funded acquisition of Ascot Capital's portfolio. GPT's acquisition of Ascot has weakened the group's cash flow adequacy such that its ratio of adjusted funds from operations (FFO) to debt is 10% for 2021. This is below our rating downside measure of 12% and is likely to remain subdued over our forecast period. We previously revised the rating outlook to negative to reflect the diminished rating headroom. Returning to more robust credit metrics and sufficient rating...

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