As at 10 September 2025

Executive Summary

Key highlights

In this report, we look at GRT’s FY25 results and assess its implications on our current view.
Financial results at a glance:
• Distributable income per share rose 3.1% on stronger SA net property income and a recovering V&A. Dividend per share also increased, helped by the payout ratio, which improved from 82.5% in FY24 to 85% in FY25.
• SA REIT FFO per share increased from 131.5c to 132.1c in FY25, with stronger SA cash flows offsetting higher interest costs and softer offshore dividends.
• NAV per share decreased by 1.6% as Australian office devaluations and disposals offset SA income growth and development gains.
• Total property assets fell 6.3%, shaped by disposals, ongoing asset recycling, and the sale of Capital & Regional.
• LTV improved from 42.3% to 40.1%, and ICR increased from 2.4x to 2.5x in FY25; in SA, LTV decreased from 35.4% to 34.5% with ICR 2.8x to 2.9x. ZAR funding costs eased from 9.6% to 8.9%.
• Offshore exposure has reduced and now accounts for 28.7% of distributable income per share and 38.0% of assets. Offshore earnings were tempered by higher dividend withholding tax at GOZ and a lower (part-scrip) payout at GWI.
• SA vacancies improved from 8.3% to 8.1%. Logistics remained tight, while retail stabilised, and offices outside prime nodes remained the main drag.
• The cost-to-income ratio increased to 44.4%. Admin cost-to-income was 6.5%. The rise mainly reflects utilities and resilience spend—that is, backup power, security, water, and infrastructure hardening—while solar and future wheeling are expected to ease pressure over time.

Analyst thesis

Our recommendation is based on:

• Stronger South African cash generation: Like-for-like net property income (NPI) improved on fewer rent cuts, lower vacancies, and better cost recoveries - supporting distributable income per share growth.
• Cleaner offshore footprint: Disposals and exits reduced overseas earnings volatility while keeping useful diversification.
• Improved balance sheet, funding tailwind: Leverage and interest cover are comfortable, borrowing costs are
trending lower, and further rate cuts would add flexibility.
• Resilient portfolio mix: Logistics and industrial remains tight with steady renewals, while the V&A Waterfront is almost fully let with strong tenant demand; capex is focused on modern Western Cape nodes.
• Energy self-help: A large solar base and the upcoming Etana PPA will wheel power, easing tariff pressure and backup-power costs to support margins.