Rental revenue up 14.2% but revaluations widened the loss to $564.9m

Revenue rose 14.2% to $244.1m, driven by rental income (rental revenue cited in the release as up 14.7%), and net cash from operating activities rose 22.9% to $112.1m. Against that, the statutory net loss widened to $564.9m from $135.4m a year earlier, with profit before tax at -$626.5m. The release attributes the swing to non-cash effects "impacting statutory profit" — consistent with portfolio devaluations in a higher cap-rate environment.

The balance sheet moved with the revaluation. Total equity fell 9.9% to $3.1b, total assets fell 2.8% to $4.7b, and gross borrowings rose 15.8% to $1.5b, taking net debt to $1.4b from $1.3b. The final dividend per unit lifted 5.1% to 1.55 cents. Note this release also marks the issuer transition from GMT to GNZ.

Property income of $244.1m and a 22.9% rise in operating cash flow show the underlying portfolio is collecting more rent and converting it to cash, which is the metric that sustains distributions for a property trust. The reported -317.2% NPAT move is a statutory artefact of property revaluations rather than a deterioration in rent collection.

Revaluation losses are now compounding into the balance sheet. Equity fell $341.6m and assets fell $137.0m even as borrowings grew $198.9m, so the loss is being absorbed by both lower asset carrying values and higher debt. For a property vehicle, the read-through is that gearing direction has weakened materially this year and will increasingly determine headroom against debt covenants.

Capex is funding the growth but is ahead of cash generation. Investment-property capex of $191.0m equals 78.2% of revenue and exceeds OCF of $112.1m by ~$78.9m, leaving free cash flow before leases at -$78.9m. Development completions are the source of next year's rental uplift, but they are being funded with debt while valuations are falling.

The supplied half-year shape shows the statutory loss was concentrated in H2 — implied H2 NPAT of -$401.7m versus H1's -$163.2m — which means revaluation pressure intensified through the second half rather than easing. Revenue split was roughly even (49% in H1), confirming rental momentum is steady while the valuation overlay deepened.

The release flags continued customer demand for warehouse and logistics space and additional revenue from completed developments, supporting top-line momentum into FY25. What the release does not yet support is a view on whether cap-rate movements have stabilised, which is the swing factor for next year's reported result and equity base.

Operating cash flow grew faster than revenue (22.9% vs 14.2%), there is no flag of working-capital benefit driving the gap, and the rental base is contractual. The 5.1% lift in distribution per unit is consistent with that operating reality rather than the statutory loss.

The statutory result is a different question. The -$564.9m NPAT is not an operating earnings collapse; it reflects non-cash property revaluation effects, with a low effective tax rate of 9.8% reflecting the deferred-tax mechanics of revaluation accounting rather than a normalised tax line. Two quality caveats nonetheless attach to the cash result. First, FCF pre-lease was -$78.9m, so the distribution and incremental development spend are partly debt-funded this year. Second, with equity down ~$342m and debt up ~$199m in a single period, debt headroom rather than rent collection is becoming the binding constraint on capital allocation.

This briefing cannot assess occupancy, weighted average lease term, like-for-like rent reversions, or the specific cap-rate movement underlying the revaluation, because those disclosures are not present in the supplied excerpts.