What happened to GPT Group Shares?
Shares of GPT Group [ASX:GPT] fell more than 2% Tuesday, closing at the lowest level since 22nd April after a major shareholder sold a big stake in the company.
Why did GPT Share Price fall?
Put simply, major shareholder the Government Investment Corporation (GIC) of Singapore sold an 8% stake in the stock, valued at more than $505 million. According to news reports GIC bought its original stake for as low as 60 cents per share back in 2008. Today’s sell-down means GIC could have banked a profit of as much as $400 million.
What now for GPT Group?
GPT Group is a $6.6 billion Australian-based property company. Its assets include high quality properties in the retail, office, logistics, and business park sectors. Since the stock price collapsed from sky-high levels during the 2008 financial meltdown the company appears to have gone some way towards repairing its balance sheet by raising cash levels and returning to profitability.
With a dividend payout ratio of just 63% the company has room to move if it wants to attract more investors with a higher yield. However, with fears that Australian property levels are at a peak, it’s likely that the company will choose to keep cash on the books in the event that banks start to tighten the reins on companies highly leveraged to the property market.
Cheers,
Kris+
