GMG has been a standout performer in 2024, surging +39% year-to-date, but we started reducing our exposure in mid-July on valuation grounds. We think GMG is a great business, and applaud their move into Data-Centres which looks like another master stroke by CEO Greg Goodman, however, our concern in the short term centres on the dislocation between a great strategy, and the timing around the actual earnings that strategy will generate i.e. there is a lot of optimism built in, yet some patience will be needed to see tangible financial benefits – much like the concern about AI being a huge theme, but not yet generating returns.
- Investing is a relative game, and many property companies are still trading at very depressed levels. While the quality of GMG can’t be questioned, relative valuation can.
GPT Group (GPT) is an owner-manager of a large property portfolio, spanning retail, office & logistics. In May they reaffirmed full-year guidance and are forecast to yield 5.6% over the next 12 months, compared to GMG, which yields less than 1%. While they are very different plays on Real-Estate, an investment in GPT is about recovery from a low base i.e. what comes next should be better, while GMG has captured a lot of future positivity in its share price around $35.
- We are considering switching within the Property Sector in search of yield – MM owns GMG in our Active Growth Portfolio.
MM is considering switching from GMG to GPT
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