The GPT result was a good one. We don’t own it, preferring other exposures, but it is a solid company.

Firstly, leasing spreads improved from the very difficult pandemic period. Still down a lot, better than the prior -14%.

Note of course that GPT, like most REITs, has annual fixed rent increases (usually 2-4%), however the lease spread (reflecting the new rent on the same space, compared to the old rent, either for a new tenant replacing a vacating one, or for an existing one rolling off contract to a market review) and so leasing spreads are not by themselves a definitive barometer of market health or conditions.

The second interesting point is GPT’s comments on high quality office exposures. GPT finds that lower quality assets are suffering, and GPT’s above market office assets are resulting in higher than market occupancy outcomes.

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