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Aussie REIT is "too woke" says activist investor

9th May 2024

Australian real estate investment trust GPT has been criticised for concentrating on ESG at the expense of returns.

David Kingston, founder of activist investor K Capital, told the REIT’s annual general meeting that GPT was too “too woke” and failing to deliver returns, Australian media reported.

He said: “REITs are meant to deliver income plus capital growth. The total shareholder return in property, if well-chosen and well-run, should be around 10%. GPT’s TSR over the last five years has averaged 4%, a big failure to deliver.”

Kingston said it was a concern that the annual report had so many references to non-commercial objectives and cited the REIT’s declaration on modern slavery as a particularly egregious example of unnecessary ESG reporting. 

GPT chair Vikki McFadden conceded that the group’s growth had not “been to the level that we would like to see,” which she claimed was for a “variety of reasons”. However, she denied the REIT was “too woke”.

She said: “There is, within the group, an understanding, and it’s embedded in the way we think, that we will have high regard to the sustainability and other social and governance requirements that are expected of a group to operate. But that has to be in the context of profitable sustainable growth which produces the right return on capital.”

GPT was the second placed REIT in the S&P Global Corporate Sustainability Assessment 2024 Yearbook and says it has reduced its carbon emissions intensity by 91% since 2005. However, it has underperformed the ASX-200 AREIT Index over the past five years.

The REIT has more than A$30 billion ($20 billion) of property assets under management, including 530 Collins Street, a Melbourne office building, pictured above.

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