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Growthpoint acquires Investec Limited's offices in Sandton and Cape Town

Posted On Thursday, 06 November 2003 02:00 Published by eProp Commercial Property News
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Growthpoint Properties has acquired the Investec Sandton head office at 100 Grayston Drive and Investec's Cape Town foreshore building, as well as the use of 580 parking bays at Merchant Place Parkade, for a total consideration of R975 million.

Norbert SasseThe transaction is subject to various regulatory approvals including the Competition Commission and the effective date of the acquisitions is the date of transfer, which is expected to be in January 2004. In the context of Growthpoint's management by Investec Property Group, the acquisition of the Investec buildings was considered and approved at arm's length by Growthpoint's non-executive directors.

Growthpoint’s tenant will be Investec Bank Limited, a South African A1 rated bank, for a 20 year period on a triple net, fully repairing and maintaining lease in respect of both the Investec buildings.

This transaction is expected to be yield enhancing to Growthpoint for the full 20-year period and should increase the overall sustainability of the total Growthpoint income stream. 15% of Growthpoint's portfolio is now based on 20 years of steadily growing rental income from the bank.

The acquisition by Growthpoint of the Investec buildings will increase Growthpoint’s total asset base to approximately R6,6 billion, enhance the overall quality of Growthpoint’s commercial portfolio and increase the total gross lettable area (GLA) of the commercial portfolio to 527 022m2 . The enlarged Growthpoint with approximately 1.5 million m2

of lettable space will be sectorally split as to retail 47,9%, commercial 35,6% and warehousing, industrial and hotels making up the balance of 16,5%.

"Growthpoint offers investors exposure to a sectorally well balanced, geographically diversified and high quality physical property portfolio, as well as a portfolio of listed property loan stock companies and property unit trusts," said Francois Marais, deputy chairman of Growthpoint and chairman of the sub-committee which dealt with the acquisition of the Investec buildings.

"In growing its asset base and market capitalisation, Growthpoint seeks to secure its inclusion in the FTSE/JSE Top 40 Index of the JSE Securities Exchange South Africa on a sustainable basis," elaborated Marais.

The targeted inclusion in the Top 40 Index could expose Growthpoint to a new market of potential investors, including tracker funds, resulting in increased tradability and liquidity.

The enviable acquisition of the Investec buildings represents Growthpoint's first major commercial deal post its merger with Primegro. This acquisition, together with the recently announced acquisition of the Waterfall Mall, cements Growthpoint’s position as South Africa's largest listed property fund.

The acquisition consideration will be settled by Growthpoint through R682,5 million cash provided from a loan facility and the issue of 50 869 565 new Growthpoint linked units at an issue price of 575 cents per Growthpoint linked unit, making up the balance of R292,5 million.

The interest-only loan funding will be provided by Investec and secured by mortgage bonds registered over the Investec buildings.

The effective fixed rate of interest over the period of the loan is 12,96% payable quarterly in arrears and Growthpoint has the right to refinance after the initial seven year period of the loan.

Post-implementation of the acquisitions and taking into account the total amount of the debt funding, the overall loan to value ratio of Growthpoint will amount to 46,6%.

Investec’s decision to select Growthpoint as its landlord should provide confidence to other SA corporates wanting to securitise their property holdings with Growthpoint.

"We are pleased to report that the Growthpoint mega-fund is operationally sound with the Growthpoint/Primegro merger transition process running smoothly," reported Martin Ettin and Derek Greenberg, executive directors of Growthpoint. "And we believe that Growthpoint will continue to offer an attractive investment for those investors seeking long-term sustainable income streams."


For further information, please contact:

Growthpoint Properties

Norbert Sasse

Cell 083 632 1599

Last modified on Friday, 09 May 2014 14:46

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