Growthpoint Properties, the largest listed property fund on the JSE Securities Exchange SA, with a market capitalisation of R5,5-billion and property assets worth more than R8,2-billion, is set to further consolidate this position.

Already Growthpoint is almost double the size of its nearest rival, Grayprop, in terms of assets.

In December last year, Growthpoint said announced that it would be acquiring a portfolio of 48 properties for R1,08-billion to increase its assets to more than R9-billion.

Unitholders should be interested to note that Growthpoint is planning to implement a commercial mortgage-backed securitisation programme before June this year.

These programmes offer a cheaper form of debt than traditional financing and they are set to change the way listed property companies acquire debt.

Listed property loan stock company iFour was the first property company to make use of such a programme using securitisation to replace R800-million of bank debt.

Securitisation allows companies to pool similar loans such as mortgages into bonds.

The bonds then use interest paid on the underlying loans to pay interest to bondholders.

Growthpoint is ideally positioned to take advantage of commercial mortgage-backed securitisation because of its size.

Debt securitisation is expensive to set up, however, and a property company would have to have a core property portfolio of at least R1-billion to even consider it.

Also, property funds making use of such programmes would have to ring-fence those certain property assets that because they were then defined as assets to back the bond typically the topquality assets.

Growthpoint has a large number of high-quality properties from which so it could to pick and choose. which ones it wanted to ring-fence.

Cheaper debt will also help Growthpoint to continue growing its already extensive massive portfolio and market capitalisation.

This will further increase the its stocks' liquidity of its stock and attract investment.