HEADED FOR THE ROARING FORTIES

Posted On Friday, 30 May 2003 02:00 Published by eProp Commercial Property News
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The whole property sector was set to be catapulted into the big time with the expected takeover earlier this week of Primegro by Growthpoint, the Investec property loan stock company.

Sam Leon InvestecEngorged with Primegro, Growthpoint would have a market capitalisation just short of R3bn, a property portfolio of R4,2bn and shares in other listed property funds of R800m. This would probably put it in the Alsi 40 - the first time for an SA property fund. 

It's a remarkable change from two years ago, when the market cap of Growthpoint was nearly 100 times smaller at R32,3m and the FM advised investors: "The sector has better to offer" (Companies May 11 2001). 

Seven years ago, institutions were reducing their property holdings. Three years ago, the market still feasted on the hi-tech and financial services boom. But property's annuity-type income and steady growth have become desirable. 

The JSE-listed property sector is still relatively small. Now the big insurers and pension funds are converting their directly held properties into listings, with two funds due from Sanlam, two from Old Mutual and one from Momentum this year. 

That was how Growthpoint started to grow. Mines Pension Fund (MPF), a large property owner, had turned to Investec Property Group, the listed bank's highly commercial property arm, headed by David Kuper, Sam Hackner and Sam Leon, for advice.

This led to Growthpoint becoming the vehicle for securitising the MPF's R1,5bn property portfolio in August 2001. MPF's listed property holdings were added last year.  And the growth will certainly continue.

In its latest research report, investment manager Provest (recently taken over by Investec) points out that Growthpoint management has declared it wants between 20% and 30% of its holdings in listed property funds. That would mean raising the listed holdings to R1,8bn and total holdings to over R6bn.

Last modified on Monday, 05 May 2014 09:58

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