Growthpoint management said the rationale behind the deal, which was subject to necessary approvals, was to enhance its property portfolio, as well as the quality, long-term sustainability and growth of the income stream available to its linked unit holders.

The deal will increase Growthpoint's asset base to about R6,6bn.

Martin Ettin, executive director of Growthpoint, said because the property loan stock company was managed by Investec Property Group, all the directors associated with Investec recused themselves from involvement in the deal.

Investec's Sandton head office at 100 Grayston Drive would be bought from the company, 100 Grayston Drive Property, while Investec's Cape Town Foreshore building would be bought from Block E Powerstation Properties.

Investec Bank will be the tenant for the 20-year period on a triple net, fully repairing and maintaining lease in respect of both buildings.

There would be a staggered payment structure to ensure the deal would not have a dilutionary effect on Growthpoint's distributions, said Ettin.

On the date of transfer, expected to be in January next year, 50869565 new Growthpoint units at an issue price of 575c would be issued for partial payment. At the same time R482,5m would be settled in cash provided by the company's loan facility.

On the first anniversary of the transfer date another R100m would be paid in cash, followed by another R100m on the second anniversary.

Ettin said Growthpoint's borrowings presently sat at 42,8%. The transaction would increase it to 46, 6%, still conservative considering that average borrowings for property loan stocks usually sat at more than 50%.

Mariette Warner, head of fund management at Standard Bank Properties and fund manager of Standard Bank's Property Income fund, said that in financial terms, given the length of lease, the deal was "very good" for Growthpoint.