Growthpoint jacks up interim 4,7% after Primegro merger

Posted On Monday, 01 March 2004 02:00 Published by eProp Commercial Property News
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LISTED property group Growthpoint Properties, the largest property fund on the JSE Securities Exchange SA, yesterday reported a 4,7% increase in the interim distribution to 33,5c for each linked unit for the six months ended December 31 2003.

Norbert Sasse

Norbert Sasse, a director of Growthpoint, attributed the increase to the performance of its physical property portfolio, in particular the retail component.

Distributable earnings increased to R209,8m for the six months to December 2003, from R109,6m for the same period ending December 2002 which reflected the doubling of the company's size after the merger with Primegro Properties in May last year.

Andisa Securities property analyst Len van Niekerk said the Growthpoint distribution forecast for the year ended June 2004 was expected to exceed the official forecast of 67c.

Van Niekerk said the results were "pleasing" and that rentals achieved on the expiry of property leases were better than expected on some of the larger properties like Growthpoint's Brooklyn Mall in Pretoria.

Sasse said the effect of the acquisitions of Investec Bank's head offices in Sandton and Cape Town for a total cost of R995m and the acquisition of the Waterfall Mall in Rustenburg for an amount of R294,6-million, which were postbalance sheet events, would only be seen after the year end to June 2004.

The company's borrowings were 38,4% on a loan-to-value ratio at December 31 2003, but because the Investec transaction would be 70% debt financed and Waterfall Mall 100% debt financed, the loan-to- value ratio for the next six months period would increase to levels closer to 48%.

The company said it was not its policy to revalue investment property at the interim stage.

Growthpoint said that the significant increase in demand for property over the last six months had resulted in the lowering of capitalisation rates, which if sustained were likely to result in an increase in the valuation of the physical property portfolio at the end of the financial year.

Sasse said this would also bring the loan to value ratio down to below 48%.

He also said the merger of Growthpoint and Primegro and increased the tradability and liquidity of Growthpoint linked units.

About 90-million Growthpoint linked units, valued at more than R540m, had traded on the JSE in the reporting period July to December 2003, Sasse said.

He said tradability had improved to an average of R98m a month, up from an average of R11m a month prior to the merger, while volumes had increased to an average of 2,6% of total linked units in issue compared to 0,75% before the merger.

Growthpoint's total assets after the merger and the acquisition of the Investec Buildings and the Waterfall Mall would have increased to more than R6,6bn.

The company would have a market capitalisation of more than R3,7bn.

On the subject of future acquisitions, Sasse said Growthpoint was "always looking for opportunities".

"We are still looking to grow the fund to achieve the objective of being one of the companies included in the Alsi 40 Index," he said.

Last modified on Saturday, 10 May 2014 11:55

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