At a total cost of R287,9 million, Growthpoint targeted the 11 commercial properties for purchase because of their A-grade character, blue-chip tenants and the long-term leases that are already in place. The properties are predominantly occupied by JSE listed and large multi-national tenants including ABSA, consumer giant Nestle, investment house Wiphold, Dutch film production company Endemol, office automation company Gestetner and Eagle Freight.

"Remaining lease periods range from 2 to 14 years with the longest dated lease being Nestle expiring in 2018 and the average remaining lease period, weighted by gross lettable area, just short of 7 years" said Norbert Sasse, executive director of Growthpoint. "This is rated as a major advantage in a market where three-year lease terms are closer to the norm" said Sasse.

Two of the 11 properties are situated in the fast-growth northern suburbs of Cape Town, providing additional geographic diversification to the Growthpoint physical property portfolio with the balance being located in Gauteng.

The acquisitions will be funded in cash and shares with 20% of the total purchase price being settled in new Growthpoint linked units at an issue price of R6.13 per linked unit on an ex-distribution basis.

The acquisitions, combined with the resultant increase in the market capitalisation of Growthpoint, will also ensure that Growthpoint moves closer to its previously stated goal of being included in the FTSE/JSE Top 40 index of the JSE.

Sasse points out that Growthpoint has significantly increased its tradeability over the past three quarters, since it merged with Primegro in May last year. On average, the fund has traded close to R100 million a month during the period. Volumes traded have increased to a monthly average of 2,6% of total linked units in issue.

"This is in line with our stated objective to increase liquidity on a sustainable basis, to meet one of the requirements for inclusion on the ALSI 40," highlights Sasse. 

Norbert Sasse Investec Property Group

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Cell: 083 632 1599

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Sandy Davey

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