Growthpoint Properties linked unitholders enjoy total returns of 63%.

Posted On Tuesday, 06 September 2005 02:00 Published by eProp Commercial Property News
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Growthpoint Properties today announced its year-end results for the period ending June 2005 which show an increase in total distributions to 73,2 cents per linked unit this year, 6.1% higher than last year’s total distributions of 69 cents per linked unit which is in line with market expectations.

Norbert SasseGrowthpoint linked units have shown a market value increase of 51%, from R6,00 to R9,06 per linked unit between July 2004 and June 2005. Based on the linked unit price of R6,00 at 30 June 2004 the total income return plus capital appreciation for the year was 63%.

Since June 2005 the price has increased further to over the R10,00 level.

Apart from normal rental escalations, the 21% increase in revenue was due to additional income from properties acquired during the year and due to the timing of acquisitions such as the Investec property acquisition, which was effective for only four months of the previous year and the Waterfall Mall acquisition, effective only for three months in the previous year.

Growthpoint’s property expense ratio decreased from 27,5% of revenue to 25,2% and the operating margin saw continued improvement from 72,5% of revenue to 74,8%.

Says Norbert Sasse, CEO of Growthpoint Properties Limited, “The company now boasts a market capitalisation of more than R7 billion - as recently as August the announced market cap was about R6,5 billion, whilst the value of property assets has topped R9 billion, up from just over R6 billion last year.”

The investment property portfolio increased in value by R1,3 billion following the discounted cash flow valuations carried out for Growthpoint’s entire portfolio. The increase in overall values was in line with the expected increase in income and decrease in market capitalisation rates over the past year.

Growthpoint linked units continued their high levels of liquidity and tradeability into the year ending June 2005. R2,4 billion of Growthpoint linked units were traded on the JSE Securities Exchange during the year to 31 December 2004, representing 61% of units in issue. The value of trade was R1 billion, equal to 18% of units in issue, for the six months to June 2005.

The recent major acquisition of 48 properties from unlisted property fund Tresso Trading 119 (Pty) Limited, was valued at R1,1 billion.  The flagship property of the newly acquired portfolio is the upmarket 20 396m² Constantia Village shopping centre in Constantia, Cape Town.

The balance of the Tresso portfolio is a good mix of well-located office, industrial and warehousing properties and also includes a private Cape Town hospital.

In July 2004 Growthpoint acquired 10 quality office properties and a modern warehouse from the Lyons Corporate Lease Fund for R288 million. These properties are mostly on long-term leases held by blue-chip tenants. Other acquisitions include the Menlyn Piazza building opposite the popular Menlyn Centre in Pretoria, acquired for R60 million, and the new 9 500m² shopping centre “The Paddocks” in Milnerton, Cape Town which was purchased for R88 million from Investec Property Group at the end of January 2005.


Strong demand from purchasers saw the company dispose of older properties for a total consideration of R101, 9 million, as these properties no longer met Growthpoint’s long-term investment criteria.

Despite the acquisition of the Tresso portfolio on 30 June 2005, which had an 8% vacancy, good letting in June of existing vacant space enabled the vacancies at year-end to remain at a very acceptable level of 4.8%. 


Sasse states with regards to securitisation, “Growthpoint has made considerable progress towards issuing its first commercial mortgage-backed securitised debt. It is anticipated that an announcement will be made in this regard within the next three months.”

Growthpoint recently announced that a BEE consortium has acquired 100 million Growthpoint linked units (approximately 14% of the total Growthpoint linked units in issue) in a transaction valued at more than R1 billion, at the current market price of Growthpoint linked units of over R10,00. 


The sale of Growthpoint’s listed property investments from December 2004 to July 2005 realized a capital profit of R262 million for the group.  Sasse confirmed that conditions had been right for the sale.  “The holdings were sold as prevailing market conditions favoured the conversion of listed units into physical property, which offers better value at present,” he said.


Subject to market conditions remaining stable, the Growthpoint board anticipates that total distributions for the next financial year will reflect a similar increase to that achieved this year.

 

 

 

 



Last modified on Monday, 05 May 2014 16:01

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