If Growthpoint hits the R2bn mark in the near future, it will become one of the more prominent players in the property loan stock sector of the JSE.

Citing a cautionary notice, Growthpoint fund manager Bernice Boshoff could not comment on shortterm prospects but said the group was working towards growing its portfolio and modifying its sectoral exposure.

She promised an annualised growth in earnings despite the harsh trading environment facing commercial property investors. At the end of August, the Growthpoint portfolio was valued at about R1,8bn.

The portfolio reflected a 71% exposure to the Gauteng province, 11% to KwaZulu-Natal and an 8% exposure to Cape Town.

As much as 48% of the group's properties are in the office sector, 21% industrial, 25% in the retail sector and 6% in hotels.

About 19% of the group's properties are in the decentralised areas of Johannesburg, but with little exposure to the ailing Sandton area.

At the end of August the group reported vacancies of 80806m², which represents 11% of total gross lettable area. The group said the major vacancies were in the 12877m² in the Ernst & Young Building in the Johannesburg central business district and 9914m² in the OK Brakpan building in Brakpan, East Rand.

Boshoff said the group was working towards reducing vacancies to levels below 10% going forward.

She said they were also seeking to include more retail and industrial property exposure.

Growthpoint concluded a number of deals which radically modified its structure during the course of the financial year ended June.

The biggest transaction was the acquisition of the Mine Pension Fund's portfolio for R1,5bn.

In addition, the group acquired an office block south of Pretoria in Centurion called Meerlus for R16,6m and the Beacon Bay retail centre in East London for R88,5m. It sold the Nestlé Building in Pinetown, KwaZulu-Natal for R53m cash.

These transactions left the group with a gearing of 35%. Boshoff said the group has adopted a conservative gearing policy and would like to maintain gearing at about 35%.

Growthpoint's portfolio features properties such as La Lucia Mall in KwaZulu-Natal , Constantia Office Park in Roodepoort, Alberton City Shopping Centre and Gillooly's View office park near Bedfordview.

Business Day