Growthpoint Properties Limited, South Africa’s largest JSE-listed property holding and investment company with property assets exceeding R13,5 billion, today exceeded expectations when successfully accessing a further R969 million from the debt capital markets as part of its R5 billion commercial mortgage backed securitisation (CMBS) programme structured by lead arranger Investec Debt Capital Markets. Successfully raising almost R1 billion given the current market volatility is incredible. This issue brings the total value of Growthpoint properties securitised through the securitisation structure to over R3 billion.

A solid spread of nine investors successfully bid on Growthpoint’s second issue of 5-year floating-rate notes listed on the Bond Exchange of South Africa.

The majority of the securitised notes were rated AAA.zaf by Fitch Ratings and achieved a credit margin of 0.35% over 3-month JIBAR (Johannesburg Inter Bank Acceptance Rate) while the transaction achieved a weighted average credit margin of only 0,45%. This compares extremely favourably to conventional bank finance which could reasonably be expected at a credit margin of between 1,10% and 1,75% over 3-month JIBAR.

“An all in cost of fixed rate debt funding of 8,48% was achieved, which is even more affordable than the originally anticipated 8,5% to 8,75% and also betters Growthpoint’s initial issue of R805 million in November 2005 which achieved an all in fixed rate of 9,34% and weighted average margin of 0,47%” says Nick Job, Head of Investec Debt Capital Markets.

Growthpoint managed to achieve these fixed rates which are more than 1% lower than the fixed rates that can be achieved today, by pro-actively taking out forward starting fixed rate swap contracts in February 2006 and December 2005.

Norbert Sasse, CEO of Growthpoint Properties Limited notes that “this securitisation will benefit Growthpoint’s linked unitholders with increased distributions. Additional benefits include the lowered average cost of borrowings and the increased competitive advantage of Growthpoint to make value-enhancing acquisitions”.

This issue is secured by 25 prime investment properties across South Africa valued at over R1,7 billion, with a loan to value of approximately 60%. 21 of the properties were purchased in Growthpoint’s most recent acquisition from Tresso with the remaining four also being recent acquisitions including City Mall Klerksdorp, the Auditor General’s building in Pretoria, Healthcare Office Park in Woodmead and a state of the art head office, sales, assembly and distribution facility of Rectron, a leading computer components distributor in Southern Africa.

Sasse attributes the favourable rates achieved to both the quality of properties and Investec Property Group’s property management as well as the efficient manner in which the transaction was executed by the Investec Debt Capital Markets team, lead arranger and manager of Growthpoint’s securitisation.

The primarily AAA.zaf bond rating was achieved, in large part, due to Growthpoint’s securitisation special purpose vehicle (SPV) which has a unique low-risk structure with the securitised properties successfully ring-fenced into a trust, the Growthpoint Securitisation Warehouse Trust, which was registered for the sole purpose of holding properties for its securitisation programme.

Sasse points out that the upfront and ongoing costs of this second tranche of securitisation are reduced as Growthpoint is tapping into an existing structure put in place for the initial issue.

Growthpoint has stated that accessing the debt capital markets through securitisation is central to its future funding and, following the of the success of the first two issues, Sasse anticipates a further R1 billion issue before the end of the year, underpinned by the bulk of the Metboard Properties Limited property portfolio.

Metboard, with its prime industrial portfolio valued at approximately R2,2 billion, is to be consolidated into Growthpoint with effect from 30 June 2006 with all the conditions and approvals precedent for this transaction now fulfilled.

Issued on behalf of:
Growthpoint Properties Limited
Stuart Sasse: CFO
Tel. Tel. 011 286 7306
Cell 083 632 1599

Investec Bank Limited
Nick Job: Head - Debt Capital Markets
Tel 011 286 9072
Cell 082 450 6899

By: Marketing Concepts
Sandy Davey/Bronwen Noble
Tel 011 880 2213
Cell 083 453 6668 (Sandy)
Cell 082 855 4349 (Bronwen)