Growthpoint Properties attributed its double-digit distribution growth for the year to last month to a strong performance from its underlying property portfolio, as well as some savings from the refinancing of debt.

Growthpoint CEO Norbert Sasse said the growth in distributions for the year to June was 11,1%. But he said if the six months to June this year were compared with the six months to June last year, the increase in distributions was 11,9%.

Growthpoint made an early declaration of distribution on Wednesday so that it could coincide with the special distribution made by Metboard Properties.

Growthpoint acquired industrial-focused sister company Metboard Properties with the effective date of the takeover being June 30.

Sasse said that the Metboard purchase would increase Growthpoint's market capitalisation.

He said Growthpoint was issuing 120-million shares for the Metboard transaction next month. This would add about R1,2bn to Growthpoint's market capitalisation.

"So it will take market capitalisation to just over R9bn," said Sasse.

Following the Metboard transaction, Growthpoint's property portfolio now has retail making up 40% of the portfolio. Industrial property and offices respectively make up 22% and 38% of the portfolio.

"Growthpoint will still continue to look at all opportunities and look to enhance the overall portfolio," said Sasse.

He said the company might also decide to reduce its exposure to industrial property.

"We are probably slightly overweight in industrial but we are comfortable being overweight in industrial in this particular market where industrial (property) is outperforming the other two property sectors. In the longer term, we would see our industrial exposure coming down to between 15% and 20%."

Metboard's special interim distribution for the three months ended June was 11,08c.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge