In the largest transaction of its kind in South Africa, Growthpoint Properties (GRT) has announced the securitisation of a R1.65 billion portion of the Metboard Properties industrial property portfolio.
 
Growthpoint, managed by Investec Property Group, is South Africa's largest JSE-listed property holding and investment company, with property assets in excess of R15 billion.
 
The Metboard securitisation is Growthpoint's third issue under its uniquely-structured commercial mortgage backed securitisation (CMBS) programme, Growthpoint said in a statement.
 
The Metboard issue is listing on the Bond Exchange and comprises one billion rand of 5-year floating rate notes linked to the 3-month Johannesburg Interbank Agreed Rate (JIBAR).
 
Security for the issue is provided by 103 industrial properties with an open market value of R1.65 billion, with a loan-to-value ratio of approximately 60%.
 
"The securitisation of the Metboard portfolio will result in substantial savings, with our margin of debt being reduced by more than one full percentage point," noted Growthpoint CEO Norbert Sasse.
 
A further advantage for unit-holders, he pointed out, is that the costs of the Metboard securitisation are minimised by Growthpoint's use of the existing CMBS structure.
 
The CMBS programme launched in November 2005 with an initial issue of R805 million and the second issue in June this year was higher at R969 million.
 
Growthpoint acquired the remaining Metboard units that it didn't already own in June this year, a move that boosted Growthpoint's exposure to the industrial property sector - from less than 10%, to its current level of approximately 22%.
 
This latest transaction brings the total value of properties securitised by Growthpoint to R4.7 billion. A fourth issue is already in the pipeline.

Growthpoint intends to bring a further R1.5 billion issue to market in a few months' time, it said.
 
I-Net Bridge
Publisher: I-Net Bridge
Source: I-Net Bridge