Growthpoint seals deals worth R2.4bn

Johannesburg - Growthpoint Properties Australia has acquired three modern office properties and a 100% pre-committed office development for a total consideration of AU$289.5m - about R2.4bn.

"These assets provide an excellent investment opportunity and continue to achieve Growthpoint Australia's strategic objectives of delivering distribution growth to investors through acquisition and diversification, targeting well-tenanted, quality, modern properties," said Estienne de Klerk, director of GOZ and its major security holder of 61%, the largest SA-listed property company Growthpoint Properties.

Growthpoint Australia's portfolio value has more than doubled over the last three years, from 24 properties valued at AU$662m in June 2009 to 40 properties worth $1.54bn - or about R12.9bn - as a result of this transaction. The portfolio has also diversified from a purely industrial property to a spread of 47% offices and 53% industrial property.

The acquisitions include three office buildings in Queensland - two in South Brisbane and a 24-level A-grade office building in the Brisbane CBD and an office building currently under construction at Gore Hill Technology Park in Sydney, New South Wales, which will be 48% leased to Fox Sports (Premier Media Group) on completion in early 2013.

This development is targeting a 5-star National Australian Built Environment Rating System rating and a 5-star Green Star rating.

The new assets are fully let, and together represent an initial property income yield of 8.7% and enjoy a 4.6-year weighted average lease expiry.

"Investing in the Brisbane office market is opportune in light of expected improved vacancy rates and effective rental growth as the Queensland economy continues to perform well, anchored by the strong resources sector," said Growthpoint Australia Managing Director Timothy Collyer.

"We are also pleased to purchase a significant property within the Sydney office market where opportunities to acquire newly constructed 'new generation' properties are limited."

The acquisitions will be partially funded by a rights offer to raise about AU$166.4m - or around R1.4bn - at an issue price of AU$1.90 per Growthpoint Australia stapled security.

"Growthpoint South Africa will take up its full entitlement of some AU$101.5m (about R850m) and underwrite the remaining approximately 39%," confirmed De Klerk.

"During Growthpoint South Africa's 2011 financial year, we received a total return of 28.6% from our investment in Growthpoint Australia. We will continue to support its growth."

The Growthpoint Properties Australia rights offer opens on the ASX on 3 January 2012 and closes on 19 January.