Growthpoint to raise R1.7bn to sell down healthcare fund stake
Part of its strategy to develop a R15bn fund management business
LISTED Growthpoint Properties hopes to raise between R1.5 billion and R1.7bn between now and the first half of next year to start selling down its 100-percent stake in the healthcare fund it has been creating.
The fund formed part of a strategy announced earlier this year to develop a R15bn fund management business over the next five years.
Growthpoint chief executive Norbert Sasse said yesterday they now owned a portfolio of four hospital buildings and an office building for doctors’ consulting rooms and medical suites valued at R2.3bn.
Sasse said these healthcare assets were housed in a separate entity called Growthpoint Healthcare Properties. The group would be ready in the last quarter of this year to raise the capital to effectively sell its shareholding to thirdparty investors.
“Between now and the first half of next year, we hope to raise R1.5bn and R1.7bn from third-party institutional and pension fund-type investors. We will effectively sell that down from our current 100 percent to about 20 percent,” he added.
Sasse said Growthpoint’s intention was to keep the healthcare fund unlisted for up to seven years and then unbundle and list it separately.
But Sasse said if there was insufficient demand from the pool of investors for this unlisted product, the option clearly then was to list it.
Growthpoint’s previously announced trading development strategy was also paying dividends and had contributed R91 million to the group’s trading profit in the year to June, he pointed out.
Sasse said historically Growthpoint would only buy a property that fitted into its long-term investment strategy and discard opportunities that did not fit into this strategy.
He added that the group had decided to look at opportunities that included buying, redeveloping and reselling properties and making a profit on these transactions, as it had done developments of more than R4.5bn within Growthpoint in the past about five years and could leverage those skills and expertise.
He said this formed part of Growthpoint’s strategic thinking when it was considering ways to boost its distributions from 6 percent to 10 percent.
However, Sasse said that with the reality today and the South African market as weak as it was, it needed initiatives like this to retain its distributions growth at 6 percent to 7 percent.
Growthpoint yesterday reported a 6.5 percent growth in distributions a share to 100.8 cents in the year to June from 94.3c the previous year.
Vacancies in the South African portfolio improved to 4.4 percent from 5.7 percent and the total letting success rate increased to 85.3 percent from 82.4 percent.
Growthpoint shares rose 0.89 percent on the JSE yesterday to close at R24.94.