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Source Engineering News: www.engineeringnews.co.za
South African property group Growthpoint Properties, in presenting its results for the year ended June 30, indicated that black economic-empowerment (BEE) aspects other than ownership and control, are receiving attention and more details will be provided in the company's annual report.
The firm grew revenue to R1-billion, from R837-million and indicated that it had acquired and divested of several properties, in addition to concluding a BEE deal.
After year-end, the company sold the balance of its Hyprop-linked units and is left with a 13,8% shareholding in Metboard Properties.
Growthpoint believes that the investment in this specialised industrial fund gives it additional exposure to the industrial sector.
Some 48 properties were purchased this year from unlisted property fund Tresso Trading 119 for R1,1-billion.
Some 46 of the properties were transferred to Growthpoint on June 30, and the remaining two properties are expected to be transferred in the near future.
The flagship of the acquired portfolio is the 20 396 m2 Constantia Village shopping centre in the upmarket suburb of Constantia, Cape Town.
The balance of the portfolio is a good mix of office and industrial/warehousing properties, as well as a private hospital in Cape Town.
Last year July saw the company acquire 10 office properties and a warehouse, mostly let, for R288-million, as well as the Menlyn Piazza building, opposite the popular Menlyn Centre in Pretoria for R60-million.
At the end of January, a new 9 500 m2 shopping centre, 'The Paddocks' in Milnerton, Cape Town was purchased for R88-million from Investec Property Group.
Woolworths have recently signed a 10-year lease to take space in the centre.
In March, Growthpoint purchased a 7 900 m2 warehouse in Milnerton, Cape Town for R2-million and spent R138-million during the year on extensions and developments at existing properties to meet tenants" requirements.
Older properties, which no longer met the criteria for core long-term investments were disposed of for R101,9-million.
These included Flora Centre in Florida North, Roodepoort; Gresswold Centre in Gresswold, Johannesburg; Hi-Tech Park in Centurion, Pretoria and The Atrium in Braamfontein, Johannesburg.
Towards the end of last month, the company announced that a consortium of BEE partners have acquired 100-million linked units, or 14,2% of the total linked units currently in issue, with a current market value of over R1-billion.
The linked units will be acquired from existing unitholders and will not involve the issue, by Growthpoint, of any additional linked units.
At the same time, the consortium will also acquire a 14,2% interest in the Growthpoint asset management contract from Investec Property Group.
Growthpoint will advance mezzanine funding of R204-million with the balance of the acquisition cost being provided by Absa Commercial Property Finance, Old Mutual Specialised Finance and Investec Private Bank.
The consortium consists of the following partners:
- Amabubesi Consortium, 80%-owned by Amabubesi a new-generation black controlled and managed investment holding company led by chairperson Bulelani Ngcuka, 15% by Desert Wind Properties, a company controlled and managed by black women with the balance being owned by a broad-based community trust.
- Miganu, a wholly black-owned and managed investment company formed in 2002 by Mzolisi Diliza, a non-executive director of Growthpoint. Dr Penuell Maduna, former Minister of Justice and Constitutional Affairs is a key member and significant investor.
The company also has a broad-based rural community trust as one of the main beneficiaries.
- Unipalm is a black-owned and managed company established in 2001 and chaired by Thandi Ramathesele. The largest shareholder is Afripalm, an investment vehicle owned by Ragavan Moonsamy and Lazarus Zim.
The Unipalm shareholder base also includes a national broad base of 35 000 people, including women, with strong rural and urban participation.
Ngcuka and Ragavan Moonsamy were appointed to the board of Growthpoint on August 31.
In a notification to the JSE, the company stated that revenue grew some 21%.
This was ascribed, apart from normal rental escalations, to additional income from properties acquired during the year, as well as timing of acquisitions such as the Investec property acquisition and Waterfall Mall.
Operating margin improved from 72,5% of revenue in 2004 to 74,8% in 2005, as the property expense ratio decreased from 27,5% to 25,2% of revenue.
Decrease in its investment income was a result of the sales of most of its listed property investment portfolio. | 