Growthpoint to acquire Tiber property portfolio, management business for R6.6bn
JSE-listed Growthpoint Properties will acquire Tiber Group’s entire property portfolio and its management business for R6.6-billion – Growthpoint’s largest single acquisition to date.
The portfolio spans 320 000 m2 of mainly P- and A-grade office space concentrated in Sandton and its surrounds, including the head offices of various multinational companies such as Nestlé, PPC, AngloGold Ashanti, Norton Rose, Merrill Lynch, Barclays and Absa Capital.
The portfolio comprises 28 prime properties and a 50% stake in a further nine properties.
Growthpoint noted that the transaction was a significant boost to its office portfolio and enhanced its underlying income streams.
The acquisition lengthened the property company’s average office lease length and, with a 95% occupancy rate, improved its overall office vacancy levels. It would also make Growthpoint the country’s biggest office property owner with a portfolio of 1.5-million square metres of office space across South Africa, valued at nearly R25-billion.
“A portfolio of this quality and size, centred in arguably the best investment property location in South Africa, is a once in a lifetime opportunity and beneficial for Growthpoint’s shareholders.
“Moreover, Growthpoint will gain the core competencies, skills and long-standing relationships with tenants of the Tiber portfolio and have access to the executive team who conceptualised, built and managed the properties,” commented CEO Norbert Sasse.
The acquisition amount would be settled through a combination of cash and shares. It would issue 93.3-million new Growthpoint shares at R27 a share to raise about R2.5-billion.
The balance would be funded from the R2.5-billion in cash raised by the JSE-listed company in May, when it issued 90-million shares at R28 a share, as well as the company’s existing debt facilities.
Meanwhile, the transaction would also benefit Tiber, as it would create liquidity for Tiber shareholders and unlock the next phase of the company’s business, which would see it continue to deliver property development, investment and management services to the South African property sector.
Growthpoint would internalise the asset management and property management business from Tiber Projects, gaining the skills of 55 employees. The JSE-listed company had also secured an initial three-year strategic agreement with the Tiber Projects executive team comprising Stephen Scott, Germano Cardoso and Artur Carrazedo.
The acquisition was expected to become effective in the first quarter of 2014, but the deal remained conditional on approval by the competition authorities.
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