Following the Competition Commission’s approval of Growthpoint Properties’  proposed acquisition of counterpart the Tiber Group, the R6.1-billion transaction became effective on Tuesday, when the acquired company’s properties and shares were officially transferred.

The acquired portfolio spanned 320 000 m² of mainly P- and A-grade office space concentrated in Sandton, Johannesburg, and surrounds, including multiple multinational head offices including Nestlé, PPC, AngloGold Ashanti, Norton Rose, Merrill Lynch, Barclays and Absa Capital.

It comprised 27 prime properties and a 50% stake in a further nine properties. It also incorporated 48 000 m² of undeveloped bulk.

“The real benefits will come through in the 2015 financial year, when shareholders will enjoy the full 12-month impact of the transaction,” Growthpoint CEO Norbert Sasse said in a statement.

Securing continuity of management and expertise in the transaction, he said Growthpoint would internalise the asset management and property management business Tiber Projects.

The group had also secured an initial three-year strategic agreement with the Tiber Projects executive team, comprising Stephen Scott, Germano Cardoso and Artur Carrazedo.

At a 7.7% property yield on income-producing properties, the deal would also enhance Growthpoint’s distribution per share, based on the mix of funding it was planning to use to pay for the acquisition.

This included the bulk of the cash it raised in May last year, when it issued 90-million shares at R28 a share, thereby raising R2.5-billion in new equity.

Sasse believed the portfolio held even more upside potential in undeveloped bulk attached to the acquired properties.

“As part of the agreement, Growthpoint will enjoy continued access to Tiber Bonvec Construction’s development and construction expertise for this bulk and when exploring other development and redevelopment opportunities for its growth pipeline,” he commented.

Growthpoint was the largest South African real estate investment trust, owning 388 properties in South Africa, 49 properties in Australia and a 50% interest in the properties at V&A Waterfront, in Cape Town, Western Cape.