Growthpoint launches depository receipt programme
JSE-listed property company Growthpoint Properties on Monday launched an American depository receipt (ADR) programme aimed at increasing its foreign shareholding percentage to enhance the diversification of its shareholder base.
The Growthpoint ADR programme would trade on the over-the-counter market in the US through a programme sponsored by global investment company BNY Mellon, with each Growthpoint depository receipt (DR) representing two ordinary shares.
Growthpoint is the thirty-fourth company out of the JSE’s top 40 to launch a DR programme.
“The US market is constantly looking for investment opportunities, so we want to make the investment in Growthpoint as accessible as possible,” Growthpoint executive director Estienne de Klerk said, adding that some of Growthpoint’s existing shareholders had also requested a DR programme.
“A DR programme is a relatively low-cost way to develop name recognition and attract more attention among the US financial community. An important additional benefit is increasing liquidity in our shares,” De Klerk said.
Meanwhile, the company noted that international acceptance of the real estate investment trust (REIT) structure was also to Growthpoint’s advantage.
“Now that our REIT status is in place, we want to leverage this status to enhance our ability to access capital, as we are a capital-intensive business. The REIT structure will put South Africa on the map as a choice for REIT investors and specifically REIT indices.
“Global REIT indices represent general trends in real estate equities worldwide, where real estate activities represent the ownership, disposal and development of income-producing real estate. It also allows small investors to obtain exposure to large commercial property,” De Klerk said.
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