Growthpoint 2017

This report covers the period from 1 July 2016 to 30 June 2017 (FY17) for the financial reporting entity – Growthpoint Properties Limited. The report provides an overview of the operations and performance of all businesses, which encompass the South African businesses, including its share in the V&A Waterfront and the Healthcare Fund, as well as its non-South African interests, which include its share in Growthpoint Properties Australia (GOZ) and Globalworth Real Estate Investments (GWI). These businesses have been depicted in a simplified ownership and legal structure on page 21.


This report should be read in conjunction with:

Our year in numbers

Largest South African primary listed REIT 21st
largest company in the FTSE/JSE Top 40 Index

Market capitalisation R70.7bn

8th year
inclusion in FTSE/JSE Responsible Index

Top 10constituent of FTSE EPRA/ NAREIT Emerging Index

Investment proposition:

  • Sustainable quality of earnings
  • 14-year track record of uninterrupted dividend growth
  • Underpinned by high-quality physical property assets
  • Diversified across international geographies and sectors
  • Dynamic and proven management track record
  • Best practice corporate governance
  • Transparent reporting
  • Level 3 BEE contributor

R3.8bn
average value of shares traded per month

About this report

Interview with the
Chairman and CEO

Questions for...

FRANCOIS MARAIS
Chairman

We are derisking our South African business by GROWING CONSERVATIVE INCOME STREAMS
from Australia and Europe

NORBERT SASSE
Chief executive officer

Complete interview details

1

Optimising and streamlining the existing portfolio

Individual asset sales for the period of R4.9bn have either been sold or are held for sale. The most noteworthy transaction is the sale of Harrowdene Office Park in Woodmead to Huawei for R845.9m which we believe to be one of the country’s largest property asset sale to a foreign investor.

Additional properties, across all sectors, have since been earmarked for sale and we are in the process of formalising a process to address the optimal mechanism to facilitate this sale, which is now approximately 5% of the value of the South African portfolio.

2

Introducing new revenue streams

Funds management business

The funds management business is essentially a “capital light” strategy for Growthpoint. It follows a business model that is prevalent in Australia where many of the major listed funds have separate unlisted funds into which third parties invest. Growthpoint’s strategy is to build a R15bn funds management business over five years. Growthpoint aims to hold approximately 20% to 30% of each fund, with third parties investing approximately 40% and with each having gearing of up to 40%.

Growthpoint will earn dividends and a management fee, based on gross asset value.

3

Internationalisation

Our three to five-year strategy is to double the 15.2% non-SA contribution to distributable income that we achieved in FY17. In line with this, offshore now represents 16.8% of FY17 distributable income and 30% of the property portfolio by value. For FY17 we invested R1.6bn into GOZ through the DRIP process and by underwriting the GPT Metro office transaction. Also, we invested R2.7bn into GWI. We continue to look for other opportunities and will support the further growth of GOZ and GWI.


Driving our strategy

Growthpoint’s vision is “to be a leading international property company providing space to thrive.

Of Growthpoint’s strategic initiatives, internationalisation was by far the largest priority during the year, and the company made good progress in this area.



Complete strategy details


Our Growthpoint story


1987

November

Listing as public company under the “Financial – real estate” sector of the JSE – with 17 properties valued at R90.1m.

2001

September

Mine Pension Funds (MPF) reverse their listed property assets into Growthpoint for a total purchase of R1.5bn.

2006

February

Growthpoint announces another “first” for the property industry by securing a R500m seven-year loan facility from Old Mutual Specialised Finance making substantial savings in the interest rates.

2010

December

First issue of long-term Corporate Bond – R500m.

2016

December

Acquired 26.9% of AIM listed Globalworth Real Estate Investments (GWl) for EUR186.4m.