Johannesburg - Growthpoint Properties, which already has a major investment in Australia, is exploring investments in alternative markets.
But Norbert Sasse, the chief executive of the listed property fund, said yesterday that there was nothing that was “hard and fast” or where it was in final negotiations at the moment.
“We have got our eyes and ears open for opportunities outside South Africa. That would include Africa and Europe,” he said.
Sasse stressed any further investments Growthpoint made outside South Africa would be “totally opportunity driven”.
It did not have a strategy or a target to have a certain percentage of its distributable income coming from offshore investments by a certain future date. Sasse said the weighted average renewal growth rate on leases that expired in a given year was still positive at 4.1 percent and the weighted average future escalations on renewals was still healthy at 8.3 percent.
The South African office portfolio maintained vacancies at 8 percent, but renewal success rate declined to 62 percent.
Sasse said given the weakness of the office market, Growthpoint did not achieve a bad result. However, Sasse still believes that through this cycle there could be a reporting period with negative renewal growth.
“Vacancies are definitely still going to continue to be under pressure, especially when all the new stuff (offices) under construction comes on to the market,” he said.
The legal and accounting fraternity was responsible for the new building boom in Sandton, but consolidation of offices by big corporates was still a trend.
He said the weighted average length of Growthpoint’s South African lease book was shorter than four years “and getting shorter by the month”.
“Everybody is sitting on the fence. Corporates in South Africa, whether they be South African corporates or multinationals, are not taking 10 year and 15 year views (leases). They are taking three and five year views,” he said.
Growthpoint yesterday reported a 7.5 percent growth in distributions to 173.4c in the year to June from 161.3c in the previous year.
Including the R1 billion paid to investors in Growthpoint five months early as part of its R18.6bn acquisition of Acucap Properties and Sycom Property Fund, Growthpoint’s annual distributions to shareholders exceeded R4bn for the first time this year.
Sasse said that if this early payment was taken into account, it would have added a further 1.3c to the distribution and increased the growth in distributions for the year to 8.4 percent.
Growthpoint increased its asset value above R100bn, grew net property income by 21.4 percent to R6.1bn on the back of acquisitions and delivered a 14 percent total return to investors.
Shares in Growthpoint fell 1.63 percent on the JSE yesterday to close at R25.33.
BUSINESS REPORT