Growthpoint: R7.5bn purchases to improve quality

The proposed acquisition by Growthpoint Properties of the Abseq Properties and Tiber Property Group portfolios for a total of R7.5 billion would enhance the quality of the listed property group’s future cash flows, Moody’s Investors Service said yesterday. The credit ratings agency said the acquisitions, if successful, would not have any impact on Growthpoint’s ratings because the benefits of its increased portfolio size and good asset quality would be offset by the higher leverage for Growthpoint, as measured by adjusted debt to gross assets ratio of 33 percent in June. The acquisitions were positive for Growthpoint because, if they went ahead, it would increase its portfolio size by 12.5 percent and improve the overall quality of its property assets. Shares fell 1.80 percent to R24.55. – Roy Cokayne