SOUTHERN Palace Properties, a wholly owned subsidiary of black-owned and managed diversified industrial holding company Southern Palace Group, has acquired a 7.95 percent stake in listed real estate investment trust Growthpoint Properties for about R4.5 billion.
The stake was acquired from the Government Employees Pension Fund (GEPF) through its asset manager, the Public Investment Corporation (PIC).
Daniel Matjila, the chief investment officer at the PIC, said the corporation had through this transaction been able to rebalance its property portfolio, which was its stated intention, while at the same time facilitating a transformational transaction in the property industry, which was an important part of its mandate.
The transaction makes Southern Palace the largest non-institutional shareholder in Growthpoint and the largest shareholder after the GEPF. The pension fund for civil servants still has a 10.96 percent shareholding in Growthpoint.
Growthpoint and the PIC have strong links through their joint acquisition in 2011 of Cape Town’s Victoria & Alfred Waterfront from the Emirati investment firm Dubai World and several local empowerment investors for R9.7bn in South Africa’s biggest single property transaction.
Lucas Tseki, the chief executive of the Southern Palace Group, which has interests in many well-established businesses, said yesterday that the group was very pleased to have concluded this landmark transaction, which was the first of its kind in the property sector for an independent, black-owned and managed investment holding company.
“Growthpoint is a leading player in the South African property sector and we hope this transaction will open the door for other such transformational deals,” he said.
Southern Palace Group has a presence in the steel products manufacturing, automotive, logistics and telecommunications industries through its stakes in Scaw Metals, MAN Truck and Bus Centurion, Altech Fleetcall, Altech Alcom-Matomo, Altech Motorola Radio Distribution, Canvas and Tent Manufacturing and Huawei Technologies Africa.
Norbert Sasse, the chief executive of Growthpoint, said the company was excited to welcome Southern Palace as a new empowerment shareholder, whose investment would have a positive impact on Growthpoint’s black empowerment credentials.
“In addition, we are confident that working closely with Southern Palace will open up new investment and growth opportunities for us,” he said.
The transaction was structured and arranged by Symphony Capital, the advisers to Southern Palace. It is being funded equally by Standard Bank and Bank of America Merrill Lynch.