CAPE TOWN – Growthpoint Properties raised R4.3 billion yesterday via accelerated bookbuild, which will be used to strengthen its balance sheet and to pay off debt from the December 2019 acquisition of a stake in UK regional shopping centre group Capital & Counties.
Growthpoint’s share price fell 14 percent to R11.82 by midday yesterday, more or less the level it was prior to the capital raise.
It is South Africa’s largest JSE-listed Reit and is invested in real estate and communities across Africa, Australia, UK and Eastern Europe.
The share later closed at R11.49 on the JSE.
Listed commercial property groups have suffered heavily through the Covid-19 pandemic after lockdowns the world over affected the ability of tenants to pay rents, substantially reduced footfalls to retail centres and accelerated an existing trend among consumers to do their shopping online.
Growthpoint’s placement was 2.74 times oversubscribed.
The initial plan was to raise R4bn, but the figure was increased in response to strong demand for new Growthpoint shares.
“We’re extremely pleased with the success of our accelerated bookbuild,” chief executive Norbert Sasse said on Thursday.
Some 358.33 million shares were placed with existing and new institutional investors at R12 a share – the R12 represented a 6.3 percent premium to a 30-day average price of Growthpoint shares prior to the bookbuild.
The shares represented about 11.9 percent of Growthpoint’s shares, prior to the placing.
Explaining the reasons for the capital raise, Growthpoint directors said in a statement that they wished to reduce leverage and maintain a strong balance sheet due to the impact of the Covid-19 pandemic and the weak economic outlook.
They wanted the group to remain flexible at an operating level and undertake “certain development and investment activities.”
After the placing, Growthpoint’s loan-to-value would fall to 41.5 percent from 43.9 percent, with the strictest LTV covenant being 55 percent.
Growthpoint also had, as at October 31, strong existing liquidity available in the form of R5.4bn of cash and undrawn facilities.
About R1 to R1.5bn of disposals of non-core assets in the South African portfolio were planned in the current financial year, with further asset disposal opportunities under review.
BUSINESS REPORT