JOHANNESBURG - Growthpoint Properties has launched South Africa’s first unlisted healthcare real estate investment trust (Reit), Growthpoint Healthcare Property Holdings.
The group said yesterday that the introduction of Growthpoint Healthcare received strong market interest, with its first close attracting capital commitments of R285 million from third parties.
It said it expected to raise at least double that amount in the next 12 months.
Growthpoint Healthcare will be managed by Growthpoint Management Services and it aims to increase Growthpoint Healthcare’s scale for investors and grow it towards R10 billion in assets and a stock exchange listing.
Growthpoint head of corporate finance George Muchanya said the group provided R2.1bn to acquire Growthpoint Healthcare’s starting portfolio.
Muchanya said a portion of the portfolio had been converted into equity, leaving Growthpoint as the anchor investor with an equity investment to R650m on the first close date.
He said the remaining R1.4bn loan to Growthpoint Healthcare would be settled over time as the company continued raised further capital, adding that Growthpoint would remain a key strategic investor in the new business.
“Growthpoint Healthcare is playing a leading role in promoting the growth of the healthcare sector by providing the capital that emerging operators and other new entrants to the sector require to establish themselves. It is often estimated that up to 70 percent of the capital required to start a new healthcare facility is spent on the property,” Muchanya said.
Growthpoint is the largest South African primary listed Reit and owns and manages a diversified portfolio of 559 property assets, including 463 properties across South Africa valued at R80.1bn.
The group invested R1.1bn in retail, office and industrial developments in South Africa in the six month to December and has R2.25bn in capital expenditure commitments to a number of developments that will be completed between now and September next year.
It also made property acquisitions to the total value of R1.1bn in the six months to December, the largest of which was the acquisition of the remaining 58 percent in the N1 City Mall in Cape Town for R922.1m.
It also sold 10 properties for a total of R478.6m in this period. Growthpoint Healthcare already holds five assets in the defensive healthcare property sector valued at R2.4bn.
The portfolio has a weighted average lease length of about nine years, reflecting the defensive nature of investing in healthcare real estate.
Two of its healthcare properties are operated by private healthcare provider Busamed, and one each by JSE-listed healthcare players MediClinic and Netcare.
Growthpoint chief executive Norbert Sasses said the group’s strategy has successfully attracted third-party capital.
“We look forward to the positive contributions both from management fees and property returns that this will introduce for Growthpoint’s investors as well as the additional new possibilities it represents for our property incomes streams,” Sasses said.
Growthpoint Properties shares rose 0.41 percent on the JSE yesterday to close at R26.81.