Growthpoint in R6.6bn prime property deal

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Johannesburg - Growthpoint Properties and Tiber Group announced on Monday that Growthpoint [JSE:GRT] will acquire the entire Tiber Group portfolio of properties and management business.

The R6.6bn transaction, Growthpoint’s largest single acquisition to date, will see it gaining one of the most exclusive property portfolios in South Africa.

The portfolio developed under the vision of the late Francesco Rivera spans 320 000m² of mainly P- and A-grade office space concentrated in Sandton and its surrounds.

It includes multiple multinational head offices such as Nestlé, PPC, AngloGold Ashanti, Norton Rose, Merrill Lynch, Barclays and Absa Capital.

It comprises 28 prime properties and a 50% stake in a further 9 properties. It also incorporates 48 000m² of undeveloped bulk.

Securing continuity of management and expertise in the transaction, Growthpoint will internalise the asset management and property management business from Tiber Projects, gaining the skills of 55 full-time employees.

Growthpoint has also secured an initial three-year strategic agreement with the Tiber Projects executive team of Stephen Scott, Germano Cardoso and Artur Carrazedo.

For Growthpoint, the transaction is a significant boost to its office portfolio and enhances its underlying income streams.

The acquisition lengthens Growthpoint’s average office lease length and, with a 95% occupancy rate, improves its overall office vacancy levels.

It will also make Growthpoint the country’s biggest office property owner, with a portfolio of 1.5 million square metres of office space across SA, valued at nearly R25bn.

Norbert Sasse, CEO of Growthpoint Properties said "a portfolio of this quality and size, centred in arguably the best investment property location in South Africa, is a once-in-a-lifetime opportunity and beneficial for Growthpoint’s shareholders".

For Tiber, the transaction meets two important goals: creating liquidity for Tiber shareholders and unlocking the next phase of its business.

Tiber’s Stephen Scott said Tiber considered several alternatives and ultimately Growthpoint enabled it to realise an enhanced value for its shareholders.

The acquisition will become effective when the portfolio transfers, which should be in the first quarter of 2014.

The portfolio holds even more upside potential in undeveloped bulk attached to the acquired properties.

As part of the agreement, Growthpoint will enjoy continued access to Tiber Bonvec Construction’s development and construction expertise for this bulk and when exploring other development and redevelopment opportunities for its growth pipeline.

Growthpoint is the largest South African REIT and a JSE ALSI Top 40 Index company.

It owns and manages 393 properties in South Africa, 47 properties in Australia through its investment in GOZ and a 50% interest in the properties at V&A Waterfront, Cape Town.

The transaction is conditional on competition authorities' approval and the adoption of certain resolutions by the respective sellers.

- Fin24

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