SA’s largest listed property company, Growthpoint Properties, has renamed its fund management business launched in 2018 and valued at over R15bn to Growthpoint Investment Partners to increase visibility in the investment market.
The company, which has already exceeded its R15bn growth target of assets under management by 2023, aims to double the value of its assets in the next five years.
“The time has come to create a formal identity for this robust partnership platform. Growthpoint Investment Partners has gained strong momentum and is successfully attracting co-investment capital,” said Norbert Sasse, Growthpoint Group CEO.
Sasse told Business Day that giving the business a formal name and separate branding of the platform reinforces Growthpoint’s focus on the capital-light strategy. It also increases the visibility of the business to investors.
Growthpoint is a JSE-listed real estate investment trust (Reit), which owns a diversified property portfolio across Africa, Australia, the UK and Eastern Europe. It also owns a 50% stake in the V&A Waterfront in Cape Town.
Since 2018, Growthpoint has launched three unlisted investments in specialist alternative real estate asset classes.
These include Lango, which has grown its assets to $601m and raised over $320m in partner funding from notable SA and international institutional investors.
Lango has 11 property assets in Ghana, Nigeria, Zambia and land holdings in Angola, and is positioned for a stock exchange listing in the medium term.
Sasse said Lango is looking at diversifying its portfolio into East Africa, starting with Kenya, which is the largest economy in the region.
Later that year, Growthpoint Healthcare Reit, with assets valued at R3.4bn, was launched. It aims to grow its assets to about R10bn for stock exchange listing and has raised over R1.3bn of co-investor funding with partners including the IFC, Kagiso Capital, Sentinel Pension Fund and Vulindlela Holdings. It has a R5bn pipeline of acquisitions and developments.
In December 2021, the company launched the R2bn Growthpoint Student Accommodation Reit, a purpose-built student accommodation portfolio offering nearly 5,000 beds. The aim is to grow assets to R12bn and list on the stock exchange within seven years.
Growthpoint Investment Partners reflects the company’s four strategic pillars, namely to co-invest and co-manage specialist alternative real estate investment portfolios where Growthpoint is both a capital partner and management partner.
“The capital-light investing has proven a defensive growth strategy in the low-growth capital-constrained South African market, and led to a co-investment approach that has quickly gained traction,” he said.
He said Growthpoint invests about 20% of its equity and leverages its skills and expertise in asset, property, facilities and development management into the business.
Co-investors contribute up to 80% of the capital to the opportunity, and investment has gearing of about 40%.
Sasse said the unlisted investments provide exposure to direct real estate that tends to be driven by long-term fundamentals rather than listed real estate volatility driven by short-term sentiment.
“The growth and scale of Growthpoint Investment Partners to date has established it as a leading investment partner in alternative real estate markets,” he said.
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