Growthpoint Properties, a bellwether of SA’s commercial real-estate market, has proposed a R250m broad-based black economic empowerment (BEE) ownership scheme to help fund initiatives focused on education, entrepreneurship and enterprise development.
The proposed transaction would see Growthpoint allocate shares to a special-purpose corporate social investment (CSI) trust, which would use dividends from its Growthpoint shares to fund the initiatives.
These initiatives will be done through Property Point, which delivers programmes that support growing, small, black businesses in the property sector and education projects such as Growsmart, which assists primary-school learners in the Western and Eastern Cape.
"The proposed Growthpoint CSI Trust would become a valuable source of perpetual funding for our social impact projects. It would also enhance our broad-based BEE credentials by helping to achieve our equity ownership targets in line with the Property Sector Code," said Shawn Theunissen, head of transformation and corporate social responsibility at the property group.
With an asset base of more than R160bn spread across the main office, retail and industrial sectors, Growthpoint is SA’s largest real-estate investment trust, followed closely by Redefine Properties.
The proposed transaction is the latest among many Growthpoint has concluded since starting its transformation journey in 2005.
"The proposed transaction aligns with Growthpoint’s long-term vision of a more empowered SA society and economy in a way that continues to benefit the communities where we are invested, our employees and their families. Through our CSI initiatives, we strive to make a meaningful and sustainable impact on the lives of people by ensuring material improvement in their conditions,” Theunissen said.
Its shareholders will consider the proposal during an extraordinary general meeting on July 19. This will include entering into a loan agreement with Growthpoint CSI Trust to enable it to acquire R250m of Growthpoint ordinary shares, valued at a share price of R12.50.
The Growthpoint CSI Trust has been structured to comply with both the broad-based BEE Act and the requirements for a public benefit organsation.
“Our proposed B-BBEE deal shows Growthpoint’s commitment to providing space to thrive in environmentally sustainable buildings while improving individuals’ and communities’ social and material well-being,” Growthpoint Properties SA CEO Estienne de Klerk said.
“We believe, with the necessary approvals, this transaction will be a notable milestone on our transformation and environmental, social and governance (ESG) journey, as we continue our long-standing track record of fostering an equitable, diverse and inclusive organisation, industry, society and economy.”
Its shares were down nearly 2% to R12.41 on the JSE in early afternoon trade on the JSE, giving Growthpoint a market value of R42.5bn.
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