Growthpoint Properties Limited today confirmed it would follow its rights in ASE-listed Growthpoint Properties Australia’s (GOZ) rights issue, which plans to raise up to AUD125 million in new equity to fund, in part, GOZ’s acquisition of the New South Wales Police Headquarters for R241.1 million. Growthpoint is the major securityholder in GOZ, at 64.03%.
The 1 for 9.37 renounceable rights issue is at an offer price of AUD2.40 per GOZ stapled security. This represents a 3.9% discount to GOZ’s distribution adjusted closing price on 2 June 2014 and a 1.2% discount to the distribution adjusted five-day volume weighted average price on the same date.
Growthpoint will take up its full entitlement under the rights offer, which equates to approximately AUD80 million, at an attractive F2015 distribution per share yield of 8.2%
Growthpoint Properties executive director Estienne de Klerk comments: “Our investment in GOZ remains strategic for Growthpoint in the present environment. Growthpoint’s decision to take up our full entitlement in the rights offer is in line with our objective of supporting the continued growth of GOZ and is an attractive investment opportunity that will deliver a quality return.”
Continuing GOZ’s quality portfolio growth, the New South Wales Police Headquarters in Parramatta, the primary CBD of Western Sydney, covers 31,954.1sqm of lettable area across two towers, both with large, flexible and efficient floor plates. The award-winning building is environmentally innovative and fully leased to the AAA-rated New South Wales State Government with 10 years remaining on the lease and a further five-year option.
“This is a prize acquisition for GOZ,” says de Klerk. “It is a modern high-spec building in a prime development precinct with low vacancy levels for quality offices of 0.5%. The district is earmarked for extensive government infrastructure spend over the next decade, and the building is let to a secure sovereign tenant on a long lease with fixed rental increases. It also offers a high parking ratio relative to other properties, and is near major public transport and other amenities.”
The acquisition strategically increases GOZ’s exposure to New South Wales and furthers its objective to diversify its high-quality portfolio.
GOZ’s equity raising of AUD80 to AUD125 million will partly fund the transaction. The remaining portion will come from expanded existing debt facilities.
Growthpoint is a JSE ALSI Top 40 Index company with a market capitalisation of R54.5 billion.