Growthpoint Properties has announced the formal name of its ‘funds management business’, ‘Growthpoint Investment Partners’, reflecting the REIT’s strategy to co-invest and co-manage specialist alternative real estate investment portfolios.
Groundwork for Growthpoint Investment Partners began in 2014, when the company identified internationalisation, local portfolio optimisation, trading and development, and co-investment as its core strategies. Prior to this, Growthpoint favoured sole-ownership investments in South Africa almost exclusively, and in response it created a new platform to deliver on its co-investment and co-management strategy.
It is this platform, previously labelled the ‘funds management business’, that has been rebranded as Growthpoint Investment Partners.
From a zero-base in 2018, Growthpoint Investment Partners has already topped its target R15 billion of assets under management by 2023. Now, it aims to double this within 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. It delivers one of our core strategies but has a distinctive investment model different from Growthpoint Properties’, and we wanted to reflect this in its new name”, commented Norbert Sasse, Growthpoint Group CEO.
Growthpoint Investment Partners’ investment model starts with the REIT backing each investment with an anchor stake of around 20%. Co-investors then contribute up to 80% of the capital to the opportunity with each investment having gearing of approximately 40%. The ability to scale each opportunity is a key consideration, as well as differentiating the assets from Growthpoint’s core South African portfolio in the office, retail, and industrial sectors.
Since 2018, it has launched three unlisted investments in specialist alternative real estate asset classes: African (ex. SA) income-producing commercial real estate, Growthpoint Healthcare REIT and Growthpoint Student Accommodation REIT, which the company is a cornerstone investor and plays a management role.
Through Growthpoint, the Growthpoint Investment Partners platform affords its investments REIT status. However, 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. Its new name not only reflects its significance for Growthpoint and its success in unlocking new real estate co-investment opportunities with its investment partners, but also its positive impacts and exciting prospects for considerable future growth,” says Sasse.
Growthpoint Investment Partners’ alternative real estate investments include Growthpoint Healthcare REIT, Growthpoint Student Accommodation REIT, and Lango Real Estate (formerly Growthpoint Investec African Properties).