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GRT
GRT
GRT - Growthpoint Properties Limited - Audited results for the year
ended 30 June 2010
Growthpoint Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/004988/06)
Share code GRT
ISIN ZAE000037669
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2010
Highlights of the year
"28.4% return to investors for the year (9.0% income yield and
19.4% capital growth)"
- 5.8% distribution growth to 121,2 cents per linked unit
- Investment (76.2%) in Australian property trust - R1,3 billion
- Oversubscribed vendor placement raises R1,3 billion
- Innovative distribution reinvestment option retains R540 million
- Favourable Moody`s rating
- Launch of R5 billion Domestic Medium Term Note Programme
Statement of Comprehensive Income
30 June 30 June
2010 2009
Note Rm Rm
Revenue, excluding straight-line 3 956 3 211
lease income adjustment
Straight line lease income 250 219
adjustment
Revenue 4 206 3 430
Property expenses (915) (759)
Net property income 3 291 2 671
Other operating expenses (101) (75)
Net property income after other 3 190 2 596
operating expenses
Investment income - 1
Operating profit 3 190 2 597
Fair value adjustments 1 (182) (143)
Finance costs (1 157) (921)
Non-cash items 2 67 (140)
Capital items 3 (30) (35)
Finance income 128 162
Profit before debenture interest 2 016 1 520
Debenture interest (1 874) (1 612)
Profit/(loss) before taxation 142 (92)
Taxation (36) 23
- normal taxation (2) (5)
- deferred taxation credit 28 28
- deferred taxation charge (75)
- capital gains taxation 13 -
Profit/(loss) for the year 106 (69)
Profit/(loss) attributable to:
Equity holders 38 (69)
Non-controlling interest 68 -
Other comprehensive income:
Foreign currency translation loss (8) -
Total comprehensive income 98 (69)
Equity holders 32 (69)
Non-controlling interest 66 -
Calculation of distributable
earnings
Net property income after operating 3 190 2 596
expenses
Less: straight-line lease income (250) (219)
adjustment
Investment income - 1
Finance costs (1 157) (921)
Finance income 128 162
Non-controlling interest share of (36) -
profit
Pre-acquisition profit 3 -
Taxation (2) (5)
Distributable earnings 1 876 1 614
Total distribution (1 876) (1 614)
- Debenture interest (1 874) (1 612)
- Ordinary dividend (2) (2)
Linked units Linked units
Linked units in issue at the end of 1 547 521 924 1 409 018 815
the year
Weighted number of linked units in 1 547 521 924 1 409 018 815
issue
cents cents
Distribution per linked unit 121,20 114,60
Six months ended 31 December 59,10 56,30
Six months ended 30 June 62,10 58,30
Basic earnings/(loss) per share 4 6,85 (4,90)
Headline earnings per linked unit 5 100,12 45,26
Rm Rm
Note 1:
Fair value adjustments (182) (143)
Gross investment property fair value adjustment 865 189
Less: straight-line lease income adjustment (250) (219)
Net investment property fair value adjustment 615 (30)
Listed property investments 1 1
Borrowings and derivatives (492) (1 442)
Foreign exchange profit 18 -
Long-term loans granted to BEE consortia 54 35
Zero-coupon loans - profit 14 -
Debentures (392) 1 293
Debenture are adjusted to fair value which
represents the net asset value attributable to
Growthpoint`s debenture holders, excluding the
intangible assets.
The debentures fair value adjustment consists of:
Fair value adjustments on other assets and (210) 1 436
liabilities excluding fair value adjustment on
debentures
Straight-line lease income adjustment (250) (219)
Non-controlling interest`s portion of fair value 35 -
adjustments
Capital gains taxation (13) -
Deferred taxation - GOZ 75
Non-cash financing charge 20 20
Fair value adjustment on GOZ (95) -
Decrease in other long-term employee benefits 16 21
Capital items 30 35
Debenture fair value adjustment (392) 1 293
Note 2:
Non-cash items 67 (140)
Non-cash financing charge (20) (20)
Amortisation of intangible asset (99) (99)
Negative goodwill 202 -
Decrease in other long-term employee benefits (16) (21)
Note 3:
Capital items
In terms of IFRS 3, Business Combinations, R41 million of
transaction costs relating to the acquisition of GOZ were expensed.
Furthermore, R10 million of proceeds from an insurance claim was
received, as well as R1 million on the sale of residential units.
The above costs and proceeds are disclosed as capital items and do
not affect distributable earnings.
Note 4:
The directors are of the view that the disclosure of earnings per
share, while obligatory in terms of IAS 33, Earnings per Share, and
the JSE listing requirements, is not meaningful to investors as the
shares are traded as part of a linked unit and practically all the
revenue earnings are distributed in the form of debenture interest
plus dividends in the ratio of 1 000 to 1. In addition, headline
earnings include profit on the sale of listed property investments,
fair value adjustments on listed property investments, fair value
adjustments on interest-bearing and zero-coupon borrowings and
debentures, as well as non-cash charges, which do not affect
distributable earnings. The calculation of distributable earnings
as set out above is more meaningful to investors and is in
accordance with Growthpoint`s reporting policy.
Note 5:
In terms of Circular 3/2009, issued by SAICA, both the fair value
adjustment on investment property and debentures are added back in
the calculation of headline earnings per linked unit. The Circular
does not make provision for the fair value adjustment on other non-
current financial liabilities to be added back.
Rm Rm
Basic earnings/(loss) are reconciled to headline
earnings as follows:
Profit/(loss) after taxation 106 (69)
Negative goodwill (202) -
Add back: net fair value adjustment - investment (526) 26
property
- Fair value adjustment (615) 30
- Applicable taxation 89 (4)
Less: profit attributable to non-controlling (39) -
interest
Headline loss attributable to shareholders (661) (43)
Add back: net fair value adjustment - debentures 336 (931)
- Fair value adjustment 467 (1 293)
- Applicable taxation (131) 362
Add back: debenture interest paid 1 874 1 612
Headline earnings attributable to linked 1 549 638
unitholders
Statement of Financial Position
30 June 30 June
2010 2009
Note Rm Rm
ASSETS
Non-current assets 36 398 30 991
Fair value of investment property for 32 903 27 582
accounting purposes
Straight line lease income adjustment 1 305 1 055
Fair value of long-term property assets 34 208 28 637
Intangible assets 1 634 1 733
Other long-term employee benefits 29 47
Equipment 3 2
Listed property investments - 10
Long-term loans granted to BEE consortia 491 396
Derivative assets 33 166
Current assets 1 293 1 374
Investment property reclassified as held 691 596
for sale
Trade and other receivables 292 281
Cash and cash equivalents 310 497
Total assets 37 691 32 365
EQUITY AND LIABILITIES
Shareholders` interest 1 550 1 436
Ordinary share capital 77 70
Foreign currency translation reserve (6) -
Non-distributable reserve 1 479 1 366
Non-current liabilities - debentures 6 20 795 18 641
Linked unitholders` interest 22 345 20 077
Non-controlling interest 496 -
Total unitholders` interest 22 841 20 077
Other non-current liabilities 10 338 9 174
Other non-current financial liabilities 9 932 8 815
Deferred tax liability 406 359
Current liabilities 4 512 3 114
Trade and other payables 821 615
Current portion of other non-current 2 705 1 673
liabilities
Taxation payable 2 3
Linked unitholders for interest and 984 823
dividends
Total equity and liabilities 37 691 32 365
Net asset value per linked unit (cents) 1444 1425
Tangible net asset value per linked unit 1365 1327
(cents)
Note 6:
Non-current liabilities - debentures
Fair value at the beginning of the year 18 641 18 283
Issued during the year 1 762 1 651
Fair value adjustment (Note 1) 392 (1 293)
Fair value at the end of the year 20 795 18 641
Statement of Cash Flows
30 June 30 June
2010 2009
Rm Rm
Cash flow generated from operations 3 048 2 416
Investment income - 1
Net finance costs (1 109) (780)
Taxation received/(paid) 10 (7)
Capital items (30) (35)
Distribution to unitholders (1 715) (1 502)
Net cash inflow from operating activities 204 93
Net cash outflow from investing activities (1 741) (1 767)
Net cash inflow from financing activities 1 352 2 144
Translation effects on cash and cash equivalents (2) -
of foreign operation
Net (decrease)/increase in cash and cash (187) 470
equivalents
Cash and cash equivalents at beginning of the 497 27
year
Cash and cash equivalents at end of the year 310 497
Statement of Changes in Equity
Non- Foreign
distri- currency
Ordinary butable translation
share reserve reserve Retained
capital (NDR) (FCTR) earnings
Rm Rm Rm Rm
Audited balance at 30 June 2008 64 1 437 - -
Shares issued 6 - - -
Loss for the year - - - (69)
Transfer amortisation net of - (71) - 71
deferred taxation to NDR
Dividends declared - - - (2)
Audited balance at30 June 2009 70 1 366 - -
Shares issued 7 - - -
Total comprehensive income - - (6) 38
Transfer amortisation net of - (71) - 71
deferred taxation to NDR
Transfer negative goodwill to - 202 - (202)
NDR
Business acquisition - GOZ - - - 77
Transfer NDR reserves with NCI - 77 - (77)
Transfer fair value adjustment - (95) - 95
on GOZ to NDR
Dividends declared - NCI - - - -
Dividends declared - - - (2)
Balance at 30 June 2010 77 1 479 (6) -
Share- Non-
holders` controlling Total
interest interest equity
Rm Rm Rm
Audited balance at 30 June 2008 1 501 - 1 501
Shares issued 6 - 6
Loss for the year (69) - (69)
Transfer amortisation net of - - -
deferred taxation to NDR
Dividends declared (2) - (2)
Audited balance at30 June 2009 1 436 - 1 436
Shares issued 7 - 7
Total comprehensive income 32 66 98
Transfer amortisation net of - - -
deferred taxation to NDR
Transfer negative goodwill to - - -
NDR
Business acquisition - GOZ 77 466 543
Transfer NDR reserves with NCI - - -
Transfer fair value adjustment - - -
on GOZ to NDR
Dividends declared - NCI - (36) (36)
Dividends declared (2) - (2)
Balance at 30 June 2010 1 550 496 2 046
Segmental Analysis
South Africa
Retail Office Industrial Australia Total
Rm Rm Rm Rm Rm
STATEMENT OF
COMPREHENSIVE INCOME
EXTRACTS
Year ended 30 June 2010
Revenue, excluding 1 258 1 442 838 418 3 956
straight-line lease
income adjustment
Property expenses (337) (321) (209) (48) (915)
Segment result 921 1 121 629 370 3 041
Fair value adjustment:
- investment property 359 449 (108) 126 826
- investment property - - - - 39 39
non-controlling interest
Total fair value
adjustment
on investment property 359 449 (108) 165 865
South Africa Australia Total
Rm Rm Rm
Further extracts of comprehensive income
Other property expenses 79 22 101
Finance costs 954 203 1 157
South Africa
Retail Office Industrial Australia Total
Rm Rm Rm Rm Rm
Year ended 30 June
2009
Revenue, excluding 1 144 1 315 752 - 3 211
straight-line lease
income adjustment
Property expenses (289) (304) (166) - (759)
Segment result 855 1 011 586 - 2 452
Fair value
adjustment:
- investment property 210 (73) 52 - 189
South Africa
Retail Office Industrial Australia Total
Rm Rm Rm Rm Rm
STATEMENT OF
FINANCIALPOSITION
EXTRACTS
At 30 June 2010
- Investment property
Opening balance - 10 152 12 399 6 682 - 29 233
30 June 2009
Acquisitions - - - - 4 272 4 272
Australia
Acquisitions - 102 11 50 467 630
Other
Developments and 202 284 103 14 603
capital expenditure
Disposals (146) (457) (60) - (663)
Foreign exchange - - - (41) (41)
loss
Fair value 359 449 (108) 165 865
adjustment
- Long-term 359 339 (108) 165 755
property assets
- Reclassified as - 110 - - 110
held for sale
Fair value of 10 669 12 686 6 667 4 877 34 899
property assets- 30
June 2010
- Fair value of long- 10 669 12 124 6 600 4 815 34 208
term property assets
- Investment property - 562 67 62 691
reclassified as held
for sale
South Africa Australia Total
Rm Rm Rm
Further extracts of financial
position
Trade and other receivables 273 19 292
Cash and cash equivalents 202 108 310
Trade and other payables (782) (39) (821)
Interest-bearing liabilities (9 846) (2 791) (12 637)
- Nominal value - interest-bearing (9 191) (2 730) (11 921)
liabilities
- Fair value adjustment (655) (61) (716)
South Africa
Retail Office Industrial Australia Total
Rm Rm Rm Rm Rm
At 30 June 2009
- Investment property
Opening balance- 9 692 11 423 6 172 - 27 287
30 June 2008
Acquisitions 10 195 190 - 395
Developments and 241 1 001 303 - 1 545
capital expenditure
Disposals - (149) (34) - (183)
Fair value 209 (71) 51 - 189
adjustment
Fair value of 10 152 12 399 6 682 - 29 233
property assets - 30
June 2009
- Fair value of long- 10 152 11 803 6 682 - 28 637
term property assets
- Investment - 596 - - 596
propertyreclassified
as held for sale
Commentary
INTRODUCTION
Growthpoint is the largest South African listed property company
with a quality portfolio of 431 properties in South Africa valued
at R30,0 billion and 25 properties in Australia, valued at R4,9
billion.
The company`s objective is to provide investors with a highly
liquid, tradable instrument delivering consistently growing income
returns and real capital appreciation over the long term.
Effectively, all rental income received by the company, less
operating costs and interest on debt, is distributed to unitholders
semi-annually, so that the company is very similar to the Real
Estate Investment Trust (REIT) models that are well established
internationally. Growthpoint`s distributions are based on
sustainable income generated from rentals. The company does not
distribute capital profits.
Growthpoint is included in the JSE ALSI Top 40 Companies Index,
having a market capitalisation of R24 billion at 30 June 2010. Over
the last year, on average more than 67 million linked units traded
per month (2009: 63 million). The monthly average value traded was
more than R950 million (2009: R875 million).
In terms of gross lettable area (GLA), the South African portfolio
amounts to 4 469 174mSquared and the Australian portfolio to 731
834mSquared. The South African portfolio represents 86% of the
total portfolio, by value and GLA, and is well diversified in the
three major sectors of commercial property, being retail, office
and industrial. The bulk of the value of the South African
properties is situated in the major metropolitan areas in strong
economic nodes.
HIGHLIGHTS OF THE YEAR
Investment in Australian Property Trust
On 30 July 2009, Growthpoint acquired 50.1% of the units in
Australia`s Orchard Industrial Property Fund (OIF) for a cash
consideration of AUD56 million.
In September 2009 Growthpoint paid a further AUD139 million and
acquired an additional 26.1% share in OIF in terms of a rights
offer. This investment was made by way of the utilisation of a
local financial institution`s foreign investment allowance.
OIF was renamed Growthpoint Properties Australia and trades on the
Australian Stock Exchange under the share code "GOZ". GOZ has its
own management team in Australia who report to the Australian board
of directors. The investment mandate has also been expanded to
include the holding of office and retail properties as well as
industrial properties.
GOZ had a market capitalisation of approximately AUD287 million at
30 June 2010. It is management`s goal to grow the fund to a market
capitalisation of over AUD1 billion. Growthpoint will reduce its
shareholding over time, which together with the proposed increased
market capitalisation should improve the tradability and liquidity
of the listed units.
The GOZ portfolio consists mainly of high quality distribution and
logistic warehouses rented on long leases to blue chip tenants,
which are well located in the major metropolitan areas of
Australia. Australia`s premier retailers, Woolworths and Coles, as
well as Star Trek Express, a freight express company jointly owned
by Qantas and Australian Post Office, account for 74% of the net
property income. The weighted average lease expiry (WALE) is 10
years with average rent escalations of 3% in Australian currency.
Taking into account expected Rand depreciation against the
Australian dollar over the long term this should provide
sustainable, growing income streams to Growthpoint, together with
capital appreciation on the investment in GOZ. The diversification
should also improve Growthpoint`s overall risk profile.
For the year ended 30 June 2010, the acquisition of GOZ has been
slightly enhancing and increased distributions for the year by
approximately 1,4 cents per linked unit.
Vendor placement
The total GOZ acquisition cost of R1,3 billion was paid for from
the proceeds of a vendor placement of new Growthpoint linked units
issued in September 2009 at R13,09 per linked unit. Strong demand
from investors saw the issue being well over-subscribed.
Distribution re-investment
In another innovation in the South African listed property sector,
Growthpoint offered linked unitholders the right to re-invest the
2009 final distribution in new Growthpoint linked units at R12,90
per linked unit in September 2009. Over 65% of linked unitholders
elected to re-invest a total of R540 million.
Moody`s rating
In November 2009 Moody Investment Services assigned Growthpoint
global long-term and short-term Issuer Ratings of Baa2 and P2
respectively, and long-term and short-term South African National
Scale Ratings (NSR) of A1.za and P1.za respectively. These
favourable investment grade ratings allow Growthpoint direct access
to the debt capital markets and enabled Growthpoint to launch a R5
billion Domestic Medium Term Note Programme (DMTN). In November
2009, Growthpoint became the first South African listed property
company to access the relatively cheaper funding available in the
short-term commercial paper market. Growthpoint`s good credit
profile has seen strong demand from capital market investors, with
large over-subscription for the initial issue in November 2009, as
well as each of the three quarterly roll-overs (up to 12 August
2010). The margin that Growthpoint pays on three-month paper has
also reduced from 56 basis points in November 2009, to 39 basis
points in August 2010.
FINANCIAL RESULTS
The large increases in revenue and expenses for the year and the
large changes in the statement of financial position are mainly due
to the inclusion of the results of GOZ for the first time.
BASIS OF ACCOUNTING
The financial statements are considered preliminary based on the
JSE listing requirements and are summarised from a complete set of
the group annual financial statements on which the auditors, KPMG
Inc., have expressed an unmodified audit opinion which is available
for inspection at the registered office.
These summarised financial statements have been prepared in
accordance with the measurement and recognition criteria of
International Financial Reporting Standards (IFRS), and the AC 500
series issued by the South African Institute of Chartered
Accountants, and have been prepared in accordance with the
presentation and disclosure requirements of IAS 34, Interim
Financial Reporting, and the Companies Act of South Africa.
With the exception of the implementation of the new and revised
accounting standards noted below, the company`s accounting policies
as set out in the audited financial statements for the year ended
30 June 2009 have been consistently applied.
The company has implemented the revised IAS 1, Presentation of
Financial Statements, and IFRS 8, Operating Segments. The changes
to both standards are of a presentation and disclosure nature only.
Comparative information has been re-presented to conform to the
revised standards.
The company adopted the revised versions of IFRS 3, Business
Combinations, and IAS 27, Consolidated and Separate Financial
Statements. The adoptions of these revised standards were applied
prospectively.
Investment property comprises land and buildings held to generate
rental income over the long term. Should any properties no longer
meet the company`s investment criteria and be sold, any profits or
losses will be of a capital nature and will be taxed at rates
applicable to capital gains. Deferred taxation on the revaluation
of investment property is off-set against the deferred taxation
asset that arises on the revaluation of the company`s issued
debentures (excluding deferred taxation on intangible assets).
ACCOUNTING FOR THE INVESTMENT IN GOZ
In terms of IAS 21, The Effects of Changes in Foreign Exchange
Rates, the consolidated statement of financial position includes
100% of the assets and liabilities of GOZ, converted at the closing
exchange rate at 30 June 2010 of R6,44:AUD. The consolidated
statement of comprehensive income also includes 100% of the revenue
and expenses of GOZ, which was translated at an average exchange
rate of R6,71:AUD for the period. The resulting foreign currency
translation difference is recognised in other comprehensive income.
A non-controlling interest was raised for the 23.8% not owned by
Growthpoint.
In terms of the initial acquisition, Growthpoint acquired 50.1% of
GOZ.
The estimated fair value of the assets and liabilities of OIF
acquired in the initial acquisition on 30 July 2009 were as
follows:
Rm
AUD`000 (at R6,46/AUD)
Investment property 642,6 4 148,0
Trade and other receivables 20,7 133,6
Cash and cash equivalents 7,5 48,4
Trade and other payables (30,1) (194,3)
Derivatives (16,7) (107,8)
Interest-bearing borrowings (450,5) (2 908,0)
Net asset value 173,5 1119,9
Non-controlling interest 86,6 559,0
50.1% of net asset value obtained 86,9 560,9
Consideration 55,6 358,9
Net asset value exceeding consideration 31,3 202,0
(Negative goodwill)
After the above transaction was concluded, Growthpoint acquired an
additional 26.1% in terms of a rights offer, resulting in a
decrease in the non-controlling interest.
REVENUE
Apart from contractual rental escalations, the increase in gross
revenue (23.2%) and property expenses (20.6%) was mainly due to the
acquisition of GOZ. On a "like-for-like" basis, net property income
increased by 7.4%.
FAIR VALUE ADJUSTMENTS
The revaluation of properties resulted in an upward revaluation on
South African properties of R662 million (2.2%) to R30,0 billion
for investment property (including investment properties
reclassified as held for sale). On the Australian portfolio, an
upward revaluation of R166 million (3.5%) was made, bringing the
value to R4,9 billion.
NON-CASH ITEMS
The acquisition of GOZ was made at a discount to the fair value of
the net assets acquired. The resulting R202 million negative
goodwill was shown as income in the current period. This is an
accounting entry that does not affect cash flow or distributable
income.
The acquisition of the Property Services Businesses from the
Investec Group in the 2008 year gave rise to a R1,5 billion
intangible asset as well as R448 million of goodwill on initial
recognition. In terms of accounting standards, the intangible asset
is amortised over a 15 year period.
The staff incentive scheme put in place as part of the management
"buy-in" transaction concluded in the 2008 year has given rise to a
plan asset, which is reflected on the statement of financial
position net of the plan liability. The net decrease in the staff
incentive scheme liability and the fair valuation of the plan asset
amounting to R16 million are book entries that do not affect cash
flow or distributable income.
ARREARS
At the end of June 2010, arrears for South Africa amounted to R36,3
million (June 2009: R36,4 million) and a provision of R14,9 million
(June 2009: R17,6 million) has been raised for potential bad debts.
The total bad debts expense amounted to R12,5 million for the year
(June 2009: R17,0 million).
VACANCY LEVELS
At 30 June 2010 Growthpoint`s vacancy levels in South Africa, as a
percentage of gross lettable area (GLA), were:
Retail 2.7% (June 2009: 3.2%)
Office 9.0% (June 2009: 8.9%)
Industrial 6.7% (June 2009: 4.4%)
Total 6.4% (June 2009: 5.4%)
The industrial sector was worst affected by the poor economic
conditions experienced over the last year. Since the first quarter
of 2010 conditions appear to have stabilised and started slowly
improving. It is expected that this will see a slow but steady
improvement in occupancy levels in the office and industrial
sectors in the next year. There were no vacancies in the Australian
portfolio.
ACQUISITIONS AND DEVELOPMENTS
In December 2009, GOZ acquired a distribution centre in Goulburn,
at a forward yield of 9.9%. The acquisition was funded from
existing syndicated debt facilities provided by financial
institutions for AU$65,5 million (R422 million). In South Africa,
Growthpoint acquired the remaining 13% of Lakeside Mall for R102
million and now owns 100% of the property. A newly developed
industrial property in Stormill was also acquired for R50 million
in December 2009.
During the year R589 million was spent on developments,
redevelopments and major refurbishments as well as maintenance
capital expenditure.
DISPOSALS
Seven properties were disposed of in the current period for R657
million, a R55 million profit on the June 2009 book value and R301
million profit on cost.
BORROWINGS
At 30 June 2010, the loan to value ratio (LTV) measured by dividing
the nominal value of interest-bearing borrowings (net of cash) by
the fair value of property assets, including investment property
held for sale, was 33.2% (June 2009: 32.2%). Excluding GOZ, the LTV
decreases to 29.9%.
99.3% of interest-bearing debt was fixed at a weighted average rate
of 9.9% (including margin) for a weighted average of 8,0 years at
30 June 2010.
SHARE AND DEBENTURE CAPITAL
The authorised share capital is R100 000 000 divided into two
billion ordinary shares of five cents each. Each ordinary share is
linked to ten variable rate debentures of 250 cents each.
The ordinary shares and debentures trade as linked units on the JSE
Limited, (JSE). In terms of the debenture trust deed, the interest
payable on the debenture component of the linked unit is always 1
000 times greater than the dividend payable per ordinary share.
96 637 537 new Growthpoint linked units were issued in September
2009 to fund the acquisition of GOZ. A further 41 865 572 linked
units were issued in September 2009 to those Growthpoint linked
unitholders who elected to reinvest their 2009 final distribution.
The linked units were issued at R13,09 and R12,90 respectively.
AFTER REPORTING DATE EVENT - PORTFOLIO ACQUISITION BY GOZ
On 17 August 2010, GOZ announced the acquisition of seven direct
property assets from Property Solutions Group for a total price of
AUD171,5 million at a weighted average yield of 8.4%. The
acquisition will diversify the 100% industrial portfolio of GOZ, to
include the office sector. The properties are located in the
attractive Queensland property market with quality tenants and good
lease covenants. The acquisition will be funded by a 1 for 3 pro-
rata renounceable rights offer at AUD1,90 per stapled security,
providing approximately AUD101 million, and the balance from
existing syndicated debt facilities.
Growthpoint South Africa (Growthpoint SA) and Emira Property Fund
South Africa (Emira), who together hold 82.6% of GOZ stapled
securities in issue, have committed to subscribe for their rights.
Growthpoint SA may procure subscription for some of its rights
thereby reducing its percentage stake in GOZ following the rights
offer. This is in keeping with previous statements that Growthpoint
SA intends to dilute its holding in GOZ over time as GOZ expands.
Emira has committed to subscribe for additional stapled securities
under the shortfall facility (if any) such that the total amount
raised under the rights offer will be approximately AUD101 million.
CHANGES TO THE BOARD
Mrs Lynette Finlay and Mrs Mpume Nkabinde were appointed as non-
executive directors of Growthpoint with effect from 4 November
2009.
PROSPECTS
Indications are that the economy is experiencing a moderate
recovery. Should this be maintained and interest rates remain at
current levels, it is expected that distributions for the year to
30 June 2011 should grow at a higher rate than the growth of 2010.
This profit forecast has not been reviewed or reported on by
Growthpoint`s independent external auditors.
CASH DISTRIBUTION WITH THE ELECTION TO RE-INVEST THE CASH
DISTRIBUTION IN RETURN FOR GROWTHPOINT LINKED UNITS
Notice is hereby given of final dividend declaration number 48 of
0,062 cents and debenture interest payment number 48 of 62,038
cents per linked unit totalling 62,1 cents per linked unit for the
six months ended 30 June 2010 bringing the total distribution for
the year ended 30 June 2010 to 121,2 cents per linked unit.
Linked unitholders will be entitled to elect to re-invest the Cash
Distribution in return for linked units (Linked Unit Alternative),
failing which they will receive the Cash Distribution in respect of
all or part of their linked unitholding.
The number of linked units to which linked unitholders wishing to
participate in the Linked Unit Alternative will become entitled,
will be included in the circular to be posted to unitholders
referred to below. The last day to trade to participate in the Cash
Distribution or the Linked Unit Alternative will be Friday, 10
September 2010. Growthpoint linked units will trade "ex" the
entitlement with effect from the commencement of business on
Monday, 13 September 2010. Subject to the approval of the JSE, a
listing of the maximum number of new linked units to be issued
pursuant to the Linked Unit Alternative will commence on Monday, 13
September 2010.
A circular and form of election dealing with the Cash Distribution
and Linked Unit Alternative, including the basis for calculating
the linked unit ratio, which ratio will be announced on Friday, 3
September 2010, will be posted to linked unitholders who have not
dematerialised their linked units (certificated linked unitholders)
on Friday, 27 August 2010. Forms of election in respect of
certificated linked unitholders who wish to elect to participate in
the Linked Unit Alternative must be received by the transfer
secretaries by no later than 12h00 on Friday, 17 September 2010.
Linked unitholders who have dematerialised their linked units are
required to notify their duly appointed Central Securities
Depository Participant (CSDP) or broker of their election in the
manner and time stipulated in the custody agreement governing the
relationship between the linked unitholder and their CSDP or
broker.
In respect of dematerialised linked unitholders, safe custody
accounts with the CSDP or broker will be updated with the
entitlement in respect of the new linked units, and/or payments
will be credited to their CSDP or broker accounts on Monday, 20
September 2010. Certificated linked units or cheques will be posted
to certificated linked unitholders at their risk on Monday, 20
September 2010. A further announcement will be published on SENS
and in the press on or about Tuesday, 21 September 2010, detailing
the results of the Cash Distribution and Linked Unit Alternative.
Summary of the salient dates relating to the Cash Distribution and
Linked Unit Alternative are as follows:
2010
Circular and form of election posted to linked Friday, 27 August
unitholders
Announcement of linked unit ratio Friday, 3 September
Last day to trade in order to participate in the Friday, 10 September
Cash Distribution or Linked Unit Alternative
Linked units to trade ex distribution Monday, 13 September
Listing of maximum number of Linked Unit Monday, 13 September
Alternative linked units commences on the JSE
Last day to elect to receive a Linked Unit Friday, 17 September
Alternative and/or to receive the Cash
Distribution
Record date Friday, 17 September
Announcement of results of Cash Distribution and Monday, 20 September
Linked Unit Alternative on SENS
Linked unit certificates posted and Cash Monday, 20 September
Distribution posted/paid to certificated linked
unitholders
Accounts credited by CSDP or broker to Monday, 20 September
dematerialised linked unitholders
Announcement of results of election of Cash Tuesday, 21 September
Distribution or Linked Unit Alternative in the
press
Adjustment to linked unit listed on or about Wednesday, 22 September
Linked units may not be dematerialised between Monday, 13 September
2010 and Friday, 17 September 2010, both days inclusive. The above
dates and times are subject to amendment. Any such amendment will
be released on SENS and published in the press.
By order of the Board
Growthpoint Properties Limited
24 August 2010
Directors
JF Marais (Chairman)HSP Mashaba (Deputy Chairman)LN Sasse* (Chief
Executive Officer)EK de Klerk*MG DilizaPH FechterL FinlayJC
HaywardHS HermanR MoonsamyN NkabindeSM Snowball*CG SteynJHN
StrydomFJ Visser
* Executive
Registered office
The Place, 1 Sandton Drive
Sandton, 2196
PO Box 78949, Sandton, 2146
Transfer secretary
Computershare Investor Services (Pty) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Sponsor
Investec Bank Limited
100 Grayston Drive, Sandown
Sandton, 2196
PO Box 78949, Sandton, 2146
Date: 25/08/2010 10:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
