Growthpoint acts on fears
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Property Reporter
GROWTHPOINT Properties' management have moved to quell scepticism among some shareholders.
Investors questioned whether its R975m tenant property deal with Investec Bank was done at "arm's length".
Some of Investec's directors are also directors of Growthpoint, creating possibilities of conflicts of interest.
Norbert Sasse, executive director of Growthpoint, confirmed that a number of shareholders were sceptical of the deal, questioning whether the deal was an "arms length transaction". But these shareholders were satisfied after management explained to them how the deal was put together as well as it's financial intricacies.
Sasse said all Growthpoint directors who had an association with Investec, as well as other directors who had interests in the fund's management company Growthpoint Managers, had recused themselves from the deal.
"The underlying asset is still property, involving two buildings, but the deal is in fact a financial transaction which provides long-term sustainable quality income for 20 years and the whole basis on which it has been structured provides growth in distributions for Growthpoint over the full 20 year period," said Sasse.
Growthpoint, the biggest fund in the listed property sector, announced earlier this month that it would be buying Investec Bank's head office buildings in Sandton and Cape Town in one of the largest single tenant property deals in SA.
Growthpoint said at the time that because the company was managed by Investec Property Group, all the directors associated with Investec had recused themselves from involvement in the deal.
The rationale behind the deal was to enhance its property portfolio, as well as the quality, long-term sustainability and growth of the income stream.
Nov 25 2003 07:09:41:000AM Nick Wilson Business Day 1st Edition
Tuesday
25 November 2003
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