The securing of these additional debt facilities has come at a time when global capital markets are in turmoil in the wake of the sub-prime crisis and ensuing liquidity squeeze.
 
Fortuitously for Growthpoint it had raised R4,3 billion of debt through commercial mortgage backed securitisation (CMBS) between November 2005 and November 2006. The balance of its funding is currently provided by ABSA, RMB and Investec.

Brian Roberts of Nedbank Corporate Property Finance said he was delighted that Nedbank was able to offer the R2 billion facility to Growthpoint. “In applying the new Basel 2 rating methodology the resultant excellent credit rating of Growthpoint enabled the bank to offer unsecured facilities at rates which are very competitive with the best rates that can be obtained via traditional secured mortgage loans”.

Roberts notes that Growthpoint, South Africa’s largest JSE-listed property company, has a quality property portfolio, is well managed and has strong corporate governance with a large component of experienced, independent non-executive directors.

At 31 December 2007 Growthpoint had approximately R8 billion of borrowings, representing about 33% of the value of its property portfolio. 94% of the debt was at fixed interest rates with a weighted average fixed interest rate of 9.2%.

Norbert Sasse, CEO of Growthpoint, says that Growthpoint has an exciting R4 billion pipeline of acquisitions and developments which will be coming on stream in the next 18 months. Approximately R2 billion will be spent by the end of June 2008, a further R1 billion will be spent from July to December 2008 and the balance in 2009.

Together with the Nedbank unsecured loan, Growthpoint has existing facilities available, as well as additional facilities currently under negotiation, to cover the cost of these developments.