Growthpoint Properties to increase stake in Globalworth

The company says Globalworth has ‘delivered on its strategy to expand in the central and eastern Europe region’

Growthpoint Properties would increase its stake in Romania-focused Globalworth Real Estate Investments from 26.9% to 29.5%, the firm said on Monday.

Growthpoint had agreed to subscribe for new shares in Globalworth, which was undertaking an equity raise, using the proceeds of a new euro-denominated bond.

The real estate investment trust share price had risen 1% to R24.44 at close of trade on Monday.

The company said in an investor update document that Globalworth had “delivered on its strategy to expand in the central and eastern Europe region”.

Globalworth would, subject to conditions, buy a 50.1%-67.9% stake in Warsaw-listed Griffin Premium Real Estate.

“On the back of this expansion into Poland, and in response to significant investor interest, Globalworth has announced its intention to raise a minimum €300m through the issue of new ordinary shares,” Growthpoint said.

The equity raising would fund further investments, reduce gearing, attract new institutional investors and improve the liquidity of Globalworth shares ahead of its planned move to the main market of the London Stock Exchange in 2018.

Globalworth expected to increase its dividend for 2018 by 23%. It said that the growth of its offshore business “remains the key driver” for the property company.

“We continue to support  both Globalworth Real Estate Investments and Growthpoint Australia in their growth trajectories while also looking for other opportunities.”

To support this expansion strategy, the management team had been restructured, with group CEO Norbert Sasse focusing mainly on “the strategic direction of the group aligned with Growthpoint’s internationalisation strategy”.

MD Estienne de Klerk had been assigned the role of CEO of the South African business.

Growthpoint has set aside $170m for its Africa fund.