Growthpoint Raised $135 million From its Right Offer.


Growthpoint Properties Australia (ASX: GOZ) owns and manages quality investment properties, and it has a diversified portfolio which includes 59 office and industrial properties throughout Australia.

On 7 December 2018, Growthpoint announced the successful completion of 1 for 17.65 non-underwritten accelerated non-renounceable rights offer of new stapled securities in Growthpoint, raising approximately $135 Mn, following which the share price of Growthpoint uplifted by 0.529 percent.

The retail component of the Rights Offer was strongly supported by the existing retail Securityholders, and it raised around $18 million. The company will issue around 5.2 Mn new shares under the Retail Rights Offer.

As per Growthpoint’s Managing Director Mr. Timothy Collyer, the funds raised from the Retail Rights Offer will be utilized for the acquisition of 100 Skyring Terrace, Newstead Property which was recently announced. The acquisition of this property will add to the defensive characteristics of the portfolio, which include high occupancy, a long WALE, and quality listed company and government tenants. The allotment of the new securities is scheduled to happen on 12 December 2018, and they will start trading on the ASX on a normal settlement basis on 13 December 2018.

Earlier in the month of November 2018, Growthpoint announced regarding the successful completion of the Institutional Rights Offer which raised around $117 million.

In FY 2018, the funds from operation (FFO), akin to earnings, was 25.0 cents per security, which was significantly higher than the Growthpoint’s initial guidance of 23.6 cents per share which was provided at the beginning FY 2018.  During the year 2018, the company paid a distribution of 22.2 cents per security which was 3.3 percent higher than the prior year.

Further, due to the fall in capitalization rates and good leasing results in 2018, there was a 6.2% increase in property asset values, on a like for like basis, due to which the Net Tangible Assets per security of the company increased by 10.8 percent to $3.19 per security.

In the last five years, the company’s Property portfolio value increased by 103% from $1,694 million to $3,447 million and the distribution per security increased by 21 percent from 18.3 cents to 22.2 cents.

In FY 2018, Growthpoint’s capital management position was healthy, with a gearing ratio at 33.9 percent which is slightly lower than the Group’s target range of 35% to 45%. However, after the recent acquisition of Newstead office and settlement of West Perth, the gearing ratio is expected to be in between 37.6% – 38.8%.

As per the Growthpoint’s FY2019 guidance, the Company’s FFO is expected to be around 24.8 cents per security and the distribution is expected to be 23.0 cents per security which is 3.6 percent higher than FY2018.

In the last six months, the share price of the company increased by 4.08 percent as on 6 December 2018 and traded at a PE multiple of 7.070x. GOZ’s shares traded at $3.790 with a market capitalization of circa $2.73 billion as on 7 December 2018 (AEST 2:49 PM).


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