Estienne de Klerk. Picture: ROBERT TSHABALALA
Estienne de Klerk. Picture: ROBERT TSHABALALA

In a first for the JSE’s real estate investment trust sector, Growthpoint Properties will now have a dedicated development and trading division to help boost earnings.

With a market capitalisation of about R78.3bn, the group is the largest South African-based property group on the JSE.

The group would add development and trading fees generated by this new division to its dividends, saying it would "total no more than 1% to 2% of its distributable income".

Most listed property funds have battled to maintain inflation-beating dividend growth in a tough operating environment and a weaker economy, which has prompted a number of groups to look for alternative or new revenue streams.

Growthpoint would develop offices, industrial and smaller retail assets for potential clients and access new business opportunities, Growthpoint CEO for SA, Estienne de Klerk, said.

"The team behind Growthpoint’s trading and development has established a sterling track record of creating assets and value for Growthpoint over the years. Until now, these in-house skills were held within each sector of Growthpoint’s portfolio office, retail and industrial," De Klerk said.

Graphic: DOROTHY KGOSI
Graphic: DOROTHY KGOSI

The trading and development division will be headed by Rudolf Pienaar, Growthpoint’s new chief investment and development officer.

"Development plays a key role in Growthpoint’s South African investment strategy," Pienaar said, "with tailor-made assets designed to enhance our portfolio and retain and attract quality clients".

He continued: "In working closely with our clients, however, we have found that some of their needs go beyond a simple tenancy; their company policy may require them to own certain types of properties, they might need to dispose of a property asset in order to become a tenant of Growthpoint, or they could require specialised premises that can only be custom developed."

Garreth Elston, a portfolio manager at Reitway Global, said the new division could enhance Growthpoint’s efficiency.

"I think it is an attempt at making the company more responsive and internally aligned in order to achieve better returns … through providing a streamlined development service for current and potential … tenants," Elston said.