Growthpoint Properties Limited (IFC-42256)

Countries
  • South Africa
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Mar 23, 2020
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
GROWTHPOINT PROPERTIES LTD
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Construction
  • Education and Health
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Equity, Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 80.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 60.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ IFC website

Updated in EWS Apr 6, 2020

Disclosed by Bank Mar 31, 2020

Contribute Information
Can you contribute information about this project?
Contact the EWS Team

Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The proposed IFC investment is a ZAR1.2 billion (US$80 million) equity and convertible debt package to finance the development and acquisition of properties for Growthpoint Healthcare Property Holdings Ltd (“GHPH”), South Africa’s first healthcare Real Estate Investment Trust (REIT). Established in 2016, GHPH was founded by Growthpoint Properties Limited (the Sponsor), South Africa’s largest REIT. GHPH is an unlisted REIT specialized in building a portfolio of income producing healthcare property assets in South Africa and these include hospitals, clinics, diagnostics centers, laboratories and other healthcare related real estate.

GHPH will build its portfolio through: (a) acquiring existing properties; and (b) developing new properties (new developments will comprise up to 30% of GHPH’s target portfolio). GHPH already holds five assets with the aggregate value of ZAR2.5 billion (US$174 million), four of which are hospitals and one a medical chamber – small office suites for doctors. Growthpoint is developing a fifth hospital for GHPH called Pretoria Head and Neck hospital, a specialized hospital focused on the head and neck, spinal and vascular surgery. It is expected to be completed in 2020. Concurrently, GHPH is pursuing a pipeline of additional investment opportunities and expects to grow to ZAR5 billion worth of assets over the next three years. The proposed IFC financing package is to support GHPH’s growth plans.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The proposed IFC financing package consists of: (i) a US$20 million equivalent equity investment in GHPH; and (ii) a US$60 million convertible C loan to Growthpoint. The C-loan investment shall be lent to Growthpoint for on-lending to GHPH. Upon the completion of the initial ramp-up phase of GHPH, which is expected to take 2-3 years, IFC will have the option to convert the C-loan or any portion of it into common equity in GHPH.

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

GHPH is majority-owned by Growthpoint and the balance of equity stake is owned by South African institutional investors. Founded in 1987, Growthpoint is South Africa’s largest REIT, listed on the JSE with a market capitalization of ZAR33billion (US$2. billion) as at March 18th, 2020. Growthpoint owns and manages a diversified property portfolio valued at ZAR136.5 billion (US$8.2 billion) as at December 31, 2019. The portfolio of 502 properties is also diversified across geography and sub-sectors, that is retail, office and industrial properties. Growthpoint’s portfolio comprised of the following:

a)      South Africa: (i) 436 directly owned properties in South Africa; (ii) a 50 percent interest in the V&A Waterfront, an iconic mixed-use development in Cape Town, South Africa; and (iii) a majority stake interest in GHPH.

b)      Australia: 58 properties through Growthpoint’s 66 percent investment in Growthpoint Properties Australia Limited listed at the Australia Stock Exchange.

c)      Eastern Europe: a 29.8 percent interest in Globalworth Real Estate Investment Limited (GWI), which owns 60 properties in Poland and Romania valued at approximately EUR3 billion

d)      Sub-Saharan Africa (ex-South Africa): a 20.3% percent interest in Growthpoint Investec African Properties Fund (GIAP), which now owns 8 properties.

Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - Growthpoint Properties Limited Client -

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Growthpoint Healthcare Property Holding Ltd.
Linda Sigaba
CEO
+27 11 944 6531
lsigaba@growthpoint.co.za
The Place, 1 Sandton Drive, Sandton, Gauteng, 2196
www.growthpoint.co.za

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

How it works

How it works