Growthpoint Properties announced its funds management business will be formally named Growthpoint Investment Partners. The name reflects its strategy – one of Growthpoint’s four strategic thrusts – to co-invest and co-manage specialist alternative real estate investment portfolios where Growthpoint is both a capital partner and management partner.
Growthpoint began the groundwork for Growthpoint Investment Partners in 2014, when it identified internationalisation, local portfolio optimisation, trading and development, and co-investment as its core strategies. Before this, Growthpoint had favoured sole-ownership investments in SA almost exclusively, and in response it created a new platform to deliver its co-investment, co-management strategy.
It is this platform, previously labelled the funds management business, that has been rebranded Growthpoint Investment Partners, and will continue to further diversify Growthpoint’s assets by harnessing new opportunities through co-investment in order to create sustainable value for Growthpoint’s stakeholders and investment partners.
Its new tactic as an investment partner – leveraging the management skills that have grown Growthpoint into a leading international property company – has proven a defensive growth strategy in the low-growth capital-constrained South African market, and led to a co-investment approach that has quickly gained traction.
From a zero-base in 2018, Growthpoint Investment Partners has already topped its target R15bn of assets under management by 2023. Now, it is aiming to double this in the next five years.
The growth of Growthpoint Investment Partners is adding meaningful depth to the real estate market by creating access to alternative opportunities in the unlisted and co-invested environment for the broader investment community, its investment partners as well as Growthpoint.
“The time has come to create a formal identity for this robust partnership platform. Growthpoint Investment Partners has gained strong momentum and is successfully attracting co-investment capital. It delivers one of our core strategies, but has a distinctive investment model different from Growthpoint Properties’, and we wanted to reflect this in its new name.”Norbert Sasse, Growthpoint Group CEO
Growthpoint Investment Partners’ investment model starts with Growthpoint backing each investment with an anchor stake of around 20%. Co-investors then contribute up to 80% of the capital to the opportunity. Each investment has gearing of approximately 40%. The ability to scale each opportunity is a key consideration. So too is differentiating the assets from Growthpoint’s core SA portfolio in the office, retail and industrial property sectors.
Since 2018 it has launched three unlisted investments in specialist alternative real estate asset classes: African (ex. SA) income-producing commercial real estate, SA healthcare property, and SA student accommodation. Growthpoint is a cornerstone investor in these investments and plays a management role. Each has introduced new co-investment opportunities that leverage Growthpoint’s management and capital strengths. All have related positive long-term socio-economic impacts and enjoy access to Growthpoint’s excellent governance oversight frameworks, and extensive dedicated environmental, corporate social investment and sustainability resources.
Through Growthpoint, the Growthpoint Investment Partners platform affords its investments REIT status. However, the unlisted investments provide exposure to direct real estate that tends to be driven by long-term fundamentals rather than listed real estate volatility driven by short-term sentiment.
“The growth and scale of Growthpoint Investment Partners to date has established it as a leading investment partner in alternative real estate markets. Its new name not only reflects its significance for Growthpoint and its success in unlocking new real estate co-investment opportunities with its investment partners, but also its positive impacts and exciting prospects for considerable future growth,” says Sasse.