Growthpoint Falls Most in 2 Years on $261 Million Share Sale

Growthpoint Properties Ltd. (GRT), South Africa’s biggest real-estate company by market value, plans to raise 2.5 billion rand ($261 million) by selling shares to fund acquisitions and development. The stock fell the most in more than two years.

“Growthpoint currently has a significant pipeline of identified acquisition opportunities, of which a number are well advanced, and in excess of 1.2 billion rand of development opportunities within it’s existing portfolio,” the company said in a statement today.

The shares fell 4.3 percent, the biggest decline since March 2011, to 28.95 rand. More than 15 million shares traded, or four times the three-month daily average. The stock had gained 23 percent this year through yesterday’s close.

Growthpoint, based in Johannesburg, manages a portfolio of commercial and office properties and joins a growing list of developers tapping the equity market to fund projects. Redefine Properties Ltd (RDF), the second-biggest property company by value in South Africa, raised 800 million rand in April, 23 percent more than it targeted.

“It’s a good time for them to raise capital because there is a strong demand in the market for property equity papers,” Leon Allison, property equity analyst at Macquarie First South Securities, said in a phone interview.

Deutsche Bank AG and Investec are the bookrunners on the issue. Growthpoint’s comments on its acquisition pipeline don’t include its bid for Fountainhead Property Trust (FPT), the company said.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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