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Growthpoint, PIC Buy Cape Town Mall for $1.3 Billion

Feb. 14 (Bloomberg) -- Growthpoint Properties Ltd., South Africa’s largest publicly traded real-estate investor, and the Public Investment Corp. agreed to buy Cape Town’s Victoria & Alfred Waterfront shopping mall in the country’s biggest property deal.

Growthpoint and the PIC, which manages state pension funds, will pay 9.72 billion rand ($1.33 billion) for the mall and surrounding properties, Johannesburg-based Growthpoint said in a stock exchange filing today. Istithmar World, London & Regional Properties and a group of local investors teamed up to buy the development from Transnet Ltd., the state-owned transport company, and three of its pension funds for $1 billion in 2006.

“The developed property portfolio boasts a well-established and high-quality portfolio of properties offering attractive rentals, rental escalations and lease expiry profiles,” Growthpoint said. “The transaction also creates the opportunity to unlock significant value.”

Shares of Growthpoint rose 9 cents, or 0.5 percent, to 16.94 rand at 1:12 p.m. in Johannesburg, valuing the company at 26.7 billion rand. The company first said it was on talks that could affect its share price on Dec. 13, and the Johannesburg-based Mail & Guardian newspaper subsequently reported it was in talks to buy the V&A for 10 billion rand.

Growthpoint said it has secured funding for its portion of the purchase, about 4.9 billion rand, through long-term bank loans. The company plans to refinance some of the debt through bond and share sales, it said.

Istithmar World is a private equity company owned by Dubai World, a state owned holding company that’s altering the terms on $24.9 billion of debt.

The V&A, which surrounds Cape Town’s harbor and has shops, hotels, restaurants, offices and an aquarium, is Cape Town’s biggest tourist draw, attracting as many as 21 million visitors a year, Growthpoint said.

For Top Gulf stories: {TOP GULF <GO>} For U.A.E. private equity: {TNI UAE LBO <GO>} For South Africa real estate: {TNI SAFRI REL <GO>}

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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