May 21 (Bloomberg) -- Growthpoint Properties Ltd., 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, 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, the company said.
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