Completion of development and land acquisitions

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    GOZ - Growthpoint Properties Australia Announces Completion of Development and Land Acquisitions

    Growthpoint Properties Australia announced that practical completion of the pharmaceutical warehouse at 27-49 Lenore Drive, Erskine Park, NSW has occurred. This property comprises a new 29,055sqm warehouse specially designed to store pharmaceutical products. This property has been leased to Linfox for 10 years from 28 August 2013. The company also reported on the completion of its acquisition of 19 & 20 Southern Court, Keysborough, Vic, and 9-11 Drake, Boulevard, Altona, Vic.

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    Acquisition of Fortius Funds Management
    Growthpoint Properties Australia (Growthpoint or the Group) is pleased to announce that it has entered into an
    agreement under which it will acquire 100% of the shares in Fortius Funds Management Pty Ltd (Fortius) (the
    Transaction).
    Transaction overview
    • Fortius is one of Australia’s leading family-owned private real estate funds management businesses with an
    established track record of investing in Australian real estate markets and generating strong returns for its
    investors
    • Transaction delivers on a strategic growth opportunity for the Group, adding $1.9 billion third party funds
    under management (FUM) to Growthpoint and bringing total assets under management to $7.2 billion1
    • Consideration comprises a $45 million initial purchase price, with a net asset adjustment, to be paid in cash
    and funded from the Group’s existing liquidity and debt facilities
    • Additional $10 million earnout component, subject to Fortius achieving agreed milestones relating to FUM and
    revenue growth over the period to June 2024
    • Performance fees for existing funds received by the Group will be paid to the sellers on an after tax basis as
    an additional purchase price adjustment. Performance fees for new funds will accrue to Growthpoint
    • Completion anticipated 1Q FY23, subject to satisfaction of conditions precedent including certain change of
    control consents being received
    Strategic rationale
    • Transaction brings enhanced sector and product capabilities, including office, retail, mixed-use and debt
    investments across value-add and opportunistic strategies
    • Continuation of Fortius successful growth story, with founder and Executive Director Ray Sproats remaining
    as Senior Adviser for at least two years and CEO Sam Sproats joining the Group’s Executive Management
    Team as Executive Director – Funds Management
    • Provides ability to scale up the platform significantly to drive incremental growth to earnings for
    securityholders
    • Growthpoint intends to grow the funds management business, targeting 10-20% of Group EBIT, over the
    medium term
    Timothy Collyer, Managing Director of Growthpoint, said, “We are pleased to announce the acquisition of Fortius
    today and the establishment of a funds management business which has been a key strategic priority for the Group.
    Fortius is a best-in-class fund manager with an over thirty year track record of generating an average IRR2 of 17% per
    annum for its investors, a mix of high quality institutional investors, high net worth and wholesale investors. Investing
    in Fortius adds $1.9 billion high quality FUM in a single transaction taking the Group’s assets under management
    (AUM) to $7.2 billion. We intend to grow the funds management business, targeting 10-20% of Group EBIT over the
    medium term, delivering incremental growth to earnings and income stream diversification for our securityholders.”
    Fortius management, Ray and Sam Sproats said “Joining with Growthpoint is an ideal outcome for Fortius and our
    stakeholders as it provides the best path to grow with our investors' aspirations as well as provide opportunities for our
    talented investment team. We are enthused by the complementary fit of an active funds manager with a leading office
    and industrial REIT.” Ray Sproats concluded, “The Fortius team and I are excited by the capital support for growth
    initiatives as well as the continuation of services for our investors. I can think of no better way to build on our thirty
    years of successful investing."
    1 Includes unaudited valuations as at 30 June 2022 of $5.3 billion. Includes 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022 2 Internal Rate of Return
    Further information about the Transaction is contained in the investor presentation attached.
    Growthpoint securityholders do not need to take any action in relation to the Transaction.
    Growthpoint appointed MA Moelis Australia Advisory Pty Ltd as exclusive financial advisor to the Transaction and
    Gilbert + Tobin as legal advisor. SW Accountants & Advisors acted as tax advisors.
    This announcement was authorised for release by Growthpoint’s Board of Directors.

    courtesy of Bell Direct
    =================================================================================

    DYOR

    i do not hold this share

    so far it has eluded my greedy fingers ( but will watch in case of an opportunity )

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