Globalworth Real Estate Investments: Capital Increase Marks A Step
Edison | Dec 06, 2016 04:33AM ET
Globalworth RE Investments (LON:GWI) has announced that it is raising €200m via a subscription by two investors for 25m new shares priced at €8. As well as significantly increasing GWI’s capital available for investment, the terms of the subscription introduce a new dividend policy similar to that of a REIT and strengthen corporate governance structures, in line with its institutional shareholder base. GWI will pay dividends equivalent to at least 90% of FFO and has indicated a total payment of €0.44 per share for 2017 (a yield of 7% on the current share price). We have suspended our forecasts pending shareholder approval of the proposals, expected by 20 December 2016.
New institutional shareholder
The two investors are Growthpoint Properties Ltd (JO:GRTJ) and Oak Hill Advisors. Growthpoint is the largest REIT in South Africa with a market cap of c ZAR65bn (c £4bn). It is one of the top five constituents of the EPRA NAREIT EM index and has a portfolio comprising 467 properties in South Africa and 63 in Australia as well as a 50% interest in the V&A Waterfront in Cape Town. GRT has identified GWI as a platform to pursue an investment strategy in Central and Eastern Europe (CEE) and this €183m investment marks its first commitment in the region. Oak Hill is a US-based alternative investment firm managing a portfolio of c $30bn. It already owns 8.4m shares in GWI, 13.1% of the outstanding shares, and intends to invest a further €17m. Following the issue of all new shares, GRT would own 27.7% and Oak Hill 11.2% of the outstanding shares. The positions of the major shareholders now and immediately after the proposed subscription are shown in Exhibit 1.
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Globalworth Real Estate Investments - Capital Increase Marks A Step
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