Growthpoint’s property pivot starts paying off

You can also listen to this podcast on iono.fm here.

JIMMY MOYAHA: Growthpoint Properties Limited released their group results for the financial year ended 30 June 2026. The business saw revenues top up over the R13.2 billion mark and we saw a loan-to-value ratio well within their ideal target of just below 40%.

We are going to be taking a closer look at these numbers with the company’s outgoing group chief executive officer, Norbert Sasse. He joins me on the line now to see what we make of the company’s performance.

Norbert, always lovely having you on the show. Thanks so much for taking the time.

I find this probably one of the most bittersweet moments because, while the business is doing well and while we are able to reflect on a strong set of numbers, it is the last time you and I will probably have this conversation.

Twenty-six years ago … did you ever think that the business would be where it is today?

NORBERT SASSE: Hi Jimmy, and thanks very much for that introduction and for having me on your show.

I think the short answer to that question is ‘Absolutely no’ – there is absolutely no way I could ever have contemplated what would have played out over the last 26-odd years in terms of growing this business to what it is today.

So, yes, it is a bittersweet moment.

ADVERTISEMENT

CONTINUE READING BELOW

And to your earlier comment, I think it fortunate that I can step down, I guess, in a year when we’ve shown a pretty decent result, very much in line with our original guidance.

And, more importantly, with the financial health of the business, considering its balance sheet and the loan-to-value ratios have come all the way down, with significant debt capacity on the balance sheet for future growth – leaving an opportunity for [new CEO] Estienne [de Klerk] and the team to use that capacity to find new growth opportunities, whether locally or internationally.

JIMMY MOYAHA: Norbert, let’s take a look at what Estienne and the team have taken over from what you built throughout the business.

At the time you joined the business there were only nine properties as part of the Growthpoint Property stable. Now we’re talking about more than 460 properties and property assets. The portfolio value at the time was around the R100 million mark, possibly R118-odd million. If my math still serves me, that property portfolio is today worth over R157 billion.

Now, of course, this isn’t work that you’ve done alone. Under your stewardship and guidance, Growthpoint Properties has grown to become the largest real estate investment trust business listed on the Johannesburg Stock Exchange.

Now we talk about a property portfolio that spans beyond the borders of South Africa.

NORBERT SASSE: Yes, that’s right, Jimmy. It has been, as you say, definitely very much a team effort and I’ve been very lucky and fortunate to work with exceptional individuals over the years who have all made a significant contribution to the business in terms of execution of strategy, identifying opportunities, working closely together with myself as leader of the group, to build a phenomenal business.

I really do believe we’ve got an exceptional business with exceptional people, with exceptional assets.

If I can single out one, I guess the V&A Waterfront in Cape Town would immediately come to mind.

But there are many of those and it’s wonderful to be able to step back and hand that to the incoming team.

It is fair to say that not everything we’ve done has worked out 100%, and there are currently some assets in the portfolio that need a little bit of work, and I think we are probably overexposed to the office sector. Those will be some challenges for the team as they move forward.

ADVERTISEMENT:

CONTINUE READING BELOW

But as I said, they have a helluva strong balance sheet. I leave an exceptional team of executives which I’m comfortable with, who have the capabilities and ability to take this business to the next level.

JIMMY MOYAHA: Norbert, what is your favourite asset that you’ve added to the Growthpoint business? The business has operations in Australia, there’s a healthcare side of the business, there’s student accommodation, there is an investment management firm. These didn’t exist at the time you joined the business, at the time you took over as CEO in 2004.

Certainly there were no V&A Waterfront assets to speak of. Of all of the work that you’ve been a part of over the last two decades, what would you say has been your favourite asset to add to this portfolio?

NORBERT SASSE: I’d probably have to single out the V&A Waterfront, just given the unique nature of that particular asset. We had a bite at the cherry in 2006 when the Transnet Pension Fund first sold the asset, and unfortunately we weren’t successful at the time.

Then roll forward four or five years to 2011. We were in the midst of the GFC [Grand Africa Café and Beach], the new owners, which was Dubai World.

The Livingston Brothers from the UK got to a point where they felt they couldn’t or didn’t want to own the asset anymore and we partnered up with the Public Investment Corporation [PIC] on behalf of the Government Employees Pension Fund and bought the asset on the second attempt.

That was very satisfying, very gratifying. But what makes that asset so unique is that I would argue if property’s in your blood, there’s not an element of property that is not on offer or evident within the greater V&A precinct – from residential to retail, to office, to industrial, to moorings, to hotels, land development.

There is absolutely everything you could dream of when you think of property in that precinct.

We have had had the good fortune of having a good partner, a strong financial partner. We’ve ourselves have been able to contribute 50/50 all the way through – just taking it from an asset which didn’t receive a lot of love from the foreign owners for that four- or five-year period – and then spending the capital that was needed to bring it back to its former glory.

And not only that, but to then expand it materially and significantly and bring new attractions and new asset classes – including the likes of the museum – to that asset.

So I would single out the V&A and the fact that it continues to perform extremely well and contribute handsomely to Growthpoint’s bottom line.

ADVERTISEMENT:

CONTINUE READING BELOW

JIMMY MOYAHA: Norbert, your final message to shareholders, other than the almost 8% dividend yield you have given them over this past financial year? Parting thoughts, parting wishes. Wishes for the new team that would be very much accustomed to what the business’s expectations are, having been transitioned in quite nicely – your final message from your perspective?

NORBERT SASSE: Just to reinforce I guess what I may have said a little bit earlier. The team that’s in place and under the new leadership of Estienne, I think are an exceptional team with world-class skills and experience. They’re dedicated, they’re hardworking, they’re good custodians of the assets within the company.

And I think we’re at a turning point where the balance sheet has been corrected – or let’s rather say we’ve created significant capacity now for growth again.

It’s been a reasonably tough four or five years after Covid. But we’ve survived, we never missed a dividend. In fact, I think somebody did the calc for me the other day – we’ve paid over R76 billion worth of dividends in the time that I’ve been the CEO.

I believe the team that stays behind and the good work we’re doing on the ESG [environmental, social and governance] and CSI [corporate social investment] front will continue, and hopefully grow and expand even further to improve the overall business.

JIMMY MOYAHA: Stepping out at the very top of the market; one couldn’t ask for a better departure from such a prestigious role.

Norbert, thank you for all of the dedication you’ve put into the business over the years; thank you for leaving the business in even better hands.

We’ll have to leave this particular conversation on that note before it gets any more nostalgic.

Norbert Sasse, outgoing group chief executive officer of Growthpoint Properties joined us to reflect on his final results presentation as the outgoing CEO, and sharing with us the long journey that the business has gone through under his tenure.

#Growthpoints #property #pivot #starts #paying