South Africa’s biggest listed property company Growthpoint Properties has launched an American Depositary Receipt (ADR) programme to attract the US investors
The programme was launched on the over-the-counter (OTC) market in the US on Monday through a sponsored ADR programme with BNY Mellon, and in turn giving the US investors the opportunity to buy dollar denominated shares in a South African based diversified property company that distributes its net rental income every half year.
Each of the Growthpoint depository represents two ordinary shares and trades on the OTC market in the US under the symbol “GWPTY”.
The ordinary shares trade on the Johannesburg Stock Exchange (JSE) under the symbol “GRT”.
On 1st July, Growthpoint became a real estate investment trust (REIT). The company is the 40th largest REIT globally by market capitalisation and the largest REIT in emerging markets.
Once all the listed property companies and property unit trusts have converted to a REIT, South Africa is anticipated to have the eighth largest REIT sector around the world.
Lauren de Klerk, the vice president of BNY Mellon’s depositary receipts business said that the global acceptance of the REIT structure had seen two South African property opportunities being available to US investors in September.
In a statement De Klerk said that “We expect yet more to follow and will work closely with Growthpoint to heighten its profile and achieve its objectives.” He also added that from 40 top companies of JSE, 34 now had a depository receipt (DR) programme.
Estienne de Klerk the Growthpoint executive director said that the US market is constantly looking for investment opportunities, so we are planning to make investment in Growthpoint as accessible as possible. He further said that “As the distribution of the income is done on the half yearly basis, management considers the capital distribution of new investments seriously and also investigates whether the new investments is providing satisfactory output for Growthpoint.”
In past the management team has proven that this gives investors a better return.
REIT structure would highlight South Africa as a priority for REIT investors and specifically REIT indices. General trends in the real estate is represented worldwide by the Global REIT indices, where the real estate activities represent the ownership, disposal and development of income producing real estate. It also gives opportunities to small investors to expose to large commercial property.
