Growthpoint raises R1.8bn at lowest ever borrowing cost

• Growthpoint secured R1.8 billion after attracting more than R6.5 billion in investor bids.
• The bond issue achieved the lowest funding margins in the company’s history.
• Strong investor demand signals confidence in South Africa’s largest listed property landlord.

SA’s biggest landlord scores record bond market win

‍South Africa’s largest listed property company, Growthpoint Properties, has delivered one of the strongest debt market performances seen in the local property sector in recent years, raising R1.8 billion through a heavily oversubscribed bond auction at record-low funding costs.

The company originally sought to raise between R1 billion and R1.5 billion but received investor bids exceeding R6.5 billion, more than four times its initial target. The overwhelming demand enabled Growthpoint to increase the size of the raise while securing the most favourable pricing ever achieved in one of its bond auctions.

‍For a property sector still navigating economic uncertainty, elevated operating costs and global geopolitical volatility, the result sends a powerful message about investor confidence in both Growthpoint and South Africa’s listed real estate sector.

‍What is a bond auction?

‍In simple terms, a bond auction allows companies to borrow money directly from institutional investors such as pension funds, insurers and asset managers.

Instead of taking out traditional bank loans, companies issue bonds and agree to repay investors over a fixed period with interest. The lower the interest margin investors are willing to accept, the cheaper it becomes for a company to raise capital.

Growthpoint’s latest auction achieved exactly that.

Record-low funding costs

‍The R1.8 billion issuance was structured across three maturities:

• Three-year bonds: R579 million
• Five-year bonds: R425 million
• Seven-year bonds: R796 million

All three tranches priced at record-low margins for Growthpoint.
The weighted average margin came in at approximately Jibar +92 basis points, significantly below previous funding levels and substantially reducing the group's future borrowing costs.

Particularly noteworthy was the five-year tranche, which achieved a margin compression of 65 basis points compared with a similar Growthpoint bond issued in 2023.

In practical terms, this means Growthpoint can now access funding at considerably lower rates than it could just three years ago.

Strong vote of confidence from investors

‍The transaction attracted 26 separate investors, the highest number seen for a corporate bond auction in South Africa this year.

This broad participation highlights strong institutional confidence in Growthpoint’s balance sheet, property portfolio and long-term strategy.

The company’s diversified portfolio spans office, retail, industrial and logistics assets across South Africa and selected international markets, providing investors with exposure to one of the continent’s most established property platforms.

CEO: Confidence despite challenging conditions

According to Growthpoint South Africa CEO Estienne de Klerk: “This is an excellent result. The strong investor support and record-tight margins achieved are especially pleasing, particularly given the current global geopolitical and local market headwinds.”

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He noted that the outcome reflects investors’ continued confidence in Growthpoint’s financial strength and long-term strategic direction.

Credit ratings strengthen investment appeal‍

The successful raise follows a series of positive credit rating developments for the company. In May 2026:

• Moody's Ratings affirmed Growthpoint’s corporate family rating and upgraded its outlook to positive.
• Fitch Ratings reaffirmed its ratings, citing portfolio resilience, stable financial structures and improving operational performance.

These upgrades and affirmations have helped reinforce investor confidence while supporting lower borrowing costs.

Why this matters for property investors

‍While most property investors will never participate directly in a corporate bond auction, the implications are significant. Lower funding costs mean:

• More affordable capital for acquisitions and developments.
• Improved profitability and cash flow.
• Greater flexibility to refinance existing debt.
• Enhanced ability to invest in property upgrades and growth opportunities.
• Potential support for future shareholder distributions and earnings growth.

The result also provides another encouraging signal for South Africa’s listed property sector, which has spent several years rebuilding following the pandemic, higher interest rates and economic pressures.

Looking ahead

‍Growthpoint’s record-breaking bond auction demonstrates that quality property assets, strong balance sheets and disciplined financial management continue to attract substantial investor capital despite uncertain market conditions.

With R5.7 billion in undrawn committed facilities, a diversified funding platform and improving credit metrics, the company enters the next phase of the property cycle from a position of considerable financial strength.

As South Africa’s largest listed REIT, Growthpoint’s ability to secure R1.8 billion at its lowest-ever borrowing cost is more than a corporate finance success story, it is a powerful indicator that institutional investors remain willing to back high-quality real estate businesses when the fundamentals are right.

For the broader property sector, that confidence may prove just as valuable as the capital itself.

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