Grindrod Bank’s Property Solutions division is known for its expertise in commercial, industrial and retail property finance, hence its strategic focus on this segment of the property market. Tailored finance solutions are provided to developers, owners and investors. We have national representation and strive to differentiate ourselves from other property financiers by developing strong relationships with our clients, providing fast turnaround times and a personalised service.
Grindrod Bank’s financing options range from basic traditional mortgage finance (vanilla debt), mezzanine debt as well as equity participation and/or a combination of all three. Each transaction is assessed on its individual merits, with emphasis being placed on the following criteria when analysing any transaction:
• Property fundamentals: This includes property type, condition, layout and location;
• Market analysis: This ensures that the property is in line with market valuations and demand;
• Investor analysis: Each client behind a transaction must have the relevant knowledge and experience to maintain and manage the property;
• Counterparty strength: Tenants must have a strong operating history and sound financial standing to ensure that lease obligations will be met.
TRADITIONAL MORTGAGE FINANCE
Grindrod Bank provides property finance solutions that can be designed and tailored for the purchase or development of small to medium scale commercial properties, redevelopment projects and refurbishments. Traditional property mortgage finance is offered where properties are geared up to a level of around 70% of their value or purchase price.
Funding over and above this traditional level is considered mezzanine finance, which is a hybrid of traditional mortgage finance and equity funding. This is utilised to bridge the gap between the available equity a client may have and the traditional mortgage loan.
Our property division specialises in providing mezzanine finance, on a select basis against quality real estate to property investors who have an established track record in the industry, with the Bank’s economic benefit being determined on a deal-by-deal basis.
Mezzanine funding allows our clients the opportunity to utilise scarce capital resources across multiple property transactions, leveraging quality assets optimally and hence enhancing their return on capital.
This is a highly specialised product that is assessed on a deal by deal basis, please contact one of our consultants to discuss this further.
Property Private Equity
Grindrod Property Private Equity (“GPPE”) evolved from Grindrod Bank’s property financing activities and is a bespoke property private equity business. GPPE invests in its own properties and also co-invests with its clients who require an equity partner. Investment alongside clients brings together mutual skillsets and allows for the effective use of scarce capital.
GPPE focusses on fundamentally strong commercial and industrial properties with solid counterparties, which provide the potential for robust growth. GPPE invests in the main hubs of South Africa and also jointly co-invested in a closed-end logistics focussed property portfolio in the United Kingdom.
Please contact one of our consultants to discuss this further.
An Exchange Traded Fund, or ETF, is an investment fund that tracks an index (e.g. JSE All Share Index). ETFs are traded much like stocks through the stock exchange, but because of their diversified nature they have lower risk and generally reduced volatility. Essentially ETFs are a “basket” of shares, rather than a single stock, so by buying ETFs investors are exposed to multiple companies while simply buying one share. Our Property ETFs for instance, are designed to track the performance of companies that buy and manage office, retail and industrial properties.
CORESHARES Proptrax Ten tracks the FTSE/JSE SA Listed Property Top 10 Equal Index, which is a custom index that consists of the Top 10 most liquid JSE primary listed property companies. These companies are then given an equal weighting. More information
CORESHARES Proptrax SAPY tracks the FTSE/JSE SA Listed Property Index (SAPY Index). The SAPY Index consists of the Top 20 most liquid JSE primary listed property companies (thereby excluding Capital Shopping Centres) that have a minimum free float of 15%. More information
Through CORESHARES, we are able to offer our clients access to a wide range of ETFs. These ETFs track the performance of various indices, providing investors with a simple and cost-effective way to access the market and achieve diversification in their investment portfolios. More information