It owns property valued at more than R80bn in SA and about R20bn in Australia, and has entered into a joint venture with Investec Asset Management.
Growthpoint will invest $50m and the International Finance Corporation $40m in the venture that will invest in and develop assets on the rest of the continent.
The JSE Alsi Top 40 Index company has grown its asset base from R1.5bn to about R100bn in 14 years, but there are now fewer local acquisitions and more competition.
The venture will not be open to public investors. However, the aim is to grow it to an optimal size for a possible stock exchange listing in the next five to seven years, Growthpoint CEO Norbert Sasse said.
The vehicle will have a bias towards buying existing assets as 80% of its real estate portfolio will consist of income-producing assets and 20% will be earmarked for development of new assets.
"Our African strategy has been in the making for some time.
"We needed the right partners and expertise to create a powerful platform for pan-African property investment."
He said the venture may partner with other funds in the future.
"We look at each opportunity one at a time. If we had an offer to acquire a very large asset, then in the interests of diversification we may buy half of it and another partner would buy the other half. Essentially, we would also like to become an exit for property funds and private equity groups in Africa, who may develop and then sell assets," said Sasse.
Analysts expect Growthpoint to gain from the venture in the longer term.
"This is small fry for Growthpoint - a $50m investment, they have individual buildings worth more - but it may be a toe in the water. African investments take time. They are targeting a listing in five to seven years which suggests this," Evan Robins of Old Mutual Investment Group said.
"We view this as a long-term story. African economies are going through short-term challenges at present but we believe that the continent has pretty amazing long-term prospects. It is a good move for Growthpoint to diversify its non-South African exposure," Keillen Ndlovu, head of listed property funds at Stanlib said.
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