December 6 2024 17:30
Longkloof Precinct
SA’s largest landlord, Growthpoint Properties is expanding primarily in the Western Cape followed by Umhlanga in KwaZulu-Natal, as opportunities look the most attractive in these regions compared to other metropolitan areas in the country.
Group SA CEO Estienne de Klerk had said in September that the V&A Waterfront, which is considered the most valuable commercial asset in the country worth around R22bn, will receive about R4.5 billion in investment over the next two years. Growthpoint and the Public Investment Corporation (PIC) each effectively own half of this precinct. The V&A began life more than thirty years ago as a strip mall with a few sections of property connected to a harbour. It has since expanded with aplomb.
De Klerk then said on Wednesday at a property tour to which Alistair Anderson of Property Flash was invited that in addition to the group’s investments in the V&A, R2bn has been invested in other property projects in Cape Town that are nearing completion.
This included around R800m in the Longkloof Precinct by Kloof street in Gardens, which included a new Canopy by Hilton hotel; R352m to upgrade Bayside Mall in Tableview in the northern suburbs; R450m in the Arterial Industrial Estate in Blackheath; and a R365 investment in the refurbishment of the 12 800m2 36 Hans Strijdom office building on the Foreshore for new tenant Ninety One, which has signed a 15-year lease for the building.
Bayside Mall
“We are doing more work in Cape Town currently as the investment case makes sense here and in Umhlanga. We are always looking around the country for opportunities. Right now, Johannesburg for example, costs a lot to develop in and it is difficult to make the numbers work out,” he said.
Growthpoint sold out its first residential development, Kent residential apartments in La Lucia, Umhlanga, and also developed a small community shopping centre in KZN.
Cape Town along with the Umhlanga Ridge node in Durban, have the lowest office vacancies in the country.
“Cape Town is showing increasing demand, due to lower vacancies and what’s becoming a case of shortage of quality office space,” he said.
Office returns could soon outpace retail and industrial returns in these areas, he said.
Timothy Irvine, Growthpoint’s new head of asset management for its office portfolio, said the Canopy by Hilton represents an investment of around R600m. As much as R400m would be spent on the hotel itself and R200m on an underground parking basement.
The project has entailed the redevelopment of one of Growthpoint’s old heritage properties from largely office space to a multi-use property, anchored by the hotel. It also includes some 16 000m2 of office and retail space.
Growthpoint’s Western Cape portfolio represents 27% of the group’s South African assets by value and makes up 11% of the group’s gross lettable area.
247@propertyflash.co.za
