Growthpoint, PIC to buy V&A Waterfront

15 February 2011

Growthpoint Properties together with the Public Investment Corporation (PIC), representing the Government Employees Pension Fund, have entered into an agreement to acquire, in equal proportions, South Africa’s iconic V&A Waterfront.

The two will pay about R9.7-billion for all of Istihmars’ and London and Regional’s financial interests in Lexshell 44 General Trading – the company that owns the property – with provision for the acquisition of the remaining ordinary shares held by Lexshell’s empowerment shareholders.

The deal represents South Africa’s biggest single property transaction to date.

Growthpoint Properties CEO Norbert Sasse said that the transaction has been driven by the existing performance and future potential of the prize property asset: “More than being the premier property asset in Africa, the V&A Waterfront has all the performance fundamentals in place,” Sasse said in a statement this week.

“[The] V&A Waterfront enjoys robust demand across all sectors, with lower vacancy rates than anywhere else in the country, and benefits from significant net income growth.”

One of the finest waterfront developments

Located around the historic Victoria and Alfred Basins which formed Cape Town’s original harbour, the V&A Waterfront is widely recognised as one of the finest waterfront developments in the world, and is South Africa’s most popular tourist destination, attracting in excess of 21-million visits annually.

Set against a backdrop of sea and mountain views, shopping and entertainment as well as arts and culture venues are intermingled with office locations, nine hotels and 518 luxury sectional title apartments in the residential marina.

The V&A Waterfront consists of 603 868 square metres of bulk development rights approved by the Cape Town City Council, of which approximately 64% (383 833 square metres) has been developed and approximately 36% (220 035 square metres) remains available for future development.

“We are pleased that this South African landmark will once again rest in South African hands,’ said PIC chief executive Elias Masilela. “In addition to the benefits this asset will bring to many South African pensioners who now own 50% of the viable and dynamically growing V&A Waterfront, it also represents an opportunity for growth which will come from the future development of the undeveloped bulk.”

Unique and highly desirable destination

Masilela said the property was a unique and highly desirable destination and historic landmark situated on a vibrant working harbour, which is an important international trading route for South Africa, with great proximity in Cape Town, including its immediacy to the Cape Town International Convention Centre and the new Cape Town Stadium and park.

The developed property boasts a well established and mature portfolio of properties across the retail, office, hotel and industrial sectors, with attractive rentals, rental escalations and lease expiry profiles. The V&A Waterfront has a mix of long-term, high-profile retail and business tenants.

Future development key

A key component to the transaction is the significant value potential to be unlocked through the development of the approved developable bulk at the V&A Waterfront.

“The development rights provide flexibility in terms of land use rights and timing of development and the purchasers intend to pursue new developments which create the best value over time,” said Sasse.

Masilela concurred on the importance of the future development at one of South Africa’s most significant harbours: “We determine a positive future through the investments that we make today and the prudent management of these investments,” he said.

According to the statement, both stakeholders are long-term property investors with the collective access to funding to drive the development of the bulk at the V&A Waterfront.

“Future plans will ensure it continues to be fresh and relevant to Capetonians – who have a strong emotional attachment to, and pride in, “their” waterfront – and visitors alike, and that it continues to set the benchmark for international waterfronts,” Growthpoint said.

SAinfo reporter

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