SA’s largest commercial real estate investment trust (Reit), Growthpoint Properties, is enhancing several of its prime properties in the Western Cape to boost investment value, as the province is delivering the highest returns.
The Western Cape, benefiting from semigration and a stable governance framework that fosters growth and opportunities, accounts for 25% of the group’s total income, excluding the V&A Waterfront.
Growthpoint Properties SA CEO Estienne de Klerk says Cape Town continues to demonstrate stronger property fundamentals across all three commercial property sectors, with high occupancy levels and strong demand, which support rental growth.
Some of the properties that are undergoing value enhancements include the Longkloof precinct, which is in Cape Town’s vibrant Kloof Street area. Major office tenants include Travel Start, Mushroom Media and Workshop17, alongside the 154-room Canopy by Hilton Hotel set to open in late January 2025.
Growthpoint has transformed Longkloof, a historical building complex, into a mixed-use destination featuring red-brick facades, industrial interiors and the new Canopy by Hilton Cape Town Longkloof Hotel, which is undergoing construction.
“The investment in the redevelopment of the mixed-use Longkloof precinct was R800m in total, which includes R600m for the new Canopy by Hilton Hotel, made up of R400m for the hotel building and fit-out, as well as 1,000m2 of ground-level retail and R200m for the parking basement. The Longkloof precinct also includes 16,000m2 of offices,” De Klerk said.
The group is focused on expanding the retail and logistics segments of its properties through targeted investments, disposals and active management. It is also optimising its domestic holdings. The Western Cape portfolio accounts for 27% of its SA assets by value and 11% of lettable area.
Meanwhile, 36 Hans Strijdom is undergoing a R365m green refurbishment to become a state-of-the-art head office. For more than 20 years, it has housed global investment manager Ninety One, which has signed a new 15-year lease, reaffirming its commitment to the building and Cape Town’s CBD.
The redevelopments feature a sleek new façade, energy-efficient air-conditioning, high-performance glazing and a rooftop solar plant. Other upgrades include a circulation staircase replacing escalators, along with enhanced amenities such as a canteen, auditorium and modern boardrooms.
De Klerk confirmed that Ninety One was being temporarily housed at the V&A Waterfront and would return to the 36 Hans Strijdom offices on a 15-year lease after the building’s green redevelopment is completed in mid-2025.
Growthpoint has observed a decline in office vacancies across all regions in SA where it invests. However, higher vacancies in Gauteng are expected to take longer to address.
The group’s office properties in coastal regions continue to outperform the rest of the portfolio, with KwaZulu-Natal maintaining a vacancy rate of under 1%, and the Western Cape portfolio also showing notably low vacancies, said De Klerk.
The V&A Waterfront, co-owned by Growthpoint Properties and the Government Employees Pension Fund, has projects under way that amount to R4.5bn, which will be conducted over the next two years with funding arranged through debt providers on the V&A’s balance sheet
“In addition, Growthpoint has developments and redevelopments in progress or recently completed in Cape Town (excluding the V&A Waterfront), representing an investment of R2bn,” he said.
Arterial Industrial Estate, situated in the industrial node of Blackheath, Cape Town, is expanding to 41,444m2 across two phases comprising 12 A-grade units tailored to meet modern logistics and industrial needs.
“Phase 1, completed in April 2024, is fully let. This strong market interest is evidence of the estate’s appeal, supported by its access to major routes like the R300, N1 and N2, and its proximity to Cape Town International Airport. These attributes make it a strategic choice for tenants looking to connect seamlessly with local and global markets,” De Klerk said.
On the retail side, Bayside Mall in Table View has undergone a major transformation with the completion of a R352m redevelopment. The 39,122m2 shopping centre, located at the corner of Blaauwberg and West Coast roads, combines modern design with an improved retail offering.
According to Gavin Jones, retail asset management head at Growthpoint, the mall has successfully recovered from losing tenants by repositioning itself. It is now one of the first malls in the area to feature both Shoprite and Checkers in the same space. The mall has 107 tenants and annual turnover of R657m with footfalls amounting to 4.6-million visits.
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