Africa’s ‘most-valuable property’ proving to be a good investment for SA’s Growthpoint
Cape Town’s V&A Waterfront, reportedly Africa’s most-valuable and -visited property, is proving to be a lucrative investment for Growthpoint Properties, South Africa’s largest primary-listed real estate investment trust.
In 2011 Growthpoint acquired a 50% stake in the V&A Waterfront, a mixed-use property development located around the historic Victoria and Alfred Basins which formed Cape Town’s original harbour.
In its financial results for the six-month period to 31 December 2016, which came out this week, the company reported distribution growth of 6.1%, supported by a strong 8.7% contribution from the V&A Waterfront.
Speaking to Moneyweb, Growthpoint managing director Estienne de Klerk described the V&A Waterfront as “probably… Africa’s most valuable property, and certainly the most visited”. According to the company, it attracted 24.6 million visitors in 2016, an increase of over a million compared to the previous year.
The V&A Waterfront also benefited from a high number of overall visitors to Cape Town – the city’s airport reportedly handled a record 10 million passengers in 2016.
Growthpoint is also investing in the further development of the V&A Waterfront. Over the reporting period it devoted R311.8m (US$23.8m) in development and capital expenditure, and made further commitments of R363.9m ($27.8m). Tenants for the newly developed areas include: British American Tobacco, PwC, Virgin Active, EY and Radisson Red. The Zeitz Museum of Contemporary Art Africa is anticipated to open at the new Silo District by September 2017.
The V&A Waterfront’s top five tenants, based on monthly rentals, are currently Nedbank Group (office), Allan Gray (office), Legacy Hotels (hospitality), Newmark Hotels (hospitality) and Edcon Holdings (retail).
Looking ahead, Growthpoint expects South Africa’s property fundamentals to weaken due to insufficient economic growth prospects. Other factors influencing the market are greater competition between shopping centres, a subdued office market and higher costs associated with attracting and retaining tenants.