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Staff Writer

V&A Waterfront to undergo extensive redevelopment, including iconic hotel



Growthpoint Properties Limited has delivered robust operational results across its local and international investments for the financial year ending 30 June 2024.


The standout performance came from the V&A Waterfront, with steadily improving property metrics from its stable South African portfolio.


Despite these gains, the strong operational performance was dampened by the impact of higher interest rates, lower dividends from Globalworth Real Estate Investments (GWI), and reduced profits from the South African trading and development division.


As a result, distributable income declined by 10%, aligning with the guidance provided to the market.


Norbert Sasse, Group CEO of Growthpoint Properties, reflected on the results, stating, “The improvement in our domestic portfolio’s property fundamentals and the strong operational performance of our international investments indicate that we may have passed the lowest point of the curve and are now seeing signs of improvement.


"We successfully progressed the company’s strategic initiatives in a year that was as tough as ever but ended with brighter prospects on the horizon.”


Sasse also highlighted a shift in sentiment following recent elections, noting, “There is undoubtedly a greater sense of positivity, which has resulted in a rise in foreign investment in SA bonds and equities and will become more evident in the property sector as higher interest rates start working their way out of debt-servicing costs.”


Looking ahead, Sasse said: “Interest rates are anticipated to come down, and the effect of this is likely to start showing in our business from the second half of FY25.


"Nevertheless, the ongoing refinancing of interest rate swaps and cross-currency interest rate swaps at significantly higher rates continues to remain a challenge for earnings growth.”


In South Africa, Growthpoint's diversified core portfolio consists of 345 retail, office, and industrial properties, along with nine trading and development properties.


The company continued to invest in its portfolio, committing R2.1 billion to upgrades and new developments.


Significant projects include the completion of upgrades and extensions at River Square and Vaal Mall, with the major redevelopment of Bayside Mall expected to finish in November 2024.


Additionally, Beacon Bay Retail’s expansion, which includes a 3,100sqm Builders Express, is set for completion in June 2025, and the Longbeach Mall extension for a 2,300sqm Builders Express is scheduled for November 2025.


The V&A Waterfront, where Growthpoint holds a 50% interest with a share of property assets valued at R11.5 billion, delivered stellar results.


The precinct saw exceptional performance in its retail, hospitality, and attraction sectors, largely driven by tourism.


This was further supported by new developments, minimal vacancies at just 0.3%, and strong demand that bolstered rental levels.


The new Union Castle building, fully let and anchored by Marble restaurant and a flagship Nike store, will open in time for the festive season.


The V&A’s like-for-like net property income (NPI), which includes a growing portion of operating income, increased by 13.4%.


“The V&A expects mid-single digit growth next year as it undertakes major upgrades. The extensive refurbishment of Table Bay Hotel will begin in February 2025, and it will relaunch as the InterContinental Table Bay Cape Town later in the year.

"The conversion and extension of an existing wing of the mall for international luxury brands is set to open in November 2025 has commenced, so normal trading in this area has paused for the project,” said Sasse.

Sasse announced a significant investment of up to R4.5 billion in the renowned mixed-use precinct over the next two years. The development includes five-star hotels, leisure facilities, residential areas, and retail spaces.


He also confirmed that the R4.5 billion development pipeline will be funded by both Growthpoint and the Public Investment Corporation (PIC).


Around R2 billion of this investment will be allocated to two internationally branded hotels at the V&A Waterfront, including a R1 billion transformation of the iconic Table Bay Hotel into an InterContinental Hotels Group (IHG) property.


The revamped hotel will feature 306 rooms, with 45 newly designed guest suites.


Growthpoint is also advancing two significant developments in its office portfolio. A net-zero carbon redevelopment at 36 Hans Strydom in Cape Town is underway for Ninety One, which will occupy the building on a 15-year lease once completed in July 2025.


Additionally, responding to the increasing demand in the Western Cape’s tourism and hospitality sectors, Growthpoint is developing the 154-room Hilton Canopy Hotel in its Longkloof mixed-use precinct, with an opening planned for December 2024.

Continuing its commitment to enhancing the quality of its South African portfolio, Growthpoint has allocated R1.5 billion for further investments in FY25.


The company’s in-house trading and development division, which develops assets for its balance sheet, earned R42.2 million in trading profits, R9.8 million in development fees, and R25.4 million in net property income during the year.

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