The Competition Commission of South Africa has recently given its stamp of approval for two significant mall transactions, ushering in a new era of growth and development in the retail landscape. In a bid to optimize the potential of the commercial property market, the commission greenlit the sale of the sprawling 67,500 square-meter Table Bay Mall in Cape Town to Hyprop, and the expansive 73,000 square-meter Mall of the South in Johannesburg to Redefine.
Hyprop’s acquisition of Table Bay Mall, located in the vibrant Sunningdale area, inland from Blouberg and Big Bay, is set to mark a transformative move in the retail sector. The R1.625 billion deal encompasses 100% ownership of the commercial letting enterprise and the installation of cutting-edge solar panels at the mall. Hyprop justified this significant investment by citing the mall’s robust growth potential, fueled in part by residential development and the phenomenon of semigration to the Western Cape.
Situated in a high-growth node, the vicinity around Table Bay Mall is anticipated to witness the construction of 5,000 to 7,500 additional residential units over the next five to ten years. The Competition Commission, after thorough evaluation, has deemed this transaction unlikely to substantially impact or hinder competition in the market. Furthermore, no public interest concerns were raised, prompting the commission to recommend unconditional approval from the Competition Tribunal.
Turning attention to the Mall of the South, the commission has similarly given the green light for Redefine’s full acquisition of the mall from joint-owner RMB. Currently, 80% owned by RMB Investment and Advisory (RMBIA) and 20% by Redefine, this super-regional retail center is strategically located at the intersection of Swartkoppies Road and Kliprivier Drive in the southern part of Johannesburg, Gauteng.
Unlike a conventional sale, Redefine’s full takeover of Mall of the South signifies the completion of terms negotiated between the companies when the mall was initially acquired from Zenprop in 2020. At that time, RMB extended a term and revolving facility amounting to R1.82 billion for the outright acquisition of the mall. Redefine provided property management services under this agreement.
The intricate deal involved a put option (shares) issued by Redefine, allowing RMB to sell its shares in the mall to Redefine. Additionally, a put option (claims) was extended to First Rand (RMB’s owner), granting First Rand the right to transfer its rights and obligations to Redefine. Exercising its option, RMBIA’s 80% shareholding was acquired by Redefine, solidifying its control over the mall.
With this transaction, Redefine will continue to operate the mall seamlessly, ensuring it remains a going concern. The Competition Commission, mirroring its stance on the Table Bay Mall deal, has determined that the acquisition of Mall of the South by Redefine poses no significant competition concerns and has no adverse effects on public interest.
These strategic acquisitions signal a promising trajectory for the South African retail landscape, with both Hyprop and Redefine positioning themselves to capitalize on the evolving market dynamics. As these malls change hands and transition under new ownership, the Competition Tribunal’s anticipated approval without conditions sets the stage for a transformative period in the country’s commercial property sector. The increased investment and confidence in these key retail hubs are expected to catalyze economic growth and contribute to the ongoing development of South Africa’s urban centers.
