Cape Town, South Africa – Leading retail property group Hyprop has made a significant move in the South African real estate market by acquiring Table Bay Mall in the Western Cape for R1.625 billion. The acquisition covers 100% of the commercial letting enterprise, including the property and lease agreements related to the mall, as well as a substantial solar panel installation. This strategic purchase underscores the mall’s strong growth potential, driven by its prime location in an area set for expansion over the coming years.
Table Bay Mall, a sprawling 67,500 square-meter shopping haven, is situated in Sunningdale, inland from Blouberg and Big Bay, on Cape Town’s burgeoning west coast. This region of the Western Cape is expected to witness above-average growth, primarily due to the ongoing residential development, partly spurred by relocation trends favoring the Western Cape.
The mall’s unique location is within a high-growth node, with plans for the construction of an additional 5,000 to 7,500 residential units over the next five to ten years, directly benefiting its retail businesses. Notably, the residents in this area tend to be medium to high-income earners, making it an attractive prospect for retailers.
Hyprop’s Chief Executive Officer, [CEO’s Name], emphasized the significance of the acquisition, saying, “The acquisition of Table Bay Mall is a unique opportunity for Hyprop to acquire a premium retail property at a fair market value at a relatively early stage of its life cycle, with the potential to unlock additional growth through active asset management initiatives, including optimizing the tenant mix, drawing on Hyprop’s proven retail property management expertise.”
According to Hyprop, the net property income attributable to Table Bay Mall for the year ending on February 28, 2023, amounted to R108.6 million. The company projects that the net property income, before depreciation, for the period from November 1, 2023, to October 31, 2024, will reach R125.7 million, highlighting the mall’s potential for generating substantial revenue.
However, it’s important to note that the transaction still requires competition clearance and must meet other conditions. Hyprop aims to fulfill these prerequisites no later than April 30, 2024, before finalizing the acquisition.
In an environmentally conscious move, Hyprop will also pay the sellers R23.3 million in respect of the cost of the solar panels currently being installed on the center. The company will oversee the installation and commissioning of the solar panels at its own expense, estimated to be around R29 million.
The sale of Table Bay Mall follows a trend of mega-retail centers in South Africa changing hands amid challenging trading conditions. In September, Baywest Mall, the largest mall in the Eastern Cape, was sold for R1.3 billion as part of a wider R7 billion sale of Rebosis properties. Later the same month, the biggest shopping mall in the Free State, Bloemfontein’s Loch Logan Waterfront, was put up for sale by closed tender.
Despite these shifts in ownership among larger retail centers, smaller, yet still sizeable, retail centers are sprouting up across the country, especially in remote areas and regions experiencing population growth. These changes in the retail landscape reflect the dynamic nature of the South African real estate market.
Hyprop’s acquisition of Table Bay Mall underscores its commitment to identifying opportunities for growth and seizing them strategically. With the potential of this prime location and the upcoming residential developments in the Western Cape, Hyprop’s investment in Table Bay Mall is poised to bear fruitful results in the near future.
