Big chunk of Cape Town’s tallest building selling for R580 million
Accelerate Property Fund is selling its share of the Portside Tower in Cape Town, the city’s tallest building.
Accelerate is selling its share of the building to Penalten Investments, a subsidiary of the Cavaleros Group Holdings, for R580 million.
The JSE-listed REIT’s share in the building includes ground floor retail, office floors from level 9 to 18, 623 parking bays and the related common areas.
The 139-metre-tall property is within the city’s CBD and comprises a city block bordered by the Buitengracht, Hans Strijdom, Bree, and Mechau Streets.
The property was completed in 2014 and was the first skyscraper developed in the city’s CBD in 15 years. It has panoramic views of Table Mountain, the City Centre and the Atlantic Ocean.
It received a 5-star Green Star rating from the Green Building Council of South Africa, making it the tallest Green Building in South Africa.
The property was initially developed for FirstRand and Old Mutual. However, Old Mutual sold its share to Accelerate, which took on about 50% of the building’s ownership.
Notably, US President Donald Trump previously owned the land on which the Portside Tower is situated.
Property broker Ash Mullër said the Trump Organisation had an equal partnership with Devland to develop a R5 billion residential and hotel development on the land. However, this never came to fruition.
Accelerate said that transaction forms part of its ongoing strategic repositioning and restructuring
programme.
Accelerate intends to use the disposal proceeds to reduce debt. For the six months ended 30 September 2024, the group’s outstanding debt stood at R3.7 billion.
In addition to Portside Tower, the group also named the Buzz and Waterford Shopping Centres, the Thomas Patullo, and the Oceana buildings as non-current assets held for sale in its latest results.
The sales came after the group’s loss after tax increased to R255 million by September 2024. Its basic loss per share also increased from 6.6 cents to 15.74 cents.
A big problem for the group is Fourways Mall, which the group co-owns with Azrapart. Following a massive revamp in 2019, it became the nation’s largest shopping mall.
However, it has faced extreme challenges, with its vacancy rate skyrocketing. Its fair value dropped from R9.6 billion in 2020 to just under R8 billion in 2024.
However, a trading update released earlier this week showed that Fourways Mall has demonstrated a strong upward trajectory. It finished the 2024 calendar year well, with leasing and foot traffic gains.
The mall’s festive season trade furthered this growth, seeing a 9.5% increase in total spend compared to the previous year.
“The independent retail experts, Flanagan & Gerard and Moolman Group, have significantly impacted lease renewals,” Accelerate said.
The experts helped attract new tenants and shoppers. They also renewed 121 leases, totalling 46,972 sqm of GLA for an average of 4.2 years.
Images of the Portside building can be found below (Sources include: dhk Architects and Metrum).
Portside Tower
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