Property

South African property giant pulling out of deteriorating areas across the country

Luke Fraser

 ·10 Sep 2025

Growthpoint Properties, the largest Real Estate Investment Trust (REIT), is increasingly selling retail and office space across South Africa, pulling out of deteriorating nodes.

In its financial results for the year ended 30 June 2025, the group noted that it is in the process of improving its South African portfolio.

This includes decreasing the portfolio weighting of the office sector and exiting deteriorating nodes and central business districts (CBDs). 

The group said it will continue to dispose of non-core assets, such as assets that are high risk and do not possess future growth prospects that interest the group. 

The group sold 24 properties across office, retail and industrial sectors for R2.3 billion, with a profit on book value of R400 million. 

Since FY17, the group has sold 40 office properties, mainly B and C grade office buildings for R5.5 billion. 

The group noted that the sector has reached the bottom of the cycle and there has been an improvement in the sector’s key performance indicators over the last two financial years. 

Nevertheless, five office properties were sold in FY25 for R432.3 million. 

29 retail assets that were below optimum size or were in deteriorating CBDs have also been sold for a total of R3.9 billion since FY17. 

“All shopping centres that are deemed a long-term hold have either undergone an extensive refurbishment or are scheduled for strategic intervention over the next three years.” 

Five retail properties were sold in FY25 for R946.7 million. 

While the group has sold over 100 old industrial and manufacturing properties since FY17, it continues to prioritise the growth of our investments in and exposure to the better-performing logistics sector. 

“Our development and capital expenditure are focused on the stronger performing Western Cape province due to its strong property fundamentals,” it added. 

“A total of R1.6 billion development and capital expenditure was incurred, and the key projects include the redevelopment of Bayside Mall in Table View (R161.4 million).” 

Moreover, the group noted that it increased its solar and backup water capacity to reduce reliance on the national grid and address water supply. 

Financials

Looking at the group’s financials, total group revenue,  excluding Capital & Regional plc (C&R), increased by 2.2% to R13.3 billion. 

Group operating profit, excluding C&R, increased by 5.5% to R8.7 billion.

Distributable income per share (DIPS) increased by 3.1% to 146.3 cents per share on the back of an improved contribution from the three South Africa sectors.

This included like-for-like net property income (NPI) growth, improved negative rent reversions in the office & retail sectors, and positive renewal growth in the logistics & industrial sectors. 

The group’s dividend per share also increased by 6.1% to 124.3 cents per share, driven by the improved South African performance and an increased payout ratio of 85.0% 

Notably, the group’s basic earnings per share increased 329.7% to 161.10 cents following heightened fair value adjustments in 2025.