Iconic Sandton properties selling for R1.1 billion
Southern Sun and its partner, Pareto, have moved to acquire several Sandton properties for a total consideration of R1.1 billion.
The properties include The Sandton Towers, Garden Court Sandton City, Sandton Convention Centre and the Virgin Active Sandton.
They are part of a consortium of properties currently owned by the Liberty Group and Pareto in a 75/25% split. Following the deal, the properties would be owned by Southern Sun and Pareto in a 50% split.
Southern Sun currently operates the Sandton Sun, Sandton Towers, Garden Court Sandton City and the Sandton Convention Centre under long-term lease and management contracts for Liberty Group and Pareto.
The Virgin Active Sandton is leased to the Virgin Active Group.
Liberty is a wholly owned subsidiary of the Standard Bank Group, and Pareto is 100% owned by the Government Employees’ Pension Fund, which is managed via the Public Investment Corporation (PIC).
In a statement to shareholders on Tuesday (3 February), Southern Sun said that it has reached non-binding terms with Pareto and Liberty to acquire the assets.
Pareto’s shareholding of the properties would increase from its current 25% to 50%, while Southern Sun would acquire the remaining 50% from Liberty.
Notably, the Sandton Sun hotel, which is not situated on the target property, will continue to be owned by Liberty and Pareto in their existing proportions of 75% and 25% respectively, with Southern Sun continuing to operate the hotel under a long-term lease agreement.
Southern Sun said the acquisition made sense because it owns 85% of its total hotel portfolio, either through freehold or leasehold title.
“The proposed transaction aligns with Southern Sun’s strategy to strengthen its portfolio of high-quality, strategically located assets in key metropolitan nodes and presents an opportunity to increase the group’s freehold exposure to world-class hospitality assets alongside long-standing partners,” it said.
The aggregate value of Liberty’s 75% interest in the Target Assets is R1.102 billion, with Southern Sun’s 50% share equating to R735 million, payable in cash from available debt facilities.
The aggregate valuation of the assets is R1.435 billion, with the last independent valuation conducted as at 31 December 2024.
The audited profit of the assets for the 12 months ended 31 December 2024 was R153 million.
The proposed deal is subject to the fulfilment of various conditions, which are standard for transactions of this nature, by no later than 30 September 2026 or another date agreed by the parties.
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