Shopping mall in South Africa selling for R442 million
The sale of the Watergate Centre in Mitchells Plain, Cape Town, has been given the green light by the Competition Commission.
The Competition Commission recommended that the Competition Tribunal approve the proposed transaction where Spear REIT intends to acquire the mall from MPW Cape Properties.
The commission said that while Spear also owns the Viking Business Park in Epping and the Maynard Mall in Wynberg, the deal is unlikely to substantially lessen or prevent competition in the market.
Spear is acquiring the mall for R442 million, having previously said that the deal forms part of Spear’s strategy to acquire well-located, convenience-led retail assets in the Western Cape.
Spear operates exclusively in the Western Cape. Watergate is a convenience-focused shopping centre that is located on key arterial routes along the R300, which serve Mitchell’s Plain and its surrounds.
The centre has 19,642 sqm of gross lettable area (GLA) and is anchored by Shoprite and Brights Hardware. Other tenants include Clicks, Pep, Ackermans, Mr Price, KFC, Capitec and Zone Fitness.
The REIT said that the value-focused tenant mix underpins the centre’s consistent footfall and daily needs trading.
It added that the mall serves a high-density catchment area with strong consumer spending power and limited competing convenience retail offerings.
The centre’s income is mainly underpinned by grocery and food trading, with national tenants accounting for the majority of gross rental income.
With the centre fully let, Spear said the acquisition generates immediate, high-quality cash flows.
“The centre represents a scarce opportunity to acquire a cash-generative, defensive retail asset with durable income characteristics and identifiable asset management upside,” it said.
The deal is anticipated to be completed by around 1 August 2026, and will go through as soon as all conditions precedent are fulfilled.
For the forecasted 7 months ending 28 February 2027, the mall is expected to record R37.5 million in rental income. Its distributable profit is expected to reach R833,000 in the seven-month period.
For the year ending 28 February 2028, Spear expects rental income of R67.1 million and distributable profit of R2.6 million.
| Watergate Centre Expectations | Forecast for the 7-month period commencing 1 August 2026 and ending 28 February 2027 (R) | Forecast for the 12-month period ending 28 February 2028 (R) |
| Rental income | 37,524,632 | 67,099,741 |
| Straight-line rental accrual | 801,498 | (29,786) |
| Gross income | 38,326,130 | 67,069,955 |
| Property expenses | (14,984,080) | (27,184,787) |
| Net property income | 23,342,050 | 39,885,168 |
| Administrative expenses | (1,125,739) | (2,012,992) |
| Operating profit | 22,216,311 | 37,872,176 |
| Finance cost | (20,581,200) | (35,282,058) |
| Profit before taxation | 1,635,111 | 2,590,118 |
| Taxation | – | – |
| Profit after taxation | 1,635,111 | 2,590,118 |
| Adjusted For: | ||
| Straight-line rental accrual | (801,498) | 29,786 |
| Distributable profit | 833,613 | 2,619,904 |
| Contracted rental income % | 93.06% | 28.41% |
| Near Contracted rental income % | 6.94% | 71.59% |
| Uncontracted rental income % | 0% | 0% |
Images of the Watergate Property
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