9 popular shopping malls in South Africa sold for R2 billion
JSE-listed South African real estate company Dipula Properties has bought nine shopping centres from Moolman Group and its co-investors in a deal worth R2 billion.
This deal, which adds almost 90,000 square metres of retail space, involves malls located in the Free State, the North West, Gauteng, and Limpopo.
The acquisition includes four shopping centres in Limpopo:
- Lephalale Mall (50% stake)
- Checkers Centre Polokwane
- City Centre Polokwane
- Great North Plaza (in Musina)
It also includes two shopping centres in the Free State:
- Sasolburg Mall (50% stake), formerly Sasolburg Junction
- Bloemfontein Makro.
The acquisition includes two assets in Gauteng:
- Kaalfontein Corner (Tembisa)
- Rand Steam Shopping Centre (Richmond)
In the North West, there is one asset:
- Game Centre Vryburg
These shopping centres host some popular South African retail brands such as Checkers, Game, Makro, Shoprite, and Cashbuild.
Dipula Properties is a South Africa-focused Real Estate Investment Trust (REIT). The company was listed on the Johannesburg Stock Exchange (JSE) in August 2011.
Dipula has invested in a diverse portfolio of assets located throughout South Africa. Its retail properties are situated close to residential areas in townships, and in both rural and urban locations.
The company owns a core portfolio of mid-sized logistics and industrial assets, multi-purpose office properties, and a smaller, non-core portfolio of affordable, quality residential properties.
The biggest property in this deal is a 50% stake in Lephalale Mall in Limpopo, which accounts for around a quarter of the total transaction value.
Dipula is using two strategies to fund the major purchase, including utilising investors and bank loans.
The company has sold new shares to private investors, which helped it raise R1.1 billion in cash. The new shares are set to start trading on the JSE on 1 September 2026.
The remaining balance will be covered by Dipula’s current debt facilities. Dipula’s overall debt-to-property value ratio will remain between 35% and 40%.
The acquisition is “accretive from day one,” meaning that the rental income from these shopping centres is sufficient to immediately boost Dipula’s earnings per share, rather than taking years to become profitable.
Over the past year, Dipula has acquired properties worth R3 billion.
Dipula increases its retail income to nearly 80%
This latest deal realigns its business model to focus primarily on retail, increasing its retail income to nearly 80% of its total portfolio while reducing its exposure to the weaker office market to around 10%.
The group raised R1.1 billion in private funding, demonstrating that institutional investors have considerable confidence in Dipula’s leadership and growth strategy.
Dipula Properties CEO Izak Petersen said the transaction advances Dipula’s strategic objective of expanding its portfolio through the selective addition of well-located, quality convenience, township and rural retail assets.
“The acquisition is strategically aligned with our portfolio strategy and reinforces Dipula’s commitment to uplift communities by providing accessible, everyday shopping experiences,” said Peterson.
“This is not growth for the sake of scale. It is disciplined, selective growth that strengthens the quality and diversification of our portfolio and is accretive from day one,” he said.
The new shopping centres are expected to generate a 9.3% annual rental return based on their purchase price.
However, this return is technically lower than Dipula’s average cost of raising capital, which includes both bank interest and investor expectations.
Since the group is financing the deal with approximately 40% lower-cost bank debt and investor equity, the malls’ cash flow is sufficient to cover their financing payments.
As a result, the transaction will be immediately profitable (“accretive”) for shareholders from day one.
“The strong support for our equity raise also demonstrates investor confidence in our strategy, our disciplined approach to capital allocation and the growth path ahead,” he said.
“The transactions are transformational for Dipula’s portfolio, increasing retail exposure to close to 80% of income in the short-term, while reducing office exposure to around 10%,” said Peterson.
He explained that Dipula expects to enhance income across the acquired assets through active asset management and the positive operational leverage created with its internal property management platform.
Images of some of the shopping centres sold
Lephalale Mall
City Centre Polokwane
Sasolburg Mall
Bloemfontein Makro
Kaalfontein Corner
Rand Steam Shopping Centre
Loading ...