Major South African retailer putting R200 million shopping centre and home base up for sale

South African retailer SPAR says it plans to sell its headquarters and other ‘non-core’ properties to raise upwards of R200 million to help pay off its mountain of debt.
The retailer had a challenging 2024, which was headlined by the group’s exit from its loss-making Polish operations as part of a broader turnaround strategy.
The exit proved to be a costly affair, with SPAR needing to pay R2.7 billion to recapitalise the business—which it sold for just R185 million.
The R2.7 billion cost includes settling the existing guaranteed debt and certain restructuring costs of the business.
SPAR sourced the funding for this move from South African lenders in the form of a bridge loan of R2 billion. Group companies will fund the remaining amount, it said.
The short-term facility, together with a further R2.5 billion of local bank overdrafts, will be converted into a medium-term loan in its new financial year.
Speaking on SPAR’s exit from the Polish business, group CEO Angelo Swartz said that the group’s foray into Poland brought hard lessons, key of which is that the company knows local best.
He said that the experience also impacted the group’s views on future expansion outside South Africa’s borders.
“For now, our focus is on the heart of our business, being South Africa,” he said. “Our energies are best spent at home focusing on the challenges of the local market and expanding our business.”
The Polish exist also had an impact on debt.
Despite reducing its debt by around R2 billion year-on-year, the retailer is still sitting with a mountain of debt, totalling over R9.1 billion at FY 2024.
According to the group, to address and manage these debts, it is looking to pull various “levers” available to it, which it hopes will improve liquidity and financial flexibility.
Part of this is selling non-core property assets in South Africa, including its Pinetown head office.
Other properties it is considering selling are the Knowles Shopping Centre and the group’s West Rand property.
This, it said, will allow it to free up capital to be used to reduce debt. The sale is projected at upward of R200 million.
Swartz pointed out that the head office is attached to the Knowles Shopping Centre, and when the group decided to sell the shopping centre, it made sense to also sell the HQ to maximise value from the sale.
However, he stressed that the group wants to remain headquartered in KwaZulu Natal and will lease the building from the new owners for about five years, while it decides whether to relocate or not.
Another way to address the debt is potentially leasing the group’s fleet, which it said will enable the company to “unlock capital tied up in fixed assets”.
This idea is still in its infancy, according to Swartz, and the group has not committed to following that particular lead. But he noted that it is an opportunity worth upwards of R500 million in cash.
It is also looking to market certain corporate stores it currently owns, which will raise capital and reduce their negative financial impact.
Positively, the group was in compliance with all financing covenants at the year-end and said it had no plans to seek additional funding from shareholders.
Swartz said that even though debt has stabilised, reducing it remains a focus for the business and the management team would “like to be a bit more comfortable”.