One of the biggest malls in South Africa just sold for R1.3 billion

 ·7 Sep 2023

The biggest mall in the Eastern Cape, Baywest Mall, has sold for R1.3 billion as part of a wider R7 billion sale of Rebosis properties.

The group confirmed the sale this week, listing Baywest and another mega-mall among 27 properties sold to date.

Rebosis, a JSE-listed Real Estate Investment Trust (REIT), entered into business rescue in August 2022, following years of deterioration in financial performance.

The group was established by the Billion Group in 2010 and became the first black-managed and substantially black-owned property fund to be listed on the JSE.

While the company owns a number of high-value income-generating properties – including several large malls – the group came under increasing financial pressure in recent periods, which resulted in the group’s financial position deteriorating significantly.

Some notable pressures included the rising interest rate cycle on servicing debt costs as well as an inability to recover increased municipal costs from sovereign tenants.

To address the group’s ballooning debt, the group’s business rescue practitioners (BRPs) embarked on a sale of around 41 properties, which include a mix of commercial properties and retail centres.

Specifically, there were five key retail centres, of which the biggest was the 87,000 square metre Baywest Mall in Gqeberha.

Baywest Mall

The others include Hemingways Mall in East London, Sunnypark and Bloed Street malls in Pretoria, and Forest Hills Mall in Centurion.

Baywest has sold for R1.3 billion to a consortium of investors under the name Hangar 18 Portfolio. The same consortium also acquired 74,000 square metre Hemingways Mall for the same price.

The business rescue documentation listed the values of the malls at R1.6 billion and R1.7 billion, respectively – however, the value at the time of sale was around R1.25 billion.

Hemingways Mall

Read: Massive shake-up for shopping malls in South Africa as Spar, Pick n Pay and Shoprite end exclusivity agreements

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