Two ‘houses’ in Cape Town sold for R100 million
Listed REIT Spear has announced the disposal of two commercial properties in Cape Town for over R100 million, resulting in a R26 million profit.
The properties, Hamilton House and Chiappini House, in the Cape Town CBD, are long-term commercial rental properties.
The properties comprise 3,452 sqm and 1,024 sqm of commercial space, respectively, in two side-by-side erven in De Waterkant, Cape Town.
Spear acquired both properties in October 2024 for just over R80 million as part of the acquisition of the Emira Property Fund’s portfolio.
Now, 19 months later, the group has concluded a deal to dispose of the properties for R100 million, with the price escalating by 0.5% per month from 1 April 2025 to the date of registration of the transfer.
Accordingly, as at the date of the latest announcement, the Disposal Consideration is equal to approximately R107 million.
The disposal was approved by the Competition Authorities on 11 May, the group said, adding that the deal has now become unconditional.
The group described the properties as non-core assets in its portfolio, which could be sold to unlock value for shareholders and allow focus on higher-yielding properties in the province.
“The disposal aligns with Spear’s capital recycling strategy when clear shareholder value unlock opportunities occur,” it said.
The group added that the properties are located in an increasingly residential and redevelopment-focused precinct.
Here, the long-term highest and best use for the properties lies in redevelopment, which diverges from Spear’s income-focused strategy, it noted.
However, this created a clear and actionable opportunity to unlock value, which the group “crystallised” by selling the buildings at a premium to the original acquisition price.
“The disposal further reduces Spears’ exposure to smaller, decentralised office assets and therefore simplifies overall portfolio composition in line with management strategy,” it said.
The uplift in value of approximately R26 million from the purchase consideration added 5 cents to Spear’s net asset value since the acquisition of the properties.
The group noted that the disposal consideration represented less than 5% of Spear’s market capitalisation as at the agreement’s signature date.
Accordingly, the disposal is uncategorised under the JSE Listings Requirements. The information has thus been voluntarily disclosed by Spear.
Images of Hamilton House and Chiappini House
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