{"id":850071,"date":"2026-02-06T10:31:40","date_gmt":"2026-02-06T08:31:40","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=850071"},"modified":"2026-03-11T12:55:18","modified_gmt":"2026-03-11T10:55:18","slug":"discovery-splashes-r4-billion-to-buy-its-own-head-office-which-has-its-own-woolworths","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/850071\/discovery-splashes-r4-billion-to-buy-its-own-head-office-which-has-its-own-woolworths\/","title":{"rendered":"Discovery splashes R4 billion to buy its head office – which has its own Woolworths"},"content":{"rendered":"\n

Discovery is buying its own head office building in Sandton, 1 Discovery Place, in a deal worth R4 billion. <\/p>\n\n\n\n

Discovery moved into the office in 2018 and believes it will remain there for more than seven years, when the current lease agreement expires. <\/p>\n\n\n\n

The move also accounts for the long-term, strategic nature of office planning, especially given the scale of Discovery’s Johannesburg operations. <\/p>\n\n\n\n

“The group is deeply committed to South Africa and believes the head office has served the group well in all aspects and aligns with its purpose, values, and its long-term outlook,” Discovery said.<\/p>\n\n\n\n

The deal will see Discovery Phase 1, which includes the Grove and Park buildings of 1 Discovery Place, and will cancel the lease for Phase 2 at the Ridge building.<\/p>\n\n\n\n

The move will be facilitated by Discovery Propco, which has entered into an agreement with South Africa’s largest landlord, Growthpoint Properties, and the trustees of the Truzen 114 Trust. <\/p>\n\n\n\n

Discovery Propco will purchase Phase 1 of the letting enterprise of the office comprising 91,756 sqm.<\/p>\n\n\n\n

The sellers have also agreed with Discovery Central Services to cancel the Phase 2 lease, comprising 19,369 sqm. <\/p>\n\n\n\n

Discovery said the total consideration for the transaction is R4.05 billion, exclusive of VAT, and that the deal is fully funded via pre-arranged debt. <\/p>\n\n\n\n

Discovery said that the transaction is subject to Competition Authority approval and other customary suspensive conditions. <\/p>\n\n\n\n

BusinessTech has regularly visited 1 Discovery Place, which differs heavily from most offices in the country.<\/p>\n\n\n\n

The vast office has several other amenities, including its own Woolworths Food Store, a Seattle Coffee, Home Affairs Services, a gym and a rooftop terrace. <\/p>\n\n\n\n

Why the move <\/h2>\n\n\n
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Discovery said that the transaction provides strong financial and economic benefits for the group. This arises because economic dynamics have moved in favour of a purchase. <\/p>\n\n\n\n

This is due to the interest rate environment, with more cuts expected, and property prices in Johannesburg, which have reduced significantly.<\/p>\n\n\n\n

This has enabled Discovery to switch from a long-term lease to a fully funded financing arrangement with ownership, at a lower overall cost.<\/p>\n\n\n\n

The positive effect of the move is expected to be immediate and to expand net annual cash-flow savings, delivering roughly R800 million in net present value over the remaining lease period. <\/p>\n\n\n\n

The group has accounted for the long-term lease obligations under IFRS 16, where the right-of-use asset and corresponding lease liability are recognised in the statement of financial position.

It noted that the obligations of the financing lease have had a similar risk exposure to debt financing. However, with a different accounting treatment, the value has been excluded from the group’s financial leverage ratio. <\/p>\n\n\n\n

Once the transactions take effect, the group expects a positive impact on earnings. <\/p>\n\n\n\n

While the financial leverage ratio will initially increase, it is expected to reduce to the lower end of the group’s guidance range of 10% to 20% over the next few years. <\/p>\n\n\n\n

Growthpoint Properties said that the move reduces its office exposure and contributes to a reduction in single-tenant asset concentration in the Sandton node. <\/p>\n\n\n\n

It also supports a rebalancing of Growthpoint’s portfolio towards sectors and regions expected to deliver more stable, resilient income profiles over the longer term, such as retail, logistics, and the Western Cape.<\/p>\n\n\n\n

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1 Discovery Place Images<\/h2>\n\n\n
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<\/p>\n","protected":false},"excerpt":{"rendered":"

Discovery has acquired its own Head Office in Sandton, noting that the switch from rent to debt repayments will actually result in a profit boost. <\/p>\n","protected":false},"author":95,"featured_media":664243,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[4883],"class_list":["post-850071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-discovery"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/850071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=850071"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/850071\/revisions"}],"predecessor-version":[{"id":853619,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/850071\/revisions\/853619"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/664243"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=850071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=850071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=850071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}