{"id":874799,"date":"2026-09-10T15:15:22","date_gmt":"2026-09-10T13:15:22","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=874799"},"modified":"2026-09-10T15:15:25","modified_gmt":"2026-09-10T13:15:25","slug":"carlton-centre-for-sale-as-struggling-state-owned-company-looks-to-save-r200-million-a-year","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/874799\/carlton-centre-for-sale-as-struggling-state-owned-company-looks-to-save-r200-million-a-year\/","title":{"rendered":"Carlton Centre for sale as struggling state-owned company looks to save R200 million a year"},"content":{"rendered":"\n

Transnet’s property division reported roughly R782 million in losses in the last year, and plans to sell off parts of its portfolio to reduce costs.<\/p>\n\n\n\n

The division of the state-owned company holds over R16 billion in assets across residential, commercial, and industrial properties, excluding in-progress projects.<\/p>\n\n\n\n

Its investment property portfolio alone is worth over R10 billion, with property, plant, and equipment assets valued at R1.8 billion.<\/p>\n\n\n\n

The portfolio posted losses of R782 million for the past year, as revenue decreased by 3.4% from the previous year.<\/p>\n\n\n\n

Transnet Property chief executive Kapei Phahlamohlaka said the decline in revenue was due to a lack of tenants for vacant properties in several areas in South Africa.<\/p>\n\n\n\n

“Revenue decreased by 3.4% due to external revenue being adversely affected by vacant properties that could not be filled,” he said.<\/p>\n\n\n\n

“Loss of major tenants in key precincts such as Deal Party and Arcadia Park in the Eastern Cape and Karsene in Gauteng,” also hit, he said.<\/p>\n\n\n\n

Phahlamohlaka said the division struggles to compete with private sector property portfolios for tenants, given these companies’ high quality.<\/p>\n\n\n\n

“Transnet Property’s poor portfolio quality makes it challenging to secure higher rentals comparable to well-maintained private sector portfolios, and this is evident in the limited revenue growth achieved,” he said.<\/p>\n\n\n\n

“The Operating Division\u2019s historically poor financial performance stems from high operating costs and the inability to attract and retain good tenants, due to an aged, inadequately maintained portfolio and limited access to capital.”<\/p>\n\n\n\n

Earnings Before Interest, Taxation, Deductions, and Amortisation (EBITDA) fell by 211% in 2026, declining to a R195 million loss.<\/p>\n\n\n\n

One issue plaguing Transnet is the historical debt owed to it, which the company struggles to recover due to legal challenges.<\/p>\n\n\n\n

“Transnet Property continues to be challenged with the high levels of debtors due to significant delays in the collection of historical debt as a result of lengthy legal processes,” Phahlamohlaka said.<\/p>\n\n\n\n

Transnet’s turnaround plan<\/h2>\n\n\n\n
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To address the division’s poor financial performance, Transnet Property plans to sell large parts of its portfolio.<\/p>\n\n\n\n

“Given Transnet\u2019s constrained financial position<\/span>, innovative measures are being explored to raise the capital for strategic investments,” Phahlamohlaka said.<\/p>\n\n\n\n

“We have adopted a dual approach \u2013 self-funding through the disposal of non-core properties and collaborating with private-sector property partners to develop commercial opportunities or to offer assets for private development.”<\/p>\n\n\n\n

Transnet previously announced it would sell 15 properties<\/a> from its portfolio, including the iconic Carlton Centre.<\/p>\n\n\n\n

The company previously tried to sell the building, which was South Africa’s tallest before the Leonardo was constructed, in 2023.<\/p>\n\n\n\n

This plan ultimately fell through when bidders could not provide evidence of the necessary funds to back their bids.<\/p>\n\n\n\n

Other properties being sold included golf courses, shopping malls, and other pieces of land as part of the company’s turnaround efforts.<\/p>\n\n\n\n

The company said selling properties and simplifying its portfolio could raise capital and reduce its operating costs.<\/p>\n\n\n\n

“Besides optimising the property portfolio, disposals allow TP to raise much-needed cash and reduce property-related costs,” Phahlamohlaka said.<\/p>\n\n\n\n

“The sale of the residential portfolio could save about R200 million per annum in holding costs”<\/p>\n\n\n\n

To improve its operational performance, the division listed several focus areas, including:<\/p>\n\n\n\n