Property group Pareto and Southern Sun’s Hospitality Property Fund are a step closer to buying further properties in the Sandton area from Liberty after receiving approval from the Competition Commission. The commission has recommended that the Competition Tribunal approve the two parties’ purchase of assets valued at more than R2bn, including the Sandton Sun & Towers, the Garden Court Sandton City, the Sandton Convention Centre and the Virgin Active gym. Pareto, which already owns 25% of Liberty’s Sandton City complex will pay about R400m to increase its stake to 50%.
“For Pareto, and the same goes for Southern Sun, this is not just a property transaction — it is the transfer of a significant legacy that goes to the heart of Liberty’s founding by Donald Gordon,” said Pareto CEO Malose Kekana. Kekana pointed out that the assets are a testament to the visionary entrepreneurship and excellence of those who came before. “Preserving this legacy is a fundamental responsibility at the heart of the transaction,” he said.
Beyond growing our balance sheet, these acquisitions add diversity. With the addition of these hotels, we gain our first significant exposure to the hospitality industry. We have always had a minority presence, but this is now the largest in our portfolio.
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“We already owned 25% of the hotel properties — Sandton Towers, the Convention Centre, and the Garden Court. The Sandton Sun is part of the mall, so we will be acquiring the rights to the income. We will be acquiring the land and buildings of the other hospitality properties,” he said.
Speaking on what is shaping up as an acquisition streak, Kekana said Pareto’s property portfolio is currently 95% retail. It keeps the business active in the sector and maintains Pareto’s involvement in hospitality,” he said. In addition, Kekana said Pareto already owns land and properties that it considers “bulk” assets.
“Our properties are very large, often regional centres. We’ve seen an increase in the number of shopping centres, particularly convenience-focused ones,” he said. Last year’s SA property Owners Association, (SAPOA) retail trends report found that smaller-format centres benefited from their proximity and convenience and surpassed super regional malls.
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