South Africa’s largest real estate investment trust (Reit), Growthpoint Properties, has channelled the bulk of its development and capital expenditure into the stronger-performing Western Cape, where property market fundamentals are more favourable.
At the same time, the group has been trimming its portfolio by offloading non-core assets — particularly higher-risk properties with limited long-term growth prospects — as it sharpens its focus on expanding exposure to the better-performing logistics sector.
“Since July 2016, we have sold 201 properties for R15.9bn, reducing the portfolio from 471 to 314 assets and reshaping our domestic portfolio through targeted disposals, with office exposure declining while logistics and industrial increased,” the group said in its results for the six months ended December.
During the period, the group sold 14 properties for R921.4m, recording a R5.3m loss on book value but a R102.2m profit on cost. In the first half of 2025, it disposed of 12 properties for R589.4m, generating a R7.4m profit on book value and R128.6m on cost, it said.
The group’s dividend per share rose by 8.5% to 66.2c. Distributable income per share rose by 2.3% to 75.7c, while total distributable income increased 2.1% to R2.6bn, driven by lower finance costs, it said.
South African revenue rose 2% to R4.2bn, boosted by lower vacancies, the completion of key developments including Arterial Industrial Estate, Bayside Mall, Beacon Bay and the Hilton Canopy Hotel, and stronger retail renewals, partly offset by weaker office reversions and asset sales.
The group expects distribution per share to grow about 3–5% for the full year 2026, with a payout ratio of 87.5%.
The group’s V&A Waterfront saw like-for-like net property income rise 8.7%, boosted by stronger tourism across retail, hotels and attractions. Its 50% share of distributable income grew 1.3% to R403m, despite higher finance costs from the development pipeline, including the temporary closure of Table Bay Hotel and Lux Mall, supported by improved hotel trading and desalination plant savings.
Its South African Reit loan-to-value improved to 33.2%, due to lower net debt after applying proceeds from the disposal of NewRiver Reit and domestic asset sales, it said.
Office net property income rose 6%, with logistics, industrial and retail also showing healthy growth, lifting total like-for-like growth across the three sectors to about 6%.
The group said its South African office sector is stabilising, with Cape Town leading and Gauteng showing signs of recovery. Lower vacancies, stronger renewals and longer leases are supporting the market, though a few large lease renewals during the period weighed on overall growth.
“KwaZulu-Natal outperformed on achieving positive renewal growth rate in the period. The Gauteng office portfolio remains under pressure due to oversupply, with high vacancy levels and higher negative reversions compared to other regions,” the group said.
Offshore, the group’s Growthpoint Overseas Zone portfolio delivered strong like-for-like FFO [funds from operations] growth, led by office at 7%, while revenue dipped slightly, affected by a stronger rand against the Australian dollar.
“At the V&A Waterfront, earnings before interest and taxation are expected to be slightly higher than last year, and including profits from 5 Dock Road residential sales, we anticipate double-digit growth for the full year 2026,” the group said.
Noxolo Majavu
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