Property

Shopping mall in Cape Town sold for R442 million

Kirsten Minnaar • 10 September 2026

Spear REIT has acquired Watergate Centre, a Mitchells Plain shopping centre anchored by retailers including Shoprite, Capitec, PEP and Mr Price, for R442 million.

This acquisition forms part of the Western Cape-focused real estate investment trust’s recent set of acquisitions, valued at R1.4 billion.

The move raised R1 billion in fresh equity for the group and delivered strong rental growth in the six months to July.

Spear’s growth drive included two significant transactions during the period – Watergate Centre in Mitchells Plain and 1 Sportica Crescent in Tygervalley.

Acquired for a combined R1.402 billion, both properties have recently transferred, adding 48,169m² to the portfolio at an average acquisition yield of 8.99%.

Watergate Centre, acquired for R442 million, is a 19,681 m² convenience centre anchored by national retailers, including Shoprite, Capitec, PEP and Mr Price.

It offers an initial yield to shareholders of 8.37%, with a 24-month weighted average lease expiry (WAULT) and 6.70% in-force escalation.

The R960 million 1 Sportica Crescent transaction adds 28,488m² of prime commercial space in Tygervalley. The property is fully occupied, carries a 28-month WAULT and offers an initial yield to shareholders of 9.67%.

These two transactions provide a major boost for the group’s profile, particularly in the Western Cape, where it is looking to grow its presence.

In July 2026, Spear’s portfolio stood at R7.1 billion in asset value, comprising 40 Western Cape properties and approximately 625,610m² of gross lettable area.

Following the transfer of the Watergate Centre and the Santam Precinct, the portfolio has increased to approximately R8.4 billion and 670,000 m² of real estate assets.

Both transactions are expected to be earnings-accretive, with their contributions not yet included in the current DIPS guidance. Spear intends to update shareholders when it reports its half-year results.

Spear goes from strength to strength

Spear affirmed its target of growing FY2027 distribution per share (DIPS) by 6% to 8% compared with FY2026, while maintaining a 95% payout ratio.

Performance was underpinned by positive rental reversions of 6.78%, weighted-average lease escalations of 6.92%, occupancy of 96.37%, and cash collections of 99% across the core portfolio.

The group’s revenue increased 28.29% year to date, while net operating income rose 29.41%.

Spear CEO Quintin Rossi said their performance in the first half of the year demonstrated the resilience of their portfolio and the strength of their Western Cape strategy.

“We have continued to grow through acquisitions while maintaining strong operational metrics and a conservative balance sheet.”

“We enter the second half with considerable momentum and a clear pipeline for further value creation.”

Spear’s balance sheet also remains well-positioned for further growth, with a loan-to-value at 7.48% at the end of July and interest cover at 6.02 times.

The group had approximately R800 million in liquidity available, net of acquisition allocations.

Spear raised R1 billion through an accelerated bookbuild in April, followed by a further R108 million through its dividend reinvestment programme in June.

“The capital raise has given Spear the flexibility to pursue growth without compromising the strength of the balance sheet,” said Spear REIT’s CFO, Christiaan Barnard.

“Our focus remains firmly on acquisitions and developments that are earnings accretive and aligned with our Western Cape strategy.”

Spear’s industrial portfolio continued to perform strongly, with occupancy of 97.98% and rental reversions of 14.32%.

Retail occupancy was 97.17%, with reversions of 7.88%, while commercial occupancy stood at 90.24%, with reversions of 4.26%.

The group invested R140 million in new industrial developments during the period and concluded a new 10-year lease with Mambos Storage & Home for a 7,150m² warehouse.

Further industrial development opportunities are progressing in George and Blackheath.

Spear also sold Hamilton & Chiappini House for R107 million, achieving a 33% premium to its original acquisition price in 2024.

The transaction unlocked 5c per share in net asset value. The proceeds are being redirected into acquisitions and developments.

The group has also secured a commercial land parcel in Century City for a new office precinct, with estimated total development costs of R950 million.

Management believes the Western Cape continues to offer strong property fundamentals across South Africa’s major real estate subsectors.

Spear said this regional focus has supported portfolio performance amid the volatility of the past six months.