R735 million property deal in South Africa’s richest square mile goes belly up

Hospitality giant Southern Sun has notified shareholders that its deal to acquire half of the Sandton Consortium properties will not go through.

Currently, these properties are co-owned by Liberty and property investment company Pareto, which own 75% and 25% stakes, respectively.

The Sandton Consortium comprises several properties located in what is often called “Africa’s richest square mile”, including Sandton Sun, Sandton Towers, Garden Court Sandton City, and the Sandton Convention Centre.

Historically, Southern Sun has operated these properties under long-term lease and management contracts for Liberty, a subsidiary of Standard Bank, and Pareto, which is owned by the Government Employees’ Pension Fund.

On 3 February 2026, Southern Sun announced that it, alongside Pareto, is looking to acquire Liberty’s 75% stake in the Sandton Consortium properties.

The hospitality giant said it had reached a non-binding agreement with Liberty to acquire the Sandton Towers, Garden Court Sandton City, the Sandton Convention Centre and Virgin Active Sandton.

This transaction would have seen Pareto increase its share from the existing 25% to 50%, with Southern Sun acquiring the remaining 50%.

The aggregate value of Liberty’s 75% interest in the target assets is R1.10 billion, and Southern Sun’s proposed 50% share would have equated to R735 million.

However, on Monday, 9 March, Southern Sun told shareholders that the deal would not proceed as Pareto had elected to exercise its pre-emptive right.

“As a result, the parties have terminated negotiations,” Southern Sun said.

Pre-emptive rights refer to contractual or legal provisions that grant existing shareholders of an asset the right to purchase additional shares in future, before the shares are made available to other investors.

Simply put, these rights allow existing shareholders to maintain their percentage ownership, should they wish to do so.

In the context of property transactions, law firm Cliffe Dekker Hofmeyr previously explained that a pre-emptive right creates an obligation on the registered owner to offer the property to the lessee first if the owner decides to sell it.