Property

The property deal that made R13.4 billion for the new owners

South Africa’s biggest property company and largest asset manager bought the V&A Waterfront for R9.6 billion in 2011. Today, the development is worth R23 billion.

The Victoria and Alfred (V&A) Waterfront is one of Africa’s most visited tourist destinations, attracting over 24 million visitors annually.

During December 2024, it attracted over 3 million visitors and achieved record retail sales of almost R1.4 billion.

At a sizeable 123 hectares, this mixed-use development is home to several corporate head offices, industrial space predominantly for marine industries, and 12 hotels. 

The development offers vast retail, dining, leisure, and entertainment options and houses important heritage sites and tourist landmarks. 

It was established in 1988 as a redevelopment project of Cape Town’s historic docklands.

The property is named after Queen Victoria and her second son, Prince Alfred, who initiated the construction of Cape Town’s harbour in 1860.

At the time, Cape Town was a key stopover for ships travelling between Europe and the East, but its harbour was vulnerable to violent winter storms, causing frequent shipwrecks.

To address this, the British colonial administration developed a breakwater and two basins, named the Victoria Basin – completed in 1869 – and the Alfred Basin – completed in 1905.

Over the next few decades, the harbour became a crucial part of South Africa’s economy, supporting trade, fishing, and naval operations.

However, as container shipping grew in the mid-20th century, larger harbours were developed elsewhere, leading to declining activity at Cape Town’s docks.

Therefore, by the 1980s, parts of the old harbour had become obsolete, leading to a vision for its redevelopment into a mixed-use waterfront similar to projects in cities like Baltimore and Sydney.

In 1988, Transnet, then called Portnet, launched the Victoria & Alfred Waterfront Company, tasked with transforming the historic docklands into a world-class waterfront destination.

The project was designed to preserve the maritime heritage while integrating retail, entertainment, and residential spaces.

Cape Town Harbour, which forms part of the V&A Waterfront

The first phase of the Waterfront opened in the early 1990s, attracting restaurants, retail stores, and tourism operators.

By the 2000s, the Waterfront had become South Africa’s most visited tourist destination, with over 20 million visitors annually.

In 2006, the V&A Waterfront was sold to Dubai World and a consortium of investors for R7 billion.

Following the 2008 global financial crisis, Dubai World faced financial difficulties and decided to sell its stake.

In 2011, Growthpoint Properties acquired a 50% stake in the V&A, with the Public Investment Corporation (PIC) owning the other 50% on behalf of the Government Employees Pension Fund.

The two companies paid around R9.6 billion – R4.8 billion each – for the company that owns the V&A. At the time, this deal represented South Africa’s largest single property transaction.

This deal proved to be one of Growthpoint’s best investments, as the property started growing in value year after year.

While it hit a slump during the Covid-19 pandemic, as many properties did in that time, it has since recovered and, in 2024, reached its highest valuation yet at R23 billion.

This means the property’s value grew from R9.6 billion in 2011 to R23 billion in 2024 – a 140% increase.

In Growthpoint’s latest annual results, it detailed its strategy to attract international visitors by refurbishing and expanding the V&A’s hotel portfolio and retail spaces to meet growing demand, particularly in the luxury segment.

Growthpoint
Growthpoint

In the 2024 financial year, the V&A experienced significant growth in international tourism, with a 20% increase in arrivals through Cape Town International Airport.

The V&A recorded around 25 million visitors throughout the year, highlighting its strong appeal as a tourist destination, particularly for international tourists, who accounted for approximately 75% of hotel occupancies and 50% of retail activity.

In addition, the property’s retail sales and visitor numbers increased by 14% footfall for the year.

The development’s vacancy rate is also exceptionally low, at 0.3%. For comparison, South Africa’s largest mall, Fourways Mall, has a vacancy rate of 17.9%.

Growthpoint explained in its latest annual report that, despite having no vacancies and limited new capacity coming online, the V&A anticipates continued growth driven by tourism, boosting retail and hotel activity. 

An upcoming development is the Table Bay hotel, which will close in February 2025 for a 10-month refurbishment, reopening in December as the Table Bay Intercontinental Cape Town.

“The rebranding to Intercontinental will leverage the brand’s 120 million loyalty programme members, enhancing the V&A’s appeal to international travellers,” the company explained.

The V&A is also developing a 140-room top luxury hotel adjacent to the Table Bay hotel, scheduled for completion in May 2026. 

This will fill a high-end market gap for an internationally branded hotel in the country.

A future development focus is Granger Bay, where the V&A has submitted planning consent for 440,000 m² of residentially led, mixed-use development with public and cultural amenities. 

Currently, the V&A has a gross lettable area of 449,768 m², and this expansion is estimated to cost R20 billion.

Considering how valuable the V&A has become, it is clear why Growthpoint continues to invest in the property.

Daily Investor analysed the growth in the V&A’s value since it was sold to Growthpoint and the PIC in 2011, which can be seen below.


The V&A Waterfront today


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