Growthpoint and PIC to pump billions into V&A Waterfront

Cape Town’s V&A Waterfront is in line for billions of rand in new development and upgrades over the next decade, largely in the form of new five-star hotels, leisure, residential, and retail space.

Group CEO of Growthpoint Properties Norbert Sasse said at a financial results media presentation in Sandton on Wednesday that up to R4.5 billion will be invested in the iconic mixed-used property precinct over the next two years.

Read: Growthpoint says high interest rates will remain a challenge into FY2025

Around R2 billion of this will go into two internationally branded hotels at the waterfront, one of which is the R1 billion overhaul of the landmark Table Bay Hotel into an InterContinental Hotels Group (IHG) property.

He revealed that another R1 billion will go into a new Marriott Hotels property, which is already under development. It will operate as a five-star establishment under Marriott’s edition brand.

Sasse said international hotel brands have been desperate to get into the V&A Waterfront, with the likes of Hilton Hotels also expressing interest. This comes in the wake of the strong recovery of the tourism industry in Cape Town, with international arrivals booming.

The trophy property has delivered double-digit growth for FY2024.

He added that the R4.5 billion current development pipeline would be funded by Growthpoint and the Public Investment Corporation (PIC) – joint 50/50 shareholders in the waterfront.

Read: Cape Town’s V&A Waterfront is Growthpoint’s ‘standout performer’

Growthpoint Properties SA MD Estienne de Klerk added that in addition to the two five-star hotel investments, the joint shareholders would be spending around R700 million on a new residential development, with further funds going towards an upgrade and expansion of the shopping centre as well as other projects across the precinct.

V&A Waterfront management announced the Table Bay Hotel overhaul in July, saying JSE-listed Sun International would still be involved in managing the property, but that it would be rebranded into an InterContinental hotel.

Read: Table Bay Hotel set for R1bn facelift and relaunch as InterContinental

The V&A Waterfront made no mention of the Marriott hotel deal. While US-based Marriott entered the SA market when it bought Protea Hotels about 15 years ago, the international group has only opened a handful of Marriott-branded hotels locally.

IHG is a UK-based hotel group, which had an historical relationship with Southern Sun Hotels in SA. There is currently only one InterContinental five-star hotel in SA, located at the OR Tambo International Airport. This after the InterContinental Sandton was combined with Sandton Sun as Sandton Sun & Towers by the Southern Sun group (and the property’s owners Liberty Two Degrees, Standard Bank and Pareto) following the Covid-19 fallout.

Sasse said the new Marriott hotel and other developments, which are part of the overall R4.5 billion in investment over the next couple of years, fall under the V&A Waterfront’s existing basket of development rights.

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He said future expansion plans around Granger Bay to the tune of around R20 billion are in the planning phase, but are based on the V&A Waterfront securing additional development bulk approvals of around 440 000m² from the City of Cape Town.

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“Altogether there are around 20 projects related to the current overall R4.5 billion investment, but the two hotels and R700 million residential project make up the bulk of the figure … As part of upgrades and expansion of the retail mall at the V&A Waterfront, we are also increasing retail space by a further 3 000m²,” he added.

De Klerk pointed out that the expansion of the mall will be to create a fully-fledged international luxury brands wing in the area of the centre where Mugg & Bean and the Baia seafood restaurant are located. This is on the side where the Cape Wheel has also been relocated, which overlooks part of Granger Bay.

“The V&A expects mid-single-digit growth next year as it undertakes major upgrades,” flagged Sasse.

“The extensive refurbishment of Table Bay Hotel will begin in February 2025, and it will relaunch as the InterContinental Table Bay Cape Town later in the year.

“The conversion and extension of an existing wing of the mall for international luxury brands [that] is set to open in November 2025 has commenced, so normal trading in this area has paused for the project,” he said.

Listen to Sasse speaking about Growthpoint’s latest results on SAfm Market update: 

You can also listen to this podcast on iono.fm here.

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