By Fred Felton | Feb. 11, 2026
Growthpoint Properties (JSE: GRT) has
successfully rebalanced its SA portfolio with two property deals that reduce
its exposure to Gauteng and unlock around R2bn in capital to go into its
strategy to target higher-performing regions and sectors.
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| One of the Growthpoint properties 29 Richefond Circle in Umhlanga which features a roof-top garden. Photo: Fred Felton |
Two transactions have been agreed between
Discovery and the current co-owners of the Discovery buildings at Sandton
Summit, Growthpoint and Truzen 114 Trust, which hold 55% and 45% respectively.
For the bigger transaction, Growthpoint
will sell its stake in the Discovery head office, or Discovery Phase 1, to
Discovery in a cash transaction with proceeds of R2.3bn. Growthpoint’s 55%
stake in the building equals to 50,466m², which was valued at R2.2bn at the end
of Growthpoint’s most recent financial reporting period, 30 June 2025. Truzen
will sell its 45% stake to Discovery.
Growthpoint is also acquiring Truzen’s 45%
stake in the adjacent Discovery Phase 2 at an attractive, market-aligned
consideration of R323 million. The 19,369m² multi-tenant building was fully let
on 30 June 2025.
Once these transactions are finalised,
subject to conditions including approval from the Competition Commission, each
building will be 100% owned by its respective owner – Discovery will wholly own
Discovery Phase One and Growthpoint will be the sole owners of Discovery Phase
2 – on a sectional title basis.
Growthpoint’s domestic strategy is to
increase portfolio weighting towards sectors and regions expected to delivery
better growth over the longer term, specifically retail and logistics properties.
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| Estienne de Klerk, SA CEO of Growthpoint Properties. Photo: Supplied. |
One only has to look at its property
portfolio in KwaZulu-Natal to see the wide range of premium properties that it
has which include: Lincoln on the Lake, Mayfair on the Lake, The Boulevard,
Gateway Hospital, Ridgeview, La Lucia Mall, Westville Mall and even Student
Accommodation at UKZN like Hluma Studios – UKZN – Howard College Campus which
is scheduled for opening in 2027. Growthpoint also has properties in Hillcrest
area like Busamed – Hillcrest Private Hospital, Hillcrest Corner, Watercrest
Mall and Trade Park in Mount Edgecombe and more developments being built in the
Cornubia area.
‘’Effective capital rotation is a
balancing act. We continually review the portfolio to identify where it makes
sense to reduce overweight positions and sell assets attracting investor demand
to fund our strategy and add value. In this case, the Discovery Head Office was
identified for disposal despite its P-grade quality and blue-chip tenant,’’
noted Estienne de Klerk, SA CEO of Growthpoint Properties.
These combined transactions reduce
Growthpoint’s office concentration in Gauteng and Sandton by more than 30,
000m² to a more appropriate level, realise value and unlock almost R2bn which
can be used for further strategic asset rotation. This enables Growthpoint to manage
its portfolio weighting responsibly while keeping overall portfolio quality.
With 100% ownership of the P-Grade
Discovery Phase 2, Growthpoint increases its exposure to potential upside from
shorter-lease, multitenant offices in a market where rental conditions are
firming. Multitenant offices also offer more diversified income and less
letting risk.
Growthpoint will continue its
long-standing relationship with Discovery as a tenant at Discovery Phase 2 and
elsewhere.
‘’These transactions are a vote of
confidence in Sandton, its office market and its blue-chip tenants, all of
which Growthpoint will continue to invest in at suitable levels. Discovery
Phase One has attracted a significant investment from Discovery. With our 100%
investment in Discovery Phase Two, Growthpoint retains an appropriate presence
in the Sandton Summit precinct, where we are also due to break ground on the
R1.2 billion Olympus Sandton residential development with Tricolt later this
month,’’ noted de Klerk.
The financial effects of the transaction
will be reported in the results for Growthpoint’s six months ended 31 December
2025, which will be published on Wednesday, 11 March 2026. The transaction will
have no impact on these interim results. The transactions are expected to have
little, if any, effects during Growthpoint’s financial year to 30 June 2026.
According to Growthpoint once final, the
transaction will result in a higher reported office vacancy percentage, as a
large, fully let asset is removed from its portfolio.
