Staff Writer
Southern Sun Limited has announced a proposed transaction to acquire a 50% undivided share in a portfolio of hospitality and leisure properties in Sandton that it currently operates under long-term lease and management agreements.
The assets, known as the Sandton Consortium Properties, include Sandton Towers, Garden Court, Sandton City, the Sandton Convention Center and Virgin Active Sandton.
The properties are located on Erf 596, Sandown Extension 38, in Gauteng. Virgin Active Sandton is leased to the Virgin Active Group.
The Sandton Sun hotel is not part of the transaction and will remain under its current ownership, with Southern Sun continuing to operate it under a long-term lease.
The Sandton Consortium Properties are currently owned by Liberty Group Limited, which holds a 75% undivided share, and Pareto Limited, which owns the remaining 25%.
Liberty is a wholly owned subsidiary of Standard Bank Group. Pareto is fully owned by the Government Employees Pension Fund and managed by the Public Investment Corporation.
Under the proposed transaction, Southern Sun and Pareto have reached non-binding terms with Liberty to acquire Liberty’s interest in the target assets through linked transactions.
Pareto will increase its shareholding from 25% to 50%, while Southern Sun will acquire the remaining 50%. Liberty will exit its interest in the targeted properties. Ownership of the Sandton Sun hotel will remain unchanged, with Liberty and Pareto retaining their respective 75% and 25% stakes.
Southern Sun says the transaction supports its strategy to strengthen its portfolio of well-located hospitality assets in key urban centers.
The group currently owns about 85% of its hotel portfolio through freehold or leasehold title, and the deal would increase its exposure to freehold assets alongside long-standing partners.
The aggregate value of Liberty’s 75% interest in the target assets is R1.102 billion. Southern Sun’s 50% share of the acquisition amounts to R735 million and will be funded in cash through available debt facilities.
An independent valuation dated 31 December 2024 placed the aggregate value of the target assets at R1.435 billion, with Liberty’s 75% interest valued at R1.076 billion.
The audited profit generated by the assets for the 12 months ended 31 December 2024 was R153 million.
Caption
Southern Sun Limited plans to acquire a 50% undivided share in Sandton properties it currently operates under long-term lease and management agreements.
- Photo: Contributed
