Spear REIT is acquiring Watergate Centre in Mitchells Plain, Cape Town, from MPW Cape Properties for R442 million.
The JSE-listed company said the deal forms part of Spear’s strategy to acquire well-located, convenience-led retail assets in the Western Cape that deliver stable, sustainable income.
The company said that the Watergate convenience-oriented shopping centre is strategically located on key arterial routes along the R300, serving Mitchells Plain and the surrounding catchment areas.
The centre has 19,642 sqm of gross lettable area (GLA), anchored by Shoprite and Brights Hardware. Other tenants include Clicks, Pep, Ackermans, Mr Price, KFC, Capitec and Zone Fitness.
Spear said that the value-focused tenant mix underpins the Centre’s consistent footfall and daily needs trading.
It said that the centre serves a high-density catchment area with strong consumer spending power and limited competing convenience retail offerings.
It added that the centre’s income is underpinned by strong grocery and food trading, with national tenants accounting for the majority of gross rental income, supporting a sustainable income profile.
With the centre fully let, Spear said it generates immediate, high-quality cash flows.
“The centre represents a scarce opportunity to acquire a cash-generative, defensive retail asset with durable income characteristics and identifiable asset management upside within a core Western Cape node.”
The purchase consideration is R442 million, and is exclusive of VAT. If the deal is delayed beyond 1 September, Spear will need to pay interest of 0.5% per month.
The deal will go through as soon as possible after the conditions precedent are fulfilled, which is anticipated to be on 1 August 2026.
For the forecasted 7 months ending 28 February 2027, the mall is expected to record R37.5 million in rental income. Its distributable profit is expected to reach R833,000 in the seven-month period.
For the year ending 28 February 2028, Spear expects rental income of R67.1 million and distributable profit of R2.6 million.
| Watergate Centre Expectations | Forecast for the 7-month period commencing 1 August 2026 and ending 28 February 2027 (R) | Forecast for the 12-month period ending 28 February 2028 (R) |
| Rental income | 37,524,632 | 67,099,741 |
| Straight-line rental accrual | 801,498 | (29,786) |
| Gross income | 38,326,130 | 67,069,955 |
| Property expenses | (14,984,080) | (27,184,787) |
| Net property income | 23,342,050 | 39,885,168 |
| Administrative expenses | (1,125,739) | (2,012,992) |
| Operating profit | 22,216,311 | 37,872,176 |
| Finance cost | (20,581,200) | (35,282,058) |
| Profit before taxation | 1,635,111 | 2,590,118 |
| Taxation | – | – |
| Profit after taxation | 1,635,111 | 2,590,118 |
| Adjusted For: | ||
| Straight-line rental accrual | (801,498) | 29,786 |
| Distributable profit | 833,613 | 2,619,904 |
| Contracted rental income % | 93.06% | 28.41% |
| Near Contracted rental income % | 6.94% | 71.59% |
| Uncontracted rental income % | 0% | 0% |
Images of Watergate Centre
