Growthpoint expects environmental approvals for R24bn Granger Bay expansion next year

JSE-listed real estate giant Growthpoint Properties says it is confident about securing environmental approvals for the massive R24 billion Granger Bay expansion at the V&A Waterfront in Cape Town by 2027.

The development, which includes land reclamation into the sea to form a more protected ‘bay’ that will enhance public access to the area, is set to be rolled out in phases over 10/15 years and will unlock mixed-use buildings including hotels, apartments, destination retail, leisure and event spaces.

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As Moneyweb reported in February, while Granger Bay itself and the reclamation for part of the development is expected to take three years, most of the ‘bulk’ for new development is on existing land adjacent to the area where the Table Bay Hotel and Cape Wheel are located.

Growthpoint jointly owns the V&A Waterfront on a 50/50 basis with the Government Employees Pension Fund (via the Public Investment Corporation).

The group says the bay development will largely be funded off the V&A’s balance sheet, which currently has relatively low debt or gearing.

“We are very optimistic about getting the relevant environmental approvals,” said Growthpoint Properties SA CEO Estienne de Klerk during an interim results media briefing on Wednesday.

He said while the new Granger Bay plan is bigger in scale, it also offers better coastal protection in the form of a fully-fledged bay with ‘two arms’ or breakwaters.

“In fact, our previous development plan which had just a single arm for the bay, was given approvals. That was a different version that got approved and the approvals expired due to the fact that we came up with a new plan based on better coastal protection and to make that area of the V&A Waterfront more accessible to public,” he said.

De Klerk added that the process to secure environmental approvals is currently underway through government’s environmental affairs portfolio (under the Department of Forestry, Fisheries and the Environment).

“It effectively needs to go through parliament [for final approvals] and we anticipated getting approval sometime next year,” he said.

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De Klerk said the V&A Waterfront Company recently received planning approvals for 440 000m² of additional bulk rights from the City of Cape Town for the development. This is largely linked to existing land, and not the part to be reclaimed from the sea for Granger Bay itself.

He stressed that the V&A Waterfront is an iconic tourism and property asset not just for Cape Town, but for South Africa, and puts the country on the global tourism map.

“The Granger Bay expansion has support from different levels of government … It is a key development for Cape Town and the country. It is in the interests of the country for this project to get the relevant approvals.”

Outgoing group CEO of Growthpoint Properties, Norbert Sasse, said the overall Granger Bay development could total R24 billion.

However, he explained that the capital outlay would not be upfront but over a number of years as the massive project is rolled out in phases.

Sasse said while the V&A Waterfront Company would leverage off its balance sheet to undertake the development, a “fair bit of residential” projects with apartments for sale will fund the Granger Bay expansion over time.

This includes later-living and life-rights options for new residential developments planned around the Granger Bay area of the Waterfront.

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A slide presentation in 2025 of the broader development that Moneyweb has had sight of, showed that the V&A Waterfront Company had a low gearing or loan-to-value ratio of around 7% or just over R2 billion in debt.

While this may have increased – with several other major developments totalling “R3 billion to R4 billion” underway, such as the overhaul of the Table Bay Hotel, luxury mall extension, and development of the new Marriott Edition Hotel – the V&A’s gearing level is still likely low compared to JSE-listed real estate investment trusts like Growthpoint (group-wide).

The industry norm is for a gearing level of between 35% and 40% for listed property counters.

Listen to Sasse speaking about Growthpoint’s latest results on SAfm Market Update with Jimmy Moyaha: 

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