Pareto Limited, the unlisted property group wholly owned by the Government Employees Pension Fund, has moved to acquire sole ownership of the Sandton Convention Centre, Sandton Towers and Garden Court Sandton City hotels in a R1.1 billion transaction that cuts out hospitality operator Southern Sun and marks Pareto’s first direct entry into the hotel sector.
The group exercised its pre-emptive right — a contractual mechanism that allows existing shareholders to match any offer before assets are sold to a third party — to increase its stake in the Sandton Consortium properties from 25% to a 100% undivided share, buying out Liberty Group’s entire 75% position on its own.
The deal’s structure has shifted materially since it was first announced in February. The original transaction, disclosed on 3 February 2026, had envisaged a joint acquisition in which Pareto would increase its holding to 50% whilst Southern Sun acquired the remaining 50% for approximately R735 million, financed from its existing debt facilities. That arrangement was undone when Pareto elected to exercise its pre-emptive right, a decision confirmed by Southern Sun in a JSE stock exchange news service filing on 9 March. Southern Sun confirmed that negotiations had been terminated and that it would no longer acquire any stake in the properties. Pareto CEO Malose Kekana confirmed that the deal value remained unchanged at R1.1 billion — the same figure attributed to Liberty’s 75% interest at the time of the original announcement.
The Competition Commission and Competition Tribunal had already approved the transaction in its earlier joint-acquisition form, and Pareto is now in the process of formally notifying authorities that it will proceed as sole acquirer. The independent valuation of the target assets as at December 2024 placed their aggregate worth at R1.44 billion, with Liberty’s 75% interest valued at R1.08 billion at that point. The assets generated an audited profit of R153 million in the year to December 2024 — figures that illustrate both the commercial logic of the acquisition and the premium Pareto is absorbing to secure outright control.
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The strategic rationale, as articulated by Kekana, centres on the benefits of unified precinct ownership. He drew a direct parallel with the V&A Waterfront in Cape Town, where consolidated ownership across retail, hotel and convention assets under a single shareholder has enabled cohesive precinct management and long-term value creation. By bringing the Sandton Convention Centre and its adjacent hotels under the same ownership structure as Sandton City mall — in which Pareto already holds a minority stake — the group aims to align decision-making and strategy across what is widely regarded as South Africa’s most commercially significant urban node. Sandton remains the headquarters of a large portion of South Africa’s financial services, legal and professional services industries, and the precinct draws significant volumes of domestic and international conference and events business through the convention centre.
For Pareto, the transaction also reflects a deliberate pivot beyond its core retail portfolio. The group’s existing assets are concentrated in large regional shopping centres, including Sandton City, Menlyn Park, Pavilion, Tyger Valley and Mimosa, and Kekana has acknowledged that the structural shift underway in retail — with major anchor tenants reducing their physical footprint — constrains the traditional path of value creation through mall expansion. As noted by Billionaires Africa, Pareto has been diversifying its development pipeline accordingly, with hotel projects planned at Menlyn, Pavilion, Mimosa and Tyger Valley, and a R850 million residential conversion of Menlyn Office Park already under way in partnership with Divercity Urban Property Fund. The Sandton hospitality acquisition accelerates that diversification, adding operational exposure to the convention, events and hotel sectors that the group had not previously held directly.
The deal also carries significance for the GEPF, which manages retirement savings for approximately 1.25 million active members and 450,000 pensioners across South Africa’s public service. As the fund’s unlisted property vehicle, Pareto’s expansion into hospitality and mixed-use assets broadens the range of income streams underpinning the GEPF’s long-term liability matching obligations. The Sandton Convention Centre alone generates demand that feeds directly into the hotels being acquired, providing a degree of revenue integration that a standalone hotel acquisition would not offer. Southern Sun, which has operated the properties under long-term lease and management contracts, is expected to continue in that operational role — retaining the management relationship with assets it will no longer own.
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