Pareto and Southern Sun’s Hospitality Property Fund have moved closer to expanding their footprint in Sandton after the Competition Commission recommended approval of their acquisition of several high-profile properties from Liberty. According to Business Day, the transaction covers assets valued at more than R2bn, including Sandton Sun & Towers, Garden Court Sandton City, the Sandton Convention Centre and the Virgin Active gym complex.
As part of the deal, Pareto will increase its stake in the Sandton City complex from 25% to 50% at a cost of about R400m. The transaction consolidates ownership of some of Johannesburg’s most established hospitality and conferencing assets within two major institutional property groups, reinforcing Sandton’s role as the country’s primary business tourism hub.
The acquisition represents a strategic shift for Pareto, whose portfolio has historically been dominated by retail assets. The fund, which is owned by the Government Employees Pension Fund, has recently begun diversifying into residential and mixed-use developments, including the R850m conversion of Menlyn Office Park into residential units in partnership with Divercity Urban Property Group. As reported by South African Property Owners Association research, retail property performance has increasingly favoured smaller and convenience-focused centres over large super-regional malls, prompting landlords to rethink land use and asset composition.
By adding large hotel and convention facilities to its holdings, Pareto gains its first substantial exposure to the hospitality sector. The move reduces reliance on retail income streams at a time when consumer spending remains under pressure and footfall patterns continue to shift. The properties involved are directly linked to Sandton City, meaning the transaction also strengthens income flows tied to tourism, conferencing and business travel rather than only retail trading.
For Southern Sun, the deal deepens its control over strategically located hotels connected to a broader mixed-use precinct. The Sandton Sun and Towers and Garden Court Sandton City form part of a cluster that benefits from proximity to corporate offices, shopping centres and the Gautrain station. These factors underpin relatively stable occupancy levels compared with leisure-focused destinations, according to market data from JLL South Africa on urban hotel performance.
The Competition Commission’s recommendation signals that the authorities do not expect the transaction to substantially reduce competition in the hospitality or commercial property markets. The assets are already closely integrated operationally, and the deal primarily reshapes ownership rather than market structure. Approval by the Competition Tribunal would allow the parties to proceed with the transfer and implement their longer-term strategy of repositioning Sandton’s hospitality offering within a broader mixed-use environment.
The transaction reflects a wider trend among property funds towards diversification and adaptive reuse. Large land parcels attached to existing shopping centres are increasingly being developed for residential, healthcare, office or hospitality use to support more stable long-term returns. In Sandton’s case, the concentration of hotels, retail and convention space strengthens its status as a regional business district while spreading risk across multiple income streams.
If final approval is granted, the deal will mark one of the most significant hospitality-linked property transactions in Gauteng in recent years, reinforcing institutional investors’ confidence in Sandton as a long-term commercial and tourism node despite slower economic growth nationally.