South Africa’s Octodec to sell Killarney Mall for $25 million

Octodec Investments Limited is moving to sell one of its long-held retail properties, agreeing to dispose of Killarney Mall in a R397.5 million ($25 million) all-cash deal that signals a clear shift in how the group is deploying capital. The agreement, signed on Feb. 24, 2026, with AJPG Property 1 Proprietary Limited, covers 100 percent of Octodec’s shares and claims in the asset. It marks a step in management’s plan to exit properties it no longer sees as central to its strategy and to free up funds for other uses.

The decision follows a broader reset outlined in the company’s FY2025 strategy, where executives pointed to the need to direct capital toward assets with stronger income prospects while also lowering debt. Killarney Mall, located at 60 Riviera Road in Johannesburg, has been part of the city’s retail network for more than 40 years. The property includes 36,225 square meters of retail space and 11,245 square meters of offices, spread across eight erven covering more than 5.5 hectares. While the centre has remained active, the group now sees greater value in reallocating capital tied to the asset.

Killarney sale balances income, liabilities

The agreed price comes in close to the latest valuation. As of Aug. 31, 2025, the mall was valued at R407.6 million ($25.7 million) using a capitalization-of-income method, with a weighted average rental of R155.20 per square meter. The sale price of R397.5 million ($25 million), which directors describe as fair market value, sits slightly below that level, reflecting current market conditions and the terms of the transaction.

Financial records show the asset has continued to contribute, though with some pressure on the balance sheet. For the year ended Aug. 31, 2025, profit attributable to the net liabilities of Killarney Mall Properties was R16.6 million ($1.04 million), while net liabilities stood at R38.6 million ($2.43 million). These figures help explain the timing of the sale, as management weighs steady income against the benefit of releasing capital from a mature property.

Deal reflects asset’s true value

Under the agreement, payment will be made in full in cash on the effective date, defined as the last day of the month in which all conditions are met. The final amount will be adjusted to reflect the subsidiary’s income, expenses and working capital at closing. A positive working capital position will increase the payout, while a shortfall will reduce it, ensuring the price reflects the asset’s position at transfer.

Several conditions must be met before completion. The buyer has 60 days to carry out a due diligence review and confirm it is satisfied. An unconditional bank guarantee must then be provided, and Nedbank Limited is required to approve the release of existing mortgage bonds and surety arrangements linked to the property.

The deal also needs clearance from regulators under Competition Act. Classified as a Category 2 transaction under Johannesburg Stock Exchange listing rules, the disposal does not require shareholder approval, which could help keep the process on track. The beneficial owners of the acquiring company have not been disclosed.

Octodec adjusts portfolio, sells Killarney Mall

The transaction forms part of a longer story for Octodec, which was established in 1956 and has built a sizable presence across Johannesburg and Tshwane. The company has been listed on the JSE since 1990 and on A2X since 2023, securing real estate investment trust status in 2013. By Aug. 31, 2024, its portfolio included 234 properties, with a gross lettable area of 1,524,479 square meters and a total valuation of R11.2 billion ($705.6 million).

Seen in that context, the planned sale of Killarney Mall is a measured adjustment rather than a major shift. It reflects a view within the company that capital can be put to better use elsewhere while also strengthening the balance sheet. Even so, Octodec is expected to remain active across key urban areas, with this deal forming part of a broader effort to reshape its portfolio in line with current priorities.