Transnet puts Carlton Centre and other noncore assets up for sale

State-owned freight and rail company Transnet has put up its erstwhile headquarters, Carlton Centre, for sale alongside shopping centres and golf courses it owns as the group moves to free up cash by disposing of noncore assets.

Transnet has owned Carlton Centre, previously Africa’s tallest building, since 1999 when it bought the property from mining major Anglo American.

The group’s sister state-owned entities and government departments will have the first right of refusal to acquire, utilise, lease or otherwise take transfer of the properties for public sector purposes. If they decline, the building, in the centre of Joburg’s CBD, will be offered to the private sector.

The same rule will apply to the other 14 commercial properties Transnet is looking to dispose of, including several shopping centres and golf courses.

Some of the properties Transnet aims to rid itself of include Bloemfontein Golf Course & Club House, Avion Park Golf Course in Ekurhuleni, Umlazi Mall Megacity and Mount Frere Shopping Centre.

It remains to be seen whether the high-rise Carlton Centre will attract buyers after a previous attempt failed to do so. Transnet put the building up for sale three years ago for nearly R1bn before taking it off the market after the sale failed to attract good offers.

Transnet Property has a portfolio worth about R6bn that is spread across South Africa. It has a footprint of residential and commercial properties in its five regions.

Transnet, which over the past 18 months received guarantees totalling R94.8bn to help it meet its debt obligations, has been selling its huge residential property portfolio and noncommercial holdings to free up cash, reduce risk exposure and refocus on its core freight and logistics mandate

Some of the properties it owns include noncore assets such as unused houses, land and some commercial properties that are not linked to freight operations.

Transnet Property has adopted a dual approach, which includes a self-funding component realised through the completion of several disposal transactions for noncore properties, particularly in the residential portfolio, including residential houses, hostels, lodges and line camps.

The company last year embarked on a fire sale of its residential property portfolio to free up cash after receiving requisite approvals from the government, its sole shareholder.