South Africa’s Burstone to Sell Half of 14-Property Platform to Nedbank
South Africa · REALESTATE
Key Facts
- —South Africa Burstone Group, formerly Investec Property Fund, is a Johannesburg-listed real estate investment trust whose directly held South African property was worth R13.9 billion (about US$854 million) at 31 March 2026.
- —Background Burstone already co-invests with outside capital abroad, alongside Blackstone and Hines in Europe and with Irongate in Australia. A South African funds platform was a stated goal.
- —What happened On 25 September 2026 Burstone announced binding agreements with Nedbank Property Partners (NPP), part of Nedbank Corporate and Investment Bank, to set up an unlisted platform seeded with 14 of its South African properties.
- —The price The portfolio is priced at a gross asset value of R5.155 billion (about US$317 million), a 5.0% discount to its R5.429 billion (about US$333 million) book value. NPP pays about R677 million (about US$41.6 million) for 50% of the equity.
- —Why it matters For investors in South African listed property, the deal shows a local REIT bringing bank money into existing malls and warehouses. Burstone says it releases R4.5 billion (about US$276 million) and cuts its loan-to-value ratio from 39.6% to 17.5%–19.5%.
- —Still open The deal needs Competition Commission approval and property transfers, with an effective date expected no later than 1 December 2026. Burstone is in talks with an unnamed institutional investor for a second close.
South African property group Burstone has agreed to move 14 malls and warehouses into a new unlisted platform and sell half of it to Nedbank Property Partners for about R677 million (about US$41.6 million), freeing capital while keeping the management mandate.
Burstone Group has entered into binding agreements with Nedbank Property Partners (NPP) to launch a South African funds-management platform seeded with 14 of its retail, industrial and logistics properties, the Johannesburg-listed company said in a stock exchange announcement on 25 September 2026. Burstone will keep 50% of the platform and act as fund and asset manager.
Dollar figures in this article use the 25 September 2026 closing rate of about R16.28 to the US dollar.
What the Burstone Nedbank property platform holds
The seed portfolio comprises five retail properties and nine industrial and logistics properties. The malls are Dihlabeng Mall and Fleurdal Mall in the Free State, The Neighbourhood Square in Gauteng, Kriel Mall in Mpumalanga and Zevenwacht Mall in the Western Cape.
The industrial assets are five warehouse properties in Gauteng and four in the Riverhorse area of KwaZulu-Natal. Burstone describes the malls as dominant rural and peri-urban shopping centres and the warehouses as backed by strong tenants on long leases.
The seed assets carry a book value of R5.429 billion (about US$333 million) as at 31 March 2026, and Burstone’s announcement describes the portfolio’s gross asset value as “approximately R5.4 billion” (about US$332 million). The price agreed with NPP is lower.
The price and the terms
The platform has been priced at a gross asset value of R5.155 billion (about US$317 million), a 5.0% discount to book value. That implies a blended asset yield of 8.4%, based on 12-month rolling net operating income of R435 million (about US$26.7 million).
NPP will pay about R677 million (about US$41.6 million) in cash for its 50% equity interest. The platform will start with debt equal to 70% of its asset value, which is why half of the equity costs far less than half of the property value.
The deal is subject to Competition Commission approval and other conditions. Payment is staggered: part on closing, once at least 70% of the properties by value have transferred, and the rest as each remaining property is registered. The price carries a 5% escalation on properties still untransferred three months after competition approval.
Why Burstone is selling half
Burstone says the transaction releases R4.5 billion (about US$276 million) for redeployment into local and international growth. Part of that capital will cover the group’s first-loss obligations on its European logistics platform with Blackstone.
The group expects its loan-to-value ratio to fall from 39.6% at 31 March 2026 to between 17.5% and 19.5%, and its look-through ratio from 48.6% to between 40.5% and 42.5%. Burstone says the deal will be earnings accretive and leaves its guidance of 4% to 6% growth in distributable income per share unchanged.
Fee income becomes a bigger part of the business. Burstone says fee revenue rises to 19.3% of total earnings, from 15.5% for the year to 31 March 2026, and third-party assets under management rise by 10.9% to R26.8 billion (about US$1.65 billion).
What Nedbank gets
NPP is the real estate equity and mezzanine financing business within Nedbank Corporate and Investment Bank. Its stake gives the bank exposure to income-producing malls and warehouses without running them.
Burstone and NPP will hold joint control. The platform is set up as a permanent capital vehicle with no fixed exit date, and it can admit new investors or dilute existing ones without a new structure.
The deal comes as Nedbank also expands in East Africa, where the Central Bank of Kenya has cleared it to buy up to 66% of NCBA Group.
What to watch next
The first milestone is Competition Commission approval. Burstone expects the transaction to take effect no later than 1 December 2026.
The second is a further investor. Burstone says it is in talks with a significant institutional investor for a second close, but it has not named the investor or the terms.
After the deal, Burstone’s directly held South African assets fall from R13.9 billion (about US$854 million) to R8.5 billion (about US$522 million), on its own figures. Whether more of that book moves into similar vehicles will show how far the group shifts from owning property to managing it, a theme that runs through Africa: The New Scramble.
Frequently Asked Questions
What is the Burstone Nedbank property platform?
It is an unlisted South African funds-management platform seeded with 14 Burstone properties, five retail and nine industrial and logistics. Burstone and Nedbank Property Partners each hold 50%, and Burstone acts as fund and asset manager.
How much is Nedbank paying for its stake?
Nedbank Property Partners will pay about R677 million (about US$41.6 million) for a 50% equity interest. The portfolio is priced at a gross asset value of R5.155 billion (about US$317 million), a 5.0% discount to book value.
What yield does the platform offer?
Burstone says the pricing implies a blended asset yield of 8.4%, based on 12-month rolling net operating income of R435 million (about US$26.7 million).
When does the deal close?
The deal needs Competition Commission approval and other conditions. Burstone expects it to take effect no later than 1 December 2026.
Sources
- Burstone SENS announcement, 25 September 2026 (Financial Mail)
- Burstone SENS announcement (Sharenet)
- News24: Burstone wraps 14 SA properties into new platform
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