Spar ditches Pinetown, books R30m loss on HQ sale

The Spar Group has disclosed that it booked a R30 million loss on the sale of its head office building in Pinetown.

It originally announced its intention to sell the property in November 2024 in its annual results for the year, where it noted that it “is in the process of selling non-core property assets, including the Pinetown head office, the Knowles shopping centre and the group’s West Rand property, which will allow us to free up capital that will be used to reduce debt”.

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Zihle Nonganga, investor relations and communications executive at The Spar Group, confirmed to Moneyweb that its “corporate and Build it teams relocated to Umhlanga Ridge in November 2024”.

However, she noted that “the Southern Africa Grocery & Liquor operational teams remain in Pinetown”.

Spar share price

The group’s head office is now at the iconic mixed-use Umhlanga Arch development on Umhlanga Ridge. The 45 000m², R2.2 billion development opened in October 2020, and is a joint venture between The Multiply Group and Devmco Group.

Devmco is the main developer and master planner of the massive 1 000-hectare Sibaya Coastal Precinct along the M4 near eMdloti.

Listen/read: Sibaya Precinct: Game-changer for Durban’s property market?

Spar would not disclose how many employees moved to Umhlanga, but Moneyweb understands from a source in the sector that the number is likely around 100.

At the end of 2025, the group had just more than 4 600 permanent employees, the bulk of which work at its distribution centres, supply chain operations, as well as at its private-label supplier Spar Encore. This number also includes its corporate office and various divisional head offices.

Read: Spar to up its private label game

It is notable that the Build it head office team relocated but not the much larger Southern Africa Grocery & Liquor operational teams.

Financial optimisation strategy

In its annual financial statements from FY24, Spar disclosed that the carrying value of both assets (Knowles and the “former Central Office Building”) was R221 million. The disclosure of the loss (one of four extraordinary items) referred to only “the head office” and not Knowles. It is not known whether the loss was related to one or both.

Nonganga says that “as part of its financial optimisation strategy, Spar executed a sale-and-lease-back of the Pinetown property”. The Knowles SuperSpar, Tops at Spar, and Build it Pinetown remain trading at the well-known centre adjacent to the M17.

The new Spar leadership under chair Mike Bosman, CEO Angelo Swartz, CFO Reeza Isaacs (previously group finance director at Woolworths), and COO Megan Pydigadu has been focused on resolving legacy issues over the past two years and refocusing on its two core businesses in Southern Africa and Ireland.

Read:
Spar sells Swiss unit for R1bn
After Polish misadventure, Spar pays R683m to exit Switzerland

Key priorities achieved

They have delivered on the three main priorities set out in 2024: portfolio simplification, financial strengthening, and operational discipline.

The group paid the purchasers in its exits of Poland and Switzerland (the former handsomely so). It has also announced its intention to exit its wholesale business in South-West England, Appleby Westward Group (AWG).

Swartz says “the closing of this complex chapter has enabled us to refocus capital for reinvestment in our core businesses. Moreover, our experience in these markets has affirmed our longstanding recognition that strong local management and in-depth knowledge of local market dynamics are essential. These principles will continue to shape our approach as we assess future opportunities”.

The divestments have seen Spar strengthen its balance sheet, and it has reduced debt levels “significantly” over the last 24 months.

Listen/read:
Spar profit plummets R5bn on Swiss, English business sales
Spar turn around still a work in progress
Spar not looking for further expansion outside Southern Africa – Swartz

Listen to Ryk van Niekerk’s interview with Spar CEO Angelo Swartz, originally aired on RSG Geldsake in early December:

You can also listen to this podcast on iono.fm here.

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