Zimbabwe-listed hotelier, Rainbow Tourism Group (RTG), is expanding into South Africa with the $5.6 million (nearly R100 million) acquisition of a commercial property in Cape Town, which it plans to transform into a prime hotel.
RTG, which operates city and resort hotels in Zimbabwe, announced that it is finalizing this strategic acquisition through its South African subsidiary, Rainbow Tourism Group (SA). The company has entered into a sale and purchase agreement with Elleke Hospitality for a seven-storey commercial property located along Buitengracht Street in Cape Town.
“The property, currently a commercial asset, will undergo adaptive reuse and refurbishment to become a branded hotel operated under a leading international hospitality group,” stated by Tapiwa Mari, RTG’s company secretary. The total acquisition cost represents about 9.3% of RTG’s market capitalization on the Zimbabwe Stock Exchange (ZSE).
RTG emphasized that this acquisition aligns with the board’s mandate to pursue growth opportunities that support the company’s long-term expansion vision. To ensure world-class operations, RTG is in advanced discussions with reputable international hotel brands to secure a management agreement for the new property.
“Partnering with a global operator is expected to enhance skills transfer, operational efficiency, and boost RTG’s visibility on the international stage,” Mari explained. The redevelopment will adhere to international hospitality standards, ensuring that the final product meets high benchmarks in design, guest experience, and service delivery.
To finance this acquisition, RTG has secured a $6 million loan facility from a Zimbabwean financial institution. The loan carries a fixed interest rate of 12.5% per annum with a tenure of five years. Following this transaction, RTG’s gearing ratio is expected to rise from 9% at the end of 2024 to approximately 32%.
The property is strategically located along a major route leading into Cape Town’s Central Business District (CBD), providing high visibility and pedestrian traffic. It is close to key business and leisure landmarks, including the V&A Waterfront, Cape Town International Convention Centre (CTICC), DHL Cape Town Stadium, and the Bo-Kaap tourist district.
“This premium location makes the property ideal for conversion into a hotel that caters to both corporate and leisure travelers,” noted Mari. Its proximity to the CTICC enhances its appeal for the Meetings, Incentives, Conferences, and Exhibitions (MICE) segment, while the surrounding cultural and recreational attractions attract both domestic and international tourists.
The Cape Town acquisition offers RTG an opportunity to diversify its balance sheet and revenue streams by establishing a presence in one of Africa’s most vibrant tourism markets. Cape Town is a globally recognized destination with strong market fundamentals, including high occupancy rates and well-developed infrastructure.
Mari stated that establishing a footprint in this environment not only enhances RTG’s regional and global profile but also provides access to global best practices in hospitality operations and customer service excellence.
