Hospitality giant Rainbow Tourism Group Limited (RTG) is set to make its first foray into the South African market with the planned acquisition of a prime commercial property in Cape Town.
The deal, valued at approximately ZAR98 million (around US$5.6 million) involves RTG’s South African-registered subsidiary Rainbow Tourism Group (SA) Proprietary Limited purchasing a seven-storey building at 13 Buitengracht Street from Elleke Hospitality Proprietary Limited.
The building currently serving as office space and retail units is slated for conversion into a branded hotel under a leading international hospitality group.
“This strategic investment represents a major milestone in RTG’s regional expansion strategy and aligns with our long-term vision to diversify our operations into high-growth destinations,” RTG said in a statement to shareholders.
The Cape Town property, located near the V&A Waterfront, the Cape Town International Convention Centre and Bo-Kaap offers unobstructed views of Table Mountain.
Its central location is expected to appeal to both corporate and leisure travellers, including the lucrative meetings, incentives, conferences, and exhibitions (MICE) market.
Currently, RTG operates seven hotels in Zimbabwe including the flagship Rainbow Towers Hotel & Conference Centre in Harare boasting a total of 8,600 rooms and nearly 1,000 conference spaces across its portfolio.
This acquisition marks the company’s first expansion beyond Zimbabwe offering an opportunity to diversify revenue streams and gain exposure to one of Africa’s most competitive tourism markets.
The transaction will be financed through a US$6 million loan facility from a local financial institution at a fixed interest rate of 12.5% over five years.
Upon completion, the company’s gearing ratio is expected to rise from 9% to approximately 32%, remaining within industry norms.
RTG is also in advanced discussions with international hotel brands to secure a management agreement for the Cape Town property a move aimed at ensuring operational efficiency and skills transfer while elevating the RTG brand on the global stage.
Shareholders and investors are awaiting the finalisation of conditions precedent, including regulatory approvals from both the Reserve Bank of Zimbabwe and the South African Reserve Bank, after which the acquisition will be formally concluded.
