These include the sale of Absa House in St Georges Mall in the heart of Cape Town city centre for R87.15 million and the 4 Star Villas Luxury Suite Hotel in Arcadia, Pretoria, which fetched R33 million.
A further two hospitality establishments, the 26-room Oakhurst Hotel in the CBD of George on the Western Cape Garden Route and Evander Villas Hotel and Conference Centre in Evander, just north west of Secunda in Mpumalanga, were sold for R8.8 million and R9.9 million respectively.
Says Norman Raad, CEO of Broll Auctions and Sales: “Of interest is that the Villas Hotel in Pretoria attracted the most interest and enquiries among all the properties we advertised this year (2016). Comprising 90 hotel suites, 26 of which are self contained, plus conference facilities and a restaurant, the hotel is well positioned across the road from the government Union Buildings.
“This is an indicator that the hospitality industry is moving in a positive and exciting direction and we are looking forward to growth and development in this sector.”
Raad says the highlight of the day was the office building on St Georges Mall in Cape Town’s thriving city centre. Comprising almost 10 000sqm and ideal for a residential conversion, Absa House is prime-located with sweeping views from the upper floors and parking for 38 vehicles.
“Our last auction of the year was well attended with almost every private property investor present to witness the bidding war for the sought after and rare assets that found their way to the market.”
“The auction proved to be a perfect platform to realise the true market value between competitive buyers. This is a process that would be advantageous for use by government and multinational companies when disposing of assets and where corporate governance and transparency is a requirement.”
Raad says residential blocks also attracted strong demand at the recent auction with active bidding on all these opportunities. With the housing shortfall the country is facing, residential properties are realising greater yields and interest than ever before. Most of these residential blocks were sold and confirmed on the auction floor.
“In addition, while Braamfontein has been a sought after area for student accommodation for some time, our auction saw a resurgence of commercial investors, with buildings being sold for over R5 000 per square metre. Braamfontein offices have struggled over the past few years, however this was not the reception received on the auction day.
“The only surprise was that certain funds did not accept offers below 12 percent, and they are holding out for their book values. With a gross lettable area of just over 11 000 sqm, Brixton shopping centre drew good interest but there were no buyers at the expected selling yields. Funding is still a challenge and interest rates are not certain going forward, so the market is factoring that risk into their purchase and appetite calculation.
Adds Raad: “However there are signs of hope and opportunity evident in the property sector. We are optimistic for 2017, and with change proving to be the one thing everyone is looking for and which the economy desperately needs, we believe it will take just a slight positive movement and change to get the country moving into a better mood and direction. We pride ourselves on niche and interesting properties taken to auction and we are very selective when it comes to allowing properties the platform.”