QPG will acquire a 25% stake in the mixed-use project located in the epicentre of the Sandton business hub. The group will also be appointed development manager responsible for construction, leveraging its directors’ extensive development experience with more than R4 billion of landmark projects under their belt.

Executive Chairman Chaim Cohen says the Sandton Eye, which is estimated to be worth almost R1,4 billion on completion, is a logical progression in the QPG portfolio.  “Sandton Eye is of the same exclusive genre and quality standard as the group’s first project – 15 on Orange in Cape Town.” Similarly to 15 on Orange, the Sandton development includes 5 000 m2 of prime boutique retail, 20 000m2 of offices, a 200-roomed 5-star Radisson Blu hotel and 12 luxury penthouse suites. 

 “Sandton represents one of the highest socio-economic profiles in the country with mainly LSM 10+ residents, and is the second largest office node in South Africa,” says Cohen, adding that for some time the area has been growing at roughly 4% annually while office space has increased around 6% a year since 1993.  “The Sandton Eye is therefore ideally positioned to capitalise on affluent local residents and business-people, Gautrain and bus commuters and tourists.”

The development is strategically positioned opposite the Gautrain Station which is expected to see about 12 000 commuters an hour.  “Our patronage will be further boosted by the rapid bus transit system – BRT – the main station being situated at the entrance to Sandton Eye.”  In light of this Cohen is confident of strong interest in the commercial and retail aspects of the development.  

The Sandton Eye transaction remains subject to a number of conditions precedent.

At the same time the group is also pursuing further expansion both locally and abroad.  Grindrod Bank has recently been appointed as corporate advisors in respect of capital raising to fund acquisitions.  CEO Gary Itzikowitz says QPG is optimistic about raising the targeted capital despite tough economic conditions.  He adds that Grindrod Bank’s optimism about a successful capital raising further underpins his confidence.

Itzikowitz says: “Investor appetite for QPG’s shares was reflected in the immediate over-subscription of our private offer just before listing in October 2008.  While adverse economic conditions have since intensified, the QPG directors’ longstanding track records in property development and asset management continue to offer comfort with the proven ability to deliver returns even in difficult markets.”

The group’s 15 on Orange development is on schedule with funding still firmly secure despite the credit crisis.  15 on Orange will be valued at almost R1 billion on completion in June/July 2009.    QPG is set to derive ongoing income from the leasing and operation of the 15 on Orange Hotel, the latter together with African Pride (the premier 5-star brand in the Protea Hotel Group’s stable), and from the parking bays and retail tenant rentals.

Cohen says:  “We have a three-pronged strategy encompassing property developments but extending also to investments and trading.  This will build a quality, sustainable portfolio with diversified revenue streams.”  He adds that further acquisitions and opportunities being considered by QPG are therefore intended to generate a mix of development and investment income for the group.

QPG’s board was recently bolstered by the appointment of Johann Opperman in February 2009. Leaving his former position as a Director of Standard Bank’s Property Finance Division, and with over 20 years’ experience, Opperman is expected to contribute strongly to QPG’s growth prospects.  “His treasury experience, capital raising expertise, proven deal-making capability, financial markets knowledge and comprehensive network will play a large role in realising future growth initiatives,” concludes Cohen.