Malls’ auction could fetch R700m

Posted On Sunday, 23 January 2011 02:00 Published by eProp Commercial Property News
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In what could be SA’s biggest auction, two Johannesburg shopping centres are expect ed to fetch R700m when they go under the hammer in March.


Rael LevittIN what could be SA’s biggest auction, two Johannesburg shopping centres are expected to fetch R700-million when they go under the hammer in March.

The centres — Lonehill shopping mall and Bel Air Mall in North Riding — are part of a group that is being liquidated with debt of more than R1-billion.

“It’s the biggest auction in the 20 years I’ve been in the business,” said Rael Levitt, CEO of Auction Alliance, the company conducting the sale. “You don’t often get auctions of this level.”

The liquidation is matched only by the R900-million Macmed liquidation in 1999, the R1-billion collapse of Retail Apparel Group in 2002 and the LeisureNet liquidation with debt of R1-billion.

It is part of the winding up of various companies controlled by the Theodosiou brothers, who achieved notoriety for building shopping malls without obtaining council permission.

In 2007, the Johannesburg High Court handed the brothers threemonth suspended sentences, R20000 in fines and a warning they would be jailed if they did not “immediately cease” unapproved construction of Lonehill Mall.

Irate Lonehill residents and the Johannesburg City Council hailed the ruling as a victory in preventing unlawful commercial property development in prime residential suburbs, though some said the judgment was lenient.

Court papers show council lawyers asked for a R1-million fine and six-month jail terms for two of the brothers, Antonys and Dimitrys Theodosiou.

The brothers, who traded under the name Universal Property Professionals, were involved in retail and commercial property development for more than three decades. They owned management rights to the Kyalami race track at one stage.

Another case involving the brothers, over a piece of beachfront land in Clifton, dragged on for 10 years.

They incurred massive debt building and renovating two regional shopping malls and undertaking other developments around the country.

In October 2008, Absa Bank applied for the liquidation of Immobili Retail Investments, owner of the 30000m² Lonehill and 20000m² Bel Air malls.

Absa, which was owed over R900-million and accruing interest at R11-million a month, brought a 4000-page liquidation application in the Pretoria High Court. A two-year legal battle between the bank and developers ensued after the provisional liquidation order was granted.

Levitt said interest in the two cash-generating centres was significant.

Local listed and unlisted property funds expressed interest, as did foreign funds — including a UK-listed property fund and a Chinese sovereign fund.

Levitt said the properties had to be auctioned and not sold directly to an interested party as the liquidation process had been long and litigious and the sale had to be open and transparent.

The two centres have been valued at R700-million.

The biggest auction to date is that of two shopping centres that belonged to King Financial Centres — one in East London and the other in Port Elizabeth — which raised R120-million when they were on the block last year.

Last modified on Monday, 09 June 2014 13:09

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