Small investors strive to rescue CBD

Posted On Thursday, 27 February 2003 10:01 Published by eProp Commercial Property News
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Small investors came to the rescue of the Johannesburg city centre when they snapped up the portfolio of commercial properties auctioned by Aucor on behalf of Sanlam Property Asset Management

Shannon WintersteinOffice buildings with a replacement value of up to R200m, like the Kine Centre in the Johannesburg Central Business District (CBD), fetched less than R10m.

The predominance of small investors in the auction continues the trend where small investors are substituting institutions like Sanlam, Old Mutual and Liberty as landlords.

Seeking to diversify their investment holdings into more liquid assets these institutions have been dumping fixed property and particularly buildings in the old CBD.

A consortium of Pretoria-based businesses took three buildings the 25 story Kine Centre for R9,1m, OK Vanderbijlpark for R1,4m and a Roodepoort office block for R1,2m. The Trust Bank building was sold to a private investor for R6,4m, while Geldenhuis House in Braamfontein fetched R3m.

A representative of the Pretoria-based consortium, Nazeer Noormohamed, said the investment represented the group's confidence in the future of the Johannesburg and other old CBDs.

'We definitely need the support from government in giving the old CBD's a business friendly environment,' he said.

Government and parastatals must also invest in the CBD's through tenancy, said Noormohamed. He said the group was looking at a number of options which would revitalise the buildings. The options vary from refurbishing and maintaining the buildings as offices to converting them into residences.

The consortium owns a large portfolio of commercial and residential properties in Pretoria. It is made up of a group of friends and related businessmen.

Director of auctioning group Aucor, Shannon Winterstein described the auction as a success. He said that it drew serious entrepreneurs and private investors. 'Expect serious efficiency changes in these buildings because these guys are putting their money into them and have a vision of how to turn them around,' said Winterstein.

He said the buildings fetched fair and market related prices.

The transaction would have to be approved by the building's owner Sanlam.

 



Last modified on Friday, 16 May 2014 10:46

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