Commission approves sale of Modderfontein property to Shanghai Zendai

Posted On Tuesday, 28 January 2014 16:45 Published by
Rate this item
(0 votes)

Sale of the Heartland property by AECI to Chinese property developer Shanghai Zendai has been approved by the Competition Commission, but with a condition.

Mark DytorThe sale of the Heartland property by chemicals and explosives company AECI (AFE) to Chinese property developer Shanghai Zendai has been approved by the Competition Commission‚ but with a condition.

The agreement between AECI and the Chinese invest or sets out a restraint of trade on AECI not to engage in property development in the Modderfontein area‚ and the commission was concerned that this restraint of trade amounted to market allocation‚ which is a contravention of the Competition Act.

The commission set a condition that the period of restraint of trade be reduced from 10 years to five years. The commission said in a statement on Tuesday that the 10-year restraint period was "too long‚ unjustified and likely to frustrate potential re-entry by AECI into the Modderfontein area".

The sale of the 1‚600ha of vacant land and buildings worth R1bn was concluded at the end of 2013 and will result in Shanghai Zendai Property developing the land for mixed use‚ which may include residential‚ commercial and retail developments. Stakeholders who may be affected by the transaction expressed concern about pollution‚ the sale of land to a foreign company and the fact there was no agreement on the building of low-cost housing. However‚ the commission's mandate is to ensure the transaction does not adversely affect competition‚ and advised the parties to raise these issues with other government agencies better suited to deal with them.

In terms of public interest‚ the commission found that the acquisition will not result in retrenchments as the land is being bought as a going concern. Shanghai Zendai has also undertaken not to retrench any employees and not to change the terms of conditions of employment.

Shanghai Zendai is an investment company with a market capitalisation of the equivalent of $294m at the end of last year on the Hong Kong Stock Exchange. It develops and manages property projects in 12 cities in northern China‚ Shanghai city and Hainan province.

Last modified on Tuesday, 28 January 2014 17:53

Most Popular

GMI Property Group adds a New Mall to its Stable: Bronkhorstspruit Mall

Jul 21, 2022
GMI Properties Group announces the development of the much-anticipated Bronkhorstspruit…

Equites Property Fund and Mabel conclude B-BBEE transaction

Jul 21, 2022
Andrea Taverna-Turisan
The JSE listed specialist logistics property fund, Equites, today officially announced…

The growing take-away and fast food, and food delivery, culture

Jul 20, 2022
Restaurant and Take-Aways data for May 2022
Restaurant and Take-Aways data for May 2022 points to “solid but slowing” growth in…

The rapidly rising cost of living is reflecting in residential rentals

Jul 21, 2022
TPN Graph-Rental Demand
Demand for residential rental properties saw some recovery in the first quarter of 2022…

Despite hike, interest rate remains below pre-Covid levels, says Dr Andrew Golding

Jul 21, 2022
Dr Andrew Golding
With the inflation outlook deteriorating since the previous Monetary Policy Committee…

Please publish modules in offcanvas position.