[Cape Town, 15 November 2004] Transformation in the ownership and management of city centre property received an impetus today with a major BEE investment in the CBD.
 
Announcing a R36-million investment in property on the Foreshore today, African Alliance Properties managing director, Wayne Arendse, said that Cape Town’s CBD was Africa’s leading success story in terms of inner city rejuvenation, and was a model for cities throughout Africa and elsewhere to follow.
 
“Underpinned by enhanced public safety, cleanliness, and new residential development, the CBD has experienced an extraordinary revival since 2000, and today it is a mixed-use, cosmopolitan, vibrant and exciting place both to work and live. 
 
“For office workers, it is well served by road and rail transport networks, and has a growing diversity in terms of its retail and leisure offering.
This means, for the investor, respectable returns as people want to be downtown”. 
 
African Alliance Properties has purchased the Foretrust building, with 24 000 m² of office space and 650 m² of retail, for R36-million.

Already the building is almost fully let, with anchor tenant the Department of Public Works signing a long-term lease, the value of which is nearly R600 000 up to 2010. 
 
“Indicative of the high potential of property investments in central Cape Town, since we originally agreed a price for the building its capitalised value has grown sharply to R80-million, and in fact, we received unsolicited offers in this region only last week.  Confidence in the CBD is at an all-time high”.
 
African Alliance Properties is owned by a number of empowerment investors and consortia, including the Cape Empowerment Trust.  This comprises community organisations such as Wecwif, a women’s group from Khayelitsha; the Bishop Lavis-based Maart Educational Trust; the Mathew Goniwe Cradock Four Trust; the Knysna Nonduna Vasi Education Trust; the West Coast Development Trust, and the Chris Nissen Park Community Development Trust from Somerset West. 
 
Other recent investments by African Alliance include a R12-million property in Bloemfontein, and negotiations are far advanced for a second office building in central Cape Town. 
 
Western Cape Premier, Ebrahim Rasool, said that the internationally-acknowledged turnaround in Cape Town’s CBD bore testimony to the success of public/private sector partnerships, like the Cape Town Partnership, as vehicles to drive development and investment.

“Over R12-billion has been invested downtown in just five years, and thousands of new jobs created.  What was in 1999 a degraded area in alarming decline is today a showpiece of regeneration and economic vitality.
 
It is pleasing to see that this new investment has come from the previously disadvantaged sector, especially as it contributes to greater diversity in the ownership of property in our central city”, he said.
 
Cape Town Partnership chief executive officer, Andrew Boraine, said today that there was an imperative to change property ownership patterns in the city.  “One of our key objectives is to diversify the ownership, management and development of property in the Central City, so that a greater number of people can benefit from the success of the past five years”. 
 
“In addition, investment should not just benefit shareholders, but also enhance the human environment and improve the quality of life of all people who visit, live and work in the city centre.  We are looking to the private sector to put something more into social development, which is why the involvement of the community-based Cape Empowerment Trust in this project is so significant”.
 
African Alliance chairman, Shaun Rai, said that both Old Mutual and Nedcor had been instrumental in facilitating the purchase of Foretrust House through generous lending criteria, assistance in raising guarantees, and other professional support.
 
“This deal became bankable because both companies are committed to black economic empowerment in the property sector.  This enlightened approach is one which will greatly help to advance transformation in the ownership and management of property assets”, he said. 
 
ENDS
For further information, please contact Wayne Arendse or Shaun Rai on
021-683 9050.