V&A could fetch R5bn - experts

Posted On Monday, 21 February 2005 02:00 Published by
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The V&A Waterfront could fetch anything between R2bn and R5bn when sold off by the government

17/02/2005 16:23 - (SA)

Bryan Porter and John Samson

Cape Town - The V&A Waterfront could fetch anything between R2bn and R5bn when sold off by the government, according to Cape commercial property experts.

Public Enterprises Minister Alec Erwin announced on Thursday that the top Western Cape tourist attraction is up for sale, as part of the government's policy to sell off all non-core businesses.

According to Peter Golding, chief executive of Pam Golding Commercial Property, "Land in that part of Cape Town is currently valued at R2 000 per square metre."

At 101.9 hectares this would value the land at R2.04bn. But, added Golding, "The value of that property would be difficult to speculate on and to calculate exactly without knowing the value of the leases and development rights on the land."

According to Marc Schneider of e-Prop Research, the value of the V&A Waterfront could reach up to R5bn.

"The V&A was valued at R2bn in 2001, and I think we can safely assume that a property like the V&A would have appreciated by around 50% since then, which would put a conservative value at around R3bn."

He went on to add, however, that the price Transnet is likely to get for its stake in the V&A Waterfront could be affected by the way the deal is structured.

"The V&A Waterfront encompasses a complex array of commercial and retail enterprises, including prominent hotels, head offices and shopping facilities and one needs to assess whether a future sale would encompass the entire development or merely elements thereof," he explained.

"One would also have to take into consideration the Waterfront's iconic status, its proximity to a broader investment hub including the foreshore and Cape Town CBD, as well as the current appetite for prime commercial property investments in general."

Publisher: Finance 24
Source: Finance 24

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