By Ian Fife 
  
Property Partners has sold 50% of Johannesburg's R1,3bn icon mixed-use development Melrose Arch to Cape developer and project manager Amdec. 

Amdec will immediately start building a 30 000 m² shopping centre as the first phase of an additional R4bn development programme.

With the deal, Property Partners has turned an undisclosed but tidy profit on its R1,27bn purchase price in December last year.

It has also avoided having to increase its administrative staff and freed CEO Stuart Chait and his small team for deal-making and financing. 

The negotiation and sale were led by Property Partners' Cyprus-based chairman, Allan Collier, who spent two months in SA finalising the deal.

 He represents Property Partners' main shareholder, UK-based Highneal.

"Our philosophy internationally is to find a suitable partner who can take over the detail of each development," says Collier. "We can then concentrate on what we do best, which is finding a

nd structuring development opportunities. Amdec stands out from the pack in its Cape Town development reputation and in its approach to Melrose Arch." 

The commercial property market has picked up rapidly since Property Partners scooped up the icon Melrose Arch.

The yield on the income-producing finished portion of the development has fallen below 8% and new offices leases are being signed at well over R120/m². 

Collier and Chait have also slashed costs, mainly of management and professionals.

These factors have probably increased the value of the completed portion to more than R900m. 

Demand for land and the price at which it can be developed are also rising towards the R3 000/m² set by Chait when Property Partners took transfer from the Mines Pension Fund in May. 

The complex's current value now far exceeds the price Property Partners struck with the seller last year.