Out of pocket

Posted On Friday, 11 October 2002 02:00 Published by
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Samrand, the property development group owned by Malaysian businessman Dato Samsudin, is experiencing a few financial hiccups as a result of the incorporation of Centurion in the Tshwane metropolitan council.
By Sven Lünsche
 
Samrand, the property development group owned by Malaysian businessman Dato Samsudin, is experiencing a few financial hiccups as a result of the incorporation of Centurion in the Tshwane metropolitan council.

Samrand's latest annual report shows a R60m rand loan to Tshwane, which relates to expenditure incurred by Samrand since 1995 on the Samrand interchange on the N1 highway and other bulk infrastructure near the group's property holdings in the area.

In terms of the original deal between Centurion and Samrand, the latter would provide bridging finance of about R40m, but would retain rates and taxes in its developments as payment for the loan.

However, since Centurion has been incorporated into Tshwane, these payments have been slow in coming. 'It's quite a complex deal and the new officials dealing with it are working their way through the details,' says Samrand director Saki Burger. He stresses that Tshwane is not reneging on the undertaking struck with Samrand, 'it is merely taking longer than expected'.

Meanwhile Samrand is charging commercial rates on the loan, whose total amount is now well ahead of the R40m that Samrand spent on infrastructure outlays.

Rate and tax payments are also slower than expected, as take-off of commercial development on Samrand's property is below forecasts, says Burger. Only two of five proposed development phases have been completed and the project appears a bit run-down.

But the group is conducting a further feasibility study of the development potential of the area and is optimistic about its future potential.

The residential development around the adjacent golf course was completed ahead of time and has since been sold.

Financial Mail


Publisher: Financial Mail
Source: Financial Mail

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