Many are the deals that have collapsed when purchasers are unable to raise a bond because the bank does not see value. 

Sales director of Seeff Commercial, Peter Rowell, who has seen deals collapse because banks would not lend money against a first mortgage, has reason to reinforce this conviction. 

Rowell and his colleague, Ian George, have just experienced what they describe as the inability of banks to apply basic financial logic to whether a commercial building could justify a first mortgage bond over a 780m2 building they purchased jointly earlier this year from an attorney. Despite the fact that Rowell and George could prove that they would still net nearly 20% after bond repayments and considerable improvements had been made. 

'We tried most of the traditional banks, including my own with whom I have an unblemished record spanning many years. Some banks didn't even bother to inspect the property, one offered 50%. Ironically, just on a whim I went to the Bank of Athens with all the details and this relatively unknown bank gave us a 90% bond within a week.' 

Rowell believes one of the reasons the main banks were reluctant to lend money was political. The property, Victoria Buildings, is a two-storey commercial and residential complex located immediately opposite the very busy Rosebank taxi terminus and station. 

'My guess is that the banks were totally biased because of the area, yet it was this very reason we liked the building. It has never had a vacancy and all the businesses trade well, at very reasonable rentals, so there is plenty of scope for improvement,' said Rowell. 

'We have spent a fair sum on the improvements to ensure that the plumbing is efficient, the electricity is in good nick. We will also be upgrading the kitchens and the commercial areas internally. And it will still deliver us 20% and escalate annually. We would not sell Victoria Buildings now because the long-term prospects are excellent. 

'Far too often the banks have failed to see the wood for the trees and a perfectly good transaction has sunk. All Cape Town brokers have lost deals because of this lack of financial nous and objectivity. Our experience with Victoria Buildings simply reinforces this belief,' said Rowell.