ApexHi Sells 11 Diagonal Street To Absa for R104-Million

Posted On Monday, 15 January 2007 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

ApexHi Properties Limited has sold its iconic "diamond building" – 11 Diagonal Street in Newtown, Johannesburg - to Absa for R104-million.

Gerald LeissnerApexHi CEO Gerald Leissner says the building is due to be vacated by Anglogold at the end of May 2007, and leasing efforts to replace the commercial tenant prompted an excellent offer from Absa. "At end June 2006 the building was valued at R62,4-million, and the sale price is revenue enhancing for ApexHi, even if the building was fully let," he says.

West Street Parkade is also being sold to Absa for R20-million to provide additional parking for the users of the 32,600m2 11 Diagonal Street.
 
ApexHi has sold a total of 53 properties since 1 July 2006 for R440-million, exceeding its estimate of R300-million for the financial year. The majority of the properties are small buildings that no longer fit the investment criteria of the portfolio.

The office component of 66 Smal Street in the Johannesburg inner city was sold for R4,5-million and the office component of African City was sold for R1,1-million. Kelhof in the Johannesburg inner city and Biccard House in Braamfontein was sold for R8,5-million and R5,4-million respectively. These four office buildings have been - or in the case of Kelhof are in the process of being - converted by the purchaser into residential units to be held for rental. ApexHi has retained a 10% interest in these properties.

Leissner says the disposal of 11 Diagonal Street is in line with ApexHi's view that the inner city is no longer a viable option for commercial office tenants. ApexHi is, however, still a serious investor in the inner city owning 16 buildings, offering 95,787m2 of office accommodation and 76,825m2 of retail space, with an acceptable total vacancy of 9.3%. "It has been ApexHi's view for some time now that our tenants are primarily government or parastatal and retailers," he says.

For the first time, ApexHi made use of auctions to sell smaller properties that no longer fit the profile of the portfolio. During this period, 17 properties were auctioned for a total selling price of R50,4-million. "The auctioned properties are fetching prices in excess of the carrying value and provide the opportunity to conclude deals quickly compared to the
traditional method of negotiating sales," says Leissner.

Leissner says with a portfolio of more than 440 buildings, the asset management component of the business is crucial to ensure that all buildings are adding value to the portfolio.

"Buildings are assessed on a regular basis to ensure that they are contributing to the bottom line. The company invests in high-yielding, revenue-enhancing properties with sound tenant profiles. Rather than focusing on location, ApexHi focuses on quality A grade tenants and sustainable income streams. When properties no longer meet this profile, we attempt to dispose of them," says Leissner.

 

Last modified on Saturday, 26 April 2014 17:42

Please publish modules in offcanvas position.