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Melrose Arch luxury units deal cancelled

Posted On Thursday, 10 May 2007 02:00 Published by
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The Melrose Arch Development Company has cancelled its joint-venture agreement with Dartingo Trading to develop the luxury residential development
10 May 2007 By Nick Wilson

The Melrose Arch Development Company, which is rolling out the development of the mixed-use precinct Melrose Arch, in Johannesburg, has cancelled its joint-venture agreement with Dartingo Trading to develop the luxury residential development, The Lincoln, at Melrose Arch.

The company now plans a mixed-use development on the site where The Lincoln would have been situated.

The Lincoln was to have consisted of 85 apartments of varying sizes.

Announced in October 2005, the developers said it would generate total sales of about R222m, with apartments ranging between R1,6m and R5m.

Construction was expected to be completed by the middle of this year.

But Nicholas Stopforth, a director of the Melrose Arch Development Company, said last week that The Lincoln did not achieve the 80% bankable presales necessary to start the development.

Stopforth said this provided an opportunity for the Melrose Arch Development Company to "re-engineer" and "redesign" the development to provide a mixed-use scheme offering retail, residential and office property.

A hotel is to be developed on a different site next to the former Lincoln site.

Stopforth said the residential units in the planned new Lincoln would "go into a rental pool" and share the hotel facilities on the adjacent plot.

He said it was difficult to say whether the product or its price prevented The Lincoln from achieving its presales target.

"The (new) product we will bring to the market will have an emphasis on smaller and more affordable units," Stopforth said.

But Dartingo MD Andrew Kirchmann said 82% of the presales were achieved by the end of March this year.

However, this missed the deadline, which was for 80% of presales by the end of last year.

Kirchmann said that therefore Melrose Arch, "as a 50% partner, cancelled" the agreement with Dartingo.

He said the deals would be cancelled this week and all deposits returned to investors.

Business Day

Publisher: I-Net Bridge
Source: I-Net Bridge
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