York St shops change hands in R87 million deal

Posted On Monday, 08 October 2007 02:00 Published by eProp Commercial Property News
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The eight-year old Game shopping complex in York Street in the George CBD has been sold by the Pretoria-based Moolman Group to ApexHi Properties for R87,5-million

Gerald LeissnerApexHi announced the transaction last week in a double deal which saw the purchase of the 11 000m² George centre and the sale of its Rivonia Square property in Johannesburg for R196-million.

The centre is close to the controversial George Tourist Resort, where owner Frik Labuschagne‘s R350-million development proposal has been turned down by the George municipality on the basis that it is not in the interests of the community.

A Moolman Group spokesman, who did not wish to be named, said the sale of the George property was a straightforward business transaction at market-related prices.

He said, however, that the Garden Route Mall, as well as the new Knysna, Mossel Bay and Oudtshoorn shopping centres, had affected trade in George‘s CBD.

He argued that the council should be pro-development in the area to bring business back to the CBD.

Funds generated from ApexHi‘s Rivonia sale will partially fund the Game Garden Centre, with the balance being used to reduce borrowings by the company.

“The centre, which is anchored by Game and Checkers, falls in line with ApexHi‘s retail portfolio of neighbourhood and commuter market centres,” said managing director David Rice.

He also said Game Gardens was located in one of the fastest-growing municipalities in the country and the purchase would expand ApexHi‘s limited investment in the Garden Route area.

Company chief executive officer Gerald Leissner said ApexHi was spending a large amount of money on developments in its property portfolio.

ApexHi acquired Game Gardens at a yield of 10,27% (a percentage of the capital outlay), while selling its Rivonia property at 8,2%, which Leissner said was profitable for the company.

He said the company specialised in purchasing properties outside prime office, retail and industrial zones, instead buying properties in depressed areas in metropolitan central business districts.

This yielded higher returns for investors and limited borrowings to a maximum of 35% of the value of the property.

George commercial property agent Johan Mouton, of Sotheby‘s International, said the yield achieved on the Game Gardens acquisition was higher than was usually realised in George.

“Asking prices in George are way too high and ApexHi are lucky to have purchased the property at a realistic price. In George we battle to get between 8% to 9% on yields,” Mouton said.

Labuschagne wanted to upgrade his property, building a hotel, shops and filling station, but the council blocked his application.

He then lodged an appeal over what he said was an illegal decision by the mayoral committee, which allegedly demanded an “enhancement” levy of R3-million from him to rezone his property.

Last modified on Wednesday, 23 April 2014 11:51

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