CAPE Town’s major tourist draw, the V&A Waterfront, could list if Transnet does not get its asking price on a sale.
That’s what Transnet CEO Maria Ramos told journalists yesterday at a media briefing, which marked the beginning of a process of disposing of the Waterfront.
Transnet established the Victoria and Alfred Waterfront to redevelop the historic docklands in 1988. According to its Annual Report, its 26% stake cost R424m.
This would mean that back in those days a 100% of the V&A would have cost R1,6bn. The value is currently estimated to be around R6bn.
Ramos would not disclose the price Transnet was looking for. She said it sought maximum value.
Experts say potential buyers are Old Mutual and the property funds.
The V&A Waterfront Holdings comprises three companies: V&A Waterfront properties, V&A Waterfront Marina and the Victoria & Alfred Waterfront.
The top company is owned by Transnet Second Defined Benefit Fund (43,6%), Transnet (26%), Transnet Retirement Fund (22,6%) and Transnet Pension Fund (7,8%).
Ramos said that the disposal would be for 74% to 100% of the Waterfront.
“The one fund, the Transnet Retirement Fund, may decide not to sell its 22,6% interest and may choose to increase its holding to 26%,” she said.
“The main objective is to realise maximum value for the investment in the V&A Waterfront. And if this is not achieved through a sale, then we will look at a listing,” she added.
Ramos said that to maximise value, a dual track process will be used to implement the disposal which will include a separate trade sale process and a listing process. Ramos said that this was the perfect time to dispose of the V&A because of the favourable market conditions.
Transnet is getting rid of its stake as it is a non-core asset. Others include rail, port and pipeline infrastructures.
For the V&A’s linked unitholders, the decision to sell is in partly based on a desire to increase the liquidity of their investment profile and reduce the risk to beneficiaries of being exposed to one class of asset.
The V&A Waterfront is a world-class mixed-use property development which has become South Africa's most visited destination attracting up to 22m visitors annually.
Shopping and entertainment venues are intermingled with office locations, world-class hotels and luxury apartments in the residential marina.
It has 603 859m˛ of bulk development rights approved by the Cape Town City Council, of which 55% has been developed, leaving 45% of bulk development rights available for development.
The developed property portfolio consists of retail (50%), office (25%), hotels & leisure (15%) and fishing /industrial /marine (9%).
Bulelani Ngcuka, chairman of V&A Waterfront Holdings said that the Waterfront is internationally recognised as a highly successful real estate venture at the heart of Cape Town’s economy.
“We believe there will be considerable interest in this opportunity. It is therefore very important that the overall process of selecting the preferred bidder is beyond reproach. I am confident that we have the appropriate mechanisms to achieve this outcome,” he reckons.
The evaluation criteria is such that, the indicative offers and final offers are evaluated out of 100 points.
The highest bidder will get 85 points and who ever is the second highest will get a point less, and so on.
Up to ten points will be awarded for BEE and up to five for retention of V&A Waterfront employees.
Offers will only be considered if a bidder wants to buy at least 25% interest in the company and to participate in the trade sales process interested parties will be required to pay a non-refundable R50 000 documentation fee and to sign a confidentiality agreement
The registration and expression of interest process opens on Wednesday May 31 and closes on July 21.