Transnet puts prime South African retail, commercial and residential property and tourist attraction the Victoria & Alfred Waterfront on the market. Classic Business Day asks Rob Stefanutto from Sotheby’s International the $10-billion dollar question - what’s it worth?
LINDSAY WILLIAMS: No price details were forthcoming from Maria Ramos from Transnet! Just imagine if you were an estate agent and you had this absolutely unique piece of real estate not just in South Africa but also in the world to sell: Unique property situated in the heart of Cape Town’s fashionable Atlantic Seaboard, boasting 3,700 bedrooms all en-suite with both sea and mountain views, within walking distance to the shops that form part of this unique package - for today’s extended family! A large fish tank is one feature that makes the Waterfront a must see. Rob, how on earth would you value this property? It’s extraordinary…
ROB STEFANUTTO: I’d have to start by giving Maria the R50,000 non-refundable cheque before I can have a look at what the assets are in this particular parcel. I’d have to agree with her - it is probably the greatest piece of real estate available in South Africa at this moment in time, and bidding I would have to say on an international as well as local level is going to be extremely fierce. If you want to enter this market and you’re a substantial fund or international investor this is the piece to go for.
LINDSAY WILLIAMS: Yes, it is. The fact that Transnet is selling now - is this a signal that perhaps they think the property market has had its run? Are they cashing in on that, or is it simply because that’s not part of what they need to do for South Africa in the next few years?
ROB STEFANUTTO: I think there’s a lot of discussion about Transnet’s core business, and the fact is it’s not their core business. One of their funds is retaining 26%. If they were to sell to an operator that specialises in this type of multi-unit development - residential, commercial and retail - they may be able to grow that even further. The type of bidders you would look for are those that are going to develop the remaining land, run the retail, and lease out the commercial. It’s an interesting consortium or individual groups that would buy it…
LINDSAY WILLIAMS: Do you think it’s going to be an international group? Is it too big for a South African company?
ROB STEFANUTTO: I don’t think South African companies are too small to handle this - there are some very substantial funds in this country that are having meetings right now knowing that this is on the table. I hope to see it go to a South African company - I’ve looked at the property many times, and there are still many fine development opportunities in it, in all three of the segments. I scratched my head when I was asked what price to give it. In the simplest terms we would value this by looking at all the leases, we would have to look at all the remaining development opportunities, and we’d have to look at the tourism industry going forward. We’d get some very good auditors in, and I think we’d come up with a very large number.
LINDSAY WILLIAMS: Give it a stab - how much?
ROB STEFANUTTO: I think I would have to say it’s a number that starts with a ‘b’ possibly.
LINDSAY WILLIAMS: It’s definitely a ‘b’ - but how many?
ROB STEFANUTTO: How many is very difficult, and in which currency we’ll negotiate is an extremely difficult question. It’s literally impossible without having seen all the leases, and all the information they would release - but I must say I do feel it’s absolutely the finest piece of property available in South Africa.
LINDSAY WILLIAMS: And possibly in the world - you’ve got the sea views, the mountain views - and you can’t recreate that. You cannot put Table Mountain anywhere - if you create this in Dubai you don’t get Table Mountain, and you can’t get the Atlantic. It’s got to be 10-billion or maybe even more?
ROB STEFANUTTO: That’s very possible - you’re looking at a large consortium for this. The apartments don’t start under R4-5-million, the hotel values, the marina!
