Speculation over V&A Waterfront ownership

Growthpoint is coy about whether it is planning to make an offer to acquire the shareholding in the Victoria & Alfred (V&A) Waterfront in Cape Town held by Dubai World, the troubled developer owned by the emirate of Dubai.

Estienne de Klerk, an executive director of the biggest JSE-listed property company, said yesterday it had bid once to acquire the V&A Waterfront and would still be interested in buying it if it became available.

However, De Klerk declined to comment both on whether Growthpoint intended to actively pursue an acquisition of the V&A Waterfront or intended to speak directly to Dubai World about the possibility of acquiring its share.

"It would not be fair to either party" to comment on this, he said. His comments follow the request last week by Dubai World and its subsidiary Nakheel for a temporary suspension of debt repayments.

Dubai World Africa, through its investment company, Istithmar, has a 37.5 percent stake in the V&A Waterfront. The popular tourist attraction's other major stakeholder is London and Regional, which has a similar stake to Dubai World, while the remainder is shared among black empowerment groups.

De Klerk added that Dubai World had bigger problems than "one small asset in South Africa" although the V&A Waterfront was one of its more marketable assets and was stable because it had just been refinanced. It had a debt facility in place for the next three years.

He said Growthpoint would make sure prior to making any offer that it had funds available to execute on any offer it made and historically the company had been able do this.

But De Klerk said there were at this stage a number of unknown variables, such as the percentage of the V&A Waterfront available for purchase, because both London and Regional and Istithmar owned a percentage of the asset and the black economic empowerment shareholders had a call on these percentages.

Hyprop, another JSE-listed property company, yesterday also expressed interest in acquiring Dubai World's shareholding in the V&A Waterfront if this stake became available.

However, Mike Rodel, Hyprop's chief executive, did not believe the company would make any specific approach to Dubai World but "wait and see what happens". In regard to whether Hyprop had the funds for such an acquisition, Rodel said Hyprop could acquire the stake on its own or with "somebody else, but there's nothing specific going on there".

Transnet and its pension funds sold the V&A Waterfront for R7.04 billion in 2006 but property values have declined since then.

Dubai World's acquisition of a stake in the property was in line with the group's strategy to acquire high-end assets in key destinations across the world. Apart from the V&A Waterfront, Dubai World Africa has acquired major shareholdings in the Shamwari Game Reserve, Sanbona Wildlife Reserve and Jock Safari Lodge.

Its portfolio of prime African properties also includes the Pearl Valley Signature Golf Estate and Spa in Paarl; Kempinski Beach Resort and Residences in the Comores; One & Only Zanzibar; Djibouti Palace Kempinski; and Nyungwe, Akagera National Park and Gorilla's Nest Lodge in Rwanda.

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