Gauteng predators hone in on Cape groups

GAUTENG-based property group Redefine has signalled its intentions to swoop on Cape property group’s – last month confirming a takeover of Spearhead Property for R1.1 billion.

Two years ago Redefine managed to snatch the Standard Bank building on Cape Town’s Foreshore, but with Spearhead it has acquired a sprawling portfolio of Cape Town industrial, retail and commercial property.

This is the second dedicated Cape property portfolio to be incorporated into a bigger player. Last year CBS Property – which owned several well known Cape properties - was merged with a Gauteng-based portfolio assembled by the former executives of Primegro Property.

And before that Benny Rabinowitz’s Good Cape – via a convoluted process – ended up as the new look Calulo Property.

While property experts believe the Redefine transaction is part of the inevitable consolidation of the property sector, it is sad to see a dedicated Cape property company swallowed by a larger, national player.

Spearhead had over the years outperformed its larger, national peers – quite probably by virtue of its focused Cape property portfolio and the local knowledge and development skills brought to new projects.

Spearhead was founded in 1999 out of the merger of Brait Properties and 26 independent shopping centres/commercial properties.

Spearhead CEO Mike Flax will now take an executive position at Madison property, the company that manages Redefine’s property portfolio.

Redefine’s penchant for Cape property groups was apparent earlier this year when the group blocked an empowerment deal (involving Tokyo Sexwale’s Mvelaphanda Group) at Paramount Property.

Most observers expected Redefine – which has built a stake of around 25% in Paramount – to make a takeover bid for the Cape property company.

Apparently the price tag on the deal was too rich for Redefine, who have now retreated from Paramount.

The other significant Cape property companies left are Atlas Property and Oasis Crescent Property.

But there appears to be no corporate action pending at Atlas or Oasis - yet.

One interesting aside from the Spearhead deal is speculation around the plans for major Spearhead shareholders, Monty Kaplan (the former CEO of Cape of Good Hope Bank) and well know property personality Allan Groll.

Market talk is that following their exit from Spearhead, Kaplan and Groll will be looking at the old Shops for Africa shell to perhaps launch a new specialised property initiative.

Trematon Capital Investments, a company in which Groll and Kaplan have a major stake, recently acquired control of Shops for Africa –which has as its main asset a small holding in property group Apex-Hi.

Get commercial property news by email

Free alerts when we publish — pick a focus or get everything, unsubscribe in one click. Subscribe »