CBS resists allure of changing offices into residences
2005-11-23
Billions of rands are being spent on converting former office blocks in central Cape Town to up-market apartments mainly sold on sectional title to buyers from Gauteng or overseas. Although it owns four office blocks that would be suitable for conversion, listed Cape Based Syndications (CBS) Property Group has resisted the temptation to move into residential property.
Gary Fisher, an executive director, said the commercial and industrial market was "moving up after 10 years in which it has not done well".
He said: "People whose leases are coming to an end are realising that the pendulum is swinging the other way and renegotiating them. Converting offices to apartments for sale means a once-off profit and we have decided to stay in our own market."
The listed property sector was now worth R30 billion and no serious investor could afford to ignore it. Converting offices to apartments for sale meant a once-off profit. The company would announce two new acquisitions, in Johannesburg and Cape Town.
"That is why we listed. We aimed at raising R250 million to fund our acquisitions but our placement to institutions was oversubscribed 7.5 times and we raised a total of R320 million," he said.
CBS Properties was founded by Fisher and its chairman, Ivan Klerck, in 1993. It owns 28 properties, of which 50 percent are in Cape Town, 30 percent in Johannesburg and 20 percent in KwaZulu-Natal. Its shareholders now include Old Mutual, Sanlam, Oasis, Catalyst, the Public Investment Corporation and Investec Private Clients.
"Management is bound to look after our clients, but what makes us different from many property companies is that management owns 30 percent of the shares. Our interests and those of the shareholders are the same," Fisher said. CBS closed 5c down at R7.35 yesterday. The property sector improved 0.29 percent.
Source: Business Report - www.busrep.co.za
Get commercial property news by email
Free alerts when we publish — pick a focus or get everything, unsubscribe in one click. Subscribe »
More commercial property news
- R59 Million Centre Extends SA Retail-Vukile Partnership 2006-10-26
- Hotels, hi-tech warehouse on offer 2006-10-26
- New R150m sectional title offices launches at Century City 2006-10-25
- SA creativity highlighted 2006-10-25
- Java to oversee Reit adoption 2006-10-25
- Calulo has new MD and big plans 2006-10-25