Nedcor has disposed of its inherited investment in Cape Town's Canal Walk shopping centre in a R1,1bn deal to Hyprop Investments and Ellerine Brothers.
The purchase price for the mall, which landed in Nedcor's property portfolio when it acquired BoE, will be paid in cash on transfer of the property.
In terms of the deal, Hyprop would own 80% and Ellerine Brothers 20% of the development. This is the second collaboration between the two companies, which together co-own a 67% stake in The Glen shopping centre.
The sale followed a competitive bidding process controlled by Nedcor to secure the property and effectively double the Hyprop portfolio.
Canal Walk, the largest shopping centre in Western Cape, was surrounded by controversy even before it opened three years ago. It cost R1,6bn to build and Martin Wragge, CEO of the mall's developer, Monex, left the company.
Monex was subsequently delisted from the JSE Securities Exchange SA.
Hyprop MD Pieter Prinsloo said yesterday, however, the sale excluded the entertainment centre Ratanga Junction and believed the R1,6bn initial investment included infrastructural developments that did not fall under the ambit of the latest deal.
"We acquired the centre at a price we consider fair. The acquisition (was also) a milestone, marking our first investment outside of Gauteng," Prinsloo said.
He said the consortium was confident of Canal Walk's growth prospects given its location and infrastructure. The 131000m shopping and office complex is directly accessible to the N1 national highway and close to the Cape Town central business district.
It is also flanked by nearly 1000000m of prime development land in the CenturyCity precinct.
Prinsloo believed the recent sale in a single weekend of the 450 units of The Island Club, a pilot residential project, underpinned the future potential for the area.
The transaction is subject to standard regulatory approvals and the passing of the requisite resolutions. However, Hyprop has already secured irrevocable undertakings in favour of the acquisition from unit holders holding more than 35% of its combined units and from the Canal Walk controlling shareholder Nedbank.
Business Day
Publisher: Business Day
Source: Business Day
Nedcor has disposed of its inherited investment in Cape Town's Canal Walk shopping centre in a R1,1bn deal to Hyprop Investments and Ellerine Brothers.
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