A landmark independent valuation of the Victoria & Alfred Waterfront which could help guide negotiations on the sale of Transnet’s 26% stake in the Cape Town property asset, has been completed by the valuation division of Old Mutual Properties. 

The valuation, as at 31 March 2005, covered 77 developed buildings totalling over 300 000m² and comprised 24 retail-related properties, four parking garages, 27 office buildings, five hotels, eight fishing industry buildings and several marine and other leisure-related properties. The project excluded the residential marina development. In addition over 200 000m² of unutilised development bulk was also valued on a phased development timing basis in conjunction with Bham Tayob Khan Matunda (BTKM) Quantity Surveyors.

Derick van der Merwe, managing director of the waterfront management company, said the valuation by Old Mutual Properties was confidential and was intended for internal use.

Old Mutual Properties’ valuation manager, Trevor King, said the valuation was a team effort completed in accordance with local and international standards and followed the valuation guidelines of Investment Property Databank (SA), the main provider of industry benchmarks in the country. King was assisted in the project by his registered valuer colleagues Shawn Crous, Magdelene Smit and Sakina Nosarka.

King said the internationally recognised definition of market value was based on the price that a willing buyer would pay a willing seller in an arm’s length transaction.  “The definition excludes an inflated price that a purchaser with a special interest will be prepared to pay for the trophy nature of an asset. “

King, a member of the Royal Institution of Chartered Surveyors, said that although Old Mutual Properties had completed market related valuations of the waterfront since 2001, the 2005 project took on a new meaning after the announcement that Transnet’s 26% stake was up for sale.

 “This valuation comes at a time when economic and property fundamentals are extremely favourable. The waterfront is a landmark location, with a prestigious tenant profile and world class entertainment facilities. Its underlying value is in the ability to attract premium long term office, retail, hotel and fishing tenants combined with the basic retail offering serving the local Cape Town and Atlantic seaboard markets.

“Given the diverse nature of buildings and more than 900 leases spread across the retail, office, leisure, hotel and marine sectors, an interest in the waterfront represents an investment in a world class multi-use “city”, all in one.  Investing in the waterfront is like buying into a property unit trust – you get a wide spread of different property sectors, set in a perfect location in a working harbour with all of its theatre and drama. “

The valuation was essentially carried out on a discounted cashflow basis, while taking account of the large quantum of leases of varying periods and terms.

King said Old Mutual Properties’ comprehensive database of reliable valuation evidence has been built from completing valuations for Old Mutual and for third party private property companies, owner-occupiers, other institutions, local authorities and listed funds such as Growthpoint, Redefine, Freestone , Emira, Ambit and SA Retail.

King says the keen interest in property, along with a drive to expand portfolios, new listings and proposed consolidations in the listed sector, has sparked a host of calls for credible valuations from owners across the board to accurately determine the value of their property assets.

He says a consistent and comparable measurement of values for owners of large and small portfolios can be ensured by the application of international valuation standards and meaningful benchmarks.

Ends

ISSUED FOR Old Mutual Properties

BY Michael Kerkhoff & Associates

INQUIRIES Trevor King 021-530-4539

                    Mike Kerkhoff 021-424-5280