UK company, BEE consortium to buy Waterfront for R7bn


Shaun Benton

A United Kingdom property group in partnership with a local Black Economic Empowerment shareholding are the likely buyers of Cape Town?s Victoria and Alfred Waterfront, carrying a price tag of R7.04 billion.

The London and Regional Consortium was identified Wednesday by Fred Phaswana, the chairperson of Transnet Ltd, as the preferred bidder to acquire 100 percent of the prime real estate.

Transnet is one of the principal owners of the VandA along with Transnet Retirement Pension and Benefit Funds.

The VandA Waterfront - arguably one of the most desirable properties in Africa - is likely to be sold for R7.04 billion in cash to the consortium of local and international investors in which black economic empowerment shareholders - including many women - have a significant stake.

The cash price offers the maximum value for the key tourist and leisure property, which was one of the criteria identified by Transnet group chief executive Maria Ramos earlier, for a preferred bidder.

The planned sale, which Ms Ramos welcomed as "a balanced deal' features a significant element of black investors, which was another component to the sale criteria for a preferred bidder.

The LandR Consortium is led by major European property group London and Regional Group Holdings Limited, which has two United Kingdom-based brothers, Richard and Ian Livingstone, at its helm and which has interests exceeding R65 billion.

The deal significantly boosts Transnet's cash flows, as the state-owned enterprise embarks on major investments in its core focus area, transport.

The other key international property investors are from the Istithmar PJSC (meaning "investments' in Arabic, Western Cape Premier Ebrahim Rasool informed the media), which is the investment arm of the United Arab Emirates-based company Dubai World. It manages a portfolio on business for the Dubai government.

A significant stake of 23.1 percent goes to black economic empowerment stakeholders through a local company called Lexshell 44 General Trading (Pty) Ltd.

Another two percent in the consortium is to be set aside in a trust for the VandA Waterfront's black employees.

The BEE shareholders comprise many Capetonians, including an empowerment grouping of women under the umbrella of the Western Cape Women's Investment Alliance (WECWIA), as well as BEE shareholders Decorum, Kgontsi Investments, Tsa Rona Investments and the Cape Empowerment Trust, which comprises a range of community-based and non-governmental organisations.

Included in the BEE component are South African entrepreneurs and executives Jabu Mabuza, Vincent Maphai, Hassen Adams and Luyanda Mpahlwa, according to background material provided to journalists.

Decorum is a BEE investment firm and private equity fund manager led by Arthur Mashiatshidi, WECWI is led by Rozanna Adams, Kgontsi Investments is owned and managed by black women that has "strong Cape community linkages' and is led by Dren Nupen, while Tsa Rona Investments is a women's group led by Nthobi Angel.

The consortium was selected out of a list of nine competitors for the prime property - 45 percent of which is yet to be fully developed - in what Cape Town-based BEE businessman Hassen Adams called a "knockout bid'.

The deal remains subject to the approval of the South African government's competition authorities as well as the Reserve Bank.

James Wilson, a key player in the deal as the chief executive of Nakheel Hotels and Resorts, a division of the Dubai World-owned company Nakheel, told journalists that future developments on the drawing board of what he said were some of the world's leading architects would not simply emulate the skyscrapers common to the Dubai skyline.

Developments would be lower density, he said, and would seek a "seamless integration' along spatial lines between the Cape Town central business district and the nearby VandA Waterfront and the yet-to-be-built 2010 World Cup Stadium at Greenpoint.

They would seek to provide for sustainable developments that would live past the "wonderful opportunity' the hosting of the 2010 Fifa World Cup will provide.

No major changes are envisaged he said, saying "why change what is already successful?'

Mr Wilson indicated that the consortium would be seeking decidedly upmarket commercial residents such as leading fashion houses Dolce and Gabbana and Gucci, along with some of the world's top hotels.