Massive property auction planned

Johannesburg - One of the biggest commercial property auctions to date will take place early next month when the R250m property portfolio of the listed SA Corporate Real Estate Fund (SA Corp) comes under the hammer.

The fact that SA Corp wants to dispose of the properties is not news. It was announced earlier this year, but the fact that it is now being done on auction could be regarded as a desperate attempt to get rid of the properties.

The timing is poor, because some of the properties were bought at the peak of the cycle and are now being sold near the bottom.

At the time the company was criticised for having overpaid for a portfolio of properties that it acquired from Sharemax.

Coronation property portfolio manager Anton de Goede says the size of the auction reflects the pressures that corporate South Africa is currently experiencing, since it seems that the current single-tenant properties are not necessarily being bought by the tenants themselves. It also reflects the limited finance available for commercial property bargains.

The properties will be sold on two auctions - the one in Cape Town and the other in Durban - on December 2.

Alliance Group chief executive Rael Levitt, who will handle the auctions, says the properties include one of the largest retail properties ever put on auction.

He expects this property, the 17 000m² Highland Mews shopping centre in Witbank, could fetch up to R170m. For that matter, there is considerable interest from other listed property funds.

Another property attracting huge interest is the Chapel Street building in Pietermaritzburg, which houses KwaZulu-Natal's Department of Health.

- Sake24.com

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