Hotels on the block

Johannesburg - Last week prospective buyers were falling over their feet in crammed halls to bid for hotel assets put under the hammer by Auction Alliance.

At an auction held at the new Crystal Towers Hotel & Spa in Century City on Friday, the La Splendida boutique hotel in Mouille Point was highly sought after.

Certain private investors and others involved in the South African hospitality industry competed strongly for the hotel with its 24 suites, says Ariella Kuper, head of new business development at Auction Alliance.

It fetched a top price of R28.6m, which she described as being at the upper end of fair market value.

The Harbour House hotel in Hermanus with 18 self-catering units was sold for R19.8m.

The Cape Castle Protea Hotel in Cape Town with 67 rooms was snapped up by an eager buyer for R66m a day before the auction, but this sale still needs to be confirmed.

At a second auction in Johannesburg earlier last week the United Hotel in Midrand with its 115 rooms was sold for R25m. Kuper says buyers are willing to tie up transactions at reasonable market values.

Another two hotels currently in the process of being sold are the Arabella Western Cape Hotel & Spa near Hermanus, with 145 rooms, and the Westin Grand Arabella Quays hotel in Cape Town with 483 rooms.

Although the hotel and hospitality sector is still under pressure following last year's sharp decline in occupancy rates, it is hoped that the World Cup soccer tournament will prove a platform for growth after the event.

According to STR Global Hotel Benchmark statistics, occupancy rates at South African hotels fell 12.8% in 2009.

- Sake24.com

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