September 21, 2006

Dubai-led group gets Cape V&A for R7 billion

Istithmar, the investment arm of the government of Dubai, and UK-based property giant London & Regional Properties beat nine other high-profile bidders to buy the V&A Waterfront for more than R7bn, the biggest single property transaction yet in South Africa.
The successful bidders, who clinched the deal with the aid of a high-profile black empowerment consortium, aim to turn the prime seafront property, which attracts more than 22-million visitors a year and covers 603.859m' of development rights, into Africa's Riviera.
London & Regional will hold 50,1% of the shareholding in a new controlling company, Lexshell, while Istithmar will have a 24,8% stake and a broad-based group of black investors the remaining 25,1%. Among the failed bidders are Canadian property investment fund Cadillac Fairview, the investment arm of the Ontario Teachers' Pension Fund, Old Mutual SA, which did the valuation on the V&A, a consortium of RMB, the PIC and Liberty International. Others who missed out include the Chait property group and Wendy Luhabe, who previously tried to buy the V&A, and Hyprop, which dropped out early.
The sale was announced by Transnet chairman Fred Phaswana, naming the biggest empowerment shareholding as DIH, the holding company of Decorum, a private equity concern with 12,7%. Decorum is headed by Arthur Mashiatshidi, who manages the R564m New Africa Mining Fund. Another empowerment shareholder is the Western Cape Women's Investment Alliance (6%), led by Roxanna Adams. Among the broad-based empowerment participants (6,4%) are Kgontsi Investments led by Dren Nupen, and which includes as its shareholders Nomusa Mufamadi, the wife of Provincial and Local Government Minister Sydney Mufamadi. Some of the empowerment entrepreneurs involved as investors are Vincent Maphai, chairman of Billiton South Africa; Jabu Mabuza, chairman of South Africa Tourism; Luyanda Mpahlwa, brother of Trade and Industry Minister Mandisi Mpahlwa, and Hassen Adams.
Mahmoud Saleh, secretary-general of Dubai World, which is owned by the ruling al-Maktoum family, said the purchase would send a strong signal to global countries to attract tourism and investment to Cape Town, especially in the light of the 2010 Soccer World Cup.
He said it was the intention to transform the V&A Waterfront into an African Riviera.
James Wilson, CEO of Nakheel Hotels and Resorts, and part of Istithmar, who represented the L&R consortium consisting of London & Regional with main shareholders brothers Richard and Ian Livingston and Istithmar, said he saw no major changes being made to the landscape of the V&A. He noted there would be improvements made through the use of the world's top architects. He said the intention was to bring more interests and funds to develop the V&A, but felt it was unnecessary to change something that "is already successful". (Business Day, Johannesburg)

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