Controversial Blaauwberg beach property development on auction
The semi-completed Blaauwberg Beach Hotel development, which has been at the centre of the Realcor Group financial scandal, is to be auctioned.
The semi-completed Blaauwberg Hotel is to be auctioned.
ClareMart was instructed to sell the property by the liquidator of Midnight Storm Investments 386, the part of the Realcor Group of companies that began building the development in a reported R616 million property investment scheme.
Funded largely through the sale of debentures, the project attracted about 3 000 investors, many of them members of the public.
But when Realcor ran into financial difficulties, Midnight Storm Investments was eventually liquidated and was unable to pay back its investors.
The SA Reserve Bank issued a directive ordering the repayment of investor funds by Realcor Group companies in August 2008, said one of the liquidators, Stephen Gore of Sanek Trust.
Now, the property is finally proceeding to auction after lying idle for a number of years due to legal challenges relating to business rescue cases.
Gore says that the aim is to sell the property at the best possible price to recoup as much as possible for the multitude of investors. However, that would ultimately depend on the bids received.
"The market will speak at the auction," said ClareMart chief executive officer Jonathan Smiedt.
Smiedt estimated the value of the Blaauwberg as between R70m and R100m, but added that investors had been talking of figures as high as R120m and it was difficult to establish an estimate as investors were still collecting information about the property.
Located at the corner of Beach Boulevard and Beach Crescent, the hotel was initially designed for an international hotel group.
The structure has a planned 144 rooms over nine floors, 80 of which are "close to completion" and about 64 which "are still to be laid out", according to the catalogue for the property. An additional three floors were destined for executive suites and penthouses.
"All major structural elements are in place already and the remainder of development could be seen as a blank canvas which awaits the visionary investor's attention," said Smiedt.
Smiedt said that the property could either continue to be developed as a hotel, or has the potential to be a luxury residential apartment block, based on the current zoning laws and opinions from architects.
Furnishings and finishes of the hotel will be sold with the property as one lot, ranging from furniture and appliances to ceramic and plumbing equipment.
The Blaauwberg Beach Hotel will be auctioned on May 23 at the Radisson Hotel at the V&A Waterfront.
Posted at 09:31AM May 03, 2013 by Editor in Auctions |