The sale at the Hilton Hotel last Tuesday attracted eight registered bidders who submitted 61 bids in total.
In a “frenetic” auction, the Alliance Property Group sold the Shoprite premises at 424 Dr Pixley Keseme (formerly West) Street in the Durban CBD, for a staggering R168million.
The sale at the Hilton Hotel last Tuesday attracted eight registered bidders who submitted 61 bids in total. The opening bid started at R100m and bids increased by R5m to reach the undisclosed reserve price of R140m in a flurry of bids.
Even after auctioneer Roy Alderdice announced that the reserve price had been reached, the bids continued in increments of R1m until the lot had finally being knocked down for R168m.
Alliance Property Group director John Lomas says although the property had been marketed throughout South Africa, local investors dominated the bidding.
“There were many prophets of doom who predicted the sale would be a failure. But I knew local investors would see the property’s potential and rise to the occasion. Nevertheless, I did not think we would achieve as much as R28m above the reserve price,” said Lomas.
“The property was purchased by a group of private investors as a long-term investment.
“Based on the price of R168m, the net return equates to just over 6%, which says a lot about the intrinsic value of the investment.
“The sellers were delighted with the result as they too did not expect the undisclosed reserve to be overtaken by such a substantial amount.”
The premises, situated in the heart of the Durban CBD, is let on a long triple-net lease to Shoprite Checkers who in turn have sub-let some front shops to other national tenants. – Auctions Writer