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PROPERTY: Some Estates On Par, Others In The Rough

 



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THE leisure property sector – what with struggling golf course estates going up for auction – certainly does not look a segment where investors are likely to play.

But last month JSE listed Hospitality Property Fund – which specialises in hotel and leisure properties – announced it was at an “advanced stage of negotiations” to buy two flagship Western Cape properties from the Arabella South Africa Holding Limited group of companies.

The properties involved are the five-star Westin Grand Hotel located adjacent to the Cape Town International Convention Centre (CTICC) and the five-star Arabella Western Cape Hotel & Spa (including the Arabella Golf Course as well as 437 hectares of undeveloped land) situated on the Arabella Country Estate near Hermanus. No transaction value was disclosed. But it looks a sizeable transaction as it requires the approval of unitholders, who have been warned that the deal could have a material effect on the price of Hospitality’s linked units on the JSE.

Meanwhile things don’t seem on par up the road at Pinnacle Point Group’s Romansbaai Beach and Fynbos Estate.

This seaside golf course development includes 380 residential erven, a group housing village and the possibility of a retirement village on a 210 hectare piece of land.

According to Pinnacle’s latest results construction on phase one of the Romansbaai development has been suspended – pending finalisation of funding.

Pinnacle advised that selling activities would only recommence once funding has been secured.

Other golf estate developments appear to have gone out of bounds. Fin24 reported last month that the Sitari Fields golf estate, which was placed in provisional liquidation in December 2009, will be auctioned off this month.

Sitari comprises a 185 hectare just off the N2 freeway. Initial plans included two hotel sites and golf course.

More ominous are the comments from Auction Alliance CEO Rael Levitt, who believes developments at Sitari reflected the amount of pressure on the leisure property market after sales of erven dried up during the downturn. Levitt expects the development to fetch between R50 million and R60 million on auction.


 
 
 
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