A private portfolio worth R700 million in properties in Bloemfontein, will come under the hamer on 14 September.
Galetti Auction will auction off 26 Bloemfontein properties that forms part of the Georgiou private portfolio of 41 properties that will be auctioned off.
The Michael Georgiou family trust is the owner of one of the largest private property portfolios in South Africa including the Fourways Mall and Cedar Squar.
The family trust partnered with Galetti Auction, part of the Galetti Corporate Real Estate in Johannesburg, to handle the sale of buildings like Sanlam’s Bloemfontein headquaters, the hotel at Windmill Casino, Rosebank College, 76 Kellner Street and the RTT distribution Centre, a prime industrial asset which is home to Pepkore and Xeon Logistics.
The portfolio spans student residential conversion, prime retail space and the corporate headquarters of some of South Africa’s largest businesses.
The properties are being sold as part of a portfolio restructuring exercise and form part of Phase 1 of the portfolio sale.
John Jack, CEO of Galetti Corporate Real Estate explains: “We specialise in corporate re-structuring and bring a focussed solution to the table for large portfolio sellers. Our business is to find the right solution for the seller, be it private treaty, sealed bid or auction, as each option is tailored to purpose”.
“With the first tranche of the portfolio we advised that auction would be the best option because it calls the market for all bids and discovers the best price for the properties. The next step will be a sealed bid, given the size of the assets and lengthy due diligence required to transact on them.”
The properties are a mix of income-generating properties and development opportunities.
“Investors look to the underlying leases to assess the value of the properties on auction. The investors retain the tenants and often upgrade the properties so it’s a win-win scenario,” adds Justin Thom, director for Galetti.
Thom highlights the keen uptake by investors for the big ticket items of the day: student residential conversions. “The cost of building has gone up and residential conversion seems to be the answer.”
Vacant office blocks located in close proximity to universities and colleges are now being earmarked by investors due to the ongoing student bed shortage.
“Earlier this year the Department of Education estimated a shortage of 400 000 beds countrywide.”
Potential residential conversions in this portfolio include the Bloem Club (4 300 m2), the MBS Building (3 300 m2) and the Penbell building (2 300 m2 ).
“Assets in this range should sell for around R3 000 – R 4000 per m2.”
“For investors, it’s all about foot traffic and high-yielding assets such as cash retail stores are continuously in high demand.”
One of the properties coming to market is the Fichardt Street complex.. “There are six buildings on sale, equating to 7 000 m2. A few of the buildings are sub-leased and there is the opportunity to convert the flats upstairs into a storage area for tenants,” says Thom
Coming to market in Bloemfontein are RTT, Pepkore and Xeon Logistics, along with a division of HCI. “Three different buildings each with blue chip tenants,” comments Thom.
Between these three buildings, there’s an impressive 29 728 m2 of space on offer. “Pepkore Logistics has been a long-standing tenant and the premises is fully kitted out.”
