V&A Waterfront valued as sale looms

The valuation, as at 31 March 2005, covered 77 developed buildings totalling over 300 000m² and comprised 24 retail-related properties, four parking garages, 27 office buildings, five hotels, eight fishing industry buildings and several marine and other leisure-related properties.

The project excluded the residential marina development. In addition over 200 000m² of unutilised development bulk was also valued on a phased development timing basis in conjunction with Bham Tayob Khan Matunda (BTKM) Quantity Surveyors.

Old Mutual Properties' valuation manager Trevor King says the valuation was a team effort completed in accordance with local and international standards and followed the valuation guidelines of Investment Property Databank (SA), the main provider of industry benchmarks in the country.

King said the internationally recognised definition of market value was based on the price that a willing buyer would pay a willing seller in an arm's length transaction: "The definition excludes an inflated price that a purchaser with a special interest will be prepared to pay for the trophy nature of an asset."

King says that although Old Mutual Properties had completed market related valuations of the waterfront since 2001, the 2005 project took on a new meaning after the announcement that Transnet's 26% stake was up for sale.

"This valuation comes at a time when economic and property fundamentals are extremely favourable. The waterfront is a landmark location, with a prestigious tenant profile and world class entertainment facilities. Its underlying value is in the ability to attract premium long term office, retail, hotel and fishing tenants combined with the basic retail offering serving the local Cape Town and Atlantic seaboard markets.

"Given the diverse nature of buildings and more than 900 leases spread across the retail, office, leisure, hotel and marine sectors, an interest in the waterfront represents an investment in a world class multi-use "city", all in one. Investing in the waterfront is like buying into a property unit trust - you get a wide spread of different property sectors, set in a perfect location in a working harbour with all of its theatre and drama."