Jul 26, 2012:
For most Sharemax investors, the prospects of being repaid are far from certain. But on Tuesday some good news was delivered to investors in the small Centurion Hazel syndication. This property was sold by Sharemax to investors for R6.1m in 2003.
On Tuesday the board of the Nova Property Group, the successor to the various Sharemax syndications, announced that it had “managed to negotiate a very beneficial sale” of the Centurion Hazel property.
The Nova Board says that the sale of Centurion Hazel was negotiated after it “independent corporate finance and related advice.” It did not state which parties rendered this advice.
Investors were informed that they will receive payment of their full R6.1m by January 20, 2014.
In November 2010 Moneyweb reported that Centurion Hazel was one of Sharemax’s healthiest syndications. It was making enough money from rental income to meet the payments investors were promised when they bought the syndication.
The syndication was healthy because it was sold to investors in 2003 when property prices were still low. Therefore they got a better deal than investors in later syndications. Younger Sharemax syndications, especially the two largest, Zambezi Retail Park and The Villa, are in a much more perilous financial state.
Nevertheless, even Centurion Hazel has been feeling the pinch of late. It has not paid any income to investors in the past 12 months. The Nova board blames this on the “countrywide office vacancy situation.”
But investors in Centurion Hazel can now look forward to a return of income. The board informed them: “Following further advice, the board has procured that a currently projected return of 4% per annum can be paid to Hazel debenture holders with effect from 1 July 2012 with the first payment to debenture holders at the end of July 2012.”
At the time of writing, Nova director Dominique Haese had not responded to Moneyweb’s questions regarding the Centurion Hazel property. These were:
1) Who is the buyer of the property?
2) What is the selling price?
3) Why will repayment only take place in January 2014?
4) When is transfer expected to take place?
5) Was the property sold through a broker, and, if so, what commission is payable?
Sharemax investors were also informed that the required upgrading of various properties is “receiving the necessary attention.” The board said this upgrading “is of vital importance as it will ensure positive re-letting and new letting of space in order to increase revenue and ultimately investment returns to debenture holders as well as an increase in the asset values of the relevant properties.”
Included in the planned upgrades are plans to complete the massive unfinished R3bn Villa Mall east of Pretoria. Investors will be informed of this process at “the appropriate time.” There was no word on whether all-important funding has been obtained to settle the building costs as well as the Villa’s outstanding debts.
The board also provided an update on the long-awaited access roads for the Zambezi Mall, north-east of Pretoria. It expects the south-eastern access road to be completed in September this year, and the Moloto access road to open towards the middle of 2013. The latter access road is awaiting the approval by local authorities of an environmental impact assessment.