Growthpoint’s acquisition of Site B from the City of Cape Town has been widely reported and we take this opportunity to confirm our position on the acquisition and town planning application.
The City of Cape Town advertised the public auction of Site B, which took place on 7 September 2016 at the CTICC. Growthpoint’s bid of R86.5 million (excluding VAT at 14%) was accepted as it was the highest bid received from some 20 registered participating bidders at the auction, and exceeded the City’s reserve price. Growthpoint paid for the site in cash and ownership of the site transferred to us on 7 March 2017.
We had no prior knowledge of any rights exceeding the 17,500m² rights for Site B, as advertised by the City of Cape Town.
Growthpoint was a keen investor and prepared to pay more than any of the other bidders as we believed the site held strategic value to us given its proximity to three of our existing properties in the Foreshore.
When valuing the site we also took into account its prime location, current and potential future property rights and use, as well as factors such as site shape and servitudes.
It was always our intention to apply for additional rights and only in April 2017, after appointing our Town Planner, did we discover through public records that there were more bulk rights already attributed to the site. The City of Cape Town’s zoning records confirm rights of approximately 46,000m² available to Site B.
Last week we met with City of Cape Town Property Management Department, which undertook the auction of Site B. They are of the view that Growthpoint purchased Site B for a fair price, through a transparent and legitimate process.
Growthpoint is significantly invested in Cape Town and its future. We currently own R17.2 billion of property assets in the Western Cape over and above our 50% interest in the V&A Waterfront, valued at R9.1 billion – a combined total investment of over R26 billion.
Growthpoint has applied to the City for planning approval for the approximately 46,000m2, which has yet to be confirmed by or agreed to by the city, and we await the outcome of the Municipal Planning Tribunal meeting considering our application. The application is for the potential development of a proposed iconic mixed-use building with retail, offices, collaborative workspace, and a hotel. This development could represent an investment of around R2.2-billion in the city.
Should the proposed development proceed, its benefits to the city over the long term would be evident and include creating approximately 1,000 construction jobs and the accommodation of over 2,500 permanent jobs. The project would be designed to be an asset for the city, its people, and the environment.
In addition, undertaking the proposed development would add some R16-million to the City’s tax base every year on top of the roughly R500-million in rates and utility costs that Growthpoint already pays to the City annually (excluding those paid by the V&A Waterfront).
We believe that a city can only thrive when communities thrive, and we invest and develop in a way that creates positive impacts.
Not only are we a major contributor to the City’s tax base, but Growthpoint also plays a key role in education through the Growsmart education initiative which we offer at 160 Western Cape primary schools. We create jobs and opportunities through Property Point which is currently incubating 14 growing Western Cape small businesses.
We are funding the assistance of 750 Cape Town residents from across the city to assess if they are eligible for the title deeds to their long-time homes. This covers a diverse range of scenarios including private ownership of formal dwellings, private and municipal rentals, municipal properties purchased on a long-term loan basis, as well as families living in informal housing.