THE High Street Auction Company is bringing a R700m commercial property portfolio to market in one of the largest sales by tender auction in SA.
The relevant properties belong to an undisclosed listed property fund. Selling properties by auction is a new trend in the listed property sector as auctioneers are able quickly to organise potential buyers in depressed markets.
High Street Auctions said the R700m portfolio comprised 10 buildings and represented its biggest deal since launching five years ago.
"It will overshadow our previous record-breaking sale of Kyalami Race Track that fetched just over R200m by a substantial margin," said Joff van Reenen, director and lead auctioneer at High Street Auctions.
Porsche SA bought the iconic Kyalami race track for R205m in July last year.
Joint MD at the company, James Dall, said the Kyalami deal had raised the group’s profile substantially.
"It was very much a catalyst for us and we are set to do more deals in the hundreds of millions," he said.
The assets in the R700m portfolio include some landmark commercial offices in central business districts.
There are a number of differences between sale by tender auctions and traditional auctions.
In a normal auction, the buyer is the person or institution that offers the highest price.
In a sale by tender, all potential buyers offer bids and then the seller can choose the buyer.
Buyers can bid for the entire portfolio or for select properties.
"Our client opted for a sale by tender — it’s regarded as a best practice process to achieve the highest possible price for the seller, while facilitating complete control over regulatory and other compliance requirements," said joint MD Lance Chalwin-Milton.
Once the majority of documents required for a due diligence in respect of the various properties had been compiled, High Street Auctions hosted this on a secure server and provided it, upon request, to prospective qualifying parties, Mr Chalwin-Milton said.
