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Uitsig on the block

Uitsig on the block

ANOTHER iconic Cape wine farm is officially on the block. Constantia Uitsig – jointly owned by well-known businessman David McKay and empowerment group Mvelaphanda Holdings – was recently put up for sale with a price tag of R175m.

The price tag is close to the R180m speculated in previous editions by CBN.

Property sources reckon it will be surprising if the farm – which includes several highly rated restaurants – fetches the R175m asking price. But it’s not like there is a shortage of buyers for wine farms, rich in heritage. If sold, Uitsig will be the fourth iconic wine estate to change hands in recent years.

Last year, Boschendal Wine Estate in Franschoek – which was once owned by mining giant Anglo America – looked set for a change of ownership when property developer IFA Holdings sold its 37,33% stake in the wine estate to Canombys for the nominal sum of R1 as well as a R80m settlement of IFA’s R163m debt linked to 2,240 hectare property. Shortly before that IFA and JCI, which owns the remaining 62.67% stake in Boschendal, elicited an offer on the estate from mystery company Cinmark for around R700m. But this deal fell through when the conditions of the sale were not met by the buyer.

In recent years retail tycoon Christo Wiese’s Lanzerac in Stellenbosch and the Jooste family’s Klein Constantia were sold purportedly to foreign buyers. No prices were indicated, although Klein Constantia – which is not too far from Uitsig – was subject to unconfirmed reports that it fetched R200m.

Currently there is no indication of a possible buyer at Uitsig. Property sources suggest a local buyer was unlikely to fork out R175m for Uitsig, but that more adventurous foreign buyers might pitch offers closer to the asking price. The fact that the estate has been publicly put up for sale also scotches rumours that Mvelaphanda might be looking to buyout McKay’s interest, and keep the property for re-development purposes.

The re-development possibilities – including a residential development - are probably a key consideration for prospective buyers. Aside from the wine farming assets and the restaurants farming, the 60,5 hectare Uitsig estate includes a 16-roomed luxury hotel, a spa, a private cricket oval, a wine shop and stables.

The perennial rumour is that the sprawling property is a nightmare to run with the property supposedly not churning enough cash flow to cover the cost of running the estate and servicing the debt load of its big investors. What Uitsig does have on its side is history. The property was a portion of Simon van der Stel’s original grant of Groot Constantia, and is one of only eight wine farms in the Constantia Valley.


 

By Jenni McCann

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