Shoprite Holdings has just completed a review of its property portfolio and as part of its restructure, on 12 September it will be auctioning seven non-core retail centres all with anchor tenant leases to be concluded at the time of transfer following their sale by High Street Auctions (HSA).
Anchor tenants in these centres are Shoprite stores, Shoprite Liquor Stores or U-Save stores.
Lance Chalwin-Milton, joint managing director of HSA, said this portfolio auction indicated that there was no loss in market appetite for retail centres – a trend that started early in 2017.
“In just about every auction that High Street has conducted since the beginning of last year we’ve had at least one, and frequently more, retail offerings in our catalogues. Prior to this, retail centres were like hen’s teeth; one simply didn’t see them come to market.Chalwin-Milton said the group had already successfully disposed of one Western Cape property in partnership with High Street Auctions. “In High Street’s July auction we successfully sold the a commercial building owned by Shoprite in Lady Grey Street, Paarl, for R25.5 million and we have no doubt the Shoprite retail properties that go under the hammer next month will be equally well received by investors.”
HSA lead auctioneer and director Joff van Reenen said corporate asset adjustment occured through all economic cycles.
“Asset registers are assessed frequently for surpluses or redundancies and especially in economic downturns the speed at which a property can be sold at auction compared to through traditional brokers is something corporates find very attractive.
“The sales model also better serves their needs; once the hammer falls it is standard for the full purchase price to be paid within a month. The transparency, agility and speed are a transactional triangle that works for boards and shareholders, and this triangle is among the reasons many of our clients have been with us for years.
“Buyers also benefit because they can acquire assets at fair market value as determined by demand on the day, and there are frequently exceptionally good deals to be found,” said Van Reenen.
Chalwin-Milton said the showcase Western Cape Shoprite portfolio of five retail centres in the September sale had also set in motion the first of what will become regular features of HSA auction days – dual sales rooms in Johannesburg and Cape Town.
“We road-tested the concept of dual venues when we broke South Africa’s residential auction record by more than R30m in November 2016 with the sale of a lavish villa in Clifton. The final sale price on that property was R96m and the buyer wasn’t on the auction floor in Summer Place, but rather bidding from inside the Cape Town villa while watching a live stream of the auction taking place in Johannesburg.
“Since then we’ve live-streamed myriad auctions to venues across the country and for serious bidders we’re convinced it’s a format that works.
“The auction that starts at noon on 12 September will be live-streamed to the Table Bay Hotel in the V&A Waterfront, and registered bidders will be able to call on the experience of High Street’s professional staff to ensure their bids are relayed to the auctioneer timeously and concisely.
“Being at a central High Street Auctions venue ensures that serious investors have the hands-on assistance of expert auction house representatives, and that they’ll remain in the race to the finish line,” said Chalwin-Milton.