Frenzied bidding for city property

• Group of private investors pays R168m and beats off the competition for commercial site in the heart of Durban’s CBD

In what can best be described as a frenetic auction, the Alliance Property Group concluded the sale of a commercial property at 424 Dr Pixley ka Seme (formerly West) Street, Durban.

The property is situated in the heart of the CBD and is let on a long triple-net lease to Shoprite Checkers, which has sub-let certain front shops to other national retail tenants.

The property was bought by a group of private investors as a long-term investment.

The auction at the Hilton Hotel on Tuesday was well attended and highly competitive, with eight registered bidders and 61 bids in total.

The opening bid started at R100m and bids increased by R5m at a time, reaching the undisclosed reserve price of R140m in a flurry.

Once the auctioneer announced that the reserve price had been reached, the bids continued to increase in increments of R1m until finally being knocked down for a staggering R168m.

Auctioneer Roy Alderdice described the auction sale as a huge success, given the quantum of money involved.

The property was marketed extensively throughout the country. However, it was the local investors who dominated the bidding.

Alliance director John Lomas, who spearheaded the marketing, said the sale was exciting, particularly as sceptics had said the auction would fail.

“I knew the local boys would rise to the occasion, but I must admit I did not think we would achieve R28m above the undisclosed reserve,” he said. “Based on the price of R168m, the net return equates to just over 6%, which says a lot about the intrinsic value of the investment.”

The sellers, who were in attendance at the auction, were delighted with the result as they too had not expected the undisclosed reserve to be overtaken by such a substantial amount.