Kentridge to Maboneng’s rescue?
Shop managers are hoping the artist can turn the centre into a creative hub and bring the crowds back
One of SA’S foremost artists, William Kentridge, has made an R8m bid for the original Maboneng development, Arts on Main.
He made the bid at an auction last month and many residents and shop owners in the 1km² redeveloped district hope he succeeds, thereby injecting a much-needed vote of confidence in Maboneng. The revitalised area has lost some of its shine in recent years, after its original investor and manager, Propertuity, collapsed.
Maboneng thrived when it opened in time for the 2010 Soccer World Cup, but over the past three to five years, interest from tourists and weekend visitors has waned.
For example, Lenin’s Vodka Bar, which served the most varied selection of vodka in Gauteng, has closed down. People who came from the suburbs in search of entertainment complained that paying R60 for a beer was just too expensive in an economy that has barely grown in the past decade.
Shop managers are hopeful that Kentridge, who runs a studio in the Arts on Main building, can turn the centre into a creative hub and bring crowds back to a rejuvenated Maboneng.
About 10% of the Maboneng precinct went under auction last month as Propertuity, the owner of about 20 properties through various subsidiaries, was liquidated.
The auctioned properties included 170 residential units in sectional-title schemes and six buildings.
The two most valuable buildings — Market Up and Hallmark House — were valued by Propertuity at R133m, but were sold for a combined price of R44m. The sectional-title units received bids between 13% and 99% below what individuals had paid for them.
It seems Propertuity, led by founder and entrepreneur Jonathan Liebmann and backed by billionaire investor Jonathan Beare, overreached by developing too many projects too quickly, and trying to sell and rent apartments targeting young professionals.
It owed shareholders R265m, creditors R2.69m in levies and the municipality running costs of R380,00 before it went insolvent. It also showed a lack of property management skill. Many tenants are now hoping that the new owners will be better landlords.
RMH Property, which owned about half of Propertuity, tried to improve its fortunes by bringing in new management last year, but the company couldn’t be revived.
Propertuity CEO Reanne van der Merwe, who replaced Liebmann when he left last July, says the challenges were insurmountable, which is why RMH decided liquidation was the best option.
“Propertuity had a highly geared business model and as it grew it was unable to sustainably keep up with its debt repayments … which led to a severe cash flow shortfall.”
He says the company implemented extensive measures to rescue the business over the course of last year, including a rights issue. But in spite of this the business continued to underperform. There were a number of underlying business challenges which led to this decision, including overly optimistic asset selection, unrealistic valuation expectations, limited management capacity, excessive gearing and operational challenges.”
The auction on April 15 turned into a fire sale, with R109.5m worth of bids for properties estimated to be worth three times that.
RMH Property CEO Brian Roberts says Kentridge was a bidder for Arts on Main, but it is premature to say who else has actually invested in Maboneng as the auction process is incomplete.
“We have 14 working days from auction to confirm the prices and/ or enter into new deals,” he says.
Tenants like The Bioscope and Che, the Argentinian steakhouse, say they are trying to continue doing business as usual as they