Istithmar team buys $1b South African property

Dubai: Dubai World's investment arm Istithmar and its UK-based joint venture partner London & Regional Properties have acquired a famous mixed-use waterfront property in South Africa in a $1 billion deal.

Istithmar formed a 50:50 venture with London & Regional Properties to buy the Victoria & Alfred Waterfront Co. from government-owned Transnet Ltd.

The joint venture also includes investors from South Africa's Black Econ-omic Empowerment.

A $700-million loan has been arranged with South Africa's Investec bank to finance the deal, while the buyers will pay $300 million in cash.

Located between Robben Island and Table Mountain in the heart of Cape Town's harbour, Victoria & Alfred Waterfront attracts 22 million visitors a year.

It has shopping and entertainment venues, offices, hotels, luxury apartments and an active fishing port.

Dubai World officials told Gulf News yesterday they will further develop the place to add new hotels, leisure facilities and residential areas.

A joint statement said that more than 60 South African and foreign companies were in the race to buy the waterfront. The Istithmar venture was one of nine bidders in the final round.

"The Cape Town waterfront will be promoted and marketed alongside our iconic projects in Dubai such as the three Palm Islands, Dubai Waterfront and The World islands. We believe that this added marketing synergy and expanded international exposure will drive up values at the Cape Town waterfront," Dubai World chairman Sultan Ahmad Bin Sulayem said.

Nakheel, the company behind Dubai waterfront projects, is involved in a masterplan that will create new projects.

Just 55 per cent of the 140 hectare area has been developed so far.

Nakheel Hotels and Resorts chief executive officer James Wilson told Gulf News discussions were already under way with several leading international hotel chains to launch five hotels.

Victoria & Alfred Waterfront Company employs 800 people but this number could grow significantly. About 3,000 people work for other businesses at the waterfront.

The planned projects will create a further 5,000 jobs in five to 10 years.

Venture partners

Istithmar, London & Regional Properties, Western Cape Women's Investment Alliance, Black Economic Empowerment (BEE) investment firm Decorum and other BEE affiliates such as Tsa Rona Investments, Kgontsi Investments, Cape Empowerment Trust.

Potential value

The Victoria & Alfred Waterfront is a prime waterfront real estate development. It was established by South African government-owned Transnet in 1988.

Transnet announced plans three months ago to sell the waterfront. So far 55 per cent of the 603,000 square metres of allowable development has been completed.