March 31 2025 14:48
215 Bree Street, Cape Town
SOUTH AFRICA
The sales process for the property portfolio of Urban Lime Properties in Business Rescue has been a success, showing that experienced and conscientious landlords have confidence in South Africa’s real estate market, especially the country’s pockets of excellence.
Urban Lime’s business rescue process was managed by ASO Capital and Claritas.
Nexus Property Group, a corporate real estate services brokerage which specialises in commercial property sales through the auction and private treaty mechanisms across South Africa, has been running a formal sales process by closed tender.
The portfolio included 32 properties located in some of Cape Town’s and Durban’s high streets. This is a rich mix of properties including restaurants, offices and medical precincts situated on Florida Road, Durban and parts of downtown Cape Town for example.
The Florida Road assets included retail buildings with well-known and trendy brands such as Seattle, Jack’s Grill and Bird & Co, Pizza Hut and Starbucks.
The Western Cape portfolio included buildings containing galleries, boutique stores and restaurants and a pharmacy in the city’s Bree Street which has been named the coolest street in the world before. The Church Square building, known as Speakers Coner, located in one of the city’s longest-standing popular high streets, Parliament Street was sold. The building contains FYN one of the world’s best-rated restaurants.
Property Flash sat down with Elias Tzouvanni, co-founder of Nexus to discuss the sale so far.
PF What has sold so far and roughly for what value?
ET We managed to sell all of the Florida Road properties and the whole of the Cape town Portfolio which consists of Sea Point retail property, Church Square Precinct, a portfolio of properties in Bree Street, Adderley Street and Long Street.
PF Were buyers surprised to see the Urban Lime portfolio come to market?
ET Urban Lime is a very well-known brand, which gentrified inner city areas and created pockets of safe environments for people to enjoy inner-city living with cool restaurants and coffee shops. When the company went into business rescue, most landlords and buyers around the country were very surprised.
PF Do you foresee buyers converting any properties or revamping them?
ET The purchasers who have been successful are very conscientious landlords who take great pride in their portfolio. We have not sold any properties to first-time buyers due to the capital and asset management requirements, and although offers were made, they were not the highest. But the portfolio in its entirety is spread across very good locations and does need tight management and maintenance. The reward will be great as tenants do well in these nodes and the underlying value is well-established.
PF What hasn’t sold?
ET We received multiple unconditional offers on all properties in the portfolio and all properties in the Florida Road precinct and Cape Town portfolio which were accepted by the creditors and the conveyancing process is underway with Ward Brink Attorneys. The three Durban CBD properties did not reach the creditors’ requirements, and we continue to look for buyers as part of the third phase of the business rescue process.
PF What has this process suggested that buyers want?
ET It’s an interesting topic. Buyers want value and they want acceptance from a seller if the offer is reasonable and unconditional. In a private sale situation where buyers and sellers attempt to transact, there is usually a situation where sellers rarely let their properties sell for lower values than they believe they should achieve, and often this private space is harder to transact in. If you take the same properties and put them in a business rescue process or liquidation scenario, then buyers see things very differently. They know that they are not wasting their time, and they also are aware that all reasonable offers will be acceptable and that there is no other alternative to selling.
PF What is next in the Urban Lime process?
ET Almost the whole portfolio will be transferred to third parties and the three Durban CBD properties will also be sold. The business rescue process has entered a third phase to realise the remaining assets. The Durban CBD assets are still available. We welcome buyers to come forward if they have appetite for office buildings in the CBD with good retail elements, and can contact us on info@nexuspg.co.za or message us on LinkedIn.
PF Are you happy with the pricing of the sales?
ET We are a business who places great emphasis on hard facts and current microeconomics in areas where we are running sales campaigns. When we saw the portfolio, we knew that a closed tender process would raise more money than an auction, and we were spot on.
The business rescue nature of the sale attracts significant interest and demand drives pricing for sought-after properties.
The most interesting observation is the broad delta between the lowest and highest offers for properties, separating the bargain hunters from serious purchasers, without limiting the price that can be achieved.
The assets in Cape Town’s Bree Street made up for one of the greatest sales we have seen, and the competition was fierce. Durban’s Florida Road surprised us greatly, and the buyers who came forward were of the highest calibre with great buying power. It felt to me like a dormant volcano had erupted in Durban and the results echo this sentiment. Durban’s CBD remains hostile and not for the faint hearted although multiple offers were achieved on all properties without conditions.
A valuation exists in theory until tested against the reality of the market. We all hope that the testing of this realisation is at the peak of value.
PF Will we see more distressed sales in SA real estate?
ET I think the banks have become shrewder; with commercial lending and the big liquidations of the past being not as frequent. The market is mainly full of astute landlords who are established with great relationships with their banks. The entrepreneur and big dreamer will always push the boundaries, and often these things go in our favour but at times we can face bankruptcy. The price we sometimes pay for big dreams and obsession to get there, is taking on too much risk and ignoring the signs of the market without sufficient provision for hard times and down markets. Either way, the market will always swallow up and, move forward almost without a trace of the past.
PF What is next for Nexus?
ET Nexus is always running sales projects around the country for listed and private clients, and we are currently running formal sales processes nationwide which can be seen online.
An example is a single tenanted restaurant in the Northern Suburbs of Cape Town on behalf of an institutional developer and a large government tenanted office building in Pretoria for a BEE consortium. We are an extremely efficient organisation, and we are obsessed with the work we do. We submit proposals to assist organisations in understanding realisable value and then executing the sale with the correct method needed to maximise the value of the asset. We have built systems over almost two decades which benefits our clients. We are experts in understanding micro economies and ascertaining realisable valuations based on current market conditions. We are expert negotiators, and our team knows how to transact efficiently.
Partner content for Nexus Property
alistair@propertyflash.co.za
