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Sold: Trendy Maboneng designer buildings

Bids varied from R400 000 to R32m, but whether they will all be accepted remains to be seen.

How much does it cost to buy a building designed by Sir David Adjaye, the lead designer of the National Museum of African American History and Culture in Washington and one of the world’s most celebrated architects?

R32 million.

At least that’s the highest offer made for Hallmark House, the mixed-use building situated in the Maboneng Precinct. It went under the hammer in a massive liquidation sale of close to 20 buildings in the area.

Not only was it the last building to go on auction in the sitting that lasted for an hour and a half on Monday, it also attracted the highest bid.

The building was a project between Propertuity and Adjaye of Adjaye Associates. It consists of a mix of 13 residential units, a penthouse, 46 hotel rooms, a bar and restaurant area, a conference centre and a gym to name just some of its features.

Propertuity, led by former chief executive Jonathan Liebmann, kick-started the renewal of Johannesburg’s inner city in 2009 with one building and now a decade later the downtown district, loved by Johannesburg’s hipster and tourists, boasts a property portfolio of over R1 billion. 

After facing financial, operational and management challenges coupled with an over-ambitious property portfolio Propertuity was put into liquidation in October 2018. But the lights are not out yet for Maboneng as investors say, in the end, Propertuity held a small portion of the buildings in the area and there are new owners in town. 

Read: Almost 20 buildings up for auction in massive Maboneng liquidation sale

On April 15 the company’s trademark buildings such as Arts on Main, residential container development Drivelines Studios and the Main Street Life building which houses The Bioscope indie cinema were all up for grabs to the highest bidder.

The open auction raised a total of R109.5 million. Offers for the 18 buildings ranged from R400 000 to R32 million.

“Some of the properties went well,” says Roy Lazarus, director of Park Village Auctions. He notes Hallmark House as one of them but says others didn’t go according to expectation and were “disappointing”.

Provisional bids for some of Maboneng’s buildings

Building

Bid

1. Urban Fox

R400 000

2. Fox Street Studios

R500 000

3. Betty Fox

R500 000

4. Rivers of Steel

R1.3 million

5. Living Moad

R2.2 million

6. 305 Fox Street

R2.3 million

7. Rocket Factory

R3 million

8. Revolution House

R3.1 million

9. Main Street Life

R4.5 million

10. Evolution House

R4.7 million

11. Artisan Lofts

R5 million

12. Aerial Empire

R6 million

13. Craftsmen’s Ship

R7.5 million

14. Remeds View

R7.5 million

15. Arts on Main

R8 million

16. Drivelines Studios

R9 million

17. Market Up

R12 million

18. Hallmark House

R32 million

Source: Moneyweb and auction notes

Lazarus feels the auction was an indication of a depressed market.

“When you have good buildings and tenants, and there is a chance that you can do something, you foresee opportunities and people are prepared to pay. [However] people take into account what is happening in the country such as elections, where we are with Moody’s, and people are not confident to invest in this country.”

Urban Fox, a building with two commercial units and an exclusive-use area, attracted no interest from the room of close to 200 potential bidders. This saw the auctioneer’s starting price fall from R4 million to R3 million to “I don’t mind folks – I will withdraw it. I have a plane to catch. Any offer you like.” The final and only offer was R400 000, which is subject to confirmation.

‘No building will be sold for R500 000’

All offers made on the properties are subject to confirmation, meaning that should the price be deemed too low, the owners can refuse the offer.

At the same time, bidders with the highest offers have first right of refusal against counter-offers that come after the auction date. All they have to do is meet the offer in order to retain the buildings.

Lazarus says they are approached with counter-offers after public auction “80% of the time” so “no buildings will be sold for R500 000”.

The commercial properties were at the upper end of the bid spectrum, with buildings such as Arts on Main and Market Up receiving offers of R8 million and R12 million respectively.

At the other end were some of the residential buildings, particularly those that are not fully occupied. 

“Students do not have a lot of money at the moment considering the turmoil at universities,” says Lazarus, adding that they want free education, let alone afford a place to stay.

Drivelines Studios, the seven-storey container apartment building with the highest rate of occupation, was valued at more than R19 million and received a bid of R9 million. Lazarus says this was the most successful property because the bulk of the units are occupied, with rentals much lower than the market norm. This is because the building costs were lower thanks to the use of shipping containers.

One developer who was looking to buy “several” buildings on the day says Maboneng is a good development area with a lot of promise. “Things are starting to stabilise, [and] especially after the elections there will be a lot of growth in this country.”

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Walk just one block from Maboneng and you are in total collapse areas brought to you by 25 years of ANC misrule.

Yip. It’s an island of privilege and hubris in a sea of poverty.

I think that Propertuity thought this would create an ever increasing virtuous circle, but that has not happened.

25 years ago the area was full of upmarket shops and businesses, lovely apartments, beautifully kept pavements…hardly. But then why let the facts spoil a good bit of prejudicial moaning.

Do yourself a favor and just check the property values in the inner city over the last 25 to 30 years and those facts will speak loud enough.

The new owners will have to wait 4 years to see their rates drop to the new market value.

Pretty sure Mashaba is pouring money down a sinkhole that will not generate new taxes, while the rest of JHB see their values drop.

JHB CBD is nasty shame, the litter the smell was horrible during our Human’s right walk from Constitution hill, all the way down the Mandela bridge. Also if you can’t collect the municipality rates and taxes, how are you going to make money to keep the municipality working. We recently saw people occupying incomplete flats in Midrand area and I am sure they will also like the South people near Kagiso who this week demanded title deeds to the flats they are renting!!!

So Propertuity has tanked , now there is a new hero on the block to resurrect a vrot cause where garbage pickers are the major traffic in the area.every time i go down to that part of town i see a steady decline.
A few years back there was talk of yuppie penthouse living , uhr uhr , but when you exit your groovy pad you get attacked – blah blah blah
When African nations can start reinvesting taxes back into CBD’s instead of stealing same there is hope , until then
KEEP MOVING ON

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