It has sold the city-block covering 142 Bree Street building in the Cape Town CBD for R150 million, the listed Spear Properties told investors on Tuesday – at what it described as "a substantial premium".
That is something of an understatement.
Until the sale, Spear had valued the single building on the property at R74 million. It currently houses a Supa Quick car fitment centre and a kitchen cupboard company, although the bulk of it is used by a debt management company.
All the tenants are due to leave the building by June, giving its new owner a vacant building – which it will almost certainly knock down as soon as decency allows.
"We were not, call it 'willing sellers' but at the price they offered we obviously had to explore it," Spear managing director Quintin Rossi told Business Insider South Africa.
Spear now plans to go shopping with the R150 million, happy with the return it achieved, while it waits to see what the new owners do with its erstwhile light-industrial building.
And that is still something of a mystery, as is the buyer itself.
The buyer is Arctigen, a shelf company registered in 2016 with no track record.
Arctigen has a single director, Russell Smith, and there is no indication where the company will get R150 million from. But Smith's history is highly suggestive. He was the chief financial officer of the mega Melrose Arch development in Johannesburg, and is currently involved in several property development companies planning glitzy, high-end buildings in Cape Town.
Smith did not respond to questions.
Spear does not know what Arctigen plans, Rossi says, but it is "more than likely some kind of redevelopment".
"They were quite adamant they wanted to acquire a high-profile CBD asset," he says.
At the approved floor size for the site, Rossi estimates that any new building could be at least 20 storeys high.
"The views would be spectacular," he says.
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