On the 29th of June we posted an article titled R110 Million Sale Falls Through For Seeff which cast some questions if whether the R110m sale of a penthouse in Sol Kerzner's new V&A Waterfront One & Only development had fallen through. We did so because in listings for the development 3 out of the 3 penthouses built are listed for sale, when there should only be 2.
And quite coincidentally (I'm sure) according to RealestateWeb, the Sunday Times ran an article this past Sunday saying literally the same thing, that the sale was in fact staged by Sol Kerzner as a "sale" to himself with the penthouse being returned to the rental pool of the hotel. And no doubt if a buyer could be found for it would be sold off without a seconds thought as the article we wrote earlier here showed there are in fact 3 penthouses for sale.
I haven't bought the Sunday Times in a while (prefer the non-tabloid Business Day Weekender these days after they gave me a shout out a year ago) so if anyone has the article let me know if it mentioned anything about the supposedly sold apartment coming back on the market and if they attribute that nugget of information to anyone.
And Sunday Times reporters if you're reading, let me know if you need any more story ideas.
17 comments:
Just discovered your blog....
good work.
Love the financial logic in all the Buy vs. Rent articles.
Keep it up - I will be a regular reader.
Off topic, but apropos our ongoing discussion about deflation, got back from Pick n Pay to find that me Weetbix is dramatically cheaper all of a sudden:
19/06 - R27.99
18/08 - R22.99
18 percent drop in two months.
Yes, Peter, one box of Weetbix doesn't herald the onset of deflation - I recall how the tuna got under your skin - but I thought I'd just put it out there.
I'll attempt to say something about property next time. Promise.
And here it is:
"LONDON, Aug 17 (Reuters) - More countries are seeing a rise in distressed sales of commercial properties in the second quarter, with South Africa, the United States and New Zealand faring worst as the market downturn worsens, a report showed."
Hey Bean Counter if this carries on I may be able to eat again some time soon.
On the Commercial property thing it seems inevitable. 3 years ago I was searching for about 200 to 300 square m of industrial space for a very short let - 6 weeks - in Cape Town. After searching for a month I managed to find one place. Landlords just were not interested in anything under 2 years if they even had anything available. for the last year or so driving around Killarney gardens the to let signs have quite quickly become more common than not.
At the time I was looking for the space I considered buying but rental returns were looking similar to housing, something like .5%. There must be a few commercial prop owners with expensive albatrosses around their necks now.
Bean Counter,
Please supply an example where the opposite result was shown. And like you said, such an increase in one price also doesnt herald the onset of (hyper) inflation. But give it a go. I am sure that you can find one for me - just to see if you are unbiased in your evaluation of general trends.
Thing is, I, like most consumers, would love 2 or 3% inflation, or even some deflation for a bit, as CJ suggested. I just cannot find such items - everything keeps getting more expensive.
Why would the O&O sale be faked? Who would benefit and how? Haven't seen the newspaper article.
Easy, just do a deed search?
OK Peter, in the interests of objectivity I've gone through all my old slips and found only one thing that's gone up - plastic shopping bags - from 35c to 40c.
Of course if I had slips from 12 months ago I'm sure most things would be up since then, but the falls I've found have been only in the last month or two.
More fuel to your fire from Lightstone: they're calling the bottom retrospectively, saying property prices have climbed slightly for four months.
Well, they (Lightstone) are using much more realistic and relevant analytical methods - can't understand why we even bother to look at bank indices.
And thats where you are wrong. The reports might say that they are 'calling' the bottom, but unlike speculative market watchers and potential property buyers, they present actual house prices, ie. resale values. It is impossible to 'call' the property market, its only possible to identify one in retrospect.
By the way, hake's gone up, R45/kg :-)
A few months I posted a nasty looking grapgh by IPD South Africa and suggested this blog start analysing commercial property too. Nice to see it creeping in more and more.
One only need to look at the number of commercial ST units financed in the last 2 - 3 years on the basis of a R/m2 selling rate, using the comparable sales method. Now the bank is saying show me the capitalised value only (we only finance cash flow). Plug a market rental into the space extent, an applicable vacancy factor (climbing), appropriate expenses (electricity climbing) and capitalise at current market cap rates (climbing), then see what you get - 50% of purchase price if you lucky!
Now look around and see how many ST commercial blocks have just gone up or are going up (committed). Frightening....
Re: Lightstone. There analysis is better, but they are calling it wrong. A month or two of increased volumes does not mean prices are levelling. In fact, looking at US graphs, such volume increases occur a number of times throughout the cyclical downturn. And, price has shown to follow volumes by at least 13 months in the US.
Lightstone (http://www.lightstone.co.za/LSC/Content/NewsRoom/NewsRoom.aspx) is very clear that they do not reckon the market has bottomed. In fact, they are adamant that the increase over the last four months just means that SA was not hit as hard as the US or UK, but still taking bad shots nevertheless.
This Sol Kerzner is a bloated ego who thinks consumers are stupid. His slogan is "to blow away the customer". Yeah, blow the customer away but just take out the wallet first ;)
Inflation/deflation: did you discover 1. higher and rising prices 2. smaller packaging but same price 3. lower quality ingredients, same price 4. crappier service 3.fees, fees, fees?
This is also called inflation.
see: http://www.itulip.com/forums/showthread.php?p=116417#post116417
Anonymous
But he did sell a flat for R110m to a willing buyer - that makes him a good salesman and businessman. His ego is irrelevant.
And so because your car salesman sold you your car, are you (the consumer) stupid!?
You said it...
You are the willing buyer of 'smaller packaging at the same price, lower quality ingredients, crappier service'.
Did you also willingly buy a house that was ridiculously overvalued?
He sold that flat to himself via a trust.
And have you seen the built quality at "one and only" ?
Whatever happened to building solid claybrick cavity walls as opposed to using highly porous cement bricks ?
Buyers have gone mad - they don't look at what's "in" the building, they look at the trendy "layout" and the luxurious "finishes"
Fat good that will do when the rain seeps in through the walls and he cold goes right through the bricks and into the flat.
Anonymous,
Let's leave it ok - you are making up crazy rumours about the sale, ridiculous assumptions re. the quality and people's taste and you are sentimental about building materials used in the 70s. By the way, baked clay is more porous through the total distance of the brick and transfer water far better than cement!!! I sense sour grapes.
There are millions of rand's worth of materials used, not only in the construction, but also to acquire and prepare the prime land in that location.
Sure, there's a good margin of profit in it, probably 30 % or more, but what do we want? Cost less 10%!
Just business, like paying R20k for a MacBook or R120k for some basic imaging software - all willing buyers paying cost plus 500% for something we want. Its our own choice!
If you are looking to invest in property and want your money to go further, I suggest looking outside of Cape Town for properties in Langebaan.
This peaceful beach town has amazing properties for sale and they are alot cheaper than buying properties in Cape Town.
A great way to invest your money is to buy property. Look into overseas property as it is usually alot cheaper.
Thank you for sharing this great post and keep up the good work.
Paula M
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