Property attracts international buyers during World Cup

5 Jul 2010

Encouraged by the number of enquiries from international visitors for guesthouses and boutique hotels during the 2010 FIFA World Cup, Pam Golding Lodges and Guesthouses (PGLAG) will conduct auctions of more hospitality properties.

"There's no doubt that the huge boost in exposure for South Africa during this event is drawing increasing global interest in our hospitality establishments. During the past weeks, we've been busy showing various establishments to Chinese investors from Hong Kong as well as French investors visiting Cape Town and the Winelands during France's participation in the World Cup. In addition, we're seeing a significant increase in enquiries from German, English and Dutch investors from overseas, who continue to contact us during this event," says Peter Bruil, a director of PGLAG.

The company will auction on 21 July 2010, a 5-star guesthouse in Franschhoek - Le Manoir de Brendel spa and wine estate and two well-situated guesthouses in Hermanus, which are operating as going concerns. This follows the recent auction of 4-Star, 24 bedroom La Splendida boutique hotel in Cape Town, which was sold for R28.6 million.

Auction process has its advantages

"La Splendida had been on the market for some nine months and had many interested parties considering a purchase. It was logical that this was brought to a successful conclusion by accelerating the process on behalf of a foreign owner by exposing it to the broadest possible target market through an auction which delivered an instant result and at a good, market-related price and it was purchased by a Cape Town consortium."

"The interest and success demonstrated that for certain hospitality properties the auction process is a great opportunity to expose a desirable property to the widest possible audience in the shortest possible time frame," adds Joop Demes, CEO of Pam Golding Hospitality. "Within the hospitality industry the auction method does not achieve results for propositions, which are highly yield dependent, however this process works very well for properties that are uniquely suited to an audience specifically seeking a certain type of acquisition, namely lifestyle combined with some commercial angle."

Other establishments recently sold include a 4-Star, 35-room boutique hotel in Cape Town's City Bowl area sold close to the asking price of R40 million to the first buyer they introduced - a consortium comprising South African and European investors and a 10-bedroom boutique guesthouse in Cape Town's Southern Suburbs to a Swiss couple.