Cape Town - A 20-year lease for the Virgin Active precinct on the iconic Green Point Common in Cape Town is up for grabs.
The lease for the precinct, which includes 18 000 square metres with pools, tennis courts and 200 parking bays to rent out, is a licence to print money.
The property, nestled alongside the DHL Stadium, is home to the Western Cape’s Stormers Rugby Team, and is also surrounded by the Green Point Track, the Green Point Cricket Club, Hamilton’s Rugby Club and the Metropolitan Golf Club.
Greg Dart, director of High Street Auctions, the company that will conduct the auction on behalf of the City, said the initial lease period of the 17 844m² spread will be for 10 years, with an additional 10-year renewal option available after the initial term.
The lease will be auctioned by the City on June 29, alongside the 32 prime non-core properties we reported on Tuesday.
High Street Auctions associate director Shawn van Jaarsveld said Virgin Active SA was aware the lease would go on auction and if it were not the successful bidder it would have to vacate the property once the City tendered the requisite three-month notice period.
“Subsequently, the main building will revert to the ownership of the council and it will thus retain ownership of this valuable asset for the people of Cape Town.”
Van Jaarsveld said the City rental payments would be due in advance on or before the first day of each month, and prospective investors could sublet a portion or the entire lease area subject to certain approvals as per the proposed draft lease agreement.
The lease for the massive indoor/outdoor fitness centre was taken over by Richard Branson’s Virgin Active 23 years ago, after the liquidation of LeisureNet, the holding company of South Africa’s Health & Racquet Club.
Dart said: “The hammer fall on the lease auction will be for the equivalent of one month’s rental of the premium site.”
He said, however, that those who could potentially acquire the lease should be aware that the current lease holder’s fixtures, fittings, furniture and equipment would be removed.
“The lease on offer is for the immovable property on the site.”
The more than 4 300m² building has a massive health and leisure centre. Under Virgin Active’s lease that expires on June 30.
The property auction will begin at noon sharp on June 29 in Business Lounge G on Level 4 of DHL Stadium on Fritz Sonnenberg Road, Green Point.
“For bidders who can’t attend the auction in person, download the High Street Auctions app free from the App Store or Google Play.”
Freedom Front Plus councillor Paul Jacobson said: “As a councillor for the City of Cape Town, someone who’s an economist and a businessman, I would support the City to do whatever it takes to grow what we would all acknowledge is a very boring area of Green Point in Three Anchor Bay.”
GOOD Party councillor Suzette Little said: “These land parcels and properties should be assessed in terms of public needs prior to any auction. Only once public needs have been established – such as shelters, transitional housing, spaces for homes and possible old-age homes – should the land/properties be auctioned.”
Last August, Mayco member for economic growth James Vos said the City had taken a milestone decision by approving leases that secured the socio-economic contribution of Killarney Raceway and commercial development to complement the Green Point common and stadium offering.
“The two significant property lease items are the Killarney Motor Raceway and Erf 2189 in Granger Bay, which is an integral part of the Green Point Common, tucked in alongside the DHL Stadium.”
He said these transactions were yet again prime examples of how the Economic Growth directorate team uses immovable property assets to underpin our economic and social recovery strategy.