Cape Town – Controversy surrounding the alleged botched auction of prime public land on the Foreshore called Site B continues as the City’s investigation into the sale is still under way.
The company that bought the land, GrowthPoint, yesterday stated that the price they paid for the land was fair.
According to activist group Ndifuna Ukwazi, the land could have sold for between R185 and R240 million, but was auctioned for R86.5m instead.
The group say Site B has 46.104m2 bulk rights, which means GrowthPoint paid about R1880 per bulk m2, which is less than half the current going rate for inner-city land.
“In effect, GrowthPoint was given a discount on some of the most valuable land in our City.
“Had GrowthPoint paid a market price, we estimate the land could have sold for between R185m and R240m,” the group said.
Meanwhile, GrowthPoint spokesperson Timothy Irvine said reports that they knew the land had more bulk than advertised when they bought it were untrue.
“In South Africa, the government (at all levels) sells land. Only some private property developers sell bulk.
“The only places that sell bulk in Cape Town are the V&A Waterfront and Century City, which have particular legislation in place and where a ‘package-of-plans’ process is followed.”
He added that at the public auction, there were approximately 20 other registered bidders and that GrowthPoint’s bid was the highest.
“We were prepared to pay well for the site because it is adjacent to several other buildings we own.
“A purchase price of R227m as suggested isn’t remotely feasible for any successful development of this property and is materially in excess of the going market rates for a property of this nature in this area.
“Interest on the land would run at over R2m a month and any development would require a rental far more than what could be achieved in the market, meaning any form of development would be impossible.
“Our development of retail, commercial and hotel will be an approximately R2.2 billion investment in the City.”
According to the City, an investigation is under way and it is being treated as a priority matter.
The City said it “cannot commit to time lines, as it could hamper the investigation”.