Major R90 million office block in Joburg is about to be converted to living space
Property group Redefine is selling one of its major office blocks in Parktown North, Rosebank Corner, for R80 million, with the plan to rezone the building for residential use.
The property is being sold to Live Rosebank Proprietary Limited, which has one of Redefine’s independent non-executive directors as its sole director.
The office block is just off Jan Smuts Avenue in Rosebank, a high-traffic area located very close to local amenities like the Gautrain stations and the Rosebank Mall.
The offices recently underwent a refurbishment process that modernised their interiors and added backups like generators and water tanks.
Despite this, Redefine described the property as having weak office leasing prospects, saying it would be better suited for residential use.
While the property itself is valued at R91.5 million, the purchase price was negotiated at R80 million, factoring in the residential conversion.
Traditional residential conversion disposals range between R2,000/m2 and R7,000/m2 and recent deals concluded within the Rosebank node are at R6,000/m2, Redefine said.
The sale has been concluded at R8,968/m2 which is at a premium when compared to the recent residential conversion disposals, it said.
“The Purchase Consideration is considered to be the fair market value of the property for residential use, as determined by the directors of the company,” it said.
According to the group, the disposal of the property is in line with its overall strategy of recycling non-core assets and lowering its loan-to-volume ratio.
The proceeds of the sale will be used to repay debt, it said.
However, the sale comes with terms and conditions, most notable being that the sale will only be effective once the property has been rezoned for residential purposes.
This should be no longer than 20 months from the date of the deal being signed, Redefine said.
If the transfer is not effected, the purchase price will escalate by 0.65% per month until the date of transfer, provided the long-stop date (24 months after signing) isn’t exceeded.
The purchase price will be settled on the date of transfer of the property, and has been secured by way of payment in cash of a non-refundable commitment and raising fee of R1 million.
It also includes a guarantee in favour of Redefine for payment of the price on the date of transfer.
Redefine noted that Simon Fifield, an independent non-executive director of Redefine, is the sole director of Live Rosebank and a minority indirect shareholder of Easy Hold Co Proprietary Limited, which holds 100% of the shares in Live Rosebank.
Pictures of the Rosebank Corner refurbishment
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