The auction is only open to those able to buy what is on offer lock, stock and barrel — and it is not the entirety of the 18 buildings, but rather just the portions owned by property developer Propertuity, which applied for liquidation in October last year,“Propertuity had a highly geared business model and as it grew, it was unable to sustainably keep up with its debt repayments at various levels of the business, which led to a severe cash-flow shortfall,” said Reanne van der Merwe,...
“What is happening is that you have a lot of investors and developers who, 10 years ago, would not have looked at this place at all; now you have R2.5-billion invested to create 2 000 residential units. That is all because of the initial plan — it’s a lot busier and more vibey than it has ever been,” he said.
As Propertuity grew, it took on shareholders such as RMH Property and Buffet Investments, the former holding 34% and the latter 20% of Propertuity’s share capital while management held 46%. But that all changed after the rights issue in April last year. “Keeping in mind that their business model was to buy unutilised industrial buildings and rebuild those into Maboneng’s exciting residential units, I think there was not enough planning and research done with respect to putting together a detailed business model for each building that they acquired.”After Liebmann left the company last year, Van der Merwe, who had joined in September 2017, stepped in to try to steer Propertuity out of its financial woes, but he was not successful.
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