The iconic establishment on 15 Alice Lane in Sandton, the sculpture like twin towers housing global law firm Norton Rose, is partially changing hands.
Tiber Group, which developed ‘Norton Rose Towers’, is exiting its 50% stake (share block) in the property. Some call the property Alice Lane Towers while others refer to it as ‘The Towers’.
The largest JSE listed property fund, Growthpoint Properties, is acquiring ‘The Towers’. The aggregate value attached to the 50% stake of the property, according to a Growthpoint announcement released yesterday, is about R480.7 million. This proposed transaction is part of a bigger, R6.6 billion deal in the making between Growthpoint and Tiber.
Growthpoint announced yesterday that it has reached an agreement with Tiber to acquire from Tiber a portfolio made of 28 prime properties and a 50% stake in a further 9 properties. The transaction also includes 48 000sqm of undeveloped bulk and the incorporation of Tiber’s property management company into Growthpoint.
The twin towers on 15 Alice Lane in Sandton are part of this mix. This development, The Towers, came on stream in 2010 under the joint (50/50) guidance of Tiber and Zenprop. When it was announced around 2008 the project was touted as a R600m development. If that value was correct, it would mean that the development has appreciated by more than 60% over the past five years or so.
That conclusion is reached on the basis that Tiber’s 50% stake commands R480.7 million in the Growthpoint announcement. The 24 000sqm property commands prime of prime rental rate. Growthpoint announcement quotes weighted average rental of R250/sqm. A property next to The Towers, 12 Alice Lane which houses Absa Capital commands weighted average rental of R158/sqm.
The 15 Alice Lane development was widely hailed when it was unveiled. The 18 storey development which also features a six storey parking basement came to redefine the Sandton CBD skyline. Its pictures, taken from the giant Sandton Towers balcony, can be breath taking. The development can also be seen as part of the legacy of the late Francesco Rivera cited as a visionary in yesterday’s announcement.
Back in 2008, Anthony Orelowitz of Paragon Architects, who worked on the project was quoted saying, “Picture two sculpted towers linked by a vertical atrium. Bridges spiral upwards in a fan-like fashion creating a dramatic internal environment”.
The conclusion of this acquisition by Growthpoint will further boost the company’s profile. Growthpoint boasts the largest commercial property portfolio on the JSE with total assets valued around R62bn mark. The portfolio is made of 393 properties in South Africa, 47 properties in Australia. The portfolio was remarkably decorated in 2011 when Growthpoint acquired 50% stake in the V&A Waterfront, the prestigious tourist landmark in Cape Town.
The broader R6.6bn transaction plus the R1.3bn Abseq Properties portfolio proposed acquisition announced in October will see Growthpoint tangible assets hit the R70bn mark.
Commenting about the broader R6.6bn transaction, Growthpoint CEO Norbert Sasse said “A portfolio of this quality and size, centred in arguably the best investment property location in South Africa, is a once-in-a-lifetime opportunity and beneficial for Growthpoint’s shareholders.”
Moreover, Growthpoint will gain the core competencies, skills and long-standing relationships with tenants of the Tiber portfolio, and have access to the executive team who conceptualised, built and managed the properties.”