Istithmar sells stake in Cape Town's V&A in $1.33bn deal

Istithmar World, a unit of state-backed Dubai World that is altering terms on $24.9bn of debt, has sold its stake in Cape Town’s Victoria & Alfred Waterfront shopping mall as part of a deal valued at $1.33bn.

Growthpoint Properties, South Africa’s largest publicly traded real-estate investor, and Public Investment Corp agreed to buy development in what is the country’s biggest property deal.

The companies will pay $1.33bn for the mall and surrounding properties, Johannesburg-based Growthpoint said in a stock exchange filing Monday.

Istithmar World, Dubai World’s overseas investment subsidiary, was part of a team of investors that bought the development in 2006 for $1.6bn.

 “The developed property portfolio boasts a well- established and high-quality portfolio of properties offering attractive rentals, rental escalations and lease expiry profiles,” Growthpoint said. “The transaction also creates the opportunity to unlock significant value.”

The V&A, which surrounds Cape Town’s harbor and has shops, hotels, restaurants, offices and an aquarium, is Cape Town’s biggest tourist draw, attracting as many as 21 million visitors a year, Growthpoint said.

Istithmar World, Dubai World’s overseas investment subsidiary, last month defaulted on a debt against a $427m London property.

A research note said securitised debt against The Adelphi Building, bought by the company in 2006, had breached loan-to-value covenants.

Istithmar World is reportedly considering a sale of the building or a refinancing, according to a statement from Indus, the vehicle that issued the notes for the Adelphi debt.

the debt, also said that Istithmar was breaching loan-to-value covenants on the building. 

In August last year, Istithmar sold the Grand Buildings, a commercial property on Trafalgar Square, to a private Russian investor for around $272m.

The move made a profit for Istithmar, and came as the investment vehicle sought to dispose of assets as part of the debt restructuring for parent company Dubai World.

 

*With agencies