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Tue 15 Feb 2011 11:47 AM

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

State-backed Dubai World unit bought stake in real estate project in 2006, as part of $1.6bn deal

Istithmar sells stake in Cape Town's V&A in $1.33bn deal
Istithmar World was part of a team of investors that bought the development in 2006 for $1.6bn
Istithmar sells stake in Cape Town's V&A in $1.33bn deal
Istithmar World was part of a team of investors that bought the development in 2006 for $1.6bn

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

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John 9 years ago

Istithmar won't see much joy from this sale, as they were not the majority investor and also the deal to buy it in the first place was totally leveraged. The traders in the development are joyous that the foreign owners saw their tails and won't be letting service standards slip while increasing rates and delivering zero. The Waterfront is South Africa's tourism jewel and having it back in local hands is a boon for everyone. That the QE2 never made it is sad, because that would have made the prize complete.