City of CT apparently undersold prime Foreshore property by millions

It's alleged that the City of Cape Town undersold a prime Foreshore property by over R100 million.

GroundUp has reported on an apparent valuation blunder which saw the City sell Site B to property giant Growthpoint for much less than its market value.

GroundUp contributor Daneel Knoetze explains that there is a discrepancy between the maximum floor area that the property was auctioned for and the actual floor area that Growthpoint plans to develop.

Knoetze adds that the money apparently lost by the City is a loss to public good and service delivery.

He says it appears to be negligence on the City's part. No corruption or deliberate wrong-doing is suspected at this stage.

When the City sold this property in the Foreshore, their prospective document for the auction said that the development rights was 17 500m2.

Daneel Knoetze, freelance journalist and GroundUp contributor

If you sell those 17 500m2 for the average price, which is R5 000 per square metre in that area, you come to the amount of R86.5 million for which the property was sold.

Daneel Knoetze, freelance journalist and GroundUp contributor

But now, two years later after the sale, Growthpoint have gone back and they've concluded that the figure that the City sold the property at was wrong and outdated.

Daneel Knoetze, freelance journalist and GroundUp contributor

They applied, according to the zoning scheme, for a much higher bulk floor plan. 46,000m2 is what they intend to develop now.

Daneel Knoetze, freelance journalist and GroundUp contributor

46,000m2 multiplied by the average price per square metre puts the property at substantially higher value.

Daneel Knoetze, freelance journalist and GroundUp contributor

Visit GroundUp for more detailed coverage.

Listen to the full report from the The Xolani Gwala Show:


This article first appeared on CapeTalk : City of CT apparently undersold prime Foreshore property by millions


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