R 175 000 000

Financial Information

Detailed financials available on request

Property Included

Development of historic landmark property as a retirement village

The property consists of various buildings of colonial architectural style situated on a footprint of ± 79.6 ha. The property has its own exclusive beach access with approximately 400 meters of beach front on the Indian Ocean. It is proposed to develop a Retirement Village by renovating / rebuilding the existing structures on the property and by the erecting of new units. Introduction to the Property The property was originally a Convent and was erected in stages from 1903 until 1939 as a Catholic Convent. A remedial school for children with learning disabilities was later introduced with the school building opened in 1938. Rationale for the proposed developmentDefinite need for retirement villages in the KwaZulu-Natal South Coast according to the Market Analysis for Retirement Villages. The existing retirement villages situated in the nearby areas are within a radius of 39 kilometres from the development and have a combined waiting list of 1,100 persons. Another reitrement village, also part of the KwaZulu-Natal South Coast retirement villages, has a waiting list of 1,149 persons. The average waiting period is currently 7,5 years.The current zoning makes provision for the development of a retirement village where the development is situated. The local municipality supports the development in principal.Prime location of the existing buildings overlooking the ocean with a panoramic view from most of the buildings, existing and to be developed.The existing buildings are a landmark in the area which could easily be restored to their prior glory and ambience 1900's architecture.The existing buildings consist mainly of large classrooms, dormitories and halls, most of which can without much cost be converted to different size apartments and bedsitters, communal areas, frail care and administration facilities.The existing and any future buildings can without extensive changes incorporate the design, construction and operational practices to comply to the regulations of the Green Building Council of South Africa and Edge Certification.The property is within close proximity to State Hospitals in Port Shepstone, Scottburgh and Durban with Private Hospitals in Port Shepstone, Margate and Durban.Large Shopping Centres at Port Shepstone and Shelley Beach.The beach-stand, which is situated separately from the land where the convent buildings are situated, has direct access to the Beach. Development Plans The municipality supports the development of the retirement village in principle, but a zoning application will have to be done which will include a Traffic Impact Assessment. All buildings have been surveyed and architectural plans drawn up. The owners have registered the property in a Company {(Pty) Ltd}, which is totally unencumbered and the only asset in the company. The shares of the company are held by the owners Family Trust. The owner would like to propose any one of the following Options:Option 1. Obtain finance to do the development being a loan to the Company of minimum R175,000,000 for a period of 3 years with interest at 10% rolled up and paid at the end of the period. The shares to be held as surety in trust with the Attorneys. Upon repayment of the loan, the shares are returned to the Family Trust.Option 2. Do a Joint Venture where the owner sells 50% of the shares which will be bought from the Family Trust. Further the Joint Venture Partner must provide a loan of a minimum value of R175,000,000 to the Company. These funds will be held in an interest bearing Attorney's Trust Account, against which progress payments will be made. This will be enough to complete the renovations of the existing buildings and convert part of it into the first 216 Units as well as furnishing the communal areas and frail care. From the sale of these 216 units, the proceeds will be utilised to develop the next 200 units and then it will roll over. At the end of year 3 the loan capital as well as interest will be repaid. The owner will do the project management of the development and oversee the construction;Option 3. Do an outright sale of 100% of the Company shares. The Purchaser can then contract the owner to do the project management of the development and oversee the construction, should they wish to do so. Number of units proposed Figures are calculated on building either 616 units or 1216 units. The footprint submitted to the municipality for 92,000M² will accommodate approximately 1216 units depending on the size and configuration of the units. Projected (ROI) Return on Investment and (IRR) Internal Rate of Return Development of 616 units The ROI is 364% over a period of 3 years. The IRR is:43% over 3 years56% over a 10-year period and57% over a 20-year period The Property (Land and Buildings Developed) will belong to the Company and be worth R825,000,000 Unencumbered. Development of 1216 units The ROI is 739% over a period of 3 years. The IRR is:79% over 3 years87% over a 10-year period and88% over a 20-year period The Property (Land and Buildings Developed) will belong to the Company and be worth R1,695,000,000 which will be Unencumbered. Conclusion An ever increasing number of South Africans are investing in retirement developments, and with good reason. There is a strong demand in South Africa for secure lifestyle retirement developments. In fact, the demand often outstrips supply, with many of the top retirement villages boasting long waiting lists, so there will be a high demand for retirement properties for a long time to come. Don't miss this opportunity to invest into a solid asset class that will guarantee future financial returns for many years to come. Interested? Find out more For more detailed information on this development opportunity please contact the listing broker



Chris Seaman

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