Transnet sells V&A Waterfront for $950 mln

JOHANNESBURG (Reuters) - South Africa's Transnet agreed to sell Cape Town's V&A Waterfront, the country's top tourist spot, for 7.04 billion rand as part of a restructuring to focus on logistics and rail, it said on Wednesday.

A consortium of British-based London & Regional Properties, Dubai-based Istithmar and South African black investors won the competition to buy one of South Africa's prime real estate assets, the state-owned company said.

"The successful bidder is the L&R consortium ... the purchase consideration was 7.04 billion rand, payable in cash," Transnet Chairman Fred Phushwana said at a presentation.

The V&A Waterfront is South Africa's biggest tourist attraction, situated in the heart of Cape Town under the imposing Table Mountain, with its shops and hotels luring about 22 million visitors a year.

Covering 603,859 square metres of development rights, the deal is said to be the biggest property deal in terms of value in South Africa's history.

London & Regional will hold 50.1 percent of the shareholding in a new controlling company Lexshell, while Istithmar will have a 24.8 percent stake and a broad-based group of black investors the remaining 25.1 percent.

Transnet and its pension and retirement funds said in May they had agreed to sell up to 100 percent of the property.

SOCCER WORLD CUP

The sale is part of a drive by the company to dispose of non-core assets as it seeks to become a focused rail and logistics group to help the government achieve its 6 percent economic growth target by 2010.

It will also help finance a planned 65 billion rand investment programme over the next five years to upgrade its ports, rail and oil pipelines.

"As linked unitholders, we are glad to be able to exit in favour of a consortium that has real prospects of unlocking further value in this prime national asset," Transnet Chief Executive Officer Maria Ramos said in a statement.

"This transaction is a major vote of confidence in our economy by international investors," she added.

The V&A Waterfront, of which an estimated 45 percent of its development rights remain unused, should be a main attraction for millions of expected visitors during the Soccer World Cup, hosted by South Africa in 2010.

Transnet said more than 60 South African and international companies had taken part in the bidding process, and nine companies were short-listed for the final round of bids.

London & Regional Properties is one of the largest private property companies in Europe, while Istithmar is an investment company wholly owned by Dubai World, a Dubai government holding company, a statement said.

The deal remains subject to approval from South Africa's competition authorities and the central bank, it added.

Article By: Gordon Bell