Chill wind blows for cool Maboneng as parts of neighbourhood go under the hammer
Tenants anxious as key developer of city hot spot goes bust
A year after the Maboneng Precinct in central Johannesburg was listed by Forbes magazine as one of the 12 coolest neighbourhoods in the world, several buildings in the development are going under the hammer after the liquidation of a key developer.
Propertuity, the company that began the project to revive the inner-city district, owes creditors hundreds of millions of rands.
At least 10 buildings in the hip precinct will be auctioned, affecting both businesses and residential developments. These include avant-garde film theatre The Bioscope, the Arts on Main centre as well as the 64-room Hallmark House Hotel, which boasts a penthouse with panoramic views, jazz bar, sauna, gym, health spa and offices.
High-end boutiques and restaurants, such as Che and the Sawubona Café, are also affected, as well as the quirky apartment building made from shipping containers.
The Maboneng Precinct is renowned for rooftop parties and weekend markets and was once described by Propertuity founder Jonathan Liebmann as a "counter-theory to the apartheid-era segregation", with accommodation catering to people earning "from R3k a month up to R100k a month".
Propertuity CEO Reanne van der Merwe said the company had spent the past year trying to rescue the business.He declined to comment further on the liquidation, but the Sunday Times has seen the liquidation papers submitted to the high court in Johannesburg, with Van der Merwe's affidavit painting a bleak picture.He writes that Propertuity lost more than 75% of its share capital over the previous year and a half, and could not pay its debts. It has mortgage bond debt of R36m and shareholder debt of R265m.
The affidavit reveals the company received loans of hundreds of millions of rands from shareholders, but there was just not enough monthly cash flow to repay them.
He says although many believe that the company owns the entire precinct, it owns only 10% of the buildings in the precinct.
In Maboneng this week there was anxiety among some tenants. Business owners said they were disappointed that Propertuity had failed to inform them of the liquidation - with some only discovering their buildings would be auctioned when billboards advertising the event went up a few weeks ago.
Sawubona Café co-owner Ola Erejuwa said: "With a new landlord, the rent could be raised, [the new owners] may not continue the lease. They could even ask us to move out."
However, he will attend the April 15 auction with his business partner with an eye to perhaps purchasing the building.