An exterior view of the Park Inn Sandton Hotel.
The 273 room Park Inn Sandton hotel has been sold by way of Private Tender by JLL South Africa, realising a sale price of R265 million, 15% more than the vendor’s expectations.
Appointed by the liquidators of the owning company, JLL Capital Markets ran a two stage Private Tender process, which has the benefit of creating a competitive bidding process, capturing market attention, maximising investor interest and realising a result within a defined timeframe.
“The complex nature of the transaction and the various issues involved meant that a number of challenges had to be addressed. However, with our robust sale practice, we completed a successful transaction through a competitive tender process,” comments Henry Playne, Head: Capital Markets, JLL.
Commenting on the transaction process, Allan Pellow, Director at Westrust, and the lead liquidator, says, “JLL executed our instructions with absolute professionalism and commitment. The quality of services rendered by the JLL Capital Markets team was the decisive factor in the outstanding result that followed from the sale.”
He further notes, “This was an excellent example of how a well organised liquidation and sales process saves jobs and returns real value to secured and other creditors.”
The process faced a number of initial challenges, not least being two separate business rescue applications which eventually failed and paved the way for the joint liquidators to engage JLL to handle the disposal process. The culmination of the efforts of the liquidators duly guided by JLL’s expertise in this space resulted in a record price with most creditors recovering a substantial recovery of amounts outstanding and over 170 jobs being saved. The process is a testament to the fact that a well-run liquidation assisted by expert professionals should very often be the preferred methodology to deal with distressed businesses and assets.
“The Sandton market is one of the most mature hotel investment markets in Sub-Saharan Africa and to be able to bring such a quality asset to the market with such a high level of buyer demand confirms the interest in hotel real estate in South Africa from global and local investors,” adds Xander Nijnens, Senior Vice President of JLL’s Hotels & Hospitality Group.
The freehold property was sold, with a management contract to the Rezidor Group in place, to an international investor and continues to operate in the heart of Sandton’s business district.