The iconic Western Cape Houw Hoek Hotel has recently been sold to hoteliers Robert Haarburger and Drew Danford for R42 million. The property, which is South Africa’s oldest hotel, has been on the market for over two years and according to the new owners, became a ‘legitimate and attractive’ option after an independent valuation was completed by a specialist hospitality valuation company.
Hotel valuations are unlike commercial or private property valuations especially in the case of heritage sites such as the Houw Hoek Hotel. These valuations are a highly specialised form of appraisal and require not only the general principles of professional valuation, but also an in-depth knowledge of hotel operations. Over and above valuing the property itself, calculations must include a myriad of elements such as assets, hotel occupancy, revenue and forecasts to be valued as a going concern.
Built in 1779 and famous for owning South Africa’s first liquor licence, the Houw Hoek Hotel required heritage valuation expertise as well, since the hotel has retained much of its original architecture, comprising 53 rooms with conferencing facilities for 120 people, an à la carte restaurant and the ‘Hitching Post’ pub. Other amenities include a squash court, two swimming pools, a tennis court, volleyball court, putt-putt course, three boreholes and a generator.
According to Gavin Commins of The Valuator Group, who offered the parties professional valuation services on terms of the successful sale, valuating hotels is not a cut-and-paste exercise. “We approached all parties explaining the importance of having an independent professional valuation which would give both the sellers & potential buyers’ peace of mind that the value was “fair value” taking into consideration all the factors that need to be considered in a sale of this nature”.
Tony Collins, senior valuer for the group carried out the valuation. Once the valuation had been prepared a fair market value was agreed with the sellers and a sale was concluded by Greeff Properties within 6 weeks.