Knock-down price for hotels a ‘sign of times’

A massive property auction in theSouthern Cape- which included three hotels in the Hartkorp Group, whose founder committed suicide in June – has fetched R43 million, less than half what it cost to develop the properties. 

Other than the three hotels auctioned on Friday, the assets, which cost more than R110m to develop, included a residential complex and two commercial properties. 

Auctioneer Rael Levitt, of Auction Alliance, said the prices fetched were a sign of the times. “A couple of years ago they would have been auctioned off for far more,” he said afterwards. 

The hotels are the Riviera Coastal Inn Suite Hotel in Hartenbos, which sold for R18.6m; the Diaz Beach Garden Route Boutique Hotel, which sold for R10.5m; and Boland Park Hotel & Lodge, which sold for R10.2m. They were sold to three different buyers – all businessmen who did not wish to be named. 

The Hartkorp Group has developed hotels, flats and buildings worth more than R200m. But in May, Hartkorp founder Hennie van Niekerk was liquidated after the flagship Riviera Hotel slumped in the post-World Cup leisure sector downturn. Hartkorp was hit hard, and Van Niekerk committed suicide in June. 

In 1996 Hartkorp, the principal developer ofDiazBeachinMosselBay, developed to the tune of R200m in Hartenbos, Mossel Bay and Great Brak River. The group also owned the High Rustenberg Health Hydro in Stellenbosch, which it sold to iProp in 1972. 

More than 250 people attended Friday’s auction.

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