Property Investment: Case Study (The Bugle)

Can you make money in property? A recent transaction in our area has provided an astonishing case study of what can happen when things really do go your way. On 23^rd May 2012, according to our deeds office records, Portion 13 of Erf 1566 in the suburb of Port Zimbali was transferred at R100m. The extent of the property is 7,2ha. The seller was Michelle Mauvis and the buyer, Formate (Pty) Ltd, under title deed T14082/2012. Ballito residents would have known this property as the Pottery Gallery, located next to Hilltop Estate. This deal followed immediately on the heels of the sale of Portion 9 of Erf 1566, the property to the north of the pottery gallery (also 7,2ha in extent) and which borders on three sides to Zimbali Coastal Resort. This property was owned by Martin Sherwood, and in fact is still registered in Straight Props 92 (Pty) Ltd. Martin Sherwood had lived on the property for a while after building a magnificent 1,300 sqm manor house, with registered name Villa D’Afrik. He had bought the property on 4^th September 2002 for R1,600,000 under title teed T50737/2002. By purchasing the company the new buyer avoided a deeds office transaction being recorded (but not transfer costs either in the form of vat or transfer duty) and would have retained a certain level of anonymity had it not been for the persistent investigative journalism. Shortly after the transaction had been recorded, massive earthworks commenced on site, raising the suspicions of the locals. Rumours that a wealthy Zimbabwean by the name of “Robert” had acquired the property, lead to the inevitable speculation that Mugabe was the actual purchaser. As the subsequent media reports have indicated, the purchaser was in fact Zimbabwean Robert Mhlanga, who had been a helicopter pilot in the Zimbabwean Air Force, and subsequently an investor in diamond mines. Contractors on site were sworn to secrecy by signing non-disclosure agreements. The sale of Portion 9 has been reported as being close to R90m. Our deeds office searches cannot reveal the original purchase price that Michelle Mauvis may have paid for Portion 13 of erf 1566, but as this property had been acquired long before the sale of Portion 9 to Martin Sherwood, my guess is that it was bought at significantly less than R1,6m. To realize profits of close to R100m on each of these transactions by the respective sellers clearly emphatically answers my original question and is nothing short of astounding! The fact that the new owner is currently embroiled in a legal dispute with the local authority has lead to further media coverage. Additional public revelations regarding the work done on site can be expected.