The Western Province Rugby Football Union has struck a new multi-million rand deal with the Flyt Property Investment Group for the sale and redevelopment of Newlands Stadium.
This latest development comes after the WPRFU’s deal with Investec for the redevelopment of Newlands fell through.
Investec were set to pay R110 million for the purchase of development rights and a 99-year lease of the Newlands. Investec has already paid the union R50 million upfront and the rest of the money would have been used to cover the WPRFU’s debt to Remgro (R60 million).
However, there seemed to have been a breakdown in the negotiations and relationship between WPRFU and Investec and the deal came to nothing. Now the union is indebted to both Remgro and Investec.
‘On 1 June 2020, a transaction in an agreement between WPRFU and Investec to develop the Newlands Stadium site failed due to suspensive conditions not being met timeously,’ Marais said in a statement.
‘The suspensive conditions were that certain Long-Form Agreements were to have been entered into by midnight on 29 May 2020 after having consented to five extensions. However, the terms of the proposed development agreement set by Investec were not acceptable to WPRFU – acting in good faith in the best interests of its constituents – and the transaction contemplated in the agreement with Investec failed.’
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But according to WPRFU president Zelt Marais, they’ve struck a new deal with Dream World Investments, a company within the Flyt Property Investment Group, who agreed to pay an advanced R112 million to the WPRFU to pay off its debt.
‘The loan is advanced at the prime lending rate for a term of four years,’ Marais said in a statement.
‘The aim is to consolidate WPRFU’s debts and enable WPRFU to unlock the inherent value in the Newlands stadium property to put it on a firm financial footing.
‘This will ensure the sustainable future of Western Province rugby and, specifically, the opportunity for investment in clubs in our poorer communities over the longer term,’ Marais said.
He said the new partnership and loan agreement will be put to the WPRFU council at a meeting on 30 June and a special general meeting on 8 July when they will discuss the proposal further.
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Marais also suggested that the WPRFU and Flyt are looking at incorporating a new equally owned company, meaning the union will have a 50% share in the economic benefits derived from the future development of Newlands. He also added that the deal with Flyt would help the union in their efforts to consolidate their position as an anchor tenant at Cape Town Stadium.
‘With WPRFU as its anchor tenant, the Cape Town Stadium will finally be used to its fullest capacity to the benefit of all Cape Town residents,’ Marais said.
‘The move to the Cape Town Stadium heralds the beginning of an exciting new era in South African rugby. The Cape Town stadium is a state-of-the-art venue in one of the best locations in the City.
‘Its world class facilities for rugby fans include a better viewing experience, top-notch safety and security measures, modern corporate hospitality suites, conferencing and banqueting facilities, and medical facilities. The stadium also has a variety of public transport options close by to broaden access for fans from all communities. This includes the Cape Town train station as well as the MyCiti and Golden Arrow Bus stations.’
‘In addition, it is proposed that another new company will be incorporated between the WPRFU and Flyt Property Investment called Brookside DevCo.’
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Photo: David Rogers/Getty Images
