By Lehlohonolo Lehana.
Transnet is selling the iconic Carlton Centre in line with its ambitions to become a leading property developer and boost group cash flow.
“Yes, we are selling Carlton Centre, but we are not leaving the CBD. I think that is one thing people will be worried about, [saying] if state-owned entities leave the city centres, what about [the future of] our CBDs?” Transnet Property CEO Kapei Phahlamohlaka told the Business Live.
Phahlamohlaka added: “I think it is going to be the beginning of a new era. People always talk about the Carlton Hotel to say this is the hotel [former president Nelson] Mandela visited when he came out of prison. Can we duplicate that at Transnet? We won’t. We believe a third-party developer can do that. When a third-party developer does that, they will resuscitate the memories, reinvent what it used to be, so people can love Carlton Centre again.”
“We find ourselves in a position today where generally Transnet is challenged financially, then we start looking at assets and say what do we do? Do we have the capability and the financial muscle to reinvest in Carlton Centre? The answer is no. What value are we adding to Johannesburg by keeping a property that has got so much potential, but we do not have the resources [to] turn it around?
This forms part of its corporate strategy to optimise portfolio returns and strengthen its balance sheet.
The construction of the Carlton Centre precinct began in the early 1960s and was completed in 1973. It comprises an office tower, retail section, skyrink and hotel, but only the retail section is fully functional.
Transnet considered the Carlton Centre, which it bought from Anglo American in 1999 for R33-million to use as its headquarters, as non-core to its operations – thus starting a process in 2007 to engage potential buyers.
The Carlton Towers has 68 000 m² of office space and the Carlton Shopping Centre is a busy shopping mall with 53 000 m² of retail space. The 43 500 m² Carlton Hotel has 663 rooms, but is currently mothballed.
The Carlton Court, the annex building, has 63 rooms. It is the smaller hotel annex across Kruis street from the hotel, connected by a pedestrian bridge into the old hotel lobby.