Property linked to Kellermann allegations auctioned

The Stellenbosch Mountain Retreat, the mysterious property at the centre of allegations around Cobus Kellermann’s handling of the Strategic Growth Fund, was auctioned in Cape Town on Monday. The auction was undertaken on the instruction of liquidators in Mauritius who are liquidating the assets of certain funds that were administered by Belvedere Management.

Jonathan Smiedt, the CEO of ClareMart Auction Group, confirmed to Moneyweb that an offer of around R13.1 million had been received for the property, including VAT and auctioneers’ costs.

This is less than a fifth of the price at which the property last changed hands. In 2010 Transholding Investments purchased the 32-hectare plot from Lancelot Stellenbosch Mountain Retreat for R72 million.

This transaction was the last in a series of deals concerning this property in which Kellermann and companies associated with him appear to have been heavily conflicted.

At the time he was the manager of the Strategic Growth Fund, which was domiciled in Guernsey. This fund invested into a number of underlying funds that were administered by Belvedere Management in Mauritius. These funds, in turn, engaged in a number of related-party transactions concerning the Stellenbosch property over a number of years.

The Guernsey Financial Services Commission has raised concerns that Kellermann had interests at almost every level of these transactions. It has also argued that the last price paid of R72 million was “highly questionable”.

Property value

Although Smiedt says that no reserve price was placed on the property at the auction, ClareMart had conducted an assessment “some time ago”. This was not a full valuation, but more of a rough estimate of what the plot might be able to sell for.

“Initially, we put it in the R20 million to R25 million bracket,” Smiedt said. “But when we approached it a little more carefully and delved into it a bit more, there were other things that affected the price.”

Although the plot is 32 hectares in size, not all of that is available to develop as it is on a mountainside. It is also zoned for a resort, which limits its use.

“The outlay to develop something like that would be in the order of hundreds of millions,” Smiedt said. “The profitable thing would be to re-zone it as single residential.”

Who wants it?

The initial plan for the Stellenbosch Mountain Retreat was supposedly to develop a number of “executive corporate lodges”. However, although an entrance gate and sales office were constructed, the scheme appears to have been abandoned towards the end of 2013.

Since then, the property has lain dormant. Smiedt told Moneyweb that attempts had been made to find buyers, but at prices of between R30 million and R40 million, no one could be secured.

It does therefore appear that investors who were caught in the Strategic Growth Fund when it was suspended have lost a chunk of their investment. As the money paid for the property will not be recovered this will affect the net asset value of the fund and ultimately what they can expect to receive when it finally pays out.

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