Mutual Platz sale stalled

A veil of secrecy has been drawn over the pending sale of Old Mutual’s first major property investment made by the life insurer after Independence. Mutual Platz, the former flagship building of Namibia’s largest insurer, has been on the market for the past two years since its replacement, Mutual Towers, was built and occupied.
Mutual Platz shares the most prominent position in the Post Street Mall with Town Square Mall. It is by any definition prime Central Business District property, but the building consists of only five storeys, making it less attractive for investors looking for letable city-centre commercial space.
A source familiar with the latest attempt at a sale’s transaction said a joint effort by Safland Property Developers and Sanlam to submit a proposal to the Government Institutions Pension Fund (GIPF) initially looked favourable, but then the GIPF rescinded on its previous decision, bouncing the proposal back with several queries on the income potential of Mutual Platz.
Sanlam acts on behalf of the GIPF as investment manager of the pension fund’s extensive property portfolio across the country.

However, Conville Britz, the investment manager at the GIPF on Wednesday denied any knowledge of the transaction, saying that he could neither confirm nor deny the proposed sale.
Chief Executive Officer of the Namibian Stock Exchange, Tiaan Bazuin, told the Economist that Vukile Property Fund, a listed property investor on the stock exchange and part of the Sanlam stable, had no intention to acquire Mutual Platz hence there was no need for cautionary measures. Contacted for clarification on the sale, Old Mutual said “the sale is an internal matter and there is no comment available to be shared publicly on its progress. There is also no agent involved.” but the insurance company was mum on any further details.
It is understood that Old Mutual is asking in the region of N$250 million for Mutual Platz and that the GIPF was initially very keen to acquire this property to add to its portfolio of local property assets. The GIPF, under compulsion of the Pension Fund Act, is required, just as any other pension fund, to comply with Regulation 28, holding at least 35% of its total assets in Namibian assets.
Asked what the impact would be of relinquishing a major asset on Old Mutual’s balance sheet, the company said “[we] have always ensured, and will continue to ensure, that we are at all times compliant with the requirements of Regulation 15” (of the Long Term Insurance Act), adding that “there should be no assumption that the sale of Mutual Platz will render Old Mutual non-compliant with Reg 15. This is in fact not the case. We have recently built the Keetmanshoop Mall and have access to sufficient other local assets to render our portfolios compliant.”
Speaking on behalf of Sanlam as investment manager for the GIPF property portfolio, Sanlam CEO Tertius Steers, said “Sanlam on behalf of various mandates and clients is considering possible property investments in order to optimise returns and comply with local investment requirements, and will continue to do so.” Another source told the Economist that there have been several prospective buyers for Mutual Platz, but that all investors have baulked so far due to the building’s limited office and retail space.