RDC Properties, a public listed property management and property development company, has continued with its expansion outside the country.
Their latest foreign foray is the turnkey acquisition of a hotel in Johannesburg’s Rosebank location.
The company, which has been listed on the stock market since 1996 and counts Masa Square Hotel as one of its flagship projects, announced this week that it has finalised the sale and development agreement for the acquisition with a developer, Itraprop.
The company has set 1 February 2021 as the date in which it will open the doors to a 222-bedroomed hotel, which will be branded Radisson RED and managed by Radisson Hospitality South Africa.
According to RDC Properties, the total cost of land, development, inclusive of furniture, fittings and operating equipment, is expected to be around R405 million (P292.53 million).
However, the transaction will be subjected to regulatory approvals and the acceptance of the final terms of long-term banking financing in South Africa, which will account for 52 percent financing and the provision of the guarantee for equity portion of 48 percent.
The company has announced that the effect of transaction on their net assets is not material due to the funding structure of the transaction.
It is projected that in the first three years of the operation of the hotel, the transaction is expected to increase RDC’s earnings per share between 12 percent and 18 percent, excluding fair value adjustments of the property.
The net profits expected from the hotel during the same period is anticipated to be between P12 million and P19 million, excluding the fair value adjustments of the hotel.
The company has expressed excitement at the prospect of operating a property branded Radisson as it a well-known brand in South Africa and the world over.
RDC further feel the investment matches its strategy of investing in prime properties.