Irish group backs €37.6m South Africa development

A group of Irish investors are behind a €37.6 million development in central Cape Town, South Africa.

An Irish-registered company, Eurocape Investments, has been established and will be used to represent the investors in a number of property development and investment deals.

The initial deal involves a high-profile city block near the Cape Town parliament building.

Many of the buildings are well-known Cape Town landmarks.

The consortium is being led by Howard Holdings, the UK-registered public company that has interests in Dublin, Cork and London.

The chairman of Howard Holdings, Mr Frank Gormley, said Cape Town was buoyant economically but had "cheap" property compared to prices on this side of the world.

He would not say who the other investors in the consortium were but said some of them had experience of the South African property scene on an individual basis.

Mr Gormley said the consortium had already agreed a second, smaller investment in Cape Town and was in the process of negotiating a third, larger investment deal. The initial development deal involves a plan for a six-star hotel, residential apartments, retail outlets and commercial units.

It is planned to market the properties here, in the UK and on mainland Europe.

Mr Gormley said that Cape Town was the fifth-largest tourist destination in the world. The region had a number of other industries, such as natural resources and wine.

Property development in Cape Town is being spurred on by the introduction of tax incentive schemes.

Mr Cormac Magannety, Eurocape chief executive and former executive with HOK, said more than 40,000 Irish people visited Cape Town last year.

He said that among the opportunities Eurocape hoped to offer investors was a scheme whereby apartments in hotels could be bought by investors who would have use of them for a defined period of each year.

Howard Holdings is 40-45 per cent owned by Mr Gormley, chief executive Mr Greg Coughlan and Mr Brendan Murtagh, one of the founding directors of Kingspan.

The three investors reversed into the loss-making family owned group in early 1998.

The company was involved in the controversial development of a car-park scheme in Beaumont Hospital.

A hearing of the Dáil Committee of Public Accounts was told last month by the Comptroller and Auditor General, Mr John Purcell, that the scheme resulted in a loss to the Exchequer of up to €13 million.