Group keen to secure the property, but not at all costs, says CEO Marcel von Aulock.
The lucrative lease for one of the largest hotel properties in South Africa – the 734-room Southern Sun Elangeni & Maharani hotel on the Durban beachfront – only had one bidder, the incumbent operator JSE-listed Southern Sun Limited.
The issue hit the headlines last year when it was revealed that the lease for the property would expire in 2025, raising concerns that if Southern Sun exited, it could mean the death knell for the busy North Beach area of Durban’s Golden Mile. “Clearly, we will do what we can to retain the lease and continue operating the Southern Sun Elangeni & Maharani Hotel in Durban,” said Von Aulock.
He said this highlights that a possible hit from Southern Sun Elangeni & Maharani hotel no longer operating would not be significant for the group.Dramatic uptick in post-pandemic conferencing SA hotel stocks surge as key international tourism markets lift travel restrictions In an interview with Moneyweb later, Von Aulock said the Southern Sun group is still “keen to secure the property” but reiterated that it would not “be at all costs”.
Asked if he was surprised that only Southern Sun had bid for the lease, he responded: “It is not an easy property to operate. Everyone forgets that we built the buildings, and all the furnishings and other equipment to run the hotel is ours. ADVERTISEMENT CONTINUE READING BELOW “If the lease ends and there isn’t a new lease with us, we then remove all our furnishings and equipment. So a new company wanting to lease the property will have to kit out this massive hotel, and that won’t be cheap.
A Moneyweb search in the tenders section of the website showed that Southern Sun was the only bidder for the properties, submitting bids totalling R7 million .
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