The worldwide pandemic has closed shops, grounded aircraft and brought the hospitality industry to its knees.

In South Africa, many restaurants, guesthouses and hotels have closed down and, as a result, Broll Auctions and Sales has seen an increase in the number of these
properties going on auction.

The pan-African auction house recently sold the Malaga Hotel in Mpumalanga. Current hospitality properties on the upcoming October 28 auction include the Hulala Lakeside Lodge in Mpumalanga, a wedding venue and country estate in Magaliesburg, and a guest lodge in Fourways, Gauteng.

“There has been a lot of value created by the pandemic, and we are seeing new entrants into various industries, including hotel groups and investment consortiums who are looking to take advantage of the value on offer,” said Norman Raad, CEO of Broll Auctions and Sales.

Broll is positioned to auction commercial properties that include restaurants, well-being centres, rehabilitation centres and retreats, hotel rooms and sectional-title sections of a commercial building or hotel.

“Hospitality properties have been through the worst of the worst and some businesses have survived while others have closed down temporarily and some won’t open again. These vacant assets need to be sold. Auctioning them draws a line in the sand and sends a strong message to the market that the property is going to be sold. Auctions’
marketing reach covers a far greater spectrum of buyers, both nationally and internationally, that conventional selling is not able to offer,” Raad said.

Auctions work when there is demand, either through the uniqueness of the asset or, alternatively, through the price as the saleable asset.

The buyers all have an equal opportunity to do their due diligence, raise finance and submit a cash or a non-suspensive offer. “Transparency and fairness are given to all parties that tick the box of corporate governance.”

Raad explained that if a guesthouse owner put their R20 million (€1.1m) property on auction, the buyer would pay the commission of between 5% and 10%, depending on the value of the property and who is paying the advertising costs, which can be anything from zero to R45 000 (€2 600), depending on the risk, property valuation and the seller’s ability to pay. The seller would be paid the full R20 million.

“Auctions create exposure and bring cutting-edge marketing techniques to elevate the property into every possible investor, owner-occupier’s mind, who would sometimes never have known that the asset was for sale,” said Raad.

“Broll Auctions and Sales is a reputable company that I can recommend in the highest regard, to facilitate the change that may be needed in the tourism industry, in order to help all parties recover from this torrid time”, said Pamela Joseph, Business Development Specialist at Pamela Joseph Consulting.