The hotel in better days. (Photo by Jeffrey Greenberg/Universal Images Group via Getty Images)
Desolate, dead and degraded, what was once a high-end luxury hotel on a corner of Rosebank is now a concrete calamity.
The hotel owner and the mixed-development body corporate are at an impasse that has been going on for years. There have been court cases that have been settled out of court and no precise date for when this internationally branded Hyatt hotel will reopen.
Here’s some background on how we got to where we are today.
The Bin Otaiba Hotels (BOH) group is headquartered in Sharjah, United Arab Emirates. BOH is a division of Bin Otaiaba Investment Group (BOIG), founded and chaired by HE Khalaf Ahmed Khalaf Al Otaiba.
According to their website, they acquire, develop and manage high-quality hospitality real estate assets. They own multiple hotels in the United Kingdom, UAE, Morocco and South Africa.
In South Africa, they own The Hilton Hotel in Durban, Hyatt Regency in the Johannesburg suburb of Rosebank, Radisson Blu Le Vendome in Sea Point, Cape Town, Park Inn Sandton, and the King Edward Hotel.
All these hotels are closed except the Hilton in Durban, which was reopened recently thanks to pressure from the local municipality.
The Hilton in Durban was close to being expropriated by the eThekwini municipality, which has an agreement with the hotel owner. The hotel owner recently reopened the hotel to avoid losing it. As for the Hyatt Regency Hotel in Rosebank, well, that’s a different story altogether.
The Firs retail and office complex in Rosebank is owned by Burstone Group (previously Investec Property Fund). It’s a mixed-use development that offers destination shopping with high-end, specialised retail and slick restaurants.
The Hyatt Regency Hotel formed part of the original development. The development was then sectionalised, and The Hyatt Hotel was sold to Georgia Avenue Investments, which then entered into an operational agreement with the Hyatt Group.
The Burstone Group gave up ownership of the hotel but maintained ownership of the retail and office component (The Firs). Georgia Avenue Investments is a subsidiary of The Bin Otaiba Group.
The Hyatt Hotel operated under the brand until 2020, when it closed its doors as a result of the Covid-19 pandemic.
They let go of all their staff, and barbed wire was strewn across the front entrance of the building. And they stopped paying their municipal rates, taxes and levies.
The Firs and the hotel share a common erf, meaning they get a central supply of municipal services divided according to each asset owner’s participation quota.
Burstone Group had to cover the hotel’s proportionate share of municipal service costs owed to avoid being in arrears with the municipality. Should the city cut off services to the site, the hotel’s lack of monthly payments would indirectly affect Burstone Group’s asset (The Firs).
Two years ago, the Burstone Group went to court to be reimbursed for the municipal costs they unwillingly covered. Representatives from the hotel group flew into South Africa to meet Burstone Group representatives to resolve the matter. Subsequently, Burstone Group withdrew the case, and the hotel owner paid a large settlement.
The Burstone Group owns three levels of parking bays in this development. They allocated 75 bays to the hotel for their guests to make use of. They lease these bays to The Hyatt Hotel monthly for about R1200 a bay. That is a total monthly rental of R90 000 excluding VAT. To date, Georgia Avenue Investments has never paid a parking invoice. They are in arrears.
The real losers have been the retailers at The Firs. They rely on the footfall and tourists that come from the hotel. Many of these retailers had to shut shop because of zero activity.
The Burstone Group has supported the retailers through rental rebates and assistance during Covid-19. The shops are open but not profitable. They need the hotel to reopen so that the ecosystem of this development can work optimally.
Burstone Group continues to bankroll the outstanding costs owed by the hotel group. Demand letters have been sent, but The Hyatt Hotel has no concrete opening date.
A source from the hotel group said they were keen to purchase The Firs but that the Burstone Group is not interested in selling it.
The hotel group is not interested in selling their hotel either. I was also told that the hotel group plans to open The Hyatt Hotel and the Park Inn by Radisson Sandton once they have completed the necessary maintenance. They will then open the Radisson Hotel in Sea Point. No opening dates were given to me.
The Radisson Hotel has been closed since the pandemic. A source at Radisson said the property needed serious renovations before it could be reopened.
The hotel has been closed and mothballed for more than three years while the building owner and Radisson disputed renovations. There is no given date for when the hotel will reopen. The last few times I saw this hotel’s pool from an apartment above, the water was swamp-green and eventually emptied.
The Bin Otaiba Hotels website states that they create long-term value in their real estate assets. This is ironic, because most of their South African hotels have remained closed for over three years.
A complete list of their hotels:
UAE
- Hilton Sharjah
- Corniche Hotel Abu Dhabi
- Hilton Saadiyat Resort (coming soon)
UK
- Hyatt Regency Birmingham
- Radisson Blu Cardiff
- Radisson Blu Bristol
- Park Inn Cardiff
MOROCCO
- Ramada Tangier
- Ramada Fes
SOUTH AFRICA
- Hilton Durban
- Hyatt Regency Johannesburg
- Radisson Blu Le Vendome
- Park Inn Sandton
- King Edward Hotel