By Wesley Cowan, Director for Galetti Corporate Real Estate
When many people hear the term ‘business rescue’ they immediately think the worst. However, it’s not always a sign of financial ruin. In fact, for savvy investors, it can open doors to unique opportunities.Business rescue is a common route for financially distressed companies to reorganise and optimise their assets. Often, this involves selling valuable assets like properties. These properties, though part of a financial restructuring process, can be well-maintained and excellent investment opportunities, offered at a lower price for a quick sale.
Take, Blue Mountain Berries, a berry and avocado farm just outside of George. Despite being in business rescue, it remains profitable and fully operational. The farm, strategically located and with a history of supplying major grocers, is now available for sale through sealed bid with a deadline of 30 November 2023.
The process of buying a property in business rescue
Buying a property in business rescue involves a slightly different process than a traditional sale. A Business Rescue Practitioner (BRP) is appointed to create a plan that considers the rights and interests of stakeholders. This includes selling immovable property to pay creditors. Only the BRP can finalise a property sale agreement. The new owner, once the sale is agreed upon, is protected from any outstanding municipal debt associated with the property. After that, it functions like a regular commercial property transaction.
The pros and cons of buying a property in business rescue
The primary advantage lies in pricing. The BRP aims to conclude the transaction quickly, making them more likely to consider a range of offers, potentially leading to a discounted price. In many cases, these properties come fully equipped, sweetening the deal for new owners.For instance, Blue Mountain Berries comes complete with farmhouses, equipment, staff accommodation, a community centre, fully operational cold rooms as well as packing and storage facilities.
Properties in business rescue offer a huge amount of versatility, as the new owner has the opportunity to either continue a legacy or view it as a blank canvas and start from scratch. On the downside, overcoming the negative stigma associated with business rescue can be a challenge, especially for new investors looking to continue operations seamlessly. This means that understanding the property’s operating structure and history is crucial for success.
In the current market, strategically located properties with a profitable history, like Blue Mountain Berries, are rare. Breaking down the stigma surrounding business rescue can open doors for savvy buyers looking to capitalise on versatile commercial property opportunities.
To submit your sealed bid offer for Blue Mountain Berries farm, visit: https://galetti.co.za/western-cape/george-rural-property/791/74611
