Navigator Property Investments (Pty) Ltd and Galleria Property Opportunities (Pty) Ltd (86/LM/Sep05) [2005] ZACT 81 (10 November 2005)

COMPETITION TRIBUNAL 
REPUBLIC OF SOUTH AFRICA
       Case no.: 86/LM/Sep05  
In the large merger between: 
Navigator Property Investments (Pty) Ltd and Two Others 
and 
Galleria Property Opportunities (Pty) Ltd and Thirteen Others  
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Reasons
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Introduction
1. On   21   October   2005   the   Competition   Tribunal   approved   the   merger  
between   Navigator   Property   Investments   (Pty)   Ltd   and   two   others,and  
Galleria Property Opportunities (Pty) Ltd and thirteen others. The reasons  
are set out below. 
The transaction
2. Catalyst   Holdings   (Pty)   Ltd   (“Catalyst”),   an   independent   property  
company, is selling 14 of its property investment holdings (referred to as  
“the transferred firms”) to the Navigator group of companies comprising  
Navigator   Property   Investments   (Pty)   Ltd   (“Navigator”),   Rowmoore  
Investments 567 (Pty) Ltd (“Rowmoore 567”) and Rowmoore Investment  
597 (Pty) Ltd (“Rowmoor 597”).                 
3. Both Rowmoore 567 and Rowmoore 597 are wholly owned subsidiaries of  
Navigator. Catalyst will hold 85% of the issued shares of Navigator and  
Absa Bank Ltd the remaining shares. Absa, as minority shareholder, will  
be protected by a shareholders’ agreement and will have veto rights over  
the   acquisition   of   properties   but   will   not   partake   in   the   day­to­day  
management of the company. 
4. The property investment holdings will be transferred as follows:
Navigator will acquire:

 Academia Studente Behuising (Pty) Ltd, which owns Academia phase  
4 and 5. 
5. Rowmoor 567 will acquire:
 Galleria   Property   Opportunities   (Pty)   Ltd.   It   owns   the   Times   Media  
Property.
 Rowmoor   Investments   326   (Pty)   Ltd.   It   owns   the   Boardmans  
properties.
 Rowmoor Investments 223 (Pty) Ltd. It owns the Metcash properties in  
Brits, Potgietersrus and Welkom.
 Rowmoor Investments 313 (Pty) Ltd. It owns the Edgars properties.
 Rowmoor Investments 205 (Pty) Ltd. It owns the Shoprite Uitenhage  
property.
 Rowmoor   Investments   257   (Pty)   Ltd.   It   owns   the   Shoprite   Silverton  
Property.
 Rowmoor   Investments   336   (Pty)   Ltd.   It   owns   the   Coin   Security  
property. 
 Harlequin Duck Properties 121 (Pty) Ltd. It owns the Absa Somerset  
West properties.
 Skyprops 94 (Pty) Ltd. It owns the EDS property.
 Double Flash Investments 33 (Pty) Ltd. It owns a Portnet property.
 Sammy Q Properties (Pty) Ltd. It owns the Sammy Marks property 
 Syfin Properties (Pty) Ltd. It owns the Boschenmere Lodges.
6. Rowmoor 597 will acquire:
 Catalyst   Residential   Investments   (Pty)   Ltd,   which   owns   Academia  
phases 2 and also Academia Phases 1 and 3 which is owned by Syfin  
Properties (Pty) Ltd.  
Rationale for the transaction
7. The Catalyst group wishes to restructure its property investment holdings  
in order to refinance the Catalyst property portfolio.  
Effect on competition
8. The   Commission   considered   the   effect   on   competition   in   the   property  
market of Absa acquiring joint control of the Navigator Group. 
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9. Both   parties   are   active   in   the   property   industry.   Catalyst,   through   the  
Navigator   Group,   is   involved   in   commercial   real   estate   management,  
property   asset   management,   property   financing   and   research­based  
investment expertise. Absa is active in the banking, insurance, financial  
and property investments.  
10. The property product market can be sub­divided into:
1. Office rental property described as Grade P, A, B, or C office property.  
2. Retail property described as regional retail shopping centres, community  
neighbourhood retail shopping centres, local convenience retail shopping  
centers,   warehouse   retail   shopping   centres   and   value   retail   shopping  
centres.
3. Industrial property described as light and heavy industrial property.
11. Absa and the transferred firms control the following properties as set out in  
the table:
Geographic 
market
Type   of   property  
held by Absa 
Type of property held  
by   the   transferred  
firms
Cape Town grade B office retail property
grade A office
grade C office
Pretoria grade B office
grade C office
retail property
Brits ­ retail property
Silverton grade B office retail property
Welkom ­ retail property
Durban grade A office grade B office
12. Even though the parties are active in the same geographic markets it is  
clear   from  the  table  that  they   do  not   compete  within  the   same  product  
markets in those areas. There is thus no overlap in the relevant markets.
13. The   Tribunal   accordingly  finds  that  the  transaction   will   not   substantially  
lessen or prevent competition.
 
Public interest
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14. No significant public interest issues are raised.
____________ 10 November 2005
L Reyburn Date
Concurring:  T Orleyn, M Mokuena
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