South African Property Review is the official voice of the South African Property Owners Association, a B2B publication which is also available in print and distributed to a targeted audience of the leading commercial property owners in South Africa
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SOUTH AFRICAN PROPERTY REVIEW July 2015 South African Property Review Financial and Investments July 2015 NEW KID ON THE BLOCK Newtown Junction takes top honours THE PULSE OF THE BAY Baywest Mall opens its doors FINANCE AND INVESTMENT FOCUS Deconstructing investing in property Ireland: Celtic Tiger rises T h e W O R L D s e r i e s ● O u r m o n t h l y c o u n t r y - b y - c o u nt r y f o c u s ● FURTHERING EDUCATION The SAPOA Bursary Fund’s biggest achievement
Transcript
S O U T H A F R I C A N
PROPERTYR E V I E W
July 2015
South African P
roperty Review
Financial and Investments
July 2015
NEW KID ON THE BLOCKNewtown Junction takes top honours
THE PULSE OF THE BAYBaywest Mall
opens its doors
FINANCE ANDINVESTMENT FOCUS
Deconstructing investingin property
Ireland: Celtic Tiger rises
The
WORLD series ● Our monthly country-by-country focus ●
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S O U T H A F R I C A N
PROPERTYR E V I E W
July 2015
2 From the CEO5 From the Editor’s desk10 Industry news13 Legal update DTI turnaround on Broad Based Empowerment14 Education, training and development18 Planning and development Planning education in South Africa20 Theme leader Deconstructing investing in property24 Eye on the world Ireland28 SAPOA Bursary Fund32 Interview Durban in the hot seat38 Feature The pulse of the bay41 REIT investments42 Eco-mobility breakfast46 Investors to increase acquisitions in 201548 Workshop Collaborating with government50 Inspired over breakfast52 Mingling at the Michelangelo54 Breakfast session at Umhlanga Rocks56 Statistics58 Profi les60 What’s on Upcoming events63 Fun & quirky JT Foxx Q&A64 Off the wall Designing to keep the lights on
ON THE COVERThe R1,4-billion Newtown Junction mixed-use development in the Jo’burg CBD took top honours and scooped multiple awards at the 2015 SAPOA Annual Innovative Excellence in Property Development Awards
Editor in Chief Neil Gopal Editorial Advisor Jane Padayachee Managing Editor Mark Pettipher Copy Editor Ania Rokita Production Manager Dalene van Niekerk
Designers Wade Hunkin, Dirk Knoesen Sales Riëtte Stevens Finance Susan du Toit Contributors Anne Schau� er, Eugenia Makgabo, Lekgolo Mayatula,
Martin Ferguson Photographers Mark Pettipher, Xavier Sauer, Pierre van der Spuy
DISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding any goods or services advertised within this edition. Copyright South African Property Owners’ Association (SAPOA).
All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from SAPOA. The publishers are not responsible for any unsolicited material.
Designed, written and produced for SAPOA by MPDPS (PTY) Ltde: [email protected]
Published by SAPOA, Paddock View, Hunt’s End O� ce Park, 36 Wierda Road West, Wierda Valley, SandtonPO Box 78544, Sandton 2146
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2 SOUTH AFRICAN PROPERTY REVIEW
from the CEO
Commercial property rates and taxes – a comparison
SAPOA CEO Neil Gopal highlights the comparisons regarding commercial property rates and taxes across South Africa’s eight metropolitan municipalities
SAPOA’s comparison of the level of rates and taxes levied in each of the eight
metropolitan municipalities reveals some variance in the cents in the rand rate across the main property types.
The latest rates and taxes research from SAPOA highlights the huge disparity between the country’s major cities in terms of the resources available to deal effectively with ongoing urbanisation, unemployment, poverty and inequality.
Within the context of the National Development Plan’s emphasis on major cities being the engines of economic growth, these disparities and the shortcomings they reveal need to be addressed as a matter of urgency.
The research also confirms that over the last decade, rates and taxes have consistently increased at a rate higher than inflation, with a rates and taxes annualised rate of inflation of +8,2% during the period from 2005 to 2014.
Although prior to this the increase in rates and taxes exceeded inflation, acceleration in growth has been more noticeable since 2005.
From solely a rates randage perspective, for the fiscal year of 2014/2015, the highest level of commercial property rate randage was levied in the eThekwini Municipality, where a rate of 3,053 cents in the rand applied to industrial property. Commercial and business property saw a slightly lower tariff of 2,36 cents in the rand being applied.
development and job creation. Investments include more than 65 flagship projects across the city, from manufacturing, construction and real estate to tourism, information communication technology, agriculture, maritime and logistics.
The projects are expected to create about 680 000 permanent jobs in the long term and bring in potential revenue of about R9-billion for the city.
The municipality has established a project-management office whose main role is the facilitation of the implementation of catalytic projects such as inner-city renewal in addition to building capacity.
Mayor Nxumalo said that in drafting the tariff increases, the city took cognisance of economic conditions, input costs and the affordability of services to ensure the financial sustainability of the city.
Rates and taxes form a significant percentage of overall municipal revenue, with the eight metro municipalities collecting R29-billion in rates and taxes – 17,9% of total revenue.
During the 2013/2014 fiscal cycle, commercial and industrial property rates billings amounted to 54,5% of overall rates revenue in the country’s metropolitan municipalities, with significantly lower levels of arrears than commercial clients.
Of the eight metro municipalities, six reported increases of more than 30% in the value of commercial and industrial properties. Mangaung reported the largest increase, with the valuation of its commercial property almost increasing, while eThekwini reported a municipal valuation increase of 50%. Tshwane and Buffalo City were the only municipalities with a valuation increase close to inflation, with 5,6% and 4,7% respectively.
The increase in rates and taxes comes in a much tougher macroeconomic environment, with economic growth currently at levels of only about half of that during the period between 2004 and 2007. As a result of this tougher trading environment, it is becoming increasingly challenging for landlords to deal with the additional tax burden.
Neil Gopal, CEO
The City of Tshwane reported the second-highest cents in the rand rate, with industrial and business property both taxed at 2,71. The lowest rates applied to the City of Cape Town, with both industrial and commercial property taxed at 1,25 cents in the rand.
The largest municipality in terms of revenue, the City of Johannesburg, applied a rate of 1,73 cents in the rand, while Nelson Mandela Bay, Buffalo City and Mangaung (the three smaller metros) had comparatively high commercial property rate randages.
It must be noted that the rate randages do not necessarily result in higher property rates as this is predominantly affected by the actual property value. The case of the eThekwini Municipality is therefore instructive.
While the eThekwini Municipality’s rate randages come out as the highest, the number of rateable properties is more than 60% less than both Cape Town and Johannesburg, and the value of commercial and industrial properties is more than half that of Johannesburg and nearly half that of Cape Town.
This can be seen with eThekwini having the least quantum of rates revenue of the three major cities. Furthermore, within eThekwini, more than 90% of the total rateable property is residential, resulting in a major challenge for the municipality.
The nett effect is therefore a higher rate randage than in the other major cities but not necessarily higher property rates. Rates revenue is a critical source of revenue within every municipality, and the huge challenges within eThekwini force it to rely heavily on such revenue.
Presenting the highlights of the city’s budget, eThekwini Municipality Mayor James Nxumalo said a large portion of the municipality’s R6,1-billion capital budget will be pumped into low-cost housing and infrastructure development throughout the city, with the aim of creating an enabling environment for new investments and other activities that lead to job creation.
Mayor Nxumalo confirmed the city’s commitment to building a sustainable city for future generations, based on infrastructure-led growth, unlocking investment, economic
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3SOUTH AFRICAN PROPERTY REVIEW
from the CEO
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4 SOUTH AFRICAN PROPERTY REVIEW
from the Editor’s desk
STRONG RELATIONSHIPS ARE BUILT ON SOLID FOUNDATIONS
We know the importance of relationships.Working together allows us to understandyour needs so we can off er the best realestate solutions for you. With over 152 yearsof banking experience, this is how we’re moving real estate forward.
They call it Africa. We call it home.
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204201 Real Estate NIGERIA Portrait SA A4.indd 1 2015/04/02 2:37 PMEd's Letter_JULY_SUBBED.indd 4 2015/06/15 8:33 AM
5SOUTH AFRICAN PROPERTY REVIEW
from the Editor’s desk
In February 2014 I wrote my very � rst editor’s letter for SAPOA’s South African Property Review.
Now, 18 months later, I’m writing my last.I dug up my � rst editor’s letter and
reminisced on what was written. “With a passion for writing and expression and a piqued interest in current a� airs, I always knew I would be involved in the media industry. But I never imagined that I would become the editor of a commercial property magazine – two, in fact.”
The letter continued with, “The South African Property Review and the Property Developer are exceptional titles that have helped to shape my career as a journalist. Property is a fascinating thing. It not only represents our built environment but it de� nes our existence as humans.”
Property still remains fascinating to me and my time as Editor of the South African Property Review has been a phenomenal experience. I have grown and learnt a great deal about the property industry in South Africa, its people and its passions.
I would like to thank Immediate Past President Amelia Beattie for teaching me about the REAL in real estate, SAPOA Chief Executive O� cer Neil Gopal for his leadership, and the SAPOA sta� for their assistance with the publications.
I would also like to extend a warm thanks to the publishing and sales team of SAPOA’s publications – without you, this product wouldn’t be the success that it is.
Lastly, I want to thank all those who play a role in the property industry. Thank you for your guidance, your insight and the wonderful stories that you helped shape for the South African Property Review and Property Developer.
I wish the next editor all the best and hope that they will carry and nurture this baby into the future. My journey has been fun – and it’s de� nitely not the end.
Farewell, Property DeveloperSAPOA Publications will also be bidding a farewell to the quarterly Property Developer. The May 2015 edition was the last stand-alone issue of Property Developer.
But this isn’t goodbye: the publication will be incorporated into the South African Property Review. Once every quarter, the magazine will be beefed up with development content, adding further value to SAPOA’s core monthly publication.
SAPOA would like to thank all clients who have advertised in the Property Developer. Your support has been unrelenting.
Signing offIn her fi nal issue of the South African Property Review, SAPOA Publications Editor Candace King refl ects on her journey
DeveloperPRO
PER
TY
February 2014
Modderfontein metropolisShanghai Zendai’s city plan
Towering feat: a catalyst for investment38
Cornubia: Durban’s mixed-use marvel35
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DeveloperPRO
PER
TY
May 2014
Mall of AfricaAtterbury’s retail roll-out: the sky’s the limit
Developing an oceanic fairy tale28
A work in progress
18
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DeveloperPRO
PER
TY
May 2015
Introducing Tongaat Hulett
Addressing Africa: RICS Africa Summit 22
Lords View: A green view on things 28
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2015/04/02 2:37 PM
from the Editor’s desk
Ed's Letter_JULY_SUBBED.indd 5 2015/06/15 8:50 AM
6 SOUTH AFRICAN PROPERTY REVIEW
from the CEO’s desk
6
The DirectorLand Use and Soil ManagementDepartment of Agriculture, Forestry and FisheriesPrivate Bag X120PRETORIA0001
4 June 2015
SAPOA COMMENTS: DRAFT POLICY AND BILL ON PRESERVATION AND DEVELOPMENT OF AGRICULTURAL LAND FRAMEWORK
INTRODUCTION
1.1. The South African Property Owners Association is the representative body and o� cial voice of the commercial and
industrial property industry in South Africa.1.2. SAPOA was established in 1966 by the leading and large property investment organisations to bring together all
role players in the commercial property � eld and create a powerful platform for property investors.
1.3. SAPOA is recognised as the representative body and o� cial voice of the commercial and industrial property
industry in South Africa, with a combined portfolio in excess of R500 billion. SAPOA members control approximately
90% of all commercial and industrial property in South Africa.
1.4. It is thus clear that SAPOA has a direct and substantial interest in the bill under discussion.
1.5. From what follows it is clear that the structure of the bill with respect to the subdivision and rezoning of agricultural land is
unconstitutional in that it falls foul of the provisions of sections 156(1) and 41(£) of the Constitution as read with schedule
4 Part B, whereby municipalities have executive authority in respect of municipal planning, as explained more fully below.
1.6. It furthermore falls foul of section 155(7) of the Constitution whereby national government and the legislative and
executive authority are to see to the e� ective performance by municipalities of their functions in respect of inter alia
schedule 4 by regulating the exercise by municipalities of their executive authority, already alluded to above. The
bill does not do so but seeks to disempower the municipalities with respect to their executive function in respect of
municipal planning and to vest the power to do so in the Minister responsible for agriculture, the MEC responsible for
agriculture and bodies created in the bill.1.7. Furthermore, the bill does not profess to be a section 44(2) statute in that section 44(2) of the Constitution applies
only to functional areas listed in schedule 5; indeed, in terms of section 44(3) of the Constitution, the bill will have to
be regarded as regulating a matter that is reasonably necessary for or incidental to the e� ective exercise of a power
concerning a matter listed in schedule 4, and will to that extent be unconstitutional for the aforegoing reasons.
1.8. It further falls foul of the provisions of section 25(3) of the Constitution in that it seeks to provide for expropriation of
agricultural land in certain circumstances at less than just and equitable compensation at a lower price than would be paid
for similar land in the same geographical area which is used optimally for agricultural purposes (clause 54(3)(c) and 151 (a)).
1.9. Furthermore the Spatial Planning and Land Use Management Act 16 of2013 is completely ignored by the Bill.
This act has been assented to by the President and is awaiting � nal promulgation. The bill, if legislated in its
present form, deals largely with the same subject matter, but substitutes the processes described in the act
with new processes and new decision makers. In many respects, the bill duplicates town planning processes but
within the context of the supremacy of agricultural use of land over any other land uses. If the bill is legislated in
its present form, the question arises whether the legislator intends to amend the SPLUMA statute, because the
two statutes cannot exist side by side with di� erent decision makers granting applications in respect of the very
same land uses and matters.
LOBBIES FOR
YOU
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7SOUTH AFRICAN PROPERTY REVIEW
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THE CONSTITUTIONAL DIMENSIONS OF DECISION MAKING WITH RESPECT TO THE FUNCTIONAL AREA
OF MUNICIPAL PLANNING
2.1. In Johannesburg Municipality v Gauteng Tribunal1 the Constitutional Court had to decide on the meaning of
municipal planning as used in part B of schedule 4 of the Constitution. It decided that the term municipal planning
is a term which assumed a particular, well established meaning which includes the zoning of land and the
establishment of townships. In that context, the term is commonly used to de� ne the control and regulation of the
use of land. It decided that there is nothing in the Constitution where the word carries a meaning other than its
common meaning, which includes the control and regulation of the use of land.2
2.2. Section 41(f ) of the Constitution con� rms the autonomy of each sphere of government by stipulating that one
sphere may not assume any power or function of the other except those conferred on them in terms of the
Constitution. The limited scope for intervention by one sphere in the a� airs of another is the context in which the
powers conferred on each sphere must be construed. While the national and provincial spheres enjoy concurrent
legislative authority over matters listed in part B of schedule 4, neither of them can by legislation give itself the
power to exercise executive municipal powers or the right to administer municipal a� airs.3
2.3. Chapters V and VI ofthe Development Facilitation Act 67 of 1995 were thus declared inconsistent with section 156
of the Constitution read with part B of schedule 4 in that it granted powers to the DFA Tribunal to grant rezoning
and decide and grant applications for establishment of townships.
2.4. The bill under discussion follows the same structure as the impugned chapters V and VI of the Development
Facilitation Act 67 of 1995 divesting the municipalities of their exclusive executive power to control and regulate the
use of land, the zoning of land and the establishment of townships, and may I add in this context, the subdivision
of land. It falls foul of section 41(f ) of the Constitution by having the Minister responsible for agriculture as well as
the MEC responsible for agriculture clothed with the powers or functions of municipalities whilst those powers and
functions were not conferred on them in terms of the Constitution.
2.5. It must be realised that all land within the Republic of South Africa fall within the jurisdictional area of some
municipality and the e� ect of the bill will be that the exclusive executive authority and administration conferred
upon municipalities with respect to agricultural land within their municipal areas will not only be interfered with,
but will become subject to decisions by the national government and the provincial government.
ASSUMPTION OF MUNICIPAL PLANNING POWERS IN THE BILL
3.1. The very object of the bill illustrates the unconstitutionality thereof. Clause 2 provides for the object to regulate the
subdivision, rezoning and protection of agricultural land whilst the object expressed in clause 2(b)(ii) is inter alia to
prohibit land uses unrelated to agriculture from taking place on agricultural land including urban and other non-
agricultural developments that are likely to create con� ict with the established or proposed protected agricultural
areas and to prohibit the subdivision and rezoning of agricultural land that results in fragmentation of farming
systems, reduced agricultural productivity and land degradation.
3.2. Clause 2(e) has the object to ensure the sustainable use of natural agricultural resources and maintain the agricultural
landscape through the prohibition or discouragement of land use changes from agriculture to other forms of development.
3.3. Clause 3(1) then declares agricultural land to be the common heritage of all the people of South Africa and the
department as custodian thereof for the bene� t of all South Africans. This declaration seems to be modelled on the
Mineral and Petroleum Resources Development Act, 2002 as well as the National Water Act, 1998. However, the
“custodianship” expressed in those acts derive from international law and the Declaration on Permanent Sovereignty
over Natural Resources adopted by the United Nations in 1962. No such instrument exists with respect to agricultural
land and the expression of custodianship in this section is a rather convoluted way of stating that the Department is
entitled to regulate agricultural land; however, as pointed out above, the kind of regulation with respect to municipal
planning as set out in the bill does not fall within the power of either the department or the national government.
3.4. Therefore clause 3(2) which states that as custodian of the nation’s agricultural land, the department’s power
to approve, reject, control, administer and manage any rezoning or subdivision of agricultural land, is simply
unconstitutional. at par 57 p 203
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8 SOUTH AFRICAN PROPERTY REVIEW
from the CEO’s desk
8 SOUTH AFRICAN PROPERTY REVIEW
LOBBIES FOR
YOU See Johannesburg Municipality v Gauteng Development Tribunal supra at par 43-44 and 49 pp 199E, 200 A-B and 204 D-D
3.5. Chapter 2 of the bill sets about to regulate on national level, high potential cropping land, and on provincial level
medium potential agricultural land.4 In both instances the subdivision of the relevant land is prohibited, unless
approved by the minister and/or the MEC, as the case may be. Again, the rezoning with associated subdivision, if
required, is prohibited unless approved by the inter-governmental committee. A similar structure is created with
respect to medium potential agricultural land in clauses 31 to 52.
3.6. In all of this the ultimate decision is not taken by a municipality and the high water mark of the municipality’s
involvement is the right to comment upon applications.3.7. However, the bill goes further by prescribing what municipalities should take into account in formulating their IDP’s
and SDF’s.3.8. All these provisions, read in conjunction, make the Department of Agriculture, the minister, the MEC’s and the
structures created in terms of the bill, the ultimate decision makers who may prescribe to the municipalities
how their planning must be done, all of which are unconstitutional.
4 See with respect to high potential cropping land clauses 5 to 40 and with respect to medium potential land, clauses 31 to 52
MISUSE OF POWER TO EXPROPRIATE
4.1. A power to expropriate may be created in legislation, but that power to expropriate has to be exercised according
to the procedures set out in the Expropriation Act 63 of 19755 and it must in general conform with the requirements
of section 25 of the Constitution.4.2. The power to expropriate ought to be closely circumscribed and deviations from section 25(3) as far as just and
equitable compensation is concerned, will be unconstitutional. The only space which exists to supplement the
provisions of section 23(3) of the Constitution lies in factors which have to be taken into account in order to arrive
at just and equitable compensation. However, legislation which seek to grant less compensation than would
otherwise have been payable in terms of section 25(3) of the Constitution, will be completely unconstitutional.
4.3. In clauses 34(3) and 15l(a) there is a strange notion that the compensation norm is to be at a price lower than
market value, apparently as a sanction for not using agricultural land optimally for that purpose or heeding a
directive issued in terms of clause 151.64.4. On the other hand clause 65(3) provides that the amount of compensation and the time and manner of payment must
be determined in accordance with section 25(3) of the Constitution. The other sections are therefore contradicted.
See Section 26( 1)See clause 151(9), 34(3)
SALE OF A PORTION OF AGRICULTURAL LAND
5.1. The use of the word “portion” is ambiguous. When an original farm has already been subdivided into portions, each
existing as a separate cadastral unit, those cadastral units are also described as portions ofthe farm. It should be
made clear that what is intended, is an undivided portion of a cadastral unit.
5.2. Section 58 does not strike at the sale of a portion of agricultural land for agricultural purposes. Was that the intention?
Will the sale of an un subdivided portion of agricultural land for agricultural purposes now be unregulated?
5.3. Does clause 59(1) also strike at existing undivided shares in high potential cropping land? Previously no consent
was necessary where existing undivided shares were bought, sold or registered. As formulated in clause 59(1)(c)
the registration of transfer of existing undivided shares in the name of another, will also need the relevant consent.
5.4. In this context the question also arises why consolidation of two or more portions of land need the consent of the
minister in terms of clause 61.5.5. As with other consents, there is no indication in clause 61 of what the criteria would be on which the minister or the MEC
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9SOUTH AFRICAN PROPERTY REVIEW
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must grant consent or must consider an application. In that sense this section is overbroad and grants an absolute discretion
with respect thereto. This is against the rule of law and is unconstitutional in terms of section 2 of the Constitution.
5.6. The same di� culty which existed with respect to the di� erentiation between a right in land and a servitude which
existed in the Subdivision of Agricultural Land Act is continued by clause 68 as read with clause 59 of the bill. For
example, a habitatio as mentioned in clause 59(1)(d) is indeed a personal servitude, while servitudes are separately
dealt with in clause 68. Are these provisions cumulative? The authorities which have to grant consent are di� erent
or may in speci� c instances be di� erent.
VIOLATION OF THE RULE OF LAW
6.1. There is a further constitutional dimension which needs comment.
6.2. In all the provisions concerning applications for rezoning, subdivision, consolidation and the like, the relevant
o� cial or body representing the national government or the MEC representing the relevant province, is granted
absolute discretions in respect to the granting or dismissing of applications.
6.3. No criteria are laid down in the bill which prescribes what the relevant factors are which the decision maker
has to take into account. Furthermore there is no indication of the circumstances and criteria applicable which
would oblige the decision maker to grant the applications.6.4. In this regard the bill is thus overbroad and leaves the applicant in a position where the law with respect to the granting
or refusal of applications is so vague that the decision maker can handle the matter according to his own whims.
6.5. In order to comply with the rule of law, the law must be certain and the exercise of discretions must be circumscribed.
6.6. In this respect the bill is contrary to the rule of law and in contravention of section 2 of the Constitution.
THE POWER TO ENFORCE OPTIMAL AGRICULTURAL USE OF AGRICULTURAL LAND
7.1. In part IV of chapter 2 from clause 54 onwards the bill seeks to enforce the active use of development of agricultural
land and the optimal utilisation thereof on pains of expropriation of the land.
7.2. The members of SAPOA, after having bought land with development potential, even with the consent of the
minister, will thus be in a position that they will have to conduct farming operations optimally on such land or face
the possibility of being expropriation until such land has been developed.
7.3. This illustrates how the bill does not take into account the highest and best use of land and simply accepts that the
highest and best economic use of land would be for farming purposes.
7.4. That would be the position even if the land is demarcated for future development in the spatial development
framework of the relevant municipality.
MISCELLANEOUS REMARKS
8.1. There are various formulation problems and other practical problems arising from the bill which are not dealt with
in this comment, such as the agricultural land register which is impractical and will in practice take years to compile.
8.2. Broadly speaking, the bill is structurally unconstitutional and once the unconstitutional aspects thereof are excised
there remains very little.8.3. The bill should be withdrawn and reformulated on those aspects which fall within the functional area of
the Department.
Yours faithfully
Neil Gopal Chief Executive O� cerSAPOA The South African Property Owners Association
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industry news
Atterbury Property Developments’ new R1,4-billion Newtown Junction mixed-
use development in the Jo’burg CBD took top honours and scooped many awards at the 2015 SAPOA Annual Innovative Excellence in Property Development Awards. Newtown Junction was declared the overall winner at the coveted awards, after also receiving accolades for best mixed-use development and the overall transformation award.
Atterbury was the big winner at this year’s SAPOA Excellence Awards with another two Atterbury developments – the West Hills Mall in Ghana and the Westcon Offices and Warehouse development at Waterfall Industrial Park – winning the international development award and the industrial development award respectively.
“We are delighted to secure multiple awards, including the main overall title at the 2015 SAPOA Innovative Excellence in Property Development Awards for our Newtown Junction development,” says Cobus van Heerden, Director of Retail Developments at Atterbury.
Newtown Junction – an 85 000m² mixed-use shopping, leisure and office development in Jo’burg’s trendy Newtown precinct – was opened in September 2014. It was developed by Atterbury Property Developments for
Atterbury Property Holdings and JSE-listed Attacq Limited. Newtown Junction includes a 38 000m² retail component, about 39 000m² of prime office space, basement parking for 2 400 cars and a new City Lodge Hotel, which is under development.
“These awards are regarded as the Oscars of South Africa’s property industry, so we are truly proud that our Newtown Junction project has been recognised as the overall best property development in the country,” says Van Heerden. “This is a great achievement for a great development, which is transforming the Jo’burg CBD’s historic Newtown precinct into a vibrant mixed-use shopping and leisure destination with prime office space.”
Newtown Junction’s development represents the first significant injection in the Jo’burg CBD in 40 years and is part of a key urban regeneration initiative in the Newtown node. The office component of Newtown Junction is largely taken up by Nedbank in a landmark building that has achieved a 4-Star Green Star SA rating from the Green Building Council of South Africa. Newtown Junction has to date created about 2 700 jobs during the construction phase of which 850 were jobs for local unemployed people. It is estimated
that about 4 800 people will be working at Newtown Junction when it’s fully operational on the retail, office and hotel components.
“Newtown Junction is anchored by its retail component, which includes more than 70 stores and restaurants, a Ster-Kinekor cinema complex and a gym,” says Lucille Louw, Managing Director of Atterbury Asset Managers. “Atterbury is committed to the success of the Newtown node and urban regeneration within the Jo’burg CBD. The Newtown Junction mixed-use development offers shoppers, office workers, residents and visitors a first-rate, trendy and safe shopping and leisure destination in the Jo’burg CBD. With the introduction of FATTi, Atterbury’s new shopping centre analytics and technology solutions service, in Newtown since December 2014, we can accurately say that the current footfall at Newtown Junction is nearing 500 000 per month.”
“Winning the SAPOA international development award for the 27 700m² West Hills Mall project is another feather in the cap of Atterbury,” says Van Heerden. “Atterbury is a leading developer of prime and world-class property projects not just in South Africa but also in other parts of the continent.” +27 (0)12 471 1600, Atterbury.co.za
Atterbury wins big as Newtown Junction takes top honours
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11SOUTH AFRICAN PROPERTY REVIEW
industry news
Nedbank makes R323-million commitment to the Cape’s retail sector
Newmark Hotels scoops multiple awards
Nedbank Property Finance has granted R323-million to
FPG Group for the purchase of the Cape Gate Lifestyle precinct from Hyprop, Africa’s leading specialist shopping centre real estate investment trust (REIT).
The acquisition comprises 30 000m2 GLA, which includes a lifestyle and decor centre, an Engen service station, drive-thru Steers and KFC, and a Toyota dealership. The six properties are located along Okavango Road in Durbanville, Cape Town, adjacent to the Cape Gate regional mall and in close proximity to the successful Makro development, which is partly owned by Nedbank. Tenants of the lifestyle and decor centres include Super Spar, Virgin Active, Build-It Hardware, Cash Converters, Pure Plastics, Postnet and Tafelberg Furniture.
Richard Thomas, Nedbank Property Finance’s Regional Executive for the Western Cape, says the bank was enthusiastic about funding the development not only because of its long-term relationship with the FPG Group, but also because the properties are well located and tenanted by quality national tenants on long-term leases.
“We have been the FPG Group’s financier of choice
for more than five years and we are proud to partner with them once again in this transaction,” he says. “The Group is an experienced retail operator and we feel sure it will add value to this key property in Cape Town’s northern suburbs.”
The FPG Group – then known as Foodprop – was established in 1989 as a wholly owned subsidiary of the Foodworld Group, which was then the largest independent retail group in the Western Cape, consisting of 13 supermarkets and four wholesale outlets, which was sold to Shoprite. Foodprop was created to build a property-owning entity to source new sites for its retail division, and
to build a diverse property portfolio to include the industrial and office sectors.
In 2006, the Group concluded its largest single property development – the R300-million The Claremont, which consisted of 322 apartments. In 2013, the Group rebranded to become the FPG Group to reflect the broader focus across all property sectors, and made its first international property acquisition in the UK. Today FPG Properties has grown to include 38 properties, primarily in the retail sector, with limited exposure in the office, industrial and residential sectors.
The portfolio comprises a GLA of more than 160 000m²
and more than 70% of this space is occupied by national tenants. “With the latest IPD results confirming that the retail sector has held its ground, Nedbank Property Finance continues its ongoing commitment to the sector by providing agile and relevant financial solutions that realise opportunities for quality retail property clients such as the FPG Group,” says Thomas. “This, coupled with our strong partnership approach, is a strong proposition that ensures we remain the market leader in the commercial property finance sector.” +27 (0)11 295 8045, Nedbank.co.za
Boutique hotel group Newmark Hotels, Reserves
& Lodges has scooped a total of 10 TripAdvisor Certificates of Excellence and one sought-after Hall of Fame award. TripAdvisor’s Certificate of Excellence awards are based on consumer reviews and take into account the quality, quantity and most recent reviews and opinions submitted by travellers over a 12-month period.
The 10 Newmark properties awarded are The Dock House
Boutique Hotel & Spa, the Victoria & Alfred Hotel and the Queen Victoria Hotel in the heart of the V&A Waterfront in Cape Town; and, also at the Waterfront, Dash restaurant at the Queen Victoria Hotel and Oyo restaurant at the Victoria & Alfred Hotel; Nkomazi Game Reserve in Mpumalanga; The Five-Star Drostdy Hotel in Graaff-Reinet; Motswari Private Game Reserve in the Timbavati – part of the greater Kruger National Park; The Nyungwe
Forest Lodge in Rwanda; and Coral Lodge 15.41 in Northern Mozambique.
Another coup is that Newmark’s Victoria & Alfred Hotel has been included in the TripAdvisor Hall of Fame, which is a new award for properties that have won the Certificate of Excellence for five years consecutively. This is some achievement because only nine percent of total winners qualify for the Certificate of Excellence
Hall of Fame by consistently doing well over five years.
“Our hotels and lodges appeal to travellers – we give them the service and the overall good experience they are looking for,” says Newmark Hotel’s Managing Director Neil Markovitz. “TripAdvisor keeps us on our toes – the public doesn’t lie – so these 10 awards confirm we’re determined to get it right on every level. We’re delighted.” +27 (0)21 427 5900, Newmarkhotels.com
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industry news
The iconic V&A Waterfront has contributed about
R227-billion towards the GDP of South Africa’s Western Cape province between 2002 and 2014, with forecasts revealing that this growth will continue for the next 10 years. Despite the perception that the V&A is predominately a retail and tourism hub, the residential property component is a significant contributor towards GDP growth.
According to David Rebe, Chief Executive Officer of Sandak-Lewin Property Trust, in the recent past the V&A has become a thriving residential area, providing residents with convenient and vibrant accommodation. While in the past residential property within the V&A has been perceived as only catering to the ultra-luxurious high-end market, the area now offers career-driven entry-to-high-level professionals vibrant urban residences at reasonable prices.
An example is the recently completed long-term residential rental complex, the Ports Edge, which is the first of its kind in the area. This is the first residential building wholly owned by the V&A that is being offered for rental. With easy access to the city centre, highways and MyCiti bus stops, the residential complex is ideal for professionals who want to live and breathe the buzz of the city.
Rebe says that apartments across the V&A Waterfront, CBD, Green Point and Sea Point remain
in huge demand because of the central and scenic location – and the lack of affordable, reasonably priced accommodation in the region means developments such as Ports Edge are fast gaining popularity, with the building’s occupancy rate at almost 100%. “Areas such as the V&A Waterfront remain attractive because of the vibrant lifestyle that residents can enjoy,” he says. “Perks of being situated in the area include easy access to the city, limited traffic congestion and amenities such as live
entertainment and an assortment of restaurants, cafés, bars, local and international retail outlets, as well as safe running tracks and bicycle lanes for residents to enjoy.”
He adds that the R50-million development of the Watershed – which is situated next to the Ports Edge, offering arts and craft workmanship exhibited by local artists – provides residents with an opportunity to indulge in the creative landscape at their own leisure. In addition, the Watershed features Workshop17, a collaborative shared working space.
“Other than the sought- after living experience at the V&A, residents are also attracted to the rental aspect of the accommodation as they prefer not to be tied down with a mortgage,” says Rebe. “Moreover, residents are able to enjoy the urban and vibrant environment knowing that they have 24-hour security.”+27 (0)21 408 7500, Waterfront.co.za
Despite the current economic environment characterised
in part by muted growth, subdued business and consumer confidence, reduced disposable income and ongoing energy constraints, South Africa’s housing market continues to demonstrate noteworthy stamina and resilience across all segments in the face of these challenges, says Dr Andrew Golding, Chief Executive of the Pam Golding Property Group.
“With rising inflation a growing concern, the decision by the Monetary Policy Committee (MPC) to keep the repo rate steady was positive news, although it is likely that the increasing fuel price and proposed further hike in electricity tariffs may bring pressure to bear on the MPC’s future stance,” he says.
Property market resilience can be demonstrated in a number of ways. One example is that of first-time buyers who continue to exhibit an increasing appetite to transact, and as a result enjoy a long-term benefit of investing in their future through home ownership. “In addition, we remain confident that in the coming months we will begin to see the positive impact of the 2015 National Budget announcement that no transfer duties are payable on property transactions below R750 000 (as opposed to the former R600 000 threshold),” says Golding. “The lending climate and affordability of a deposit and bond repayments play a significant role in the first- time home-buyer segment of the market. Also encouraging is what
is generally perceived as a more favourable lending environment, with mortgage originator Ooba reporting higher approval rates (76% in April 2015) and more competitive rate concessions by financial institutions. These are critical factors in supporting growth in this sector of the market.
“Despite socioeconomic and political challenges, confidence in real estate as an investment prevails across all sectors of the market, with some clear trends evident. These include a desire to reside in economic nodes and transport corridors with easy access to the workplace and schools; a growing demand for convenient apartment living, both in terms of sales and rental accommodation; and a shift towards secure estate living in integrated communities where there is a strong emphasis on sustainability and self-sufficiency. The latter undoubtedly reflects a direct response to rising energy, water and other municipal costs as well as a growing environmental awareness.” +27 (0)21 710 1700, Pamgolding.co.za
V&A Waterfront rental accommodation offers affordable and vibrant luxury living
Stable interest rates provide affirmation for home buyers
Dr Andrew Golding, Chief Executive of the Pam Golding Property Group
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legal update
The Department of Trade and Industry caused widespread
uncertainty and confusion in its Notice 396 in the Government Gazette of 5 May 2015, which stated that black participants in broad-based and employee share ownership schemes could only contribute a maximum of three points (out of the total available 25 BBBEE ownership points) to a firm’s BBBEE score in terms of the Codes of Good Practice issued under the Broad Based Black Empowerment Act.
On 8 May, the Department issued a statement that BBBEE transactions concluded before 1 May 2015 would not be affected and that the Department would appoint a technical task team to explore the “appropriate balance between active (direct) and passive (broad based schemes) ownership”, and report to the Minister within 30 days.
On 12 May 2015 in a radio interview, the Minister of Trade and Industry Rob Davies clearly and unequivocally announced that the DTI will withdraw paragraph (d) of the clarification notice, and as such dispense with the three-point cap on broad-based empowerment schemes and employee share ownership schemes.
On 15 May 2015, the department issued a further notice in the Government Gazette, which withdrew Notice 396. It accordingly now appears that the status quo has been restored and that broad-based and employee share ownership schemes are again eligible to contribute to all (and not just three) of the 25 available BBBEE ownership points in the Codes.
It would thus appear that the task team that was to be created in this respect would no longer be necessary.
The Revised Notice of Clarification has, however, retained the following:
● The Amended Codes of Good Practice came into effect on 1 May 2015.
● All BBBEE verifications conducted using the financial year ending before 30 April 2015 can still be verified using the old Codes of Good Practice, and all BBBEE verifications conducted using the financial year ending after 1 May 2015 must be verified using the amended Codes, with the exception of the Sector Codes. This is a welcome clarification, as companies with a financial year end in 2014 or prior to 30 April 2015 may still be rated under the old Codes.
● The transitional period for the alignment of Sector Codes has been extended to the end of October 2015. From 1 November 2015, Sector Codes that are aligned shall be effective in accordance with the 1 May 2015 effective date. A consideration shall be made for Sector Codes not aligned by the end of October 2015 to be repealed.
● All valid BBBEE certificates issued under the old Codes as well as the relevant Sector Codes should remain valid, accepted and treated as empowering suppliers.
● All EME (Exempted Micro Enterprises) certificates issued without Empowering Supplier Status will be automatically recognised as Empowering Suppliers.
Eugenia Makgabo is an Admitted Attorney of the High Court and Legal Manager at SAPOA
DTI turnaround on Broad Based EmpowermentIn light of the recent uncertainty regarding the DTI’s Broad Based Empowerment notice, the department has made some revisions
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legal update
Eugenia Makgabo is an Admitted Attorney of the High Court and Legal Manager at SAPOA
Don’t be left in the darkLandlords are cautioned to heed against the cutting off of tenant’s electricity
Landlords are constantly faced with frustration when tenants
do not fulfil their contractual obligations. This leaves the landlord in a situation where they could potentially be left out of pocket. A scenario that is popular is the non-payment of electricity by tenants.
In the Anva Properties CC v End Street Entertainment
Enterprises CC case (hereinafter referred to as the case), there is evidence of the above-mentioned conduct by a tenant.
Anva Properties CC (hereinafter referred to as the applicant) sought an order authorising it to terminate the electricity supply to premises in a building situated at 34-36 Riebeeck Street, Cape Town. The applicant owns the building and
End Street Entertainment CC (hereinafter referred to as the respondent) was one of the tenants occupying it.
The applicant pays electricity to the City of Cape Town and recovers that cost from the tenants. The respondent occupied the basement of the building since 2012, from where it conducted business as a bar and nightclub.
The respondent used electricity for its air-conditioning, refrigeration and lighting facilities, which were the primary requirements for the business to be functional. It was established that the tenant had not paid its electricity bill since September 2014; and that it is in arrears in excess of R300 000.
ConsiderationsThe respondent raised two defences. The first related to the validity of the lease and the second to the right to bring an action by the landlord.
● Firstly, it was contended that on the applicant’s own showing, the respondent was finally deregistered in 1998, long before it purportedly entered into a lease agreement with the applicant on 7 May 2012 to hire the premises. Secondly, the applicant has no locus standi to claim payment of any debt from the respondent because it has ceded all its rights to Nedbank Limited. Consequently it has no right to recover any amount under the ceded debt.
● It is settled law that deregistration puts an end to the existence of a corporate entity. No steps have been taken to restore the respondent to register
of close corporations, and even if these had been taken, the restoration of a close corporation under the Close Corporations Act No. 69 of 1984,
read with the Companies Act No. 71 of 2008, does not necessarily mean that all of its activities during the period when it was deregistered are automatically validated.
● Given the above-mentioned established facts it was recognised that no valid lease agreement was entered into between the parties, and that the applicant’s claim for the relief based on a lease purportedly entered into between the parties cannot succeed.
● Further, given that the respondent has been deregistered and that the lease agreement purportedly concluded is invalid, it is unnecessary to deal with respondent’s second defence.
Landlords are constantly faced with frustration when tenants do not fulfil their contractual obligations. This leaves the landlord in a situation where they could potentially be left out of pocket. A scenario that is popular is the non-payment of electricity by tenants
The only defences available to the landlord would be that the tenant failed to prove one of the two essential spoliation requirements, namely possession or dispossession, which would be a mammoth task
This legal opinion is only a guide and should not be copied with the expectation that it will serve each party’s individual circumstances. Most of these recommendations have not been tested in our courts. SAPOA cannot guarantee any success in any court if any of these recommendations are put to use.
It accordingly now appears that the status quo has been restored and that broad-based and employee share ownership schemes are again eligible to contribute to all (and not just three) of the 25 available BBBEE ownership points in the Codes
The Spatial Planning and Land Use Management Act (Act No. 16 of 2013) is now in effect.
Dear Members, please note that the Spatial Planning and Land Use Management Act (Act No. 16 of 2013) came into effect on 1 July 2015.
In terms of Section 61 of the Spatial Planning and Land Use Management Act (Act No. 16 of 2013) (“the Act”), South African President Jacob Zuma determined 1 July 2015 as the date on which the Act shall come into operation.
SPLUMA proclaimed
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education, training and development
The purpose of the property valuation and management
programme at the University of Johannesburg is to prepare students to be well-rounded prospective employees once they enter the property industry.
To achieve this, property valuation and management modules were introduced as electives in the BCom Finance degree. After a generic first year, students can register for property valuation and management modules in the second and third year of their undergrad studies.
The primary purpose of the BCom Finance degree is to provide students with applied competencies in the mastering, analysis, interpretation and application of financial and investment management, financial planning, accounting principles and property valuation and management in preparation for a career in the property industry as well as to provide a basis for further learning.
Consistent exposure to real- world situations provides students with opportunities to reflect on their ability to apply financial, investment, financial planning, accounting and property valuation and management decisions, and to assess the effect thereof in the holistic context of the property industry.
Exposure to the different disciplines provides a sturdy foundation to support the multidisciplinary nature of the property industry. After successful completion of the BCom Finance degree, students can specialise in one of four honours degrees: Financial Management, Investment Management, Financial Planning, or Property Valuation and Management.
Martin Ferguson is SAPOA’s HR, Education, Training and Development Manager
Property programmes at UJ
The purpose of the BCom Honours in Property Valuation and Management degree is to strengthen students’ knowledge and comprehension of the disciplines of property valuation and management.
The programme consists of a broad-based curriculum to prepare the postgraduate student for a wide range of property-related specialities. The curriculum topics range from property valuation and property law to property finance and property management.
The programme emphasises application, analysis and evaluation within each topic area, and the application of integrity and ethics in a professional environment. Mastering the curriculum will provide students with the skills to synthesise complex valuation, management, financial and legal principles in order to add value to the entities that employ them.
Although the BCom Finance degree with property valuation and management modules is the preferred route of entry into BCom Honours in Property Valuation and Management, there are other routes for prospective students who completed other qualifications.
One such route is the Bridging Programme in Finance, intended for prospective students with any bachelor’s degree, related BTech degree or a related national diploma, excluding the National Diploma: Real Estate, who intend enrolling for BCom Honours in Property Valuation and Management.
The learning material repeats the core topics and outcomes covered in the second and third year of Financial Management, Financial Planning, Investment Management, and Property
Valuation and Management modules. The content of these modules provides students with the foundation necessary for the successful completion of honours studies in the field property valuation and management.
The Advanced Diploma: Property Valuation and Management offers progression for National Diploma: Real Estate students to NQF Level 7. Successful completion of this programme will provide students with property valuation and management knowledge and may lead to articulation into the BCom Honours Property Valuation and Management programme.
The formal qualifications described above were all accredited by the South African Council for the Property Valuers Profession in 2014. Students who successfully complete any one of these qualifications will be able to register as candidate valuers, and those who complete the BCom Honours in Property Valuation and Management as professional valuers.
In addition to the formal qualifications, the University of Johannesburg also offers a number of extracurricular qualifications, which include well-known SAPOA courses such as the Introduction to Commercial Property Programme (ICPP), the Essential Commercial Property Programme (ECPP), the Property Management Programme (PMP), and the Property Financial Programme at basic, intermediate and advanced levels.
The PMP programme with UJ is run over two separate week- long block sessions (total of 10 contact days), followed by an examination.
For more information, please contact:
Martin FergusonHuman Resources, Education, Training and Development Managert: +27 (0)11 883 0679 e: [email protected]
A look at property valuation and management qualifications available at the University of Johannesburg
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education, training and development
Partnering with UJ
SAPOA Valuations Workshop series for 2015
University of Johannesburg Annual Prize Giving Breakfast in the spotlight
SAPOA in partnership with the University of Pretoria is planning a series of Valuations Workshops for 2015
SAPOA has a close relationship with the University of
Johannesburg, especially the Department of Finance & Investment Management, under which the Property Valuation and Management qualifications and the SAPOA Educational Short Learning Programmes fall.
On 23 April, the Department of Finance & Investment Management honoured its top-performing students for the 2014 academic year at the Johannesburg Country Club.
Various associations – including the South African Council for Valuers, SAPOA and the South African Institute of Chartered Accountants, and others that are involved in the allocation and sponsoring of bursaries, providing internships and graduation programmes, serving on the Department of Finance & Investment Management advisory committees, and sponsoring top performance awards – were present.
For the Property Valuation and Management qualifications, Martin Ferguson from SAPOA and Andrè Kruger from the Property Division of the Department of Finance & Investment Management were invited to present the award to
the Top Performing Student, Nichole Leigh Maroun, who achieved the highest marks in Property Valuation and Management 2 during the 2014 academic year.
We wish Nichole all the best with her future studies and trust
that she will be rewarded again next year for her 2015 academic achievements. We congratulate the Department of Finance & Investment Management on this great initiative and wonderful event in honour of their top achievers.
The Valuation Workshops will be offered monthly for the
remainder of the year. They will be full one-day workshops and will deal with the following topics on the indicated dates. Venues will be confirmed and will either be at the University of Pretoria or in Midrand:
● 3 July 2015: Advanced income capitalisation valuations
● 21 August 2015: Commercial property economics
● 18 September 2015: Principles of discounted cash flow valuations
● 23 October 2015: Highest and best use valuations
● 13 November 2015: Valuation of properties under construction
● 4 December 2015: Principles of feasibility studies
The workshop fees for SAPOA members will be R2 150 per workshop (including VAT).
The workshop fees for non-members will be R2 500 per workshop (including VAT). If delegates register and pay for all workshops before commencement of the first workshop, they will receive a 10% discount per workshop.
The workshops have been vetted by the Engineering Council of South Africa and SA Council for the Property Valuers Profession, and CPD credits will be allocated. See Sapoa.org.za for more details.
To register or for enquiries, please contact: Banele SenatlaCourse Coordinator t: +27 (0)012 434 2630 e: [email protected]
FROM LEFT Martin Ferguson, Nichole Leigh Maroun and Andrè Kruger
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education, training and development
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education, training and development
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planning and development
The South African Council for Planners (SACPLAN) is
the statutory council responsible for regulating the planning profession in terms of the Planning Profession Act No. 36 of 2002 (the Act). In addition to the typical functions of a statutory professional council, this includes the setting of standards and the accreditation of planning schools for ensuring and promoting a high standard of education and training in planning.
As a result of ongoing transformation since 1994 and the implications of the need for planning to be “reinvented”, in 2009 SACPLAN commissioned a consortium to undertake research into the process of preparing new competencies and standards for the planning profession.
SACPLAN has identified the need to re-evaluate the current planning competencies to ensure that the competencies enable registered planners to meet the challenges they face. What is clear is that the definition of planning in South Africa has evolved over time.
Planning was widely viewed as a technical activity concerned mainly with layouts, infrastructure design and control of land use and the built form. This was followed by a period during which planners needed conceptual and technical skills to enable them to operate effectively in an increasingly complex world where change is less predictable than in the past.
The formulation of competencies and standards for the planning profession needed
Planning education in South Africa
to be informed by four contextual factors. The first is recognising the diversity of local needs and choices: how planning can improve people’s lives while taking cognisance of diversity of cultural, gender and rural-urban relationships as well as the formality-informality continuum.
The second is the need for planning to promote sustainable patterns of development. Sustainability can be broadly understood to mean social, economic and environmental sustainability. The role of planning is to harmonise the three dimensions of economic efficiency, social equity and environmental sustainability.
The third relates to the high level of economic inequality in the country. How can planning reinvent itself and become a catalyst for providing economic and livelihood opportunities? Different forms of investment need to reflect local needs and choices, and not only represent the dominant public and private drivers of investment. This not only requires a substantial understanding of the dynamics of land markets and regulatory instruments used to influence the forces at play in those markets but also an understanding of the nature of the economies at local and community levels.
The fourth relates to the complexity of our rural history and land use practices. Planning education needs to ensure that planners are mindful of the rich history of traditional land practices and that they incorporate these into planning approaches in a way that builds on and supports indigenous practices while also
recognising the role formal and informal land markets and planning practices play in a global economy.
To achieve the above, three inter-related sets of competencies have been identified for the planning profession. These are generic, core and functional competencies.
Generic competencies are the essential skills, attributes and behaviours that are seen as important for all planners, regardless of their function or level. Generic competencies are the basic competencies common in all the built and natural environment disciplines.
Core competencies, on the other hand, include the specific knowledge, skills, abilities and experience that a planner must possess to successfully perform the work and activities central to professional planning practice. This is the set of competencies that distinguishes planning from the other professions with which it interfaces.
Functional competencies are the basic skills and behaviours needed to do a job successfully. These are competencies that relate to the “how to do” aspects of planning.
Accredited qualifications must cover the competencies at either a diploma level (NQF Level 6), a three-year bachelor’s degree level (NQF Level 7), or a four-year professional bachelor’s degree level, honours degree level or master’s degree level (NQF Level 8 or 9).
A professional planner (a person who holds a qualification on NQF Level 8 or 9 with at least 24 months of post-qualification
The South African Council for Planners places education in the spotlight
SACPLAN has identified the need to re-evaluate the current planning competencies to
ensure that the competencies
enable registered planners to meet
the challenges they face. What is clear is that the definition of
planning in South Africa has evolved
over time
By Martin Lewis
Sources SACPLAN Consolidated Report on Competencies and Standards: December 2014; SACPLAN Guidelines for Competencies and Standards for Curricula Development: December 2014
Lekgolo Mayatula is SAPOA’s Planning and Development Manager
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planning and development
Martin Lewis is the Chief Executive Officer of the South African Council for Planners
experience) must demonstrate a good conceptual grasp of the field of urban and regional planning as practised in South Africa and an ability to assess a situation that requires planning intervention and formulate appropriate responses; provide leadership to fellow professional planners, professionals in related fields, communities and other stakeholders in the planning processes; and possess some specialist planning knowledge or skills.
As indicated, SACPLAN is mandated to accredit planning schools with the aim of ensuring and promoting a high standard of education and training in planning. There are eleven institutions of higher education that offer planning at NQF Level 6 or higher. SACPLAN has accredited qualifications of the following institutions:
● Cape Peninsula University of Technology (National Diploma: Town and Regional Planning (ND TRP) and Bachelor of Technology: Town and Regional Planning (BTech TRP));
● Durban University of Technology (National Diploma: Town and Regional Planning (ND TRP) and Bachelor of Technology: Town and Regional Planning (BTech TRP));
● North-West University (Bachelor of Arts ET Science (Planning));
● University of Cape Town (Master in City and Regional Planning (MCRP));
● University of the Free State (Master in Urban and Regional Planning (MURP));
● University of Johannesburg (National Diploma: Town and Regional Planning (ND TRP) and Bachelor of Technology: Town and Regional Planning (BTech TRP));
● University of KwaZulu- Natal (Master of Town and Regional Planning (MTRP));
● University of Pretoria (Bachelor of Town and Regional Planning (BTRP) and Master of Town and Regional Planning (by coursework) (MTRP));
● University of Venda (Bachelor of Urban and Regional Planning (BURP)); and
● University of the Witwatersrand (Bachelor of Science Honours in Urban and Regional Planning (BSc Hons (URP), Bachelor of Science in Town and Regional (BSc TRP), and Master of Science in Development Planning (MSc (DP)).
Property developers who wish to appoint an urban and regional planner must ensure that such a planner is registered with SACPLAN. Registration with SACPLAN as a professional or technical planner validates a person’s professional knowledge, experience and commitment to working to highest standards, and indicates that the person is a responsible member of the planning profession, working under a Code of Ethics and Professional Conduct.
If a planner is successfully registered with SACPLAN,
property developers can expect that person to have a knowledge of urban spatial structure or physical design and the way in which cities work; an ability to analyse demographic information to discern trends in population, employment and health; a knowledge of plan-making and project evaluation; an understanding of local, regional and national government programmes and processes; an understanding of the social and environmental impact of planning decisions on communities; an ability to work with the public and articulate planning issues to a wide variety of audiences; an ability to function as a mediator or facilitator when community interest conflict; an understanding of the legal foundation for land use regulation; an understanding of the interaction between the economy, transportation, health and human services and land-use regulation; an ability to solve problems using a balance of technical competence, creativity and pragmatism; and an ability to envision alternatives to the physical and social environments in which we live.
Registration with SACPLAN as a professional or technical planner validates a person’s professional knowledge, experience and commitment to working to the highest standards, and indicates that the person is a responsible member of the planning profession, working under a Code of Ethics and Professional Conduct
For more information, please contact: Martin Lewis Pr. Pln, MRTPI, CEO South African Council for Planners t: +27 (0)11 318 0460/0437 e: [email protected] w: Sacplan.co.za
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Deconstructing investing in property
The South African property sector has been a huge winner over the last decade, returning 22% per year compared with 18% for the FTSE/JSE All Share Index (ALSI). Allan Gray discusses how the sector has
managed to perform so well, why this performance is unlikely to be repeated, and why property companies may be more risky than they appear at fi rst glance
By Allan Gray Associate Portfolio Manager Jacques Plaut and Investment Analyst Yusuf Mowlana
The past decade has been a very good one for property investors. Those investors,
ourselves included, who were underweight in the sector, lost out.
Looking back, we underestimated the extent to which interest rates would decline and stay low under a very accommodative monetary policy in developed countries, and we underestimated the ability of some management teams to add value to their portfolios.
On top of this, the resulting tailwind to valuations allowed listed property companies to bene� t from earnings-enhancing acquisitions in South Africa and overseas.
While this past decade’s performance has been fantastic, it is unlikely to be repeated. Investors who buy into the sector today are only getting a 5,1% initial dividend yield. This might not seem so much more expensive than the 8,7% yield they would have received in 2005, but it equates to a 70% price increase.
The sector’s eight percent growth over the last 10 years is better than in� ation, which has averaged six percent, but worse than the average JSE-listed company, which has grown dividends at about 16% per year over the same period. Even this relatively modest eight percent is an overstatement of underlying growth because it has been boosted by acquisitions and by property companies paying less interest on their debt.
More generally, the upside of owning a property share is limited compared to other businesses. Some companies can reinvest earnings at a 30%-plus return on equity; property companies tend to do single digits.
This is probably partly the result of the di� erent competitive position. Despite location advantages, most malls and o� ces can be replicated, but it is harder to compete with an established brand such as Cartier or the technology and commercial innovation expertise at work in Tencent.
In the last � ve years, there have been 29 new property listings, more than in any other sector. These have been driven not only by favourable valuations but also by recent changes to regulations that now favour listed property over unlisted property.
Large new o� ces are under construction in Sandton, Johannesburg, despite already-high vacancies, generally low levels of net space uptake and a trend towards more e� cient use of space. In most industries, high levels of investment coupled with more competition equal lower returns for existing players. With capacity expanding ahead of demand growth, certainly one should expect lower growth in dividends for the next part of the industry cycle.
Lastly, re-valuation has added six percent to overall returns over the past 10 years but this may not be the case over the next 10. Because interest rates are currently zero in many countries, investors are paying high prices for risky assets such as shares, junk bonds and property. This has bene� ted South African property companies, which are currently trading at record-high valuations.
The large South African property companies in the sector currently trade at a premium to the 10-year rolling bond yield, which was previously only surpassed in 2007 during the last decade.
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22 SOUTH AFRICAN PROPERTY REVIEW
theme leader
Investors appear to be pricing in future growth, which is higher relative to history. The risk is that the growth disappoints. One could argue that this will continue but on a balance of probabilities, we think it is more likely to reverse and turn into a headwind.
Risks in the sectorOne explanation for the sector’s high valuation could be that investors see very low risk to current earnings. We think this view is optimistic.
Many companies use debt to boost their returns. There is nothing wrong with this, but the extent to which it happens in the property sector can be somewhat disquieting. Some property companies have a debt balance that is seven times larger than annual income. To put this another way, if a company in such a position applied all its income to paying o� debt – and paid no dividends – it would take seven years to pay o� all the debt.
The only other sector that is more geared than this is the banking sector. It is no coincidence that both sectors have long-term contracts with their clients and relatively stable income. But in times of stress, the large debt balances will become more prominent in investors’ minds.
Economically stressed tenants can’t always meet their commitments nor easily renew their leases. If debt holders suddenly required higher interest rates or safer covenants, equity holders would be in trouble.
If property valuers became more conservative, the ratio of debt to property value would increase, and property companies would have to raise more money from shareholders. We saw this all happen to a dramatic extent in Australia in 2008.
Property companies do not account for the replacement cost of assets like other companies do: there is no depreciation charge on the income statement. In this respect, long-term earnings are overstated, and property companies normally need to issue debt or shares to be able to pay for capital expenditure.
Take Growthpoint Properties Ltd, the largest South African property stock, as a typical example. It is clear that capital expenditure – some of which was for growth, and some of which was for replacing or upgrading of old buildings – has been paid for by borrowing money and by issuing shares. It is striking that the company has raised R7-billion more from shareholders than it has paid to the shareholders. As a result, Growthpoint Properties Ltd’s shares in issue have increased by 14% per year over this period.
To a large extent, these shares have been issued to make acquisitions – and, mostly, Growthpoint Properties Ltd has bought companies trading on a higher dividend yield than itself – in other words, companies that the market has placed on a cheaper valuation than Growthpoint Properties Ltd itself.
This operation has the e� ect of boosting earnings per share even when there is no actual organic improvement. We believe Growthpoint Properties Ltd has added real value by issuing all those shares in order to make acquisitions; however, we don’t think this is something it will be able to repeat given its current size.
Beware of paying a premiumIn hindsight, there were times in the past 10 years when we should have been more positive on property. But right now, we think that investors are paying a premium multiple for property stocks that is not justi� ed by the fundamental prospects.
The re-valuation tailwind is not likely to repeat, and may even reverse. Dividend growth has been boosted by acquisitions. We think the market does not fully appreciate all of the risks in the sector, especially the high level of gearing.
Unlike in the late 1990s, when more than 20% of our clients’ balanced portfolios was invested in property and the dividend yield on the property sector went as high as 23%, we continue to have an underweight position in the sector.
So it’s not surprising that Phumza chose Savanna City as the community
in which to grow her enterprise.
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24 SOUTH AFRICAN PROPERTY REVIEW
The Republic of Ireland is the quintessential phoenix story. Born out of political
and religious con� ict, Ireland became an independent state and transformed into one of Europe’s economic success stories in the � nal decade of the 20th century.
With a history characterised by religious tension and bitterness between Protestant and Catholic communities, Ireland’s past is � lled with clashes and uprisings.
Situated in Western Europe, occupying � ve-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain, the Republic of Ireland occupies most of the island of Ireland, o� the coast of England and Wales. Boasting a beautiful environment and an international cultural presence, Ireland is known as a prime tourist destination. It’s nicknamed the "Emerald Isle” because of its lush landscape of rolling green hills.
▼ Population 4,8-million (July 2014 est.)▼ Major cities Dublin, Cork, Limerick,
Galway, Waterford▼ Currency Euro (EUR) ▼ Total area 70 273km²▼ GDP growth 3,6% (2014 est.)▼ Key industries Pharmaceuticals, agriculture,
chemicals, computer hardware and software, food products, beverages and brewing, medical devices
Key facts
Ireland is the third-largest island in Europe and the 20th-largest in the world.
Did you know?
After taking a fi nancial knock, Ireland is rising
from the ashes
By Candace King In 1948, all ties to the British monarchy were severed and the modern-day Republic of Ireland formed. In 1973, Ireland joined the European Community and the Eurozone currency union in 1999 – it was a founding member of the euro. Thereafter the country transformed from a largely agricultural society into a modern, high-technology economy.
Tax cuts, deregulation and a policy of negotiated pay restraint introduced in the late 1980s transformed Ireland’s economy. With an in� ux of foreign investment, it became one of the top economies of the time and unleashed a period of rapid growth. The country became known as the “Celtic Tiger” from the mid-1990s onwards, boasting an average GDP growth of six percent between 1995 and 2007.
The boom attracted a growing number of incomers, creating a new multiculturalism.
The Celtic Tiger rises
The
WORLD series ● Our monthly country-by-country focus ●
Eye On The World Ireland_SUBBED.indd 24 2015/06/15 10:08 AM
25SOUTH AFRICAN PROPERTY REVIEW
eye on the world
Ireland is the only country in the world that has a musical instrument – the harp – as its national symbol.
Did you know?
After 2000, Ireland’s growth was characterised by a property boom, which was fuelled by large bank lending. This boom collapsed as a result of the 2008 global financial crisis, sending Ireland into one of the Eurozone’s deepest recessions. The country also suffered public debt and heightened unemployment, while also experiencing a subsequent collapse of the domestic property market and construction industry.
In return for agreeing to implement strict austerity measures, the Irish government had to accept an EU/IMF bailout of €85-billion in 2010. Between 2010 and 2013, Ireland relied heavily on international lenders. In 2009, the country introduced the first series of draconian budgets in order to stabilise its fragile banking sector.
It was in 2013 that things finally began to turn around for Ireland: the country’s economy pulled out of its second recession since the 2008 crisis, and became the first Eurozone nation to leave the bailout scheme.
From the ashesIreland is slowly beginning to recover. The turnaround is largely being stimulated by growing foreign direct investment, especially from US multinationals.
In 2014, Ireland’s economy improved rapidly – it was one of the fastest-growing economies globally that year, with the GDP growth of approximately five percent representing the highest in the Eurozone.
Foreign direct investment continued to perform strongly last year with the IDA recording 197 investment projects realised, of which 88 were entirely new to the country. The recovering economy assisted in lowering the deficit to 4,2% of GDP. Towards the end of 2014, the government introduced a fiscally neutral budget, resulting in the end of the austerity programme.
Amid the collapse of the construction sector and the downturn in consumer spending and business investment, Ireland’s export sector has become an important aspect of its economy.
Characterised as a small, modern, trade-dependent economy, Ireland’s high birth rate has made it demographically one of the youngest populations in the EU. The country is also active in international peacekeeping and pursues military neutrality. One of Ireland’s key issues is unemployment; Ireland’s low corporation tax of 12,5% has been at the heart of the encouragement of business investment.
Once steered by agriculture, Ireland’s economy is now dominated by its IT sector. According to the Harvard Business Review, Ireland has been listed alongside Israel and Singapore as a “standout” country – where the digital economy is moving at its fastest.
The situation in Ireland is becoming more positive. Consumer confidence is at its highest since 2006, unemployment is decreasing steadily and the attractive improvements to taxation have resulted in increased disposable income.
In light of this, Ireland’s property market is starting to show signs of positive growth.
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27SOUTH AFRICAN PROPERTY REVIEW
eye on the world
Property investors, esepcially those in dollar-denominated countries or with currencies pegged to the dollar, can find Ireland attractive, with purchasing power rising as the euro moves closer towards parity.
Property in luckIn 2014, the performance of the commercial sector exceeded all market expectations, with end-of-year commercial market investment in excess of €4,5-billion. A record figure of €4,5- billion was also invested into the Irish property market. In 2014, the Irish property market outperformed both Irish bonds and equities, which in isolation performed very strongly, with returns of 23,1% and 16,9% respectively.
In the final quarter of 2014, overall returns from the Irish commercial property investment market grew by 40,1% year-on-year. This is according to a recent IPD/SCSI Property Index.
In Q4, the Irish office sector led the overall market, returning 8,7% and 45,3% year-on-year, compared to 18,3% in 2013. In terms of retail, the returns reached 8,8% in the final three months of 2014 and 34,7% over the year as a whole.
While the first months of 2015 showed a decline in Ireland’s residential property market, recent property data has shown an upward price trend. According to the Residential Property Price Index, average house prices increased nationally by 0,6% during April.
According to the data, April saw national average property prices at 15,9% higher than a year earlier, with Dublin’s prices inflating by 20,2% for the same period. The rental market has also shown signs of improvement: the country has experienced considerable growth in rents, with the data showing that private rents increased 8,7% year-on-year in April.
Ireland’s capital Dublin has been earmarked as an investment hotspot for property investors in 2015. The upliftment of commercial property in the capital has also begun to be seen in other areas. However, there are concerns regarding the health of the property industry in Ireland. The core concern is that prices will continue to rise, driven by a severe lack of supply, which could lead to instability in the housing market.
Furthermore, the bottleneck in supply together with an improved lending climate and increased investor interest will result in the market combusting.
There have been warnings that the supply of homes in the Dublin area could be depleted by 2015. The number of new housing units to be built in 2015 is expected to increase to 10 000, following 8 800 completions in 2014. Property experts estimate that supply needs to at least triple to catch up with demand.
The shortage of houses and commercial property in Dublin is resulting in rising prices and rents, while on the other side, significant oversupply and falling populations in rural areas are depressing prices in other parts of the country.
An important aspect of the Irish commercial property sector is the recent introduction of the real estate investment trust (REIT) system. The first Irish REIT launched on the Irish Stock Exchange in July 2013. Since its inception, substantial funds have been raised by various REITs, including Green REIT and Hibernia REIT PLC.
The latter recently said that its first full year marked a period of intense activity in Ireland’s recovering property market, as the REIT invested €445-million and committed €43- million to 14 transactions.
Looking towards the future, there are mixed forecasts regarding the outlook of the Irish property market – only time will tell where the luck will go.
Sources: MSCI; KTI; OECD
The longest place name in Ireland is that of Muckanaghederdauhaulia, in County Galway.
Did you know?
INCOME RETURN VS BOND YIELD
0
1
2
3
4
5
6
7
8
9
Sout
h Af
rica
New
Zea
land
Irela
nd
Aust
ralia
Cze
ch R
epub
lic
Finl
and
Pola
nd
Belg
ium
Sout
h Ko
rea
Port
ugal
Net
herl
ands
Nor
way
Spai
n
Hun
gary
Italy
USA
Ger
man
y
Can
ada
UK
Fran
ce
Swed
en
Den
mar
k
Aust
ria
Switz
erla
nd
% Relative Pricing in 2014 For Selected CountriesSpread Between All Property Income Return and 10 - Year National Bond Rate
613
bpts
Ireland has the largest spread
Income return vs bond yield
Sources: MSCI; KTI; OECD
25 IPD measured markets for the year to December 2014
Total Returns to 2014 Across Global MarketsAll Property Annual Returns
IPD GLOBAL PROPERTY INDEX (GPI)— NATIONALMARKETS
IPD Global Property Index 2014
Eye On The World Ireland_SUBBED.indd 27 2015/06/15 11:20 AM
28 SOUTH AFRICAN PROPERTY REVIEW
SAPOA Bursary Fund
Big Bursary announcementStill remaining focused on raising funds for its bursary scheme, SAPOA announced at Convention that R40-million has been approved for the organisation’s Bursary Fund
SAPOA announced at the Annual SAPOA International Convention and Property
Exhibition in Durban that it has raised R40-million for its Bursary Fund.
“Over the next four years, R40-million has been approved for 100 bursary students,” said Head of STANLIB Direct Property Investments and Outgoing SAPOA President Amelia Beattie. “We have surpassed our original goal of 50 students.”
The money was raised through a contribution by the Services SETA (SSETA), after negotiations with SAPOA took place over the previous seven weeks.
Pamela Snyman, a board member of the SSETA who represented the Chair of the SSETA at the Convention, said, “My wish and goal is to see, through SAPOA, these students
partaking in postgraduate degrees after the next four years.”
Passionate about real estate and education, Snyman highlighted that initiatives such as the SAPOA Bursary Fund are exactly what the country needs. “We need skills today and we all need to stand up together and do something – we need to � y high and we need aspiration,” she said.
Through education, training and skills development, SAPOA can assist the youth and budding entrepreneurs in becoming independent. “They also need to be focused and relentless in their goals and dreams,” she said. “The youth need to stay current and up to date, and face challenges head on.”
In an e� ort to address transformation in the property industry and to alleviate the
skills shortage in the country, SAPOA established a bursary fund scheme � ve years ago, which has garnered much success since its inception.
“The SAPOA Bursary Fund was initiated with the sole objective to create a fund in the commercial property industry for scholarships and bursaries for previously disadvantaged individuals,” says SAPOA Chief Executive O� cer Neil Gopal. “These students are taken through a four-year BSc degree, with the fund fully managed at the SAPOA head o� ce, which takes the intensive administrative matters out of our members’ hands. On completion of their degree, the students are placed with member companies by SAPOA. The future of our nation depends on how we invest in our youth.”
BACK ROW, FROM LEFT Meshack Phiri, Ntwanano Hlekane, Andile Chabani, Abdullah Sidat and Edwin Ndlovu FRONT ROW, FROM LEFT Neil Gopal, Joy Rakgoale, Wendy Ngomane, Katlego Maboko, Nokulunga Lushaba, Martin Ferguson, Matimba Ngobeni, Nomzamo Radebe
Other current SAPOA Bursary Fund students (not pictured):
Nomahlubi Ndziba BSc Honours Property Studies First year University of Cape Town
Happy Boy Mnisi BCom Honours Property Valuation & Management First year University of Johannesburg
Olebogeng Moagi BCom Finance Third year University of Johannesburg
Irene Tsotetsi BSc Town and Regional Planning Final year University of Pretoria
Lehlohonolo Mosotho BSc Town and Regional Planning Third year University of Pretoria
Bianca van Niekerk BSc Honours Urban and Regional Planning First year University of the Witwatersrand
Itumeleng Nambo BSc Property Studies First year University of the Witwatersrand
Nande Kizza BSc Honours Real Estate Second year University of Pretoria
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SAPOA Bursary Student 2015 Intake
29SOUTH AFRICAN PROPERTY REVIEW
Nokulunga LushabaBCom Finance (� nal year),
University of Johannesburg
Matimba NgobeniBSc Honours Urban and Regional
Planning (� rst year), University of the Witwatersrand
Andile ChabaniBSc Construction Studies (third year),
University of the Witwatersrand
Abdullah SidatBSc Construction Studies (third year),
OBJECTIVES OF THE SAPOA BURSARY FUND◆ To transform the commercial property industry
demographics to reflect the population demographics
in South Africa.
◆ To redress the past by offering black disadvantaged
individuals funding for property related education.
◆ To have financially sound solid governance structure
and processes.
◆ Promote the Commercial Property Industry at both school
and tertiary levels to students from black disadvantaged
backgrounds to ensure growth into the future.
◆ Address the current and future skills shortage levels in the
Commercial Property Industry.
AREAS OF STUDYSAPOA offers bursaries for full-time South African University and University
of Technology studies in the following disciplines:
◆ Property Studies
◆ Legal Studies
◆ B Com – Accounting and Finance
◆ B Com – Property Valuation and Management
◆ Studies in the Built Environment
◆ BSc Quantity Surveying
◆ BSc Town Planning
The SAPOA Bursary Fund is audited by PriceWaterHouseCoopers
INVESTING IN THE FUTURE OF PROPERTY LEADERS The South African Property Owners Association (SAPOA) is a member
driven organisation that aims to represent, protect and advance its
members’ commercial and industrial property interests within the
property industry in terms of ownership, management and development.
Its objectives are based on the principles of the free enterprise system,
as the only workable economic system and the inalienability of property
ownership, not only for its members but also for the future of South Africa,
and its competitiveness in the world arena.
SAPOA is committed to searching for the most talented people who
will add value to our members and the industry in its entirety by providing
tertiary educational support through the SAPOA BURSARY FUND.
The SAPOA Bursary Fund was established in 2009.
SAPOAThe SAPOA Bursary Fund is funded primarily by SAPOA members.
External bursary funding from any non-member companies and
Government will be welcome as it will assist in transforming the
commercial property industry and up-skill the nation.
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SAPOA Bursary Student 2015 Intake
31SOUTH AFRICAN PROPERTY REVIEW
SAPOA PARTNERSHIPSThe SAPOA Bursary Fund wishes to partner with its members, non-member companies and Government in investing in the future of property leaders.
There are three options available to contributors:
OPTION 1Companies who contribute for the full degree of one or more student will have first option to take one or more students for vacation work and to offer a full-time position after the student has successfully completed the degree.
OPTION 2Companies who contribute for a full academic year will have an option to take a student for vacation work and to offer a full-time position after the student has successfully completed the degree.
OPTION 3Companies who contribute smaller amounts are not excluded from participating in providing vacation work for students however; the exposure to students will be less. These companies may offer full-time employment to the bursary student at the end of the bursary period.When potential partners choose their contributing option we urge them to take the following into account.
◆ If you provide funding for only one year, who will fund the balance of the years for the student to obtain a degree?
◆ In these instances the bursary scheme can only fund final year and honours students and not full degrees.
VALUEStudy bursaries may provide the following:
◆ Registration fees
◆ Tuition fees
◆ Exam fees
◆ Accommodation and Meals fees (within reason)
◆ Mandatory books / papers where they are listed as
recommended reading
◆ Other training courses that will assist the student
WORK OBLIGATIONAll bursars will be required to perform vacation work or in-service
training, whichever applies, in their field of study at the funding
SAPOA member company.
After obtaining the degree, bursars must work for the funding SAPOA
member company for years in respect of each year for which they received
a bursary or repay the bursary costs incurred by the bursary fund.
CONTRACTUAL OBLIGATIONSA contract will be entered into between the SAPOA Bursary Fund and each
successful applicant, reflecting the terms and conditions of the bursary.
An important condition of the bursary is that bursars who fail to
complete their designated course of study will be required to repay
the bursary costs incurred by the SAPOA Bursary Fund.
WHAT IS IN IT FOR SAPOA BURSARY PARTNERSSAPOA will administer the bursary fund and the students on behalf of
the funding partners.
◆ Partners can concentrate on running their core businesses.
◆ Partners can determine the skills shortage and have an input in
specifying the qualifications required to address the skills shortage.
◆ Partners can o� er vacation work and provide practical experience.
◆ Partners will qualify to claim points on their BBBEE scorecards
under Statement 300 (Skills Development)
or Statement 500 (Socio-Economic Development).
◆ A certificate confirming the SAPOA Bursary Fund is compliant in
accordance with the B-BBEE Codes, (Skills Development and
Socio-Economic Development), will be issued to
contributing partners.
◆ Skills shortage of PDI’s in the industry will automatically be addressed.
◆ Partners will be able to monitor how and where their money is spent.
◆ Partners will be in a position to employ students once they graduate.
◆ Being registered, bursary fund partners will be issued with a
Section 18 (a) certificate that will allow TAX deductions from SARS.
WE ARE LOOKING FORSAPOA is seeking sponsorship and funding assistance from our members,
non-members and government for the SAPOA Bursary Fund to provide
graduates who are skilled in commercial property for placement in the
public and private sector.
CLOSING DATE FOR APPLICATIONSThe closing date for bursary applications is 31 July of each year.
Study bursaries are open to all Grade 12 students with a minimum of a
C symbol / 60% in Mathematics, Science and Accounting.
This also applies to students who are already studying at a University or
University of Technology.
The Universities have different requirements for the symbol needed in
these two subjects.
Students therefore need to contact them directly for further information.
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32 SOUTH AFRICAN PROPERTY REVIEW
interview
Q What is Durban planning to do to raise its profile nationally and internationally?There’s a strong thrust on both the tourism front and investment promotion front. The tourism one is perhaps a bit more public, easier to see. Through the city’s own interventions and also private business success, in the last six months Durban has won four or five key accolades.
One, we’ve been included in the new 7 Wonder Cities of the World; two, The New York Times rated Durban number seven on its list of top 50 places to go; three, there’s a global consulting company called Mercer, which does a quality-of-living index of 230 cities, and Durban came out as the number-one city on the African continent and number one in South Africa by default (higher than Cape Town and higher than Johannesburg).
We sit at position 85 out of a total 230. That also puts us in the top five of the whole of the Middle East and Africa.
By comparison, the quality of living in Dubai – the “haves” – is at 74. The suggestion is that when we sort out crime and grime, we will rocket from 85 into the top 50.
Then, National Geographic has rated its top 10 metropolitan port cities globally – we’re rated at number seven.
On the investment side, the city continues to attract investors, and we’re having probably our best success of late both in the CBD and the surrounds. The Durban Investment Dashboard has about 65 projects – in excess of R650-billion worth of investments. Interestingly enough, a fair number of foreign investments are in there as well. Samsung is a public one we can talk about, but we’re also engaged with other multinationals that want
Durban in the hot seatSouth African Property Review caught up with eThekwini Municipality officials Russell Curtis, Head of Durban Investment Promotion (DIP), and Dr Ajiv Maharaj, Deputy Head of the Policy, Strategy, Information and Research Department (PSRI), part of the Economic Development and Investment Promotion Unit, to discuss the City of Durban’s investment strategy and its way forwardBy Anne Schauffer
Durban came out as the number-one city on
the African continent and number one in
South Africa by default (higher than Cape Town
and Johannesburg)
eThekwini Municipality Interview_SUBBED.indd 32 2015/06/15 10:25 AM
33
interview
SOUTH AFRICAN PROPERTY REVIEW
to relocate their manufacturing, commercial or other facilities. It’s reflected in other areas too, such as the number of tower cranes in the centre of Durban (currently six or seven, which we haven’t had for 20 years). Durban is doing a collective job of both the private and public sector. Government can’t take credit for this because it’s a combination of what private investors and the public sector people are doing to raise the profile of Durban on both the leisure-tourism front and the business-investment one.
Q What is Durban doing or planning to do to put itself on the investment map ahead of Johannesburg and Cape Town?Of the new developments that the city has on the Durban Investment Dashboard, the city leadership has decided to take the top
20 projects, pull them into an elevated structure under the deputy city manager, and attach more senior project managers to those flagship investment projects to accelerate them through the regulatory processes. That’s just happened in the last month. It’s been a concerted six-month effort to raise the priority of projects, to raise the reporting of projects, and to add additional human and financial resources to accelerate delivery of these projects.
At the same time, there’s been a nice resonating partnership with national government, particularly in the form of the national treasury, national economic development and the DBSA, who have recognised that our growth in job numbers and in property rates can principally come through catalytic flagship projects. The likes of the national treasury and the DBSA have started to apply some of their own funding to these projects to help accelerate them, thus creating additional resources and platforms for the private sector to come on board with its land, its ideas and its capital, and to start to accelerate not only the scale and number of projects, but also the pace at which they move forward.
The city’s also looking at creating a kind of one-stop shop for investors – certainly for your key kind of investors initially and then rolling them out further – to improve the bureaucratic process of submitting plans, getting approvals and so on.
Another initiative that will be going through to council quite soon is the development of an incentive policy – looking at how we can incentivise certain types of development to meet different objectives for the city, such as job creation and so on.
There are a lot of potential partnerships with the city and the different spheres of government, particularly the national treasury. There is also an approach that the treasury is promoting, and Durban has translated that into the local context. I think there is also a need for more detailed interaction between the city and SAPOA members to help understand all of that and to see that we’re promoting and directing development.
Q How can the private sector work more collaboratively with the city?There was a question around rates – not a question from us. We don’t see it as a question of local government, administration and the private sector. It’s one problem, a joint problem; we need to sit together to see how we can solve such problems and find the best way of solving them.
FROM LEFT Dr Ajiv Maharaj, Deputy Head of the Policy, Strategy, Information and Research Department (PSRI) and Russell Curtis, Head of Durban Investment Promotion (DIP)
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34 SOUTH AFRICAN PROPERTY REVIEW
interview
It’s not just a question of the city dictating what it thinks its approach should be but also a way for the private sector as a collective to understand the total problem that the city is facing and to discuss possible solutions.
That’s critical. Other elements where the private sector is already coming closer to partnering with the city’s infrastructure? I think we all concede inside the city leadership what the private sector has known for a lot longer – that we cannot continue to roll out bulk infrastructure in the same way. We can’t continue to finance it in the same way, construct it in the same way, manage it in the same way.
It’s great that there are partners in the private sector – many may not want to be named, but SAPOA is one – and there are others who are coming, helping to herd us all closer to alternative bulk infrastructure financing options and alternative bulk infrastructure contracting, construction, operating and maintenance. I think that’s a key space, one that Durban has not explored or delivered on in the past.
We have a forum which has come together, which I’m happy to say is led by the private sector – although it does have the support of provincial government and some parts of eThekwini Municipality’s leadership. It’s focusing on some potential pilot projects, not work done in a vacuum; it’s not an academic or theoretical exercise. We’re trying to target some very specific projects where we can get these alternative forms of bulk infrastructure financing put in place. And it’s a key spot where the private sector and the public sector must come closer together.
To add to this, I think that in the past, the way in which we’ve done planning in the city was based on certain principles. The private sector, on the other hand, develops according to where it thinks the market is going. But the two haven’t necessarily come together – so we end up doing plans that look very nice, but that don’t work in terms of implementation.
There seems to be a meeting of minds, there seem to be market forces coinciding with city plans. I think for us to take our vision and focus forward, we need to share as much information as possible with the private sector because ultimately the success of those plans depends on the private sector coming to the table.
There’s another, or rather, a few other new structures in which the city hasn’t had as much focus. We have an urban renewal steering
committee which started a year or so ago, and that’s playing a key role in helping to accelerate some of the urban CBD regeneration. It covers things such as social housing, port partnerships, private sector investment in the Point and other places.
For the first time in a long time, there seems to be a convergence of minds around the fact that we need to accelerate the scale and pace of our investment, and we need to do it in partnership with the private sector.
Q There is a dire need for one form of one-stop-shop philosophy within the city where key investment and development decisions can be dealt with efficiently, proactively and professionally, and with a single city voice. Are there plans in place to implement such an approach?There are many ways to get things done. That “one-stop shop” is a work in progress; some people want it, others remain unsure about it. Being a work in progress, it’s the direction we’re moving towards; the shape, form and timing of it I can’t specify.
To add to that, the city’s incentive policy (still in draft form) and the industrial land strategy, which was done by the city in consultation with SAPOA members, are both pointing in the direction of a single point of entry for particularly strategic types of developments.
Q Greenfields development is inherently risky, but it’s what grows the rates base, and facilitates new investment, new commercial opportunities and new jobs. Is there space for some form of “assistance” by the city, around firstly, punitive rates charges on vacant land rates during the pre-occupation stages of development, and secondly, to look at alternative funding and financing models for procuring major new road infrastructure that open up new development areas?That’s absolutely something we’re looking at. I’d like to talk a bit about the incentive policy because it absolutely speaks to these kinds of issues. One, I think, is the “non-financial” incentives, which is your one- stop shop improvement, speeding up the process of approvals, and so on. That’s part of the incentive policy as well. Your financial incentives look at precisely what you mentioned, addressing the issue of punitive rates – where developers intend to develop.
“On the investment side, the city continues to
attract investors, and we’re having probably
our best success of late, both in the CBD and the surrounds. The Durban Investment Dashboard has about 65 projects –
in excess of R650-billion worth of investments”
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Provided there’s a case on the table – some sort of definite development proposal – the city can look at the issue of punitive rates.
Those issues are covered within the proposed incentive policy.
There are also other issues around financial incentives. The city is trying to promote a particular spatial plan, so the incentives are not going to be just anywhere in the city; they’re going to be promoting nodes of development and corridors of development (transportation corridors, built areas, and so on), not the whole municipality. Infrastructure costs are a huge constraint to the City.
Another thing that the incentive policy provides for is partnerships in terms of infrastructure. Where developers and the private sector are willing to come to the party in terms of providing bulk infrastructure, there is definitely provision for some kind of incentive around that.
Q The electricity situation has a hugely negative impact on the property sector. Load shedding is said to remain part of daily operations for at least two more years. What plans is the municipality putting in place to assist the property industry?First off, we’re a little disadvantaged in as much as we don’t have our own localised generation taking place, so we need to acknowledge that – like many other places – we’re at the mercy of Eskom. Having said that, what we do have an advantage as the City of Durban, is that we own and control the distribution network – so at least on that score, we’re better off than other places. They have to rely on Eskom’s energy, and they have to rely on Eskom being the controller of the distribution and the billing.
We don’t have the latter challenge. We run our own infrastructure and own it, and we want to expand it quite significantly. We run our own pricing – yes, subject to the Eskom pricing – so that’s the first acknowledgement. What the city leadership (through the mayor, the city manager and deputy mayor) has realised is that we can no longer stand by and do nothing with regards to load shedding, so they have formed an ad hoc committee on load shedding. That committee has looked at two things:
Firstly, the critical installations of the municipality also get load-shed, for which we need to find solutions. Take our clinics, for example: you have temperature-sensitive
vaccines and so on. So there’s a whole body of work inside the city. In terms of waste-water treatment works: when the power goes out, you can’t do what you need to do with waste water.
The other stream of work I’m happy to say involves and engages business. We have engaged with the Durban Chamber of Commerce, the KZN Growth Coalition, a range of the industrial clusters – Durban automotive cluster, chemicals cluster, maritime cluster, textiles and clothing – and on that leg of the business front, what we want to do, what the mayor, city manager and deputy mayor want to do, is to communicate to business that this structure at the highest level of the city exists.
To broaden the channel of communication for business, business needs to tell the city leadership two things: one, what are the potential impacts of load shedding from job loss or revenue point of view, so we can start to aggregate that information and use it as a tool to get certain changes we want to take place; and two, things we want from business are technical recommendations – so from big business in different sectors, technically, what are the technical engineering, electrical, management suggestions that business wants to make to Durban Electricity and to Eskom, as to how we can better manage load shedding.
We need to concede that load shedding is going to be a threat for the next couple of years. In that time, what does business suggest we do with regards to how we manage that load shedding? Some of those technical solutions have begun to come forward from business; one of the terms is “load curtailment”, so certain businesses are able to voluntarily curtail their load in exchange for not necessarily being switched off (i.e. absolutely shed). We want to communicate to business that the ad hoc committee for load shedding exists; we want to broaden the communication with business to get technical solutions; and together, we can go as both the City of Durban and business to Eskom with our complaints, concerns and technical recommendations.
There are things that Eskom needs to hear from us, things that Eskom needs to do that we ask them to do, from both the public and private partnership perspective. That is all managed by the city manager’s office and the mayor, and there is a full-time senior business continuity manager who’s been attached to this task to develop new plans. He has already engaged with the business structures, and SAPOA is welcome to engage with them.
“We need to concede that load shedding is
going to be a threat for the next three to four
years. In that time, what does business suggest we do with
regards to managing that load shedding?
Some technical solutions have begun to come
forward from business”
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development
The pulse of the baySet to be a game-changer
in retail, the much-anticipated Baywest Mall in Port Elizabeth
is fi nally open for business
Regarded as South Africa’s “most advanced mall”, the super-regional, R1,7-billion
Baywest Mall welcomed more than 38 000 eager shoppers during its � rst o� cial day of trade on 21 May 2015.
Just 24 months after ground broke on the 90 000m² mall, Eastern Cape Premier Phumulo Masualle declared it o� cially open, saying it would be a major boost for the province’s economy.
Baywest Mall is located on the western side of Port Elizabeth along the N2 national highway. It is the catalyst and � rst phase in the development of the multi-billion-rand greater Baywest City Precinct, which is being undertaken by the Billion Group and Abacus Asset Management.
The 320-hectare R6-billion Baywest City Precinct will be mixed-use, encompassing retail, o� ce parks, residential nodes, private schools with associated sporting facilities, hotels, a hospital complex, a motor city, a light industrial node and a lifestyle centre. It is a green� elds project, and it is estimated to be fully developed over the next 15 to 20 years.
To coincide with the opening of Baywest Mall, a new interchange over the N2 and other road infrastructure to the tune of R250-million have been completed, which will allow for direct access to the mall and future Baywest City Precinct. The road infrastructure, which will also alleviate tra� c congestion experienced in the area, is jointly � nanced by the developers and national roads agency SANRAL.
Baywest’s bells and whistlesCurrently the largest shopping centre in the Eastern Cape, the mall boasts about 250 stores, restaurants and entertainment attractions such as an ice rink, an eight-screen Ster-Kinekor cinema complex with an IMAX screen, a tenpin bowling alley, a hi-tech games arcade and an indoor dodgem cars o� ering.
Co-developers Abacus Asset Management and the Billion Group are celebrating the economic boost the development has given the region, having overshot their employment targets by 81%. According to an independent audit by BTKM, instead of 3 000 direct jobs being created during the construction of Baywest Mall, 5 418 direct jobs were created, 76,8% of which involved Eastern Cape locals. Almost 95% of employees were classi� ed as previously disadvantaged individuals (PDIs).
• Size: 90 000m² (GLA)
• Parking area: 3 500 vehicles
• Construction value: R1,7-billion
• Road infrastructure: R300-million was spent on
developing the road network in the area in conjunction
with SANRAL and the NMB Metro. The road network
includes an interchange onto/off the N2 freeway, as well
as Baywest Boulevard, linking the suburbs of Sherwood
and Rowallan Park/Bridgemeade via a road over the N2
• The mall is central to the development of the greater
Baywest City project, which will be similar in concept
Heralding the opening, Masualle addressed a crowd of VIP stakeholders and media inside the mall. “This development is a reflection of the hard work which has gone into the project over time,” he said. “A development of this magnitude has the potential to spur other developments in the manufacturing sector, and downstream industries will flourish. I am encouraged that more than 75% of people employed during construction came from the province. It is something worth celebrating. We are looking forward to the further 2 500 permanent jobs that the operation of this mall will create.”
Baywest City co-Chairman and Billion Group’s Chief Executive Officer Sisa Ngebulana said the mall was a game-changer within the national retail landscape, heralding a significant shift in investor sentiment in the Eastern Cape.
“This mall is the epitome of modern architecture with an exciting tenant mix. It offers an unparalleled shopping experience,”
Ngebulana told a delegation of political and private business stakeholders shortly before the mall’s doors opened at 10am. “The mall is a first development for a mixed-use precinct; it is the catalyst for more development to come. This has been a long journey; one which started all the way back in 2006.”
Fellow co-Chairman of Baywest City and Executive Chairman of Abacus Asset Management Jaco Odendaal said he could not help but recall the early days of the project. “We had to deal with many challenges, from relocating sensitive rocky outcrops to planning the R300-million road development around the mall,” he said.
“This mall represents some staggering statistics, such as 54km of electrical cabling used, a team of 22 architects involved in development, and a whole host of fashion tenants,” said Odendaal. “We are looking forward to having our international tenants –many of whom are firsts for the province –trade very well in this region.”
Project architect Joe Struwig of dhk Architects, described the mall as “new look at retail architecture”.
“What excited us was putting this rather large building gently into the [virgin] landscape,” he said.
Catalyst for growthAccording to Nedbank Property Finance, which financed the development, Billion Group and Abacus Asset Management “saw the potential of such an establishment to inject sustainable benefits and growth into Port Elizabeth and the Eastern Cape economy as a whole”.
“Financing the development of Baywest Mall remains one of our biggest partnerships to date, and we believe that it will make a significant contribution to the socioeconomic enhancement of the people and communities of Port Elizabeth,” said Ken Reynolds, Gauteng Regional Executive for Nedbank Property Finance.
“I will be bold enough to say that this is the most leading-edge, world-class shopping development in South Africa,” says Gavin Tagg, Managing Director of Retail Network Services, the full-service retail leasing and development specialist that’s leading the leasing at Baywest Mall. “It’s arguably the most innovatively designed mall, and it differentiates itself by being one of the most compact super-regional shopping centres. It has a totally unique architectural design in the shape of a square, which is unlike
any other super regional mall in South Africa. Most mega malls are expansive, and shoppers have to walk a long way from one end to the other. Baywest Mall has a compact layout with prime parking at every corner, always keeping the shopper in mind.”
Tagg believes the convenience of this layout sets it apart from other super-regional malls in South Africa. The comprehensive mix of 250 tenants, in addition to attractions such as the mall being home to the only ice rink in the Eastern Cape, are integral aspects of the overall world-class offering at Baywest Mall.
“Baywest Mall is ground-breaking – and while it will cater for the under-served retail market in Port Elizabeth as well as its surrounds within a 90km radius, the Baywest City development is certain to become a key part of its market and growth over the next decade,” says Tagg.
development
The Baywest development is a joint venture between two
major South African developers, Abacus Asset Management
and Billion Group. Between them, the developers have more
than 25 years of experience in retail, commercial and mixed-
use developments located in major South African cities. With
super-regional shopping centres, landmark office towers and
golf course developments, the developers have successfully
completed malls such as Hemingways in East London,
Mdantsane City in East London, Forest Hill City in Pretoria,
Eikestad Mall in Stellenbosch, Cape Gate in Cape Town and
Globalisation and technology have made it possible for links to appear in
unexpected places. This interconnectedness of economies makes it important for businesses decision-makers and investors to understand how changes in the world a� ect the local market.
In the wake of the European Central Bank’s announcement to introduce monetary stimulus to improve the economy, one is interested in how this will impact the local REITs.
The EU’s policy to introduce quantitative easing (QE) is important, given South Africa’s experience in the past six years of US quantitative easing, which is clearly visible in the performance of the local stock exchange, as well as the REITs during this time.
Since the announcement of the QE programme in 2008, South Africa saw an average 21% annual growth in foreign portfolio in� ows, coupled with the rand strengthening. The REITs gained a 13,9% annual growth during this period. This set the tone for a chain of events with weaker performances in the REITs when QE sessions ended, and recoveries whenever the programme was renewed.
In December 2013, The Fed announced that it would begin tapering the QE programmes. This has seen the rand weakening against the dollar, lower growth in portfolio in� ows into the economy and, subsequently, a lower performance in the local REITs index.
One could argue that the timing of the European Central Bank’s introduction of a QE
programme is likely to have come just at the right time for the local stock market, as the economy deals with the out� ow of US capital. However, the EU’s approach to QE is notably di� erent to that of the US programme, and it is likely to have a di� erent impact.
The magnitude of the initial programme is an example: the US’s QE programme was introduced at US$800-billion in 2008. In contrast, the EU’s €60-billion programme, valued at US$65-billion, is a mere eight percent of the US’s initial programme.
The question is, to what extent the European Central Bank’s programme will lend itself to the carry trade – and if it does, to what extent these � ows will be directed to the South African stock exchange.
Aside from the magnitude of the programme, the investment culture in the US versus that of Europe is very di� erent. Clive Ramatibela-Smith describes Europeans as more cautious and risk-averse in contrast to their American counterparts. Hence the culture of riding in the carry trade is less likely to take place in Europe.
Worse still, even if Europeans were less risk-averse, the decline in investor con� dence in South Africa is likely to have played against South Africa as an option. Investor con� dence has been challenged as a result of labour unrest, power issues and a generally weaker
growth prospect than similar countries. Ratings agency downgrades will no doubt play a role in contributing to weaker investor sentiments.
Finally, the exchange risk would likely crowd out any potential gains from quantitative easing, with the rand now trading above R12 to the US dollar.
On the upside, the absence of speculative investment � ows could contribute to stability in the local stock exchange as opposed to the volatility seen in the past. Furthermore, the JSE has continued to show a strong performance in 2015, irrespective of the unfavourable climate.
Narrowing this down to the REITs, it is clear that share appreciation will not develop from carry trade activity, or the change in monetary policy at the European Central Bank.
The REITs remain investable assets, attractive for their own value more than being carried by the market. Even in a weaker economic climate, the top 30 REITs by market capital showed an average pro� t growth of 62% year-on-year, with an overall vacancy of less than six percent in 2014.
As with any industry, the performance of listed REITs has not been balanced across sectors, and selecting the best investment boils down to the property assets in each company’s portfolio. More than sub-industry, the word in the real estate market is now “quality”.
What global monetary policy means for your REIT investments
By Zandile Makhoba, Head of Research: South Africa at JLL
Source: Grindrod, South African Reserve Bank, Standard Bank
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42 SOUTH AFRICAN PROPERTY REVIEW
eco-mobility breakfast
The temporary transformation of the Sandton CBD
The Sandton CBD will become Africa’s only car-free CBD for the month of October as many roads will be closed to allow for cycling and pedestrian activities, pop-up restaurants,
entertainment stands and food stalls
The City of Johannesburg is the host of the EcoMobility World Festival 2015, which aims
to show that the urban eco-mobile lifestyle can be implemented in cities across the world.
The festival, which takes place over South Africa’s Transport Month, is the City of Johannesburg’s endeavour to encourage the use of public transport, cycling and walking as alternative modes of transport.
Activities to encourage healthy living, such as aerobics and daily walks, will also take place in selected areas.
City of Johannesburg Executive Mayor Parks Tau outlined the concept behind the festival at the Sandton Sun Hotel in Sandton during a breakfast event held in conjunction with SAPOA on 28 May 2015.
The Sandton Central Business District (CBD), the second-busiest in the City of Johannesburg, is the host of the international event, which will temporarily transform the CBD into an urban EcoMobility neighbourhood, featuring selected road closures, park-and-ride facilities, increased pedestrian activity as well as a more intense usage of public transport.
Neil Gopal, Chief Executive O� cer of SAPOA, supports the city in its e� orts as he recognises the gridlocking and tra� c congestion in Sandton. “While we are concerned about the operational issues of the functioning of retail facilities in Sandton and the resultant impact on shopping centres, we are working with the city on these issues,” he says. “I call on other CEOs to join the mayor in this important endeavour aimed at changing people’s behavioural patterns.”
The � rst EcoMobility festival was organised in 2013 by the City of Suwon in South Korea and attracted more than a million visitors. This year’s event is also expected to attract a large number of visitors.
The primary objective of the festival is to enable behavioural change from private car use towards other transport. As such, drivers visiting and working in the CBD will be provided with park-and-ride facilities.
This year’s instalment of the festival will showcase the Rea Vaya Rapid Bus Transit system and Metro buses as alternative modes of transport; promote Jo’burg as
a cycle-friendly city; show o� and promote non-motorised and alternatively powered vehicles; promote walking; and show the bene� ts of reduced congestion on productivity, quality of life and emission standards.
The month-long festival will have di� erent components, including legacy projects, EcoMobility dialogues as well as street festivals and pop-up events.
A transport management plan has been adopted by the City of Johannesburg to encourage the CBD’s users to participate in the festival.
For the duration of the festival, there will be additional public transport in the form of the Gautrain, which will be travelling at 10-minute frequencies and increased availability of Metro buses. Accredited minibus taxis, tuk tuks, pedi cabs and electric vehicles will also be accessible to commuters.
The festival is not only expected to gear vehicle users’ minds closer to considering alternative means of commuting but also to signi� cantly alter the travelling routine of the daily Sandton CBD commuter.
eco-mobility breakfast
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eco-mobility breakfast
ABOVE City of Johannesburg Executive Mayor Parks Tau with SAPOA Immediate Past President Amelia Beattie and SAPOA Chief Executive Officer Neil Gopal OPPOSITE Parks Tau discusses the role of alternate modes of transport in the Sandton CBD BELOW Delegates networking
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Ernst & Young takes the building industry to new heights. Ernst & Young’s new building stands out as an iconic addition to Sandton’s skyline with its futuristic protruding glass design that is unlike anything you’ve seen in the vicinity.
Consisting of two conjoined buildings that rise to 8-storeys, Ernst & Young’s new head office embodies the firm’s commitment to building a better working world for all. The site is located at 102 Rivonia Road, a stone’s throw away from the iconic Sandton Gautrain station.
The new innovative 8-storey workplace is more than just a visually appealing design but one that embodies the firm’s commitment to sustainability and connection to Africa. “It transforms our vision into reality by demonstrating who we are and what we stand for,” says Ajen Sita, CEO for EY Africa.
Achieving a 4-star green rating with Dulux Ecosure.The 38000 sqm of open plan architecture is registered with the Green Building Council of South Africa for a 4-star rating. Among several elements designed to collectively achieve a 4-star green rating, the building makes the most of innovative opportunities to harness natural light and ventilation, and to conserve energy.
All paint, adhesives and sealants used in the indoor environment have low VOC content to mitigate the impact of internal pollutants. Dulux Ecosure was therefore selected as the paint range of choice for the world-class building. A quality, water-based paint that’s trusted around the world to meet sustainability targets and maintain a professional finish. The building design has already achieved early recognition at the World Architecture Festival held in Singapore, where the project was shortlisted for an award in the Future Commercial Office category.
“This green design is a first for the South African environment,” says Bob van Bebber, director at Boogertman + Partners. “It is significantly different from any other building in the area and will certainly become a local landmark.”
For more information visit www.duluxtrade.co.za or contact the Dulux Careline on 0860 330 111
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46 SOUTH AFRICAN PROPERTY REVIEW
editorial
Investors to increase acquisitions in 2015A survey shows that 53% of global investors plan to increase their investment purchases in 2015. In Africa, investments are also increasing as investors search for better yields
According to the CBRE Global Investor Intentions Survey 2015, 53% of global
investors plan to increase their investment purchases this year. Investor appetite for cross-regional acquisitions has increased signi� cantly, with 38% of respondents intending to invest outside their own region in 2015, up from 28% in 2014.
In Africa, investments are also increasing as investors search for better yields, says Elaine Wilson, Divisional Director: Research & Marketing at Broll Property Group. “Investments in South Africa are mostly driven by the strong local listed property sector, while in other countries, real estate investments are driven by international companies looking to invest in the oil and gas industries as well as natural resources.”
She explains that in the SADC region, countries such as Mozambique and Angola (because of oil and gas) have seen renewed interest from international investors, while South Africa is still seen as the gateway into Africa. Political stability, sound economic policies and investor-friendly legislation are of
utmost importance in attracting and retaining investors in any part of Africa.
Kenya in east Africa continues to see an in� ux of investors, especially those looking for real estate assets to apply to their REITs, says Jonathan Yach, Broll Kenya Chief Executive O� cer and Head of East Africa Operations.
Yach says they anticipate an increase in property developments in various counties as government continues to drive the devolution process. County land values and opportunity are within reach for investors looking to make a di� erence in the market.
Nairobi County remains the key business hub for major organisations because of the higher levels of development and infrastructure in place.
Despite macroeconomic challenges and currency depreciation, Nigeria in West Africa shows that long-term economic and demographic fundamentals are a strong attraction for institutional investors.
Lagos’s o� ce sector, which was heavily under-supplied a few years ago, has seen sizable additions of prime o� ce space in the
ABOVE Elaine Wilson, Divisional Director: Research & Marketing at Broll Property GroupBELOW The Delta Mall in Nigeria is set to open soonOPPOSITE, FROM TOP Jonathan Yach, Chief Executive O� cer and Head of East Africa Operations at Broll Kenya; Broll Nigeria Chief Executive O� cer Bolaji Edu
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47SOUTH AFRICAN PROPERTY REVIEW
past year, with a further 80 000m² expected over the next 12 months, says Bolaji Edu, Chief Executive Officer of Broll Nigeria. “We expect that there will more investment activity this year than in recent years, with a focus on the retail and office sectors from international and indigenous investors,” he says.
The CBRE Global Survey notes that although London retains its position as the top city for investment, there is also a marked increase in appetite among investors from Europe, the Middle East and Africa and North America for value-add and opportunistic investments.
“The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year,” says Chris Ludeman, Global President of CBRE Capital Markets. “Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields – a trend that will result in a stronger focus on value-add and opportunistic investments.”
Which investors buy in Africa?According to Wilson, investors generally enter the African market through formal retail, thanks to increasing numbers of consumers and increasing retail facilities leading to increasing demand for warehousing space and distribution centres.
In Kenya, office and retail properties are sought-after, with many international companies either looking to set up offices in Nairobi or expanding their current office holdings.
As in the SADC region, Kenya’s retail sector is experiencing exponential growth while the industrial sector is seeing a much higher demand for modern warehousing (which currently outstrips supply).
Meanwhile in Nigeria, office and retail properties remain the most preferred asset classes for investments. Edu says the office sector has seen strong demand in the past few years. A number of developers and investors are taking advantage of the lack of prime properties with the addition of A-grade office properties onto the market. However, increased supply is creating a more competitive, tenant-friendly environment in a market that was previously dictated by landlords.
“Rents in Lagos are among the highest in Africa and attractive to prospective investors,” says Edu.
Retail is an attractive investment opportunity, particularly for investors who wish to benefit from the growing middle class and increased disposable income, he says.
Price and availability of investment assets On price and availability of assets, Wilson notes that good quality stock is scarce. As a result, most investors look at developing their own assets – but a lack of infrastructure, land tenure issues and high construction costs have put a damper on new developments and increased the price of assets, she says.
In Nigeria, availability is often a concern for investors looking to buy prime assets because currently there is limited investment-grade stock available for purchase, with a small number of transactions taking place annually. “Price is also an issue,” says Edu. “High rentals mean that the capital value per square metre is high compared to other similar locations and countries.”
Overall, Broll anticipates an increase in investments in sub-Saharan Africa – but challenges of doing business in some countries remain. For example, South Africa has recently introduced new Broad-Based Black Economic Empowerment (B-BBEE) codes; up north, Zimbabwe’s economy is failing; falling oil prices have led to infrastructure projects being put on hold in Angola; and political unrest in the northern gas-rich areas of Mozambique may make investors have to rethink their investment strategies.
“In general African markets are still immature,” says Wilson. “However, given time, growing investor interest will increase the state of the commercial property market.”
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workshop
Collaborating with governmentThe City of Tshwane engaged
with the private sector via a Development Investment Incentives Policy workshop
The City of Tshwane, in association with SAPOA and High Street Auctions,
recently hosted a Development Investment Incentives Policy workshop at the Centurion Council Chambers.
The workshop was an opportunity to meet with SAPOA for a discussion of the draft 2015/2016 Medium-term Revenue and Expenditure Framework (MTREF) Property Rates.
The workshop is aligned with the City of Tshwane’s goal to engage with the private sector in terms of development. The city, in collaboration and association with SAPOA and High Street Auctions, hosted an investor summit on 19 February 2015.
The City of Tshwane Inaugural Investor Summit aimed to engage business as potential strategic partners on the City of Tshwane’s Key Catalytic Capital Projects – the Incentive Framework Programme and Public Auction of Council-Owned Land Project.
In terms of the city’s Incentive Framework Programme, long-term local economic development within the boundaries of the city will be stimulated. The City of Tshwane Inaugural Investor Summit 2015 marked the o� cial launch of the city’s incentives programme.
The Development Investment Incentives Policy, read in conjunction with the City of Tshwane 2015/16 Rates Policy, was approved on 28 May 2015. The approval has granted the City Planning & Development Department and the Chief Economist the mandate to develop administrative guidelines for the implementation of the Development Investment Incentives Policy. In addition to this approval, the City of Tshwane will submit an application to the Minister of the Department of Cooperative Governance and Traditional A� airs to include additional sub-categories with respect to the city’s rates policy in terms of Section 8 of the Municipal Property Rates Act.
City of Tshwane Chief Economist Shaakira Karolia
Ben Espach, a professional valuer and Director of Valuations at Rates Watch (Pty) Ltd
City of Tshwane Head of Budget Nthabiseng Mokete
The City of Tshwane, together with SAPOA and High Street Auctions, hosted a Development Investment Incentives Policy workshop at the Centurion Council Chambers
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S O U T H A F R I C A N
PROPERTYR E V I E W
Online and in hand, these monthly publications are the o� cial voice of the South African Property Owners Association
With a South African property market value in excess of R250-billion, SAPOA members control in the region of 90% of South Africa’s private sector commercial land and building stock, and manage the majority of property funds listed on the JSE.
Each member is a leading player and decision-maker in the commercial property arena – and they use the South African Property Review as an extension of the SAPOA website and information platforms.
These members – company chairmen, CEOs and MDs – often control massive companies and their associated budgets. As true decision-makers, some of the brightest and most talented people in the sector occupy senior roles in the SAPOA member organisations.
The South African Property Review is mailed directly to the association’s leading members, and is also available to the general public both internally and online via Issuu - the online version is an exact copy of its printed original and has on average over 3675 impressions a month, with an average read of upwards of six minutes per issue, giving a monthly reader exposure of over 5000.
The true value of the online versions is that they get revisited over and over again and generate a liquid international exposure for your company, making the South African Property Review a ‘must include’ in your marketing plans.
For advertising opportunities and rates contact Riëtte Stevens t: +27 (0)71 877 5520 e: [email protected]
Getting your brand noticed by South Africa’s leading property
Inspired over breakfastEmerging leader and businesswoman Kate Moodley brought motivation to the table
at the SAPOA Women’s Annual Breakfast in Durban
Nicky Chetty, Subashnee Moodley and Lee-Anne Bac
Amelia Beattie and Kate Moodley
Briget Grosskopff and Louise O’Raw
Desiree Rabie, Janet Glendinning and Nnema ByrdPumla Mlondo and Rakhi Nundkoomar
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SAPOA events
Nomzamo Radebe, Portia Tau-Sekati and Amelia Beattie
Carla Delaney and Amelia Beattie Nonkululeko Ntshona and Mpume Nkabinde
Shivani Rooplal and Zithobile Jiji Helen Seymour and Anne Schauffer
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SAPOA events
Mingling at the MichelangeloWith cheese and wine in abundance, SAPOA hosted a sumptuous networking session
for its Gauteng members at the Michelangelo Hotel on West Street in SandtonPhotographs by Xavier Sauer
Jenna Robertson, Christopher Woolcott, Lezanne Burger and Nandan Patel Tsietsi Madonsela, Mike Sithole and Brian Mncube
52 SOUTH AFRICAN PROPERTY REVIEW
Philip Buchner, Robert Fleming and Nicholas Levesley
Cindy McMillan and Nannette McMillan
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SAPOA events
Jonathan Klimek, Roye O’Brien, Trevor Spencer-Crooks and Clive Grundlingh
Ian Broli, Tony Walsh and Bruce ClarkRene Styber and Richenda Mostert
Yuliana Swartz, Bronwynne Wood and Davin GiddishMatshidiso Pilane and Gareth Shepperson
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SAPOA events
Breakfast session at Umhlanga Rocks
SAPOA KZN Regional Council – in partnership with MAXPROP – recently held a lively breakfast session in Umhlanga with the informative and entertaining Professor Francois Viruly
By Anne Schauffer Photographs by Val Adamson
A property economist with more than 20 years of experience in the analysis of the
South African property market, Professor Francois Viruly lectures in urban economics, property development and portfolio management at the Department of Construction Economics and Management at the University of Cape Town.
Among numerous other projects and consultancies, he’s undertaken extensive research into South African property cycles, the drivers behind the South African property market, and the relationship between urban economics and the property market.
As KwaZulu-Natal’s property industry put down its knives and forks on a lively networking breakfast, Professor Viruly’s presentation certainly gave everybody more food for thought.
His topic, “Why the state of our cities is important for the real estate sector in South Africa”, packed out The Square Boutique Hotel with property professionals from across the broader industry, including key municipality � gures.
Edwin van Niekerk, SAPOA KwaZulu-Natal Regional Chairman and Executive Director at MAXPROP, opened the event by recognising that everybody present was concerned with the same issue: that of growing the rates base.
“The only way we can achieve this is by working together,” he said.
One of the major themes of the breakfast was the sense of importance attached to high-quality, authentic private-public sector collaboration in KwaZulu-Natal.
Professor Viruly began by posing the question he puts to his university students every year: “What will the South African property market look like when you guys retire in 40 years’ time?”
He sends the students o� to mull it over, and says the response is often, “I type in ‘SA property market in 40 years’ and nothing comes up. And if nothing comes up on Google, it doesn’t exist!”
The other questions he asks include, “What would have told us that places like La Lucia were coming? What were the indicators that told us about Century City? What is the next big thing in our urban environment? What should we be thinking about? Will it be spatially somewhere, or will it be a sector? Will it be the residential sector, for example, rather than where it will be physically?” It was all about an ability to understand and read, to some degree, the way forward.
Professor Viruly sees a greater recognition across the country of the importance of our cities. “If our cities don’t function, the economy won’t function,” he says. “Two-thirds of South Africans currently live in cities. We are starting to see the National Treasury emphasising the importance of cities, and the two big-ticket items are transportation and housing. The National Treasury will be questioning how to integrate those two components as e� ciently and cost-e� ectively as possible.”
After another cup of co� ee, a catch-up with a colleague or two, and discussion around the concept of transit-oriented development, the breakfast drew to a rowdy close, with Professor Viruly having left the professionals with a great mix of questions, answers and perhaps even tools to see into the future.
Lorentha Covenden, Cheryl van Niekerk, Shivani Rooplal and Caressa Naicker
Louise Gibson, Steve North and Di Frank
Nuthan Maharaj, Nina Saunders, Aurelia Albert, Takalani Rathigaya, Ajiv Maharaj and Russell Curtis
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SAPOA events
Musa Shabane, Geoff Ball, Craig Dohne and Mogie Naidoo Sonet Viljoen, Samantha Anderson, Seamus Holmes and Sue Hudson
Sharendra Bedesi, Mohsin Shaik, Noel Steven and Stephen Lawson Edwin van Niekerk, Professor Francois Viruly and Doug Ross
Justin Haines, Patrice Masson and Chris Tattari Lindy Haworth, Kevin Dunkley and Cheryl Johnson
Jack Kirton, Marc Binns, Gareth Bowman and Cebo Gama
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statistics
Market updateJLL South Africa Q1 2015 research reports
The JLL South Africa research team has released its Q1 2015 research reports with
the addition of a new o� ering: an analysis of the Johannesburg retail property market.
In addition, the Johannesburg o� ce market, Johannesburg industrial market and Cape Town o� ce market reports have also been released, boasting several highlights.
In the Johannesburg retail market, South African consumers have seen a more challenging start to the new year, putting a dampener on the prospects of retail sales growth. However, the outlook is not likely to be balanced across all sectors, with centres located in more a� uent areas expected to perform much better than those in lower income areas.
Developer con� dence remains high on the back of a growing city and the longer term outlook is more encouraging for investors.
In the Johannesburg market, demand for o� ce accommodation remains unchanged in the current climate, contributing to slower growth in rental rates, but the long term outlook is encouraging for the city.
The development pipeline will see an additional 430 000m² being added to overall o� ce stock within the next two years. The overall vacancy rate in Johannesburg showed a marginal increase attributable to an increase in supply rather than a decline in demand. It is anticipated that the Johannesburg o� ce market will continue to be tenant-driven.
Industrial occupation has continued to be supported by local trade activity in Johannesburg, despite having come under increased pressure in recent months. Industrial vacancies increased notably from Q4 2014, while the average rental rate for industrial properties remained largely unchanged in Q1 2015.
Economic conditions forewarn of a further deterioration in industrial activity in the economy but still present an opportunity for tenants to position themselves for the long term.
The � rst quarter of 2015 has seen a continuation of � at market conditions in the Cape Town o� ce market. The overall vacancy rate in Cape Town remained stable the quarter, with pressure on rental rates is most visible in Grade P properties. It is anticipated that low demand will see rental rates declining in some of the best buildings.
Sources: Baker Street, JLL, SAPOA
Sources: JLL, SAPOA
Sources: JLL, SAPOA
Source: JLL
Cape Town o� ce market outlook Q1 2015
Johannesburg o� ce market outlook Q1 2015
Johannesburg retail market outlook Q1 2015
Johannesburg industrial market outlook Q1 2015
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interview
SAPOA DPS S.A PROP AD (420X297).pdf 1 2/26/15 10:11 AM
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58 SOUTH AFRICAN PROPERTY REVIEW
people in profile
Adelene van der Westhuizen Asset Manager
Atterbury Asset Managers
Adelene van der Westhuizen detoured from studying BCom Accounting at North-West University to obtaining her CA at the University of KwaZulu-Natal and working various banks as a commercial property investor, until she found her niche as an Asset Manager at Atterbury, where she happily settled in 2013.
“What I love about working here is that you are expected and encouraged to do everything,” she says. “You’re expected to know every angle of managing a property from legal, negotiation, finance and operational to the finer daily details that form part of it. You always learn something new, most times by having to be proactive. This is why I’m proud of being a part of developing three centres in 14 months, including the Grove Mall in Namibia, the largest regional retail development in that country.”
It doesn’t matter how much Atterbury has grown, it still keeps to the same values. Van der Westhuizen says that because of the close-knit, family culture within the company, you can happily keep your social and work life balanced. “Like our slogan says, ‘It’s a matter of association’,” she says. “We will always choose to work with those who have the same principles and values for the simple reason that it makes business sense.”
Heloise van Niekerk Asset Manager
Atterbury Asset Managers
Heloise van Niekerk has come a long way from working in telecommunications: she is an Asset Manager at Atterbury, which has more than 800 000m² of property assets to manage – a number that will continue to grow.
“I was fortunate to be invited to join Atterbury after 10 years as a manager in telecommunications, and I couldn’t be happier,” she says. “Here, the search is always on to find the right people to work with – people who are passionate and who aim to be successful by sticking to their principles.
Atterbury prides itself on having a workforce that is ethical and honest. “We’re constantly reminded that we must not be arrogant about our success and that keeping the human factor in business will ensure longevity in the property sector,” says Van Niekerk.
She focuses on the company’s various property assets in Africa and is known as a hard-working, passionate person.
“As a company, we always support each other in both the personal and the work sphere,” she says. “This is why we make it look easy even when we’re hard at work behind the scenes. Atterbury has reached so many goals as a company already, from expanding into Africa and Europe to getting Attacq listed on the JSE. I can’t wait to see what milestones are achieved next.”
Lucille Louw Managing Director
Atterbury Asset Managers
Lucille Louw, Managing Director of Atterbury Asset Managers, says that getting into the property market (and asset management specifically) was circumstance. She went from being a restaurant owner to working as an executive at one of the top companies in the industry within 15 years.
“It all started accidentally,” she says. “I had just sold my shares in my business; Atterbury was looking for a salesman for its first residential development, Woodlands Lifestyle Estate… I got the job on the day of the interview. Now I cannot see myself working anywhere else.”
Louw insists that asset management requires constant energy, all-rounder skills and the ability to always look at an old asset as if it were new. This University of Pretoria alumnus learnt all her skills on the job while bringing the company to new heights.
“This company has been my first child for so long but it has grown because of the people in it,” she says. “We find and keep people who can really move on things, who have the confidence to make decisions and move on. Our tenacity and integrity have only helped us to still be here, in business after 21 years.”
Louw can see that new goals will always be reached when you are part of a company that keeps and manages buildings with care and energy.
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people in profi le
Catherine BosmanAsset Manager
Atterbury Asset Managers
Catherine Bosman never followed the crowd. With a degree in quantity surveying from the University of Pretoria and a PrQS, she moved to the UK to work for the Atkins Group for three years. When an opportunity to work for Atterbury came along in 2010, she took it and never looked back.
“Life as an asset manager is never dull,” she says. “You start o� as a ‘jack of all trades’ and attempt to master of all of them. This is facilitated by a company attitude that looks to add value to every asset over the long term, ensuring optimum operational management and not just looking for a way to cut costs.”
Bosman recently returned from Mauritius with accolades that included managing a portfolio of which the Mall of Mauritius development formed part, as well as the expansion and training of new sta� at Enatt, Atterbury’s asset and property management company on the island.
“Atterbury provides a platform for us to take pride in who we work with,” she says. “Every single person, both within and outside the company, is the best at what they do and contributes a unique skills set to the team. Even when the company grew to 100 people, the same ethical family-like culture has been maintained. In the 21 years that Atterbury has been in business, what we commit to is always what we deliver.”
EACH YEAR WE ACCEPT a large number of listings and advertisements from professionals and service providers across the entire spectrum of property activities. Don’t miss out on this well-used, popular industry resource.
SAPOA aims to provide added value by offering the basic listings free of charge to all members. In this respect, we hope that we are assisting you in your marketing endeavours to some extent.
We thank you for your support in previous years. In an effort to improve the look and ease of usage, we have redesigned the directory layout to a four-column grid and have made available certain entries that will stand out from the norm.
● 53 categories ● Full- and part-category page sponsorship ● Highlighted data entries ● Data entries with logos
● A� ordable small advertisements (half- and quarter-page) ● Boxed column and part-columns
Reon van der Wiel: [email protected] w w . a c t i v a t e . c o . z a
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22 S A P O A P ro p e r t y R e g i s t e r 2 0 1 4 - 2 0 1 5
Developers DEVELOPERS
Abland
Property Register 2014-2015 Section 2.indd 22 2014/10/10 11:00 AM
S A P O A P R O P E R T Y
REGISTER2014 - 2015
South African Property O
wners Association - P
roperty Register
2013 - 2014
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2015/01/13 2:31 PM
BOUDRY ARCHITECTS & ASSOCIATES P.O.Box 51838, Waterfront, The Western Cape, 8002+27 (0) 21 448 3955+27 (0)21 448 5910
CHAMELEON ARCHITECTSP.O.Box 4063, Tygervalley, The Western Cape, 7536
CHRIS OWTRAM ARCHITECTURE
CO-ARC INTERNATIONAL
CONSULT THREE ARCHITECTS P.O.Box 71671, Central, Port Elizabeth,
40
S A P OA P ro p e r t y R e g i s t e r 2 0 1 4 - 2 0 1 5
Managers and administrators OWNERS
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July Region Date Event
Gauteng 2 July 2015 Negotiation Skills Masterclass Programme
Mpumalanga 3 July 2015 Networking Event
Gauteng 7 July 2015 Introduction to Brokering Seminar
Gauteng 15 July 2015 Regional Meeting
East London 23 July 2015 Networking Event
Gauteng 23 July 2015 Legal Breakfast
Gauteng 28 July 2015 Golf Day
KwaZulu-Natal 31 July 2015 Breakfast Presentation
August Region Date Event
Gauteng 4 August 2015 Research Breakfast
Gauteng 6 August 2015 SAPOA Audit Risk
Gauteng 11 August 2015 PWC Breakfast
KwaZulu-Natal 11, 12 and 14 August 2015 ECPP Training
Polokwane 12 August 2015 Breakfast: Town Planning Scheme
Polokwane 12 August 2015 Breakfast Session
Gauteng 13 August 2015 Lease Agreement Workshop
East London 14 August 2015 Golf Day
Gauteng 14 August 2015 PWC Power Hour Breakfast
Gauteng 17 to 21 August 2015 FMP Training
East London 19 August 2015 Introduction to Brokering Seminar
Port Elizabeth 19 August 2015 Regional Meeting
TBC 20 August 2015 Introduction to Brokering Seminar
Gauteng 20 August 2015 SAPOA HR Meeting
Mpumalanga 20 August 2015 Networking Breakfast
TBC 20 August 2015 SAPOA Board Meeting
KwaZulu-Natal 25 August 2015 Golf Day
Gauteng 25 to 28 August 2015 ECC Training
Gauteng 27 August 2015 Networking Event
Gauteng 28 August 2015 MOMFA
SeptemberRegion Date Event
Port Elizabeth 1 to 3 September 2015 ICPP Training
KwaZulu-Natal 3 September 2015 Negotiation Skills Masterclass Programme
Gauteng 7 and 8 September 2015 ICPP Training
TBC 7 to 11 September 2015 ECPP Training
Port Elizabeth 8 September 2015 Golf Day
Western Cape 8 to 11 September 2015 ECPP Training
Polokwane 10 September 2015 SANS 10400 Workshop
Gauteng 15 September 2015 Retail Trends Report Breakfast
Port Elizabeth 16 September 2015 Council Meeting
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Events and dates subject to change.
SeptemberRegion Date Event
Port Elizabeth 17 September 2015 Networking Event
Mpumalanga 17 September 2015 Golf Day
TBC 17 and 18 September 2015 National Council Meeting
Port Elizabeth 22 September 2015 Golf Day
Mpumalanga 23 September 2015 Networking Dinner
Western Cape 26 September 2015 Property Development Workshop
Gauteng 28 to 30 September 2015 IPMP Training
Gauteng 29 September 2015 Legal Breakfast
KwaZulu-Natal 29 September 2015 SANS 10400 Workshop
KwaZulu-Natal 30 September 2015 SACSC Annual Congress
OctoberRegion Date Event
Gauteng 1 and 2 October 2015 IPMP Training
Western Cape 6 to 8 October 2015 ICPP Training
Gauteng 7 October 2015 Media Lunch
Gauteng 8 October 2015 Legal Breakfast
KwaZulu-Natal 15 October 2015 Breakfast Presentation
Polokwane 15 October 2015 Golf Day
Gauteng 17 October 2015 Research Breakfast: Industrial Industry Report
Gauteng 20 October 2015 Industrial Vacancy Report Breakfast
Gauteng 23 October 2015 Brokers Economic Update
KwaZulu-Natal 23 October 2015 Networking Breakfast
Gauteng 26 to 30 October 2015 BCTP Training
Port Elizabeth 29 October 2015 Gala Dinner
NovemberRegion Date Event
Gauteng 4 November 2015 ECPP Training Course
TBC 5 November 2015 SAPOA Board Meeting
Gauteng 6 November 2015 Legal Power Hour
TBC 10 November 2015 Research Breakfast
Gauteng 11 November 2015 Negotiation Skills Masterclass Programme
KwaZulu-Natal 11 November 2015 Gala Dinner
Gauteng 12 November 2015 Networking Event
TBC 13 November 2015 Networking Evening
Gauteng 16 to 20 November 2015 FMP Training
Gauteng 17 November 2015 FM and IAMP Training Courses
Port Elizabeth 18 November 2015 Council Meeting
KwaZulu-Natal 19 November 2015 Gala Dinner
Gauteng 20 November 2015 Brokers and Legal Update
Polokwane 20 November 2015 Council Meeting
Western Cape 21 November 2015 Property Development Workshop
What's On_JULY_SUBBED.indd 69 2015/06/15 8:15 AM
DecemberRegion Date Event
Bu� alo City 3 December 2015 Developers’ Gala Dinner
NovemberRegion Date Event
Mpumalanga 25 November 2015 Gala Dinner
Polokwane 26 November 2015 Gala Dinner
Gauteng 27 November 2015 PwC Half-Day Workshop
Port Elizabeth 29 November 2015 Gala Dinner
What's On_JULY_SUBBED.indd 70 2015/06/15 8:23 AM
63SOUTH AFRICAN PROPERTY REVIEW
fun & quirky
JT FoxxWe explore the eccentric mind of the world’s number-one
wealth coach JT Foxx in 10 questions
Q What gets you going every morning?The desire to become a better person today than I was yesterday. I live by two mottos: how can I be number one and how can I make my product, services and investments better.
Q What inspires you?People succeeding. Our motto is powered by your success. The more successful you are, the more successful I will be. If you take care of your clients, your clients will take care of your pro� ts.
Q The motto of your life would be?Go big or go home.
Q Passions and hobbies?Golf, movies and kite sur� ng – or any water sports.
Q Favourite destination in the world?I have been all over the world and South Africa is truly the best … except for the tra� c on William Nicol.
Q Who are your role models?Donald Trump and Steve Jobs.
Q If you had to liken yourself to any animal, what would it be and why?The lion – because I like being the king of the jungle.
Q Best thing that has ever happened to you?Getting coaching. Without it I wouldn’t be where I am today.
Q One place that you’re dying to visit?Tahiti.
Q What’s on your bucket list for 2015? ● Buy a � y-board ● Buy a plane ● Donate lots more to charity ● Become a better me everyday ● Get on the cover of the South
African Property Review.
By Candace King
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64 SOUTH AFRICAN PROPERTY REVIEW
off the wall
Designing to keep the lights on
With concern looming around South Africa’s energy and water resources, the time to go back to the drawing board – literally – is upon us
The widespread effects of South Africa’s energy crisis and its evil twin, the
impending water crunch, may be difficult to quantify accurately but two things are absolutely certain: constrained electricity supply and limited access to water aren’t going away any time soon and only bold, innovative solutions can make a difference for South African businesses.
Reserve Bank figures suggest that the energy crisis could slash production by as much as 25%. Economists believe 500 000 potential jobs have been sacrificed as a result of the power shortages. Predictions range from bleak to catastrophic.
As average South Africans gets a first-hand look at just how disruptive an unstable power supply can be, there is growing awareness that for businesses to operate successfully in this environment, self-sufficiency and energy efficiency are critical.
Business parks and industrial developments that were designed and constructed during an era of steady supply have ceased to be relevant. Ample water and cheap, unfailing power can no longer be relied upon as a mainstay of local businesses.
“South African developers need to move away from industrial and commercial construction modelled on ideals,” says Marius Esterhuyze, Major Accounts Manager at Autodesk. “Buildings, manufacturing plants and business parks have to be designed to withstand the infrastructural challenges that face our country. Sustainable ecosystems are the new reality, and going ‘green’ is no longer a nice-to-have – it is a matter of ultimate survival.”
The role of design in this build revolution is key. Bolted-on quick fixes such as generators are not enough to negate the effects of limited infrastructural resources. Long-term solutions for an energy constrained environment have to be developed from the ground up.
The national grid and limited water resources have to be considered in every phase of construction, from structure and systems right through to the technology that brings a building to life.
“Today’s software technology allows architects and engineers to iteratively test, analyse and improve on building design,” says Esterhuyze. “This means that performance – including energy consumption, airflow ventilation, solar radiation, water use, etc – can be optimised before a single brick is laid.”
Why does any of this matter? The United Nations Environmental Programme (UNEP) Sustainable Buildings & Climate Initiative estimates that the building sector is responsible for up to 30% of global greenhouse gas emissions annually and consumes up to 40% of all energy. These figures indicate that how we design and build in South Africa can have a significant impact on our limited resources.
“Good, sustainable building design starts with a clear understanding of the climate of the building site,” says Esterhuyze. “Building information modelling (BMI) allows for data to be captured and displayed through visualisation tools that can help to consider factors such as temperature, humidity, wind conditions and sky conditions in a design. The achievement of a net zero energy build should always be the end goal.”
Reducing water use is the next step in sustainable design. Skilful system design and a suitable specification of products can easily reduce water use by 50% or more. There are several ways to get the most out of every drop: water-efficient fixtures and equipment, water-efficient irrigation and landscaping, recycling water so it can be used more than once, and capturing rainwater. Purification of water on site with living machines or advanced septic systems can also be highly effective.
Biomimicry (the design and production of materials, structures and systems that mimic biological processes) is becoming increasingly popular for rainwater harvesting designs. Various plant species (some of which exist in our local environment) are being studied as a blueprint for the design of new rainwater capture methods. Nature is an outstanding source of information and inspiration in the pursuit of innovative ways to generate heat and light and create a sustainable future.
“Although design on its own cannot solve the energy crisis, it has the potential to change the way in which we use energy, significantly decrease energy wastage and reduce our dependence on the overloaded national grid,” says Esterhuyze.
Werner van Antwerpen (left), who heads up Growthpoint Properties’ specialised sustainability division, with Brian Wilkinson, CEO of the Green Building Council of South Africa (GBCSA) at Kirstenhof Office Park in Johannesburg – the 100th building to achieve Green Star SA certification. Kirstenhof, which is owned by Growthpoint Properties, secured a 5-Star Green Star SA: Existing Building Performance Pilot (EBP) rating
Off The Wall_JULY_SUBBED.indd 64 2015/06/15 11:40 AM
development
41SOUTH AFRICAN PROPERTY REVIEW
Menlyn Maine is being dubbed as Africa’s first green city – striving to stimulate a paradigm shift in how South Africans live, work and play through the single biggest development project in Pretoria. It was with this philosophy in mind, and given our solid reputation for innovation and expertise in structural and civil engineering as well as sustainability that WSP has been a key partner to bringing this vision to life.
As one of the largest engineering consultancies in Africa, WSP plays an important role in our country’s sustainable development. We aim to future proof our projects, helping our clients to achieve their sustainable development goals and approaching everything we do with passion and caring.
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AFRICA’S FIRST GREEN CITY
Image courtesy of Boogertman + Partners Architects.
