STRAPLINE
COMPANY PROFILE
REALITY 11 REALTY
2013
First ininproperty First property MAY 12 PAGE 1
COMPANY REPORT
First in property Editorial - Lauren Grey Production - Hal Hutchison
As the global real estate market enters a new era of change, IndustrySA speaks Hano Jacobs, COO at one of South Africa’s largest real estate agencies, to find out how the business is diversifying to meet changing consumer demands in the country.
On a global scale, the real estate industry is in a constant state of change as it works tirelessly to meet changing consumer demands and keep on top of dips and fluctuations in the market. In South Africa however, the biggest changes in the industry started around 15 years ago with the introduction of the internet, the increased use of technology and a growing hunger from consumers to be given more information about the property sector. “It is important for companies working within real estate to stay on top of global trends in the market,” explains Realty 1 COO, Hano Jacobs, “at times, South Africa lags behind the world’s economy but it is crucial that we are aware of trends so we can anticipate our next move.” Realty 1’s success can be measured by its rapid growth throughout South Africa over the past 51 years; the company boasts an impressive portfolio of 73 offices, and with a staff complement in excess of 700 agents, it is certainly one of the biggest real estate agencies in the country. “We have a substantial heritage in South Africa,” says Jacobs, “Realty 1 is part of Jigsaw Holdings Limited which focusses on the property industry as a whole, and alongside ERA Real Estate we are one of the oldest real estate brands in the country.”
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Jigsaw Holdings operates within the property sector with divisions in property development, investment holdings, training and finally property selling, in which three brands operate within South Africa; Realty 1, ERA and AÏDA. “Being part of the Jigsaw Holdings group puts us at an immediate advantage because of our combined heritage and expertise” explains Jacobs.
INDUSTRY EXPERTISE Knowledge, expertise and awareness are all factors contributing to Realty 1’s success; the company prides itself on the expertise of its agents and the local knowledge they offer consumers when considering purchasing or renting a property. The company specialises in the entry side of the upper market, with properties in the range of R1.5-2M within South Africa’s two major metropolitan cities. “The biggest focus for us will always be the major metros, with Pretoria and Johannesburg seen as one region and the whole Cape bowl seen as another,” says Jacobs. “Statistically more than 50% of all sales occur in Gauteng, so Gauteng as a province is massive for the real estate industry and it is hugely important to service each different area in the province properly.” In order to service different areas within the two major metros efficiently, Realty 1 have agents who specialise
REALTY 1
in different geographical areas, in order to bring a local understanding to consumers looking to live in a specific area. “Efficiency is hugely important, for example, to service a city like Pretoria with only two or three offices is really tough; what you really need is agents who specialise in certain geographical areas within the city, and for that reason alone, we have eight offices in Pretoria. “Local understanding is very important which is why we aim to match our agents to the right regions, because like all major cities, there are different regions that appeal to different consumers and we need to ensure we have the right agents to service those areas.” Realty 1 prides itself on the efficiency of its agents, and to ensure they keep on top of local knowledge and understanding, the company immerses itself in community projects. “Community involvement is crucial because it allows us to understand more about certain areas and how they are evolving alongside our growing South African economy. So for that reason we have to be as involved as we possibly can with understanding the local market and getting involved with the community.”
consumers began tightening their purse strings and demanding more for their money. Realty 1 has handled the pressures of the economic slowdown extremely well, which Jacobs says is down to ‘forward planning’ and ‘understanding your consumer and marketplace’. “Because we have such a good distribution of offices and outlets, we are able to track trends quite closely,” says Jacobs, “for example, the country sites have seen substantially more pressures than the city areas; in most of the city areas we have seen a fairly stable market over the last two to three years, and not a dramatic change in terms of decreases of unit sales.”
ECONOMIC CHALLENGES Since the global economic downturn in 2008, the world’s real estate market experienced a dramatic change as
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COMPANY REPORT
Jacobs says that the stable city market is due to consumers wanting to move closer to work and local schools, so to cut down on travelling costs, “travelling is becoming more and more expensive due to increasing fuel prices and maintenance of vehicles; what we’ve seen is consumers moving towards the city and downscaling their properties. “We have seen a substantial increase in downscaling, up to about 30% of value, so a R3M property is sold in return for a R2M property, in order to save on bond payments, insurance, maintenance and energy costs. “There has also been a move by the consumer for a more efficient way of living, and there are a number of things that can be attributed to that; the cost of energy is increasing globally at a rapid rate so there is a move towards solar energy and more efficient lighting such as long life bulbs. There’s also a move towards gas, so a lot of the new properties being developed do not have electric stoves and geysers for example. “The other move towards efficiency is in maintenance, so basic maintenance of a 250m² free-standing property, would be substantially more than if you were part of a complex where the collective carry the burden of maintaining the complex as a whole. So there’s a move towards more efficient property ownership, and that for me is also a global trend.”
FUTURE PLANS Going forward, Jacobs says that Realty 1 intend to continue diversifying the business and keeping up-to-date with consumer demands and global trends, in order to maintain its position as an industry leader.
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“Traditionally, estate agencies could specialise in residential sales only, but these days it is important to have a combination of residential letting as well as residential sales. This combination is valuable in terms of the repetitive income that is generated from the rental side. “Our future plans in that respect, are to combine rental and sales in order to service our consumers efficiently and to identify smaller operations within South Africa rather than bigger outlets, that way we can ensure our agents have the local knowledge and expertise needed to satisfy our consumer demands.”
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“Because we have such a good distribution of offices and outlets, we are able to track trends quite closely”
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