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High Court sets aside strike guidelines
INDUSTRY NEWS
THE FUTURE OF THE SOUTH AFRICAN PROPERTY SECTOR
By PAUL HASELAU
The Covid-19 pandemic and subsequent lockdowns have had a significant impact on SA’s property market. However, as vaccination roll-outs bring the hope of easing of personal restrictions and an improving economic situation, what does it mean for property sector stakeholders? A recent webinar hosted by Nedbank Private Wealth brought together a panel of property experts to explore the impact of Covid-19 on property in SA and the emerging trends and opportunities.
The panellists agreed that property was arguably one of the worsthit sectors by the pandemic and the ensuing national lockdown. However, while the eventual lifting of restrictions, coupled with the vaccine roll-out, should equate to better economic fundamentals that may catalyse a property recovery, the impact of the pandemic is fairly different across the various property sectors.
Dr Andrew Golding, CEO of the Pam Golding Property Group, pointed out that the residential market had already been somewhat subdued before Covid-19, with volumes and prices trending down. “There was an expectation that after the lockdown, there would be some pent-up demand,” he said, “but it soon became clear that the market had actually benefited somewhat from the restrictions. And to everyone’s surprise – largely due to the low interest rates – the market’s remained buoyant until now.” strength. “Volumes are up significantly and despite a slow start, prices are now beginning to move up as well,” he said. “This upward trend has been predominantly fuelled by the lower end of the market, where those who would previously have been renting now see an opportunity to own their homes. This has pushed the entire market up in terms of sales volumes and values.”
Another significant trend is remote working and the emergence of “Zoom towns” which allow people to live and work from wherever they
“THE PANELLISTS choose. This has resulted in material AGREED THAT PROPERTY changes to the perceived value of many towns (particularly on the
WAS ARGUABLY ONE coast) and there is opportunity in these areas, especially for dwellings
OF THE WORST-HIT that offer the flexibility and space for SECTORS BY COVID-19 working from home.
AND THE ENSUING On the commercial and industrial front, the picture is somewhat less NATIONAL LOCKDOWN.” rosy. Panel member Norman Raad, CEO of Broll Auctions, explained that these sectors had also been struggling before Covid-19, with a decline of roughly 20% in values already in place across the board, primarily due to economic challenges.
CREATIVE THINKING
As a result, participants in these sectors were hit extremely hard and values were driven down even more. “Rentals have had to be re-negotiated, with some reverting back to levels last seen many years before the pandemic,” Raab explained, “creating massive and widespread devaluation of commercial, industrial and retail property.”
TRENDING UPWARDS
Golding pointed to significant structural trends underpinning this residential property market He emphasised that the main opportunity in the commercial segment now lies in finding creative ways of rethinking and re-engineering existing properties,
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particularly given that the shift towards working from home appears to be a permanent one. This means that many office spaces are likely to become liabilities, rather than assets, unless their owners can repurpose them effectively.
According to webinar participant Shala Ramokolo, listed property equity analyst at Nedbank Private Wealth, the 2021 outlook for listed property is also not overly positive. She explained that the focus for most listed property funds is likely to be on repairing their balance sheets in the short to medium term. “Feedback from many participants in this sector is that they’re still struggling to sell assets,” she said, “which means the only option they have to pay down debt and achieve the desired balance sheet equilibrium is by limiting dividend payments and holding onto their cash reserves.”
CHANGING TRENDS
On the positive side, according to Robin Lockhart-Ross, nonexecutive chairman of Fortress REIT, while new commercial mortgage bonds registered at the Deeds Office were down nearly two thirds, year-on-year in 2020, this does not necessarily mean that bank appetite for property finance has declined. Rather, it indicates that its appetite has changed.
“New lending is vital for the sustainability of any bank, so we’re likely to see property finance transactions picking up as demand improves,” said LockhartRoss. “However, lending has definitely become more nuanced, as banks pay more attention to the serviceability of the loan and the sustainability of the client’s cash flow.”
Other trends and opportunities highlighted by the panellists included the ongoing digitisation of the industry, with something of a “hybrid” property transaction environment emerging, effectively giving realtors, brokers and banks an opportunity to focus less on the minutiae of processes and, instead, add more value to clients through their market knowledge and experience.
* Paul Haselau is the team leader of structured lending: Nedbank Private Wealth, KwaZulu-Natal.
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HIGH COURT SETS ASIDE
STRIKE By JOHAN OLIVIER, JESSICA BRAUM AND SHANE JOHNSON, ALL OF WEBBER WENTZEL GUIDELINES
The High Court recently set aside guidelines issued by the Minister of Employment and Labour on balloting for strike action on the grounds that they were ultra vires (ie, falling beyond the legal power of the relevant authority).
On 9 December 2018, the minister gazetted the Guidelines on Balloting for Strikes or Lockouts, issued in terms of s 95(9) of the Labour Relations Act (LRA) – GN 1396 GG 42121 of 19 December 2018.
The guidelines, which became operational on 1 January 2019, provide that ballots before strike action must be conducted in line with the LRA 66 of 1995 and the trade union’s constitution.
They also detail procedures that “should be followed when conducting a secret ballot”. Although guidelines are not strictly binding in law, these particular ones are drafted in a peremptory manner. Examples of peremptory language used in the guidelines include the following:
Paragraph 9.1: “Reasonable notice must be given to members of a ballot…”
Paragraph 9.2: “The notice must specify the time and place of the ballot.”
Paragraph 9.3: “The question that is the subject of the ballot must be clearly phrased and must be consistent with the terms of the dispute referral.”
Paragraph 9.4: “Ballot papers must be prepared in accordance with…”
Paragraph 9.5: “Ballots must not contain…”
Paragraph 9.6: “A ballot must be conducted in terms of…”
The Association of Mineworkers & Construction Union (AMCU) recently brought an application in the High Court under the Promotion of Administrative Justice Act (PAJA) 3 of 2000 to review the guidelines. Ultimately, in its judgment (Association of Mineworkers & Construction Union v Minister of Employment and Labour (78915 2019) [2021] ZAGPPHC 187 (6 April 2021)), the High Court upheld AMCU’s review and the guidelines were set aside.
This judgment and the setting aside of the guidelines have significant implications for
