News & Views Apartment hotels – a growth area, New industrial and wholesale suppliers division, Desperate call to Government, Health & safety key drivers, Continued demand for residential property in Pretoria, Brewery truly wired

Apartment hotels – a growth area

South Africa’s hotel development market, and specifically Cape Town’s, is buoyant despite a tough economy and the after-effects of the drought. Innovative ways of accommodating corporate and leisure travellers, such as apartment hotels or serviced apartment-style hotels, are gaining momentum.

Romney Park Hotels

Recent figures highlight that five-star-hotel occupancy in Cape Town, where many apartment hotel operators are located, has increased by 4% over the last year, while the average daily rate (ADR, the average realised room rental per day) has grown by 2,6%. The four-star sector’s occupancy, despite new hotel entrants, has also increased, by 1,6% and with a 2,2% increase in ADR.

‘Cape Town’s tourism resilience and attractive rate of return are making property buyers move to other, non-traditional options of buying property, like buying an apartment in a hotel property and then leasing it back to the hotel and enjoying a good monthly return that mirrors the uptick of local tourism,’ says Wayne Troughton, Managing Director of HTI Consulting, a development consultant for the hospitality sector across Africa and the Middle East.

A working example of this is Romney Park Luxury Apartments, previously a five-star all-suite hotel in Green Point, which for six consecutive years won the AA’s Best All-Suite Hotel in South Africa award. Following a multimillion-rand redevelopment in 2018, Romney Park now offers for sale fully furnished apartments to local and overseas buyers, which are leased back to an on-site hospitality management company, The Stay Collection, to operate as self-contained hotel apartments, along with all the bells and whistles of a five-star luxury hotel.

Romney Park Luxury Apartments, previously a five-star all-suite hotel in Green Point.

Serviced apartments in Africa represents less than 1% of all hotel rooms, whereas internationally the figure is closer to 10% of supply. South Africa’s highest concentration of serviced apartment-style hotel developments, with 1% of total rooms, is in Cape Town. Several new apartment hotel developments entered the Cape Town scene in recent years, including The Protea North Wharf, Capital Mirage, Onyx, Radisson Blu Hotel and Residences, and Harbour Bridge Hotel & Suites. The Marriott Residence Inn, which forms part of the highly anticipated Harbour Arch development on the Foreshore, will start trading once the development is completed.

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Brighter future with symbiosis

A new “symbiotic relationship” aims to offer great benefits to customers who will now have access to a more comprehensive range of tools at good prices. W estern Cape based family owned hardware chain, Brights Hardware, has launched their new Brights Industrial and Wholesale Suppliers division through a merger with Cape Engineering Supplies.

Orlando Luis, CEO of Brights explains that this new symbiotic relationship between Brights and Cape Engineering Supplies offers great benefits to customers who will now have access to a more comprehensive range of welding, abrasives, safety, industrial tools and power tools at more competitive prices.

‘Brights imports a wide range of our own products which retail under the Brights Stallion brand, distributed across eight Brights branches in the Western Cape. Trade and industrial customers can purchase this full Stallion range, plus all of the other 58 000 Brights products, at wholesale pricing on account at any of our branches – and orders will be delivered directly to the customer’s factory or business premises,’ says Luis. Russell Benadie of Cape Engineering Supplies explains that the Brights Industrial and Wholesale Suppliers division, which operates out of the Brights Blackheath branch and has access to the central distribution centre’s full stock holding, services an extensive range of industry sectors – any business that manufactures, repairs, maintains or services any kind of products – from food production equipment to large machinery, vehicles, boats and more.

‘We distribute a vast range of products within daily use in any workshop or factory environment. Through this merger with Brights, Cape Engineering Supplies are now able to offer industrial customers a far bigger portfolio of products at a more competitive price. The merger has afforded Brights the opportunity to create a focused and specialist division servicing the needs of industrial clients and not just building contractors and retail customers,’ Benadie explains.

Desperate call to Government

A recent report by the CSIR Energy Centre on load shedding indicated that it cost the country between R60 billion and R120 billion last year.

Notable author, independent power advisor and activist, Ted Blom, frames the problem.

Speaking at the recently held Mining Indaba, Blom said: ‘More than 30% of South African mining projects will be terminated prematurely due to additional power costs if suitable solutions are not found within the next 12 months.’

He made his comments in the wake of Minister Gwede Mantashe’s announcement last week that the government had conceded that it must allow mining companies to produce energy for their own use.

‘Most mining projects in Africa provide their own power for operations, but that just increases the hurdle rate for committed capital to develop and run the project. The big difference is that provision of own power is already factored into those projects whilst South African projects have never factored in the costs of providing own power,’ says Blom.

Meanwhile, Kadri Nassiep, Executive Director of Energy at the City of Cape Town states: ‘The City’s court case, in which it seeks clarity with respect to the role of municipalities in the purchase of electricity from sour ces other than just Eskom, is a ground-breaking issue and potentially an exciting one for the sector as a whole.’

‘If the courts rule in favour of the City it will trigger a public tender process to bring additional generation on stream, mostly from independent sources. This will open the door for other municipalities to follow suit and in the process, relieve some of the burden imposed on Eskom by the current legislative and regulatory framework.’ The hearing is scheduled for May this year.

Health & safety key drivers

Health and safety are reported to be key drivers for Concor Buildings at the construction of Oxford Parks Phase I, which is due for completion during 2020. This project comprises the construction of four mixed-use premium office and retail buildings, and a fifth building which will house a hotel.

Accommodating the workforce and all subcontractors required for the simultaneous construction of the various structures, means that there can be no compromise on health and safety. Godfrey Baloyi, Concor Buildings HSE practitioner on site, explains that Concor’s internal health and safety policies are applied in line with those of ComPrac Holdings who has been appointed health and safety compliance consultant.

As part of the stringent safety requirements, Baloyi audits and ensures that the safety files of all subcontractors are aligned with those of Concor Buildings. All site staff undergo an initial safety induction before they can commence their duties, and issues of concern are addressed at weekly toolbox talks. Daily planning and safety meetings confirm the priority given to health and safety on site.

Safety is enforced through a policy of Visible Felt Leadership (VFL). The implementation of this policy is a two-way approach. When a potential health or safety infringement or a life-threatening situation is observed, activity is stopped immediately, and corrective coaching is given.

Major incident prevention (MIP) is the second approach. To this end, foremen and section leaders are required to check that the site is safe, while the contract manager ensures that all documentation relating to competence and certification are in place in terms of the OSH Act.

Bennie de Koker, Concor Buildings HSE Manager, says that in the past safety on site was the responsibility of safety officers only.

‘Today, safety is fortunately no longer seen in isolation, but as a collaborative effort on the part of everyone on site. Continuous coaching and awareness campaigns are critical.’

A new concept has been introduced on this site by Concor Buildings.

‘Understanding the impact of visuals, workers are Concor

Godfrey Baloyi, Concor Buildings HSE practitioner and Bennie De Koker, Concor Buildings HSE manager.

shown a picture and are asked to identify unsafe or potentially hazardous practices and to suggest corrective action,’ De Koker says. ‘This method of interactive discussion is proving to have great impact when used in conjunction with traditional safety instructions.’

De Koker and Baloyi jointly have more than 30 years’ experience and both are registered Construction Health and Safety Professionals with The South African Council for the Project and Construction Management Professions (SACPCMP), attesting to Concor’s commitment to observing safe practices.

Continued demand for residential property in Pretoria

Pretoria is currently experiencing an increase in new developments, including commercial and mixed-use precincts, says Retha Schutte, Pam Golding Properties (PGP) Pretoria regional executive.

PGP. Magnolia Meadows

‘T he massive investments from large corporations and private companies into the local economy in the region are encouraging to prospective buyers who continue to show huge interest in buying property in Pretoria.’

The Brookings Global Metro Monitor report identified Pretoria as the fastest growing city in South Africa in 2018. Schutte says: ‘The number of new developments that have come onto the market in the last few years are indicative of the demand for property with a focus on lifestyle and precinct living.’

Pretoria’s newest security estate, Zambezi Manor Lifestyle Estate, recorded the highest price growth in Gauteng in 2018. According to Lightstone data, property prices within this estate, considered one of the top in Gauteng, grew by 10.8% in 2018.

Early this year, PGP launched the first ever green, sustainable and completely off-grid, exclusive residential development comprising just 23 units. The development, Magnolia Meadows, is located in the established Nieuw Muckleneuk suburb with beautiful tree-lined streets – which completes the feeling of a green and low carbon footprint lifestyle.

‘Green homes at Magnolia Meadows are priced below R3 million, and we expect demand to exceed supply given the limited number of units,’ adds Schutte.

‘In addition to the price and location, the prospect of capital appreciation/growth is also important for buyers purchasing in new developments. Nonetheless, we find that even in the current subdued growth environment, properties within the R3 million range are still in demand and tend to sell quickly,’ notes Schutte.

Brewery truly wired

In addition to the supply of three transformers, an important brewer was looking for a partner who would interface with the suppliers of various aspects of electrical equipment. A local supplier was sourced to supply European Directive on Efficiency compliant equipment, to the requirements of the client.

Dry-type transformer specialist Trafo Power Solutions has delivered transformers and other electrical upgrades for a global beer maker’s expanded facility in Gauteng. In addition to supplying three transformers, the company interfaced closely with the customer’s Europe-based engineering team as well as with local electrical contractors and consultants. Installation was co-ordinated with plant shutdown schedules to avoid costly downtime.

In addition to the supply of three transformers, the customer was also looking for a partner who would interface with the suppliers of various aspects of electrical equipment, according to Trafo Power Solutions managing director David Claassen. Trafo has therefore interacted closely with the customer’s Europe-based engineering team on the one hand, and with local electrical contractors on the other.

Meeting high-pressure deadlines, three transformers were designed, supplied and commissioned. These included a 1250 kVA and a 1600 kVA unit – both with 11kV to 400 V capacity – as well as a 2000 kVA unit for 11 kV to 690 V application.

“These transformers all comply with the European Directive on Efficiency and are the lowest-loss dry-type transformers available,” Claassen says. “This was the customer’s specification, as they place strong priority on energy efficiency worldwide.”

Also, in the scope of work was medium voltage switchgear, including two ring-main units (RMUs) with one a three-way and the other a four-way. Traffo

Dry-type cast resin transformers installed in IP21 enclosures.

“We modified the RMU’s in line with the customer’s requirement, including a battery-tripping unit (BTU) on each,” he says. “This ensures there is power available regardless of the condition of the circuit breaker.”

As a brownfield project, there was considerable adaptation of design to suit the plant configuration. Instrumentation was located on a raised base, for instance, where voltage transformers and current transformers were installed for monitoring each RMU.

“We also supplied three very specialised distribution boards (DBs) between the low voltage transformers and the new sections of the plant and new brewhouse,” he says. “This non-standard design has a modular type assembly conforming to EIC 61439 and EIC 61641.”

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