South African Property Review November 2013 by SAPOA

South African Property Review

PROPERTY SOUTH AFRICAN

November 2013

REVIEW

GOING THE EXTRA GREEN MILE A very real passage towards sustainability

Engineers & quantity surveyors

CAPE TOWN CBD City development open for business

ECOFRIENDLY MASTERPIECE Efficiently showing off engineering and design aesthetics

November 2013

Banking on green investments More than just finance

> Corporate and Investment Banking

NOTHING BUILDS A STRONGER FOUNDATION THAN A WEALTH OF EXPERIENCE REDEFINE PROPERTIES LImITED

gROWThPOINT PROPERTIES LImITED

DELTA PROPERTY FUND

ZAR 488 million

ZAR 750 million

ZAR 306 million

Term Funding

Syndicated Term Funding

Term Funding

gROUP FIVE hEAD OFFICE Atterbury group

hYPROP INVESTmENTS LImITED

ASCENSION PROPERTIES LImITED

ZAR 408 million

USD 40 million

ZAR 502 million

Development Funding

Term Funding

ACUCAP PROPERTIES LImITED

EYEThU ORANgE FARm mALL

LEAF PROPERTY FUND TRUST

Stretford Land Developments, Flanagan & gerard and Dipula

ZAR 450 million

ZAR 349 million

ZAR 150 million

Term Funding

Development and Term Funding

Term Funding

Our experience shows how involved weâ&#x20AC;&#x2122;ve been in building the real estate market. This foundation allows us to provide you with the best possible financial solutions for your real estate needs. www.standardbank.co.za/cib

Moving Forward

Authorised financial services and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). SBSA 140012/R 3/13 Moving Forward is a trademark of The Standard Bank of South Africa Limited

from the CEO

Are your tenants and customers safe? SAPOA CEO Neil Gopal asks what our property sector, specifically retail shopping centres, can do to ensure security threats are snuffed out before they result in tragedy

he Westgate Mall attack, in which 69 people were killed, serves as a bleak warning to all property owners, including office operators, that security measures and evacuation procedures are paramount. Soft targets such as retail centres, where thousands of civilians work and play on a daily basis, need sophisticated monitoring technology to screen for any potential threats both on the street and on the walkways inside. Security staff need to be extra vigilant, and shoppers as well as retailers need to be made aware of emergency exit protocols. Ironically, September was National Preparedness Month in the US, while worldwide International Day of Peace was commemorated on 21 September – the same day as the attack. How prepared are we for an attack such as the one in Nairobi? Are we screening those who enter and those who set up shop in our malls and in our office blocks? In an exercise designed to gauge your centre’s readiness for an attack or possible natural disaster, the Building Owners and Managers Association (BOMA) International has prepared its own Emergency Preparedness Guidebook. The task force reviews all communications with its security agencies, collaborates with BOMA local associations on individual emergency response plans for their respective cities, and collates and distributes information to be used as a best practice for building owners and managers in emergency preparedness, evacuation and recovery planning. How many of the points in the box on the right can our industry tick off? As individuals, we should have emergency plans in place with relevant contact information not only in our phones, but also in our wallets and handbags; we should have an agreed meeting point should we be separated from our family and friends when emergencies

occur; and our offices, schools and malls should have adequate supplies of water, food and firstaid equipment. Does the local industry have any complementary measures in addition to visible security and CCTV cameras? If not, why not? And if it does, what are they – and how effective have they proved to be in averting potential security threats? SAPOA will be looking at creating such a guide for our members. This guide is intended to be a resource to help property professionals develop emergency plans for any sudden event, natural or human-based, that jeopardises the occupants, contents and/or physical structure of a building. South Africa is not immune to the kind of savage, inhumane and ruthless attacks as the one experienced in Nairobi. We should be planning ahead to mitigate, and thus prevent, future emergencies and/or reduce their effects. Neil Gopal

CHECK LISTS n Airborne hazard plan n Attacker surveying building n Building and systems general readiness n Communications preparedness n Emergency supplies n General preparedness n Hurricane and tropical storm watch and warning n Power outage preparation n Severe flooding n Suspicious mail n Workplace violence plan

SOUTH AFRICAN PROPERTY REVIEW

contents

November 2013

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

November 2013

REVIEW

e Th

GOING THE EXTRA GREEN MILE A very real passage towards sustainability

Engineers & quantity surveyors

Abreal

CAPE TOWN CBD City development open for business

ECOFRIENDLY MASTERPIECE Efficiently showing off engineering and design aesthetics

November 2013

Oilgro

es: seri ica n Afr s o ICA cu Fo AFR

ON THE COVER In a testament to a company that’s walking the talk, Nedbank’s head office in Sandton was recognised by the Green Building Council of South Africa as the country’s first“as built” Green Star SA-rated building

Banking on green investments More than just finance

4 News 8 SAPOA’s new mission and strategy 10 Education, training and development 14 Legal update Property rates 16 Cover story Sustainability case for green buildings 20 Councillors in conversation 22 Going the extra green mile 28 Green giants of the service industry 32 Africa uncovered: South Africa 37 Keep cool 38 Cape Town CBD: open for business 44 Tshwane landmark receives major face lift 47 Grundfos’ green masterpiece 53 Mixed use for a sustainable Sandton 54 Focus on quantity surveyors & engineers 56 Sustainability under the spotlight 60 SAPOA breakfast 61 Statistics 62 Port Elizabeth golf day 64 Off the wall Vertical farming in the city FOR EDITORIAL ENQUIRIES email editorial@sapoa.org.za or managingeditor@sapoa.org.za. Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 e: sales@sapoa.org.za Editor in chief Neil Gopal Editorial advisor Jane Padayachee Managing editor Mark Pettipher Editor Candace King Copy editor Ania Rokita Sales Riëtte Stevens Finance Susan du Toit Contributors Advocate Portia Matsane, Martin Ferguson, David A Steynberg, Nicky Manson, Tammy Sutherns Photographer Michael Glenister

P R O P E R T Y

F U N D

SOUTH AFRICAN PROPERTY REVIEW

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) Ltd e: mark@mpdps.com

Printed by Printing Solutions e: info@sedmarketing.co.za

news

Attacq Limited ushers in exciting JSE listing

ormally Atterbury Investment Holdings, Attacq Limited recently announced its listing on the main board of the JSE under the “Real Estate – Real Estate Holdings and Development” sector. Attacq will give investors the opportunity to share in a long-term sustainable real estate capital growth fund with a successful track record as a public company. Since inception eight years ago, Attacq has delivered an average compound annual return exceeding 20%. “Listing Attacq will create a foundation to grow the business further,” says Attacq CEO Morne Wilken. “It enables Attacq to access capital efficiently, raise its profile and expand its investor base, all of which should enhance its prospects. Attacq’s focus on long-term sustainable capital growth distinguishes it from other JSE-listed property entities, such as REITs that predominantly focus on rental income distribution. “When considering Attacq’s listing, we assessed the investor benefits of various structures, including REITs. But our established structure and business model of delivering sustainable long-term capital appreciation has proved successful and delivered excellent results to our investors. The timing of the listing also places Attacq in an ideal position to invest in excellent development opportunities, especially those at Waterfall Business Estate.” Attacq will heighten long-term sustainable capital growth and improve total returns to shareholders via its strategic weighting of investments to developments. Furthermore, it will reinvest profits from rentals or occasional disposals and retain completed developments, rather than selling them, to realise development profits. Investment in Attacq will be made available by private placement, which aims to raise up to R800-million at a price per share determined by the book build, managed by Java Capital. Apart from raising equity, the private placement is also designed to increase the spread of shareholders for Attacq. “For our existing over-the-counter shareholders, who played such an important role in establishing Attacq’s successful track record, investment in shares will be tradable on the JSE from listing. This will ultimately enhance liquidity for our shareholders,” says Wilken. Attacq’s assets comprise both investments and developments. Its portfolio strategy is to hold 65% investments and 35% developments to optimise long-term sustainable capital growth, enhance total returns to shareholders and mitigate risk. Attacq’s asset base of R12,5-billion (as at March 2013) includes landmark commercial and retail assets and developments. Among its developments is the prime Waterfall Business Estate. Attacq benefits from an African portfolio that includes Bagatelle Mall of Mauritius and Bagatelle Offices. It also has an effective 32,5% stake in Atterbury Africa, in partnership with Hyprop Investments and Atterbury Property Holdings, which invests in retail centres and developments across sub-Saharan Africa. “Our long-term strategy is to achieve an optimal portfolio balance of 70% of our assets by value in South Africa, 20% in other countries on the African continent and 10% internationally outside Africa,” says Wilken. “We are already making good progress on this objective and will continue to seek opportunities to further this goal as well as expand our development pipeline to grow long-term prospects.” +27 (0)87 845 1136, Atterbury.co.za/attacq

SOUTH AFRICAN PROPERTY REVIEW

Growthpoint opens offices at Menlyn Corner

rowthpoint Properties has opened a regional office in the 10 000m² AAA-grade Menlyn Corner in Pretoria – a prime office address that Growthpoint owns. With its excellent location and energy-efficient measures, Growthpoint has chosen this building from its portfolio of properties in Pretoria as the home base for its office team serving its clients in the area. “Menlyn Corner is a unique proposition in the Pretoria office market,” says Rudolf Pienaar, Growthpoint Properties divisional director for offices. “Our new offices at Menlyn Corner allow us to be closer to our clients in the region and, by doing so, facilitate even better relationships. It also gives our team more time to spend at our properties and with our clients, to gain a better understanding of their businesses and how they interact with our buildings.” “Demand for this type of prestigious office space has increased in the area,” says

Debbie Theron of Growthpoint Properties offices division. “Menlyn is quickly becoming one of the city’s most desirable office nodes, and is certainly the place to be for the banking and financial sector in the region.” This premier office building also provides occupants with cost savings, thanks to its energy-efficient design and technologies. The façade of Menlyn Corner is designed to the new energy standard SANS 204 and energy regulation SANS 10400 Part XA. The offices meet the new fresh air regulation SANS 10400 Part 0, and provide 100% more fresh air than formerly required. A heat pump incorporated in the construction saves 30% to 50% of the electrical energy that heating of the same capacity would require, and an air-conditioning system saves energy by allowing different zones to be activated. The offices also feature a water-wise garden. +27 (0)11 944 6000, Growthpoint.co.za

90 Grayston Drive wins safety award

edefine Properties’ 90 Grayston Drive construction site was awarded first prize in the Master Builders Association North Regional Construction Health and Safety Awards. “Safety is literally top of our agenda,” says Mike Ruttell, head of development at Redefine. “We drive it home strongly by discussing it first at every site meeting. A safe site is a positive and productive site.” The main contractor for 90 Grayston Drive, WBHO, received the award and the project has now progressed into the national competition.

Redefine appointed health and safety agent ComPrac Gauteng to manage the overall occupational health and safety during the construction at 90 Grayston Drive. “In this way, we give safety due attention as well as the responsible measures and implementation from WBHO,” says Ruttell. Speaking at the awards ceremony, executive director of the Master Builders Association North, Mohau Mphomela, said, “Companies recognised for their efforts in this regard are exemplary businesses managed

news

Colossal investment in African affordable housing sector

FC, a member of the World Bank Group, and the National Housing Finance Corporation (NHFC) recently announced investments of more than US$63-million in the second fund of global private equity investor International Housing Solutions (IHS). The fund, named IHS Fund II, will support the development of affordable housing in South Africa and sub-Saharan Africa. “Providing affordable basic services, such as access to quality housing, is a priority for IFC in Africa,” says Saleem Karimjee, IFC senior manager for southern Africa. “IHS Fund II offers an attractive opportunity for private investors to gain access to a fast-growing market with significant positive social impact. IFC’s commitment will stimulate investment, growth and job creation in sub-Saharan Africa, demonstrating our support that can help catalyse additional fundraising.”

by people who, although still pursuing profit, would not allow that objective to harm their staff.” Redefine is developing a 21-storey premium-grade office building at 90 Grayston Drive in Sandown, central Sandton. The R505-million redevelopment spans 19 343m² and includes 11 levels of parking and nine levels of offices above an elevated atrium. Demolished in March 2012, the redevelopment of 90 Grayston Drive is due for completion in June 2014. +27 (0)11 283 0000, Redefine.co.za

From LEFT: Saleem Karimjee, Soula Proxenos, Samson Moraba

IFC has committed US$25-million to the fund. NHFC CEO Samson Moraba said the NHFC is committed to ensuring that all South African households within the affordable housing market have greater access to housing that is affordable and appropriate, both in terms of size and location. “Our goal is to enhance the wellbeing and quality of life of the low- to middle-income households with the security of a home, as well as an opportunity to create wealth,” said Moraba. “We firmly believe that our deliberate strategic partnership with IHS will unlock the

Tower Mall welcomes shoppers and investment

ipula Income Fund welcomes its newly developed 15 400m² Tower Mall, which opened last month. Developed by Landmark Real Estate Services, the R155-million Tower Mall is set to serve the growing Jouberton area and surrounds in Klerksdorp, City of Matlosana, and will bring about investment into the under-serviced community.

delivery of housing at scale, and ultimately lead to the creation of sustainable and attractive communities, where people can live, play and pray.” “IHS has already provided financing for more than 28 000 housing units with a combined total value of more than R8,6-billion, providing tangible positive social impact for the people living in IHS developments,” said IHS managing partner Soula Proxenos. “We can substantially expand that impact through IHS Fund II.” +27 (0)11 300 8600, Ihsinvestments.co.za

“This is the largest ever private investment into this community, and among the largest in the City of Matlosana in recent years,” says Izak Petersen, CEO of Dipula Income Fund. “The investment goes beyond providing a quality mall and excellent retail for this community. It is also an investment in the community which will boost employment and skills. This investment is in line with Dipula’s strategy of investing in quality assets in previously disadvantaged communities. We believe that this helps restore the dignity of these once forgotten people of our country.

Landmark did a sterling job in the design and development of this centre. This is an asset for the people and we are delighted that we can be part of this, and certain that it will act as a catalyst for more investment in the area.” Landmark Real Estate Services identified the potential of this community and purchased the land five years ago. “Through a steering committee, the community played a vital role in assisting us to make this investment a reality,” says Lionel Kisten, executive director at Landmark and SAPOA National Property Developers Forum chairman. “We also received excellent support from the municipality. We’ve designed a financially feasible mall that creates a standout attractive, modern and vibrant shopping environment. “Tower Mall will be the first modern shopping centre in this area and will definitely be the impetus to further commercial development and local economic growth.” +27 (0)11 325 2112, Dipula.co.za

SOUTH AFRICAN PROPERTY REVIEW

news

SAPOA places SA on global property standard map

APOA is at the forefront of a new initiative to establish global property measurement standards for property investors and users alike as part of the International Property Measurement Standards Coalition (IPMSC). Established in 2012 at a meeting in New York hosted by the World Bank, IPMSC has 20 founding members, of which SAPOA is the only African organisation. As a first step towards achieving its goal of global property measurement

standards, the IPMSC set up its Standards Setting Committee (SSC) with 19 property experts covering property sectors in 50 countries across five continents. SA is represented on the SSC by Tony Gebhardt, principal at Hamlyn Gebhardt and a member of SAPOA’s Method of Measuring Floor Areas Committee. Once the SSC has completed its work over several months, it will make a recommendation to its constituent bodies, including SAPOA. “The next step will be for SAPOA and other local

organisations to undertake a separate process to consult with its members,” says Gebhardt. For SAPOA, the discussion will be about the advisability of progressively amending the SAPOA Method of Measuring Floor Areas to incorporate the international recommendations.” Global investors and occupiers have long grappled with the fact that consistent, international property standards simply do not exist at the moment. “Property assets are measured differently

Sandown Valley receives face-lift

ue to the ongoing demand for upmarket office space in Sandown, Johannesburg, construction group Liviero has netted a R97-million contract to extend and upgrade an office block in the soughtafter Sandown Valley Crescent. Liviero’s contract, which is being undertaken for client Zenprop, will see the five-storey office block extended to seven storeys, offering a total of 8 000m² of gross lettable area. “This contract entails the construction of three new basement parking levels, a new glass façade, the addition of two reinforced concrete floors, the installation of three new scenic lifts and a complete remodelling of all of the floors,” says Liviero CEO Neil Cloete. “The existing lift shafts will be converted into stairwells and two new fire escapes will also be constructed.” The refurbishment of this building will complete a series of upgrades that have been undertaken along the Crescent, which is situated in a prime location in the heart of Sandton. Liviero will complete this fasttrack project in just over 10 months. “Logistics and access are going to be a major challenge for the first six months as the additions involve extending the ground-floor slab to the entire extent of the site,” Cloete says. “Until this is done, it is going to be difficult to get materials in and out of the site.” +27 (0)11 466 2644, Liviero.com

SOUTH AFRICAN PROPERTY REVIEW

Changing trends in retail sector

ccording to Johan Engelbrecht, director of retail properties at JHI Properties, several interesting trends have emerged in the local retail sector. “With public and private school holidays now more evenly spread over longer periods throughout the year, rather than coinciding, we are seeing a less noticeable impact on retail trading,” he says. “As a result, shopping appears to be more sustained rather than experiencing marked peaks and troughs, although the key festive seasons in December and Easter holiday periods still attract larger volumes of shoppers, and therefore increased consumer spend. “In addition, with consumer spend, and more specifically the discretionary

spend, remaining under pressure for economic reasons, shoppers tend towards much higher frequency shopping in smaller volumes as opposed to the days when they carried out one major monthly shopping expedition. “In this regard, the conveniently located neighbourhood shopping centres have benefited, as shoppers choose to visit easily accessible retail outlets more often, even twice a week. “In line with this, retailers are keeping less stock, and restocking to suit changing consumer buying patterns.” JHI Properties currently manages approximately 2,7-million square metres of retail space in southern

in different places, and methods can vary widely, making accurate comparisons virtually impossible,” says SAPOA CEO Neil Gopal. “In this way, we can help drive a more transparent and stable property market worldwide, by enhancing public trust and building investor confidence.” Other positive spin-offs include improved valuations and financial reporting for property holdings worldwide. +27 (0)11 883 0679, Sapoa.org.za Africa, comprising some 240 shopping centres. Despite sector challenges including rising energy costs, Engelbrecht says that the shopping centres managed by JHI Properties have remained stable, with low vacancy levels that have, in some instances, even reduced. “We are taking a somewhat conservative view of the remainder of the year and estimate that growth in retail turnover will be between three percent and 4,5%, mainly because the spend did not materialise as anticipated over the past number of months, and more specifically over the Easter holidays,” says Engelbrecht. “General consumer sentiment continues to be increasingly conservative and we believe this is largely due to high consumer debt levels (unsecured debt remains a concern) and inflation coming under renewed pressure from a weakening rand. “However, while foot count in general still reflects negative growth, we are seeing growth in spend per head and increased turnovers in JHI-managed shopping centres, particularly in the greater Gauteng market.” +27 (0)11 911 8000, Jhi.co.za

news

South Africa drives retail expansion in Africa

Improved performance in H1 2013 for SA property

ccording to Malcolm Horne, CEO of Broll Property Group, South African retail is driving development in Africa. Retailers are responding to increased demand from consumers in Africa, in particular expanding operations on the continent from South Africa. Last year, South Africa was the single largest investor in foreign direct investment in Africa. Several top retailers are already staking their claim on the continent. Retail leader Massmart recently announced its aim to expand its footprint in Kenya, with ambitions in food retail in West and East Africa. In total, the group plans to open 15 new stores outside South Africa in the next three years. Shoprite Holdings already trades from 192 stores in 16 countries outside South Africa. It opened 19 new supermarkets outside South Africa in its 2013 financial year and has a further 20 confirmed for 2014. “In sub-Saharan Africa, growing customer demand is coupled with an increasingly well informed customer base, making it easier to position retailer brands, especially as far as fashion, supermarkets and electronics are

concerned,” says Horne. “The combination of regional retailer expansion, international retailer entry and South Africa’s retail springboard all make for an exciting market that is ready to grow at pace, but choked by a shortage of quality retail space.” Horne notes that rapid middle-class growth in Africa has created a gap between consumer and retailer, with insufficient mall retail space. “In East Africa, certain categories of experiential and mainstream retail are missing,” he says. “Retailers who fill this gap will flow into the country once it is evident there are more new well-designed malls, ready to receive and accommodate them.” “There are many new malls that will open in 2015 and 2016,” says Jonathan Yach, MD of Broll Kenya. “Among them are Garden City, The Hub and Two Rivers. Several malls in Nairobi are also under renovation including Nairobi’s stylish The Village Market and Sarit Centre. This will advance much-needed topnotch modern retail space for new and expanding retailers in the region.” +27 (0)11 441 4000, Broll.co.za

JHI reports low vacancies in Namibian retail and office sectors

espite Namibian economy’s slow recovery path, JHI Properties reports good performances in the retail and office sectors, with very few vacancies. “Within our portfolio of managed properties, vacancies are only around 1,8%, with annual rental escalations of eight percent,” says Monica Pienaar, regional executive in Namibia for the Namibia-based JHI Properties, which operates throughout the country. Situated in the Windhoek CBD, the well-established Sanlam Centre, which comprises office and retail space, has just completed its refurbishment. This has created more foot traffic, and a new vibrancy, with tenants from the nearby office buildings as well as tourists visiting. “In Oshakati Shopping Centre in Oshakati, northern Namibia, we have no vacant commercial space,” says Pienaar. “There is no doubt that the current tenant mix definitely contributes to the success of the centre, which is the first stop for taxis coming in

from the northern areas.” JHI Properties also reports no vacancies in the Katutura Shopping Centre in Windhoek, where refurbishment has been completed. Standard Bank has also completed an internal upgrade of its premises. “In addition to Sheet Street and Mr Price, we have also opened the first Pep Home in Namibia at this centre earlier this year, and it is trading very well,” says Pienaar. “Fish and Chip Company has also opened its new shop, and other small tenants have opened their doors. The greater variety of stores in the centre has added significantly to the appeal for shoppers and visitors to the centre.” +264 61 252 095, Jhi.co.za

he recently released SAPOA/IPD South Africa Biannual Property Indicator shows that the South African property sector delivered an improved 9,2% total return for the first six months of 2013. This is 30 basis points more than the December 2012 biannual total return of 8,9%. The performance growth came from high capital growth of 4,9% and an income return of 4,2% for the period. The property sector outperformed both equities at -2,8% (MSCI South Africa Equities) and bonds at -2,5% (JP Morgan 7-10 Year South Africa Government Bond Index) for the first six months of the year. The growth was driven even higher by capital growth and firming of the rental yield by 30 basis points over the first half of the year. Operating costs continue to be a thorn in the industry’s side, increasing by six percent compared with December 2012. Operating costs as percentage of gross rent also increased to 47,3% in this update from 46,3% as at December 2012. Property taxes, which constitute about 21% of the total operating costs, registered a strong 10,5% growth following the new municipal price increases. Electricity, which contributes 33% to the costs, posted a growth of 4,3%. On a sector level, the retail sector posted an overall total return of 10% – 5,9% capital return and 3,9% income return. The industrial sector followed closely with 9,1% overall return, of which 3,9% was capital growth and 5% income return. Offices trailed behind at 7,9% total return, comprising 3,5% capital and 4,3% income return. “It is encouraging that the SAPOA/IPD Biannual Indicator shows a modest overall improvement over the first six months of 2013,” says Stan Garrun, executive director and head of South Africa at IPD. “The retail sector continued to dominate, but the industrial market improved in a number of key aspects. Offices continue to bear the brunt of it, exacerbated by new development activity. There are conflicting signs, which in an uninspiring economy will make for interesting for reading for property investors in the next six months.” +27 (0)11 656 2115, Ipd.com/southafrica

SOUTH AFRICAN PROPERTY REVIEW

vision, mission and objectives

SAPOA’s new mission and strategy Executive director at Growthpoint Properties Limited and SAPOA president Estienne de Klerk shares SAPOA’s brandnew mission statement and tells us how the organisation is reaffirming its focus on its members

“SAPOA’s mission is to be committed to actively and responsibly represent, protect and advance its members’ commercial property interests within the property industry” Vision

Q Can you tell us a bit about how the new mission statement compares with the old one? The SAPOA board sat to review the strategy in late July and, as part of the process, we also looked at the mission of SAPOA as an organisation. The board focused on the core purpose of the organisation and tried to ensure that the mission carries that message to the reader. The primary change was adding the words “protect and advance” – for our members with a commercial property interest.

Q Why has the mission statement changed? The addition of the words “protect and advance” really highlights the important role the organisation has to fulfil to guard and promote the sector’s interests.

Q How does this reflect

SAPOA’s strategy and focus?

Some of the key elements that we set out in our strategy as areas for the organisation to focus on, and that I would like to highlight, include: 1) Advocacy: this includes government liaison, tax legislation, competition issues, assisting the Department of Public Works, and building a broader relationship across government to promote and advance the interests of our members and the sector. Thus we are not just aligning with one government department. 2) Education and training: expanding the skills sessions offered to members. 3) Improving and expanding industry research: an economic impact study and various other initiatives. 4) SAPOA events: delivering value to members and creating platforms to advance relationships. 5) Organisational capacity review: reviewing the staffing and skills to ensure they are sufficient to deliver on the strategy. 6) Improving PR and marketing: ensuring effective communication of various activities.

SOUTH AFRICAN PROPERTY REVIEW

“To be a nationally accepted and internationally recognised leading property association.”

SAPOA’s aims and objectives l Issue a clear position on matters relevant to the property industry where the interests of its members and the economy as a whole are impacted upon. l Provide a source of information for members and government through the coalition, collection and dissemination of property data and statistics. l Enable wider participation in the industry by historically disadvantaged members of the community to become involved as owners, developers, employees and managers in the property industry.

l Provide professionally designed education programmes. l Expand contacts with government at all levels to ensure continued good relations and recognition as the authoritative voice of the commercial and industrial property industry.

Services 1. Monitoring and acting on legislation 2. Government lobbying 3. Dissemination of research 4. Hosting networking functions 5. Hosting golf days 6. Running educational courses 7. Running workshops and seminars 8. Issuing of publications and standards 9. Hosting the annual SAPOA Convention

Services plan for 2013/2014 Service

Responsibility

Education

SAPOA Education Committee SAPOA HRD manager SAPOA marketing & events manager

SAPOA Convention

SAPOA Convention Committee SAPOA CEO SAPOA marketing & events manager

Research

SAPOA Research Committee SAPOA CEO

Legislation

SAPOA Legal Committee SAPOA CEO; SAPOA legal manager

Frequency

SAPOA events - Golf days - Gala dinners - Networking functions - Research breakfasts - Workshops

SAPOA marketing & events manager

- Golf days x 6 p.a. - Gala dinners x 6 p.a. - Networking functions x 4 per region - Research breakfasts x 15 p.a. - Workshops x 10 p.a.

SAPOA Publications

SAPOA CEO SAPOA marketing & events manager

Monthly

SAPOA committee meetings

All managers SAPOA CEO

Approx. 10 meetings per month Average of 106 committee meetings p.a. Average of 200 attendees

vision, mission and objectives Key objectives for 2013/2014 Strategic objective

Operational objective

Action

l Review DPW leasing strategy vs the Property Charter vs the DTI codes and the impact on industry l Review current DPW commercial administrative practices and their impact on the industry

l Review matter at SAPOA board level l Initiate discussions with the Property Sector Charter Council (PSCC) and DPW l Assist the PSCC to ascertain status of transformation in the industry l Table outcome to DTI and DPW

Government liaison

Engage with Government to develop platforms for open communication with local, provincial and national government

l Target specific government departments at local, provincial and national level l Establish meetings with: - Mayor Parks Tau (JHB) - Mayor De Lille (Cape Town) - Mayor Ramokgopa (Tshwane) - Mayor Nxumalo (eThekwini) l Initiate a “Meet the Mayor” campaign

Stakeholder engagement

Continue to build relationships with affected and involved stakeholders in the public sector

l Engage affected and involved organisations l Meet with relevant cabinet minsters (DTI, finance, human settlements, etc)

REIT legislation

Ensure the unlisted sector is brought in line with REIT dispensation

l Embark on legislative process to ensure National Treasury grants the unlisted sector REIT tax dispensation l Engage with National Treasury and SAPOA members

Competition Commission (CC)

Competition Commission thresholds submission

l Revisit CC submission process and thresholds; l Make official submission to DTI l Investigate whether property transactions should be part of the CC mandate

SAPOA to continue providing the current 21 courses per annum

l Investigate professional designation for property practitioners l Establish via a survey to top executives which educational courses the industry would like to see offered by SAPOA l Look at setting up a course on negotiating skills for leases l Add new courses and workshops to current offerings

Industry research

SAPOA to continue providing the current 14 reports per annum

l Plan an annual economic impact study l Establish broker panels for Limpopo province and Mpumalanga l Re-examine the manner of releasing research reports as a way of profiling SAPOA

SAPOA events

SAPOA to continue providing the current networking events annually and expand sponsorship opportunities to as many members as possible

l Continue to plan and hold stakeholder engagements/round-table discussions at a strategic level (e.g. “Meet the Mayor” campaign)

Membership

l Segment membership benefits l Implement member retention strategy l Increase membership

l Segment membership categories into Category 1 and 2, ensuring fees are aligned to benefits l Hold member induction breakfast session to ensure legal and education incorporated into this process

Communication

l SAPOA publications to continue to be issued monthly l Strengthen internal communications l Target the right segment with relevant communication

l Appoint PR agency l Bring SAPOA publications in-house l Implement regional electronic newsletters

Advocacy

Department of Public Works

Education, training & transformation

Membership & marketing

PR & media liaison

Organisational review

SAPOA to undertake an organisational review to examine operational capacity and financial resources SOUTH AFRICAN PROPERTY REVIEW

education, training and development

Youth lekgotla hosted

Government has a big role to play: it has to nurture entrepreneurial spirit to ensure it shines brighter within and among the youth – the future leaders of our country By Zaheera Walker

A Martin Ferguson, SAPOA’s HR, education, training and development manager, collaborates with thought leaders in South Africa’s property sector

ddressing more than 600 guests at the Economic Development Cluster Youth Lekgotla in Fordsburg in September, MMC councillor Ruby Mathang said interventions have been put in place – one of which included a business plan that placed youth development at the core of the city’s mandate. The aim, he said, was to question how to help the young men and women out there. The event was used as a platform to introduce the youth to opportunities available through the City of Johannesburg’s Department of Economic Development (DED) as well as the Joburg Property Company (JPC) and Joburg Market. The event was in line with the Joburg 2040 Growth and Development Strategy (GDS) outcomes, such as creating an inclusive, job-intensive, resilient and competitive economy that harnesses potential of citizens.

Ground-breaking initiatives

POINTS TO NOTE l The

Joburg Property Company (JPC) was established in 2000 as the only mandated agency of the City of Johannesburg to manage and develop land and property on behalf of the city. l It currently manages a property portfolio worth more than R8,8-billion, with 64 000 properties covering at least 39 000 hectares. l Since 1 November 2012, JPC has merged with the Facilities Management Unit and Metro Trading Company in an effort to consolidate key functionalities and provide excellent service delivery to its stakeholders.

“The business plan contains some ground-breaking initiatives, for example, the co-production concept,” said Mathang. “This model recognises that the delivery of services to communities will only succeed if there is involvement from all parties concerned. The communities should not be seen as participants but as drivers of service delivery, focusing on the use of local labour. This will be of benefit to SMME and young entrepreneurs. “We are also intent on an economic transformation agenda. We’re currently reviewing the procurement procedures of the city so that they are pro-poor, pro-youth and pro-SMME. To this end, we have set ourselves a target of directing no less than R2-billion of the city’s spend towards SMMEs/youth/women.” Speakers from JPC, Joburg Market, the Economic Development Cluster, property developers, financial institutions and SAPOA shared their knowledge on how to access the market, and offered assistance in understanding the merits of the property sector. Youth delegate Lindile Jim said the summit was the ideal channel to access the available property and agricultural opportunities. “I have been going around in circles trying to get guidance on how to augment myself in the field but until now I was not successful. This platform has opened doors for me and has helped me to understand the fundamentals of the property sector. It has unpacked the way forward on how the city provides assistance for us to realise our entrepreneurial potential.”

SOUTH AFRICAN PROPERTY REVIEW

Department of Economic Development MMC councillor Ruby Mathang gives the opening address at the Youth Lekgotla held at the ImageLifestyle Centre in Fordsburg

In closing, Mathang said his desire was to find resolutions that gave direction on how to support emerging players within the property sector. “If I may be bold, one of the resolutions I would be happy to see is how to continue this session in the form of working groups that will continually guide and ensure that we are always on the same page,” he said. “We must be able to demonstrate that this engagement is not another talk shop, but a gathering of minds for a better city, and a better country.”

Some of the resolutions l DED will form and facilitate a steering committee to monitor projects targeted at the youth. l Educational programmes for property incubation, entrepreneurship and learnerships will be put in place. l There will be monitoring and status reports for the R2-billion allocated for the designated groups by CoJ and DED. l Enterprise development should be made a compulsory element of all JPC, DED and JM contracts. l JPC Property training programme: create an NQF level certificate. l Supply chain database registration: all entities within DED should accept and help the designated groups on their database.

education, training and development

SAPOA calls for bursary sponsorship I

n 2010, Pareto Limited and SAPOA established the SAPOA Pareto Bursary Scheme with the sole objective to create a fund for scholarships and bursaries. The main aim was to focus on education, training and development in the commercial property industry. The beneficiaries of the trust are previously disadvantaged individuals. The intention of the Bursary Scheme is to recruit and enrol new students every year, and to reach a stage where we will be in a position to provide (on an annual basis) graduates who are qualified in commercial property, to the SAPOA members and the commercial property industry.

Management of the scheme The SAPOA Industry Bursary Scheme is managed by trustees and administered by SAPOA, and includes the following services: l The SAPOA Education, Training and Development Committee interview and select students in terms of the sponsoring companiesâ&#x20AC;&#x2122; mandate. l The SAPOA education manager will assist with university and hostel registrations. l Manage the payment of study fees, accommodation, books and pocket money. l Provide quarterly feedback to SAPOA Industry Bursary Scheme trustees and the subcommittee consisting of sponsoring employers. l Arrange student vacation work with sponsoring companies. l Ongoing mentoring and quarterly one-on-one student meetings. l Managing student progress and performance. As can be seen, SAPOA takes the administrative management of the scheme out of the hands of its members, who can focus on their core business activities. The end result is that the industry has access to qualified graduate property students, and they will be able to address their BBBEE and Property Charter targets with skilled people. Furthermore, in terms of the recently gazetted Property Charter, members can utilise Code 700, the socioeconomic development code, to fund the SAPOA Bursary Fund. This Code deals with the benefit companies can derive from contributing towards socioeconomic development or sector-specific initiatives that promote access to the economy for PDIs. The compliance target is 1% of net profit after tax,

and in terms of the charter the weighting points are 3. SAPOA members are therefore requested to consider making this 1% NPAT contribution to the SAPOA Bursary Fund. This will be an initiative that will ensure constant financial injections to the trust. Members will benefit as follows: l Comply with their BBBEE targets. l Contributions utilised to educate and train people in commercial property. l Scarce skills in commercial property addressed. l Members have opportunity to employ skilled graduates, qualified in property or as mandated. l The SAPOA Bursary Scheme is registered and will issue Section 18A certificates for tax purposes, so participating members will receive tax rebates. However, to achieve the SAPOA Industry Bursary Scheme objectives, more funds and sponsorships to the scheme are needed. Our first intake of 10 bursary students will graduate this year; they have already been placed with our participating sponsors and other members. If each SAPOA member company commits to sponsoring one graduate for four years, we will have 1Â 700 qualified graduates that will enter the commercial property industry by the end of 2017.

SAPOA, on behalf of the commercial property industry makes an appeal to all its member companies to join its current sponsors and contribute sponsorships and donations to the bursary scheme

For more information, contact: Martin Ferguson, human resources development manager t: +27 (0)11 883 0679 e: martin.ferguson@sapoa.org.za SOUTH AFRICAN PROPERTY REVIEW

education, training and development

First for property sector careers By Claire Cole

he Property Sector Charter Council (PSCC) recently organised a Property School Career Week to create interest among learners about the career opportunities in the property sector. The aim of the exercise was to create a single platform for learners to find out as much as possible about the industry by engaging with professionals from various representative bodies so that they could understand more about the industry and about available career options within it. Targeted at learners in Grades 10 and 11, the Property School Career Week event was held in Gauteng at a venue sponsored by Vunani Property Investment Fund (Investment Place in Hyde Park) from 25 to 27 September. Sixty learners from township

schools in Soweto, Thembisa and Alexandra took part. This event was the first of its kind in the property sector, and the 2013 career week was a pilot to gather lessons that would enable PSCC to roll out a similar annual programme nationally.

Property sector overview The presentations on day one began with an overview of what the property sector is about. Learners were informed about tertiary institutions that offer property studies in Gauteng and the criteria for acceptance in those faculties. Learners were also exposed to the departments of government that make use of property knowledge and offer property-related jobs,

PROUD SUBSIDIARY OF EPS

PSCC CEO Portia Tau-Sekati

and told about which voluntary associations are represented in the property sector and what they offer their members. Day two’s schedule included speakers expanding in more detail on the different disciplines within the property sector. The disciplines discussed included asset management, brokering, property management, estate agency, conveyancing, property ownership, corporate advisory roles, valuation, facilities management, shopping centre management and portfolio management. Each of the speakers talked about what their role entails, as well as how it links with and contributes to the property value chain. Martin Ferguson of SAPOA, which represents commercial property owners, told learners about the role, mission and function of the organisation and how it serves the property industry. Similarly, the other voluntary associations covered the same content with respect to their organisations. These included associations and/ or regulators such as SAFMA, SAIBPP, WPN, EAAB, SACPVP and Services SETA. Two university students were also part of the programme: a first-year and a senior honours student currently busy with

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property studies. Both gave some insight into the day-today life of a university student in the property studies faculty. The learners were Dintle Mahlatsi and Nthabiseng Makgabo. On day three, three separate site visits were arranged. Learners were split into three groups of 20. The first group of learners visited OR Tambo International Airport; the second group went to South Gate Shopping Centre; and the third group visited an office development in Pretoria (the Department of Environmental Affairs). The intention of the site visits was to expose the learners to practical property projects, so that they would be able to relate and link the theory shared with them by the various professionals to a specific practical project.

Roll-out to other provinces in 2014 “We are very pleased with the way the career week turned out and would like to roll out the concept to other provinces in 2014,” said Portia Tau-Sekati, CEO of PSCC. She emphasised the need to educate youngsters about the possible careers available and about choosing property as a career option – particularly those from a disadvantaged background, as they will ultimately be the ones to help transform the sector. “The Property School Career Week has changed my whole perspective on life and my success,” said one of the learners. “Every single speaker at the event inspired us. I vow to make a success of my life despite the circumstances I come from. Thanks to the Property Sector Charter Council for an inspiring career week.”

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legal update

The rate in the rand: P R

We take a look at how rates affect municipal taxation on property By Advocate Portia Matsane, manager of the legal services department at SAPOA

ates are necessary to fund service delivery and other municipal services and outputs in South Africa. To ensure excellence in corporate governance, all municipal stakeholders must be consulted on the municipality’s rationale to the levying of rates, and informed about the rates process. In terms of Section 229 (1) of the Constitution of the Republic of South Africa Act 108 of 1996 (hereinafter referred to as the “Constitution”), a Municipality has the power to levy a rate on property in its area. In this case, “rate” means a tax on property that is imposed by the municipality, as envisaged in Section 229 (1) (a) of the Constitution. Section 229 (2) (a) of the Constitution states that a municipality may not exercise its power to levy rates on property in a way that would materially and unreasonably prejudice the national economic policies, economic activities across its boundaries, or the national mobility of goods, service, capital or labour. Section 16 (2) (a) of Municipal Property Rates Act No 6 of 2004 (MPRA) provides that if a rate on a specific category of properties or a rate on a specific category of properties is above a specific amount in rand, is materially and unreasonably prejudicing any of the matters listed in subsection (1) above, the Minister, after notifying the Minister of Finance, must by notice in the Gazette give notice to the relevant municipality or municipalities that the rate must be limited to an amount in the Rand specified in the Notice. MPRA, in support of the imperatives of the Constitution, provides further that a municipality affected by a notice referred to in paragraph (a) of Section 16(2) of MPRA, must give effect to the notice and, if necessary,

SOUTH AFRICAN PROPERTY REVIEW

adjust its budget for the next financial year accordingly (our emphasis). MPRA, through Section 16 (3) (a), gives any sector of the economy, after consulting the relevant municipality or municipalities and organised local government, the discretion to, through its organised structures, request the Minister to evaluate evidence to the effect that a rate on any specific category of properties, or a rate on any specific category of properties above a specified amount in rand, is materially and unreasonably prejudicing any of the matter listed in paragraph (c) above. If the Minister is convinced by the evidence referred to in paragraph (a) that a rate on any specific category of properties or a rate on any specific category of properties above a specific amount in rand, is materially and unreasonably prejudicing any of the matters listed in paragraph (c) above, the Minister must act in terms of paragraph (d) above. Such a notice must give reasons why a rate on the relevant category of properties, or a rate on the relevant category of properties above the amount specified in the notice, is materially or unreasonably prejudicing a matter referred in paragraph (c).

Local Government: Municipal Property Rates Act No 6 of 2004 (MPRA) In terms of Section 3 (1) of the Local Government: Municipal Property Rates Act 6 of 2004 (MPRA) and Section 62 (1) (f ) of the Local Government: Municipal Finance Management Act 56 of 2003 (hereinafter referred to as the MFMA), a Municipality should adopt and implement a policy on the levying of rates on rateable property.

legal update

The Council must, in terms of Section 6 (1) of the MPRA, adopt by-laws to give effect to the implementation of its rates policy. Council must further, in terms of Section 5 (1) of the MPRA, annually review, and may, if necessary amend this policy. Proposals for reviewing this policy must be considered by the Council in conjunction with its annual operating budget. MPRA gives Council the discretion to levy an additional rate on property in a special rating area and, in doing so, may differentiate between categories of property. This discretion is provided for in Section 22 of the MPRA. The MPRA is emphatic on the need for all persons liable for rates to be treated equitably as required by the Act. What is noteworthy is that the preamble to the MPRA provides that the Constitution enjoins local government to be developmental in nature, in addressing the service delivery priorities of our country and promoting the economic and financial viability of municipalities. It is further stated that there is a need to provide local government with access to a sufficient and buoyant source of revenue necessary to fulfil its developmental responsibilities. It is acknowledged through the MPRA that income derived from property rates is a critical source of revenue for municipalities to achieve their constitutional objectives, especially in areas that have been neglected in the past because of discriminatory laws. It is essential that municipalities exercise their power to impose rates within a statutory framework that not only enhances certainty, uniformity and simplicity across the nation, but also takes into account historical imbalances and the rates burden on the poor.

Period for which rates may be levied Section 12 (1) of MPRA provides that when levying rates, a municipality must levy the rate for a financial year. A rate lapses at the end of the financial year for which it was levied. Subsection (2) provides that the levying of rates must form part of a municipality’s annual budget process as set out in Chapter 4 of the MFMA. A municipality must annually at the time of its budget process, review the amount in rand of its current rates in line with its annual budget for the next financial year. The interpretation of subsection (1) and (2) of Section 12, read together with the definition of “rateable property” implies that each year a municipality must determine and review the amount in rand of its current rates. This seems to imply that the rate automatically lapses at the end of the financial year, i.e. 30 June of each year. This interpretation is supported by Section 13 (1) of MPRA, which provides that a rate becomes payable as from the start of a financial year or if the municipality’s annual budget is not approved by the start of the financial year, as from such later date when the municipality’s annual budget, including a resolution levying rates, is approved by the provincial executive.

“

It is acknowledged through the MPRA that income derived from property rates is a critical source of revenue for municipalities to achieve their constitutional objectives, especially in areas that have been neglected in the past because of discriminatory laws. It is essential that

“

: Property rates

municipalities exercise their

power to impose rates within a statutory framework that

not only enhances certainty, uniformity and simplicity

across the nation, but also

takes into account historical

Conclusion

imbalances and the rates

MPRA clearly states that a rate becomes payable as from the start of a financial year or if the municipality’s annual budget is not approved by the start of the financial year, as from such later date when the municipality’s annual budget, including a resolution levying rates, is approved by the provincial executive. A municipality must levy the rate for a financial year and such rate lapses at the end of the financial year for which it was levied. The rate is levied on the market value of the property. A municipality must annually, at the time of its budget process, review the amount in rand of its current rates in line with its annual budget for the next financial year.

burden on the poor

SOUTH AFRICAN PROPERTY REVIEW

cover story

An increasingly compelling sustainability case for green buildings Nedbank highlights the benefits and value of green buildings, as this sustainable case study gathers green momentum in South Africa

he advantages of sustainable building design, construction and operation of green buildings are becoming increasingly evident in all areas of business, most notably the bottom line. “Nedbank’s position as a South African leader in terms of green building finance and occupation has delivered immeasurable benefits for the bank and its stakeholders, many of which involve areas of sustainability other than the environment,” says Ken Reynolds, Gauteng regional executive at Nedbank Corporate Property Finance. “Since September 2010, when Nedbank’s Phase II head office building in Sandton was recognised by the Green Building Council South Africa as the country’s first ‘as built’ Green Star SArated building, we have steadily grown our involvement in, and commitment to, green buildings across South Africa.” Apart from the obvious positive environmental contribution that green buildings can make in terms of energy efficiency, reduced carbon emissions and lower utilisation of scarce natural resources, Reynolds emphasises that Nedbank has experienced many other, often less obvious, benefits that make the case for green buildings even more compelling. “It’s becoming evident to us that, when it comes to the potential for economic returns that can be unlocked for any business through a green building commitment, we’re really just scratching the surface in South Africa,” he explains. “Even so, it’s widely accepted that a property built or retrofitted using truly green design principles 16

SOUTH AFRICAN PROPERTY REVIEW

has the potential to deliver reduced operating costs of around 30% per year.” According to Reynolds, Nedbank has seen this level of annual operations cost saving delivered consistently by its Phase II head office building, and the majority of the other seven Green Star SA rated buildings the bank occupies or those that it has financed over the past four years. “When you consider that this level of saving means an organisation can effectively recoup the cost of green design and construction within three years, there is simply no viable argument that can be made against green buildings any longer.” Reynolds also points out that the case for green building design and construction goes further than the environmental and economic benefits. He says that the social and corporate sustainability advantages seen by Nedbank since it pioneered the first Green Star SA-rated building in South Africa are equally compelling. “While it is too early in the history of green buildings to be able to offer statistical data to support the claims that they deliver increased productivity and happier employees, as a business that occupies a number of these green buildings, Nedbank has first-hand experience that they undoubtedly deliver these benefits,” he says. He points particularly to raised levels of employee goodwill, wellbeing and productivity as key benefits that Nedbank has seen unlocked by its green buildings – particularly those like Menlyn Maine – that exist within the country’s emerging green precincts.

Ken Reynolds, Gauteng regional executive at Nedbank Corporate Property Finance

cover story

THIS PICTURE Spacious communal areas and plants create a natural environment where employees can feel closer to nature. OPPOSITE TOP Nedbank’s Phase II head office in Sandton was recognised by the Green Building Council South Africa as the country’s first ‘As Built’ Green Star SA-rated building

“It’s becoming evident to us that, when it comes to the potential for economic returns that can be unlocked for any business through a green building commitment, we’re really just scratching the surface in South Africa”

“Not only do these green precincts create ideal natural environments in which employees can live, work and feel closer to nature, they also offer viable solutions to the densification, transport and security challenges that currently face many of South Africa’s local municipalities,” he says, adding that it is not just Nedbank that has experienced the benefits of green buildings. The approach is delivering increasing commercial value for its property development clients as well. “As retail, commercial and residential tenants become more environmentally aware, we’re increasingly seeing that green buildings have the potential to deliver higher, more consistent revenues,” he says. “It is highly likely that, over time, these green properties will experience lower vacancy rates while potentially being able to levy higher rentals.”

Gauteng: Ken Reynolds +27 (0)11 294 1948 Western Cape: Richard Thomas +27 (0)21 416 7121 KZN: Anand Joseph +27 (0)31 364 2629 For more on Nedbank Corporate Property Finance visit Nedbank.co.za. SOUTH AFRICAN PROPERTY REVIEW

cover story

Green forces unite Nedbank Corporate Property Finance and the Green Building Council shine a spotlight on the performance of existing buildings

Identify, manage, improve “The Existing Building Performance tool focuses first on understanding the issues, then on managing existing buildings more efficiently and sustainably,” explains GBCSA project manager Francois Retief. “It will allow building owners to analyse and benchmark their property portfolio, set out plans for improving the performance of their building stock, and create a common language that recognises the value of high-performing buildings, which can be communicated to both tenants and investors.” The credits of the rating tool will fall within three broad categories, considering measurable performance indicators such as water, energy and waste management; lease agreements, management contracts or procurement policies that define performance requirements; and building attributes that inform performance.

Environmental imperative

Frank Berkeley, managing executive at Nedbank Corporate Property Finance

he Green Building Council South Africa (GBCSA) and Nedbank Corporate Property Finance launched the new Green Star SA Existing Building Performance rating tool at the Green Building Convention held recently in Cape Town, aimed at addressing the demand from an entirely new segment of the property market in South Africa. The new rating tool will allow effective and objective measurement of an existing building’s environmental performance in operation and assess key performance indicators relevant to environmental issues such as energy and water consumption. “This powerful tool will give property owners the opportunity to make every building a greener building, thus leveraging the benefits, such as lower operating costs, higher returns on assets and increased property values,” says Frank Berkeley, managing executive at Nedbank Corporate Property Finance. To date, the GBCSA’s efforts have focused on new buildings – advocating specific design and technical interventions to be implemented before

SOUTH AFRICAN PROPERTY REVIEW

“This powerful tool will give property owners the opportunity to make every building a greener building, thus leveraging the benefits, such as lower operating costs, higher returns on assets and increased property values” and during construction to improve environmental impact and performance. “It is a natural progression of the rating tools currently at our disposal, and unlocks a whole new frontier for the GBCSA,” says GBCSA CEO Brian Wilkinson. “New buildings only account for one or two percent of a company’s property portfolio, so the Existing Building Performance rating tool is a game changer, allowing all property owners to embrace environmental sustainability across their entire building stock.”

Globally, the built environment is responsible for about 40% of the world’s energy consumption, and generates one third of global carbon dioxide emissions. Thus this sector presents the single largest – and most cost-effective – opportunity to tackle climate change, and limit naturalresource depletion. “With a fast-growing economy and population, developing human and financial systems to match has taken a massive toll on the planet,” says Berkeley. “As South Africa’s green and caring bank, Nedbank has developed a clear vision of a thriving future – a future it wants for all South Africans – by ensuring that it plays its ‘fair share’. This is embodied by what we have termed Fair Share 2030, a plan that is built on a clear vision of a prosperous South Africa that will have successfully addressed its major social, environmental and economic challenges by 2030. The launch of this new tool is a step in that direction.” The Existing Building Performance tool is now available in pilot form to allow for feedback from stakeholders in the South African market. The pilot phase will run through 2014; during this time, the tool is available for download on the GBCSA website (www.gbcsa.org.za). To register interest in participating as a pilot project, please email existingbuilding@gbcsa.org.za.

9106

MAKING

TOP-RATED PROPERTY FINANCE HAPPEN

Rated first in the 2013 PwC South African Banking Survey. Nedbank Corporate Property Finance has been rated the top property finance bank in South Africa. We know that when we do well, our clients enjoy the benefits. We are honoured by this accolade, which affirms our position as market leader in the industry.

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sapoa national councillors

Councillors in conversation

It was a logical decision at the time as SAPOA is a strong and formidable organisation and has a lot of clout. SAPOA has a very important role to play in the property industry, and it is essential that such an organisation exists to unify the property commercial sector under its umbrella so that we can all speak with “one voice” on matters affecting the industry. The Legal Committee provides a very valuable service to SAPOA members by getting involved in litigation where necessary, lobbying against impending legislation where such legislation will have a negative impact on the property industry, providing training, providing legal guidelines and being involved in property research.

Who is Desirée Nafte? I’m employed at Hyprop Investments Limited as the national legal executive. Hyprop Investments Limited is South Africa’s largest specialised shopping-centre fund listed on the JSE. The fund currently has R22,5-billion in assets under management. Hyprop Investments’ property portfolio includes 11 prime shopping centres over 720 600m² of lettable area, classified as regional, large-regional, super-regional and lifestyle. I completed my BA LLB at the University of Witwatersrand in 1989, and was admitted as an attorney in 1993. After practising as an attorney in private practice for several years, I entered the commercial property industry as a legal advisor, specialising in property law and landlord and tenant law. I joined Hyprop Investments Limited in October 2011, with more than 11 years’ experience in the commercial property industry. 20

I am the current chairperson of the SAPOA Legal Committee. The Legal Committee consists of several legal advisors from various property companies in South Africa and a few attorneys in private practice. On average, we meet four to five times a year to discuss various legal issues concerning the property industry. In our meetings we usually consider all legal issues affecting the industry as a whole. My role as chairperson of the Legal Committee is to ensure that SAPOA continually monitors legislation and government or municipal policies relating to the industry in order to ensure that SAPOA members are protected and ensure that SAPOA gives practical guidelines to its members regarding the laws affecting the property industry.

When did you join SAPOA, and what are your thoughts on the organisation? Although the commercial property environment is highly competitive, during 2007 and 2008 I saw the need for legal advisors from various commercial property companies to come together and work with each other to lobby against the amounts of legislation that was being promulgated against the property industry and affecting our industry. Unaware of the SAPOA Legal Committee, I formed the Association of Property Lawyers and, upon discovering in 2009 that there was already a legal committee at SAPOA, I joined SAPOA and we merged the two entities together.

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What have been your greatest achievements at SAPOA so far? On 8 November 2012, SAPOA won a very important court case against the council of the City of Johannesburg Metropolitan Municipality, when the Supreme Court of Appeal held that the council had unlawfully increased the property rates levied on owners of business, commercial and industrial property within the jurisdiction of the Johannesburg Metropolitan Municipality during the 2009/2010 budget. The SAPOA Legal Committee has prepared a standard sale of commercial property agreement in respect of a transaction that falls within the scope of the Consumer Protection Act No 68 of 2008 (CPA). The Committee has also prepared standard lease agreements for the commercial and retail property industry where the tenant is a consumer as defined in the CPA and the lease is a transaction that falls within the scope of the CPA. These agreements are available to members of SAPOA together with practice notes on each agreement.

The practice notes explain certain aspects of each agreement as well as certain sections of the CPA affecting the property industry. These agreements are to be used as guidelines for the industry and, as each transaction or lease is unique, the user of these agreements must seek and obtain legal advice for their specific requirements. In conjunction with Roslyn Lake of Norton Rose, SAPOA held seminars on the CPA for its members. These seminars looked at the CPA in relation to the property industry and were well attended and received by the members of SAPOA. In October 2013, a lecture was held in Johannesburg by attorneys Lauren Barnett and Eric Levenstein of Werksmans Attorneys to members of SAPOA on the business rescue provisions of the Companies Act No 71 of 2008.

Who is Gareth Shepperson? I am an attorney and conveyancer, with additional qualifications in tax and in business rescue practice. I practise at my own firm, Shepperson Attorneys. We are a boutique law firm catering to our clients’ individual requirements. We focus on corporate, commercial and property law, and aim to be an integral part of your success by providing solutions that enhance your unique circumstances. I am chairman of the Gauteng Regional Council (GPC) at SAPOA, which also affords me a seat on the National Council. In addition, I am also a member of the National Legal Committee at SAPOA.

When did you join SAPOA and what are your thoughts on the organisation? As a consequence of my passion for property and my interactions with SAPOA past president Dr Sedise Moseneke, I joined SAPOA in 2008.

sapoa national councillors

We speak to our national councillors about their role at SAPOA and their future goals at the organisation By Candace King

This lecture focused specifically on how these provisions affect commercial and retail landlords where tenants place themselves under business rescue. From the time that I have joined the SAPOA Legal Committee until now, the Legal Committee has transformed itself from a loose body of members to being a committed, hard-working, dedicated, organised committee of legal advisors. The Legal Committee functions well and effectively; we hold regular meetings and carry out our undertakings. The success of the Legal Committee is largely due to the commitment and hard work of Advocate Portia Matsane who is employed as the legal advisor at SAPOA. Her enthusiasm and responsibility to SAPOA and its members has been of tremendous I was privileged to attend SAPOA’s prestigious Property Developer Programme at the UCT Graduate School of Business in 2009, which inspired me to become more involved in the activities of SAPOA. And the more involved I became, the more I appreciated SAPOA’s role and importance within the property industry. Whether it be the education of future leaders in our industry or the vital role that SAPOA plays in monitoring legislation and municipal administration, the property industry is fortunate to have a body such as SAPOA looking after its interests.

What have been your greatest achievements at SAPOA so far? I hope that people believe I have done a reasonable job of leading the GPC. I’ve tried to focus the Council’s attention on a limited number of core areas where we can make a meaningful contribution on behalf of our members, rather than being a mere “talk shop” for all aspects of the property industry.

benefit to the organisation, the members and the Legal Committee.

As part of your portfolio at SAPOA, what are the current industry challenges and how can these be solved? How can SAPOA assist with these issues?

ensure that we lobby against these Bills and to ensure that the voice of the commercial property sector is heard.

What are your future plans with SAPOA? What would you like to achieve alongside – or for – the organisation going forward?

The most important challenge is the amount of legislation that has been promulgated against the property industry, which has imposed cumbersome legal and administrative requirements on the industry. We are also facing huge challenges in our industry with the Expropriation Bill and the Property Transaction Bill, and the Legal Committee’s role is to

For the remaining period of my term as chairperson I want to focus on lobbying against impending legislation and to continue to provide practical guidelines to the industry. In this regard, the Committee wishes to: 1) Finalise the guidelines for the property industry in respect of the application of the Financial

I am fortunate to have an excellent group of individuals who sit on the Council and who contribute to the enhancement of the industry despite busy schedules and full-time careers.

Obviously, we have little influence over external issues such as the labour market and macroeconomics. But SAPOA’s research in conjunction with the IPD is extremely helpful in identifying and quantifying these issues. SAPOA’s role in educating its members is vital, and it would be remiss of me not to mention our superb networking functions, where our members can mix with one another in a social atmosphere.

As part of your portfolio at SAPOA, what are the current industry challenges and how can these be solved? How can SAPOA assist with these issues? There is a plethora of legislation affecting all role players within the property industry. My firm has recently identified 72 separate Acts that affect our property clients, and the list is growing. With more “red tape” in the form of pending legislation (such as the Expropriation Bill) this trend shows no sign of abating. SAPOA’s monitoring role is absolutely vital in this regard in order to alert all of our members to the potential pitfalls and to actively engage with local and national government where required.

What are your future plans with SAPOA? What would you like to achieve alongside – or for – the organisation going forward? My term as chairman of the Council comes to an end next year but I expect

Intelligent Centre Act No 38 of 2001 to the property industry; 2) Provide guidelines to the industry in respect of the business rescue provisions of the Companies Act; 3) Hold a lecture for members of SAPOA on the Protection of Personal Information Bill; 4) Once it comes into effect, provide guidelines to the industry on the Protection of Personal Information Bill; 5) Continue to lobby against certain provisions of the Expropriation Bill; 6) Continue to lobby against the Property Transaction Bill.

to continue participating in the GPC as well as the National Legal Committee. I would love to take up any leadership positions in which I think I can add value.

SOUTH AFRICAN PROPERTY REVIEW

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Going the

extra green mile

Sustainability in the property industry is no longer a fairy tale. The green movement is very real and will become imperative in the near future By Candace King

Greening affordable housing In December 2011, ahead of COP17, a small, ordinary street of 30 lowcost houses in Cato Manor, Durban underwent a “green upgrade”. With the world’s attention focused on South Africa for the international climate change talks, the GBCSA, in association with the World Green Building Council, wanted to demonstrate that greening lowincome housing can also generate a range of socioeconomic benefits and materially improve the lives of the people living in them. The Cato Manor Green Street retrofit is a living showcase and celebration of how greening interventions in low-cost housing can improve quality of life for residents and provide benefits for the country. It points towards a more sustainable approach for housing delivery and human development.

SOUTH AFRICAN PROPERTY REVIEW

t a recent property development conference, where sustainability was a highlighted topic, a panellist jested, “Why install an expensive, ‘green’, state-of-the-art air conditioner when you can just put on a jersey or take it off?”. Jokes aside, this sentiment is common in the South African property industry. Many still believe that green building is far too expensive, unprofitable, unnecessary and merely a phase we’re going through. Despite the negativity and the non-believers, the greening of our built environment is definitely not a fad, and does have tremendous benefits. Several property players are making inroads with prestigious sustainable commercial developments that are mushrooming across the country. These companies are not only developing green buildings because they are ecofriendly and aesthetically appealing; they are developing sustainable structures because it’s something all of the industry will have to do in the near future. “South Africa has passed the key tipping point with green buildings,” explains Brian Wilkinson, CEO of the Green Building Council of South Africa (GBCSA). “Following the launch of the Green Star SA rating system in 2008, green building gathered momentum and is now mainstream in the commercial property industry. There is pressure from industry stakeholders, asset managers, tenants and the government to build green, but there are still pockets of scepticism in the commercial property industry, specifically around the perceived cost of initiating, building, procuring and operating green.” “Green building is not a fad,” says Bruce Kerswill, founding chairperson of the GBCSA. “It is a response to the new global realities of energy and resource depletion. South Africa may be a couple of years behind the leaders but green building in the country is growing rapidly in spread and sophistication, and South Africa will soon be up there with the best.” “The green building industry in South Africa is undergoing a transition from an early adopter stage, where few companies implemented green building practices, to these practices becoming standard,” says Wilkinson. “No longer is it only companies that are already committed to the green building industry that are constructing greener buildings – we are now seeing implementation from a far wider base.”

Brian Wilkinson, CEO of the Green Building Council of South Africa (GBCSA)

Since its formation in 2007, the number of GBCSA ratings has doubled annually, with almost 40 certifications achieved since the rating system has been in place, which is just over four years. This reflects a similar growth pattern to the council’s Australian counterpart, the Green Building Council of Australia (GBCA), which now has more than 500 certifications after a decade of rating the country’s buildings. “For an institution that is relatively young – just six years old – this is an incredible achievement, especially given that the council was established during the economic downturn,” says Wilkinson. In recent years, green buildings have increasingly become “must-haves” in a world where sustainability has become indispensable. Although green building practices fundamentally focus on environmentally friendly practices, they also make economic and business sense – solar panels, rainwater harvesting and double glazing are putting a dent in high utility costs.

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“The industry is increasingly embracing green building concepts,” says Wilkinson. “Through our work within the industry in South Africa, the GBCSA has witnessed first-hand the passion, innovation and motivation that is driving sustainable design and development in the country. Green and resourceefficient buildings are an area of growing focus in the commercial property and construction industry, spurred on by severe electricity shortages, steep price increases, building regulations and the imminent Carbon Tax.” ALW Estates director Gary Woolf says that in the past greening wasn’t a priority. However, with energy costs escalating, the minimising of operating costs has become important. Green building can alleviate these in the long term. “Internationally, greening is becoming a corporate responsibility among big companies,” he says. “The minimising of company carbon footprint has also become imperative.” In terms of developing a building, Woolf notes the old way of thinking was that the less spent on a building, the higher the return. Now, the green train of thought is to spend extra on a green building so the end user pays less in the long run. “There is only one way forward – to build with the long term in mind, to build green buildings,” he says. ALW Estates is currently in the process of developing its first on-spec building, Atholl Towers, which is aimed to be registered for a 4-star Green Star SA Office v1 Design rating by the GBCSA. Not only is ALW Estates building and developing Atholl Towers, the company is also teaching South Africans the benefits of going green and how to become more economically conscious. With the development of

Atholl Towers, which is scheduled for completion in early 2014, ALW Estates is also creating employment through interdependent industries such as plumbing, glazing, architecture and others. The building will feature a modern, iconic design and open concept spaces. It boasts an energyefficient envelope through its glazing and insulation, while its energy-efficient design incorporates optimised air-conditioning and a central heatrecovery system, motion sensor light fittings and hot water generated from waste heat from the air-con system. It will also feature Otis GeN2 regen drive elevators, which are up to 75% more efficient than non-generative drive lifts. “We believe the building will be one of the first Green Star-rated buildings of this magnitude to be built on spec in South Africa,” says Woolf. “We really believe both landlords and tenants will increasingly look for such properties to lease and rent, as they offer benefits to both parties. According to the GBCSA and SAPOA Green Lease Toolkit, research shows that green buildings have large reputational, operational and long-term financial benefits for landlords and tenants, but in different ways. So we wanted to construct a new building, on spec for rent, that would offer all that.”

Talking point trends According to McGraw-Hill Construction’s 2013 SmartMarket Report, “World Green Building Trends: Business Benefits Driving New and Retrofit Market Opportunities in Over 60 Countries”, green building is accelerating around the world due to the growing belief that it is a long-term business opportunity.

Atholl Towers, which aims to be registered for a 4-star Green Star SA Office v1 Design rating by the GBCSA

GBCSA facts n Established in 2007 by leaders from all sectors

of the commercial property industry. n Is an independent, non-profit, membership-

based organisation. n Focus includes commercial or higher-income

building applications, multi-unit residential developments and, more recently, lowerincome residential buildings. n Currently has: • 39 Green Star SA certifications • More than 3 000 people educated on Green Star SA • 400 accredited professionals • 1 000 member companies n Is one of 92 green building councils that make up the World Green Building Council. n Is a full member of the World Green Building Council. SOUTH AFRICAN PROPERTY REVIEW

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Gary Woolf, ALW Estates director

Dispelling the myths The business case for green building continues to stack up. We now have evidence that green buildings deliver a range of quantitative and qualitative benefits, from lower operating costs and increased office productivity to faster patient recovery times and improved student results on tests. Many associate green with higher costs and a common misperception is that building green can add as much as 17% capital cost to a project – but this is changing. There is also evidence that green buildings return higher rents, offer faster letting, secure greater occupancy and generate higher resale value. In an economic environment where quality is king, green buildings offer higher quality at modest additional cost.

SOUTH AFRICAN PROPERTY REVIEW

Fifty-one percent of the architects, engineers, contractors, owners and consultants participating in the study anticipate that more than 60% of their work will be green by 2015, up from 28% of firms in 2012. The GBCSA believes that green building will grow from predominantly new buildings, into the existing building sector, as well as through implementation by tenants in the fit-out of their space. Wilkinson says we will increasingly see the main players differentiating themselves on the basis of their sustainability credentials. Property managers and developers will actively use their green credentials in marketing of vacant space and for ensuring retention of existing tenants. This will leverage the virtuous triangle of lower operating costs for the tenant, fulfilling the responsible investment mandates from asset managers and the very real objective of climatechange mitigation. The economic argument will be taken as a given. Similarly, tenants will also want to demonstrate their commitment to sustainability through their own fit-outs as a response to customer and stakeholder requirements. The main move, however, will be when an A-grade building and a green building are seen as synonymous. And according to Wilkinson, this is not far off. One intriguing trend gaining momentum in South Africa is the concept of green roofs, a greening movement that has been adopted around the world, including in Australia and the US. Due to climate change, rapid urbanisation, population density and an increasing shortage of quality agricultural land, urban green roofs are fast becoming a viable alternative. “Green roofs are wonderful opportunities,” says Wilkinson. “Apart from the obvious benefits of CO2 absorption, our great climate has meant these features have become used, either as a staff amenity as is the case at Alan Gray’s new head office, No 1 Silo, where the green roof will be part of the inhouse gym facility, to client entertainment facilities, as is the case with Aurecon’s Century City building.

There are technical benefits as well, including insulation and protection of the roofing fabric. So it’s a great invention with multiple benefits!” Another trend, or rather law, is the Carbon Tax Policy. Currently, there are mixed views about the policy in the industry. Woolf feels that the policy is just another tax – another way of obtaining money. “Australia was one of the first countries to implement carbon tax but it was soon removed because it hurt the country’s economy,” he says. However, he adds that it could serve as an incentive to develop more energy-efficient buildings. “We would have preferred to have seen some form of a more direct incentive/disincentive programme,” says Wilkinson. “While carbon taxes are being deployed in other countries as a disincentive to excess carbon emissions in a similar manner to the South African proposals, we would have liked to have seen this matched by the provision of incentives to speed up the retro-fitting of existing buildings, as well as the installation of energy-efficient technologies in new buildings. The impact will be low given that our sector will be excluded from the initial ‘primary’ industry, but there is the intention to eventually include all emitters – which will obviously then impact our sector. “One of the arguments for green building is the concept of future-proofing a building – the practice of including green building features and initiatives at the time of construction in order to immunise the building from future shocks in operating costs such as electricity and water. Clearly a carbon tax will just become another layer of operating cost that can be minimised through green building practices.” Then there are also alternative forms of energy. Woolf believes that the use of alternative forms of energy is definitely the future. “Companies such as Eskom need to change their mind-set on alternative forms of energy,” he says. “The private sector can also get more involved in this movement. The introduction of end-user incentives is also a good idea.”

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GREEN facts n Globally, the built environment is responsible

ABOVE Adjacent to the No 1 Silo development, No 2 Silo is the V&A Waterfront’s first residential development in more than five years. OPPOSITE Allan Gray’s new head office, No 1 Silo at the V&A Waterfront, is the first six-star rating of commercial office space of this scale in South Africa, and the first building to achieve this rating in the City of Cape Town

Wilkinson believes that although this market is gaining ground, we should be focusing first on saving traditional forms of energy. “It was very interesting to see the drop in effective cost of generation from renewables between the first and second bids by Independent Power Producers, proving that as this market grows, costs will come down,” he says. “I do believe that sometimes we look in the wrong direction – I would prefer to see more attention given to saving electricity, rather than trying to produce more! “Consider, for example, the latest 6-star Green Star building at the Cape Town Waterfront – this building will use 65% less electricity than a standard office building. So let’s focus on saving. Renewables will really come into their own when ‘feed-in’ opportunities open up at the building level – in this way developers will not only benefit from lower consumption from the grid, but will also be able to ‘sell’ any excess back to the grid, and effectively use the grid as a battery for when their own supply cannot cope.”

It will assess key performance indicators (KPIs) relevant to specific environmental issues, such as energy and water consumption. “It is a natural progression of the rating tools currently at our disposal, and unlocks a whole new frontier for the GBCSA,” says Wilkinson. “Because new buildings only account for one or two percent of a company’s property portfolio, the Existing Building Performance rating tool is a game changer, allowing all property owners to embrace environmental sustainability across their entire building stock.” Wilkinson notes that new buildings are a small portion of the entire building segment, and it was necessary to develop a building tool that would rate existing buildings and encourage owners to improve existing building efficiencies. The ability to gain accreditation for existing buildings will be very attractive for owners to increase efficiencies, and this will become the differentiator in the decision to lease or renew leases.

for a third of all greenhouse gas emissions/ carbon emissions. n Green buildings offer one of the simplest, most immediate and cost-effective ways to reduce emissions. n Green buildings save money and create jobs. n Green buildings advance social-economicenvironmental wellbeing. n Energy efficiency and introducing more renewable sources of energy is a current priority for South Africa as it faces a medium-term national power supply shortage and steeply rising electricity tariffs. n Green buildings ensure a reduction in operational costs – they save energy and water, reduce utility costs, and improve productivity in the workplace. n Property developers need to future-proof their buildings against rising utility costs. n Green buildings present the single largest opportunity for greenhouse gas abatement, outstripping energy, transport and the industrial sectors combined. The movement is an opportunity to use resources efficiently and address climate change while creating healthier and more productive environments for people to work and live in.

Lakeside Office Park in Centurion is a great example of “green” refurbishment

The GBCSA leads the movement To date, the number of green certified developments is 39, with three projects achieving a 6-star rating certification and a further 58 buildings registered for certification. This may not appear significant but South Africa is on a par with where Australia was five years in. Considering that these ratings are being achieved during an economic downturn, it seems the move towards more environmentally sustainable building is gaining momentum. The latest in the GBCSA tool rating agenda is the development of a rating tool for existing buildings, enabled by the sponsorship of Nedbank Corporate Property Finance – addressing demand from an entirely new segment of the property market in South Africa. This new rating tool will allow effective and objective measurement of an existing building’s environmental performance in operation. SOUTH AFRICAN PROPERTY REVIEW

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The green Sage VIP head-office building is designed to be simplistic in nature and to limit maintenance costs

Alternative energy sources South Africa has committed to including power from renewables in the total power provision but this is still fairly modest. European countries have been far more aggressive in the shift to renewables; one need only travel to Germany and see the proliferation of photovoltaic panels on rooftops to understand their commitment. We have just seen our first PV farm come on stream in the Northern Cape, adding a modest 75MW to the grid – but there are many more to come and it is a given that these will become a feature.

SOUTH AFRICAN PROPERTY REVIEW

Another significant development is the recent imminent launch of an Interior Rating tool, which was released in October. This is an opportunity for the tenant to demonstrate his/her responsibility towards “green” through measures such as adopting energy-efficient lighting systems, installing furniture with low formaldehyde content, reusing existing drywalls, efficient waste management and water recycling measures. The commercial interiors rating tool puts the decision to commit to environmental sustainability in the tenants’ hands. They can decide, independently of the building owner, whether they wish to comply with green building standards within their own office spaces. This rating tool is enabled by the sponsorship of Standard Bank and Saint-Gobain. The South African green building industry is also playing more of a supporting role to the industry in the rest of Africa, as other African countries take more interest in green building. “We already support Ghana, Mauritius, Kenya, Nigeria, Namibia and, Botswana and a further five countries are showing an interest,” says Wilkinson. “In the same way that we were supported by Australia and the World Green Building Council in our early stages, we are now aiming to support the rest of Africa.”

Sustainability in the future There are a host of forces collectively forming the perfect wave – these range from asset managers requiring environmental sustainability in the built environment in terms of the responsible investment code and the now well understood lower operating cost and economic case for green, to the increasing awareness of customers and staff of sustainability, and the fact that we’re out of the early adopter curve in green building practices and principles.

Green Star SA… n Is the GBCSA’s green building rating tool system. n Is South Africa’s only green building rating system. n Is based on the Australian Green Building Council

tools, and adapted by the GBCSA with the input of a local stakeholder group of industry experts. n Comprises eight green building categories: management, indoor environment quality (IEQ), energy, transport, water, materials, land use and ecology, emissions, and innovation. n Certification can be achieved for the “Design” and/or the “As Built” phases. n Certified ratings: • 4 Star Green Star SA: Best Practice (45-59) • 5 Star Green Star SA: South African Excellence (60-74) • 6 Star Green Star SA: World Leadership (75-100) The culmination of this will be the acceptance that a building cannot be A-grade without being green. As consumers, investors and staff become more discerning and environmentally conscious; they will also be the drivers of sustainable design and construction, as well as greener building occupation. “We need to educate the industry through the use of case studies of how the GBCSA has made massive inroads thus far,” says Woolf. “Once people start to see the benefits, the mind-set of many will change. The tenants also need to drive the movement forward. Green building may be seen as a privilege or a luxury for now, but it will become a necessity and a priority going forward.” “We are very privileged to have the support of basically all the serious property players in South Africa,” says Wilkinson, “and we’re committed to fulfilling our members’ mandate to change the way the world is built.”

The coffee-table book… E

very year, buildings get smarter and more beautiful. SAPOA’s primary objective is to define excellence in property and recognise top-quality design and functionality as a benchmark for excellence. The SAPOA Awards for Innovative Excellence in Property Development are widely respected within the commercial property design industry, illustrating various types of excellence, from the clarity of purpose in the brief to ingenuity of product, clever design solutions and delivery on time and within budget.

2 0 1 4 SAP OA awa

Alexander For bes headquart ers

he new headquarters for financial services company, 115 West Street, Alexand er Forbes is an iconic building opposite the Gautrain Sandton station. The design of the building draws its concept from the difficult northwest orientation and the need to adhere to new energy legislatio South Africa. n in

rds for exce

llenc e 2014

It is this recognition that owners, developers, architects and property practitioners strive for. A SAPOA award is forever, much like the raw bricks and mortar that make up the timeless beauty of property.

To be part of this amazing opportunity, partner with us by profiling your executives and/or team in our SAPOA Innovative Excellence Awards Coffee-Table Book Volume 1 in 2014. Your double-page advert will become part of the 2014 profile submissions for the excellence awards.

set to becom e an iconic lan dmark

The 2400 staff member building has extensiv e grey water systems, passive heating and cooling systems and high performance glazing with louvres to shade from the afternoon sun. The east and elevations are characte west rised by scalloped profiled zinc sheeting The design required . a flexible building hence the large floor punctuated by two plates, atria to maximise the natural daylight into office and atria spaces. the Modelling software was used extensively to generate the concrete columns and much of the interior fit out and also the 8.4m wide which float above the cones atrium space like giant clouds. The external areas are xeriscaped with indigenous low water consumption plants. The work areas are punctua ted with colourful breakout spaces to provide relaxation areas for the staff with re-cycling facilities to assist with the change of mindset regarding sustainable office culture.

in Sandton n head office 5 kswage Vol ng design

the organizi forms directly express These movement based and spacious head office was The interiors are breezy 5500m Volkswagen of the office floor plate. d he contemporary enhance the expresse on a prime principle and smooth textures 2011 and is well located and the light colours completed in October walking distance of within street e design. onto katherin modernism of this ent makes sandton site facing internal spatial arrangem fluent and . direct , ted Gautrain The efficient site hips that reinforce the newly construc stretches across the connected spatial relations building well office and tive storey for construc This prestigious three phase of development. ng of its inhabitants. y and allows for a further larly the well-bei modern south-african for maximum efficienc office is a spectacu to a competitive and the volkswagen head It The building belongs of The architecture of inspired environment. the modulated scale it serves thrive in its poise is evidenced through to its culture, and the people modern design. its users and a solid return working life to all its to ‘float’ across the site. inspired an appears offers which form and its built quality specifications. tive tendering period its striking design & the recently competi through during owners built end was It high timing of building a s advantage in the period. there was enormou this tough financial office project during quality of construction nal articulation of through a layered orthogo ent The envelope is scuplted void. the spatial arrangem patterns of solid and a series of rhythmic n matrix. the efficient circulatio of its planform defines al and vertical layering of horizont the A fluid compositional between ship relation tions, expresses the structural modula SAPOA awards for inside and the outside. excellenc e 2014 the extended horizon, simultaneously seek in The building’s lines provides an intimacy spaces nearby of views has a and the contained procession of forms d. this sequenced the entrance courtyar poetic. recognizable spatial 2

SAPOA awards for

Developer: Zenprop Property Holdings Architects: Paragon Architects Project manage rs: Capex Projects Quantity surveyor s: Schoombie Hartmann Civil and structura l engineers: Sotiralis Consulting Other consultants: A Riley, Pure Consulting , Ramsden Consulting Principal contract ors: Tiber Bonvec Constructi on, WBHO

excellenc e 2014

Corporates lea d the way wit h creative me etings

ents

on Projects & Developm managers: CPD Constructi s: AMA Architects Project engineers: ACAS int Properties Architect rs: PDNA Mechanical Developer: Growthpo and structural enginee s: Davis Langdon Civil ors: Exabuild Quantity surveyor S4E Principal contract Solutions for Elevators Other consultants:

SAPOA awards for

excellenc e 2014

uring 2010 the Universi ty of Pretoria determin ed the requirement of new lecture halls for the growing demand in tertiary educatio n which has recently gained impetus with government backing. Urgent upfront thinking was required by the Technical Department at the University and informed the consulta to provide four 600 nts seat lecture halls on a small footprint within years on the Hatfield two Campus. The selected site on Roper Street is wedged between three building large trees and furtherm s, ore the site is within a high use pedestri area. The heritage impact an of the site was assessed and approval was gained regarding existing trees, buildings and pedestrian routes. Finally the building projects a quiet air of peace and harmony appropriately fitting , into the environment considering the complex of the requirements. ity

SAPOA awards for

ABOVE Parks e 2014 Tau, Richar excellenc d Grenin SAPOA awards for

ger, Estienne

de Klerk, Lisa

Prats, Peter Merret

t, Jeremy Kelly,

Richard Quest, Peter

Merrett Patrici a de Lille,

igh h e to d and ere u D an th , d demsivity imite ing lu tis al exc only dver le. a b are er of vaila b sa num pace s 7

Developer: University of Pretoria Architect s: Impendulo Design Jeremie Malan Architects Architects, Quantity surveyor s: Del QS Civil and structura l engineers: Civil Concepts, Egmont Furstenburg Associates Mechani & cal engineers: QMech Consulting Engineers Other consulta nts: Delport du Preez and Associates, Marian Landscape Architect, Louw Pro Acoustic Consortiu m Principal contract ors: Boogertman Smit Building

excellenc e 2014

Cost R20 000 excluding VAT (Includes design, photography and production)

Deadline 15 February 2014 Bookings Jane Padayachee, marketing manager, SAPOA T: +27 (011) 883 0679 E: marketingmanager@sapoa.org.za

…an opportunity not to be missed!

SAPOA awards for

excellenc e 2014

green accommodation

Green giants

of the service industry

Luxury accommodation, excellent service, friendly staff and wonderful facilities are what South Africans have come to expect from our hotels. Now you can experience all that at these city hotels while saving the planet at the same time By Nicky Manson

Thaba Ya Batswana Eco Hotel & Spa

Location Klipriviersberg Nature Reserve, Johannesburg Number of rooms 52 Awards Winner of 2013 Service Excellence award, winner of Gauteng’s Best Four-Star Hotel, Fairtrade certified Markets Corporate and leisure Nature, conservation and ecosystem Home to the Thaba Lions Educational Centre – guests are educated and can interact with wild animals Eco-activities Meditation trail, mountain-biking trails and guided hiking trails through the bush Business Two boardrooms, three conference rooms Extras Chapel, Sinzinani Spa Green dining On-site organic vegetable and herb garden that supplies three restaurants: Kraal Kombuis, The Olive Tree and Fire Kraal Sports Bar Special features Rooms have wood-log fireplaces, jet baths, heated towel rails, underfloor heating and private patios overlooking the bush

Why we love it Its mission is to establish a sustainable, green, biodiverse, aesthetic freedom corridor along Kliprivier Drive. This initiative is a three-to-10-year process of creating one of the first major green urban corridors in Gauteng. Contact details +27 (0)11 959 0777, Tyb.co.za

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Green landscape l Composting plant to recycle 95% of all wet waste l Elimination of all exotic plant species l Reintroduction of game l Reintroduction of plants to enhance biodiversity l Annual fire breaks to protect the flora lC reation of edible and medicinal plant trails to educate guests and schools about protecting the natural habitat l Indigenous landscaping and water-wise gardens lO n-site nursery to propagate local indigenous trees and shrubs l Worm farm Green building and room practices l Energy-saving light bulbs l Carpet under-felt made from recycled plastic l Components of furniture made from recycled materials l Natural colours to reduce visual impact lO nly 50% of bushveld suites’ floor plan touches ground to ensure maximum protection of fauna and flora lT opsoil removed before construction and later used for landscaping l Double plumbing system to ensure grey water is recycled l Guests encouraged to be water-wise l Solar-powered geysers l CFC-free air-conditioning units Water, waste, energy management l Rainwater harvesting lG reen Team Policy: recruit staff who live nearby to minimise travel l Full recycling plant l HASSAP-approved chemicals l Safe disposal of low-energy light bulbs containing mercury l Safe disposal of electronic equipment l Recycling of used ink cartridges

green accommodation

Gateway Hotel Green building and room practices lL ights and air conditioners turn off automatically when room is empty; air conditioners turn off when windows or balcony doors are opened even if room is occupied l Low-flow water outlets reduce water usage lR ooms have large windows, allowing natural light throughout l Only used local, approved green-building materials lE xtensive use of concrete, which acts as heat sinks or cold beams l Rooftop vermiculite screed to create a heat barrier l Atrium light wells to facilitate natural light penetration lT hermal performance glass and glazing minimise the need for air conditioning l External shading devices l Cool, fresh air blended into rooms as required

Location Umhlanga, KwaZulu-Natal Number of rooms 146 Architects Stauch Vorster Architects (designers); CHT Architects (principal agent) Awards Granted Green Leaf Status, enable and certify the balance between business and nature Markets Corporate, government, conference and leisure Nature, conservation and ecosystem Environmental management of overall project to reduce the impact of building practices on the environment Business Five conference venues Extras Rooftop pool and bar Green dining Fig Tree CafĂŠ; the wild fig tree located at reception was saved during design and construction Special features Direct access to Gateway Theatre of Shopping

Why we love it The leafy green screen that covers the front of the hotel is eye-catching and cleverly designed for shading, and acts as a solar shield.

Contact details +27 (0)31 536 9200, Thegatewayhotel.co.za, Threecities.co.za

Water, waste, energy management l Regeneration drive lift systems lH eat pump technology, a management system that allows for remote control of various equipment l Water preheating facility on site lV ariable speed drive installations allow for optimisation of motor systems l Ozone water treatment system reduces need for chlorine l Waste-management programme l LED luminaries used

SOUTH AFRICAN PROPERTY REVIEW

green accommodation

Why we love it Plasma screens throughout the hotel speak a green language, encouraging guests to follow suit and take what they learn or experience home with them.

Contact details +27 (0)21 380 5500, Hotelverde.com

Hotel Verde Location 400m from Cape Town International Airport Number of rooms 145 Architects Heinrich Gerstner Harding (leading architects); André Harms (Hotel Verde’s sustainability consultant) Awards Runner-up in the Energy Efficiency and Carbon Management Award, 110% Green Flag from 110% Green Project by the Western Cape Government, winner of the Enviropaedia Eco-Logic award in Water Conservation division Markets Corporate, traveller Nature, conservation and ecosystem Wetlands have been created adjacent to the hotel. The area consists of a pathway leading through a specifically created mini-forest with indigenous plants and birds Eco-activities Outdoor jogging trail, rock pool Business Business centre, seven conference rooms Extras Gym with power-generating equipment that pushes power back into the hotel Green dining All food is seasonal (sourced and produced locally), featuring lots of raw, organic ingredients. Details of ingredients, where the products are sourced as well as any possible allergens are clearly displayed Special features 24-hour complimentary airport shuttle service, Bon Voyage Deli open 24/7, interactive hospitality TVs with live flight information Green landscape With a conservation project under way, Hotel Verde hopes to attract an exciting range of birds and wildlife back to the area

Green building and room practices l Garden roof to aid in cooling and insulating reception area l Recycled brick l Locally sourced supplier lH and lotions, soaps and body washes all locally produced and not harmful to the environment lC omplimentary bottles of mineral water are filtered and bottled on site lM inimum use of paper – promotion of digital equipment, all powered by solar panels lN atural, fresh, optimum temperature airflow is fed into every room and reduces the need to use air conditioners lG uests encouraged to embrace the greening philosophy via hotel’s rewards system lB uilt with concrete slabs containing recycled materials, using Cobaix Void Formers – recycled plastic balls placed strategically within the concrete slabs to displace the concrete Water, waste, energy management lC omplex network of pumps and piping that uses the Earth as a heat source in winter and heat sink in summer l Photovoltaic panels l Wind turbines l Grey-water recycling plant lC O monitoring, and passive measures to reduce 2 heat-load and energy losses lE levators run on a regenerative drive, allowing about 30% of the energy input to be recaptured and fed back into the building l Double-glazed windows with spectrally selective glass lI nstead of standard air-conditioning systems, cooling is via ground-source heat pumps in geothermal boreholes lS olar panels on the north façade of the building generate electricity and create shade lE nergy-efficient technology such as occupancy sensors, key-card readers, micro-switches

Fo 30

SOUTH AFRICAN PROPERTY REVIEW

green accommodation Off the beaten track

Oudebosch Cabins Location: Kogelberg Nature Reserve, Western Cape Number of rooms Five Architects Justin Cooke (architecture co-op) Awards International Holcim Regional Award for Sustainable Construction with Architectural Excellence Markets Leisure, functions Nature, conservation and ecosystem Ecofriendly swimming pool doubles as water feature full of plants to attract various birds, dragonflies, amphibians Green dining Self-catering; fully equipped, energyefficient kitchens Business One function room Special features Designer decor, lighting features by artist Brendan Dickerson Green landscape lE IA environmental impact assessment before project began, as Kogelberg is a biosphere reserve lW orkshops with Cape Nature, specialists in hydrology, botany, energy

Green building and room practices lL ightweight, sustainable South African pine used (not cement) lS tone gabions (wire baskets filled with stone from local quarry) create durable base for structures and fire protection lC abins built along passive design principles: careful orientation for light, shade and cross-ventilation l Low visual impact l Locally sourced, nontoxic materials l Roof gardens provide insulation lE ach cabin has its own eco-tower, an ecofriendly power station where the solar geyser, gas canisters for the stoves and fire extinguisher are stored Water, waste, energy management l Combusting toilets â&#x20AC;&#x201C; waste dries and evaporates l Solar geysers l Gas hobs l Combustion fireplaces l Energy-efficient appliances l LED and CFL lighting

Why we love it The glass-fronted cabins afford guests breathtaking views of the reserve, which is a World Heritage Site. Contact details +27 (0)21 483 000, Capenature.co.za

Appearances can be very deceiving... One tends to take things at face value, we on the other hand look a little deeper and understand your needs, now and for the future. With 35 years experience in Property Management Software, we have seen it all, and provide indepth training, consultancy and needless to say support.

For more information, call 0861 4 NICOR or email: pro@nicor.co.za

For all the support youâ&#x20AC;&#x2122;ll ever need

www.nicor.co.za SOUTH AFRICAN PROPERTY REVIEW

eye on africa

SOUTH AFRICAN PROPERTY REVIEW

eye on africa

Africa uncovered

Mediterranean Sea

Tunisia

Morocco

Algeria

Western Sahara

Libya

Egypt

Mauritania

Mali

Senegal

Gambia Guinea Bissau

Niger

Eritrea Chad

Home is where the investment is as South Africa leads Benin Sierra Leone the African continent towards Nigeria and prosperity Togo growth Ivory By Candace King

Sudan

Guinea

Liberia

Coast

Ghana

Central Africa Republic

Cameroon

South Africa

Ethiopia

Equatorial Guinea

Uganda

Gabon

Congo Rwanda Democratic Republic of the Congo

2013

Kenya

Tanzania

AFRICA

espite its tumultuous sociopolitical past, South Africa has been a shining beacon of investmentReport and opportunity for the African continent. Pre-1994 apartheid South Africa was a dark place, a country plagued by widespread unrest and upheaval, strikes and massacres, rife inequality, a failing government, and a flailing economy. Trade and financial sanctions coupled with internal political opposition to the apartheid government had contributed to the poorest 10-year growth performance (from 1984 to 1993) since World War II. Since the inception of its democracy, the South African economy has recorded several successive years of positive real GDP growth. With the abolishment of Office market apartheid legislation and the welcoming ofmarket a newisliberal constitution, the demand country In Johannesburg, the office polarised, with occupier focuseddespite keenly on quality property in prime, accessible locations. has grown tremendously its good internal challenges, including the famous three The city has very constrained withbattles most new – poverty, unemployment andainequality – all ofdevelopment which Southpipeline, Africa still with. projects being tenant-driven and almost no speculative development. Over the years,InSouth Africa has come to prominence as an investment hot spot. Cape Town, vacancy rates have moved upwards in the CBD over Alongside Nigeria recent and Angola, the country hasofconsistently achieved to above-average years, partly as a result companies relocating the Century City node.(FDI) Similarly, vacancy in the Durban been Subforeign direct investment inflows overlevels the course of theCBD pasthave decade. adversely affected by occupiers moving to suburban locations, Saharan Africa has South Africa as an internationally preferred location for doing particularly La Lucia and Umhlanga in the north. Rental growth in the business, and attracts significant foreign capital. South Africa has several characteristics major office markets of South Africa is expected to be fairly modest that make it a compelling destination on thesentiment African continent. during 2013, with economic remaining subdued. The World Economic Forum Global Competitiveness Report 2012 ranks only market South Africa in theRetail top 50 out of 142 countries, leaving other African nations at the Consumer confidence dipped during the latter part of 2012, which tail end of global competitiveness, while the World Bank’s Doing Business Report ranks does not bode well for the short term outlook for the retail sector, South Africa in thewhere top 50 out ofretail 183,sales withgrowth Botswana, Ghana,There Namibia andaZambia annual has slowed. has been of modest increases in vacancy rates across the board, ranking in the topgeneral half of trend the index. although widehas disparities in performance between individual Over the past two years, there SouthareAfrica seen some of the greatest improvements locations. Indeed, in the run-up to Christmas 2012, a number of major in transparency. The Jones Lang LaSalle Global Real Estate Transparency Index 2012 regional malls were reporting significant increases in footfall and ranks South Africa sales. high above the rest continentnumber – it is of ranked 21st in the index, Moreover, withofanthe increasing international retailers to enter Russia, the market, steady demand for prime space in the best ahead of its fellow seeking BRICS (Brazil, India, China and South Africa) members. locations for the foreseeable future. Its high ranking is theshould resultcontinue of several factors, including rigid listed vehicle governance, strong auditing and reporting standards, a highly developed legal Industrial market system, the fairnessWhile and the efficiency of the regulatory framework relating to real estate recent economic uncertainty may dampen short term growth taxation, planningprospects, and building codes, enforceability of contracts and title, andasa industrial market fundamentals remain broadly positive, by falling vacancy and upward pressure on capital values strong tradition ofshown property rights. With a rates well-established performance benchmark Sameer Business Park, Nairobi in some areas. However, despite falling availability and the increasing – the SAPOA/IPD South Africa Property Index – the country also scores well on real willingness of investors to commit to speculative development in estate performanceanticipation measurement. of a resumption in growth, the balance of power in the

Angola

Mozambique

south africa

industrial market remains largely in favour of occupiers. On a positive note, forthcoming spending on infrastructure projects should boost employment and help to stimulate occupier demand.

Residential market The outlook for the residential market remains subdued, with most forecasts suggesting relatively modest price growth in the short-to-

Malawi

Zambia

Zimbabwe Namibia

Botswana Pretoria

Johannesburg

South Africa

Durban

Cape Town

South Africa at a glance

Key facts

Population 51.8 million t Hub for multinational corporations seeking Major cities: a low-risk gateway4.3 intomillion Africa Johannesburg Cape t Town 3.7 millionstrong market Highly diversified economy: Durban 3.5 million natural Pretoria positions in alternative/renewables, 2.5 million Official languages Afrikaans, English, isiXhosa, siSwazi, resources, automotive software and ITisiZulu, services, isiNdebele, Sepedi, Sesotho, Xitsonga, and pharmaceuticals Setswana, Tshivenda and business Total t areaHighly developed legal 1,219,090 sq km GDP growth (2012)conducive 2.6% climate to attracting FDI Key industries Mining, automobile assembly, metalworking, t Restrictions on foreign investment limited machinery, textiles, iron and steel, chemicals and Currency to electronics, banking, Rand automotive (ZAR) Trade association some public sectorsSouthern African Development Community, membership Southern African Customs Union

t Key challenges: labour unrest (mining sector potential to spread), high unemployment, Southbut Africa prime rents and yields skilled-labour shortage, Prime rents crime, and weak Prime yields Johannesburg policing, justice system Offices US$20 per sq m per month Retail US$45 per sq m per month Industrial US$6 per sq m per month SOUTH AFRICAN PROPERTY REVIEW Residential US$5,500 per month*

8.5% 8% 9.5% 33 5%

Cape Town Offices Retail

US$19 per sq m per month US$40 per sq m per month

9% 8%

eye on africa Middle East and Africa Real Estate Transparency Index 2012

Global Real Estate Transparency Index 2012 The US, The UK, Australia, the Netherlands, New Zealand, Canada, France, Finland, Sweden, Switzerland Hong Kong, Germany, Singapore, Denmark, Ireland, Spain, Belgium, Norway, Poland

Sources: Jones Lang LaSalle, LaSalle Investment Management

Italy, South Africa, Austria, Malaysia, Czech Republic, Japan, Hungary, Brazil, Portugal

n Highly transparent n Transparent n Semi-transparent n Low transparency n Opaque n Not covered

Taiwan, Turkey, China, Greece, Israel, Philippines, Slovakia, Russia, Indonesia, Thailand, Romania, South Korea, Puerto Rico, Mexico, Chile, UAE, India Croatia, Macau, Botswana, Bulgaria, Argentina, Mauritius, Cayman Islands, Ukraine, Slovenia, Bahrain, Saudi Arabia, Kenya, Lebanon, Kuwait Vietnam, Serbia, Costa Rica, Bahamas, Qatar, Jamaica, Oman, Panama, Morocco, Egypt Zambia, Peru, Jordan, Uruguay, Colombia, Kazakhstan, Dominican Republic, Honduras, Guatemala Venezuela, Mongolia, Tunisia, Ghana, Iraq, Pakistan, Algeria, Belarus, Angola, Nigeria, Sudan

Why invest in SA?

Ease of doing business rankings: top 20 African countries Africa rank (out of 51)

Global rank (out of 185)

Country

Mauritius

South Africa

Tunisia

Rwanda

Botswana

Ghana

Seychelles

Namibia

Zambia

Morocco

109

Egypt

120

Uganda

121

Kenya

122

Cape Verde

123

Swaziland

127

Ethiopia

131

Nigeria

143

Tanzania

136

Lesotho

140

Sierra Leone

Source: World Bank, Doing Business 2013

SOUTH AFRICAN PROPERTY REVIEW

According to South Africa: Investor’s Handbook 2012/13, a publication put together by the Department of Trade and Industry (DTI) and Deloitte, South Africa is one of the most sophisticated, diverse and promising emerging markets globally. Not only does the country offer key investment opportunities within its borders but it also acts as a gateway to the rest of the continent. South Africa is home to a rich array of natural resources, including coal, platinum, gold, iron ore, manganese, nickel, uranium and chromium. It boasts world-class infrastructure, an established manufacturing base, and vast capabilities with regards to innovation, research and development. South Africa also features quality financial, legal, telecommunications and real estate sectors. It also possesses a relatively stable political and macroeconomic landscape, with an abundance of both skilled and unskilled labour. Our country’s unrivalled scenic beauty and vast demographic profile, headed by a thriving emerging middle class, are also what attracts investors to our shores. South Africa is the only African country that is a member of the Group of 20 (G20) countries. In the Economist Intelligence Unit’s Survey of Democratic Freedom, South Africa ranks 31st out of 184 countries. Despite the country’s rife corruption, it is ranked as the 40th least-corrupt out of 150 nations surveyed by WorldAudit.org. According to the Open Budget Index, South Africa has the most transparent budget in the world (International Budget Partnership). In 2012, at 5,5%, South African interest rates were at a 30-year low. South African tax revenue has increased from R100-billion in 1994 to R742,7-billion in 2011/12. The country’s debt-to-GDP ratio is 32% – the World Bank recommends a ratio of 60%. According to the World Economic Forum Global Competitiveness Report 2012/13, South Africa is ranked first out of 142 countries in respect of regulation of security exchanges. In the same report, it also ranked first in respect of auditing and reporting.

Highly transparent Transparent

Semi-transparent

Low transparency Opaque

Although South Africa’s education system has received much negative criticism in recent years, there have been several improvements. The country has 30 000 schools (23 000 primary and 7 000 secondary). In 1994, only 12 000 had access to electricity; today, 24 000 have access to electricity. According to the Global Competitiveness Report 2011/12, South Africa is ranked 13th out of 142 countries for its quality of management schools. South Africa is also making headway in the greening and sustainability arena. Thanks to the efforts of the Green Building Council of South Africa as well as several other organisations and leading property players, South Africa’s built environment is transforming, becoming more sustainable and energy efficient. According to the MasterCard Insights Report on Urbanisation and Environmental Challenges, Johannesburg ranked second among countries from Asia-Pacific, the Middle East and Africa in dealing with urbanisation and environmental challenges in 2011.

The South African property industry The continent’s largest and most mature property investment market is, by some distance, South Africa, where more than US$800-million of commercial property transactions were completed during 2012, according to Real Capital Analytics data. Domestic funds dominate the South African market, with investors being among the most active buyers in 2012. Property development in the country has gone through boom periods, notably in the years around the successful 2010 FIFA World Cup, where South Africa showcased its strong project management skills and developing infrastructure. The deep pool of skilled labour, emerging economic strength and improving transparency are increasingly making it the location of choice for international companies and investors.

… with limited deal volumes spread broa

eye on africa Sub-Saharan Africa investment by country 2010-2012 2011

(US$B, number of investments)

2012

Number of deals

Total capital invested (US$m)

Number of deals

Total capital invested (US$m)

Number of deals

Total capital invested (US$m)

Ghana

Kenya

Nigeria

188

South Africa

Tanzania

Togo

Other Total

121

US$0.8B, 53

US$0.8B, 36

523

199

n/a

211

n/a

102

237

306

267

631

1 060

1 161

South Africa

Ghana

Nigeria

Kenya

Tanzania

Nigeria

Kenya

272

N D

Source: Emerging Markets Private Equity Association 20 13

2010

Sub-Sah

Sub-Saharan Africa Investment by Country 2010-2012 (US$B, No. of Investments) Sub-Saharan Africa investment by country 2010-2012

South Africa

Togo

US$0.1B, 9

US$0.6B, 21

Ghana

Tanzania

Other

US$0.2B, 5

Togo

US$0.2B, 26

Other

US$0.2B, 4

Total

Foreign direct investment Investment Flows (1970 - 2011)

Nigeria

South Africa

Morocco

Angola

Ghana

Kenya

Uganda

Ethiopia

Source: World Bank Doing Business 20 13

Source: Emerging Markets Private Equity Association, 2013

According to the Global Competitiveness Report, South Africa is 30th out of 142 on property rights, and 34th out of 192 in terms of infrastructure. Major cities – Johannesburg, Cape Town and Durban – have evolved into bustling metropolises over the past few years and represent the country’s economic hubs. Two South African cities were voted among the world’s “Top 100 Most Liveable Cities” in the 2010 study conducted by Mercer Human Resource Consulting. Cape Town was ranked 86th and Johannesburg ranked 90th. One of South Africa’s key property industry drivers is the listed property sector, which has outperformed all other assets and is currently being boosted by the newly implemented REIT structure. The retail sector is currently leading, with industrial and office not far behind. The residential sector has hit a few bumps recently times but is slowly recovering.

Foreign direct investment hot spots in Africa

Angola

Nigeria

Labour force

8,5m

53,8m

Population growth

+2,8%

+2,5%

Nominal GDP per capita CAGR 2009-17

8,7%

17%

Greenfield FDI inflow 2003-2012

US$60B

US$117,7B

Africa business climate ranking

Growth sectors

40 out of 54

Natural resources Transportation Metals Food and tobacco Financial services

17 out of 54

Natural resources Communications Chemicals Pharmaceuticals Food and tobacco

South Africa

17,9m

-0,4%

7,8%

US$67,6B

2 out of 54

Alternative/Renewables Natural resources Automotive OEM Software and IT services Pharmaceuticals

Ethiopia

37,9m

+2,9%

16,3%

US$6,3B

16 out of 54

Chemicals Beverages Food and Tobacco

6 out of 54

Communications Natural resources Industrial machinery Financial services Logistics

13 out of 54

Alternative/Renewables Financial services Logistics Communications Software and IT

10 out of 54

Metals Alternative/Renewables Automotive components Food and tobacco Business services

12 out of 54

Logistics Communications Alternative/Renewables Healthcare Food and tobacco

Ghana

Kenya

Morocco

Uganda

11,6m

18,9m

11,7m

16,5m

+2,2%

+2,4%

+1,0%

+3,3%

8,1%

7,3%

8,8%

US$31,4B

US$11,4B

US$54,9B

US$17,9B

Retail market

Source: World Bank Doing Business 20 13

Country

Note: Data on FDI flows are presented on net basis (capital transactions’ credits less debits between direct investors and their affiliates). Hence, FDI flows with a negative sign indicate reverse investment or disinvestment.

Leading the South African property industry is the retail market, a sector that is also leading in the rest of the continent. As the middle class develops and the demand for consumer goods grows, African retail markets are developing rapidly. South Africa is home to some of sub-Saharan Africa’s largest shopping centres, with key regional malls across the country. According to the recent SAPOA/IPD South African Biannual Property Indicator, the retail sector outperformed the others on the back of strong capital growth and stable vacancies. Key regional shopping centres registered the strongest capital value growth in the sector (6,7%); the income return was 3,3%. SOUTH AFRICAN PROPERTY REVIEW

eye on africa South Africa prime rents and yields Prime rents

Prime yields

Offices

US$20/m² per month

8,5%

Retail

US$45/m² per month

Industrial

US$6/m² per month

9,5%

Residential

US$5 500 per month*

Offices

US$19/m² per month

Retail

US$40/m² per month

Industrial

US$5/m² per month

10%

Residential

US$6 000 per month*

Johannesburg

Cape Town

Source: Knight Frank LLP / * Four-bedroom executive house – prime location

% return per six months

8 6 4 2 0 -2 All Property

Retail

Office

Industrial

Other

ABOVE AND BELOW The SAPOA/IPD South Africa Biannual Property Indicator measures ungeared total returns to directly held standing property investments from one open market valuation to the next, and in H1 2013 returned 9,2%

Regional and community shopping centres registered impressive base rental growth of 4,5% and 6,1% respectively over the six months, though this does not yet reflect in strengthening capital value growth or returns. South Africa is reaching maturity, with formal retail penetration at 65% to 70%, and is likely to peak at 80% (UK at 90%, US at 85%). Currently, space growth remains between three and six percent at sector level, 30% driven by extensions and 70% through new space. In medium-to-longer term, success in retail will be driven by marketshare gains and the ability to launch new format and products. South Africa will remain a key driver of sales/earnings for the next 20 to 30 years. In the run-up to Christmas 2012, several major regional malls were reporting significant increases in footfall and sales. Moreover, with an increasing number of international retailers seeking to enter the market, steady demand for prime space in the best locations is set to continue. One major retail trend that has sparked in the last year is the development of retail in upand-coming towns and underserviced outlying rural areas. Major property developers, investors and financiers such as Flanagan & Gerard, Dipula Income Fund and Nedbank Corporate Property Finance have piqued interests in this segment of the retail market, which is sure to further drive and stimulate growth in the sector.

SAPOA/IPD South Africa Biannual Property Indicator Total return % 6 months

Income return % 6 months

Capital return % 6 months

9,2

4,2

4,9

All property Retail

3,9

5,9

Office

7,9

4,3

3,5

Industrial

9,1

3,9

Residential

4,1

Other

8,4 Comparative data

Equities

-2,8

Bonds

-2,5

Inflation

2,9

Data sources: MSCI, JPM 7-10yr, Stats SA CPI Urban Area

Capital value (ZAR m)

Capital value (%)

Number of properties

Number of funds

107 865,3

100

927

Retail

60 929,2

56,5

211

Office

28 046,8

289

Industrial

15 131,2

375

Residential

3 746,7

3,5

Other

The figures above represent the full coverage of the SAPOA/IPD South Africa Biannual Property database as at June 2013. The SAPOA/IPD South Africa Biannual Property Indicator employs only fully revalued assets from that database

SOUTH AFRICAN PROPERTY REVIEW

The economic downturn may have dampened the short-term growth prospects of the industrial sector, but market fundamentals have remained mostly positive. This has been shown in the decrease of vacancy rates and the upward pressure on capital values in certain areas. There has been an increasing interest from investors in the industrial sector in recent months, and several developments have come to fruition. One issue in the industrial sector is the availability of stock – there appears to be a shortage of stock and a high level of demand for large distribution facilities. Despite this, the SAPOA/IPD South African Biannual Property Indicator showed that the industrial sector’s impressive performance for the first six months of 2012 was underpinned by high capital growth and low vacancy rates averaging 2,8%, which is 1,6% less than the 2012 annual average. This occupancy level compensated for relatively low base rental growth in this segment at R35,3/m² versus R34,6/m² in the six months ending December 2012. Office sector performance has been slightly subdued. The SAPOA/IPD South African Biannual Property Indicator showed that the office sector continued to register high vacancy levels (of 12,6% overall) with recent office development activity placing pressure on rental levels and the lowergrade office space. Provincial offices were the worst performing segment, registering 2,5% negative capital growth and a total return of only 2,3%. In terms of occupancy, inner city office continues to register low occupancy levels, with the areas recording a 22,8% vacancy rate for the first half of the year. In Johannesburg, the office market is polarised, with occupier demand focused on quality property in prime, accessible locations. In Cape Town, vacancy rates have moved upwards in the CBD in recent years, partly as a result of companies relocating to the Century City node. Vacancy levels in the Durban CBD have similarly been adversely affected by occupiers moving to suburban locations.

Residential market

SAPOA/IPD South Africa Biannual Property Indicator database profile All property

Industrial and office market

What has been described as a sector that is “bombing” along, the residential market has not seen much growth, with the outlook for the sector remaining subdued, with most forecasts suggesting relatively modest price growth in the short-to-medium term. House prices are expected to soften in real terms, in line with slower economic growth and higher inflation. The buy-to-let market is showing weak growth and overall yields are low, making this sector the least attractive to investors in the overall property market.

thermguard

Keep cool One man’s small idea has become part of the country’s big picture By Nicky Manson

Mark Stannard

“Our company is like a small, tightknit community. Nearly all of the staff have been with us for years – some from the very beginning”

hermguard is a small, family-style business in Pietermaritzburg, KwaZulu-Natal, born out of pure entrepreneurial spirit. The company was started in 1984 by Mark Stannard who, while at his old business Waste Tech, noticed how much paper was being thrown onto dump sites in those days. “I heard about an insulation product manufactured from recycled newsprint and decided to investigate. Thus Thermguard was born.” What began in a small office with just one receptionist and a sales rep (Stannard’s sister) has grown from strength to strength. Over the years the company has been able to add more and more agents to its national network. There is a lot of hard work, determination and luck that goes into making your own small business a success, and Stannard believes he has had all three. He certainly got into the business at the right time, when competition was rare. Today, thanks to the new government building regulations that have made ceiling insulation a prerequisite, the company is reaping rewards. He also credits his team for much of Thermguard’s success. “Our company is like a small, tightknit community.

Nearly all of the staff have been with us for years – some from the very beginning.” He also believes that even today, despite a competitive market, and a variety of insulation products being available, his company still stands out. “We believe we have the best manufacturing plant in South Africa and our product is the only cellulose insulation that is manufactured under ISO 9001 – 2008 Quality Management Systems – your guarantee of consistent quality,” he explains. Thermguard is made from predominately recycled newspapers with a number of harmless household chemicals added to make the product fire retardant and insect and rodent resistant. Installers blow the insulation onto the ceiling, covering every nook and cranny for the ultimate coverage, ensuring cool summers and warm winters. And where do the newspapers come from? Stannard started a school initiative early on in his career, and it’s

one that is still going today. He called upon all scholars to bring old newspapers to their schools; he then collected the papers and paid for them. Today this is still standard practice. Thanks to being made from recycled newspapers, and being manufactured using a low energy process, you certainly can’t get a greener or more ecofriendly product. It’s also delivered in recycled plastic bags. And with the latest technology from the US, Thermguard is able to reduce the density of its product by 20%; this allows more air in, making the insulation lighter and ultimately less expensive. Sound-proofing, non-allergenic qualities and a lifetime guarantee are all par for the course. What about all the fuss surrounding insulation? Why is it so important? The obvious reason is that ceiling insulation protects your home and balances its heat levels. In the colder months, it is able to prevent up to 91% of the home’s generated heat from escaping through the ceiling. Similarly, in summer it can keep out 88% of the sun’s heat, keeping your home at a natural temperature all year. However, according to Stannard, the future of insulation is about to change and time will reveal a more significant purpose. “As time progresses insulation will become more and more important in South Africa for two reasons,” he says. “The first is that Eskom is still battling to meet the demand for electricity and will continue to do so in the future. (Eskom actually initiated the compulsory use of installation in hopes of reducing future load shedding.) The second is that the price of this electricity is increasing dramatically, so the heating and cooling of buildings will have to be as efficient as possible.” Already the battle is on for the all-important Green Star rating for new buildings, and as the days, months and years go by, sustainable building techniques and products will no longer just be fashionable by-products of a construction project but vital and non-negotiable elements of every building in South Africa. +27 (0)33 346 0111, Thermguard.co.za

SOUTH AFRICAN PROPERTY REVIEW

development

Cape Town CBD: open for business

Bucking the trend of the late 1990s, which saw an exodus of people and businesses from South Africa’s major city centres, Cape Town today is seeing the revitalisation, rejuvenation and reinvestment in its CBD – to the healthy tune of R4,5-billion By David A Steynberg

et up as a trading post in the 17th century, Cape Town has a rich history of commerce, trade and architecture. It is home to one of the country’s most cosmopolitan societies, reflected in language, culture, food and celebrations. Bordered by Table Mountain and the Atlantic Ocean, land in Cape Town is hot property – and to be more specific, land for commercial and residential development. The Cape Town Central Business District was not spared the move by residents and businesses in the 1990s, but has successfully turned the tide and is today experiencing massive investment in both existing and new stock. How this 361-yearold city has done this is what’s most exciting: from refurbishments, tax breaks and pop-up shops to city upgrades, repurposing existing stock and hosting a full range of world-class events.

According to Rob Kane, chairperson of the Central City Improvement District (CCID) board, the Urban Development Zone (UDZ) tax incentive is one the “best-kept tax break secrets of the South African property sector”. So well-kept, in fact, that since its introduction by National Treasury in 2003, between 2006 and 2011 the City of Cape Town issued location certificates for R2-billion and R1,6-billion to UDZ applicants for new construction and refurbishments respectively. “The Cape Town CBD has certainly made use of the scheme,” says Kane, adding that even more investors and developers need to get to grips with it. “Close to R15-billion has been invested in the Cape Town CBD since the scheme was promulgated. The UDZ allowance is designed to cover all construction costs related to the erection, extension, addition or improvement of buildings. The tax incentive can

Bringing the fans Cape Town takes nearly 50% of the market share of conventions hosted in Africa. Estimated annual economic contribution to the national GDP of just six events is almost R2-billion. In 2012, the annual estimated economic contribution to our national GDP of some of Cape Town’s Central City events included the Mining Indaba (R106-million), Design Indaba (R326,9-million), Cape Argus Pick n Pay Cycle Tour (R450-million), Cape Town International Jazz Festival (R700-million), The Old Mutual Two Oceans Marathon (R223-million), and the Loerie Awards and Creative Week (R100-million).

SOUTH AFRICAN PROPERTY REVIEW

only be claimed by the end user or the taxpayer of the property, who must use the building (or part of it) for trade purposes. It is not only JSElisted companies than can benefit from the UDZ. Any owner-builder or owner-first purchaser is eligible for the incentive; it doesn’t matter if they are an individual, company, close corporation, trust or partner in a partnership.”

Reshape what your mama gave you Green field and new developments are not always possible from both a cost and land-availability perspective. And in the context of Cape Town’s CBD, this rings true. Refurbishments, therefore, have played a major role in making the CBD both a beautiful and relevant environment for business and residents.

development

“Unlike Dubai, not every world-class city can bring its aesthetic and functionality into the 21st century through ground development,” says Kane. “However, developers and property owners in the CBD, like many of their counterparts around the world, recognise the commercial importance of refurbishing buildings.” Defaced property reduces its own value as well as that of a street or whole sections of a city. Attracting and retaining tenants is vital to the longevity of property and the city. “Tenants want value for money, and a properly refurbished existing building can offer excellent space to a tenant at rentals that are competitive when compared with a new building,” says Kane. One company that recognises the value of reinvesting in the CBD is hotel-and-leisure group Tsogo Sun. The group is undertaking

LEFT Clear signage developed by the CCID FAR LEFT The Cape Town International Convention Centre is conveniently situated near both luxury and affordable hotel accommodation, and is within walking distance of the V&A Waterfront TOP Cape Town’s central business district, laid out in a grid system

SOUTH AFRICAN PROPERTY REVIEW

development The Cape Town CBD has emerged as a consistent global contender in terms of offshore and local business process outsourcing (BPO), of which call centres are a big part. Call centres are a major source of economic growth for the CBD, creating an impressive 7 500 jobs and contributing approximately R1,7-billion to the provincial GDP.

SOUTH AFRICAN PROPERTY REVIEW

of business turnover

380 000m² of retail space

Central City share of A-grade office space in the Cape Town metro-region

Contribution of the Central City to the larger Cape Town metro-region

Over 1 200 retail shops That’s almost 60 international-sized soccer fields

Total of 491 285m² 71 000m² new A+/A-grade office space planned for future development

CAPE TOWN’S

CENTRAL CITY

OVER 350 000 PEOPLE move through the Central City each day

4 600 beds

49 TERTIARY

Over at 57 hotels of which 8 are five star

EDUCATIONAl INSTITUTIONS

8 436 191 passengers

Educating on average 15 500 students

passed through the Cape Town International Airport in 2011

Employing over 1 200 faculty & staff

on 21 airlines

NuMBER Of COMPANIES PER SECTOR

594

Central City share of total bed space in larger city region

A. Travel Services B. Architecture & Engineering Services C. financial Services & Banking D. Information & Communications Technologies E. Specialised Services F. Medical, Health & Cosmetic Services & facilities G. Legal Services

Well governed 3 Spheres of Government

(National, Provincial & Municipal)

164

175

120

73 A

CENTRAl CITY

GOVERNMENT OFFICES

OVER

GOVERNMENT EMPLOYEES

PEOPLE served each day

5 000 27 000

a R40-million refurbishment to the Cullinan Hotel and a R100-million refurbishment to the Southern Sun Waterfront Hotel (in the neighbouring V&A Waterfront), and will later invest in a major refurbishment to the 32-storey Southern Sun Cape Sun Hotel – a CBD landmark. “We believe that upgrading and refreshing our properties will lead to increased occupancies and return on investment for our clients as well as for Tsogo Sun,” says John van Rooyen, operations director at Tsogo Sun Cape Town. “The thriving Central City is attracting much new business and tourist activity to the inner city, and Tsogo Sun is proud to be part of this cosmopolitan business hub.” The Pinnacle building on Strand Street underwent upgrades to its main reception as well as its lobbies and lift cars. This has resulted in a number of leases being renewed while new ones have been signed. “With current CBD developments, changing trends in the area and in the best interest of attracting and retaining tenants in the CBD, refurbishment is essential to ensure buildings have a competitive edge,” says Kane. Repurposing certain spaces also goes a long way to creating a new image for a building. 44 Wale Street now boasts a rooftop garden replete with its own solar-powered water feature and irrigation system. Woolworths has followed suit by installing a solarpanel roof system on its head office in the CBD, which will save the building bout 48 000kWh a year. “There is no doubt that refurbishing a building is a much greener alternative than building even an ecofriendly building from ground up,” says Kane. “Developers should investigate the green refurbishment opportunities already present in existing buildings before building from scratch. Sustainability is no longer a nice-to-have; it’s an imperative in order to keep the heart of the Central City beating as a commercial, residential and retail hub. As with other successful global CBDs, the importance we place on making this a green city is fundamental for our plans to retain and attract business. 14 Loop Street, which is owned by Vunani Property Investment Fund Limited, is a great example of how this can be done.”

24.5% 32.8%

BuSINESS SuRVEY:

88% of businesses

say the MyCiTi BRT system contributes towards making the Central City a more accessible place

Two years ago Vunani adopted a few simple changes, which have resulted in material savings for the fund and tenants of the 1904 building. Water consumption has been reduced by a 16th and power consumption by a third, compared to the rest of the buildings in Vunani’s portfolio. “The renovations have translated into saving the tenants between R10 and R15/m2 – a 10% to 15% saving on a rental of R100/m2,” says Kane. “Bearing in mind how sensitive tenants are about their accommodation costs, this is a material saving.”

93% of businesses

The fringe Innovation District Potential to generate 3 500 jobs R1.2 billion in tax revenues R1.5 billion GDP per year by 2031

say that they are likely to remain in the Central City

83% of businesses say that Cape Town’s Central City is the

safest in the country

IS O fOR BuS

RAL ITY

IS OPEN fOR BuSINESS

2012

This will save them time and fuel as they’ll no longer need to re-route or backtrack to the correct street. Companies such as couriers, online retailers, cabs and food-delivery companies – the bulk of whose business includes matching addresses to street names – will also enjoy enhanced operational efficiency through the new numbering system. “There are more than 200 intersections in the Cape Town Central City and many of the most prominent ones will be numbered by the time the project is completed next year. We encourage building owners to prominently display their building numbers, as this will help to ensure that the street numbering system is even more effective for users of the CBD.”

R1.5 billion

R4.6 billion

More than

GDP contribution generated by events THE CBD HOSTS:

Investment in property over the past 3 years

R21 BILLION

75%

major local events

Total current value of Central City property

90%

Central City Property

2010

2011

business & international events IN THE METRO REGION

2012

R216 MIllION

Annual rates generated by the Central City

RESIDENTIAl 76%ESTIMATED

Cape Town’s Container Terminal 2nd largest container port in South Africa Moves 700 000 containers per year 4 deep-sea berths Current expansion will double capacity to over 1.4 million containers per year

population increase between 2001 & 2010

3 100 people per day

visit the Cape Town Central Library, open 63 hours each week

CTICC

PE N’S

development

In 2010 - 2011

The Cape Town Opera:

over LEGAL SERVICES

Earned

R9.2 million of income Provided

R7.3 million

in employment for artists

All of South Africa’s major law firms have offices in the Central City, making it one of the biggest legal hubs in the entire region

8/10 businesses

Contributed

Performed 6 full opera productions in 2010/2011 season Employed over 283 people (full time & ad hoc) Provided 711 employment contracts

500 OffICES

Contributed

R1.85 million

in revenue to local businesses

World Design Capital 2014 71% of businesses are positive about the economic benefits of Cape Town being the World Design Capital in 2014

are happy to be based in the Central City

Streets ahead Still, what is the point of having world-class property when finding business addresses in a CBD is a challenge? The City of Cape Town and the CCID recognised this and have spent in the region of R300 000 on upgrading street signs and upping the tally of motorcycle parking bays from 39 to 130. Cape Town’s CBD is the frontrunner in South Africa to feature building numbers together with street names on the street signs.

The Cape Town International Convention Centre

R2.68 billion

Created

7 870 JOBS

to the National GDP throughout the year.

Produced over

60 000 DIRECT & INDIRECT JOBS since opening in 2003

CTICC expansion will total

R690

MIllION

All business future expansion

34% of businesses in the Central City are likely to expand their operations in the near future

863 BOOKINGS up to the year 2020

Top 5 events at the CTICC saw over 188 769 VISITORS

77.1% Of PEDESTRIANS coming into the Central City use public transportation

“The CCID invested in the preliminary research and reports required, which entailed walking each and every street in the CBD and identifying the direction of the street numbers, particularly as they pertained to every intersection,” says the city’s mayoral committee member for transport for Cape Town, Councillor Brett Herron. Chief operations officer of the CCID, Tasso Evangelinos, elaborates. “Users of the CBD will enjoy faster location of venues and easier identification of destinations,” he says. “Motorists will be able to decide which way to turn into a street to find their destination.

City living A look at the various sectors taking root in the CBD reveals that not only is the city a viable and soughtafter business destination, but it is also a place where consumers visit to shop and invest to live. This fact is evident in the number of people living in the CBD: 10 years ago only 750 people called the inner city home. Today that figure sits at well over 5 000, living in 3 500 sectional-title units. The Central City boasts more than 20 apartment complexes, where prices range from R350 000 to as much as R30-million for luxury penthouses. “The market has definitely begun to change,” says Richard Boxford of Life Residential. “During 2005/2006, approximately 70% of our buyers were first-time ‘utility’ buyers – young professionals. Through the downturn (over the past five years or so), approximately 80% of our sales have been pure (and mostly South African) investors, buying to rent out. Since the beginning of 2013, we’ve seen the re-emergence of first-time buyers who now account for an increased number of our CBD sales. Once again, these buyers tend to be young professionals in their 20s and 30s, working in town. The majority of tenants on our rental portfolio are the same.” Having a “live-in” consumer base makes retail in the CBD not only viable and profitable for retailers but also necessary for residents. The staple of location is as relevant for suburban centres as it is for city merchants. And the rentals reflect this. Stephen Wormald of Baker Street Properties says retail rentals can range from R90/m2 to R350/m2 – depending on space needed and location. According to Andrew Kendall of Eris Property Group, “Retail in St George’s Mall is always taken up quickly. A corner property with good exposure could go for R250/m2 to R350/m2, but two blocks further away it could be half that.” With office developments such as Portside and 22 Bree on the south side of the CBD, a new crop of hungry workers will seek out food and general retailers, which will see increased demand in the area known as the Foreshore – where rentals are low, for now. SOUTH AFRICAN PROPERTY REVIEW

development 1

21 16

10 18

28 7

4 11 29 30 17

1 21 Pepper Street: redevelopment, no completion date available. 2 22 Bree Street: redevelopment, completed. 3 33 Heerengracht: redevelopment, development under way and nearing completion. 4 29 Martin Hammershlag Way, ACB House: redevelopment, completed. 5 Corner Bree and Longmarket Streets, ACME Garage: redevelopment, completed. 6 36 Buitenkant Street, Albes Building: redevelopment, completed. 7 DF Malan Street, Artscape Phase 1: redevelopment, completed. 8 Christiaan Barnard Street, Atlantic Centre, Atlantic House: redevelopment, development under way. 9 St George’s Mall, Strand Street, Cape Sun parking: refurbishment, completion second half 2013. 10 Cape Town Station Phase 1: redevelopment, development under way. 11 Castle of Good Hope: refurbishment, completed. 12 Queen Victoria Street, Centre for the Book: refurbishment, completed. 13 Civic Centre: refurbishment, nearing completion. 14 Block Table Bay Boulevard, Heerengracht, Harbour, Lower Long, Convention Centre: expansion, completion mid-2016. 15 Corner Long and Bloem Streets, Fiction nightclub: refurbishment, completed. 16 Grand Central Shopping Centre, Grand Central Building: refurbishment, completed. 17 Corner Hertzog Boulevard and Christian Barnard Street, Grant Thorton building: redevelopment, completed. 18 Barrack Street, Home Affairs: refurbishment, completed. 19 Green Market Square, Inn on the Square: refurbishment, completed. 20 Jetty Street, Liebenberg and Stander building: redevelopment, completion November 2013. 21 St George’s Mall, Newspaper House: refurbishment, completed. 22 Castle, Berg, Long Streets, NH Oscar Pearse: redevelopment, development under way. 23 29 Heerengracht Street, Park Inn Hotel: redevelopment, completed. 24. 11 Wale Street, PGWC Building: refurbishment, development under way. 25 Bree, Hans Strydom, Prestwich, Buitengracht Streets, Portside: new development, completion January 2014. 26 Corner Buitenkant and Commercial Streets: redevelopment, completion end 2013. 27 Wale Street, Wale Street Chambers: refurbishment, ongoing. 28 Eastern Boulevard, in front of Naspers, new Netcare Hospital: new development planned. 29 Christiaan Barnard Street, Ducat Tower: new development planned. 30 Christiaan Barnard Street, Culemborg: new development planned. 31 Christiaan Barnard Street: redevelopment, consolidation of city block planned. Office space, too, is some of the best in the city boasting 25% of all P- and A-grade offices. P-grade space in the Central City is sitting between R160/m2 and R185/m2. But location still applies. “You can have a building such as The Terraces (34 Bree Street), where Growthpoint is achieving rentals of R110/m2 to R120/m2, but just 200 metres down the road there is a building that was once great but hasn’t been upgraded in decades,” says Kendall. “Its occupancy currently stands at 30%, which means that even its R85/m2 asking is still considered to be too high for the condition of the building. It’s stuck back in the 1970s when it was built. The modern trend is for hot desking, green park environments, and trendy and open-plan spaces.” Cape Town’s Central City looks set to improve further, attract even more investment and walk the talk for the next 361 years of its evolution. 42

SOUTH AFRICAN PROPERTY REVIEW

OVERALL OBJECTIVE

Head Office:

Implemen�ng s�stainable fa�ili�es sol��ons� ��ilst striving for perfe��on� When it comes to implementing facilities management solutions to ensure sustainable Green Building principles are followed, we are the experts. Through our design division, we are the only Facilities and Project Management company in South Africa to have successfully led a Green Building project incorporating FM principles. The proof? Agrivaal - the rst 4-Star Green Rated building and a landmark achievement for Government. Not only is it green by design, but is t for effective and cost efcient facilities management support and use. Our team of highly qualied multi-disciplinarary built-environment experts offer the following services:

Ÿ Strategic Facilities Management, Design and Operations Ÿ Interior Design and Space Planning Ÿ Project and Programme Management

Sustainable Partners for Sustainable Solutions. Afroteq Design • Cape Town Head Ofce: +27 21 528 8980 •www.fm-solutions.co.za • Email: info@fm-solutions.co.za Branches in Johannesburg, Port Elizabeth, East London and Durban

green regeneration

Tshwane landmark receives major face lift

CHIEF PHOTO / RENDERING

Mention the “Union Buildings” in Tshwane and people instantly associate it with the historical landmark that houses the presidential offices. Mention “Agrivaal” building and few people know what you’re talking about By Nicky Taylor

AGRIVAAL BUILDING, PRETORIA he Agrivaal building is an iconic landmark that has 4 Star Green SA –Tshwane OFFICE v1landscape Design Rating v1 the late formed part Star of the since Achieved in November 2012 1930s, and not many realise the cultural and historical PROJECT FLOOR AREAS FLOOR AREA (GFA): 26 989 m2 significance it holds. TOTAL TheGROSS three-storey building, located TOTAL COMMERCIAL OFFICE AREA: 26 989 m2 Building Footprint: 2069 m2 in the Tshwane CBD and owned by the Department of INTRODUCTION PROJECT ADDRESS The Agrivaal building project is a refurbishment of an old government building (heritage Public Works, was vacated in early 2000 and has been 178 Schoeman Street building) located in the Tshwane CBD. It is the first government building to target a Pretoria, Gauteng Green Star SA Certification. vacant– until now. SOUTH AFRICA The building comprises many green building features, some of which are: an HVAC When Government identified the need to system that has an economic cycle and an ice storage system; a DALI system-a lighting the system that controls the lighting of spaces in use; a system that will collect, treat and reuse grey water and 60% of all the reinforcing steel has been specified to have a revitalise the building, it undertook a feasibility study minimum post-consumer recycled content of 90%. the scope of the project. This resulted in The office Block is located on the corner of Edmond and Hamiltonto and isascertain a mere 600m from the Union Building. the commissioning of a large-scale restoration and refurbishment of the heritage building, and required a PROJECT TEAM: PROJECT MANAGER DEVELOPERS HPM CONSULTING NATIONAL DEPARTMENT OF team of specialists – not only for the refurbishment PUBLIC WORKS QUANTITY SURVEYOR PENTAD QS ARCHITECT in general, but specifically because the Department PKA INTERNATIONAL ARCHITECTS TRANSPORT ENGINEERS ROUTE² TRANSPORT STRATEGIES CIVIL/ STRUCTURAL ENGINEERS wanted to create a Green Star building, the first WSP STRUCTURES SUSTAINABLE DESIGN CONSULTANT WSP GREEN BY DESIGN national government building project to target Green ELECTRICAL ENGINEER WSP CONSULTING ENGINEERS WET SERVICES WSP CONSULTING ENGINEERS Star certification. FIRE CONSULTANT WSP CONSULTING ENGINEERS ACOUSTIC ENGINEER SUBSONIC DESIGNS Akani Consortium, consisting of a mix of architects, LANDSCAPE ARCHITECT IGREENIC LANSCAPE ARCHITECT quantity surveyors, engineers and project managers, MECHANICAL ENGINEER WSP CONSULTING ENGINEERS won the bid to undertake the project, and Afroteq INTERIOR DESIGNERS Facilities Management was appointed to lead the AFROTEQ.DESIGN consortium as the facilities-management, interiordesign and space-planning consultants. PROJECT FLOOR AREAS The mandate was to design the interior architecture OSS FLOOR AREA (GFA): 26 989 m2 based on sound operational and facilities management MERCIAL OFFICE AREA: 26 989 m2 principles, and to ensure that these were incorporated Building Footprint: 2069 m2 within the total building design. As consortium leader, Afroteq, a division of Afroteq FM Solutions, PROJECT ADDRESS has played a fundamental role in the overall building 178 Schoeman Street design and has ensured that the building will Pretoria, Gauteng perform consistently with the client’s needs, and – SOUTH AFRICA most importantly – that it will function at an optimum financial, operational and practical level once completed and occupied. A notable achievement is that the building has been given a 4-star Green Star Rating by the Green Building Council of South Africa – the first national government building to receive this certification. The building comprises many green building features and incorporates innovations such as an HVAC system with an economic cycle and ice storage system, a DALI system (which controls the lighting of spaces in use) and a “grey water system” to collect, treat and reuse grey water. Operations director Lydia Hendricks is thrilled that Afroteq is the first facilities management company PROJECT FLOOR AREAS to lead a refurbishment and construction project as SS FLOOR AREA (GFA): 26 989 m2 consortium leader, since a consortium is traditionally MERCIAL OFFICE AREA: 26 989 m2 led by architects. Building Footprint: 2069 m2

DING, PRETORIA

FFICE v1 Design Rating v1 hieved in November 2012

GREEN STAR SA CASE STUDY | SPIRE HOUSE, TANNERY PARK, 23 BELMONT ROAD, RONDEBOSCH 7700 | P O BOX 155, RONDEBOSCH 7701, CAPE TOWN | WWW.GBCSA.ORG.ZA

DING, PRETORIA

FFICE v1 Design Rating v1 hieved in November 2012

SOUTH AFRICAN PROPERTY REVIEW

PROJECT ADDRESS

178 Schoeman Street Pretoria, Gauteng SOUTH AFRICA

It is anticipated that the project will attract much attention and praise, and Hendricks is confident that this platform will promote facilities management as a discipline that takes necessary cognisance at the planning stages of building projects, ensuring intrinsic value to overall operations and aesthetic design of the structure. Another major benefit derived from using an FM company to lead such a project is that the majority of aspects traditionally seen as being part of the tenant’s responsibility, including retrofitting (which is usually undertaken after handover), have already been incorporated into the initial planning and completion phases. This will ensure that the tenant’s relocation experience will be limited to basic operational needs as the completed structure will be fully operational on move-in day. The Agrivaal refurbishment is the Department’s first project to approach the design and construction of new government structures using an FM methodology, and incorporates the following design milestones: l Acts as a benchmark for Government structures; l New government corporate identity; l First national government 4-Star GBCSA rated structure on design criteria; l Designed from a facilities management operations perspective; l All legislated security requirements have been integrated into the structures’ design; l Designed to include office accommodations that create a highly flexible working environment; l Heritage site incorporated and integrated into main structure façade. The design and implementation approach was to promote the benefits to this 4-Star structure, which include: l Reduced carbon footprint; l Lower energy costs; l Reduced water costs; l Increased productivity; l Market leadership in sustainable buildings. The office block is located on the corner of Edmond and Hamilton Streets, 600 metres from the Union Buildings. Tshwane citizens can look forward to the modern and gleaming, environmentally-friendly office block, soon to be a “must-see” historical landmark in the city.

green regeneration

Renderings courtesy of PKA Architects

Developer National Department of Public Works Consortium leader Afroteq/FM Solutions Architect PKA International Architects Francois van der Merwe Architects Civil/Structural engineer WSP Group Africa (Structures) Electrical engineer WSP Group Africa (Building Services) Fire consultant WSP Consulting Engineers Landscape architect GREENInc Landscape Architects Mechanical engineer WSP Consulting Engineers Interior design & space planning Afroteq/FM Solutions Facilities management consultant Afroteq/FM Solutions Project manager HPM Consulting Quantity surveyor PENTAD Quantity Surveyors Transport engineers RouteÂ˛ â&#x20AC;&#x2030;Transport Strategies Sustainable design consultant WSP Green By Design Wet services WSP Consulting Engineers Acoustic engineer Afroteq/FM Solutions SOUTH AFRICAN PROPERTY REVIEW

on show

Grundfos’ green masterpiece

A unique fusion of design and aesthetics with efficiency and engineering By Nicky Manson

rundfos’ new headquarters are located on one of the most prominent sites in Germiston/Ekurhuleni, at the junction of the N12 and R24 highways, which means great exposure potential. While the site is owned and developed by Growthpoint Properties, it incorporates both the new head office (3 000m²) and a warehouse (6 500m²) for Grundfos South Africa. From the start it was envisioned that the head office should be green and that a 4-star Green Star rating would be targeted. With this in mind every decision was made in consideration to the environment. SOUTH AFRICAN PROPERTY REVIEW

on show

The office block is conceptually constructed from two interconnecting blocks around a central full-height atrium, and consists of two office levels over a ventilated basement level

The office block is conceptually constructed from two interconnecting blocks around a central full-height atrium, and consists of two office levels over a ventilated basement level. Using insulated concrete roofs, brick walls and a large span of glazing, the design had to stay true to Grundfos’ unique global architectural language, but also incorporate a South African impression. This was ensured by Empowered Spaces Architecture, who created a contemporary style. There are a number of unique features, the most distinctive of which are the two white boxes that intersect to form the main entrance with the glass façades cut from it. The main entrance is another statement space, although fairly challenging in that the natural ground level was 2,5m lower than the ground-floor entrance. “We decided to have access from all directions and to break up the entry into various levels to make the height difference less noticeable for the visitor approaching the entrance,” explains Empowered Spaces’ Quinton Piek.

SOUTH AFRICAN PROPERTY REVIEW

The prominent orange façade is created from the vertical shading louvres made up of Grundfos’ solar panels and mesh. The mesh was created to allow enough shading onto the glass yet keep good views to the outside. The louvres also harness the west sun by means of solar panels, which generate the electricity to run the filtration system for the building. Jonathan Hamp-Adams of Grundfos admits that, aesthetically, this is his favourite feature, and it’s also the view that one gets from the freeway. The water feature also stands out and is a reference to Grundfos,

the biggest pump supplier in the world. It is made up of slabs sliding past each other penetrating out of the ground – a subtle reference to geological dynamics with water pumped through it. Lynne Blumberg Interior Design took on the challenge of the exterior and interior finishes, which also had to stay true to the worldwide Grundfos buildings and Green Building Council regulations. The colour palette consists of shades of crisp white, warm charcoal and black, injected with the bold Grundfos blue, dynamic red and fresh lime. The clean, powerful lines of the building are reinforced in the reception area, which is also home to a floating reception desk. A glass image of a raging waterfall, backlit with LED strip lighting against watery, silver porcelain, showcases the magnificently designed Grundfos pumps. Oversized palms, bold Grundfos blue seating, white swivel chairs, a trio of stainless-steel low-slung coffee tables and Nguni hides complete the picture. Large pumps are used as pieces of art, creating an integrative sculpture display area, which in turn leads to the atrium.

on show Sustainable initiatives l Building oriented south to allow maximum light penetration with minimal heat gain from the sun. l Insulation used on all the roof slabs, under all exposed concrete soffits and even on the glass façades. l Grundfos solar panels to generate enough electricity to run the entire Grundfos water-filtration system. l Building designed to allow external views and light penetration to 80% of the floor area, reducing lighting requirements. l All lights to be low-energy fittings with light and motion sensors. l Wind turbines on the roof to generate electricity. l All building materials guided by the Green Building Council of South Africa Green Star requirements – low-VOC and 0% formaldehyde. l Materials from demolished buildings on site reused in the construction of the building. l Landscaping requires almost no watering – endemic to the area. l 70% of construction waste redirected from the landfill due to reuse or recycling of the waste. l Fresh air provided at a rate of 12.5ℓ/s/p, exceeding minimum regulatory requirements by 150%. l Daylight glare control via vertical fixed shading devices. l High-frequency ballast provided for 100% of usable area (UA). l Variable speed drives for mechanical equipment installed to reduce operational energy consumption. l Heat pumps for domestic hot-water production for kitchen, emergency rooms and gym. l Energy uses of 100kVA or greater sub-metered, and energy consumption effectively monitored through the BMS. l Dedicated parking spaces provided for fuelefficient vehicles. l Cyclists’ facilities provided. l Rainwater harvesting system present, with treatment of water to drinking quality. l Efficient water fittings. l Water meters for all major water uses. l A recycling waste storage facility.

SOUTH AFRICAN PROPERTY REVIEW

on show A water-jet feature and a largely green space are surrounded by oversized white umbrellas, providing the perfect relaxation area. The atrium is also a fully functioning water-recycling plant. Further on, a funky, colourful canteen boasts a glass graffiti wall.

The main entrance is a statement space, and fairly challenging because the natural ground level was 2,5m lower than the groundfloor entrance

SOUTH AFRICAN PROPERTY REVIEW

The space has certainly been designed for both efficiency, and the wellbeing of the staff, and this was important to the company as Jonathan Hamp-Adams reiterates. “I think the project as a whole has pretty much achieved what we originally envisaged:

improved ability to deliver outstanding customer service, fantastic working environment for our staff, maximum brand exposure and – of course – the great engineering and aesthetic of the actual building,” he says.

on show

The team Lynne Blumberg Lynne Blumberg Interior Design +27 (0)11 447 6016, Lynneblumberg.co.za Jonathan Hamp-Adams Area managing director: sub-Saharan Africa at Grundfos GZA +27 (0)11 579 4800, Grundfos.com Quinton Piek Empowered Spaces Architects +27 (0)11 883 83 80/6, Espaces.co.za Yovka Raytcheva-Schaap Environmentally sustainable design (ESD) consulting and project management, Aurecon +27 (0)12 427 2223, Aurecongroup.com Peet Botha Conscius Consultants +27 (0)11 246 1244, peet@conscius.co.za SOUTH AFRICAN PROPERTY REVIEW

ELECTRICAL ENGINEERS

FOR FOR HIGH HIGH PERFORMANCE PERFORMANCE BUILDINGS BUILDINGS

* Intelligent Green Designs * Innovative Sustainable Systems * Integrated VeriďŹ cation Networks * Accredited Professionals * Independent Commissioning Agents

Tel: (+27) 011 246 1244

e-mail: info@conscius.co.za website: www.conscius.co.za

opinion

Mixed use for a sustainable Sandton The architecture of the everyday By Adrian Maserow, AMA Architects

t AMA Architects we subscribe to the vision of designing projects as urban catalysts. We promote visionary mixed-use developments and we believe this initiative will leave a significant impact on the future of South African cities – in particular Sandton. The International Congress for Modern Architecture (first organised in 1928 by Le Corbusier and delegates), saw architecture as an economic and political tool that could be used to improve the world through innovative urban planning. The common purpose that incorporates mixed-use buildings and precincts achieves the highest goals of integrated development, and these precincts – the V&A Waterfront, Melrose Arch, etc – have been successfully developed in South Africa. Yet the trends seem to have been lost with the critical impact that such development could bring to Sandton. As architects we understand the impact of shopping densities, office floor-plate efficiencies,

homemaking spaces and places of instruction as part of the urban place-making imperative. We must actively include places of work (offices), places to live in (hotels/homes/apartments), shopping centres and retail nodes, places of relaxation and play (from parks and squares to bars, theatres and galleries), the civic realm, transportation hubs (stations), educational facilities and other programmes. Separate-use zoning disconnects with the principle of diversification, and the result is that these developments diminish their ambition, which leads to unsustainable environments. Precincts and single structures must actively evolve towards compact and integrated developments that belong to the economics of sustainability. Development that encourages connections to the wider web of spatial relationships must now be promoted. We are drawn to the urgent recovery of something lost. According to the author Peter Buchanan, “This pursuit is driving evolutionary change in architectural design and the

environments in which we live.” He elaborates on the urgent need to provide frameworks for mixed-use developments that communities may connect to and flourish in. Strong pedestrianisation of an entire area, together with diverse functions, manifest highly valued place-making nodes. Collaborative methodologies draw inspiration from multiple inputs and are integrated with the principles of densification and sustainability. The impetus of architecture lies as much in the creation of aesthetically stimulating physical settings as the sheltering of people within them. Our culture of spatial configuration belongs to a complex sociopolitical creation, and we have learnt that adjacent spatial locations and functional experiences can be choreographed in a layered set of rituals and actions, which reinforce a life lived to the fullest. Fluid networks are activated among dwelling, working, playing, learning, relaxing, healing, eating, shopping, travelling and praying – all within walking proximity. SOUTH AFRICAN PROPERTY REVIEW

engineers & quantity surveyors

Focus on quantity surveyors & South African quantity surveyors and engineers are sought-after around the world, and especially in Africa. We look at some of the leading local players Willem Hendrik Steyn QS Bureau Quantity Surveyors

Fritz Christian Relling QS Bureau Quantity Surveyors Fritz Relling was born in Kroonstad and schooled in Bloemfontein. Together with Willie Steyn, he is the managing partner at QS Bureau Quantity Surveyors, and the men’s professional relationship history is almost as long as their friendship. The company was established in 1997; both Relling and Steyn came to the partnership with many years of experience. Relling has notched up 29 years as a quantity surveyor and was previously a director at leading quantity-surveying practice McLachlan du Plooy (at its Johannesburg, Bloemfontein and Welkom branches. He also gained experience across Africa, especially in Swaziland, Botswana, Angola and Mozambique. Relling’s qualifications include a BSc Quantity Surveying degree from the University of the Free State. A a Masters in Business Leadership (MBL) from the University of South Africa (UNISA) has also provided opportunities and opened many doors. “Among the attributes that set QS Bureau apart from its competitors is that, through highly developed and specialised expertise, we continuously deliver creative and innovative solutions to maximise returns for our clients,” says Relling. “The company’s willingness to embrace the latest technology gives it a competitive edge. This ensures that our competent team of specialists’ delivery of projects is always exceptional, consistent and on time.” And QS Bureau’s future plans? “We want to go on attracting the same great level of clients by offering the top consulting service that we already do and by maintaining our existing loyal client base.”

+27 (0)11 791 3888 fritz@qsb.co.za www.qsbureau.co.za

SOUTH AFRICAN PROPERTY REVIEW

Willem Steyn has 29 years of experience in quantity surveying. After obtaining his BSc in Quantity Surveying from the University of the Free State, he joined Basie Verster to start Verster Steyn Quantity Surveyors in Bloemfontein. He also lectured at the University of the Free State. Upon joining McLachlan du Plooy, he moved to Johannesburg and opened the Johannesburg branch with Fritz Relling and Robert More. QS Bureau has taken 17 years of hard work, dedication and building a very particular work ethic to grow into the company it is today. Steyn personally managed numerous projects in Angola, with Group Five International as main contractor. QS Bureau is the driving force behind a future island development in Mozambique. Steyn has also acted as an advisor for Protea Hotels across Africa to assist in new developments. Some of the recent projects where QS Bureau acted as principal agent include the Fairway Hotel, Soweto Theatre and Tom Campher Motors. QS Bureau is also pleased to be part of the Steyn City development, consisting of projects such as Auto and General/Telesure Head Office as well as the Cedar Road Gatehouse. The company was recently a proud recipient of the 2013 PMR.Africa Diamond Award for Small Firm Quantity Surveying (Outstanding First Overall). Over the past five years, QS Bureau has featured consistently and prominently in the PMR.Africa Awards, which is evidence of the company’s determination to stay on top of its game. These awards include the Diamond Arrow Award, the Silver Arrow Award and a Top 5 Award. “The fact that this comes from the people to whom QS Bureau provides its services is just fantastic,” says Steyn. “It’s testament to our principal philosophy of leading from the front and making sure it’s Fritz, Jerry and myself the customers deal with to get the benefit of our experience and input. Far too many firms win business then let junior staff contribute to (and even make) major decisions, which is not fair to the clients.”

+27 (0)11 791 3888 willie@qsb.co.za www.qsbureau.co.za

Jerry Erasmus QS Bureau Quantity Surveyors Jerry Erasmus joined QS Bureau Quantity Surveyors in 2006, and today his job description and role include all quantity-surveying duties and project-management services, as well as project administration. He received a BSc in Quantity Surveying from the University of the Free State before performing a number of different roles at top companies such as Victor Petersen & Partners, City of Johannesburg, Iscor Architect and Quantity Surveyor Division, Myles Rousseau Nevay Erasmus Inc, Schoombie Hartmann Inc and Murray Roberts. At one point, he was also in charge of his own company, Jerry Erasmus Quantity Surveyor CC. This has ensured that his skills set is varied and accomplished. QS Bureau prides itself on its successes and firmly attributes these to work ethic and the great team behind the firm. In the end everything comes down to hard work and dedication and building a very particular work ethic, which then allows the company to achieve what it has in the past. It’s a very simple ethic of making sure that the clients are always in the hands of top management, people who have the experience to understand the clients’ needs, offer the right advice and help make the right decisions. QS Bureau’s service ethic is also evident in some of its recent projects, including Clearwater Estate, Tharisa Mine, Unilever Waterfall HCL, Kloofzicht Lodge, MIT Auto Parts, M2 Hostel and Klerksdorp Checkers Phase 3.

+27 (0)11 791 3888 jerry@qsb.co.za www.qsbureau.co.za

engineers & quantity surveyors

& engineers

Jonathan Edwards Sutherland Engineers

Noel de Villiers Sutherland Engineers

PLANTECH Associates is a consulting engineering firm established in 1982. Since its establishment in Pretoria, the company’s activities have expanded throughout South Africa, Lesotho, Nigeria, Mauritius and India. Present offices are located in Pretoria and Stellenbosch, with a total staff complement of more than 20 engineers, technicians and support personnel. PLANTECH’s extensive electrical and mechanical engineering knowledge and experience is applied to deliver optimum and viable engineering solutions, supporting its clients to deliver projects of the best possible quality on time and on budget. PLANTECH has received several awards over the years, including the Shell Design Award, the Schneider Award, the PMR.Africa Diamond Arrow Award and the SABS Design Institute Merit Award (the latter for a revolutionary through-wall isolator, making economical highvoltage indoor type cellular substations possible). As a mechanical engineer involved in the building-services arm of PLANTECH, Peter Pelser was involved in several projects where green building practices were high on the agenda. Some of these projects include: l SANRAL Corporate Head Office Building, which received a 4-star office as-designed rating from the Green Building Council of South Africa; l Old Mutual Kagiso Mall Retail Development, which was nominated for the SAPOA 2013 innovative excellence awards; l City Power Control Building & Executive Wing, which is to be submitted for an as-designed Green Star SA rating; and l Eskom Kusile Power Station Admin Building, which is to be submitted for an as-built Green Star SA rating.

University of Cape Town electrical engineering graduate Jonathan Edwards worked in Johannesburg for six years on high-profile projects, before starting the electrical engineering division at Sutherland in January 2011. Heading up the electrical division at Sutherland has been a great experience, and the division has gone from strength to strength. To make Sutherland truly multidisciplinary, in less than three years, this new division has grown to consist of an experienced, strong team, including three professionally registered engineers, with strong technician and CAD support. Edwards believes the growth of Sutherland Electrical to complement the established Structural/ Civil and Mechanical (HVAC, Wet Services and Rational Fire) offerings nationally can be attributed to the strength of the Sutherland brand among the national client base and the company’s commitment to constantly delivering the most optimal design solutions possible (from a capital cost, running cost and maintainability perspective). Apart from Sutherland Electrical’s increasing involvement in projects across South Africa, the firm has been fortunate enough to attract exciting projects across sub-Saharan Africa, where clients often prefer a full multidisciplinary service offering. Sutherland is currently engineering a 29 000m² shopping centre in Nairobi and a 15 000m² 14-storey office building in the most prestigious area of Lagos, as well as a number of new retail and hotel developments. “The expansion into sub-Saharan Africa really puts energy-efficient, totally sustainable designs to the test,” says Edwards. “North of our borders the typical client’s stated requirement for a green building is not to achieve a green building accreditation, but rather to make the building truly functional. The buildings have to be completely self-sufficient and non-reliant on any municipal services (because of the intermittent or simply nonexistent electricity, water, storm water and sewerage supplies or connections). “It is for this reason that a fully optimised engineering design solution for all services is absolutely essential from a purely functional perspective, and prioritises the mechanical, plumbing and electrical engineering disciplines far more than it used to on traditional building projects in South Africa, even as little as five years ago.”

Since graduating with a mechanical engineering degree from the University of Cape Town in 1981, Noel de Villiers has spent most of his working life in the building services industry, specifically in the HVAC discipline. His first position in 1981 was with Hill Kaplan Scott consulting engineers, based in Cape Town, followed by a three-year stint at gold and platinum mines, where he obtained his Govt. Certificate of Competency. He then returned to Cape Town to join Improvair as a design and estimating engineer, spending the latter part of his five years there in the contracting division. De Villiers moved into manufacturing, working for Rickard Air Diffusion in Cape Town. During his 13 years with the company, he moved from sales engineer through various technical and production-related positions, ending with a short stint as MD before deciding to start his own business as a contractor, still in the airconditioning industry. After seven years as a contractor, he decided to put his 25 years of experience in the HVAC industry into consulting. He joined Sutherland in 2006 as technical director and soon got involved in the green building movement, serving on a technical working group for the development of one of the Green Star SA rating tools. Until about five years ago, little had changed in the HVAC industry. However, due to the threat of global warming and the steep rise in energy costs, lately there has been a significant shift in the way buildings are air conditioned. In the past, it was all about the lowest capital cost, with little or no regard for the operating costs. Today the emphasis is on operating costs as well as environmental impact. Most clients are prepared to spend more money initially, knowing that the cost will soon be recovered, while at the same time offering their tenants a better working environment. It’s been exciting to see new technologies emerging, making it possible to design HVAC systems that have a significantly reduced impact on the environment and operating costs. For the new building at 90 Grayston Drive, the three air-cooled Ammonia chillers that are being installed will have an efficiency almost twice that of the standard chillers that were common 10 years ago. The challenge is to keep abreast of the latest technological developments without exposing clients to the risks that can be associated with concepts that have not been tried and tested in the marketplace.

+27 (0)12 349 2253 / +27 (0)21 880 1280 ppelser@plantech.co.za www.plantech.co.za

+27 (0)82 415 8461 / +27 (0)21 425 0065 JonathanE@sutherlandengineers.com www.sutherlandengineers.com

+27 (0)83 320 3534 / +27 (0)21 425 0065 noeldv@sutherlandengineers.com www.sutherlandengineers.com

Peet Pelser PLANTECH Associates

SOUTH AFRICAN PROPERTY REVIEW

workshop

MAIN PICTURE Essop Basha, divisional head of utilities/ sustainability management at Growthpoint Properties and SAPOA chairperson of the Sustainability Committee INSET Heidi Hertz, head of strategic operations at City Property Administration

SOUTH AFRICAN PROPERTY REVIEW

workshop

Sustainability under the spotlight Sustainability and energy saving were at the top of the agenda at a recent SAPOA/Eskom Energy Efficiency Workshop By Candace King Photographs by Michael Glenister

ith escalating energy costs and the growing need for property players and buildings to be more green and efficient, sustainability has become a big issue in the property industry – something that SAPOA has taken full cognisance of. SAPOA takes pride in hosting workshops and seminars in an effort to inform and educate its members and the industry as a whole on the best green practices and how to deal with rising utilities costs. In partnership with Eskom, SAPOA presented a one-day workshop on energy efficiency on 16 September to a group of almost 50 delegates, including SAPOA members as well as non-members. Held at the Eskom Academy of Learning in Midrand, the workshop provided an industry update regarding energy efficiency, and was suited to organisations that have embarked on integrated demand management funding programmes as well as those who have not yet introduced it. The workshop covered various energy efficiency aspects, including an update from Eskom, case studies of pertinent technologies, and the Green Building Council of South Africa (GBCSA) energy and water benchmarking tool. Facilitated by Essop Basha, divisional head of utilities/sustainability management at Growthpoint Properties and the chairperson of the SAPOA Sustainability Committee, the workshop kicked off with Heidi Hertz, head of strategic operations at City Property Administration, opening the floor with a welcome and a few housekeeping pointers. The workshop’s keynote address was presented by Andrew Etzinger, senior general manager at Eskom Integrated Demand Management (IDM), who gave an update on Eskom’s IDM programme as well as the current state of the grid. Eskom IDM is responsible for developing solutions and managing the delivery of energy savings through various programmes

in the commercial, industrial, residential, and agricultural sectors. New sectors and future solutions will be developed from time to time to address the changing needs of the market and changing conditions of supply outlook. Etzinger noted that Eskom’s power stations are ageing and are being run hard. He added that sustained high levels of planned maintenance are needed to ensure reliable performance. “The power system has been particularly tight, and planned maintenance was impacted in 2013 by several factors,” he said. “These included the failure of a transmission line from Mozambique because of flooding, which reduced imports from Cahora Bassa (850MW); the unplanned outage of Koeberg Unit 1 (900MW); the need to manage the impact of the strike at Exarro’s coal mines (1 000MW); and volatile power station performance.” Etzinger noted that Eskom kept the lights on in summer using open cycle gas turbines and demand side measures, but planned maintenance had to be reduced. “Eskom usually reduces maintenance to a minimum in winter so that we can meet higher demand,” he said. “But this winter is different: planned maintenance cannot be deferred. Demand during winter-evening peaks can jump by up to 3 000MW in one hour, as households switch on lights, heaters and stoves.” Eskom has reached a point where it cannot continue to defer planned generation maintenance any longer as this could have severe consequences. The performance of Eskom’s generation fleet is volatile and that of the Cahora Bassa scheme has become unpredictable. The Multi-Year Price Determination 3 (MYPD3) adds to the challenge of managing a tight power system by reducing Eskom’s ability to procure additional demand and supply side levers. “We will implement a generation maintenance strategy that is based on an 80% availability,

Andrew Etzinger, senior general manager at Eskom Integrated Demand Management

The national electricity supply system remains under pressure. The economic downturn provided temporary relief but the economy is recovering, and consumption levels now exceed those of 2008 SOUTH AFRICAN PROPERTY REVIEW

workshop

10% planned maintenance and 10% unplanned outages over five years to maintain the current fleet, meet environmental requirements and achieve predictable performance from our existing assets,” said Etzinger. He added that much of the planned maintenance will be fixed, providing certainty for planning, while outages will happen to ensure Eskom can comply with environmental legislation. Additional supply and demand side options must be explored to meet medium-term electricity demand. Furthermore, the summer period will be extremely challenging as the issue will be to meet demand throughout the day and not just at peak while having sufficient operating reserves to deal with contingencies. Currently, Eskom’s power stations are in their mid-life, and require constant and increased maintenance. On average, Eskom’s power stations are 30 years old, with the oldest being 49. Some of the plants will require refurbishment in order to extend their life cycle and improve their performance. Eskom needs to sustain planned maintenance levels at 10% for three years to turn around and sustain stable generation performance. Planned maintenance has often had to be shifted or deferred to ensure Eskom has sufficient capacity available to meet demand and “keep the lights on”. This approach, however, is not sustainable and thus it is essential that planned maintenance be done to enable predictable and sustainable performance from Eskom’s power stations. Eskom has put in place a five-year strategy for generation sustainability, which includes a firm commitment not to postpone critical maintenance. This is based on the 80:10:10 principle – that is, on average, an energy availability factor (EAF) of 80%, planned maintenance of 10% and a projected unplanned outage ratio of 10%. About eight percent of the planned maintenance will be made up of maintenance that will be fixed in terms of its schedule. The other 2% will be short term maintenance. This will allow for certainty in planning and executing the maintenance outages.

SOUTH AFRICAN PROPERTY REVIEW

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Outages to achieve compliance with environmental legislation, where no exemptions have been obtained, will be done. Any improvement in unplanned outages will be used to create space for planned maintenance. Eskom will implement a programme that allows for better resource planning and more effective use of contractor capacity, as well as improved internal skills and processes. In executing the 80:10:10 principle over a five-year period with scenarios on demand growth and delays to the new-build programme, there is a potential gap in supply of between 100MW and 2 000MW in mid-merit and base-load capacity. The most likely scenario could see a gap of about 700MW. “There are available supply and demand side levers with different levels of feasibility that can close the gap but are not in the approved MYPD3 determination,” said Etzinger. “The levers and assumptions exclude the implementation of any demand reduction protocols. In scenarios done with worsening plant performance and higher growth rates in electricity demand, the gap could be as much as 5 000MW.” In conclusion, Etzinger pointed out that energy efficiency and demand management are essential to keep the lights on and grow the economy, and that a long term perspective is needed to stay on course. It’s inevitable that the funding challenge is significant, and currently there are programme structures that are being reviewed to align with the new reality. There needs to be a focus on quality and safety as well as on ethical practices. “The national electricity supply system remains under pressure,” said Etzinger. “The economic downturn provided temporary relief but the economy is recovering, and consumption levels now exceed those of 2008. There is a high likelihood of an energy supply shortfall until 2015. However, collectively we have done well over the last three years. Thank you for your contribution – and let’s keep going.” The workshop ended on a high note with a riveting panel discussion and energyefficient food for thought.

ABOVE The workshop was attended by several energy efficient vendors OPPOSITE TOP A panel discussion took place between (from left) Dhevan Pillay, Dr Wilfred Fritz, Trevor Naicker, Advocate Portia Matsane and Hendrik Greyling

Speakers included: 1. Darryl Chapman, Eskom chief engineer, who discussed Eskom’s Internal Energy Efficiency Programme; 2. Francois Retief, technical manager at the Green Building Council of South Africa, who spoke on existing building performance and the energy and water benchmarking tool; 3. Trevor Naicker, commercial sector manager at Eskom IDM, who spoke about the IDM incentive; 4. Dr Wilfred Fritz from the Department of Energy; 5. Hendrik Greyling, CEO of Remote Metering Solutions, who discussed ways to make energy visible; 6. Advocate Portia Matsane, SAPOA legal manager/company secretary, who addressed sustainability regulation; 7. Tshepo Chuene from the Department of Energy, who (together with Dr Fritz) spoke on the Energy Efficiency Target Monitoring System; and 8. Dhevan Pillay, director at LDM Energy, who discussed his company’s green benefits. SOUTH AFRICAN PROPERTY REVIEW

kwazulu-natal social networking

SAPOA breakfast

Riverside Hotel, Durban North On 17 September, more than 100 SAPOA KZN members packed the Riverside Hotel’s conference centre for a networking breakfast presentation in partnership with the Department of Trade and Industry By Anne Schauffer

t was no wonder that the Riverside conference centre was packed for the SAPOA KZN breakfast meeting. There, to offer property owners and developers an opportunity to take advantage of a specific government grant, was speaker Wiseman Myeni, regional manager for the Department of Trade and Industry (DTI). Welcomed by Edwin van Niekerk, KZN regional chairman of SAPOA, Myeni briefed members of SAPOA on the department’s critical infrastructure programme (CIP), an incentive scheme designed to contribute towards infrastructure costs of

development projects such as industrial parks or factory schemes. The CIP is a cost-sharing grant for projects designed to improve critical infrastructure in South Africa, and although it isn’t new, only one application has been approved since April. Myeni conceded the DTI had been “talking to the wrong people”, and he was here to put that to rights. And SAPOA members were clearly the “right” people – members were keen to gain clarification of this grant and, importantly, to learn what criteria were applied when the DTI considered applications.

SOUTH AFRICAN PROPERTY REVIEW

The grant pays qualifying developers between 10% and 30% of the total infrastructure costs of their project, capped at R30-million. Myeni said there was sometimes confusion between the entire project and the infrastructure component of it – the grant applies to elements such as transport, energy, water and sanitation, telecommunications and fuel. The grant only covers infrastructure on publicly accessible land. Myeni also indicated elements that would give the application more weight. Applications are awarded points based on the project’s contribution to

economic development or investment, the number of jobs it helps create, and whether it’s deemed to contribute to upliftment of an underdeveloped area. To strengthen the application, Myeni strongly advised applicants to get the local authorities on their side. SAPOA members were keen to find out the detailed elements of the grant, and question time was lively – and the subsequent breakfast well earned. A comprehensive DTI booklet was distributed to guests, and the breakfast offered an excellent opportunity for vocal networking between old and new members.

statistics

Greening and sustainability: the natural facts Green Building Council of South Africa (GBCSA)

l Energy Star-certified buildings

command rent that is 2,1% higher than similar non-certified properties. Despite increases in the supply of green buildings and the recent downturns in property markets, green premiums have been maintained. – RICS Research Report (United States), October 2010

Normal buildings

Green buildings

l Normal buildings globally

l Green buildings generate 33%

generate one in three tons of CO2

less greenhouse gases

l Globally, the built environment

l Green buildings consume 26% less

is responsible for: 40% of end-use energy consumption 40% of solid-waste generation 12% of fresh water consumption

energy than the average building

l Treatment for illnesses and health

conditions that are influenced by the indoor environment costs employers at least US$750 per employee annually, accounting for approximately 14% of all annual health insurance expenditures. – Prof Vivian Loftness, Carnegie Mellon University School of Architecture, “Sustainable Design for Health and Productivity” presentation for GBCSA Convention, November 2008

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upfront, but can save money over the life of the building through lower operating costs. These savings may be more apparent through life-cycle assessment (LCA). – US EPA

l 3,5% lower vacancy rates in green

buildings

l Studies using data from 2005

l 13% higher rental rates l 2,8 fewer sick days per year

l Rated Green Star office buildings

deliver a higher return than non-rated buildings for both CBD and non-CBD office markets. – IPD Australia and New Zealand Green Cities, 2011, “Introducing the PCA/IPD Green Investment Index” presentation

l A green building may cost more

l The South African commercial

l Globally, energy efficiency

property sector was responsible for the emission of 35 000 000 tonnes of CO2e in 2006 alone, representing 10% of the national total. The South African residential property sector was responsible for the emission of 45 000 000 tonnes of CO2e in 2006 alone, representing 13% of the national total. – UNEP, 2009, “Greenhouse Gas Emission and Baselines and Reduction Potentials from Buildings in South Africa”, Sustainable Buildings & Climate Initiative, United Nations Environment Programme DTIE, Paris

represents about 40% of the greenhouse gas reduction potential that can be realised. It is an extremely attractive upfront investment that pays for itself over time. – McKinsey & Company, 2009, “Pathways to a Low-Carbon Economy: Version 2 of the Global Greenhouse Gas Abatement Cost Curve”

through to late 2009 have consistently found that green buildings, on average, have higher rental premiums, higher occupancy levels and higher values than buildings with otherwise similar characteristics. – Budapest Business Journal l Since energy costs are at

an all-time high, the low cost of operating and the easy maintenance of the green building will make for much lower vacancy rates along with much higher property values. – EcoWorld Magazine

l Of the nine-billion people

predicted to live on Earth in 2050, 70% are expected to live in urban areas. – UNEP, 2011, “Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication”

l The commercial sector uses 10%

of the country’s electricity. – Andrew Etzinger, Eskom’s senior general manager in the Integrated Demand Management department, 2012

Greener, better, healthier OFFiCeS

November 2011

Green offices are designed and constructed to save energy, water and money.

l Global carbon dioxide

The hallmarks of a green office are natural light, fresh air, low toxins and views to the outdoors. This makes them healthier and more productive places to work. Organizations around the world are recognizing that just small improvements in workplace productivity can mean big savings.

With more than

85%

of total workplace costs spent on salaries and benefits, compared with less than 10 percent on rent and less than one percent on energy. 1. Persram, S., Lucuik, M. & Larsson N. (2007) “Marketing Green Buildings to Tenants of Leased Properties.” Canada Green Building Council. 2. Meng Y, Babey SH, Wolstein J. Asthma-Related School Absenteeism and School Concentration of Low-Income Students in California. Prev Chronic Dis 2012;9:110312. 3. World Green Building Council Business Case for Green Building (2013).

Research and case studies have found that green offices:

> Boost productivity and performance

> Enhance worker satisfaction

emissions jumped by the largest ever amount in a single year – from 31,6-billion tons to 33,5-billion tons

> Reduce sick leave, stress levels and absenteeism

Are a powerful recruitment and retention tool

5,49-billion tons (16% of the world). During the KP, the US emissions have increased by 16% – four percent in 2010

Why are Green OFFiCeS better OFFiCeS?

11%

23%

Up to 11% gains in productivity from fresher air.3

Up to 23% improvement in productivity from good lighting and access to views.2

25% Up to 25% better functioning memory when workers have views.3

l US carbon emissions output:

18%

l China carbon emissions

output: 24,3% of global carbon emissions (50% more than the US) l India carbon emissions

Up to 18% increase in productivity through access to daylight and operable windows.3

output: 2,06-billion tons (6,1%) – highest rise from any country, 9,4% over a year

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Port Elizabeth golf day at Hill Golf Club

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Welcome to our new members

group PROJECT MANAGEMENT | QUANTITY SURVEYING | PROCUREMENT | CONSTRUCTION LAW | TRAINING

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For membership information please contact: Beryl Tshaka on T: 011 833 0679/83 or e-mail: msofficer1@sapoa.org.za

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off the wall

Vertical farming in the city A tussle for urban and farming land means we may have to come up with solutions to accommodate both forms of development. Is vertical farming the solution? By David A Steynberg

ur world is staring at two potentially life-altering probabilities: we’re producing too little food for our growing global population, and our cities are encroaching on the arable land we do have. Food security and a growing urban population are really two sides of the same coin. Alternative food production technologies have long been a reality: biotechnology (such as genetically modified seeds) to save on pesticides and herbicides, drip-irrigation systems for hot and dry regions, and aquaculture to grow and farm ocean fish inland are just a few of the strides that have been made in agriculture. Still, commercial farming requires large swathes of arable land. It is also expensive and dependent on a thorough understanding of logistics and supplychain management. Conversely, our world is becoming increasingly urban, which means the workforce is being depleted in the rural areas, and land is needed to build housing as well as commercial industries – a political, societal and economic hot potato if there ever was one. One solution to this issue may be right in our own back yard. Vertical urban farming has been trumpeted as the answer to our problems. Bring the farm to the city! Make use of either existing skyscrapers or build entirely new stock. Different floors can host different crops; the existing lighting system can be adjusted to illuminate only red and blue light – the only spectrum of light plants make use of. The irrigation system is also already installed with fire sprinklers requiring adjustments to make perfect drip irrigation possible.

Consumers are increasingly becoming more aware of the concept of a carbon footprint – the amount of carbon used to get a product from creation to the store shelf. Urban farming will dramatically reduce the carbon footprint of our food by producing it in the city where it will be consumed. According to the Food and Agriculture Organisation of the United Nations and NASA in the US, some 80%

Source: Verticalfarm.com

Advantages of vertical farming l Year-round crop production; one indoor hectare is equivalent to four to six outdoor hectares (or more), depending on the crop (e.g. strawberries: 1 indoor acre = 30 outdoor acres) l No weather-related crop failures due to droughts, floods, pests l All VF food is grown organically: no herbicides, pesticides or fertilisers l VF virtually eliminates agricultural runoff by recycling black water l VF returns farmland to nature, restoring ecosystem functions and services l VF greatly reduces the incidence of many infectious diseases that are acquired at the agricultural interface l VF converts black and grey water into potable water by collecting the water of evapotranspiration l VF adds energy back to the grid via methane generation from composting non-edible parts of plants and animals 64

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l VF dramatically reduces fossil-fuel use (no tractors, ploughs, shipping) l VF converts abandoned urban properties into food production centres l VF creates sustainable environments for urban centres l VF creates new employment opportunities l We cannot go to the moon, Mars or beyond without first learning to farm indoors on earth l VF may prove to be useful for integrating into refugee camps l VF offers the promise of measurable economic improvement for tropical and subtropical least developed countries (LDCs). If this should prove to be the case, then VF may be a catalyst in helping to reduce (or even reverse) the population growth of LDCs as they adopt urban agriculture as a strategy for sustainable food production. l VF could reduce the incidence of armed conflict over natural resources such as water and land for agriculture

of the land that is able to grow our food is already in use, and human populations are expected to increase by another three billion by the year 2050. We will need to come up with at least another 109 hectares of new (arable) land if we continue to farm the way we currently do. With this in mind, vertical farming really is a no-brainer.

Committed to inner city regeneration, Delta is a specialist property fund with a portfolio of sovereign underpinned and other large commercial properties. Deltaâ&#x20AC;&#x2122;s on-going property portfolio growth is through strategic high-yielding acquisitions and refurbishments, all supported by stringent cost management.

Tel: 27 (0)8780 DELTA / 33582 Fax: 27 (0)86 504 1237 Silver Stream Office Park, 10 Muswell Road South, Bryanston Postnet Suite 210, Prvate Bag X21, Bryanston 2021

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Building and Property Economics is our Speciality Pro-active. Innovative. Maximising returns DelQS remains one of the most established and respected names in the industry. Through highly developed and specialised expertise we are continuously delivering creative solutions to maximise returns for our clients. And when you consider our remarkable track record in South Africa, Africa and the Middle East, there should be no doubt with DelQS at your side, all will be accounted for. Every time QUANTITY SURVEYING

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