Property Developer May 2015 by SAPOA

Developer

PROPERTY

May 2015

Introducing

Tongaat Hulett

Addressing Africa: RICS Africa Summit

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Lords View: A green view on things

2015/04/29 10:03 AM

interview

SOUTH AFRICAN PROPERTY REVIEW

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contents

PROPERTY

Developer

2 4 12 14 20 22 26 28 32 36 40

From the CEO

Abland

News Legal matters Cover story: Introducing Tongaat Hulett Housing for the future RICS Africa Summit: Addressing Africa Servicing Hatﬁeld’s students

Abreal

A green view on things CBD retail heats up Growthpoint changes lives Changing with the times

Developer

PROPERTY

May 2015

ON THE COVER Introducing Tongaat Hulett

Oilgro

Introducing

Tongaat Hulett

Addressing Africa: RICS Africa Summit

Lords View: A green view on things

Cover_MAY_SUBBED.indd 1

2015/04/29 10:03 AM

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 Production Editor Dalene van Niekerk Designers Wade Hunkin, Dirk Knoesen Sales Riëtte Stevens Finance Susan du Toit Contributor Eugenia Makgabo 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.

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F U N D

e: david@rsalitho.co.za

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from the CEO

Commercial property in KwaZulu-Natal With an ongoing need to inform the property sector, SAPOA CEO Neil Gopal highlights the organisation’s latest in-depth research report, which focuses on the commercial private property industry and its role in KwaZulu-Natal

ith SAPOA’s attention currently placed on the City of Durban – where the highly anticipated 47th Annual SAPOA International Convention and Property Exhibition is taking place this month – the organisation endeavoured to conduct in-depth research into the private property industry’s role in this area. SAPOA commissioned Urban-Econ Development Economists to undertake a detailed investigation of the private property industry of the KwaZuluNatal province, with special reference to the eThekwini Metropolitan Municipal area. Titled “The Role and Impact of the Commercial Private Property Sector in KwaZulu-Natal”, the study delved into the economic value component as well as the application process aspect. The objective of the former was to contextualise the size and overall economic contribution of the private property sector in KwaZulu-Natal in order to provide a foundation for cost calculations related to application and other administrative processing time-frames. The latter supplements the first by analysing development application procedures and relevant case studies to link processing time frames to economic performance. In order to measure the economic value of the private commercial property industry, the relevant activities within specific economic sectors had to be identified. Property-centred economic activities with a direct link to the private commercial property industry were evaluated in line with generic economic impact practices. The study shows that gross domestic product (GDP), direct employment and tax revenue generated by the private commercial property sector in KwaZulu-Natal are all direct impact factors. The research reveals that in 2014 the private property sector contributed approximately R18,09billion to the provincial economy’s GDP (six percent), with construction encompassing R9,64billion and property management R8,84-billion.

Furthermore the private property management sector sustains 17 119 jobs within KwaZulu-Natal in addition to the 222 994 employment opportunities sustained by property construction activities. During 2014 the private property management sector also generated R452-million in tax, while private sector construction activities generated R273-million. The commercial private property sector currently contributes significantly to the economy of the province. The metropolitan and provincial private property contributions in terms of GDP, employment and tax are significant if it is considered that they surpass the contributions made by other major economic sectors, such as the mining, agricultural and utilities sectors, on a provincial level. The report notes that because the private commercial property sector consists of various construction and property management activities as well as various administration processes that are involved within the value chain of these identified activities, it’s thus impractical to measure administration efficiency within the entire development cycle. The responsibilities of the private sector are also stressed in the report. The private sector has to utilise pre-consultations with the municipality to enable interaction between private property professionals and public sector officials before the submission of applications. Applicants should also pre-check requirements of the application before submission because it is vital to ensure that the application submitted complies with the requirements set by the governing entity. When comments are received, it is the applicant’s responsibility to respond timeously in order to amend requests and ensure that all requirements of the application are adhered to in sufficient detail. Finally, private sector

2014 GDP value (R-millions, constant 2005 prices)

professionals should participate in consultation opportunities to voice their opinions regarding specific concerns of the administration process. The research concludes that the commercial private property sector is a key driver of both the metropolitan and provincial economies. It adds substantial value to the provincial economy in terms of GDP contributions, sustainable job creation and tax revenue. It highlights that any delays experienced during the application administration process are detrimental to the commercial property sector and development in general, which in turn hampers provincial and metropolitan economic growth. It is therefore imperative that, as one of the most important phases in the development cycle, the administration of development applications should avoid delays and improve on administrative processes where possible.

Neil Gopal, CEO

2014 employment (persons)

2014 tax value (R-millions, constant 2005 prices)

KwaZulu-Natal

eThekwini MM

KwaZulu-Natal

eThekwini MM

18 085,76

240 113

116 283

725,32

450,29

Share of own total economy (provincial or MM)

5,96%

8,86%

8,85%

18,26%

11,36%

Share of total national economy

0,98%

1,61%

0,78%

1,70%

1,05%

Total commercial private property sector

KwaZulu-Natal

eThekwini MM

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interview

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SOUTH AFRICAN PROPERTY REVIEW

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Large, growing waiting list for …my place lifestyle @ Stellendale highlights big demand for quality, affordable retirement accommodation

An artist’s impression of …my place lifestyle @ Stellendale, Visual International’s new affordable retirement accommodation development, which forms part of its greater Stellendale Village mixed-use suburb project in Kuils River, in the northern suburbs of Cape Town

isual International Holdings, the JSE AltX-listed property development company, has revealed it’s experiencing high levels of demand for its affordable retirement accommodation. Nearly 300 potential residents have registered their interest for …my place lifestyle @ Stellendale before its sales campaign has even kicked into gear. “We always knew there was a vast, untapped market for the affordable retirement sector but the extraordinary levels of demand have outstripped our expectations,” says Charles Robertson, Chief Executive Officer of Visual International Holdings. Construction of …my place lifestyle @ Stellendale in Kuils River in the northern suburbs of Cape Town starts this month. Robertson adds that, while there are many factors contributing to the popularity of this over-50s lifestyle concept, what is really winning it tremendous support is the affordable quality it offers investors and residents alike. “We place all the emphasis on our residents, with a vigilant focus on keeping their costs as low as possible, while still

offering exceptional quality finishes and facilities,” says Robertson. This also means working with expert partners who share Visual International Holdings’ commitment to providing innovative, affordable, quality retirement living. Putting this approach into action, Visual International Holdings has appointed GERATEC as the care provider for …my place lifestyle @ Stellendale. It is using a first-of-its-kind model of meaningful engagement, where residents are encouraged to actively participate in the running of services. “We believe retirees are an integral part of the greater community – they shouldn’t be isolated and excluded from society,” says Robertson. “At our villages, retirees will be provided with opportunities to fully engage in the day-to-day creation of their own community, using their skills and furthering their interests. This could include areas such as helping with daycare, food preparation and the like.” Visual International Holdings is creating a blueprint for this unique model in which villagers are encouraged

and supported to create a stimulating life that fosters companionship and confidence by being actively engaged in society with a sense of purpose. Visual International Holdings and GERATEC work on principles based on the Eden Alternative philosophy, which is founded on creating a human habitat where daily life revolves around close and continuous relationships with children, animals, plants, meaningful occupation and wellbeing. The property company has appointed Retirement Villages SA as rental agents and service advisors. Marelize van Rooyen, Marketing Director at Retirement Villages SA, explains that they base their service on first-hand knowledge of all the residents in the properties they manage. “We pride ourselves on walking the extra mile with our clients,” she says. Visual International Holdings also works with a dedicated team of lawyers, accountants and real estate agents to capitalise on the tax write-offs for buy-to-let investors. In addition, buyers get full title, rather than a liferights option. In all these aspects, Visual International Holdings is leading the way to ensure affordable retirement is within reach of those South Africans who need an affordable retirement lifestyle. The rental cost for a single-occupancy suite including 25 meals a month, a basic weekly suite cleaning and a wash-load of laundry each week starts at R5 170 per month. At the top end, a two-bedroom cottage, also with 25 meals for two people, a basic suite cleaning and a weekly load of washing per person, comes in at about R8 600 per month. The units all provide prepaid water and electricity metering and consumption. +27 (0)21 919 8954, Visualinternational.co.za

City of Cape Town releases major properties to the market:

n line with our strategic objective to leverage city assets and drive economic growth, the City of Cape Town will release to the market a number of city-owned properties not required for municipal purposes. This is in line with our efforts to create an opportunity city as outlined in our Integrated Development Plan (IDP) to leverage the city’s assets and drive economic development with the release of immovable property not required for municipal purposes in order to stimulate economic activity, economic investment, and growth and job creation. Among the properties to be disposed of are two high-valued properties: erf 171453, Cape Town

Statement by Executive Mayor Patricia De Lillessssss

(also known as Site D) located in Lower Long Street; and erf 5161 Montague Gardens, located on Century Boulevard in Century City. Erf 171453 is located in the Cape Town central business area, and is the last of two remaining undeveloped properties within the former Foreshore Power Station site. After the demolition of the power station, the property was subdivided into eight parcels of land. Six of these properties were previously sold by the City and improved by the Icon, ENS and Investec buildings and the Protea North Wharf, Holiday Inn and Cullinan hotels. Site D, which is opposite the CTICC, is approximately 3 500m² in extent with a general business zoning

and maximum permissible floor area of 15 500m², providing for a wide range of uses. The property is particularly well located for prime A-grade offices, with retail at the ground level. The other remaining Foreshore Power Station site, Erf 165639 (also known as Site B) was placed on tender by the city a month ago and is still open for interested parties to submit tenders. Erf 5161 in Montague Gardens is located within Century City, on Century Boulevard. This 25 000m² property is zoned for general business. Other properties will also be on offer and will be placed on tender for community, business and residential use in areas such as Atlantis, Brackenfell, Goodwood, Constantia, Langa and Simon’s Town.

The city is currently compiling a call for proposals for a long-term lease of bulk rights of the proposed Heerengracht Tower Block development. This development is currently being planned as part of the Cape Town International Convention Centre expansion on the Foreshore and will be located on Heerengracht on the opposite side of the offices of Webber Wentzel. This development will cater for mixeduse consisting of, among others, hotel, office and residential uses of approximately 45 000m² of bulk. It is envisaged the proposal call will be released early this month. +27 (0)21 401 4701, Capetown.gov.za

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Beautification of Tembisa sidewalks

ore than 400-million people in Africa live in urban areas and because of high rural-to-urban migration rates the number of people living in urban areas will increase from 62% to 70% by 2030. In 2011, the South African government recognised that there was an urgent need to address the revitalisation of South African townships, and the National Development Plan: Vision 2030 (NDP) was drawn up. President Jacob Zuma welcomed the National Planning Commission’s draft vision and plan for 2030, which (when ﬁnalised) would evolve into the NDPL Vision 2030, and called on South Africans to take ownership of the proposals and ideas. This plan envisaged an approach that promoted the development of capabilities and the creation of opportunities for all South Africans. Three years on, Corobrik (Pty) Ltd and the Ekurhuleni Municipality are working together on the renewal of Tembisa’s sidewalks, creating a pedestrian environment that

will beneﬁt all of Tembisa’s 463 109 (Census 2011) citizens. Corobrik supplied approximately one-million Champagne PA clay pavers to the main contractor, White Haze Building, and a selection of smaller contractors from Ekurhuleni who were on a municipal mentorship programme. Although most clay pavers can be laid in a variety of patterns, a lot of consideration was given to the laying pattern of the pavements to make it cost-effective and simple for the contractors to lay. With more than 10 819 people per square kilometre (Census 2011) potentially using the sidewalks, an attractive Herringbone design in a fully interlocking pattern which promotes even load bearing and reduces the possibility for movement of the paving system was considered the best option to suit the needs of Tembisa. A key feature of the Corobrik Champagne Clay Pavers is their colour fastness – even after a hundred years of baking in the hot African sun they will retain their attractive colour.

Several contractors from Ekurhuleni area laid one-million Corobrik Champagne PA clay pavers along pavements to upgrade the municipality. A herringbone design was used to ensure the result was cost-effective and strong In fact, one of the earliest forms of paving more than 5 000 years ago in ancient Iraq relied on using baked clay bricks to construct a pavement. “In the Nguni language, Tembisa means ‘promise’ – and Corobrik is delighted to be part of Ekurhuleni Municipality’s urban renewal programme, which will see the realisation of the area’s potential,” says Corobrik’s Teboho Clement

Mokoena, who liaised with the contractors on the project said. “The rejuvenation of Tembisa is expected to take ﬁve to 10 years to implement and will see the fulﬁlment of previous Human Settlements Minister Tokyo Sexwale’s vision when he said in 2011 that housing developments should be where ‘people play, stay and pray’.” +27 (0)11 871 8600, Corobrik.co.za

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Waterfall announced as the new business home of Hilti, Stryker and Schneider Electric

An artist’s impression of Hilti’s new South African country headquarters being developed in Waterfall by Atterbury Property Development

tterbury Property Development together with Attacq Waterfall Investment Company are developing top-notch premises for three more leading companies at Waterfall. Top companies Hilti, Stryker and Schneider Electric have all chosen to join the growing number of businesses in this vibrant new city, continuing its rising trajectory among South Africa’s best business addresses. Waterfall, ideally located between Midrand and Sandton, is one of the largest “greenfield” urban concept developments in the country. With its many advantages, it is quickly becoming one of the strongest and most successful commercial nodes nationally. To date, nearly 30 leading commercial and industrial companies have chosen the growing Waterfall development as their base for business success. These include PwC, Servest, Colgate Palmolive, Cell C, Group 5, Altech, Digistics, Massbuild, Cipla, Golder & Associates, MB Technologies, Virgin Active, Premier Foods, Dräger SA, Westcon Group, Novartis, Covidien, Cummins, Honda Motor SA, Attacq and Atterbury, and City Lodge Hotel.

Waterfall also features an extensive variety of retail, with the iconic new 131 000m² super-regional shopping centre, Mall of Africa at Waterfall City, set to open in 2016. Attacq Waterfall Investment Company holds the development rights to the prestigious Waterfall City. It is wholly owned by JSElisted real estate capital growth fund Attacq. Attacq Chief Executive Officer Morné Wilken and Coenie Bezuidenhout, the Director of Atterbury Property Development responsible for coordinating this immense commercial real estate project, both hailed Hilti, Stryker and Schneider Electric’s move to Waterfall. “Hilti, Stryker and Schneider Electric are all respected business names and leaders in their respective fields, and we welcome them to Waterfall,” Wilken says. “This vibrant and flourishing business node really meets the business requirements of modern companies. It offers more than a commercial precinct designed to work for business. It is an exceptional asset that also provides all the amenities needed

for everyday living, from retail and restaurants to hotels and hospitals.” “Atterbury is creating a strategic business presence, with purposedesigned premises, for each of these businesses,” says Bezuidenhout. “Their new buildings will support optimal operation. They also create work spaces ideally suited to reflect the unique brand and values of Hilti, Stryker and Schneider Electric, and create quality environments that will help achieve their future goals.” Hilti, based in the European principality of Liechtenstein, provides leading-edge technology to the global construction industry. Hilti is moving its South African country headquarters to Waterfall Logistics Precinct. In a tailor-made facility, it will combine offices and a warehouse. With an ultra-modern design evocative of prime office structures, the new head office will also include training space for Hilti product end-users. Construction is under way and Hilti is scheduled to begin trading from its dynamic new address from 1 October 2015. Stryker is a US-based Fortune 500 firm and a market leader in the rapidly growing orthopaedic implant

and equipment market. Its new South African premises will consist of offices and a warehouse. The crisp, clean lines of this new building will be highly visible from Bridal Vale Road, where Waterfall is constructing a new bridge over the N1 highway. Stryker will begin operating in its new premises on 1 October 2015. “Waterfall is becoming the hub for medical equipment and pharmaceutical companies,” says Bezuidenhout. “Stryker South Africa’s relocation to Waterfall further supports this.” Introducing the first LEED Silver-rated building to Waterfall, Atterbury has begun the development of Schneider Electric’s new 4 265m² building. As a global leader in energy management, sustainability is at the heart of Schneider Electric’s business, and its commitment to the environment will be reflected in its new green premises. Earthworks began in February this year and construction started on 1 April 2015. A Frenchbased multinational, Schneider Electric will begin functioning out of its new environmentally innovative office building before the end of 2016. +27 (0)10 596 9800, Atterbury.co.za

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Mantis to develop a new hotel in Saint Helena

antis, a collection of privately owned boutique hotels and eco-escapes around the world, is proud to announce that it has been officially awarded the contract to develop and manage a new fivestar hotel on the island of St Helena, a UK overseas territory located in the South Atlantic Ocean. This is off the back of the news that also broke recently that Comair has been awarded the first-ever scheduled air service between Johannesburg and St Helena Airport. St Helena Island has an abundance of natural beauty, friendly people and fun-filled activities, including Napoleonic sites and walks on land once occupied by prisoners of war during the Boer Wars. Jonathan, possibly the oldest tortoise in the world, enjoys life in the picturesque gardens of Plantation House, which is the governor’s official residence. A visit to St Helena also means exploring the scenic coastal and inland walks. A leisurely escorted tour in the island’s only Charabanc is a highlight, as is the stop at the top of Jacob’s Ladder, which looks across to Jamestown. The museum in Jamestown explores the history of Britain’s secondoldest colony in an informative and interesting way.

As one of the most remote places in the world, situated more than 2 000km from the nearest major land mass, and with its rich flora and fauna, the island quite comfortably fits into the Mantis portfolio, which promises to “unearth the exceptional”. A Mantis team that included founder and Chairman Adrian Gardiner, visited the island in 2013 and identified Lower Jamestown as the location for the hotel, which will have 32 bedrooms, a restaurant and bar facilities. Construction is due to start in July 2015, and the hotel is expected to open during the first half of 2016. The island, a new tourism destination that is currently accessed by the last commercially operating Royal Mail Ship, will be opening its first airport in 2016, marking another important step in the evolution of St Helena Island, with the involvement of companies such as Comair and Mantis; demonstrating that St Helena can attract the best international partners. A major priority for the project will be the restoration of the building, ensuring it is sensitive to its history, the environment and the local

community; something that Mantis has experience in from the 2011 refurbishment of 16th century country house hotel Ellenborough Park, Cheltenham. In addition to its development expertise, Mantis will also be bringing its wealth of hospitality, education and conservation experience to the island, with various initiatives on the cards to develop skills in the community and to support the natural environment. “We’re so proud to be associated with this new and exciting venture on the island of St Helena,” said Gardiner. “Mantis is all about unearthing the exceptional, and we’ve undoubtedly achieved this here – not many people have visited this remote part of the globe. Now we’ve been given the opportunity to open up the doors to this new destination. Aside from just developing a new hotel and operating the islands first-ever five-star boutique hotel, we’re going to assist with the training of the locals in the hospitality space and also bring in our strong conservation ethic.” +27 (0)41 404 9300, Mantiscollection.com

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Low income residential development on the rise in South Africa

emand for affordable housing for South Africa’s low- and middle-income earners is superseding supply, with industry experts predicting that the asset class will show excellent growth potential. Because of South Africa’s history of racial divide, a shortage of affordable, entry-level housing within urban areas exists and supply is expected to take many years to catch up with the demand. This is an asset class within the property market that investors have typically been reticent to invest in, leading to a widening supply-and-demand gap, says Ryan Wintle of Construct Capital, which specialises in providing development management services and funding solutions. Construct Capital is converting old, economically non-viable commercial buildings into low-cost residential accommodation in Germiston, Randburg, the Johannesburg CBD and Durban’s Point area. “Factors contributing to driving this demand include urbanisation, as rural South Africans move to bigger centres in search of work and a better life for themselves, as well as the cost of transport and more efficient travel times,” Wintle says. “As for all of us, time is money, and these properties are centralised and located in commercial areas. In some of these properties it is even viable to have a crèche, making the lives of working parents easier.” In order to make a market-related return on rentals, it is imperative to effectively manage building costs of the conversion. However, it is equally important

not to cut costs on items that can later lead to significant increases in operational costs. “We use granite tops in our units as opposed to melamine which deteriorate quickly if tenants put hot items on the surface,” Wintle says. “There is massive demand for affordable and safe residential accommodation, yet the traditional banks are cautious of funding these sorts of developments. We feel that this is for two main reasons. First, the fact that the tenants can only be signed up once the development is complete means funding needs to be approved on a theoretical income stream. Second, these assets are tenanted by numerous short-term leases as opposed to longer-term stronger leases, which the banks currently perceive as riskier. This generally results in more equity being required to convert these projects.” Despite these barriers, private investors are allocating capital to these projects, which show viable long-term potential. “This limits entrance to this market to those who have significant cash,” says Wintle. “Yet even with the equity requirements, these projects are drawing in lots of investors because of the good yields and a secure income stream.” TPN credit bureau, which specialises in property rentals, says that at the start of 2014, 86% of residential tenants were recorded as being in Good Standing. Of this figure, 83% of tenants rented for less than R7 000 a month. TPN’s Residential Rental Monitor for 2014 noted that the “sweet-spot” for

residential rentals was the R3 000 to R7 000 rental category, “with 61% of tenants renting in this price range, resulting in a consistently strong demand for properties”. Wintle believes that operational control is of utmost importance in making these types of properties viable. “If this type of asset is managed properly, it can provide a bulletproof income stream for the investor,” he says. “Access control is critical and managing non-paying tenants very quickly is key; thus management needs to be very active.” The property managers need to provide a safe and clean environment for tenants, keep out bad influences and ensure rent is paid. “It is more expensive to manage than other property classes but this type of investment does provide a good and consistent return,” says Wintle. Internationally, residential-focused property funds make up a large percentage of the listed property sector but no such fund currently exists in South Africa. Recent reports in the business press are that a property loan stock company plans to list the first residential-only property fund on the JSE by the middle of this year. “Previous residential listing attempts have been unsuccessful,” says Wintle. “A major reason for this could be investor perceptions – but these are changing. Construct Capital believes the time is ripe to see such a specialised residential fund listed and a new asset class created.” +27 (0)82 559 7906, Constructcapital.co.za

Tongaat Hulett is inviting offers for its last remaining stands at the Umhlanga Ridge Town Centre

wo iconic sites in the up-market Umhlanga Ridge Town Centre – the Oval Sites – reflecting the form framed by the sweeping arcs of the Umhlanga Ridge Boulevard as it splits around them, are being released for development. Tongaat Hulett Developments, the property arm of Tongaat Hulett, offers these jewels in a most sought-after location. Located at the heart of the swanky business, residential and leisure hub, these last remaining sites account for 30 000m² of the 640 000m² within the mixed-use Umhlanga Ridge Town Centre and offer very special opportunities for developers. The two sites may be attractive to a single developer, given their proximity to each other and the potential to create something exceptional. “The Oval Sites are zoned for 17 storeys of mixed-use buildings, so they offer potential for truly iconic

structures,” explains Andile Mnguni, Development Executive at Tongaat Hulett Developments. “The closest in height comparison to that is a 12-storey residential zoning with the balance between four and eight storeys. Buildings of scope can be designed for the Oval Sites, which will boast sea views from the top floors.” The location is suitable for an important set of buildings. “The sites have road frontages on all sides,” says Mnguni, “meaning that the structures will be able to be viewed from all angles. This uninterrupted panorama implies that bold, magnificent architecture can be used to create exemplary buildings.” It should be noted that if the sites are acquired by separate purchasers, the design proposals will need to complement each other to create a coordinated look for the environment. The sites afford an extraordinary investment opportunity for a discerning

An artist’s impression of the Oval Sites buyer. With the Gateway Theatre of Shopping less than a kilometre away and the proposed strong transport links, the buildings on the Oval Sites are likely to find appeal among occupants. The King Shaka International Airport is 17km away and the sites have been earmarked to include a station on the GO! Durban route, eThekwini’s Integrated Rapid Public Transport Network. Links to the Durban city centre in the south and to Bridge City in the west

are incorporated in the plans. All bulk infrastructure is in place, so the stands are ready to be connected to the network. A well-established management association attends to the common interests of its members in the Umhlanga Ridge Town Centre, ensuring the local environs are looked after. “This is a strategic location,” says Mnguni. “It’s a matchless investment opportunity.” +27 (0)32 439 4000, Tongaat.co.za

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Westbrook mega-development launches in Port Elizabeth

aster developers the Amdec Group, whose current property portfolio places the company among the country’s largest independent property developers and investors, are transforming an undeveloped portion of land in Port Elizabeth into a shiny, new “town-meets country” neighbourhood never before experienced in the Nelson Mandela Bay area. The staggering R7-billion megadevelopment will transform a formerly derelict and isolated 128-hectare part of the city, conveniently situated on a main arterial route north of the Old Cape Road and located in close proximity to the newly developed Baywest Mall. Named Westbrook, located 12km west of the Port Elizabeth CBD, the neighbourhood has been named both as a result of its positioning and the many watercourses to be found within the suburb. Backed by the experience and expertise of Amdec Group’s 26 years of developing South Africa’s most successful places to live, work and play, Westbrook will consist of 3 500 residential homes spread across nine residential villages. Each village will provide a variety of homes, apartments and townhouses – plus a retirement lifestyle estate and charming retail village ofﬁce component, medical centre, “town centre” and an already established private Curro school.

“When you create a suburb from scratch,” says Amdec Group’s Development Director Cobus Bedeker, “you’re able to forge a 21st-century mixed-use community; to perfectly create appropriately scaled homes for young and old alike, and to determine what public spaces they want to spend time in and what amenities are important to them. We have an amazing opportunity here and we’re thrilled to be able to unlock it. This will have a sizeable impact on the region.” Catering to a variety of lifestyle needs and supporting the “new urbanism“ principles on which previous Amdec Group developments have successfully been created, the heart of Westbrook will feature a 160 000m² mixed-use node housing a leading medical facility, comprehensive retail offering and business park. All this, plus the added convenience of a “walk to work” reality, with more than 40 000m² of premium ofﬁce and commercial space connected by lush parkland, will be criss-crossed by pedestrian and cycling lanes. “As part of our vision to change the way people live in Port Elizabeth, we’re looking to create spaces and places that will uplift and inspire the human spirit,” says Bedeker. “This means new homes, fresh designs, innovative ways of living and viewing life. The suburb will consist of 30 hectares of open space that ideally lends itself to expansive parks,

Westbrook mega-development picturesque walkways, bicycle paths and children’s play areas – the very things that promise to make this suburb so unique.” Eighty percent of the bulk infrastructure and services (roads, sewers, water, electricity, etc.) on this sprawling development have already been established, while nine show houses forming part of the ﬁrst residential phase, The Ridge, have also been completed and are now available for viewing. Designed by renowned architect, Lance Kinnear, these homes reﬂect an attractive contemporary village style, with three bedrooms and two bathrooms and ranging in price from R1-million to R1,5-million. Four of the nine planned residential estates (including The Ridge) will be launched on this sprawling development over the next 12 months. Each will cater to a wide spectrum of real estate needs – with house prices ranging from R 800 000 to R2-million. The Westbrook village retail centre will

also be launched shortly, and the already existing Curro school will experience further expansion to provide a full and comprehensive school (pre-primary to matric). Designed to raise the benchmark for premium mixed-use estates in South Africa, security at Westbrook is being taken into consideration at each stage of the development process. Twentyfour-hour Westbrook security patrol vehicles will circulate within and around the perimeter of the estate, visitor access will be managed through state-of-the art CCTV, and all Westbrook estate access points will be monitored by dedicated Westbrook security guards. Allowing residents the enviable ability to live, work, play and learn in a secure, beautiful and convenient environment, Amdec Group looks set to deliver to Port Elizabeth a thriving communityrich environment, backed by a solid commitment to quality and sustainability. +27 (0)21 702 3200, Amdec.co.za

FEENSTRA GROUP (PTY) LTD WINS TWO PRESTIGIOUS AFRICAN PROPERTY AWARDS Office Development : Menlyn Corporate Park

Residential High-Rise Development: Hatfield Studios

Menlyn Corporate Park Building • Block C, 3rd Floor • Cnr Garsfontein Rd & Corobay St • Waterkloof Glen Ext 11. Pretoria Tel 012 472 9200 • Fax 012 472 9216 • www.feenstragroup.co.za • marketing@feenstragroup.co.za

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on record

The Liberty Property Portfolio diversifies into healthcare

he Liberty Property Portfolio continues to diversify its investments in line with its growth strategy. The Portfolio has for the first time added healthcare to its range of assets with the conclusion of a 20 year lease agreement with wholly black owned private hospital group, Melomed Richard’s Bay Proprietary Limited. The new state-of-the-art healthcare facility will consist of a 100 bed, 10 000sqm hospital at the John Ross Eco Junction in Richard’s Bay. Development will commence in the third quarter of 2015, with completion expected at the end of 2016. The development is a joint partnership between Liberty Group and Tuscaloosa, who will co-own the property and operate as landlords of the R220-million healthcare establishment. Speaking of the deal, Head of the STANLIB Direct Property Investment Franchise, Amelia Beattie, said, “Melomed is a significant player in the rapidly developing healthcare industry in South Africa. It will be a prime, value-adding tenant within the Junction and provide a vital service to the wider community. The Liberty Property Portfolio is always finding new ways to strengthen its composition to benefit our investors, and I believe Melomed will be a strong tenant that will enhance the Portfolio’s returns.” The portfolio has traditionally been weighted towards retail, with assets including some of South Africa’s prime superregional shopping centres. Among these are Sandton City and Eastgate in Gauteng, Midlands Mall in the KZN and Promenade Shopping Centre in the Western Cape.

The construction of the Melomed Hospital that is currently underway at the John Ross Eco Junction in Richard’s Bay The highly skilled investment team is now focused on diversifying into light industrial and office property to add further value to shareholders, and the signing of Melomed as an anchor tenant is in line with this strategy. “As fund managers our role is to find innovative, fresh ways to channel our clients’ investments into areas that will deliver solid returns over the long-term. Not only do we seek growth, but opportunities that will benefit the communities we operate in”, said STANLIB Fund Manager, Alex Phakathi, who manages the overall Portfolio. The John Ross Eco Junction is a diversified commercial and industrial development across 30 sites on the property. The hospital will primarily serve areas around the greater uMhlathuze municipality which includes Richard’s Bay, Empangeni, KwaMbonambi

and Mtunzini. Ismail Bhorat, Executive Director of Melomed, says, “Melomed will play an important role in delivering quality, affordable healthcare to the community. This will be our first foray out of the Western Cape Province. Our aim has always been to ensure that healthcare is accessible to all developing and emerging communities. It is in line with our vision to provide sustainable, affordable and state-of-the-art healthcare.” Dr Lungile Masuku from Tuscaloosa, the company that has been awarded the hospital licence said, “We are pleased to be involved in this investment and development which will bring healthcare services to the local community while boosting economic growth in Richard’s Bay and the wider economy.” +27 (0)11 448 6000, Stanlib.com

Cape industrial property market showing encouraging signs

he industrial property market in the Greater Cape Town area continues to show signs of improvement in some sectors, according to Lloyd Nussey, a director of Baker Street Properties. Nussey says, “Gross rentals for existing facilities have increased slightly and are now averaging R42/m2, up from R40.00/m2 (excl. VAT) six months ago, with escalation rates averaging 8% per annum. This increase has been driven by recent new developments, which now command rentals of more than R60.00/ m2 (excl. VAT) and the conversion of older redundant factories into more suitable distribution facilities. A sizeable amount of larger space has been developed and occupied since our last survey six months ago and there a number of buildings under construction with others in the planning stages. Areas most active with building activities or future plans are Epping, Joostenberg Vlakte, Montague Gardens, Atlas Gardens, Rivergate, Sheffield, Blackheath, Bellville, Brackenfell and Capricorn Park.” “At Baker Street Properties we use our extensive database to track the

An artist’s impression of the new Waterstone Industrial Park development being completed in Capricorn Park, Cape Town industrial property vacancies across the greater Cape Town areas, including buildings which will become vacant within the next six months. Based on this data, we have seen a decrease in the vacancies in the greater Cape Town area from 403,015m² in August last year to 386,652m2, a decrease of 4.23% measured in February this year. Although this is a much smaller decrease compared to the previous six months, it is encouraging as it shows a continuing downward trend, which will in turn begin to nudge average gross rentals upwards.” Other statistics from Baker Street revealed that current vacancies reflected in facilities larger than 1,000m2 for the period, were down from 277,167 in August 2014 to 276,173 in February 2015. This decrease represents a total of

71.4% of the overall current vacancies in the Greater Cape Town industrial market. For industrial properties between 500m2 and 1000m2 the vacancy figure remains at 58,928m2 in February this year, representing a slight increase in the previous period and 15,2% of the current overall vacancies. There has been a big improvement in the market for premises smaller than 500m2 where there has been a vacancy reduction of 25,3% for the overall industrial market, from 64,596m2 in August 2014 to 51,551m2 currently. This means that vacancies for this sector are down 13.4% to February 2015, which is most encouraging. Nussey adds that a lot of smaller companies have expanded to larger premises, while some larger companies have consolidated their operations into one large warehouse. A

continuing trend is for movement in the logistics company’s and warehousing sector, with very little in manufacturing. Baker Street has found that most enquiries received from prospective tenants are for premises ranging from 800m2 to 1200m2. There is also strong demand for owner occupiers wanting to purchase and own their properties. Some of the larger developments taking place currently are in Montague Gardens, Blackheath, Airport Industria and Capricorn Park. Nussey concludes, “From a tenant’s point of view, should you find your lease expiring in the next six months, please make contact with us to explore what options are available. We have seen a marked increase for tenants engaging in our services to assist in renewing their leases. Working on a fee based on a percentage of savings achieved, we find various avenues to add value during these negotiations on behalf of the tenant. “As a landlord, if you require assistance with tenant retention and need market knowledge and our negotiation expertise, please contact us to assist.” +27 (0)21 461 1660, Baker-street.co.za

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2015 - 2016

legal update

DON’T MISS OUT on this well-used and popular industry resource, where each year we accept a large number of listings and advertisements from professionals and service providers across the entire spectrum of property activities. SAPOA aims to provide added value by offering the basic listings free of charge to all members, and in this respect, we hope that we are assisting you in your marketing endeavours to some extent. We thank you for your support in previous years, and in an effort to improve the look and ease of usage, we have redesigned the directory layout to a four column grid and made available certain entries which will stand out from the norm. Architects

R E T S I REG

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Ranked as the #1 design enginee firm by ring reve Enginee ring New nue in magazin s-Record e’s rankings annual indu stry , fully inte AECOM is a prem grated infrastru ier, and sup port ctur broad rang services firm e , with e of markets a operatio . AECOM’ ns 1,900 peo in Africa boa s st deliveri ple with a prou more than ng d solution excellence and history of s industry for our clients developing across sectors. all Contact us on

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ADENDORFF INTERIORS ARCHITECTS & CC

P.O.Box 4030 1, Eastern Cape Walmer, Port Elizabeth , 6065 , t: +27 (0)41 581 4765 f: +27 (0)86 618 2183

Roof Terrace Suite 8 Arnold Road , , Rosebank t: +27 (0) 11 788 8095 , 2132 F: +27 (0) 11 788 8097

AMA 3 (PT

Directors: Edward Broo Michael Mag ks: edward@activate.c o.za Reon van ner: michael@activ ate.c der Wiel: reon@activat o.za e.co.za w

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ARC ARCHIT PRETORIA ECTURAL CONSUL TANTS

P.O.Box 1339 9, Gauteng, 0028 Hatfield, t: +27 (0)12 362 7350 f: +27 (0)12 362 7349

ARCHI-M

Property

STUDIO

3 CC P.O.Box 9650 , Bloe The Free State mfontein, , t: +27 (0)51 9300 430 8714 f: +27 (0)51 448 5384

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P.O.Box 1299 , Gauteng, 2052 Gallo Manor, t: +27 (0)11 807 7505 f: +27 (0)11 807 7509

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S (PT Y) LTD P.O.Box 9566 4, Gauteng, 0145 Waterkloof, Pretoria, t: +27 (0)12 346 1295 f: +27 (0)12 346 1249 BLACKSHEE P

P.O.Box 5260 S INC 4, Saxonwo Gauteng, ld, 2132 t: +27 (0)11 447 1344 f: +27 (0)11 447 1343

CONSULT

THREE ARC

P.O.Box 7167 HITECTS 1, Eastern Cape Central, Port Elizabeth , , t: +27 (0)41 6006 585 0086 f: +27 (0)86 513 2278

CSAR 3

P.O.Box 5267 3, Gauteng, 2132 Saxonwold, Rosebank , t: +27 (0)11 880 2466 f: +27 (0)11 447 3441

DESIGN

223 Tribella, 166 Gauteng, 2192 Rivonia Road, Morn ingside, t: +27 (0)87 700 8291 f: +27 (0)86 225 6665

BNM 3 BHI

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P.O.Box 5, Bhis Eastern Cape ho, , t: +27 (0)40 5605 635 1951 f: +27 (0)40 635 1961

CO-ARC INT ARCHITECT ERNATIONAL

DAKOTA DES

P.O.Box 1356 IGN (PT Y) LTD , Rivonia, Gauteng, 2128 t: +27 (0)11 803 0000 f: +27 (0)11 803 0000

DAVID CRA

IG ARCHIT

P.O.Box 153, Louis Trich ECTS CC ardt, Makhado Louis Trich ardt, , Limpopo, 920 t: +27 (0)15 516 2460 f: +27 (0)86 524 3827

DBM 3 JHB

(PT Y) LTD

P.O.Box 6953 5, Gauteng, 2021 Bryanston, Johannes burg, t: +27 (0)11 467 5299 f: +27 (0)11 467 6067

DBM ARC

HITECTS

PTA (PT Y)

P.O.Box 9578 0, Gauteng, 0145 Waterkloof, t: +27 (0)12 809 3941 f: +27 (0)86 619 6662

LTD

DESIGN THR

SIXT Y (PT P.O.Box 1572 Y) LTD 1, The Western Vlaeberg, Cape, 8018 t: +27 (0)21 4626630 f: +27 (0)21 462 6634

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P.O.Box 5268 5, Saxonwo Gauteng, ld, 2132 t: +27 (0)11 326 5000 f: +27 (0)11 326 5002

BENTEL ASS

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P.O.Box 8761 9, Gauteng, 2041 Houghton, t: +27 (0)11 884 7111 f: +27 (0)11 884 7110

ACG ARCHIT

S CC P.O.Box Cape Town, The Western Cape, 7915 t: +27 (0)21 448 6615 f: +27 (0)21 448 6621 ARCHITECT

Managers and adm inistrators

HITECTS P.O.Box 4063 , Tygervalley, The Western Cape, 7536 t: +27 (0)21 949 2530 f: +27 (0)21 945 4183

& FOGART

PM BAT LEY PARTNE RS ARCHIT DESIGN ECTURE

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1 2:14: 36

P.O.Box 1128 8, Gauteng, 1457 Randhart, t: +27 (0)11 907 2015 f: +27 (0)11 907 2020

P.O. Box 321, Saxonwold, Gauteng, 2132 t: +27 (0)11 788 8095 f: +27 (0)11 788 8097

ARCHITECT

P.O.Box 1293 CHR ARCHITECT 2, S CC P.O.B IS OWTRAM ARC Eastern Cape Centrahil, Port Eliza HITECTURE ox 1926, Pine beth, , 6006 gowrie, t: +27 (0)41 Gauteng, 373 4340 2123 f: +27 (0)41 t: +27 (0)11 373 4324 022 6260 f: +27 (0)86 648 8262

ARG DESIGN

Block Ad.in

BOUDRY

P.O.Box 5183 S & ASSOCI 8, ATES The Western Waterfront, Cape, 8002 t: +27 (0) 21 448 3955 f: +27 (0)21 448 5910

P.O.Box 157, PERTY X1 Gauteng,2146 Postnet Suite, Melr ose Arch, t: +27 (0)11 033 6600 f: +27 (0)11 033 6600

BALSHAW

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ARCHITECT (GROUP) URAL DESIGN ASS (PT Y) LTD OCIATES

P.O.Box 8707 6, Gauteng, 2041 Houghton, t: +27 (0)11 880 0600 f: +27 (0)11 880 0603

OWNERS

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For advertising opportunities and rates contact Riëtte Stevens SOUTH AFRICAN PROPERTY REVIEW 20 c: +27 (0)71 877 5520 t: +27 (0)11 883 0679 f: +27 (0)86 216 9026 e: sales@sapoa.org.za Register ad.indd 20

2015/04/24 12:18 PM

legal matters

A revisit of SPLUMA T

Eugenia Makgabo is an Admitted Attorney of the High Court and Legal Manager at SAPOA

A relook of the revised Regulations in terms of the Spatial Planning and Land Use Management Act No. 16 of 2013

he implementation of the Spatial Planning and Land Use Management Act No. 16 of 2013 (SPLUMA) has been greatly anticipated by the property industry. The accompanying Regulations needed to be finalised in order for same to happen. It has become apparent that the Department of Rural Development and Land Reform has made headway and the Regulations have now been gazetted. The Regulations were published for public comments on 12 December 2014. The Regulations have been vastly simplified from the extensive Regulations published in 2013. The present proposed regulations are much less detailed and leave many items up to the decision and reputation of the municipalities. This is to be welcomed, as planning is a municipal function. However, the municipalities will have to adopt many policies, by-laws and regulations to implement the regulations. There is no prescribed time limit to do so. The below considerations were brought forward:

Section 2 – Municipal Assessment Prior to Establishment of Municipal Planning Tribunal

This is a welcome provision and requires that the municipalities undertake an internal investigation to ascertain the capacity to establish a Municipal Planning Tribunal. If a municipality cannot sustain the Tribunal, then they should not be established. The alternative then is to have an agreement with another municipality under Section 4, being a joint Municipal Planning Tribunal. The concept is a good one but the municipalities must take positive action to make the decisions. As mentioned above, there is no time limit on this.

Part C – Joint Municipal Planning Tribunal

The concept of establishing Joint Municipal Tribunals is welcome, especially in the case of small municipalities. However, there is provision for a municipality to withdraw from a Joint Municipal Planning Tribunal. This may result in a municipality that does not have the means to establish a Municipal Planning Tribunal, as set out in Section 2 being in a joint tribunal situation, and following a withdrawal, will not be having a Municipal Planning Tribunal. The concern is that there may, for this reason or other reasons, be a number of municipalities that do not have Municipal Planning Tribunals. There does not appear to be any default position in this regard.

If this is the case, then planning may be severely restricted. It is not clear what happens if an application is submitted under Chapter 6 of the Act, but there is no Municipal Planning Tribunal to deal with the application. Section 35(1) is peremptory and a municipality must establish Municipal Planning Tribunals. The solution may be that the applicant would have to bring the required action to court to have the municipality establish the Tribunal.

The Regulations have been vastly simplified from the extensive Regulations published in 2013. The present proposed regulations are much less detailed and leave many items up to the decision and reputation of the municipalities. This is to be welcomed, as planning is a municipal function. However, the municipalities will have to adopt many policies, by-laws and regulations to implement the regulations. There is no prescribed time limit to do so Part D

The same issue arises here regarding to withdrawal of the municipalities from Municipal Planning Tribunals for district municipal areas. Again it would be incumbent upon an applicant to force a municipality to establish a tribunal with a specific period in terms of Section 35 of the Act. Section 11(2)h should refer to the “High Court” and not the “Supreme Court”. Section 11(3) appears to indicate that the technical advisers may be regarded as employees on the one hand, yet on the other hand a number of entitlements are not permitted to the employee. Perhaps this would have been better worded on the basis that the technical advisers are not employees and are appointed on an ad hoc basis.

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They would be remunerated for those services. Section 12(1): Proceedings of Municipal Planning Tribunal The cross-reference to regulation 4(1)1 would appear to be incorrect. Section 12(2) requires that cognisance be taken of the type and complexity of the application in appointing the number of members of a Tribunal to consider the land development and land use application. This requires an administrative act on behalf of the municipality each time a matter is to be heard. In practice, though, the number of members of the Tribunal would hopefully be consistent when assigned to applications. Failing that, there could be delays in the process. Section 13(2): There should be added to the category where there is no legal indemnification, circumstances where the member has been induced, bribed or any other way influenced by the applicant. Section 14: Submissions of Land Development and Land Use Applications The cross-reference in Section 14(3) to “1(g)” should refer to “1(h)”. The determinations required in Section 14(1) should be published in a manner readily available to the public.

Submission of Documents to the Surveyor General and Registrar of Deeds

Section 17(a) requires that all the approvals of land development applications must be filed with the Registrar of Deeds. While this is to be welcomed, not all applications will have relevance to the Registrar of Deeds and affect the registration process. For example, simple re-zonings are not a matter for the Deeds Office to consider. This clause should be amended, by the addition of the words: “…affects a registration matter filed or to be filed at the Registrar of Deeds.”

contained in the Service Level Agreement with the Traditional Councils to perform land use management functions on behalf of the municipality in a traditional area. It is doubtful whether this is constitutionally sound, but much would depend on the agreement concluded.

This is a welcome provision and requires that the municipalities undertake and internal investigation to ascertain the capacity to establish a Municipal Planning Tribunal. If a municipality cannot sustain the Tribunal, then they should not be established. The alternative then is to have an agreement with another municipality under Section 4, being a joint Municipal Planning Tribunal. The concept is a good one but the municipalities must take positive action to make the decisions. As mentioned above, there is no time limit on this

Section 33 – Petition to be Granted Intervenor Status

Intervenor status should only be granted if the proposed intervenor did not or could not have reasonably received notice of the application. This is dealt to an extent in Section 34(4) – Security for Costs of Appeal, but should be made clear in Section 33.

Conclusion

The shorter version of the Regulations is to be welcomed as set out above, as it devolves the planning function to municipalities. However, there is still much work to be done by the municipalities before they are able to implement SPLUMA together with its regulations. Municipal readiness remains a concern as issues such as a lack of capacity, a shortage of planners and training that has not occurred are problematic realities that municipalities are faced with. The Department of Rural Development and Land Reform has, however, given the assurance that it is willing to assist and give its support to all municipalities through various programmes. SAPOA will continue to work closely with the Department of Rural Development and Land Reform while ensuring that spatial transformation occurs, and ensuring that holistic planning and various critical aspects of the commercial property landscape are taken into consideration.

The shorter version of the Regulations is to be welcomed as set out above, Section 19 – Section 22 – as it devolves the Application where no Contents of Appeal Procedures Town Planning Scheme The reference to “Regulation 20” in the first line planning function should be to “Regulation 21”. or Land Use Scheme applies to municipalities. It should be noted there are significant In the third line reference is made to land that is “lawfully used in terms of Schedule 2 of the Act”. regulations to be passed to determine the However, there is still much work As the land will not be included in the Town appeal procedure. Planning Scheme of the municipality, it may be to be done by debatable as to whether it is lawfully “used”. The Section 27(2) – word “lawfully” should be changed to “currently”. Decision of Local Appeal Authority the municipalities To remit the matter back to the Municipal before they are Planning Tribunal is in effect a review able to implement Section 20 – Areas under Tradition Leadership procedure, and only the High Court may Constitutionally, planning is a municipal review administrative actions. It is doubtful SPLUMA together with its regulations function, so it is not clear what would be this sub-clause is legally sound. May 2015 l property developer

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Introducing Tongaat Hulett South African-based Tongaat Hulett is a leading JSE-listed company located in Durban, KwaZulu-Natal, on the countryâ&#x20AC;&#x2122;s eastern seaboard

n acclaimed agricultural and agriprocessing business, Tongaat Hulett focuses on the complementary feedstocks of sugarcane and maize and, through its sugar and starch operations, produces a range of refined carbohydrate products. Agriculture and agri-processing are integral to socioeconomic development in South Africa, particularly in the development of

rural communities, farming activities, food security, water management, housing and land conversion to development, as urban areas continue to expand. Tongaat Hulett is ideally positioned in the nexus of these dynamics and has the capacity to make a substantial contribution to economic growth and development of the Durban environment.

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Our strategic focus

At a time when world economies remain sluggish and investors are seeking viable new destinations, a major market beckons: Africa, and more specifically South Africa, which with its well-developed first-world infrastructure is one of the most sophisticated emerging markets in the world. Crucially and as one of South Africa’s leading land developers, Tongaat Hulett is especially optimistic about investment opportunities in one of South Africa’s major cities, Durban in KwaZulu-Natal. KwaZulu-Natal is home to the country’s second-largest economy and has two of Africa’s busiest and biggest seaports, Durban and Richards Bay. The principal city, Durban – recently crowned one of the world’s New7Wonders Cities - is a critically important economic complex, the leading domestic tourist destination in South Africa, the top conferencing destination and one of the fastest growing cities in Africa, giving rise to a robust entrepreneurial and vigorous investment environment. With its harbour facilities, advanced infrastructure, major multi-modal logistics and trade-port platform, significant manufacturing hub, growing IT environment and extensive world-class tourism attributes – all enhanced by an idyllic sub-tropical climate and exceptional lifestyle – Durban is widely held to be the emergent economic gateway to Sub-Saharan Africa. The potential for significant growth within, especially, the highly desirable and largely

undeveloped north coast area, as well as Ntshongweni on the Durban-Free State-Gauteng Logistics and Industrial Corridor, is considerable. There also exist substantial opportunities for business and industrial growth in adjacent areas, most notably in the area surrounding Dube Trade Port - home to King Shaka International Airport and heart of KwaZulu-Natal’s emergent Durban aerotropolis. On the back of such economic growth and development, Durban has emerged as a highly credible and desirable investment destination, and Tongaat Hulett is, accordingly, committed to introducing a range of development opportunities to the investor market. Tongaat Hulett creates value for all stakeholders through an all-inclusive approach to growth and development. The company’s evolution in the priority area of social sustainability has become increasingly innovative, inclusive of a holistic approach to socioeconomic development. The company’s strategic positioning within the region is underpinned by the inextricable links between agriculture, sugar production, rural jobs and community development, the government and local authorities, unlocking infrastructure investment and the conversion of cane land to development. Working in collaboration with key provincial and local public sector stakeholders, the company is uniquely positioned to take on projects on a massive scale. With its current growth trajectory and the enormous future investment potential, Tongaat Hulett believes that Durban and its environs

will rapidly develop into one of sub-Saharan Africa’s key strategic hubs.

Delivering premium real estate investment opportunities

A key value driver includes our proven ability to transform agricultural land into some of the most superior real estate investment areas in South Africa, thus making a considerable contribution to the growth and development of the region. With an enviable 20-year track record of excellence as one of South Africa’s leading private land developers, Tongaat Hulett has been responsible for the planning and development of serviced land and complete development concepts for residential, commercial, industrial, resort and mixed-use purposes. The company owns sizeable tracts of prime land along Durban’s highly desirable north coast area, as well as Ntshongweni, on the city’s western Durban-Free State-Gauteng Logistics and Industrial Corridor. The potential for significant economic growth within these key corridors – areas attracting major infrastructural development and real estate investment – is considerable. Working in collaboration with key stakeholders, most notably the KwaZuluNatal provincial government and eThekwini Municipality, Tongaat Hulett is uniquely positioned to take on projects on a massive scale, delivering unequalled new premier investment opportunities in the Durban region and delivering premium real estate for key growth node development .

Our diverse operations ●●

●●

Sugar Sugar operations span six SADC countries – South Africa, Mozambique, Swaziland, Zimbabwe, Botswana and Namibia – with cane supplies coming from a combination of our own estates, large-scale commercial farmers and small-scale farmers. Additional demand for sugarcane supply has largely been met through economic development initiatives aimed at establishing small-scale growers in rural, historically disadvantaged areas. Renewable energy Our eight sugar mills in South Africa, Mozambique and Zimbabwe all generate electricity from the fibre found in sugarcane, known as bagasse, during the sugarcane crushing season. In some instances these operations supply electricity to the grid. Starch and glucose Our wet-milling operation is a major producer of starch and glucose in Africa and has grown to become an important supplier to a diverse range of South African and African industries. Wet-milling plants in Kliprivier, Germiston and Meyerton (in Gauteng) and Bellville (in the Western Cape) enable Tongaat Hulett to convert more than 600 000 tons of bought-in maize per annum into starch and starch-based products. Land conversion Urbanisation in KwaZulu-Natal is accelerating rapidly. Tongaat Hulett has identified about 13 000 hectares of land for conversion from agriculture to other uses. This land is situated in the primary growth corridors of Durban and enjoys strong government policy support for conversion at appropriate intervals. Tongaat Hulett’s conversion of agricultural land to other uses, in a proactive and optimised manner, has been a long-held strategy, through which we create substantial value in cooperation with – and for – many stakeholders.

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cover story Urban growth and consolidation of the Umhlanga region

The urban growth and consolidation of Umhlanga makes this KwaZulu-Natal’s fastest developing and most attractive real estate investment area. Cornubia Cornubia, KwaZulu-Natal’s biggest mixed-use, mixed-income integrated human settlement is eThekwini and KwaZulu-Natal’s first – and only – Cabinet Lekgotla-endorsed Priority Project. This major development node is strategically located adjacent to Mount Edgecombe, the Gateway Theatre of Shopping in Umhlanga Ridge town centre and Dube Trade Port, home to King Shaka International Airport. Features of Cornubia ● A public-private partnership between Tongaat Hulett and eThekwini Municipality, which will consist of 25 000 affordable residential units and 1,36-million square metres of commercial bulk; ● Positioned and tailored for those who value time and seek convenience, safety and ease of connectivity to the city, harbour, airport and primary road and rail linkages to Gauteng; ● One of KwaZulu-Natal’s boldest and most significant mixed-use land developments; ● Winner of the Govan Mbeki Best Priority Project in both 2013 and 2014 (Housing Awards); ● Identified as ideal for use as an Athletes’ Village in Durban’s official bid for the 2022 Commonwealth Games. Phases already under development include the Cornubia Industrial and Business Estate, the Cornubia Business Hub and Cornubia N2 Business Estate. Significant upcoming opportunities include the western expansion of the Umhlanga Ridge Town Centre and high-quality residential precincts near Marshall Dam, at Umhlanga Hills and at Blackburn.

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cover story Coastal lifestyle, leisure and high-end residential market

Durban’s coastal lifestyle, leisure and high-end residential market is proving highly attractive; Tongaat Hulett is focusing on opening up significant new opportunities to these markets over the next five years. These areas will provide for a range of land use, including lower-density residential, hotel, higher-density residential, and a range of mixed-use environments. Sibaya The Sibaya venture integrates urban development with the natural environment, creating an idyllic new urban identity and way of life in a relaxed setting, just 25km north of central Durban and 10km south of King Shaka International Airport. This large-scale tourism-based development opportunity provides for a vibrant and inter-connected mixed-use lifestyle, incorporating commercial, office, recreational, entertainment and predominantly up-market residential facilities.

Features of Sibaya Nodes ●● Five development nodes; ●● 750 hectares in extent, inclusive of the picturesque Hawaan Forest; ●● Exceptional 180° sea views; ●● Idyllic lifestyle; ●● Urban living in an environmental paradise, immediately adjacent to one of the last remaining pristine coastal dune forests in KwaZulu-Natal; ●● Nodes 1 and 5 have all development rights in place and are ready for development; ●● Node One (existing development rights and land use mix, which may be refined): u 49,6 developable hectares; u 1 140 residential units; u 130 hotel rooms; u 65 800m2 of commercial space; u Total bulk: 362 000m2 ●● Node Five (existing developments rights and land use mix, which may be refined): u 76,7 developable hectares; u 1 185 residential units; u 490 hotel rooms; u 37 900m2of commercial space; u Total bulk: 385 500m2

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cover story Coastal development north of Ballito

Tongaat Hulett owns prime coastal landholdings north of Ballito. With the exponential growth of the region’s tourism sector and given that the majority of key tourist attractions are situated in the northern region, this area is particularly well-suited for major resort development. Tinley Manor Tinley Manor is an exceptional property and unequalled investment opportunity, located in a prime position about 10km north of Ballito and 25km from King Shaka International Airport. The tourism-themed site is ﬂanked by two signiﬁcant natural features, the Umhlali River Estuary and Christmas Bay beach, and offers exceptional beach resort development opportunities. Features of Tinley Manor ● Four idyllic sea-facing resort nodes with direct beach access, ideal for the development of world-class beach resort hotels; ● Provision for both residential and commercial nodes; ● Strategically located, close to King Shaka International Airport and the vibrant commercial hub of Ballito; ● Development support from KwaZulu-Natal provincial government structures, through direct collaboration, set to facilitate and deliver a superior property development and investment prospect here; and ● A development opportunity to complement a proposed north bank international development, positioned for the international tourist market.

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editorial

Housing for the future JOSHCO develops R200-million Dobsonville housing project creating more than 700 jobs

BELOW Rory Gallocher, Chief Executive Officer of JOSHCO OPPOSITE Artist’s impressions of the Dobsonville housing development project

he Johannesburg Social Housing Company ( JOSHCO) has begun work on a housing development valued at R200-million in Dobsonville Extension 2, Soweto, to be completed by June 2016. As part of its ongoing attempts to alleviate the housing shortage in the city, JOSHCO is building 502 rental housing units. The project is expected to deliver 152 one-bedroom units and 350 two-bedroom homes for the rental market, and create more than 700 jobs during the construction phase. The labour for construction will be drawn from the surrounding communities. In this way, residents of the area are involved in the development of their community, and also benefit financially and acquire additional skills. “There is a critical gap in the housing market,” says Rory Gallocher, Chief Executive Officer of JOSHCO. “There are a huge number of people living in Johannesburg who do not qualify for RDP housing at the lower end, and also many who cannot afford a bond at the higher end.

The provision of rental housing ensures that residents who do not qualify for government-subsidised or bonded houses are also catered for. It is JOSHCO’s mandate to increase low-cost rental housing so that people who earn between R3 500 and R7 000 per month can have a roof over their head and eventually move into bonded houses once their economic situation improves.” JOSHCO’s rental housing scheme is aimed specifically at benefiting South African citizens living in Johannesburg. In addition to the provision of housing, the development in Dobsonville has a number of important benefits. Of the R200-million, about R52-million has been allocated for empowerment purposes. These funds will be channelled towards the creation of local suppliers, skills training, and small and medium enterprise development. “It is our hope that, at the end of the project, the beneficiaries can start their own income-generating businesses,” Gallocher says. “Such projects enable the

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editorial

city to tackle the triple challenge of unemployment, poverty and inequality identified in our 2040 Growth and Development Strategy.” Part of the Dobsonville project is funded by the Social Housing Regulatory Authority. These units will be subsidised and aimed at people who earn less than R3 500 per month. For a one-bedroom unit with a kitchen, lounge and bath, a pre-qualified renter will be expected to pay anything from R750 to R2 000 monthly rent. “The Dobsonville project adds to the City of Johannesburg’s growing portfolio of housing initiatives,” says Gallocher. “These include Lufhereng, Fleurhof and South-Hills developments.”

About JOSHCO

Within 10 years, Johannesburg Social Housing Company (JOSHCO), a City of Johannesburg-owned entity that has received an unqualified audit over the past eight years (clean audit over the last six years), has invested more than R1,8-billion towards making Jo’burg a more liveable city. In this time, JOSHCO has provided more than 7 500 homes, and refurbished or constructed 8 749 units. It has an ambitious plan to increase the number of units to more than 13 600 by the end of June 2017. May 2015 l property developer

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RICS Africa Summit

Addressing Africa RICS places a spotlight on the future of African real estate at its Africa 2015 Summit, a first for the institution on African soil

Kganya Kgare, Emerging Market Economist at STANLIB

he Royal Institution of Chartered Surveyors (RICS) Africa 2015 Summit in Johannesburg, South Africa, brought together professionals, academics and industry leaders to examine the future vision for Africa’s real estate market. The well-attended, high-energy event on 25 March 2015 was RICS’s first international conference on the continent. A common thread throughout the presentations and discussions was recognition that Africa is taking its place on the world stage in terms of real estate, infrastructure and construction. There was a clear sense that the RICS can play an important role in helping countries build consistent standards where needed, albeit with a definite focus on collaboration with existing bodies and governments. RICS President Louise Brooke-Smith told the participants that she has been championing RICS partnerships in Africa and that it was appropriate to hold the conference in the city with the largest GDP in the region.

“We’ve evolved into a truly international body,” she said. “By 2020, the majority of our membership will be from countries other than the UK. We’re seeking to spread best practice wherever we find it.” The aim was to share experiences with open minds in a spirit of partnership.

Africa on the move

While several participants – including STANLIB Emerging Market Economist Kganya Kgare – stressed the divergence within the continent, all acknowledged that consistent standards would go a long way to addressing challenges. Whereas inflation in east Africa is well within target and the Kenyan shilling is very stable, with six-percent growth expected in 2015, inflation in Nigeria is expected to accelerate from the middle of the year and interest rates are at an all-time high, said Kgare. Among the topics examined was the future economic sustainability for southern Africa. Africa’s economic growth is

FROM LEFT James Dadson, Chief Lands Officer at the Land Commission in Ghana; Itumeleng Nkoane, Manager at Ekurhuleni Metro and Vice-President of SAPI; Louise Brooke-Smith, RICS President and Managing Director at Brooke Smith Planning; Gugulethu Cele, presenter and anchor at CNBC Africa

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RICS Africa Summit

Professor Francois Viruly from the Department of Construction Economics and Management at the University of Cape Town; Martin Brühl, Head of International Investment Management at Union Investment Real Estate; RICS President-Elect Vincent Lottefier, Global Director and Chief Executive Officer at EMEA, Jones Lang LaSalle

predicted to outpace all other continents in the next five years, with forecasts showing that four of the world’s 10 fastestgrowing national economies will be on this continent. The panellists looked at investment sources, risk and the vital ingredients underpinning ongoing momentum. One conclusion was that commercial property is one of the darlings of the market in countries such as Ghana, Kenya and South Africa. Speakers Martin Brühl (Fellow of the RICS), Jones Lang LaSalle Global Director and Chief Executive Officer at EMEA Corporate Solutions Vincent Lottefier, and Francois Viruly (FRICS) debated key markets, drivers, trends and opportunities. Brühl, who is the RICS President Elect and Head of International Investment Management at Union Investment Real Estate, said there are investors who “think that Africa is the new Asia”. Again, the need for benchmarking and adequate data was mentioned. Viruly, of the University of Cape Town’s Department of Construction Economics and Management, identified Kenya, Rwanda, Ghana, Mozambique and Zambia as possible markets for new investors. Urban development, planning and land use was another topic of discussion. “Spatial transformation is an evolutionary animal,” said Johannesburg town planner

and Manager at Ekurhuleni Metro, Itumeleng Nkoane. He called for a mix of the “first and second” (formal and informal) economies. “As planners, we cannot industrialise in the same way as Europe and the US,” he said. “Living in a sustainable environment is not only about living in a beautiful environment, but about survival as well. There should be a shift from being development controllers to being development facilitators.” RICS President Louise Brooke-Smith agreed that planning is a balancing act, citing the increasing neighbourhood approach to planning and commercialism even in developed countries such as the UK. However, she identified “a massive skills gap” in two areas: there are not enough skilled professionals in the built environment and there is a lack of data and information. Co-panellists Nkoane and James Dadson, Chief Lands Officer at the Ghana Land Commission, agreed, with Nkoane saying not enough young people are encouraged to go into the built environment as a career in South Africa. Dadson said that since investors come in primarily to make a profit, African governments should position themselves to absorb investors in a way that benefits society.

Infrastructure, infrastructure and infrastructure

A common theme throughout the conference was the importance of infrastructure as a core factor in sustaining growth. In a session on the “African economic engine”, a question was asked about the infrastructure sub-Saharan Africa needs to be globally competitive. Dale Ramsden, founder and Managing partner at RMP Westport, said the “supply and demand mismatch” in west African countries such as Ghana, Nigeria and Angola creates opportunities. While RICS can be a huge help in drawing up standards, African countries often wrongly “get a bad rap”. “There are planning standards and approval processes,” he said. “You have to be patient and things will happen. Do proper traffic impact studies, don’t take short cuts and embrace the community.” In these countries, urban planning is a challenge – there is an emotional attachment to land and a strong demand for A-grade real estate. There are opportunities in the fact that there is a massive retail shortage and limited competition, but challenges in that the debt market needs to be grown, delivery is an issue and there is a lack of qualified rentals. Strong local partnerships, market knowledge, a zero-tolerance approach to corruption and having the necessary equity in place are key. May 2015 l property developer

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RICS Africa Summit

“In an ideal world, you start with planning,” said RICS Senior Vice President Amanda Clack. “In reality, each country in Africa starts from a different place.” She also noted that the absence of adequate infrastructure can cost African countries two percentage points in terms of GDP growth per year. One of the reasons China is successfully investing in infrastructure development in countries such as Nigeria is that it is willing to take the extra risk, speakers felt. Chinese companies tend to take a long-term view based on a model linking infrastructure and real-estate development. This risk will be reduced by increased transparency and a zero tolerance of corruption across the region, the panel agreed. Data points are also key to removing risk – and this is an area where RICS can play a role.

Transparency is key

RICS President Louise Brooke-Smith

Debunking several myths about his continent, Broll Chief Executive Officer Jonathan Yach (member of the RICS), described himself as a “proud Afro-optimist”, saying, “Africa is probably one of the most connected of continents, and this is driving growth.” While social instability poses a risk throughout Africa, corruption needs to be

dealt with country by country and democratic governance must be strongly encouraged. Opportunities lie in the continent’s young, well-informed and rapidly urbanising people. Enhanced electrification is also opening up opportunity and scope. “This continent – this Africa – is redefining itself through its real estate,” Yach said. “Standardised valuation practices around Africa will increase transparency,” said Amelia Beattie, Chief Investment Officer at STANLIB and President of SAPOA, adding that she had seen interest in South Africa and Africa increase “significantly” over the past two to three years. “The capital is out there. Our biggest challenge is to find investable opportunities to put the money into. The international market is looking for a much more significant investment base. We should learn as an industry to work together and bring these opportunities to the world.” In response, RICS Chief Executive Officer Sean Tompkins confirmed that “RICS is a natural collaborator to make this happen”. RICS would be delighted to support the development of valuation standards, and it would prepared to host meetings with leaders and stakeholders to agree on common standards.

FROM LEFT James Dadson, Chief Lands Officer at the Land Commission in Ghana; Amelia Beattie, Chief Investment Officer at STANLIB and SAPOA President; Jonathan Yach, Chief Executive Officer of Broll Kenya; Mark Latham, Managing Director at 5th Avenue Africa; Sean Thompkins, Chief Executive Officer of RICS; Gugulethu Cele, presenter and anchor at CNBC Africa

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www.impendulo.co.za

interview

SOUTH AFRICAN PROPERTY REVIEW

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2015/04/24 10:37 AM

editorial

Servicing Hatfield’s students With the rising demand for student accommodation, the Feenstra Group has created a unique product in Hatfield Studios

atfield Studios is a dedicated student accommodation complex that was completed in November 2014 – just in time for the 2015 student intake at the University of Pretoria. The Hatfield node offers easy access for vehicle, bus and rail commuters, and is known as the student hub of Pretoria, offering a range of amenities for all residents. The surrounding area has been earmarked by local authorities as a key growth student accommodation node to cater for the current undersupply. There has been no real stock coming onto the market in recent times, and the Feenstra Group hopes to take advantage of this opportunity. It conceptualised Hatfield Studios to create a unique product for the student accommodation market in Hatfield. This student accommodation concept is one of a handful in Pretoria that are leading the way in the market. The high-level project brief was to create a secure, large-scale, modern, sought-after student accommodation development within walking distance of the University of Pretoria. The complex needed to accommodate about 1 000 students to create bulk and have the development benefit from the economies of scale in property capital investment cost and maintenance expenses over its lifetime.

Extensive research was done internationally in the United Kingdom, the United States and Australia in terms of the latest concepts in student living. Research was also done in South Africa to understand the current and latest student accommodation trends and offerings. A very detailed research study was conducted in the local Hatfield market among students at the University of Pretoria to understand their needs and preferences in terms of student accommodation. Feenstra Group also took cognisance of the draft policy for student housing presented by the South African government. The site is uniquely located in that it fronts onto the busy Burnett Street and Prospect Street, which leads to the university gate. Provision was made for secure pedestrian and vehicular access from both these streets. The local authority has increased the allowable bulk rights and height restrictions in Hatfield to pave the way for student accommodation and attract development in this node. It also aims to entice largescale student accommodation development by way of allowing sites larger than 5 000m² (which are mostly consolidated

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27 27

editorial sites) to use substantially increased rights and height limitations. This results in larger-scale developments, which will be much more feasible given the fact that the limitations on smaller sites render them unfeasible almost from the outset. The architectural style on the external façades of the building is modern but subtly underlines historic elements in the design – such as the coloured panels below the windows that are reminiscent of old blocks of flats that are still visible in close proximity to Hatfield Studios and in central Pretoria. The use of bright colours on the façade was limited to understate the size and mass of the scheme as a whole. A reception foyer with different façade finishes on each street level is set slightly forward, breaking the design scale at street level for passers-by. The above should be seen against the backdrop of Hatfield being in its infant stages in terms of catering for the large student accommodation demand, and will drastically change the landscape of the entire node through the locality authority initiatives (among others) during the next few years. Hatfield Studios is a balance between old landscapes and what the new landscape would look like. It is, however, important to also look forward in this space and to create a robust development with stable investment returns.

May May 2014 2015 l property l property developer developer

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development

A green view on things Regarded as one of the greenest industrial developments to date, Lords View Industrial Park is making a “powerful” difference By Candace King

ince its inception in 2013, Lords View Industrial Park has come a long way. Apart from its exceptional growth, Lords View Industrial Park boasts a unique angle as a green township development. “We haven’t been sitting on our hands,” says Warwick Lord, Chief Executive Officer of Lords View Industrial Park. “With a lot of green elements and interesting aspects, Lords View Industrial Park is different from other industrial townships,” notes Alan Hendricks, Head of Marketing for Lords View. First, he says, the size of Lords View is one of its prime characteristics. With eight phases at present and 1,3-million square metres in size, Lords View is unlike any other industrial township in the Johannesburg region. “Another aspect is that Lords View boasts elevation and contours while other townships

are generally flat,” says Hendricks. “The site has amazing views – the lay of the land has worked for us.” Phase 1 is virtually sold out, with major clients having already moved in, including Unilever, Cochrane group, Green Cross and Freightmore. Unilever is building an Ola icecream factory, which is set to be completed in June 2015. Over and above the ice-cream factory, Unilever is talking about building a cold-storage depot on its site. Developed for pharmaceutical purposes, the Green Cross building is now complete. The majority of Phase 2 is owned by Grandmark International, importers and distributors of automotive parts, while Laser Transport has purchased virtually all of Phase 3. “It recently had its sod-turning ceremony and should start building the first of four buildings shortly,” says Hendricks.

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29 29

development feature

“Because of the current market demand, Lord Trust has taken the decision to service Phases 4, 5 and 8 of the industrial park,” says Lord. “The demand is driven by a 22 000m² distribution centre to be developed for the Foschini Group in Phase 8. This development will be owned in a joint venture between the Lord Trust and Equites Property Fund. Provision has also been made for future expansion of 18 000m². Earthworks has begun on the seven hectare site with beneficial occupation expected by February 2016 and occupation in April 2016. “With regards to Phase 6, the Trust has decided to hold this prime land for leases rather than to sell off the land – this creates an appetite for investment rather than for trading. At this stage, Phase 7 is on hold. We will sell once we acquire a buyer.”

LEFT Warwick Lord, Chief Executive Officer of Lords View Industrial Park

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development

THIS Picture Unilever’s Ola ice-cream factory

Lords View Industrial Going green Lords View Industrial Park is home to Park is home to various various green elements, including the green elements, use of a storm-water attenuation system that, according to Hendricks, is a relatively including the use new thing in South Africa. “The Park has five large dams used to of a storm-water attenuate all storm water from the attenuation system developments,” he says. “Central attenuation that, according of storm water means individual owners/ developers do not have to attenuate on to Hendricks, is a their site. This also creates a green lung relatively new thing for the township.” “We want to create walking and cycling in South Africa tracks, and plant indigenous plants around the dams,” adds Hendricks. “We want to make industrial developments sexy.” Lords View Industrial Park, together with Enviroserve, is negotiating with the local authority for the development of a municipal solid waste plant in order to generate green electricity. “We are working closely with the municipality on this,” says Lord. “Green energy is attractive to large multinationals because of the cradleto-grave approach of their product life cycle. We are going about this in a First World manner.”

The appeal

Green, locality, size and premium infrastructure are Lords View Industrial Park’s golden threads. Lords View is situated in a prime spot with exceptional access, says Lord. With the recent Allandale Road upgrade, the area has been opened up significantly. “We saw the potential for industrial and warehousing needs. It’s a development led by market demands,” he says. “The Park is in close proximity to a large labour force, which works with municipality’s requirements. We have stimulated job creation.

“We are two years ahead of our sales forecast, which speaks to the type of product that we are delivering. We have experienced a huge traction with international clients because we are bringing a European-standard industrial park to South Africa.”

The Lord Trust The Lord Trust provides a prime location in Lords View Industrial Park to help reduce transportation costs and streamline the supply-chain process. With the increased global competition and transportation costs, the location of your company distribution centre or manufacturing base becomes vitally important in cost management. Lords View Industrial Park has been planned as an environmentally friendly and eco-sensitive industrial and logistics park.

This is reflected in:

● Eskom electricity being supplemented with electricity converted from methane gas from the Enviroserv landfill site; ● Centrally landscaped storm-water reticulation for irrigation purposes; ● On-site storm-water management and waste management; ● Private open spaces with jogging and walking tracks; ● Tree-lined roads and central boulevard. In addition, an assessment of the internal and external environmental aspects of all building plans will ensure a positive ecological impact. The landscaping of each stand will be controlled to provide for uniformity and consistent quality that maintains the look and feel generated in the common areas. The maintenance and irrigation of the landscaping will be undertaken by the Property Owners Association to ensure effective landscape management of all public open spaces.

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feature Contact Alan t: +27 (0)83 653 5853 www.lordsview.co.za

Lords View Industrial Park Entrance

www.lordsview.co.za

PHASE 1

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887

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± 8,380 Ha.

SYCA

CHLOORKOP 83/12-IR

CHLOORKOP

Head Office 14 Eglin Road, Sunninghill 2191 P O Box 2700 Rivonia 2128 Fax: +27 11 807 5670 Web: www.gibb.co.za

DATE : MAR. 2014 SCALE : 1 : 2 000

PLAN NO. CHL/Master Plan

Freightmore structure going up

Revised 05_03_2015

Cochrane site preparation

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THIS IMAGE One of the busiest Shoprites in South Africa can be found on the corner of Lilian Ngoyi and Church Street in the Pretoria CBD

CBD retail heats up The corporate head offices in Pretoria’s CBD, as well as those in Jo’burg and Ekurhuleni, have been repurposed to house students, families and those looking for a quality residential offering that is both safe and conveniently situated. Don’t even get started on the retail aspect – the CBD’s potential is beyond expectations, as City Property continues to prove By David A Steynberg Photographs by City Property

he Pretoria CBD and its surrounding areas of Hatfield and Sunnyside are vastly different property markets with demographic variations, and changing property values and types, shifting from one end to the other. A range of listed and unlisted property owners have an appetite for retail, office and industrial, with some government thrown in, but few include residential as a significant proportion of their portfolio in terms of size and value. Octodec, which merged with sister company Premium late last year, has been an active player in Pretoria for most of four decades. City Property, the managing agent for the Octodec portfolio, is well known and highly regarded in the city, and is vital in its success of attracting tenants and retaining them. This is something Managing Director Jeffrey Wapnick, son of the late founder

Alec Wapnick, takes very seriously. It is clear that he both strives for and recognises that a quality property offering that is well managed and built on relationships is key to playing and succeeding in this market. In a country of more than 50-million people, more than 13% (or 6,5-million) of South Africans live in informal housing, according to Stats SA’s General Household Survey 2013. Instead of developing affordable homes on the outskirts of our urban areas, we should instead be looking to where it all began: in the CBDs. “Government needs to increase supply seven-fold and has the potential to do this in the CBDs,” says Wapnick. “City Property has made a difference in the CBD by managing 8 000 units and in effect providing quality, secure and clean accommodation to 30 000 people.”

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City Property manages 13 000 residential units across Gauteng, with the bulk being in the Pretoria CBD and the rest in Johannesburg and Ekurhuleni. Residential vacancies are at a paltry one percent, while bad debt is the same. Accommodation is one aspect of the business, holding 13 000 units in the CBDs of Pretoria, Johannesburg and Ekurhuleni, student apartments in Hatfield, as well as a sprinkling of industrial. While housing in the CBDs will remain key to Octodec’s strategy, Wapnick believes CBD retail is an opportunity ready for the taking. He adds that both independents and national chains need to give it another serious look.

Reviving CBD retail

“CBD retail is very exciting,” he says – and wonders why in up-market areas retail centres are refurbished every six to eight years but in the CBD things are different. “Retail upgrades in the CBD have generally

not been done for the past 30 years – or at least not since its heyday.” It’s this recognition of the fact that the people whose shoes walk the dusty pavements of CBDs are not that different from those whose sashay the polished tiles of super-regional shopping centres: they have the same aspirations and recognition of quality. Octodec, through City Property, has been instrumental in effecting upgrades in look and feel as well as fittings and fixtures in the retail portions of its properties. “We find smashed-up buildings and fix them, and retailers are then happy to have their badges displayed on the buildings,” he says, adding that in Johannesburg retailers moved north from the CBD to nodes such as Rosebank and Sandton, while in Pretoria they went east to Brooklyn and Menlyn. “This created a vacuum in the CBDs as property managers and owners still had to pay their bonds but had to do so with subpar tenants. The fundamentals of property management are all about tenant mix.”

ABOVE The Inner Court contains a range of small and larger independent business owners in the offices above, while the retail aspect on the street walks out onto clean and tidy sidewalks BELOW Steyn’s Place on Francis Baard Street in the Pretoria CBD rents out one-bedroom apartments for between R3 500 and R4 000 per month. The retail space below has been refurbished

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ABOVE Centre Walk on the corner of Thabo Sehume (Andries) and Pretorius Street was formerly known as Die Meent. Renamed and refreshed, the centre boasts a great tenant mix for the city shopper

City Property’s design team is working with smaller mom-and-pop retailers to help them become more competitive, especially considering national chains are again testing the CBD waters. “We help them design, and find better developers and shop-fitters to present a competitive offering to the consumer,” says Wapnick.

Central residential district Back in the 1990s, Jeffrey Wapnick, son of Alec Wapnick (the founder of City Property), saw a gap in the Pretoria CBD. Many high-rise office properties were in a derelict condition and no longer met the standards of the day, with many businesses moving operations east to Brooklyn and Menlyn. This left a gap for an innovator and chance-taker. The father-and-son team set about snapping up the buildings for a song and converting them into residential accommodation. “The CBD was at an all-time low and my dad was buying three to four properties a month,” says Wapnick, adding that his father recognised their inherent value. “They were cheap. My dad asked me to sort out a block of flats in the CBD that housed poor residents who lived hand-to-mouth and either did or did not pay their rent.” A chance meeting with a doctor who needed a place to live changed City Property’s fortunes.

The young Wapnick realised there were many professionals who required housing. “It was the tip of the iceberg,” he says, noting that as more residents moved in, his income streams improved. Number 111 Church on the corner of Church and Schubert – headquarters of the air force – was bought for R4-million, and the 4 000m2 to 5 000m2 of retail and 17 000m2 of office space was quickly transformed into 300 apartments. Today the company owns and manages more than 300 buildings and is certainly the market leader across Gauteng’s CBDs. “The test is, would you be happy to stay there?” says Wapnick about what the success of his CBD residential units is based on. With an average income per unit across the portfolio estimated at R27 500, it goes to show just who is prepared to pay to live in them.

“The standard of CBD retail is rising in Pretoria. It costs three to four times more to set up shop in a retail centre but it means being exposed to far fewer feet than in the CBD. Many retailers are looking for space in the CBD.” General retailers such as Shoprite and Pick n Pay have put their money where their mouth is with one of the country’s biggest Shoprite stores placing its branding on one of City Property’s CBD buildings, Centre Forum, on the corner of Lillian Ngoyi and Church streets. “It’s A-grade and one of the busiest Shoprites in the country,” says Wapnick. A new development, that will enjoy the prime position of being across the road from the much-lauded and anticipated Tshwane House, is 1 on Mutual – a R161-million project consisting of 142 apartments, 400m² of office and 1 550m² of retail. Because parking in the CBD is tight, the development will make way for 210 bays. “This new development will be popular with upcoming young urban professionals who are looking for a place to work, stay and play in the city,” says Wapnick, adding that national retailers have already expressed interest in setting up shop when the development opens in April next year.

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SOUTH AFRICAN PROPERTY REVIEW

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Growthpoint changes lives Growthpoint invests R1,7-million in early childhood development

Seen at the opening of the two educare centres were (from left) Malcolm Mbatha, Pumla Litye, Shawn Theunissen, Pateka Mtintsilana and Norbert Sasse

ommunities in the Eastern Cape celebrated the official opening of two life-changing centres on 12 March 2015 that will help boost early childhood development in the region, and create a brighter future for young and old alike. Putting corporate social investment into action, Growthpoint Properties has partnered with the Loaves and Fishes Network (LAFN), an East London-based non-profit organisation, to develop the Khanya and Phakamani educare centres. Growthpoint contributed R1,7-million towards the centres’ development. Aiming to create sustainable and holistic childcare training and development in disadvantaged rural communities in the Eastern Cape, LAFN works with local communities to implement effective early childhood development programmes and has already realised positive impacts. LAFN is involved with more than 30 early childhood development centres supporting nearly 1 500 children, and is

recognised as having one of the best childcare facilities and programmes in the country. “This mission speaks to what Growthpoint seeks to achieve as part of our social investment initiatives, specifically building social infrastructure and boosting education,” says Norbert Sasse, Chief Executive Officer of Growthpoint Properties. “We are happy to be in a position to empower communities and help to create a more sustainable and brighter future.” The Phakamani and Khanya Educentres are situated in the rural villages of Mathanga and Zikwaba Newlands, East London. The two centres were chosen for the project based on the phenomenal results achieved within their communities. This is consistent with the aim of the organisation. “On behalf of The Loaves and Fishes Network and on behalf of our primary beneficiaries – the children who attend the early childhood development centres supported by us – I’d like to extend our

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editorial

sincere gratitude to Growthpoint Properties for partnering with us to assist these two deserving centres,” says LAFN Chairman Brendan Connellan. “We look forward to continued collaboration with Growthpoint in the future.” “For us, this project is about creating platforms for access to quality education as well as providing spaces for the community to thrive,” says Shawn Theunissen, Head of Corporate Social Responsibility at Growthpoint Properties. “LAFN’s focus on education in early childhood development supports our belief that quality education should be provided from a young age.” It isn’t only the young children of the community who benefit from the centres. “The greatest advantage to the LAFN is its approach to community development,” says Theunissen. “Not only does it provide holistic childcare training and development, but the appropriate facilities as well.” All of this is done while rallying and supporting parent and community participation. Women from the local communities have received training to put them in a better position to manage childcare centres and enjoy the benefits of stable employment. This project was made possible with the assistance of engineers from Hatch & Goba Consulting and development contractors Amanz’abantu Services (Pty) Ltd. Growthpoint Properties’ own Beacon Bay Retail Park has also been actively involved in the support of the project by coordinating the landscaping and providing additional resources for the centres. Together, these partners are making precious contributions to the upliftment of rural communities in the Eastern Cape. Growthpoint Properties is the largest South African REIT and a JSE ALSI Top 40 Index company. In addition to Growthpoint Properties’ social investment being strongly focused on education and social infrastructure, it also places a priority on investing in entrepreneurship, skills development and staff engagement. TOP Norbert Sasse, Chief Executive Officer of Growthpoint Properties, plants a tree at the Phakamani Educare Centre in the Eastern Cape. Growthpoint has invested R1,7-million in the development of two educare centres in the province LEFT Nomvula Jiikija, Principal of the Phakamani Educare Centre, proudly shows off a frame highlighting the transformation of the centre, made possible by Growthpoint’s financial backing

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In hand and online, SAPOA’s South African Property Review has a far-reaching appeal - not only does the print version get mailed to a 2000+ targeted database, it also enjoys a monthly online impression rate of over 3675 hits, with an average read of upwards of six minutes per issue.

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March 2014

REVIEW

EMERGING MARKETS Affordable housing and student accommodation

PROPERTY SOUTH AFRICAN

April 2014

REVIEW

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RICS A femalepresident ﬁrst

NEW LEASE ON LIFE Urban regeneration and spatial transformation change the game DEVELOPING AGAINST THE GRAIN Harvesting student accommodation

THE BIG DEAL The point when growth changes the way of doing business

Taking ‘Atvantage’ of great project management 2014/02/06 10:40 AM

Commuter AXIS to Jo’burg’s rail network

AMAzing contemporary architecture

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MOTHER KNOWS BEST Diving into opportunities in the Mother City

HARBOURING SUCCESS The V&A: a destination in its own right

BOWING OUT Estienne de Klerk on a year of legislation, tabled motions and a commitment to education

Making a difference

The 46th Annual SAPOA International Convention and Property Exhibition

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June 2014

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New-age aesthetics

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EYE ON AFRICA Mauritius: sun, sea, sand and citizenship

THE WORLD UNDER CONSTRUCTION Construction management: a pillar of development strength

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AFRICA Mozambique: more than prawns and beaches

46th Annual SAPOA International Convention and Property Exhibition: report back and Innovative Excellence Awards

AFRICA SERIES Zimbabwe: time to play the market

April 2014

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46th Annual SAPOA International Convention and Property Exhibition

BANKING ON DESIGN Setting new standards in interiors

PROPERTY REPORTING ON AFRICA Taking a constructive approach to Africa’s future

March 2014

More than just finance

2015/02/24 8:45 AM

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REVIEW

GAUTRAIN Unlocking the property pipeline

CSI Are you doing your bit?

February 2014

Banking on green investments

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AFRICA SERIES Botswana: from rags to riches

Urban design and regeneration

AFRICA SERIES Namibia in focus

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December 2013 / January 2014

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FACILITIES MANAGEMENT It’s all about integrated service

Showing off modernity Hertford office park

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November 2013

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ECOFRIENDLY MASTERPIECE Efficiently showing off engineering and design aesthetics

November 2013

Inspired, innovative and independent

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GOING THE EXTRA GREEN MILE A very real passage towards sustainability

CSI and interior design

SANDTON CITY MOVES UP A GEAR Muller mulls over retail offerings

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October 2013

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SASOL’s SANDTON HQ Alchemy brings the magic

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INVESTMENT FUNDING Vunani’s quest for true value

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SHINE ON, SAPOA Our Convention report back

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December 2014 /January 2015

March 2015

EYE ON AFRICA Uganda: prosperity and heightened development

ARROWHEAD Always on target ALL-STAR ASSET SA listed property in the lead

THE PRECINCT EFFECT The rise and rise of trendy nodes

THE TALENTED MR NOMVETE Delta’s rise and rise

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September 2013

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Project managers

PROPERTY EYE CANDY Excellence winners announced

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VUKILE’s NEW WUNDERKIND Why Dr Moseneke made the move

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WALKING ON BROKEN GLASS Women shatter the ceiling

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PRESIDENT’S MESSAGE Amelia Beattie reflects on the year to date PROPERTY TRENDS The industrial sector revolution: alive and well

REVIEW

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Woodstock Cape Town’s darling of regeneration

AFRICA SERIES Rwanda’s riveting revival

PROPERTY SA REITs The dream becomes a reality

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Menlyn Maine Pretoria’s “Sandton” rises

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PAYING IT FORWARD Corporate social investment: not just for seasonal goodwill

July 2013

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The industrial “design” revolution

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Innovative Excellence Awards And the winners are…

YOUR NEW PRESIDENT Meet Amelia Beattie AFRICA Angola: oil-rich and growing fast

REAL ESTATE and the South African economy

WORLD SERIES Global markets in the hot seat

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Getting your brand noticed by the leading decision makers in South Africa’s commercial property industry - you know it makes sense Modderfontein metropolis

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October 2014

Alexandra township mixed-use development

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May 2014

Mall of Africa

Shanghai Zendai’s city plan

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Changing with the times As the environment continues to change, developers need to be cognisant and build with the times

ommercial property has been the most susceptible to change. Over the years, commercial spaces have been shaped by changing needs, from layouts to environmental awareness and topical issues. Many companies have turned to green building as a means of accommodating not only occupants but also their desire to remain relevant. One such company is Horizon Capital, whose latest development, Ibis House – a premium-grade office building developed in the heart of one of Africa’s largest green precincts, Century City – is changing the way business and space interact.

In addition to dealing with the everincreasing operating costs, businesses have had to deal with the country’s rolling blackouts. Load shedding has created an increasingly hostile environment in which businesses are required to operate; as a result, landlords have again been put under pressure to adapt their properties to the changing needs of the tenants. This has led to the installation of generators at numerous buildings, office parks and factories. It was for this reason that Horizon Capital made the decision to retrofit Ibis House with a generator.

According to the World Green Building Council, staff costs account for approximately 90% of a business’s operating costs. With businesses under continuous pressure to improve profitability and the constant rise of operating costs, the most sustainable way to achieve this is to increase productivity. For this reason, Horizon Capital’s Chief Executive Officer, John Witter, believes it is in the best interest of all parties, including owners and tenants, to ensure that a comfortable work space is provided and that this space translates directly to the wellbeing of employees and their productivity. Happy employees are a vital component of longterm business success. Green buildings have proven to increase the productivity of staff in a number of ways. The indoor air quality, thermal comfort and scenic views at Ibis House encourage occupant wellbeing and stimulate productivity. Knowing the impact of staff wellbeing on a business’s bottom line, the primary focus when designing Ibis House was to create an inspiring work environment.

Think smart

Ibis House is currently available to let at favourable rates with flexible leasing options

Escalating costs

With cost of utilities, particularly electricity, rising at an increasing rate, green building features and initiatives implemented at Ibis House specifically targeted in the rating were aimed at significantly reducing operating costs. The development’s green consultant, Terramanzi, anticipates electricity savings of 36% per annum when compared to a conventional building of a similar size. With the 12,69% price hike in effect since April, this saving will escalate exponentially. In March 2015 Eskom requested a further 25% tariff hike. If approved, Independent Online’s Business Report puts the cost of electricity at 250% more than in 2008 while the average salary has only increased 40% over the same period. Property owners need to remain sensitive to the costs that will affect property occupants.

Going green

While generators are not considered to be particularly environmentally friendly, businesses need to ensure that they operate within an environment that best assists them in achieving all three of their triple bottom line objectives, not just their environmental goals. Another green building initiative that landlords should focus on is improving the working environment for occupants. Literature on green building has traditionally focused on the benefits to investors but the real benefits are realised by the tenants occupying the greener space. Tenanting a green building also provides a business with multiple benefits, inducing marketing and branding opportunities that ensure they gain a competitive advantage.

According to Professor Francois Viruly of the Department of Construction, Economics and Management at the University of Cape Town, the focus of property management should not be on the investment itself but rather on the business of property – rent, management and operating costs. He outlines that it is no longer sufficient to just be an investor but that one has to be smart in the chosen environment. With rising operating costs such as electricity, security and municipal rates, it is critical that property investments are managed effectively to retain value. The successful performance of a property portfolio largely depends on how well it supports a company in achieving its objectives financially, socially and environmentally. By carefully managing the balances of both environmentally friendlier office spaces and the ever-changing environment of the property industry, landlords are able to “future-proof” properties against increases in utility costs, potential energy and water supply problems, tightening legislation, carbon taxes, mandatory carbon disclosure or costly retrofits in the future.

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