South African Property Review Dec13 Jan14 by SAPOA

s ss s s

Tau Parks Lille e d a i c Patri

s s s ss

MEET S YOR A M E TH

s sss s

REVIEW

December 2013 / January 2014

South African Property Review

PROPERTY SOUTH AFRICAN

sss ss CSI and interior design

AFRICA SERIES Namibia in focus

December 2013 / January 2014

BANKING ON DESIGN Setting new standards in interiors

Alice Lane on show A wonderland of aesthetic excellence

CSI Are you doing your bit?

from the CEO

Answers around carbon tax needed There’s been a lot of talk and confusion surrounding Treasury’s Carbon Tax Policy Paper. SAPOA CEO Neil Gopal asks whether our industry – and South Africa – can afford to have another tax imposed on business

oes South Africa really need another tax? Can business, industry and consumers afford to have yet another tax imposed on them? What will become of our competitiveness in a global community where few nations, and no developing countries, have so far adopted a carbon tax? How will carbon tax impact on property developers, managers and owners’ ability to do business, and what measures have been put in place to ensure the taxes are not blindly passed down to the owner and/or tenant? Unfortunately, there are more questions than answers at present. A lack of clarity and detail, complicated and seemingly inaccurate calculations, and what appears to be doubletaxation dog the issue even further. Australia’s incumbent Prime Minister, Tony Abbott, is pushing to have that country’s carbon tax repealed. The issue formed part of his election arsenal and was welcomed by the electorate. Australia has suffered a haemorrhaging of direct foreign investment as a result of the tax, with automotive manufacturer Ford closing shop. This follows aluminium smelter Kurri Kurri’s close in New South Wales last year, with other industry players announcing production cuts. Back home, petrochemicals giant Sasol has already told Parliament that implementing carbon tax was premature, too onerous and lacked sufficient analysis. “In every jurisdiction I have identified where there has been a carbon tax in place for a reasonable period … carbon emissions at best have been almost static, and in a number of cases they have soared in spite of the tax,” Prof Philip Lloyd of the Energy Institute at the Cape Peninsula University of Technology was quoted as saying in a recent Sunday Times article. In the same article, Pietman Roos, a policy consultant at the South African Chamber of Commerce and Industry, said that the tax was counter to the government’s aims of reviving the country’s industrialisation efforts. Deloitte’s head of tax-dispute resolution and controversy management Patricia Williams was quoted in a Business Day feature on the introduction of the tax as saying, “South Africa has bigger fish to fry. Recently announced measures to address base erosion [of tax] and profit shifting will have a much bigger impact on tax revenue in future. Why stifle business with additional layers of taxes?”

SAPOA agrees that the potential for change of behaviour defined as the objective of the Carbon Tax Policy Paper has, to some extent, already been achieved, as evidenced by the significant reduction in the electricity intensity of the economy, which has largely been driven by the steep rise in electricity price. In reflecting on these improvements in electricity efficiency, it is important to note there is not an infinite potential for improvement, particularly on existing facilities. SAPOA sees no reason for South Africa, which contributes less than 1% to total global emissions, to take a lead in climate change mitigation by being one of the few countries, and the first developing country, to introduce a carbon tax – particularly in light of the fact that the earliest date of implementation of an international agreement will be 2020. SAPOA requested more information on the tax settings and adjustments mechanisms to be implemented to give effect to the carbon tax, as well as a comparative analysis by Treasury and government of the existing legislative framework and the amendments thereto to determine the challenges and compatibility issues that may arise. It is not clear how the carbon intensity of the property sector is established. Will the Department of Energy or any other regulator establish this annually or will this merely be a matter of estimates? Treasury is required to unpack the revenue recycling process of the carbon tax, to explain in detail how the carbon

tax will facilitate the country’s transition to a low-carbon economy and how the tax will mitigate carbon emissions. Treasury needs to explain what recourse Scope 2 emitters will have against the abuse of carbon tax emissions by Scope 1 emitters as the latter parties will most probably pass on the cost to the former, instead of coming up with energy-efficiency measures. This is particularly problematic when SAPOA considers the additional tax on the purchase of electricity from Eskom, as its power stations are a long way from being energy efficient. SAPOA thus has concerns on the following: l We do not have any verifiable information on the impact of the carbon tax imposed on Eskom, and neither do we understand the energy efficiency measures to be introduced by Eskom and the costs thereof; l We cannot influence Eskom to implement energy-friendly technologies; l It is unclear whether the purchaser will benefit from the offset mechanisms outlined in the Paper. If the aim of the carbon tax is to incentivise both producers and purchasers to reduce their respective carbon intensities, then the purchasers should also benefit from the 60% tax-free threshold and all the other offset mechanisms provided for in the Paper; l The consumer will not benefit from implementing energy-efficient measures if the carbon tax is simply passed on in the electricity charges; l If Eskom does include the carbon tax as a cost in the price of electricity, then when the cost of electricity escalates so will carbon tax (in addition to the 10% escalation of the carbon tax) as it will be presented as one cost, thus resulting in a double escalation. What mechanisms will Treasury implement to prevent this?; and l We are not certain about the method to be used by Treasury to collect the tax at a municipal level as the electricity distributors include many other charges in their electricity pricing. In essence, our biggest concern is that the “intermediary” position of a commercial property owner be recognised in the structuring of any proposed levies, to the extent that these levies can be imposed on the eventual user. Neil Gopal SOUTH AFRICAN PROPERTY REVIEW

contents

December 2013 / January 2014

PROPERTY SOUTH AFRICAN

Abland

REVIEW

s ss s s

MEET S AYOR

THE M

Parks

Patricia

Tau

de Lil

REVIEW

s sss s

s s s ss

December 2013 / January 2014

South African Property Review

PROPERTY SOUTH AFRICAN

sss ss CSI and interior design

Oilgro

December 2013 / January 2014

Abreal

AFRICA SERIES Namibia in focus

CSI Are you doing your bit?

BANKING ON DESIGN Setting new standards in interiors

ON THE COVER Alice Lane is home to tenants including Marsh, Bloomberg, Standard Bank and Virgin Active’s new flagship club. This is also our “On Show” feature, where we take a look at the companies behind one of South Africa’s greenest buildings.

Alice Lane on show A wonderland of aesthetic excellence

3 7 10 13 16 20 22 27 29 31 37 40 42 44 46 52 54 56 57 58 60 61 62 63 64

President’s message News Education, training and development Reconnect, realign and rebrand Legal update Taking legal stock Councillors in conversation Bricks, mortar and charity The industry’s CSI strategies CSI in South Africa Pressing issues over lunch On show Defying space and design Interior designers Banking on great design Security: the hard and the soft Hand over the goods Africa uncovered Namibia Meet the mayor Patricia de Lille Meet the mayor Parks Tau Werksmans to the rescue PROCSA in focus Breakfast with Dr Moyo Western Cape golf day Gauteng golf day Mpumalanga Gala dinner KwaZulu-Natal gala dinner Off the wall Saving Private Zadar FOR EDITORIAL ENQUIRIES email editorial@sapoa.org.za or managingeditor@sapoa.org.za. Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 e: sales@sapoa.org.za Editor in chief Neil Gopal Editorial advisor Jane Padayachee Managing editor Mark Pettipher Editor Candace King Copy editor Ania Rokita Sales Riëtte Stevens Finance Susan du Toit Contributors Advocate Portia Matsane, Martin Ferguson, David A Steynberg, Nicky Manson Photographer Michael Glenister

P R O P E R T Y

F U N D

SOUTH AFRICAN PROPERTY REVIEW

DISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding any goods or services advertised within this edition. Copyright South African Property Owners’ Association (SAPOA). All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from SAPOA. The publishers are not responsible for any unsolicited material. Designed, written and produced for SAPOA by MPDPS (PTY) Ltd e: mark@mpdps.com

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

from the president

Farewell 2013, welcome 2014

The year 2013 was an eventful and productive one for SAPOA, and I’m pleased to report we have made excellent progress on many fronts. During the year we started and advanced several successful projects with the goal of representing, protecting and advancing our members’ commercial property interests within the property industry and bringing you even more value. These initiatives address many of your objectives and seek to overcome the challenges you face today – on a national, regional and committee level. We are pleased to share an update of some of this year’s highlights with you on the following pages.

Our ability to represent South Africa’s commercial property sector is only possible thanks to the knowledge and commitment of the very capable people who volunteer their valuable time and resources to further the work of SAPOA and its committees. I would like to commend and thank you for the invaluable contribution you make to SAPOA, our sector, and our economy and society by serving your industry. At the heart of all of SAPOA’s triumphs is its fulltime team, under the able leadership of Neil Gopal, who have worked exceptionally hard this year to deliver innovative, relevant and valuable benefits for members. SAPOA has already set its sights on what needs to be done in 2014, and has put strategies and goals in place to continue to optimise the value it delivers to its members on all levels throughout the year. On behalf of SAPOA, I wish you prosperous and productive 2014.

Lobbying to protect and advance our sector Forming strong partnerships with other groups and organisations is essential to successful advocacy. Ekurhuleni Metropolitan Municipality SAPOA’s formal recommendations raising concerns about how advertising by-laws were implemented for the commercial property sector when they were more suited for residential property, were considered by the Ekurhuleni Metropolitan Municipality. Estate Agency Affairs Board SAPOA requested a copy of the Property Practitioners Bill, which hadn’t yet been published for formal comments, to analyse and consider the legal and practical ramifications of some of the provisions. We are working to ensure a specific definition for “property practitioner” in the Bill, as well as include provisions on “exemptions” or “exclusions”. We are preparing a comprehensive, formal submission for the Bill, which should be published before the end of the year. Competition Commission The legal concern from SAPOA members, especially property owners, is whether the

provisions of the Competition Act that deal with merger control are applicable in instances where a property-letting company acquires or disposes of a commercial, industrial or residential property where the property is used for letting business purposes. A submission was made and sent to the Department of Trade and Industry requesting the letting property sector be excluded from filing and notifying the Competition Commissioner about any acquisitions and mergers as described above. SAPOA submitted that the property thresholds for such mergers, as determined by the Minister of Trade and Industry, be increased due to significant increase in the value of properties over the years. Prior to the Competition Commissioner making a decision on SAPOA’s submission, SAPOA (duly represented by the CEO, the legal manager and me) met the senior officials of the Acquisition and Mergers Department. After formal discussion, it was clear there was an intention by the Competition Commission to have the thresholds increased in the near future – possibly in two years’ time. There is a final submission that is being prepared prior to the Commissioner making a decision on SAPOA’s concerns. SOUTH AFRICAN PROPERTY REVIEW

from the president “Meet the Mayor” opens communication channels We recognise that good communication with local government is essential for the positive performance of the commercial property sector in South Africa. To unlock improved communication we met with Johannesburg Mayor Parks Tau as well as Cape Town Mayor Patricia de Lille. Both attended and presented at the successful 45th SAPOA Annual Convention. And, based on the positive results of these meetings, SAPOA will continue to unlock relationships with local governments. We have launched our “Meet the Mayor” campaign, which offers member CEOs the opportunity to meet with Mayors around South Africa. This campaign encourages debate on the challenges facing members, creates access to development and infrastructure expansion matters, and removes obstacles to investment and to working together.

Growing our future with education To ensure the sustainability of our sector, we need skilled people to carry it forward. SAPOA’s education programmes, workshops and seminars have significantly increased over the past few years. In 2011, SAPOA had eight education programmes. Next year, we will have increased this to 14. Two new programmes were launched in November 2013: Building Construction Technology Programme (BCTP) and Immovable Asset Management Programme (IAMP). SAPOA will also launch its first e-learning programme in 2014 as well as the Property Financial Programme (PFP),

Click with SAPOA SAPOA’s new website is only a click away – and it’s packed with the latest information. With a fresh new look and helpful up-to-the-minute content, the recently launched www.sapoa.org.za is designed to help long-standing members, and those interested in becoming members, with easy access to all the details they need about membership, marketing and events, education, research, publications, and much more.

SOUTH AFRICAN PROPERTY REVIEW

Fostering an enabling legal environment in 2013 Tackling policies and legislation that are harmful to members and the industry, our legal committee made excellent progress in promoting a more enabling legal environment for the commercial property sector. SAPOA’s legal advocacy ensures we take part in forming policy and enacting laws that impact the property sector. We monitor and analyse relevant Acts of Parliament, Green and White Papers, municipal ordinances and policies and submit formal comments on behalf of our members. We use advocacy to create supportive policies, and to remove and reform policies that prejudice the commercial property sector. SAPOA submitted comments on 26 draft policies and Bills for our members. They are: 1 Spatial Planning Land Use Management Act 2 Expropriation Bill 3 Infrastructure Development Bill No 99 of 2013 4 Gauteng Planning and Development Bill 5 Mpumalanga Planning and Development Bill 6 Western Cape Land Use Planning Bill 7 Property Practitioners Bill 8 Subdivision of Agricultural Land Amendment Repeal Act 9 Preservation and Development of Agricultural Land Policy 10 Consumer Protection Act No 68 of 2008 11 eThekwini Development Surcharge Policy 12 eThekwini Transport Development Policy 13 Restitution of Land Rights Bill

the Property Lease Agreement Workshop, and the Lease Negotiating Workshop. Delegates attending SAPOA’s Educational Programmes increased from 378 in 2011 to 479 in 2012 and this year the number grew further to 561 delegates. We also lobbied for the reintroduction of the BSC Property Development programme, leading to an honours degree in construction management and quantity surveying at the University of KwaZulu-Natal. We’re pleased to report it will be offered again from next year. This year, SAPOA was at the forefront of an initiative to create global property measurement standards for property investors and users alike as part of the International Property Measurement

Event Golf Gala dinner

14 Green Paper on Land Reform 15 Property Valuations Bill 16 Housing Consumers Protection Measures Amendment Bill 17 Deeds Registries Amendment Bill 18 Property Sector Transformation Charter 19 Special Economic Zones 20 Municipal Systems Act, 2000 21 The Tobacco Products Control Act, 1993 Regulations 22 The SANS Standards 23 Environmental Impact Assessment Regulations 24 The City of Johannesburg – Supplementary Valuations Roll 25 The Nelson Mandela Metropolitan Transport System 26 Carbon Tax Policy

Standards Coalition (IPMSC). Established in 2012 at a meeting in hosted by the World Bank, SAPOA is one of 20 founding members and the only African organisation represented.

Connecting at events Collaboration, idea sharing and debate all help to inspire innovation for the commercial property sector. Creating a platform to do this, all seven of SAPOA’s Regional Councils successfully hosted several events and workshops, highlighting industry issues and creating valuable networking opportunities for members.

Number of delegates 908 600

Networking function

4 019

Power-hour breakfast

1 244

Workshop

809

SAPOA Convention

1 213

Total members in attendance

8 793

from the president Updates from our regional councils Mpumalanga SAPOA welcomed a new region this year by launching the Mpumalanga Regional Council in Nelspruit, under the able leadership of James Aling, to address the urgent need in the local property sector. Its immediate goals are to strengthen relationships with local government to create an encouraging environment for investment in property development, streamline legislation affecting the industry and promote more transparency in the market. In Mpumalanga, SAPOA intervened on behalf of its members as the provincial government failed to appoint an Appeals Board in terms of section 124 of the Town Planning and Township Ordinance, 1986. SAPOA received confirmation from the department it would appoint one by the end of October 2013. Establishing this new council will also create greater insight into commercial property in the region. We plan to include data from Mpumalanga in the annual SAPOA Office and Industrial Vacancy Surveys. (SAPOA Mpumalanga chairperson James Aling) KwaZulu-Natal Due to many concerns raised by property owners and developers in Durban, the KwaZulu-Natal Regional Council of SAPOA sought a meeting with the eThekwini Municipality. In September, SAPOA successfully met with Dr Naledi Moyo of eThekwini Municipality’s Economic and Planning Department. We’re pleased to confirm that an eight-person development forum will meet bimonthly to continue the discussion on these and new issues. It includes representatives from both the City’s Real Estate Department and SAPOA. The Regional Council is also pursuing synergies with the Durban Chamber of Commerce and Industry after meeting with its CEO, Andrew Layman. (SAPOA KwaZulu-Natal chairperson: Edwin van Niekerk) Western Cape The relationship between the City of Cape Town and the Western Cape Regional Council of SAPOA has improved and grown this year. This is thanks mainly to the continued commitment shown by its committee members to get involved and serve on various committees at local and provincial government level. The region also continues to share a close relationship with the Green Building Council of South Africa (GBCSA), Cape Town Partnership (CTP), Women’s Property Network (WPN), Economic Development Partnership (EDP) and the Central City Improvement District (CCID).

The regular half-day education workshops held in the province are extremely well attended and often overbooked. This shows the SAPOA Education Programme and its topics are right on target in the region. Its networking functions and the annual golf day in particular continue to be successful. (SAPOA Western Cape chairperson: Imraan Ho-Yee) Eastern Cape: Buffalo City Our liaison with the local Chamber of Business has grown and we receive more invitations to take part in its activities. The region has representation on some key committees through committee member Johan Burger, who is the executive manager of zone operations at the East London Industrial Development Zone (ELIDZ). Its interaction with the Provincial Department of Roads and Public Works remains strong through the region’s connection with its vice chairperson Zoe Chagadama. (SAPOA Buffalo City chairperson: Grant Wheatley) Eastern Cape: Nelson Mandela Metro We joined the Nelson Mandela Bay Civil Society Coalition and met with the mayor of Nelson Mandela Bay Metropolitan Municipality. The Mayor has responded with actions being taken to address the Coalition’s concerns. This is a significant step in our drive to improve service delivery by the metro. We also continued working towards realigning the goals of the SAPOA Nelson Mandela Bay Metropolitan Forum, and we are keen to get involved on the task teams that best serve the interests of our members.

These are infrastructure, electricity, water, re-zoning and plan approval task teams. We’ll continue mapping the way forward for the forum. Building plan approvals at the metropolitan municipality are being monitored after they ground to a halt for three weeks in September, largely because of technical staff shortages in the building control department. The impact of these delays on SAPOA members is considerable, and as an industry, we are concerned about the increased financial risks of longer property development holding costs. We were advised that the municipality plans to appoint a plan examiner as soon as possible, but no hard deadline has been provided. Our Heritage Task Team has nearly finished the guideline for developers, outlining the areas of the city and surrounds that are most likely to attract attention of Provincial Heritage Resource Authority. FNB sponsored a breakfast that provided an insightful economic overview. Investec sponsored several-networking events with interesting topics, which attracted excellent attendance. Coega Development Corporation sponsored a popular and well-received breakfast presentation on the latest developments at nQura Port and the Industrial Development Zone at Coega. (SAPOA Nelson Mandela Metro chairperson: Mark Bakker) Limpopo We achieved a major breakthrough in ending and preventing illegal land use in Polokwane this year. SAPOA first reported the illegal land use issue to the Polokwane Municipality in 2011, responding to SOUTH AFRICAN PROPERTY REVIEW

from the president Ready for REIT legislation members’ concerns about the absence of regulation of building laws, such as zoning rights and duties, which was affecting building values in the city’s commercial area. After we escalated the matter to the Public Protector, the municipality obtained a court order against illegal street traders as well as anyone failing to comply with trading and building laws. This positive outcome has also opened doors to work together on other initiatives. The city invited SAPOA to be part of its Street Trading Forum to progressively deal with challenges. It met for the first time in August. Plans are under way for a cleaning campaign and SAPOA will be part of this initiative with the South African Police Service, COSATU, taxi associations and the city. (SAPOA Limpopo chairperson: Sumari de Ridder) Gauteng SAPOA is investigating the impact of the standard electricity by-laws on the commercial property owners. The City of Tshwane Metropolitan Municipality Council of the Municipality approved these by-laws on 25 April 2013 and intends to install electricity prepaid meters in all properties within its authority. SAPOA is assessing property owners’ legal position regarding this, and specifically if property owners should amend leases to include a clause that requires tenants to pay for electricity upfront. Meetings have also been held with the City of Johannesburg’s mayor and planning department. We are encouraged by the mayor’s efforts to engage with SAPOA. (SAPOA Gauteng chairperson: Gareth Shepperson)

On 5 July 2013, National Treasury released a new Tax Legislation Amendment Bill (“TLAB”) with various proposals to amend the Income Tax Act. Some of these proposals, specifically sections 8F and 8FA, will have a negative impact on the unlisted property loan stock sector. SAPOA has established a Real Estate Investment Trust (REIT) Committee mandated to negotiate with National Treasury for a tax dispensation for institutional and private investors as the second phase of the tax legislative process. SAPOA made an official submission to National Treasury before 5 August 2013, noting industry concerns and putting forward suggestions regarding these concerns. On 24 October 2013 the majority of these were addressed in the release of the new TLAB. There are still various areas of concern specifically relating to the unlisted property investment companies, which SAPOA will continue to discuss with National Treasury to extend the dispensation to the unlisted property sector.

RFP tool kit or guidelines to ensure fair tender processes SAPOA is compiling a Request for Proposal (RFP) industry toolkit to improve the RFP or tender process for developments. Currently, no guideline exists for submitting tenders with an RFP process. The purpose of the guidelines is to ensure principles of fairness for everyone – both

the business embarking on the process and those providing submissions. An industry guideline on the RPF process will encourage advisers to manage their clients’ process more suitably, create more certainty, and ensure transparency and efficiency.

Some interesting statistics l Forecasted revenue of R32,4-million compared to R25,3-million (2012) l Forecasted divisional expenses of R17,1million compared to R13,4-million (2012) l Forecasted operating expenses of R12,9million compared to R11,6-million (2012) l Forecasted reserves of R9,8-million (2013) compared to R7,7-million (2012) l Forecasted 2013 membership fee income up by 30%

l Forecasted 2013 educational net income up by 3% l Forecasted 2013 operating expenses up by 11% l Forecasted 2013 surplus of R2,2-million compared with a deficit of R237,000 for 2012 l National membership up to 1 175 in 2013, from 1 092 at the beginning of 2012

Improved stakeholder engagement is another important goal on SAPOA’s agenda as the organisation will continue to build relationships with affected and involved stakeholders in the public and private sectors. SAPOA is engaging in government liaison to develop platforms for open communication with local, provincial and national government. We’ll continue our move towards engaging in and providing industry research. SAPOA is planning a Property Sector Economic Impact Study, and will establish broker panels for the Limpopo and Mpumalanga regions to provide letting and vacancy studies.

Engaging and networking with members and the media, SAPOA will continue to offer its annual networking events and expand the associated sponsorship opportunities. Producing quality publications for members and stakeholders remains a priority and we’re committed to strengthening member communications, including releasing regional electronic newsletters. Our members drive our organisation, so growing our membership base remains a focus. We will continue our membership drive by offering valuable benefits, ensuring our representation is relevant and creating innovation and insight for our industry.

SAPOA’s strategy in 2014 In 2014 we’ll continue to focus on SAPOA’s key objective pillars to bring our members even more value. We have set clear objectives for each pillar, from advocacy, education, transformation and industry research to membership, marketing, events, media relations and member communication. Continuing our advocacy, SAPOA aims to review the Department of Public Works’ leasing strategy against the Property Charter as well as Department of Trade and Industry codes to confirm the impact on our industry. SAPOA also aims to assist in improving the current DPW commercial administrative practices and its impact on the industry.

SOUTH AFRICAN PROPERTY REVIEW

news

Nelson Rolihlahla Mandela 18 July 1918 – 5 December 2013

On behalf of its CEO, board members and staff, the South African Property Owners’ Association (SAPOA) offers its deepest condolences to the family and closest friends of the former president of the Republic of South Africa, Mr Nelson Rolihlahla Mandela. In this time of global mourning, SAPOA pays tribute to this great icon and hails him for his unquestionably positive contribution to the new South Africa. Mandela was a man of so many facets – a charismatic leader, a devoted mentor, a passionate humanitarian, a pillar of strength, a bringer of peace and a giant of justice, as described by US president Barack Obama at Madiba’s memorial on 10 December 2013 at the FNB Stadium in Johannesburg. It is our hope that all that he represented will once more unite a nation that made great strides since its first democratic election. May his soul rest in peace. Hamba kahle Tata.

Redefine International PLC now trading as a UK-REIT

edefine International PLC has announced its full conversion to a UK-REIT. The South African Reserve Bank granted approval for Redefine Properties Limited to sell its interest in the management company to Redefine International. This was the final approval needed to internalise its management function, a condition for UK-REIT status. With a primary listing on the London Stock Exchange and

Redefine CEO Mike Watters

a secondary listing on the Johannesburg Stock Exchange, Redefine International will now gain access to a wider scope of investors and solidify its place among the top group of UK midcap stocks.

As part of the conversion, Redefine CFO Andrew Rowell has been appointed as the executive director of Redefine International. “Simplifying our corporate structure was an important objective for Redefine International,” says CEO Mike Watters. “Now that it is complete, many benefits for the company, and its management as well as our investors will be unlocked. We’re delighted that, very soon, we will begin an exciting new chapter as a premium listed UK-REIT – the gold-plated international investment benchmark for property investment companies.” Internalising the management function ensures the continuation of management from the highquality team that guided Redefine International to this milestone point. It will reduce ongoing administrative costs and be more efficient in the longer term given the anticipated growth in its portfolio value. “For our shareholders, the transaction will be significantly earningsenhancing in the medium term,” says Watters. +27 (0)11 783 0700, Redefineinternational.com

Property and art join forces in a new cultural development

roperty and art have joined forces in an exciting and equally unique partnership between the V&A Waterfront partners and business entrepreneur Jochen Zeitz. This collaboration will see the creation of a major new cultural institution that will focus on collecting, preserving, researching, and exhibiting contemporary art from Africa and its diaspora. Named the Zeitz Museum of Contemporary Art Africa (Zeitz MOCAA), the museum will be housed in the historic grain silo at the V&A Waterfront. With the V&A committing more than R500-million to the development required for the establishment of the museum, this investment will further the development of art in Africa, and acknowledge the important

cultural and financial contribution the visual-arts sector makes. Zeitz MOCAA will consist of more than 9 500m² (of which 6 000m² will be dedicated to exhibition space), placing it among leading contemporary art museums worldwide, and will be spread over nine floors. Through an entire floor dedicated to education, the museum will develop a new art-loving, museum-going audience. Zeitz MOCAA is set to welcome its first visitors at the end of 2016. Until the extensive renovations to the silo complex are complete, selections from the Zeitz Collection will be presented at Zeitz MOCAA Pavilion, a museum-quality temporary exhibition space also at the V&A Waterfront. +27 (0)21 408 7500, Waterfront.co.za

SOUTH AFRICAN PROPERTY REVIEW

news

Growthpoint to acquire Tiber Group portfolio

t has been announced that Growthpoint Properties will acquire the entire Tiber Group portfolio of properties and management business, a major transaction that amounts to R6,6-billion. As Growthpoint’s largest single acquisition to date, the portfolio spans 32 000m² of mainly P- and A-grade office space concentrated in Sandton and its surrounds, including multiple multinational head offices such as Nestlé, PPC, AngloGold Ashanti, Norton Rose, Merrill Lynch, Barclays and Absa Capital. Furthermore, it consists of 28 prime properties and a 50% stake in a further nine properties. It also incorporates 48 000m² of undeveloped bulk. Securing continuity of management and expertise in the transaction, Growthpoint will internalise the asset management and property management business from Tiber Projects, gaining the skills of 55 full-time employees. Growthpoint has also secured an initial three-year strategic agreement with the Tiber Projects executive team of Stephen Scott, Germano Cardoso and Artur Carrazedo. The acquisition extends Growthpoint’s average office lease length and, with a 95% occupancy rate, improves its overall office vacancy levels, making Growthpoint the country’s biggest office property owner, with a portfolio of 1,5-million square metres of office space across South Africa, valued at nearly R25-billion.

Norbert Sasse, CEO of Growthpoint Properties

“A portfolio of this quality and size, centred in arguably the best investment property location in South Africa, is a once-in-a-lifetime opportunity and beneficial for Growthpoint’s shareholders,” says Norbert Sasse, CEO of Growthpoint Properties. “Moreover, Growthpoint will gain the core competencies, skills and long-standing relationships with tenants of the Tiber portfolio, and have access to the executive team who conceptualised, built and managed the properties.” “While achieving these goals, we wanted to find an excellent home for our people and our property portfolio,

and we believe we have done this with Growthpoint,” says Tiber’s Stephen Scott. “Tiber considered several alternatives; ultimately, Growthpoint enabled us to realise an enhanced value for our shareholders. It has the ability to readily access and implement large transactions of this kind.” At a 7,41% property yield on incomeproducing properties, the deal will also enhance Growthpoint’s distribution per share, based on the mix of funding Growthpoint is planning to use to pay for the acquisition, which includes the bulk of the cash it raised in May this year when it issued 90-million shares at R28 per share (raising R2,5-billion in new equity). “The acquisition will become effective when the portfolio transfers, which should be in the first quarter of 2014,” says Sasse. “The real benefits will come through in the 2015 financial year when shareholders will enjoy the full 12-month impact of the transaction.” Growthpoint will settle the acquisition with a combination of cash and shares. It will issue 93,3-million new Growthpoint shares at R270 per share to raise approximately R2,5-billion. The remaining consideration will be paid by accessing the cash resources from Growthpoint’s successful capital raise in May 2013 and its existing debt facilities. +27 (0)11 944 6000, Growthpoint.co.za

Local expert panel to iron out commercial disputes

n an effort to resolve disputes in the builtenvironment sector, the Royal Institute of Chartered Surveyors (RICS) has spent the past two years developing a southern African panel of expert built environment practitioners who are fully trained and internationally accredited in commercial mediation. This was initiated prior to the introduction of the Department of Justice’s proposed Court Annexed Mediation Scheme in South Africa, which is aimed at encouraging a mediation process prior to matters being set down for trial in court. “Disputes in the built environment are often very complicated and involve issues at multiple levels, which would incur a great deal of time and money to resolve in the courts or through arbitration,” says Dr John Fletcher, global director of RICS Dispute Resolution Services says. “The key aim is

SOUTH AFRICAN PROPERTY REVIEW

to achieve a commercially sensible outcome quickly, avoiding lengthy and costly litigation. We’ve been careful not to launch the service – now offered via our panellists – in South Africa until we were confident we had the depth of expertise and geographic spread sufficient to meet the needs of the industry. “RICS panellists are mainly senior members of leading firms in a broad variety of fields with many years of practical experience. All have been equipped with internationally accredited mediation skills focused on moving the parties to a sensible and commercially viable settlement.” Fletcher says awareness of the local RICS built environment mediation panel is already increasing exponentially. In recent months, its training and dispute-resolution service has been approved and accredited by several organisations, including the South African

Property Owners Association (SAPOA), the Association of South African Quantity Surveyors (ASAQS), the South African Council for Project and Construction Management Professions (SACPCMP), the South African Geomatics Institute (SAGI), and the South African Council for the Property Valuers Profession (SACPVP). RICS members incorporate the entire spectrum of land, construction and realestate activities, ranging from valuers, building surveyors, architects, engineers and commercial property agents to property asset managers, cost consultants, facilities managers, lawyers, finance and investment professionals, environmental experts and quantity surveyors as well as urban planners, planning and development managers and researchers. +27 (0)21 975 5537, Rics.org

news

Listed property still in the lead

hile certain sectors in the property industry continue to lag, the South African listed property sector remains strong. Listed property produced a strong showing among the country’s listed companies that earned the most for shareholders this year. The sector featured prominently overall, with 14 listed property investments performing in the top 100 over five years based on share-price growth and investor returns. Again this year, the sector’s top player in this category was Resilient Property Income Fund, which earned 38th place with compound annual growth of 28,21%. “These results show that, as an asset class, South African listed property companies

have performed well,” says Norbert Sasse, chairman of the SA REIT Association and CEO of Growthpoint Properties. “It also displays the good defensive qualities of an investment in the sector, especially as this five-year performance, from 1 October 2008, represents results achieved since the global economic crisis.” As the most active sector on the JSE, the listed property sector boasts a market capitalisation of more than R256-billion, with two new listings in October 2013 alone attracting R11,6-billion of capital to the sector. According to Catalyst Fund Managers, over the past 12 months to the end of October 2013, the listed property index delivered total returns of 18,47%,

Intaprop secures two major deals in Western Cape

ntaprop has secured two major deals for tailor-made premises at Saxdowne Park in the Western Cape for form work, support work and scaffolding supplier FormScaff and waste-management company Wasteman. With the development receiving strong tenant interest, Intaprop director Henti van Zyl notes that the company is very pleased. “We’re thrilled to have signed up these two industry leaders, and we can’t wait to welcome them to Saxdowne Park,” he says. Located in a growing commercial node at the bustling intersection of Stellenbosch Arterial Road and Saxdowne Road, the 15hectare Saxdowne Park will include retail, offices, logistics facilities, distribution warehouses and small- to medium-scale manufacturing outlets. “Demand for light industrial, warehousing and distribution facilities within a properly managed business-park environment is high in this part of the metropolitan area, especially because of its central location within the city,” says Van Zyl. Perfectly positioned for distribution, logistics and

manufacturing businesses, the first phase of the prime park consists of ready-to-build Business 1 and Business 4 development parcels, with sites ranging in size from 5 000m² to 20 000m² that can be consolidated to form larger development parcels. “Its prime location, zoned rights and competitive land costs all deliver the best quality development opportunities in the node ,” says Van Zyl. “The interest shown so far by the business community serves to prove the park’s future success.” Intaprop has already started on the R42-million development for Wasteman, which will include a 17 500m² yard, an approximately 1 800m² waste-management facility, workshops and 1 700m² of offices. For Form-Scaff, Intaprop is developing a R27-million premises that will include a 1 391m² sales warehouse, a 9 720m² yard facility and 422m² of offices. Both Wasteman and FormScaff are due to move into their new premises in the third quarter of 2014. +27 (0)11 268 0610, Intaprop.co.za

outperforming cash at 5,18% and SA bonds at 4,14%, and second only to equities at 26,23%. “The sector’s strong showing among South Africa’s top listed investments is reason for any serious investor to regard meaningful exposure to listed property, as an asset class, as essential,” says Sasse. The sector further benefits from having access to the internationally-recognised REIT structure thanks to the implementation of the new SA REIT tax dispensation. South Africa is on track to become the eighthlargest REIT market globally and, as a more tax efficient structure, the SA REIT is also encouraging unlisted property companies to bring their portfolios to the market. +27 (0)11 783 2201, Sareit.com

Emira celebrates a decade of success

t’s been a decade since it was first listed on the JSE, and SA REIT Emira Property Fund is going strong. In 10 years, its asset base has grown almost James Templeton six-fold from R1,65-billion to R10,1-billion in June 2013, and its diverse portfolio of retail, office and industrial properties has almost doubled in number from 77 to 146. It has also paid out nearly R4-billion to its shareholders over this period and delivered a total return of 13,7% per annum. “We’ve come a long way since listing in 2003,” says Emira’s CEO James Templeton. “Our focus has always been to grow and evolve in a way that benefits investors and stakeholders, and adheres to good governance and best practice, ensuring sustainable performance.” Over the last 10 years Emira has achieved several noteworthy milestones, including the diversification and growth of its portfolio, the acquisition of property loan stock company Freestone Property Holdings Limited (which added R1,8-billion to its portfolio with 81 commercial, retail and industrial properties), becoming of the first Collective Investment Scheme in Property (CISP) to raise funds using mortgage-backed securitisation with a successful R650-million issue, fruitful offshore investment, and the adoption of REIT status. Excluding the acquisition of Freestone in 2007, over the past decade, Emira made 31 strategic acquisitions of R2,337-billion, while it opportunistically disposed of 41 properties valued at R867,2million. Furthermore, Emira has invested R1,391-billion on capital projects to improve and expand its properties. “In 2003 we set out to grow a fund that offered investors and stakeholders sustainable, growing performance,” says Templeton. “I’m pleased to report that we have managed to achieve this.” He also notes that investors can expect the same, if not more, from Emira in the next decade. “Emira will continue its focused programme of strategic acquisitions, prudent disposals, value-enhancing development and redevelopment, and shrewd financial management to grow performance for investors for the long term,” he says. +27 (0)11 028 3118, Emira.co.za

SOUTH AFRICAN PROPERTY REVIEW

education, training and development

Fit for service

SAPOA’s Student On-Boarding Programme prepares our future property players from day one at the office

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

eld on 26 and 27 September 2013, the SAPOA Student On-Boarding Programme hosted 10 students from the University of Johannesburg and Wits who are currently taking property-related courses. In response to a call from members, SAPOA introduced the Student On-Boarding Programme last year. Aimed at university students, including those on SAPOA and SAPOA member bursaries, the goal of the programme is to fill the gap between the “academic” and the “practical” – in other words, to prepare students of propertyrelated degrees for their first day at the office. Subjects covered by the programme include basic property terminology, the property mix, documentation for sales and leases (offers, agreement, FICA, CPA, mandates, resolutions, deposits, introductions, etc), some facilities and town planning, and basic property finance.

Students are also coached on what will be expected of them in the workplace. This includes guidance on how to dress; how to make a positive impression; how to treat clients, colleagues and other stakeholders; and career opportunities. Facilitators are also open to discuss whatever is of concern to the delegates. SAPOA runs this programme twice a year, with one occurring in the beginning of the year and another towards the end. To date, the Student On-Boarding Programme has been available only in Gauteng but there are plans to roll it out in all regions in the futures. Feedback has been highly positive from all of the students who attended. SAPOA believes that, through this programme, it is producing more rounded and confident members of the property industry. By Joan Goldswain

Empowerment through education We speak to SAPOA’s bursary recipient Mandla Khuzwayo about his future goals

Q How do you feel about SAPOA? SAPOA has assisted me in learning more about the property sector, which has been very helpful.

Q How do you feel about receiving a bursary? My career is finding a direction thanks to this bursary.

Q What are your thoughts on the property industry? The property industry is very broad and yet it is specialised. There are many professions involved – and that makes it interesting.

SOUTH AFRICAN PROPERTY REVIEW

Q What would you like to achieve going into the property industry? For the first few years I want to learn as much as I can about the industry. Later on in my career I would like to start a property consulting company. For now, I simply want to focus on property management.

Q What are your goals and dreams for the future? My goal is to be involved in the construction of a new high-rise building from start to finish. I want to be successful in the industry but remain humble – it would be a dream come true.

education, training and development

Meet Baaitse Nethononda Q Who is Baaitse Nethononda?

A new height of multi-disciplinary collaboration

I’m a registered psychometrist with a postgraduate degree in industrial and organisational psychology. My professional background stems from the NGO sectors, where I worked as a workshop assistant, programme assistant/coordinator, office administrator and a project coordinator. My experience encompasses HR management, events management, project management and psychometrics.

Q What are your thoughts on SAPOA? How do you feel about working for the organisation? I dealt with SAPOA during the time I worked at Billion Group. I received professional assistance when coordinating colleagues’ training and workshops. I think SAPOA is a custodian of the commercial and industrial sectors. With large businesses affiliated to SAPOA, I feel that there is a responsibility and a sense of accountability that one has to ensure that our members are informed and kept updated on education, training and skills development, networking, research, trends, legislature and many others. SAPOA’s mission is to represent, protect and advance our members’ commercial property interests within the property industry. Therefore I feel that I am now partly responsible for fulfilling SAPOA’s mission and ensuring that the vision is kept.

Q As the new education manager at SAPOA, what are your goals for the organisation? My main aim as the education manager is to support the SAPOA’s objectives by protecting the interests of the commercial and industrial property sectors

SAPOA welcomes its newly appointed education manager, Baaitse Nethononda, to its dynamic team

through the training courses that we continue to develop for our members. I aim to continue encouraging the culture of learning at SAPOA for both staff and our member companies. I believe that relationship management will also assist in ensuring that our training courses become well-known. As we develop the training and refine it for the industry, our member companies will be encouraged to renew their membership and recommend us to others.

Q What are your future plans? One can never stop bettering oneself. I therefore aim to study and learn more about the industry I’m in. I’m peoplecentred and wish to grow my career in the management of people. I want to leave a legacy and a footprint so that companies associate SAPOA with excellence. SOUTH AFRICAN PROPERTY REVIEW

education, training and development

SAPOA education in 2014 The following programmes have been developed by SAPOA and the University of Johannesburg for launch in 2014

THE PROPERTY FINANCIAL PROGRAMME (PFP) This is a programme presented at three levels of increasing complexity, to be hosted as: l Level 1 – two days dealing with the financial environment and time value of money l Level 2 – two days dealing with budgets, legal, income, financial and balance sheets, contracts and leasing, accounts payable and receivable l Level 3 – ratio analysis, accounts payable and receivable, utilities management

THE PROPERTY LEASE AGREEMENT WORKSHOP This is a full-day workshop to be presented by a property lawyer. The following is an outline of the workshop contents: l Essentials for a lease agreement l Rights and obligations of the lessor and the lessee l Specific leases – Office space – Commercial space – Types of leases l Legislation affecting leases – The Consumer Protection Act – The National Credit Act – The Public Finance Management Act – The Prevention of Illegal Eviction and Unlawful Occupation of Land Act – The Constitution l Recent case law affecting leases l Practical input by industry experts on: – Measurement of leased space – Tenant mix – Tenant installation

SOUTH AFRICAN PROPERTY REVIEW

SAPOA E-LEARNING SOLUTION SAPOA currently offers 10 different training programmes with various universities in South Africa. Rising travel, venue, trainer and study-material costs have resulted in SAPOA evaluating alternative e-learning methods, as well as following new educational trends. There are various e-learning options and service providers available, but at this point service providers such as Get Smarter (used by University of Cape Town) will take up to 75% of the revenue generated by our programmes. SAPOA will partner with Hypenica to provide a proposal for the creation of a training platform, including the filming and production of video content. SAPOA’s primary objectives for deploying a system of this kind are the following: l Developing a customised, central training platform that can host all training material l Generating additional revenue by increasing total student numbers l Reducing trainer and venue costs l Making training content available anywhere at any time, and optimising it for mobile and tablet platforms The solution is based on Hypenica’s Mobile Training Solution (MTS) and enables companies to manage the delivery of training material to audiences who will be able to access training material on their desktops, tablets and mobile devices. Hypenica’s MTS uses multiple channels, including mobile and web, to manage and deliver training material to defined student groups. Specific functionality includes: l Configuring any number of training programs – that includes multiple content types, flexible work flow, question and test preparation, automatic scoring and real-time feedback from student.

l Optimising for mobile and tablet access l Full granular control of which training can be accessed by specific students l Easy communication with students through built-in communication functionality l Ability to schedule training per student or student group l Real-time configurable dashboards that provide immediate feedback on student and course performance l Automatic report generation and distribution l Extensible platform generation and distribution l Extensible platform to include ability to configure and manage additional enterprise feedback and voice of the employee/voice of the customer surveys l Fully managed and supported solution This solution can also be used to run programmes from one source to various venues for workshops and seminars. The e-learning will be implemented in 2014, and the first programme targeted will be the SAPOA Essential Commercial Property Programme.

NEGOTIATIONS SKILLS MASTERCLASS PROGRAMME (NSMP) These workshops, in partnership with Corporate Intelligence Training, will be run on three levels: basic, intermediate and advanced. Each level will be run over two days, during which negotiating skills, techniques and role-playing will form part of the programme. A “before” and “after” video assessment will be done as proof of the negotiating skills acquired. The maximum delegates per workshop will be limited to 14.

developer relaunch

Reconnect, realign and rebrand The relaunch of the Property Developer magazine opens a new chapter for the construction and development industry By Candace King Photographs by Michael Glenister

ith business and development constantly on the move and the property industry evolving, it was deemed a fit decision to revive the Property Developer, SAPOA’s quarterly sister publication that focuses solely on the construction and development side of the property industry. On 31 October 2013, SAPOA held a breakfast session for the relaunch of Property Developer. It was attended by several property players, including SAPOA National Property Developers Forum chairman Lionel Kisten and Dipula Income Fund CEO Izak Petersen, who gave a noteworthy presentation on the current state of the market and provided some insights into 2014 trends. Kisten opened the floor with a speech on the industry and a few words regarding the importance of rebranding the publication. “SAPOA is proud to announce the relaunch of the Property Developer magazine, which has undergone a significant

Developer

SAPOA National Property Developers Forum Chairman Lionel Kisten

Dipula Income Fund CEO Izak Petersen gave a presentation on the current state of the market and 2014 trends

for developers who wish to engage in current problems and become more aware of what’s going on in their sector,” he said. “We also encourage feedback from developers and companies who want to provide suggestions on issues as well as the way forward.” Kisten likened the development sector to the three Rs of the environment – reduce, reuse, recycle – stating that the property development sector should reduce corruption by acting as whistle-blowers; reuse buildings in a more productive and efficient manner by redeveloping dilapidated structures into modern masterpieces

that will help to alleviate the supply-and-demand issue; and recycle by taking the negative and turning it into something positive, rejuvenating the industry through professionalism, education and shared knowledge. He added that further Rs for developers can include redevelop, reconnect, realign and rebrand – redevelop our metropolises into world-class cities; reconnect with industry peers; realign with best practices; and rebrand companies and organisations to coincide with sustainability and international standards.

PROPERTY

November 2013

h nc lau e Re issu

all CradlestonentMunder way me

Retail develop

PDP class of 20

e Rewarding th A course GSB, UCT, SAPO

Futuristic dream or visionary future?

Bridging the gap in the City of Tshwane

face-lift,” he said. “The rebranding is aligned with SAPOA’s new stance on addressing key issues in the industry with a hands-on approach.” He added that the brand-new look, feel and voice of the publication aims to speak louder on behalf of the industry, and that the publication will act as a more boisterous mouthpiece for the sector and its players, bringing focal issues to the table to be discussed and resolved. “We want the publication to be a go-to source SOUTH AFRICAN PROPERTY REVIEW

3087_SAPOA_Courses_AD_18_11_2013_print.indd 1

2013/11/19 1:43 PM

legal update

Taking legal stock L

SAPOA utilises advocacy to influence policy-makers for the purpose of creating supportive policies, or to reform or remove policies By Advocate Portia Matsane, manager of the legal-services department at SAPOA

egal advocacy is fundamental in ensuring SAPOA actively participates in policy formulation and enactment of laws affecting the property sector in South Africa. Monitoring, analysis and submission of formal comments on published relevant and pertinent Acts of Parliament, Green and White Papers, municipal ordinances and policies having an impact on the property industry are some of the strategic focuses. SAPOA utilises advocacy to influence policy-makers for the purpose of creating supportive policies, or to reform or remove policies that are identified as being prejudicial to the mutual interests of the commercial property sector. The 2013 financial year saw many policies and/or Bills that have a significant impact on the commercial property sector. While SAPOA’s key focus has fundamentally been on propertyrelated draft policies and parliamentary Bills, it has been interesting to note that most of the Bills that were published this financial year for public comment were from the National Department of Rural Development and Land Reform. The crucial ones are the Expropriation Bill, Restitution of Land Rights Bill and the Spatial Planning and Land Use Act. SAPOA focused on a combination of 25 (twenty-five) draft policies, Bills and regulations for the current reporting financial year. While some were published in previous financial years, there was a responsibility to monitor the ultimate adoption and culmination of such policies and Bills into Acts of Parliament. This enables SAPOA to determine the changes that are eventually adopted as applicable laws.

The monitoring of current Bills or policies does not exclude the other current and applicable property-related laws that range between 40 and 50 in number. Table 1 below shows the aforementioned 25 draft policies and Bills. Most of the draft policies or Bills that SAPOA focused on are the responsibility of the national departments of Rural Development and Land Reform and Trade and Industry, as well as municipalities. There seems to have been a special focus by government to ensure that all legislation that supports the Green Paper on Land Reform was published for public comment during this financial year (see Figure 1). The reasonable probability is that Bills such as the Expropriation, Property Valuations and the Restitution of Land Rights will be assented to as law in early 2014.

Lobbying highlights SAPOA agrees that forming strong partnerships with other groups and organisations is essential to a successful advocacy strategy. Much of SAPOA’s reliance in respect of legal advocacy has been on its internal governance structures – such as its committees, on which representatives of its members serve on a voluntary basis. The legal committee, brokers committee, sustainability committee, property developers committee, property facilities management committees and the regional councils have been fundamental in highlighting the practical challenges that SAPOA’s member organisations face as a result of property-related laws and administrative implementation thereof by relevant authorities.

Table 1 1 Spatial Planning Land Use Management Act 2 Expropriation Bill 3 Infrastructure Development Bill No 99 of 2013 4 Gauteng Planning and Development Bill 5 Mpumalanga Planning and Development Bill 6 Western Cape Land Use Planning Bill 7 Property Practitioners Bill 8 Subdivision of Agricultural Land Amendment Repeal Act 9 Preservation and Development of Agricultural Land Policy 10 Consumer Protection Act No 68 of 2008 11 Ethekwini Development Surcharge Policy 12 Ethekwini Transport Development Policy 13 Restitution of Land Rights Bill

SOUTH AFRICAN PROPERTY REVIEW

14 Green Paper on Land Reform 15 Property Valuations Bill 16 Housing Consumers Protection Measures Amendment Bill 17 Deeds Registries Amendment Bill 18 Property Sector Transformation Charter 19 Special Economic Zones 20 Municipal Systems Act, 2000 21 The Tobacco Products Control Act, 1993 (Regulations) 22 The SANS Standards 23 The Environmental Impact Assessment Regulations 24 The City of Johannesburg – Supplementary Valuations Roll 25 The Nelson Mandela Metropolitan Transport System 26 Carbon Tax Policy

legal update

CHART TITLE

Figure 1

CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS 3%

MUNICIPALITY 13%

RURAL DEVELOPMENT & LAND AFFAIRS 20%

TRADE & INDUSTRY 14% PUBLIC WORKS 14%

AGRICULTURE 7%

PROVINCIAL GOVERNMENT 10%

NATIONAL TREASURY 3% ENVIRONMENTAL AFFAIRS & TOURISM 3%

HEALTH 3%

ECONOMIC DEVELOPMENT 3%

HUMAN SETTLEMENTS 7%

It is noteworthy to mention the successful breakthroughs that have been achieved during this reporting year.

• Ekurhuleni Metropolitan Municipality In 2012, SAPOA addressed correspondence to the Ekurhuleni Metropolitan Municipality wherein it raised concerns about the implementation of advertising bylaws on the commercial property sector (while such are far more suited to the residential property market. Several recommendations from SAPOA were formally taken into consideration. The final deliberations on the bylaws were done on 6 November 2013, prior to the gazetting thereof.

• Competition Commission The Competition Act (Act No 89 of 1998), hereinafter referred to as the “Act”, as amended, intends to provide for the establishment of a Competition Commission that is responsible for the investigation, control and evaluation of restrictive practices, abuse of dominant position, and mergers; and for the establishment of a Competition Tribunal responsible to adjudicate such matters. Some of the reasons the Act was established, as pronounced through the policy imperatives provided for therein, include the intention to restrain particular trade practices that undermine a competitive economy; to regulate the transfer of economic ownership in keeping

with the public interest; and to establish independent institutions that should monitor economic competition. The legal concern from SAPOA members, especially property owners, is whether the provisions of Chapter 3 of the Act, which deals with merger control, are applicable in instances where a propertyletting company acquires or disposes of a commercial, industrial or residential property where the property is used for letting business purposes. A submission was made and sent to the Department of Trade and Industry requesting that the letting property sector be excluded from filing and notifying the Competition Commissioner about any acquisitions and mergers as described above. Alternatively, SAPOA submits that the property thresholds for such mergers, as determined by the Minister of Trade and Industry, be increased due to the significant increase in the value of properties over the years. Prior to the Competition Commissioner making a decision on SAPOA’s submission, a request was made for SAPOA, duly represented by its president, CEO and legal manager, to meet the senior officials of the acquisitions and mergers department. The meeting was held on 21 October 2013 at the offices of the Department of Trade and Industry. While there was an agreement in principle about the policy rationale for property notifications, SAPOA contended that each industry, due to various unique circumstances, must have its own prescribed notification merger and acquisition thresholds. In response thereto, the Department of Trade and Industry advised summarily as follows: a) It will be cumbersome from a legislative point of view for the country to develop different notification thresholds for various sectors. Most countries have a uniform regulation when it comes to terms of mergers and acquisitions; b) There is an intention to have the thresholds increased in the near future, possibly in two years’ time. SAPOA requested that a final decision not be made by the commissioner until it has been provided with the submissions that the Department of Trade and Industry made before parliament/cabinet when the property thresholds were increased. The purpose thereof is to understand the social, SOUTH AFRICAN PROPERTY REVIEW

“ legal update

economic, legal or/and political grounds that informed the increase. The Department has since responded to SAPOA’s written request by advising that there was no formal submission that was tabled before parliament/cabinet, and that the decision was made by the Competition Commissioner. SAPOA has requested to be provided with the founding formal documentation that led to the thresholds being increased.

SAPOA intends to increase its efforts of collaborating with other associations or organisations in pursuing legal advocacy matters in the next financial year. • Mpumalanga We wait with anticipation Provincial Government to see what changes the On 5 September 2013, SAPOA addressed property sector will be correspondence to the Department of Agriculture, Rural Development and Land faced with in 2014, and we Administration in Mpumalanga, citing its concerns about how the province has failed, are committed to continuing refused and/or neglected to appoint a Service to safeguard the interests Appeal Board in terms of the provisions of Section 124 of the Town Planning and of our members Townships Ordinance of 1986. This is despite some of SAPOA’s members having submitted appeals. SAPOA advised the province that the failure, neglect or inability to appoint one was a serious infringement of the rights that are protected by the Constitution to ensure that parties aggrieved by an action of a tribunal or organ of state or a court are afforded the right to appeal such a decision. The premier of the province was also copied in the correspondence from SAPOA. SAPOA received a response from the province that apologised for the failure to appoint the board. It stated that it had been difficult to secure the appointment of members due to the low stipend that is payable. SAPOA was assured that the province would be appointing members to an appeal board during the month of November 2013.

“

• Polokwane Municipality The illegal land use within the Polokwane Municipality was reported to the municipality in 2011 after members complained about the inability or reluctance by the municipality to regulate compliance with building laws, such as zoning rights and duties. This included instances where the municipality failed or neglected or refused to sanction conduct where buildings were encroaching on sidewalks or pavements. It was SAPOA’s contention that failure to regulate zoning and building laws was affecting the value of the commercial zone within the city. SAPOA escalated the matter to the office of the Public Protector. In 2013, the municipality advised SAPOA of a court order that it had obtained against illegal street traders and persons and entities that fail to comply with

SOUTH AFRICAN PROPERTY REVIEW

trading and building laws. The city further invited SAPOA to be part of a Street Trading Forum in order to deal with the challenges progressively. The first meeting was held in August 2013. The city has already made headway in ensuring that illegal advertisements and land use are dealt with. SAPOA, the SAPS, COSATU, taxi associations and the city will be involved in the initiative.

• Johannesburg Metropolitan Municipality The City of Johannesburg has paid SAPOA the legal costs that were due in respect of the party and party costs that were awarded for the Supreme Court of Appeal proceedings. The costs for the High Court processes have been settled, and the city intends to have them paid before the end of 2013.

Legal advocacy highlights SAPOA made a concerted effort to raise its stakes in respect of legal advocacy through ensuring that relevant information and material is made available to members. The following legal documents were formulated, reviewed and standardised for use for free by members of SAPOA. They are also available for non-members upon payment. Requests have been received from members of the public. The documents that can currently be accessed on the SAPOA website include: w Offer to purchase; w Offer to lease; w Disclaimer notice compliant with the Consumer Protection Act of 2008; w Practice notes relating to an offer to purchase and an offer to lease; and w Sale agreement. SAPOA is in the final stages of endorsing the Financial Intelligence Advisory Act Guidelines.

Conclusion The update is not taking stock of legal advisory services, corporate governance and contract management services that have been provided during the 2013 financial year. SAPOA intends to increase its efforts of collaborating with other associations or organisations in pursuing legal advocacy matters in the next financial year (i.e. 2014). We wait with anticipation to see what changes the property sector will be faced with in 2014, and we are committed to continuing to safeguard the interests of our members.

One of SAPOA’s A primary objectives is to define excellence in the property industry

s part of this objective, our SAPOA Awards for Innovative Excellence in Property Developments provides public recognition for top quality design and functionality and a benchmark for excellence in property Be part of this exclusive award category entry in the most prestigious property awards program in South Africa, cement your position as an industry leader and align your company with the industry’s peak leadership body in recognising excellence. Position your company as a market leader - reap the benefits from positioning as a champion of South Africa’s property industry, innovation and excellence.

Winning a SAPOA Innovative Excellence Award provides members of the project team with a multitude of benefits. Don’t miss the opportunity of celebrating the success that results from determination and the resilience demonstrated by our industry in providing exceptional PROPERTY. ENTRIES CLOSES 17th FEBRUARY 2014 ENTRY FEE R7 500.00 (excl VAT) QUERIES Jane Padayachee marketingmanager@sapoa.org.za or 011 883 0679 ONLINE REGISTRATION www.sapoaconvention.co.za - Awards

w w w. s a p o a c o n ve n t i o n . c o. z a

sapoa national councillors

Councillors

in conversation of the achievements over the years, since the days Brian Kirchman was the CEO up to now, with Neil Gopal leading the organisation – in my view, with distinction.

What have been your greatest achievements at SAPOA so far?

Who is Gerhard Kirchner? After school I qualified at the University of Stellenbosch with a BSc Eng (Civil) in 1977 and an MSc Eng (Water Resources) in 1982. I worked in the engineering field for about 10 years, then joined Sanlam Properties as national technical adviser in 1989. I progressed in the company in various roles, from portfolio manager to regional manager and then asset manager. I served on the board of Resilient for a few years until I was appointed asset manager for Vukile. After 20 years at Sanlam Properties, I joined Old Mutual Property in 2009 as property management executive, managing the Old Mutual portfolio and SA Corporate listed fund. Since the early days, I was quite involved in SAPOA structures, firstly on the SAPOA Method of Measurement Committee in 1993, then the Western Cape Regional Committee since 1997/8 and the Property Owners Committee during 2000/1. Recently I joined the Property Managers and Facility Managers Committee. 20

When did you join SAPOA, and what are your thoughts on the organisation? SAPOA for me has always been a home for industry players. It creates a venue for debate, discussion, information sharing and friendships. The organisation has grown in stature and can be very proud

SOUTH AFRICAN PROPERTY REVIEW

The culmination of the revised SAPOA method of measuring way back in the 1990s and the proactive work by the Western Cape Regional Committee on CIDs for Cape Town and Claremont, among others.

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

The rapidly changing environment, globalisation and connectivity are posing challenges we have not experienced yet. Hence, agility, a proactive anticipation of future trends and willingness to embrace the opportunities with associated risks will determine the winners and losers. SAPOA can be the glue of the industry where we can share ideas and build a new world.

What are your future plans with SAPOA? What would you like to achieve alongside – or for – the organisation going forward? I want to continue this exciting journey with our colleagues and business partners, and craft a better tomorrow for our successors and generations to follow.

Who is David Green? I am a director at ProAfrica Property Services (Pty) Ltd, which assists international corporates with all aspects of real estate in South Africa and much of Africa. Projects have included the largest industrial sale and lease back disposal in sub-Saharan Africa, and relocation of head offices in South Africa, Kenya, Ghana, Nigeria, Mauritius and Angola. Land acquisition and development oversight are also a specialisation throughout Africa.

sapoa national councillors

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

When did you join SAPOA and what are your thoughts on the organisation?

Who is Edwin van Niekerk? I am a proud father of our first child, Evan. I am married to my beautiful wife, Sarah, and I recently celebrated the big 40! Two Jack Russells, Lulu and Mandla, complete our family. I’m the general manager at Maxprop, a company established in 1958 with the slogan “The Complete Property Solution”. As it suggests, we cover all aspects of property with a focus on property management, commercial and industrial sales, and leases. I am privileged to be the KZN regional chair.

When did you join SAPOA and what are your thoughts on the organisation? I have been a member of SAPOA since 1982 and am currently the chairman of the SAPOA Convention Committee, a position I have held for three years.

What have been your greatest achievements so far with SAPOA? SAPOA is an important institution in South African real estate and adds

Maxprop has been a member for many years;d I joined the company and became a member in 2009. SAPOA is the unequivocal voice of commercial property and is highly regarded in all spheres of engagement. SAPOA’s role has become more important in recent years as an oversight for its members in dealing with government. There is a plethora of new legislation being tabled and the ramifications and impact on the property industry need to be monitored. SAPOA is in the unique position to guide government, particularly at municipal level, on policy and legislation. This is the true value it offers its members.

What have been your greatest achievements at SAPOA so far? I’ve only recently been appointed chair but I have established strong relationships with the municipality through the deputy city manager,

huge value to our industry. Over the last 45 years, SAPOA has played a vital role in the property arena, supporting members with regard to many of the legal and practical issues facing the industry.

What are your future plans with SAPOA? What would you like to achieve alongside – or for – the organisation going forward? Looking ahead to the SAPOA 2014 Cape Town convention,

Dr Naledi Moyo. We have set up a four-a-side team where we will engage in bimonthly meetings to raise issues affecting the KZN membership. I have also established a relationship with the Durban Chamber of Commerce’s Andrew Laymen, and will meet with him on a regular basis to tackle issues that affect our membership – bearing in mind that a lot of our membership is shared.

As part of your portfolio at SAPOA, what are the current industry challenges and how can these be solved? How can SAPOA assist with these issues? One of the greatest challenges facing South Africa is unemployment. One way to address it is through investment and creation of not only incomeproducing but job-producing developments in the form of factories, call centres, offices. SAPOA needs to engage with government and provide an environment that attracts the right kind and level of development.

which is themed “Making a Difference”, we look forward to delivering a first-class event with excellent take-home value to be enjoyed by all SAPOA members. Having already developed a relationship with the City of Cape Town and the Honourable Mayor Patricia de Lille, SAPOA is keen on hosting the Convention in the Mother City. With planning already in full swing, the 2014 Convention is set to be an even greater success, with a stellar line-up of speakers and in-depth panel discussions.

Durban has an opportunity to become one of the powerhouses of Africa. With one of the busiest ports in Africa, beneficiation needs to be established in KZN. It no longer makes sense to transport goods from the port to far-away provinces to assemble and then transport them back for export. The cost of transport is becoming prohibitive, and this is driving development closer to port. Government is in danger of killing the proverbial “golden goose” with its excessive taxation on property through massive increases in rates. Not only have rates increased through the method of rating on market value but also through the rates increasing every year. SAPOA needs to engage with government and address this issue as it’s inhibiting the investment and development we desperately need.

What are your future plans with SAPOA? What would you like to achieve alongside – or for – the organisation going forward? I believe that property relationships are paramount. I intend to establish meaningful relationships with all stakeholders to attain our common goals. I believe that SAPOA’s approach must be collaborative and not in any way adversarial if we are going to achieve our common goals – a prosperous peaceful nation with work, food, health and education for all. How these goals are achieved is where an opportunity exists for SAPOA to make a meaningful difference in the future of South Africa. I’m passionate about Africa and South Africa, and through SAPOA I look forward to contributing to the future of both.

SOUTH AFRICAN PROPERTY REVIEW

feature

Bricks, mortar and charity While the sector works at what it does best, the property industry is simultaneously actively engaging in noteworthy CSI initiatives By Candace King

Synergy Income Fund

orporate Social Investment (CSI) has become a necessity in South Africa. Social responsibility is no longer an additional bonus of corporates but rather a core element of a company’s overall strategic plan. “I believe much of a country’s success lies in the involvement of corporates in their communities,” says Ronnie Khoza, Aurecon South Africa’s head of offices, and former CEO of the Construction Industry Development Board (CIDB), in an interview on its website. “Because of the economic power big businesses hold, they are in a position to make a real difference when it comes to the many challenges our country faces. “As corporates and as individuals, we vastly underestimate the power we have to transform our communities. I think now, especially, as South Africa attempts to distinguish itself as a developing country, strategic CSI initiatives are becoming crucial in the corporate environment. It begins and ends with us.” Khoza further notes in the interview that CSI is not solely the responsibility of the government and that it should be made a key part of business strategy and be in alignment with company values. No matter how big or small the project in question, CSI initiatives in the property industry are much appreciated by the greater community and are truly making a difference. Key players in the sector have made astounding contributions, ranging from social and economic initiatives to education and the construction of important facilities for underprivileged communities.

SOUTH AFRICAN PROPERTY REVIEW

Synergy Income Fund’s social responsibility initiatives are based on the belief that working with (and uplifting) surrounding communities is fundamental to the effective sustainability of its shopping centres. Synergy is passionate about education and the improvement of the lives of South African youth. Synergy’s Lap Desk project donated 720 lap desks to Vhutuwangadzebu School, located in close proximity to Nzhelele Shopping Centre in Makhado, Limpopo. Lap desks are a practical solution to the dire situation in many schools in South Africa that sees a lack of formal classrooms and desks. The desks are light and durable, and rest on the child’s lap, providing a surface to write on, whether they are sitting on a chair or on the floor. The desks are portable, so children are able to take them home to ensure they have a surface on which to do their homework. Synergy’s Academic Prize Sponsorship has been extended to 28 schools identified in the communities where its centres are situated. The prize consists of a floating merit board, a contribution to the student’s school fees and a voucher for the Synergy shopping centre in the student’s community. The Academic Prize is awarded annually to the top performing student in each of the schools identified. Synergy aims to support young, talented students through internships and scholarships

in partnership with Go for Gold and the University of Cape Town (UCT). The Go for Gold programme is a public-private partnership between a number of corporate concerns, representative of the construction sector and the Western Cape education department. Go for Gold aims to develop disadvantaged young people through education, training and mentoring. Synergy provides matric graduates from the Go for Gold programme with a one-year internship, during which they gain work experience and exposure to the property industry. Synergy has developed a relationship with UCT and has established the Synergy Income Fund Bursary Programme, which offers a bursary for the university’s BSc Honours degree in Property Studies. The Bursary is offered to deserving previously disadvantaged students with consistently above-average academic performance. There’s also Synergy’s Graduate Internship, a six-month programme that provides graduates with exposure to different areas of the property industry, including property management, asset management, leasing, developments and investments. The graduates are based at Synergy’s head office in Claremont, Cape Town and at Synergy’s retail centres. This internship is offered to graduates of UCT’s property studies (honours and masters), quantity surveying and construction management (honours) programmes, as well as business science graduates.

feature Synergy also supports South African sailing through the sponsorship of Asenathi Jim. Asenathi’s unique story demonstrates that, regardless of an individual’s background, the greatest of challenges can be faced and overcome through a strong work ethic and self-belief. Synergy’s intention is to support Asenathi’s aspiration of winning a medal at the 2016 Olympics in Rio de Janeiro, and for Asenathi to be an example to communities and to inspire them to realise their goals.

FedGroup

Broll Broll has a big heart when it comes to the upliftment of others. Since 2008, the company has supported two young girls in Cape Town, providing them with transport, food allowance, school fees, school uniforms and stationery. Every year Broll also supports the Hospice Association in both Cape Town and Johannesburg by purchasing globes for the Tree of Light, a fundraiser held over the Christmas season. Broll has also engaged with See and Be Seen, a non-profit organisation committed to raising awareness about pedestrian safety, and preventing road accidents by promoting the use of safety reflectors. Broll purchased 2 000 Broll-branded reflectors, of which 1 000 will be distributed to its staff and the other 1 000 will be donated to an underprivileged school in the Cape.

Following the success of Brinny Mphogo, the first graduate of FedGroup’s Beneficiary Care Education Trust Programme, FedGroup has launched Iteke, an adjacent learnership programme. Iteke, which means “to challenge yourself” in Sepedi, will challenge beneficiaries to shape a future for themselves – and, by doing so, build role models out of them. The programme is open to all beneficiaries who have just completed their matric, or who

Brinny Mphogo, the first graduate of FedGroup’s Beneficiary Care Education Trust Programme

completed their matric in 2012. Over the course of 2014, the selected beneficiaries will rotate through FedGroup’s various departments, gaining important skills and hands-on experience. Beneficiaries will be remunerated and taught how to save and invest their money. According to Mphogo, who will head up the programme as a mentor, Iteke is not for beneficiaries looking to entertain a gap year, but for candidates who are looking to build a strong foundation for future success. “Through Iteke, we are aiming to give our beneficiaries access to the tools they require for optimal development,” he says. “We are presenting them with an opportunity to unlock their full potential. At the end of the programme, whether our beneficiaries are interested in pursuing a career in financial services or not, they will graduate from Iteke with a sense of independence as well as a greater understanding of interpersonal and corporate communication. “At FedGroup, we firmly believe that education is the key to a successful future.

We are a family that sees a future where others see underprivileged individuals. In 2005, FedGroup invested in me, in my education and in my future. I would like to extend this investment to beneficiaries who may find themselves in a similar a position to the one I was in.” Mphogo’s aim is to have the beneficiaries walk away as role models to their communities. He hopes to make them realise that opportunity is not finite. FedGroup is simultaneously involved in the SOS Back-to-School initiative. In 2013, FedGroup partnered with the SOS Ennerdale Village to celebrate the back-to-school period. With the help of its staff and suppliers, FedGroup was able to give 94 children new stationery packs filled with everything they’d need to tackle the school year. The children who received these packs range from pre-primary to high-school learners. While most of the children live at Ennerdale Village, there are a few from childheaded households who form part of SOS’s community outreach programme. SOUTH AFRICAN PROPERTY REVIEW

feature Excellerate Property Services and JHI Properties

Property Point’s Chris Ndongeni and Kenneth Khumalo of Twin Cities Cleaning

Growthpoint and Property Point Growthpoint believes in investing in the future of young leaders, and does so via educational bursaries for tertiary-school students who are pursuing property-related qualifications. Growsmart is Growthpoint’s flagship programme, which focuses on developing and improving literacy levels in schools. Through a partnership with 200 primary schools in the Western Cape, local communities and the Western Cape education department, the programme has been able to engage learners in developing their literacy skills. This is made possible through competitions among the participating schools. The winning schools are awarded R250 000 towards much-needed refreshment and refurbishment of facilities and equipment. Individual learners from the winning schools receive R20 000 towards their education, as well as bursaries. On the development side, Growthpoint has invested funds in the development of community centres in Gauteng, KwaZuluNatal and the Western Cape. These community centres are used for a variety of purposes, including youth development programmes, as shelters for orphaned and vulnerable children, and for community-support services. Rental subsidies are offered to nongovernmental organisations in support of the programmes they offer to communities. Moreover, Growthpoint realises that by contributing to the support costs of the organisations, it creates opportunities for them to focus on delivering impactful programmes to local communities. Some of the organisations supported include Opera Africa, Education Africa, Field Band Foundation and Stop Hunger Now. Helping and Loving Others, also known as HALO at Growthpoint, is the staff community

SOUTH AFRICAN PROPERTY REVIEW

involvement initiative. Growthpoint staff often identity organisations, programmes and projects within their communities that are in serious need of help with both financial and human resources. Staff get involved in projects by giving time and funding towards the needs identified. Property Point is Growthpoint Properties’ enterprise development programme, which unlocks opportunities for SMEs operating in South Africa’s property sector. Established in 2008, the programme provides entrepreneurs with the skills, training and personaldevelopment support they need to develop their enterprises into fully independent companies. Over a period of two years, Property Point partners with them to grow their SMEs into sustainable businesses that will further community upliftment through job creation. Since being established just over five years ago, Property Point has created more than 790 direct jobs and unlocked market opportunities to the collective value of more than R130-million, both within Growthpoint and the industry.

Excellerate Property Services (EPS) supports a broad range of programmes that assist the communities in which it operates. In addition, the company helps to foster entrepreneurs who wish to enter the industry. Such programmes provide training and education, creating sustainability for the community. In addition to various CSI projects undertaken by the group on an ongoing basis, other initiatives include a practical threemonth training-and-mentorship programme which was conducted for employees in the Gauteng Department of Infrastructure Development. For three consecutive days of a week, four staff members from this department were seconded to JHI Properties for practical on-site training and mentorship as well as theoretical learning at the company’s head office in Sandton, Johannesburg. “Underlining the potential for successful private/public partnerships, this programme enabled JHI to provide the Gauteng Department of Infrastructure Development staff with specialised knowledge and access to valuable experience and expertise across a broad spectrum,” says EPS CEO explains Marna van der Walt. “This incorporated property management; retail management and consulting; drafting of leases; facilities management (including supply-chain procurement); public sector, development and project management; market research; analysis and strategic planning; and tenant and corporate representation, among others. “In addition to being exposed to the business on a daily basis, the interns attended workshops at JHI, where they gained theoretical knowledge on various aspects of property management, and were assisted with coaching, self-development and research in order to gain maximum personal benefit from a practical and theoretical perspective.”

feature In December 2012, the Starfish Greathearts Foundation, an NGO which helps children in South Africa who are orphaned or vulnerable as a result of HIV/Aids, received assistance from Sandton-based JHI Properties. The company’s sales and leasing brokers and staff led a campaign to support the charity, whereby JHI donated R5 000 in cash while the JHI staff packed Santa shoe boxes with toys, stationery and other useful items for the children in Soweto.

went to the safe house to host a braai for about 20 children. JHI has also erected a large Wendy house school at the safe house. In the Bucks for Bread campaign at the JC Daycare Centre, JHI Properties provides two schools in the Tygerberg area with sandwiches. In total, 144 children receive a peanut-butterand jam sandwich every Friday (excluding school holidays). This involves, on average, 18 loaves of white bread weekly (in addition to the peanut butter and jam). Interpark, a member of the EPS group, is a proud donor to a charity called Lily of the Valley. This is a children’s village that cares for children and the community in which they live. Lily of the Valley provides accommodation, food, clothing, relief and other amenities to the ill and frail children (and other people in the community) through a multidisciplinary range of support to promote the physical, mental and spiritual welfare of the whole community. Interpark selected Lily of the Valley because the charity is in desperate need of clothing; by donating uniforms, Interpark aims to make a difference. The items are collected from all the regions, the logos are removed and the items are donated. In October 2013, Interpark donated 1 365 items (30 boxes); another batch will be donated before the end of the year.

Acucap Marna van der Walt, CEO of EPS

Starfish currently supports around 25 000 children through 50 community-based organisations. The charity has permanent staff working with local communities to better manage child protection, health and education support programmes for the children. Among other projects, Starfish supports the Ikageng community-based care programme in Soweto. JHI Properties also partners with MEC Ministries, an inter-denominational ministry that focuses on the upliftment of underprivileged communities in the Western Cape. The company is involved in two specific initiatives of MEC Ministries: the Ray of Sunshine House and JC Daycare Centre. JHI’s involvement in the Ray of Sunshine House is via raising donations, partnering with its network of contractors within the EPS group and providing time and expertise. Specific assistance provided includes the collection of donations by JHI staff (including plastic-ware, ironing boards, nappies, clothes, cleaning materials, washing powder, cash and foodstuffs). In addition, in July 2012 the JHI social committee and some staff members

Several CSI campaigns and projects are running over the festive season at various malls and centres in Acucap’s retail portfolio. At Bayside Mall in Cape Town, non-profit organisation SALT will be doing a charity drive, selling baubles to shoppers for R20.

Once a shopper has purchased a bauble, they can write their name on the board and hang it on SALT’s Christmas tree. SALT tackles social-justice issues in the Tableview community, so all the proceeds from the charity drive will be going towards assisting one of the projects SALT is currently running. The Paarl Mall Tree of Joy initiative involves registered charity organisations that supply the Christmas wishes of children under their care to the mall. These “gift wishes” as well as the details of each child are placed on small Christmas cards that are then hung on the Christmas tree situated in the Food Court of the mall. The public choose a card, buy the gift, wrap it and place it in the collection box situated at the tree. The gifts are collected by the charity organisations two days before Christmas to deliver to the children in time for Christmas. About 1 500 children benefit from the Tree of Joy.

Liberty Properties Liberty Properties and Aveng Grinaker LTA sponsored two edutainers to St Martin’s pre-school in November 2011. As part of sustaining the relationship with the school over an extended period, Liberty Properties and Aveng Grinaker LTA created the Bright Buttons project. Through this initiative, the school selected 10 deserving learners from the surrounding communities, based on their potential educational performance as well as their disadvantaged background. These 10 learners receive fully paid bursaries to attend St Martin’s Pre-school for one year. The total value of the edutainer was R406 000, with the cost of the bursary being R48 000 annually.

The Property Foundation The Property Foundation (TPF), alongside its members and supporters in the property sector, works with community-based non-profit organisations and social enterprises to provide effective property solutions that help build the social and economic fabric of communities. In addition to assisting with projects that help entrepreneurs develop sustainable businesses, TPF provides South African property companies with a socialinvestment pipeline. Through unlocking and developing land for community use, TPF is making a positive contribution to our society, and contributes towards CSI projects by acting as an organising entity that brings together ITS members and community development organisations. One such project is the Mfuleni Community Park. In order to expand services to the Mfuleni community, an early childhood development centre, multipurpose hall, media library, sporting facilities and extended office space were constructed (and completed) in 2012. TPF is currently involved in the Thembalitsha Foundation School of Hope, which offers hope through education for youth at risk. TPF is assisting the School of Hope in its search for suitable premises in the Athlone area of Cape Town. The assistance includes negotiations with government, connecting professionals providing services pro bono, and project management of any future property developments.

SOUTH AFRICAN PROPERTY REVIEW

feature Liberty Properties, in collaboration with the Department of Education, provided infrastructural support to Ibhongo Secondary School in Soweto. Liberty Properties identified Ibhongo Secondary School as a school with facilities that were in desperate need of refurbishment. Materials salvaged from various existing redevelopment sites were repurposed for utilisation in Ibhongo Secondary. The project also included the installation of carpets and doors from the refurbishment of the 11th floor of the Liberty Libridge Building. The value of the contribution was R250 000. Liberty Properties believes that green efficiencies are an essential ingredient to business longevity. This philosophy was emphasised at its exhibition stand at the 45th annual South African Property Owners Association (SAPOA) Convention. Eighty-four second-year creative-development students from Vega participated in the project, which tasked them to create an organic, functional object, manufactured mainly from recycled materials, to be incorporated into Liberty Properties’ exhibition stand at the convention. The Vega winners were presented with prizes totalling R16 000, and their work was displayed at the Liberty Properties stand at the convention. As part of the African Property Investment Summit, SACSC Convention and Green Building Convention, Liberty Properties had a living wall as a section of the exhibition stand. The vegetables were purchased from Food and Trees for Africa, and the seedlings were donated to three schools after the conferences. Two of the schools are in Johannesburg, while the third one is in Cape Town. The value of the vegetable garden was almost R9 500. To commemorate Arbour Month in September, Liberty Properties and Aveng Grinaker-LTA also teamed up in a treeplanting venture. People often don’t stop to think about the importance of trees in our environment. Apart from their visual appeal, trees have some very practical benefits: they provide shade and clean air, they define recreational areas, and they generally remain in place for many generations. The value of this initiative was R33 000. The beneficiaries of this project included six schools: l Elandspark Special Needs School, Gauteng l Cavendish Primary, Gauteng l EW Hobbs Primary, Gauteng l Beacon View Primary, Gauteng l Seyisi Primary School, Cape Town l Ekukhanyeni Special Needs School, Pietermaritzburg.

SOUTH AFRICAN PROPERTY REVIEW

Liberating through CSI We speak to Liberty Properties’ managing director Maurice Mdlolo about the company’s CSI involvement Furthermore, we have found that through conducting joint CSI activities with our partners we extend our reach and build good relationships in the communities in which we do business.

Q What is the importance of property companies getting involved in CSI projects? Corporate South Africa has a responsibility to play an active role in tackling the various issues that our country faces. If coupled with a sound strategy, it can become an impressive movement that invites society at large to do even more. Liberty Properties is committed to making a sustainable contribution to the development and economic growth of the country. Our CSI projects provide us with the opportunity to contribute to the real needs of the communities in which we are involved.

Q How has Liberty Properties

Q How is Liberty Properties involved in CSI projects and charitable efforts? Liberty Properties actively supports initiatives that are aligned to the wider Liberty CSI strategy. Liberty Properties has a robust corporate social initiative programme, which has been giving for many years to various communities. The core focus underpinning all our CSI programmes is education. Our commitment to education aims to make a sustainable difference by addressing the needs of a community in a way that will benefit them over the long term. Employee involvement is a vital component of the CSI programme. We constantly strive to engage our employees, and to encourage them to get involved in our volunteering programme. Where possible, we get staff to identify educational initiatives in which they can get involved directly. Liberty Properties also supports initiatives that showcase our commitment towards greening, up-cycling and recycling.

Q Why is Liberty Properties involved in CSI projects? The CSI initiatives allow us to demonstrate our commitment to conducting business responsibly. These initiatives change realities in one way or another; this has always been the cornerstone of why Liberty does business.

benefited from giving back to society? While there are many elements in our various initiatives, the main benefits of giving back are: l It assists in improving relationships, and creating a stable economic and social environment for the communities that we are involved with. l It creates opportunities to build relationships with business partners. l It assists in improving our employee satisfaction through staff involvement in various CSI programmes. l It assists in increasing customer goodwill and loyalty.

Q What are Liberty Properties’ future CSI plans? Liberty Properties’ future plans in terms of CSI projects in the property industry are: l To continue to support Liberty’s CSI strategy, which focuses on education within the maths, science and financial literacy space. l To assist with minor renovations of school facilities in poorly developed areas. l To support initiatives that will showcase our commitment towards greening, up- cycling and recycling. l To support our employees with staff volunteering programmes. l To increase our CSI targets and contributions year on year.

statistics

CSI in South Africa Source: The CSI Handbook 2013 (Trialogue, 16th edition)

rialogue, a consulting and publishing company that specialises in the areas of business sustainability and corporate social investment (CSI), recently launched the 16th edition of The CSI Handbook 2013, a sought-after publication eagerly awaited by CSI practitioners and non-profit organisations (NPOs) every year. The CSI Handbook gives a detailed overview of the current state of CSI in South Africa. In addition to the extensive research results, the handbook includes feature articles and viewpoints from experts and thought leaders in the field. Case studies of leading CSI programmes and practice make this an invaluable resource for all corporate and NPO development practitioners. Trialogue conducted its annual corporate and NPO research between June and August 2013. NPOs responded directly to a shorter online survey. This year, 103 companies completed the corporate questionnaire and 208 organisations answered the NPO survey. According to the research conducted, South African companies spent nearly R8-billion in cash, goods and services on CSI in 2012/2013. The most noteworthy development sectors for investment were education, social and community development, and health. Fifty-five percent of companies increased their CSI expenditure in 2013; another 20% kept their budgets the same. Education received the largest portion of CSI expenditure, with 89% of respondents supporting the sector and giving an average of 43% of their

Distribution of CSI expenditure by industry sector

Final accountability for CSI function

CSI expenditure to educational causes. While more than a third of companies run programmes in the food security and agriculture, entrepreneur and small business support, and environment sectors,

Corporate distribution of CSI funding by development sector

only five or six percent of CSI budgets, on average, is dedicated to these initiatives. Projects in Gauteng were supported by the largest number (65%) of corporate respondents in 2013, and garnered the second-largest share of funding (26%) behind projects run at a national level (which were supported by half of companies and received an average of 31% of CSI funding). Although more than half of companies support projects in the Western Cape (52%) and KwaZulu-Natal (54%), the provinces draw an average of just 10% and nine percent of CSI expenditure respectively. South African corporates were the top source of income for NPOs (representing an average of 23% of funding), followed by private individuals (15%) and then government (15%). Nearly 90% of all corporate respondents fund NPOs, and more than half of CSI spend is channelled to them. Despite challenges and common perceptions, the percentage of NPOs whose total income increased during the year grew to 46% in 2013, up from 33% in 2012. And 48% of NPOs reported an increased headcount in 2013. SOUTH AFRICAN PROPERTY REVIEW

feature

A focused Hyprop CSI foundation is set up to encourage employee participation in charitable events Hyprop gives us an insight into their CSI operation Tell us about your company’s CSI initiatives. Hyprop’s CSI initiatives are facilitated through the Hyprop Foundation. The foundation was established in 2013 and provides a centralised vehicle for Hyprop’s social investment projects, ensuring that they are not isolated activities but a part of the broader socially responsible performance of the group. Funding for the foundation is generated through employees accumulating “care shares” by participating in defined charitable events, with Hyprop then donating a set sum per care share to the foundation. This ensures that all employees are encouraged to participate in the group’s CSI initiatives and have the opportunity to give back to society.

Nikki Catrakilis-Wagner, investor-relations executive at Hyprop Investments Limited

“Our aim is not for the company to derive benefits from these initiatives but rather the communities in which we operate. More importantly, the aim is to cultivate a culture of giving, involvement and caring among our employees and stakeholders”

SOUTH AFRICAN PROPERTY REVIEW

Care shares are split into the following areas depending on the type of activity or donation: l Hour shares l Health shares l Needs shares l Skills shares l Donation shares The foundation is focused on the previously disadvantaged communities that surround Hyprop’s shopping centres. It aims to contribute to the future sustainability of individuals and families, primarily through key skills training. This dovetails with the foundation’s long-term vision of igniting a culture of learning and skills in South Africa, and particularly Hyprop’s communities. This includes developing skills within Hyprop’s core competency areas of property management, property maintenance and retail development. During 2013, staff participated in the following events, earning “care shares” for the foundation: l JP Morgan Corporate Challenge – 200 health shares; l Soup drive – 13 670 donation shares; l 702 Walk the Talk – 255 health shares. More recently, and as part of Hyprop’s festive season celebrations, we partnered with Stop Hunger Now Southern Africa and packed 48 200 meals, which will provide 100 children with three meals a day for a year. Stop Hunger Now is a volunteer-based mealpackaging and results-orientated nutrition programme. The event was also captured by photographers from “I was shot in Joburg” – and organisation that provides a platform for young people to hone their photographic skills. Children who would not ordinarily be given this exposure are taught by professional photographers to look, compose and capture what they see in a manner that is professional and aesthetically pleasing.

In addition, Hyprop has partnered with Mould Empower Serve (“MES”) – a registered non-profit organisation that has been serving the homeless and destitute community in the city of Johannesburg for more than 25 years. At present MES has branches in Johannesburg (Hillbrow), Kempton Park, Cape Town and Port Elizabeth. Its vision is to change the heart of our cities by empowering people holistically to live independent, sustainable and meaningful lives. MES started as a feeding programme in 1986, handing out food parcels to the homeless and unemployed community of Hillbrow. In 1989, the project achieved Section 21 status with a board of directors. Why these specific initiatives? The partnership with MES effectively facilitates our aim of contributing to the sustainability of the communities in which we operate, particularly since shopping centres play a central role in local communities. The projects are also strongly aligned with our values of respect and integrity. But our CSI efforts are not restricted to initiatives driven by Hyprop’s head office. Individual centres are involved in an array of programmes to assist local charities and initiatives. These events also contribute to corporate team building and provide our staff with an opportunity to make a difference while having fun. How do these projects/initiatives benefit your company? Our aim is not for the company to derive benefits from these initiatives but rather the communities in which we operate. More importantly, the aim is to cultivate a culture of giving, involvement and caring among our employees and stakeholders. Are you looking to expand your current projects? If yes, how and in what areas? Hyprop endeavours to increase the frequency with which employees can participate in initiatives and will consider projects in line with the MES programme.

+27 (0)11 447 0090 Nikki@hyprop.co.za www.hyprop.co.za

ceo press lunch

Dr Clarence Tshitereke, head of Old Mutual Foundation, takes us through his involvement with OM’s CSI

A1 - 170mm

A2 - 120mm

A3 - 87mm

Clarence Tshitereke grew up in Limpopo and joined Old Mutual in January 2012 as head of the Old Mutual Foundation, with responsibility for corporate social investment and overseeing overall investments in communities. He completed his DPhil (cum laude) at Queen’s University, Canada in 2004 and his MPhil at Stellenbosch University after obtaining an undergraduate degree in political studies at UCT, majoring in international relations and development studies. Tshitereke is passionate about education at all levels as well as community development investments for the common good. He believes that commercial success, and respect for people and communities, their ethical values and the natural environment are business imperatives in equal measure. It’s this key alignment with the values of Old Mutual that provides the impetus for his work at the foundation. “I draw inspiration from the resilience of ordinary people in their everyday challenges,” he says. The Old Mutual Foundation fulfils its responsibility to socioeconomic transformation by investing in marginalised communities in rural and peri-urban areas throughout South Africa. The focus areas of investment are education (maths and science), skills-capacity development, enterprise development and staff volunteering. “I’m proud to be part of a corporate that encourages a culture of caring, and has more than 35% of its staff engaged ld Mutual GENERIC LOGO prINt with community projects in one form or another,” says Tshitereke. Old Mutual acknowledges the national education and skills deficit, and in 2013 an education project with an investment of R350-million was launched to improve the performance of South Africa’s schools. “We have a moral responsibility as a good corporate citizen to invest in the upliftment of the communities in which we operate,” says Tshitereke.

+27 (0)11 217 1700 ctshitereke@oldmutual.com www.oldmutual.co.za/foundation

Estienne de Klerk, SAPOA’s president, addresses members of the press and board members at an intimate lunch

Pressing issues over lunch By Candace King Photographs by Michael Glenister

n an effort to strengthen its relationship with the South African property media, SAPOA held a press lunch on 19 November 2013 at the Da Vinci Hotel in Sandton, which was hosted by SAPOA CEO Neil Gopal and attended by SAPOA president Estienne de Klerk as well as SAPOA board members. The small, intimate lunch served the purpose of opening the channel of dialogue between SAPOA and the media in order for the press to become more acquainted with the organisation, its key players and its lobbying efforts. De Klerk presented SAPOA’s operational elements, achievements and future goals to the press. The highlight of the lunch was an in-depth discussion on increased municipal rates, which SAPOA is fervently passionate about. SAPOA is questioning the legality of the increased municipal rates charged to its members, who have seen rates increase by 23% for the year (on average). Over the past five years, members have complained about total rates increases of between 43% and 500% for the period. “Not only is this unsustainable, but property owners pass

these increases on to tenants, which has a material impact on the health of businesses in the economy,” says De Klerk. “Further, property owners are providing various ‘undelivered’ municipal services for themselves and their tenants via City Improvement Districts, at extra expense to the sector. The ongoing rates increases for commercial property simply make no sense.” SAPOA plans to consult municipalities on their basis of levying rates, and aims to gain insight into each municipality’s commercial property valuation basis, rates ratio level and budget approval process, and to confirm that rates are being reset annually. Furthermore, SAPOA is willing to assist municipalities with correcting inconsistencies. “SAPOA is committed to ensuring that rates are being levied from a correct base, and not being overcharged. We believe this is essential to further an enabling environment for business and the commercial property sector in South Africa, and to help ensure the sustainability of our economy,” says De Klerk.

LEFT: SAPOA CEO Neil Gopal MIDDLE: Managing Director Capstone Property Group Brian Azizollahoff RIGHT: Tongaat Hulett Developments CEO Michael Deighton SOUTH AFRICAN PROPERTY REVIEW

on show

Abland

SOUTH AFRICAN PROPERTY REVIEW

Property Developers www.abland.co.za 011 510 9999

on show on show

Defying space and design By Nicky Manson

11 Alice Lane is an impressive new addition to the Sandton skyline

he new Alice Lane development is situated on the corner of Fifth Street and Alice Lane in the heart of Sandton, a prime location with access to freeway routes, the Gautrain station and worldclass amenities. An Abland, Standard Bank Properties and Pivotal Property Fund joint development, Alice Lane offers prestigious Triple A-grade office space with top quality features and finishes. The property has also been awarded a 4-Star

Green Star SA rating, thanks to having a green mind-set from the very beginning. Solid Green owner and consultant Dashiell Colville explains that Abland, in conjunction with the future tenants of the building, started with the Green Star SA certification early on in the design process, thus making it simpler. â&#x20AC;&#x2030;â&#x20AC;&#x153;Abland is very proud of having achieved this Green Star SA Office V1 rating for phase one, and has committed to constructing the second SOUTH AFRICAN PROPERTY REVIEW SOUTH AFRICAN PROPERTY REVIEW

31 31

on show and third buildings as Green Star SA buildings to create the first Green Star-rated precinct in the area,” says Abland development manager Janet Glendinning. Number 11 Alice Lane is made up of more than 70 000m² of rental space, including retail and office offerings. The property is being developed in three phases. The first 18 000m² building on Fredman Drive was completed in 2013. Phase one’s tenants include Marsh, Bloomberg, Standard Bank and Virgin Active’s new flagship gym. Associated Alterations are behind the new look of Standard Bank, and responsible for all of its new fittings and stylish furniture, creating a unique and contemporary space for the branch. The Virgin Active Classic gym is also housed here and is a modern masterpiece, thanks to De Haan Skrynwerkers, who were responsible for a variety of features (including the wall panelling and granite counters). The second building, situated on the Alice Lane side of the property, will be 16 000m² and will be ready for occupation in September 2014. It will accommodate Sanlam and Santam. Phase three will be on the prime Alice Lane and Fifth Street corner.

Virgin Active’s new flagship gym

L & S Consulting are proud to be involved with the Alice Lane Precinct Project

Green features l Easy access to amenities means less transport emissions. l Construction and demolition waste is recycled and reused. l The building is constructed on a brownfield site. l Location provides good access to public transport. l Energy-efficient lighting and air-conditioning systems are in place. l Paints, adhesives, carpets are low in volatile organic compounds. l Portable water for irrigation is minimised. l Power Factor Correcting equipment is present. l Protective glazing is fitted on east- and west-facing windows. l Roof insulation is in place. l Solar heating is utilised where possible. l Motion sensors have been fitted.

SOUTH AFRICAN PROPERTY REVIEW

on show

Standard Bank has undergone an extensive revamp, giving the impression of openness and lending a welcoming feel to its customer-relations areas

Associated Alterations is the only BWO Level 1 AAA+ BEE company presently carrying out revamps and new installations at Standard Bank. Rachel Arends started a glass-and-aluminium shopfront manufacturing company 18 years ago after buying out the company she worked for. To this day, she successfully manufactures glass doors, shop fronts and stack doors, and has her own factory in Booysens. Laurel Young started her own company 26 years ago, carrying out a variety of renovations and new installations specifically for banks. The two met 20 years ago and decided to go into business together. They started Associated Alterations but kept their individual companies, soon realising that, between the three businesses, they were actually running a full turnkey facility. Associated Alterations offers all the banks a TK Principal contracting function, where it runs and oversees the entire project from start to finish. The company has 72 employees, with several new female employees currently in training. Every year, Associated Alterations also holds a drive to satisfy its corporate social responsibility through community upliftment and charity work. The partners have managed to form a very successful female-owned enterprise, and are honoured to have been selected by Standard Bank to carry out the new installation at Sandtonâ&#x20AC;&#x2122;s Alice Lane. This will be one of Standard Bankâ&#x20AC;&#x2122;s flagship branches, and it is going to receive a lot of attention. Associated Alterations: PO Box 39545, Booysens 2016 e: laurel@assalt.co.za t: +27 (0)11 943 2900

Expansive walkways, public seating areas, and trees and other plants bring tranquillity to the Alice Lane project SOUTH AFRICAN PROPERTY REVIEW

on show Meet the team

Open spaces and comfortable modern furniture allow tenants to be able to enjoy the great outdoors in the middle of the Sandton CBD

But this is so much more than just an office precinct, with a striking central piazza between the three phases, and a pedestrianfriendly and naturally greened environment – a first for Sandton office offerings. On the piazza you will find restaurants, coffee shops, and various convenience retailers.

Paragon Architects are the creative minds behind these unique looking buildings, which have added a slightly futuristic dimension to the more conventional vistas of Sandton. The first-phase design with a central open atrium allows maximum natural

l Developer Abland, www.abland.co.za l O wner Standard Bank Properties, Pivotal, Abland, www.standardbank.co.za, www.pivotalfund.co.za www.abland.co.za l C ivil & structural engineers L&S Consulting, +27 ())11 463 4020 Tinus@lsgauteng.co.za, www.lsgauteng.co.za l C ontractor WBHO +27 (0)11 321 7200, wbho@wbho.co.za, www.wbho.co.za l F urnishings De Haan Skrynwerkers, +27 (0)11 472 2355, fred.vlith@gmail.com lM ain shopfitters Associated Alterations, +27 (0)11 943 2900, laurel@assalt.co.za l P lastering Monarc Group, +27 (0)21 671 5048, tony@monarc.co.za, www.monarc.co.za l T enant Marsh, +27 (0)11 060 7100, www.africa.marsh.com light exposure to all offices – an important part of the design concept. Phase one and two have unitised aluminium on all panels dominating the façade, while phase three on the corner of Alice Lane and Fifth Street will have a full glass façade.

Proudly associated with the Alice Lane development and the new Virgin Active Health Club Sandton PO Box 7591, Westgate 1734 / 290 Granville Avenue North, Robertville Ext 10, Roodeport t: +27 (0)11 472 2355 f: +27 (0)11 472 1469 e: dehaan@lantic.net

PANELLING l CUSTOM-MADE FURNITURE l RECEPTION COUNTERS 34

SOUTH AFRICAN PROPERTY REVIEW

on show Special plastering was done on ceilings to create an “offshutter concrete” look, sprayed onto curved steel mesh

Monarc Projection Plastering is the 21st-century solution for internal and external plastered surfaces. Projection Plaster is a single-coat gypsum-based plaster, which is sprayed directly onto walls, ceilings and columns, drying to a velvet-smooth finish that’s ready to be painted or sealed all in one application. Projection Plaster is ideal for projects of any size, from a single-family home to a large industrial or commercial project. Projection Plaster is always consistent – it’s mixed as needed from quality-assured materials directly in the machine that delivers it onto the intended surface. This ensures 100% perfect strength and consistency every time. The process is three times faster than conventional two-coat plastering. Our teams of highly trained applicators can cover in excess of 150m² per day, leaving behind the equivalent of a perfectly plastered skimmed surface. We are happy to offer quotes on any project in the Western Cape and Gauteng. Monarc Projection Plastering is currently the only trained and accredited applicator of Projection Plaster for both Knauf and Saint Gobain (Gyproc). t: +27 (0)21 671 5048 e: tony@monarc.co.za www.monarc.co.za

RE LY

OU R

A B ILIT Y

www.wbho.co.za SOUTH AFRICAN PROPERTY REVIEW

on show

Our new building features contemporary technology and design that takes into account our impact on the environment and our surrounds.

It's smart design for a leading company. Marshâ&#x20AC;&#x2122;s global industry practices and risk specialities ensure our clients receive the best solutions tailored to their particular needs, helping them MANAGE RISK FOR GROWTH. Corner 5th Street and Fredman Drive, Entrance 1, Building 1, Alice Lane, Sandton, 2196 MARSH AFRICA www.marsh-africa.com | +27 11 060 7100 An authorised financial services provider | FSB/FSP: 8414

SOUTH AFRICAN PROPERTY REVIEW

interior designers

Creating your vision By Nicky Manson

uslin Interior Architects, an interior-design studio, was founded by Belinda Gillies and Karen Rudd in February 2009. Over the past five years, Ruslin Interiors has built up a solid reputation in the industry of updating commercial office space by “creating your vision”. Gillies and Rudd obtained qualifications in interior design from the Greenside Design Centre in Johannesburg. Rudd’s career started with the design of custom-built furniture. From there she progressed to retail sales and ultimately to corporate interiors. Gillies progressed through the ranks of interior design while working for some of the industry’s leaders. In 2004, Gillies started Ruslin Space Planning, a business focused on drafting space-planning layouts. This was the foundation on which Ruslin Interior Architects would be built. In February 2009, Gillies contracted Rudd for a project. Following the project’s successful completion, the two decided to combine their skills. A joint partnership was created and the company name was changed to Ruslin Interior Architects, as a full turnkey could now be offered. The Ruslin team lives its slogan, “Creating Your Vision”. The two are able to take their clients’ ideas and portray them within the office, bringing the vision to life. Their passion is creating office spaces that are both are beautiful and functional. Gillies and Rudd are able to take full control of the process from conception to completion by allowing their clients the freedom to concentrate on business (knowing the project is in expert hands). Ruslin strives to find the most effective way to get the look and feel its clients aspire to while ensuring budgets and timelines are adhered to. Gillies and Rudd believe each client and project is unique – and each space should reflect that.

One of their favourite projects: the Villa Crop headquarters

Karen Rudd and Belinda Gillies

One of their favourite projects to date has been the Villa Crop headquarters. Villa Crop was designing a new building to accommodate the company’s future growth. This mandate allowed for the use of the latest technology and some of the newest products on the market. Villa Crop added a focus on green design; Ruslin Interior Architects was able to meet this requirement by using its existing skills and further enhancing its knowledge. Ruslin was involved from the very beginning of the project, before ground was broken, which made the design process more interactive between everyone involved (the building contractors, the staff and the design team). These two designers embrace all projects, irrespective of their size, with enthusiasm and an array of unique ideas. Within each project there are unique opportunities and challenges. Ruslin aims to build relationships with staff across the entire organisation to ensure each project is a success. Gillies and Rudd aim to embrace new technologies and design ideas, which enables them to be challenged and inspired. They also aspire to incorporate green elements into their design and, where necessary, educate their clients on the benefits these bring. “Interior architecture stands at the intersection of the architecture and design of the built environment,” says Gillies. “Designs are created in response to and coordinated with the building shell. At Ruslin we believe that structural boundaries give your employees a building to work in, and the design gives your employees a space where they want to work. Both are needed for employees to feel happy in the space, and to ensure the space encourages productivity.”

Inside Ruslin Interior Architects office space - an inspired environment for creativity

belinda@ruslin.co.za t: +27 (0)82 955 5278 karen@ruslin.co.za t: +27 (0)83 327 312 www.ruslin.co.za

SOUTH AFRICAN PROPERTY REVIEW

interior designers

DNA’s best project so far was for Cape Town-based financial computer programming company Web System Solution Consulting

It’s in our

DNA

By Candace King

With a passion for interior design running through its veins, DNA Design Associates continues on its growth path with the goal of conquering the African continent

SOUTH AFRICAN PROPERTY REVIEW

Convention Centre (CTICC) interior, which we recently completed,” says Bradnick. DNA’s best project so far was for Cape Town-based financial computer programming company Web System Solution Consulting. The late Sizwe Vilakazi, a major shareholder, was so impressed that he introduced DNA to a Swaziland corporate after the company completed his project. DNA is now busy with a R600-million mixed-use development consisting of a hotel, conference facilities, and a retail and corporate component. DNA’s most challenging project up till now has definitely been working with quasi-government company RSSB. Saayman explains that, from the beginning,

ounded in 2007, DNA Design Associates is a Gauteng-based interior design company with design experience in various provinces in South Africa. In the early years, DNA’s focus was on developing its brand in the industry as a fully fledged design company. “Originally we focused on retail design but slowly worked our way into corporate and public spaces,” says DNA founder and head of business development Eben Saayman. Due to its tremendous growth in the short period since its inception, DNA recently moved into bigger, improved premises. “We now offer our clients a full turnkey solution in design development, space planning, 3D conceptual drawings, corporate IDs, project management, interior quantity surveying and office relocations,” notes Saayman. “Although we have done plenty of retail and corporate projects in the past, our focus would be corporate interior design,” explains DNA design studio manager Dustin Bradnick. “It is difficult to pinpoint a particular design style because the final design is usually based on the client’s corporate identity. From here we take the company’s current corporate image and create a blend of modern office design, transforming the office into a functional, free-flowing work space. Our primary objective is to create a space that works because a functional office space will lead to a more productive office.” To date, DNA has completed more than 40 projects. On the corporate front, DNA is currently busy with a project for South African Customs Union (SACU) for a new four-storey corporate head office in Windhoek, Namibia; as well as the Rwanda Social Services Board’s (RSSB) new 16-storey head office in Kigali, Rwanda. “In the public-space arena, we’re proud to announce the design and fit-out of the Cape Town International

Dustin Bradnick DNA Design Associates it became a game of politics rather than a design project, and that the amount of red tape DNA had to cross in order to get one thing completed started to become tedious and frustrating. However, amid the negatives, DNA was able to pull out the positives. Learning from the experience with RSSB, DNA is now more prepared when it comes to doing business in Africa and aims to expand further into the continent. Furthermore, DNA’s goal is to transform into a brand standard in the industry. “We want DNA to represent the way a business thinks about its corporate image and the way it functions on a day-to-day basis. We strive to offer solutions that also make financial sense,” says Saayman.

+27 (0)11 447 8272 info@d-n-a.co.za www.d-n-a.co.za

interior designers Trevor Spencer-Crooks Platynum Interiors

Bronwyn Di Terlizzi Eketsa Interior Design (Pty) Ltd Eketsa was formed in 2012 in Randburg by three professionals from the interior design and installation fields, who felt that passing projects from department to department was inefficient and led to countless errors. By applying specialist skills in design, procurement and implementation in unison from the beginning of each project, and continuing at each crucial step, we would offer a service that delivered according to our clients’ requirements every time. This allowed each management team member to add their own special flair and creativity at each step, creating unique, magical solutions. And so Eketsa was born. As a new start-up with the usual challenges, Eketsa has implemented the approach of the combined input of three unique management skills throughout each project – the Triple Dot Check – with another design consideration called the Sensory Journey. We evaluate each space in terms of the five human senses to ensure an optimum experience. This has ensured that our interior projects have gone smoothly and delivered beyond our clients’ expectations. It has given us the confidence that our synergistic management style is working superbly well, and we continue to build on this. In an industry where delays in completion and overspend are all too common, Eketsa’s unique approach offers amazing interiors that are reliably on spec, on budget and on time.

+27 (0)11 782 3621 info@eketsa.co.za www.eketsa.co.za

Platynum Interiors was started in 2001 by Trevor Spencer-Crooks and his partner Rob Clouston. It began in a granny flat using with furniture and a single computer used by four people. They acquired office space in 2002 and have since grown steadily. In 2011 Platynum relocated to Brightwater Commons. Design companies have to keep evolving; Platynum Interiors is no different. If you don’t innovate, you’re a dinosaur – and we all know what happened to them. Part of the company’s process was to create an office environment that represents the “best of” practice, incorporating varied design elements, finishes and applications so our clients could come to see, touch and experience them for themselves. The theory is that, if you can’t live in it yourself, you should not apply it to your clients. By subjecting ourselves to the installations, we get an insight into what works and what to avoid. Technology, the design environment and people are key drivers in the company. No matter what the design is or how we progress using the latest trends, concepts and finishes, the way in which they affect people is still key. Thus Platynum’s focus is still “Spaces for people”.

+27 (0)11 886 6368 trevor@platynum.co.za www.platynum.co.za

Heather Brunsden Platynum Interiors Heather Brunsden joined Platynum Interiors in January 2009 with the grand idea that she was going to get into business development and sales. True to the nature of Platynum Interiors culture, nothing ever stays the same – and now she heads up the furniture department. People would say corporate furniture is boring. One often thinks of it as only desks and chairs but this is where the illusion ends. The reality is that, at times, the furniture and the solution needed can have an impact on the design of the space. Having said that, the design is still the key driver as it has to take all the client’s requirements, structures and operational requirements into consideration. By combining all elements the right solution is provided, and the end result is an environment that works on all levels. The use of technology in the manufacture of furniture is constantly evolving. If we are to keep meeting our clients’ expectations, it is our responsibility to keep up with those developments. With that in mind, Platynum Interiors has created and designed its offices to represent that ethos. Our doors are open to anyone who wishes to come view the space.

+27 (0)11 886 6368 heather@platynum.co.za www.platynum.co.za SOUTH AFRICAN PROPERTY REVIEW

interior design

Banking on great design Unique, exciting and innovative, Standard Bank has changed its spots and created an intriguing space to welcome new and existing customers By Nicky Manson

o’burg retail design agency Design Partnership is behind the reinvention of the iconic brand, under the leadership of CEO Callie van der Merwe and creative director Yatish Narsi. Their brief was to create a space to help move the bank’s customer experience forward, but also to reflect Standard Bank’s commitment to innovation. “The bank had come under fire for being perceived as stagnant, old and lacking in innovation,” says Yatish. “The retail space had not been working hard enough in this regard. How could a bank still be relevant in the age of online and mobile?” The actual design procedure and implementation was extensive and research-heavy. Advocates of the “design thinking” process, the team moved through the perceived challenges that needed solving and embraced the words of Mathius Durate, head of user experience at Google: “Design is not just about how something looks, and it’s not just about how something works. It’s knowing what you need to make, and how to make it right.” The process involved asking several important questions: what are the design intentions? What does the design need to solve? How can we add value? Callie, Yatish and the team spent a lot of time in the bank itself. “Working at the tellers and in enquiries, understanding the challenges from the bank’s perspective, and observing the flow and needs of the customers allowed us great insight,” says Yatish. “We also did a vast amount of hidden-camera research, as well as opening accounts and using banking services at various competitors.” Inspiration for the stylish recreation came from a wide range of sources – everything from radios by Dieter Rams, classic furniture designers such as Hans Wagner and the Eames, restaurants, bars and hotels. “If we just looked at banks all we would have come up with was another bank!” says Yatish. Design Partnership took the decision to use the Standard Bank defining blue as the call-out. “It’s the signage, the shopfront, the blue wall of the ATMs. 40

SOUTH AFRICAN PROPERTY REVIEW

Design is not just about how something looks, and it’s not just about how something works. It’s knowing what you need to make, and how to make it right It’s how you recognise the bank,” says Yatish. “We had no intention of changing that. We just needed to defer to what the design needed and what was appropriate. It needed customers to recognise the brand but it also needed them to stop and look at this twice.” The interiors are different and the use of calming, tranquil and contemporary colours, textures and decor is evident throughout, finishing off the experience. The resulting space is welcoming, sophisticated and almost homely, with all items being sourced by Design Partnership’s internal procurement division. Those not found were created from scratch. “We didn’t need to remind people they were in Standard Bank when they’d already seen the sign upon walking in and were taking a seat,” says Yatish.

Specific areas were created, including the Hello Desk, Service Bar and Self-Service Lounge. The Hello Desk is the first place you get to after walking into a branch. This is where staff greet you and ensure that they can serve you correctly. The layout of the desk in relation to the rest of the branch was critical – it was eventually set up at 90° to ensure immediate first contact. The next key feature was the Service Bar. “The long-term goal is to consolidate all enquires to this one counter,” says Yatish. “By consolidating all resources and eliminating the possibility of wrong queuing, the bank will dramatically reduce time to service. Numerous studies by banks internationally have shown single queues to be far more effective.”

interior design

Design Partnership’s intentions were not to channel anything specific but rather to make it comfortable and personal

The booths, which in time will become hot desk environments, are situated close to the Service Bar. Should the need arise, a lengthy or private enquiry, can move to the nearest available booth. The tellers and ATMs were left mostly unchanged due to security and safety requirements, but were visually refreshed to tie in with the rest of the branch. “We will be trialling new cash recyclers in branches early next year to try to improve the transactional experience.” The last area of focus was the Self Service Lounge. The team combined waiting and self-service to help maximise space and atmosphere. “The wild idea here was that these could one day become mini outlets on their own,” says Yatish. The shopfront was also opened up as much as possible to make the bank more

inviting and accessible, and some branches have been given a dedicated kids’ table to keep them busy while the parents do their banking. In terms of environmental concerns, Design Partnership took a more holistic view. The company believes it’s less about the materials used and more about the day-to-day in which environmental impact needs to be considered. The move to paperless was critical from both an experience and waste perspective. “The increased use of digital in marketing in the branches and staff on tablets with all the info they need, as opposed to numerous brochures and charts, will seriously reduce the carbon footprint of these branches,” says Yatish, who has also been working with the engineering teams within the bank on lighting

and electrical efficiency. “This is where considering the environmental impact makes sense – where business, design and consumer experience can all be positively affected.” To date the feedback has been extensive, varied and very positive. To some, the new spaces resemble a photography studio, a restaurant and a furniture showroom. However, Design Partnership’s intentions were not to channel anything specific but rather to make it comfortable and personal. The result is a cutting-edge, contemporary space with the classic and comfortable ambience of a leather-trussed gentleman’s study. These chic new spaces will be strategically rolled out through Standard Bank branches countrywide. SOUTH AFRICAN PROPERTY REVIEW

security

Security: the hard and the soft How secure are our public spaces. What measures do we have in place to ensure the safety of our shoppers, tenants and everyone else who makes use of our facilities? By David A Steynberg

enya’s Westgate tragedy has shone the light on exactly how secure our public spaces are. It has forced property owners and manages to take a hard look at their vulnerabilities as well as at where they may have been lax. Terrorism is a reality. Its organised, under-the-veil nature makes it difficult to pre-empt and thus stop. Still, good security systems, visible and invisible personnel and clear emergency protocols make attacks such as the one that happened on the International Day of Peace that much harder to orchestrate.

Retail and commercial industries are soft targets In South Africa, the retail and commercial industries are the softest targets. The recently released 2012/2013 crime stats paint a very worrying picture: business robberies have increased by 2,7% to 16 377 incidents. About 426 more armed attacks on businesses were reported in 2012/2013 than in the previous year. In eight years, this class of crime has risen by 345%.

The South African Insurance Bureau takes this further. Its numbers reflect that, in 2012/2013, some insurance companies reported increases of up to 25% in business robberies (in addition to a 34% increase the previous year). According to the Consumer Goods Risk Initiative, the situation is not improving. It reported increases in aggravated robbery attacks in the retail industry during 2012/ 2013: shopping centres experienced a 60% increase in robberies (from 274 incidents in 2011/2012 to 438 in 2012/2013) and a huge 88% increase in financial losses; jewellery retailers had a 63% increase in robberies (from 38 to 62 incidents) and a 30% increase in financial losses. Overall, retail members of the Consumer Goods Council of SA saw an increase of 36% in aggravated robberies and a resulting 67% increase in financial losses. The only silver lining related to a decrease in aggravated robberies for the past five years for banks and cash-in-transit operators. Clearly, we could be doing more. Security is big business worldwide, and South Africa is no exception. Africa’s largest security operator at the moment is G4S.

Besides guarding and cash-in-transit services, the company also boasts an impressive tech division (see “G4S Offerings” ).

Anti-jamming devices installed One retail property owner that is innovating is Tintswalo Property Group: the owner of Lonehill Shopping Centre in northern Johannesburg has put measures in place to proactively respond to the spate of car-lock-jamming incidents occurring in the centre’s carparks. “As mall owners, Tintswalo Property Group invests a lot of effort and money in protecting shoppers to ensure that they have peace of mind while shopping at our centres,” says Michelle Conradie, general manager of the Tintswalo Property Group. “This is why Tintswalo has installed an anti-jamming device at Lonehill Shopping Centre to alert security to vehicle lockjamming taking place so they can react immediately and catch the perpetrators.” The detection device vibrates when it picks up jamming activity from about 100m

THIS PAGE Lonehill Shopping Centre OPPOSITE Some of the devices available on the market that aid in security and access control: the Bosch licence-plate camera (1), carpark monitoring surveillance linked to mobile devices (2), and the biometric fingerprint reader, which can be used to control access to sensitive and restricted areas

SOUTH AFRICAN PROPERTY REVIEW

security

in undercover parking areas and 200m in open parking areas. “At the end of each day, a thorough reconciliation is taken of every activation picked up on the device, and the device history is kept on file in case of future complaints from shoppers,” says Conradie. According to Jonathan Yach – Broll’s new Kenyan CEO – the question around security has been approached incorrectly. It’s not purely about hard protection – there needs to be a softer element. “Security is a state of mind,” he tells us. “It is an element of the comfort level that we have come to expect within public spaces. Some security is interventionist, some unobtrusive, some ineffective, and some objectionable. Users expect a steady state, though; they expect security as part of an environment.” Malls depend on customers being comfortable – and security is one of the components of that comfort. Marna van der Walt, CEO of Excellerate Property Services Group, agrees. She was quoted as saying that airport-like security “is counterproductive to what we want to achieve as a lifestyle environment – but you still have a responsibility to secure shoppers”. And the answer to securing shoppers, she said, did not lie in arming security guards. “One thing we don’t want to do is allow guns on the premises, including guns for security guards. We are upping security in shopping centres without it being visible,” she said. It would seem that the most effective measures are a combination of those you can see and those that remain hidden. If we mean to win the war against crime in our public spaces, a coordinated effort between property owners, facility managers, the police and the public is required.

G4S OFFERINGS Surveillance l CCTV w IP vandal camera w Vandal dual camera w High-sensitivity camera realises 24 hours/day full-colour monitoring down to 0,3mlx (which is below available light under starlight) w Facial recognition: best-in-class facial recognition algorithms with the ability to perform photo identification, photo verification and real-time matching w Wireless & cordless: the motion viewer doesn’t require an external power supply; runs on self-contained batteries for up to four years w Safe housing: holds all major international explosion-protected certification for safe use in almost any region of the world w Close-range number-plate camera Access control l Visitor IQ: optimised to increase security and the management of visitors while lowering risk and giving increased control over their access in specific areas l Mobile barcode scanner: a mobile Wi-Fi- or USB-connectible device that opens the door to advanced visitor management l Biometric fingerprint reader: a powerful platform with a beautiful yet functional interface, securely housed in an IP65-rated casing l Panache metal detector: a robust and durable unit that will not deteriorate over time; light and easy for one person to move

l Full-height industrial turnstile: designed for interior and exterior installations where high-volume access and a high level of security are required l Speedstile Express: a combination of security and aesthetics all in one stylish product l Plantime Time Recording System: used for monitoring fixed or flexible working hours in full-, part-time jobsharing and contract-staff applications across a wide range of the sector l Hybrid finger-vein scanner: captures fingerprint and fingervein data simultaneously by one-shot scanning function Visible security l G4S provides a range of specialist security personnel to help secure people, assets and premises, and minimise the security risks. l The company has experience in tailoring security solutions and services – from the deployment of security officers and monitoring to crisis management, planning and training, and security advice – to the needs of more than 6 000 customers of all types. l G4S offers the following services across South Africa, operating out of sites local to your business: w Guarding w Monitoring (via the national control centre) w Patrol and response w Journey management w Event security

SOUTH AFRICAN PROPERTY REVIEW

feature

Hand over the goods The age of storage space has dawned on South Africa: it’s fast becoming a unique asset class By Candace King

he American reality-TV series Storage Wars might seem unbelievable, but there is no doubt that storage space is a colossal phenomenon in the US. And it is starting to gain ground in South Africa. Gone are the days of storing belongings in the garage or on a friend or family member’s plot out in the countryside far away from the city. Today, the average South African – or a successful business – is making use of smart, professional storage options. “In America and Europe, the concept of storage-space facilities is an old one,” says Izeldi Loots, marketing and development manager at Storage RSA. “In fact, it has reached a point of saturation. Some US companies have more than 2 000 facilities.” Loots explains that storagefacility companies are on the rise in South Africa, and people are becoming aware of the concept and the service. “Many people don’t know or aren’t aware of their own storage needs or the available facilities,” she says. “But they are definitely picking up on the concept.” Apart from Storage RSA, several other storagespace companies are leading the market locally. These include Stor-age, Rent-AStore and XtraSpace.

SOUTH AFRICAN PROPERTY REVIEW

Since its inception in 1997 in the Western Cape, Storage RSA – a privately owned company – has been offering excellent service and a convenient storage experience. “My father, Attie van der Linde, bought into the company and began to re-brand and expand the business in 2002,” says Loots. “The first Gauteng facility opened in 2007; today we have a total of five facilities.” After more than 15 years in the business, Storage RSA operates nationally with facilities in Gauteng and the Western Cape.

“We select sites that are safe and convenient for our clients. We provide a quality product and offer a professional service” Storage RSA builds high-quality buildings purposely designed for storage. The company selects conveniently situated locations so that clients (both personal and business users) have easy access to their belongings. These sites are in close proximity to main arterial routes as well as top retail centres.

“We select sites that are safe and convenient for our clients. We provide a quality product and offer a professional service,” says Loots. “Many storage sites in South Africa are located in industrial zones or CBD areas that are old and dilapidated, and that do not always provide a safe and secure environment for clients. With most of our clients being women who act on behalf of the family, we want our storage facilities to be highly secure for clients’ peace of mind.” The self-storage facilities are developed in such a way that large removal trucks can easily access the sites, and clients with frequent access requirements can drive up to units on the ground floor. For longerterm clients with less-frequent access needs, Storage RSA offers storage on the top floors, accessed by professional goods lifts and trolleys. The sites are monitored by CCTV cameras as well as highly trained security guards, and have strict access procedures. Storage RSA offers a high-quality product at prime locations, and therefore set a high price for its services. “This has the added benefit that it deters criminals,” says Loots. She explains that customers have 24hour access to their storage units and are provided with an access tag for this purpose.

feature

“Our rental period is not fixed, thereby offering our clients the ultimate in flexibility when they want to move in or vacate their unit. No deposit is required and we only have a 14-day notice period,” she adds. Storage RSA offers a wide range of storage-unit sizes, from 3m² to 72m². The company ensures that client goods are kept in a waterproof and fireproof environment, as well as pest- and dustfree. According to Loots, the facilities are cleaned and sprayed with pesticides, and are constantly maintained and operated by full-time staff who are both professional and knowledgeable. The company implements regular maintenance plans and executes routine pest-control procedures to ensure that its buildings remain spotlessly clean and pestfree. “Furthermore, the ground-floor storage units are elevated off the ground to prevent water seepage,” says Loots. Storage RSA offers covered parking, which is ideal for holidaymakers, who can leave their boats and caravans at the facilities. The company also sells packaging materials such as boxes, bubble wrap, mattress- and chair covers and high-quality padlocks at all of its facilities. As a word of advice for those wanting to establish their own storage-space company,

Loots says that – like all property-related businesses – success boils down to specialisation in order to overcome challenges such as feasible locations, funding, long lease-up times, and the sophisticated systems required. She says that marketing has become a very sophisticated web-based game, and it is a critical resource to ensure high occupation levels to cover the relatively high fixed costs typical of the industry. Systems are also very important in the industry. About 40 clients are moving in and out of any one facility, mostly on month-end day, so it’s crucial to have your ducks in a row to enable client moves. “In order to be the best, we have implemented good processes and software programs that help streamline our business,” Loots says. “In the long term, our biggest challenge is the possibility of market saturation.” Storage RSA is currently working on a growth plan, with several new developments in the pipeline. According to Loots, the company wants to enhance its client-service offering even further, and is currently working on a system that will allow clients to make bookings and do payments online. As they say, in today’s world, everything is about convenience…

Storage RSA offers a wide range of storage-unit sizes, from 3m² to 72m². The company ensures that client goods are kept in a waterproof, and fireproof environment, as well as pest- and dust-free

SOUTH AFRICAN PROPERTY REVIEW

eye on africa

Africa uncovered Namibia

Although it’s a small market, Namibia is on the rise with investment and development notching up a gear By Candace King Photograph by Neil Gopal

amibia is an ancient, enchanting place, famous for its undulating sand dunes, diamonds, and an exotic array of fauna and flora. Apart from its picturesque landscape, beautiful people and iconic flamingo populations, Namibia is an investment haven thanks to its political and economic stability, strong tourism and healthy trading climate. While it is a small-market, low-risk, midincome country, Namibia continues to appeal as a relatively safe place in which to do business. It has managed to attract international investment with higher GDP per capita, and more sophisticated governance and regulatory structures. Namibia is very serious about its tourism and land cultivation, as well as transport and shipping. Being on the trade route to the Cape of Good Hope, Namibia features prime connections with key neighbouring African countries, including South Africa, Botswana, Zambia and Angola.

SOUTH AFRICAN PROPERTY REVIEW

Swakopmund Walvis Bay

Windhoek

Oranjemund

It continues to ensure stable relations with its SADC counterparts and has several crucial foreign policies. Namibia’s trading stance is conducive to investment thanks to its stability. Based on its geographical location, transportation structure

and integration with regional markets, Namibia stands as a gateway to the fast-developing markets of southern Africa. Socioeconomic development is positive and democracy is a hallmark in Namibia. In March 2010, Namibia’s ambassador to the US, Patrick Nandago, held a reception in Washington DC to celebrate 20 years of independence, freedom and democracy. (The country had gained independence on 21 March 1990.) “Over the years, we have witnessed successful transfers of power, and our country is known to be one of the most democratic on the African continent,” said Nandago at the time. “Our economic and political stability makes it an attractive location for investors.” He noted that Namibia’s four key economic pillars are agriculture, mining, fishing and tourism. The agricultural, fishing and mining industries account for more than 25% of GDP, while tourism contributes nearly four percent.

: eye on esafrica

eri s ica thly ntry r f n e A r mo -cou h T ou by y- cus r t n fo cou

The mining of diamonds, gems, uranium, gold, silver and base metals forms the backbone of Namibia’s economy Namibia at a glance t Population 2,2-million t Major city Windhoek (0,3-million) t Currency Namibian dollar (NAD) t Total area 824 292km² t GDP growth (2012) 4% t Key industries Mining, meat packing, fish processing, dairy products SOUTH AFRICAN PROPERTY REVIEW

eye on africa

In September 2009, the US government’s Millennium Challenge Corporation signed a US$304,5-million contract with Namibia aimed at boosting the quality of education and correcting the country’s unequal distribution of income

Share of imports by country in total imports

However, as is the case with many African countries, Namibia’s greatest challenges include the availability of portable water, access to quality healthcare, housing and education, unemployment, HIV/Aids, tuberculosis and malaria. With climate change fast becoming a concern, Namibia has also been plagued by drought and heavy floods. The global economic crisis affected the country as well. Despite this, Namibia is still hopeful. As part of its strategy, the Namibian government has established the Namibia Investment Centre and has signed agreements with Botswana and Zimbabwe to acquire dry-port facilities in Walvis Bay. The Namibian economy has a modern market sector, which creates the majority of the country’s wealth, and a traditional subsistence sector. The economy is very capital-intensive and is closely linked to South Africa’s as a result of the countries’ similar past. The banking sector is highly developed and features modern infrastructure. There are a number of legislative policies in place to alleviate poverty and the high unemployment rate. Namibia has compulsory free education for 10 years per child between the ages of six and 16. According to UNICEF, primary-school attendance was 89% between 2005 and 2009, and the adult literacy rate was 88% between 2005 and 2008.

The Namibian property industry Infrastructure and development is on the rise in Namibia, and major infrastructure developments are being made, especially in the air-transportation sector. The Namibia Airports Company (NAC) has recorded significant continual growth in its passenger traffic over the past several years. As a result, NAC’s corporate strategy involves the improvement of Namibia’s major airports, such as Ondangwa Airport and Walvis Bay Airport, both of which are in the middle of extensive upgrades and expansions.

Retail market Source: Merchandise trade matrix, imports and exports of total products, annual, 1995-2011

Retail development is significantly high in Namibia, with new shopping centres being constructed and existing malls undergoing

PRIME RENTS

Source: Knight Frank Africa Report 2013 – page 9, 31; Opendataforafrica.org

SOUTH AFRICAN PROPERTY REVIEW

expansion. Several leading South African property developers are involved in retail development in Namibia; these include Broll and Atterbury, both of whom are currently developing retail centres. An example of a prime retail development is Phase 3 of Wernhil Park Shopping Centre in the Windhoek CBD, which extends its floor space to 38 000m². Work is also under way on the expansion of Maerua Mall, in the south of the city, which is Namibia’s largest shopping centre with about 43 000m² of retail space. A major project in the pipeline is the 54 000m² Grove Mall, which will be developed as part of the mixed-use Hilltop Estate in Kleine Kuppe, a southern suburb of Windhoek. This project is spearheaded by Developers Frontier Property Trust, Demushua Property Developers and Atterbury. One downside of the retail development expansion is that, given the relatively small size of Windhoek, there are concerns that the high level of activity in this sector could lead to an oversupply of retail space.

Industrial and office market The industrial property market focuses on the development and provision of warehousing space. In Windhoek, manufacturing activity is relatively limited at the moment, although there are concentrations of such properties located in the city’s southern and the northern industrial areas. Several large-scale industrial projects have been planned elsewhere in Namibia, many of which are associated with the country’s growing uranium industry. A notable example is Gecko’s N$12-billion Vision Industrial Park near the coastal city of Swakopmund, which received government approval in August 2012. The demand for office space has be fairly steady in Windhoek, and this has spurred on the development of new projects and the refurbishment of existing buildings in the CBD (for example, at Alexander Forbes House). In recent years prime rents have remained stable, but could come under downward pressure in light of new space coming to the market. The most significant new development in the pipeline is Freedom Plaza,

PRIME YIELDS

Offices

US$18/m² per month

Retail

US$30/m² per month

Industrial

US$6/m² per month

12%

Residential

US$2 500 per month*

eye on africa Population in thousands Population, thousands

Population density (persons per square km) persons per square km

15 10 5 0 -5

1980 Medium

High

2016 Low

2052 Constant

2088 Estimates

Source: World Population Prospects: The 2010 Revision (Updated: 28 June 2011)

Population (thousands)

Land area in km²

Population density (persons/km²)

Khomas

341

36 964

Ohangwena

245

10 706

Omusati

243

26 551

Kavango

223

48 742

Oshikoto

182

38 685

151 - 223

Oshana

175

8 647

223 - 350

Erongo

150

63 539

Otjozondjupa

142

105 460

70.8 - 76 76 - 89 89 - 151

Source: World Population Prospects: The 2010 Revision (Updated: 28 June 2011)

Urban areas

People living in urban areas as a % of population

Urban areas

Real GDP (% change) 15

Percent change

-5 2000

2004

2008

2012

2016

Source: World Economic Outlook, October 2012

GDP per capita (USD) 7.5k

9 - 28

28 - 46

46 - 93

U.S. dollars

1-9

2.5k

2000

2004

2008

2012

2016

Source: World Economic Outlook, October 2012

SOUTH AFRICAN PROPERTY REVIEW

eye on africa Q&A with Leon Jooste,

Households with Safe water Households living with safe water

Pam Golding Properties Namibia Why should one invest in Namibia? I believe that Namibia is one of the most attractive real-estate investment destinations in Africa, specifically for South African buyers due to the geographical proximity and the fact that we share the Common Monetary Area. What makes Namibia so attractive? We are fortunate to be in one of the most politically stable countries in Africa, with a robust real-estate industry driven by pure market forces (supply and demand). Our conservative financial sector is shielding us from unduly high-risk investors and lenders. How is Namibia’s residential market faring? According to the Median House Price Index, the median house prices in Windhoek have increased by 46% over three years, 89% over five years and 21% last year (year-on-year), with no indication of any contraction. Trends point towards a seller’s market for properties under N$4-million and a buyer’s market for properties valued at more than N$4-million.

62 - 83 83 - 93 93 - 98

Households with Electricity for lighting

Households living with electricity for lighting

What are the future trends for Namibia? New products in the form of various lifestyle estates will enter the market soon to create even more fresh activity while unlocking a lot of new stock for our buyers. Strong growth in our tourism, mining and agriculture sectors will stimulate further growth as local and direct foreign investment increases.

Residential market Driven by activity in the middle and upper price segments, house prices in Namibia showed steady growth in 2012, with the development of affordable housing remaining limited. The most desirable residential locations of Windhoek are mainly found in the suburbs that spread over the hills around the city – Ludwigsdorf, Eros and Klein Windhoek. There is also strong demand for high-end apartments in central locations, which is reflected in recent residential developments such as the 82-unit Trift Towers and 77 On Independence, which includes 232 apartments. 50

SOUTH AFRICAN PROPERTY REVIEW

4 - 19 19 - 42 42 - 73

Investment (% of GDP)

Investment (% of GDP) 40 35 Percent of GDP

a mixed-use scheme on Independence Avenue that includes 35 000m² of office space alongside retail, residential and hotel elements, and is expected to be built over the next five years.

30 25 20 15 2000

2004

2008

2012

Source: World Outlook, Economic Outlook, October 2012 Source: World Economic October 2012

2016

SAPOA Annual Convention Previous thought-provoking speakers

Parks Tau Mayor of Johannesburg

Thabo Mbeki Former president of South Africa

Tokyo Sexwale Former Minister of Human Settlements

Mamphela Ramphele Former MD of the World Bank

Thuli Madonsela Public Protector

FW de Klerk Former president of South Africa

Judge Dikgang Moseneke Deputy chief justice of the Constitutional Court of South Africa

Thoko Didza Former Minister of Public Works

Patricia de Lille Mayor of Cape Town

Meet the leading players in the property-industry at the annual SAPOA Convention and Property Exhibition. This event celebrates all things property-related, and has a stellar line-up of speakers. For three days every year, attendees have unsurpassed access to internationally and nationally renowned speakers, the latest trends in commercial property, and a unique forum to learn about developments within South Africaâ&#x20AC;&#x2122;s government and private sector that affect the property industry as a whole.

Tony Leon SA ambassador to Argentina

Gill Marcus Governor of the Reserve Bank of South Africa

Elias Masilela CEO of Public Investment Corporation

Sir Ken Livingstone Former mayor of London

Richard Quest Convention facilitator and MC

John C Cushman III Chairman, Cushman & Wakefield

www.sapoaconvention.co.za

Save the date: 10 to 12 June 2014, CTICC

meet the mayor series

Building the Mother City SAPOA and the City of Cape Town hosted top property owners for an evening of exchange and discussion

By Thandanani Mhlanga Photographs by Michael Glenister

ape Town is the place for business, and its practitioners will soon have a much easier time conducting it. This was heard at an exclusive dinner held at Cape Town’s Twelve Apostles Hotel on 24 October 2013, which was attended by City of Cape Town officials, Mayor Patricia de Lille and SAPOA president Estienne de Klerk. The event, held to facilitate detailed interaction between property owners, members of SAPOA and the local government of Cape Town, was also attended by top industry role players who engaged with De Lille on ways of improving their partnership. De Klerk said the function was the first attempt to create a platform for the property industry to engage on issues affecting the buildings it owns and which the city manages. He acknowledged that the mutually beneficial partnership was at times fraught with challenges that could be avoided through better understanding. “The reality is we are inseparable and we have to work together,” he said. To this end, De Klerk conveyed SAPOA’s desire to understand the government’s requirements and point of view, and to “assist you in achieving some of your goals and so you can assist us in achieving some of ours”.

Growing pains Vunani Investment Fund Limited CEO, Cape Town Partnership board member and the chairman of the Cape Town City Improvement District, Rob Kane, expanded on the issues faced by the city’s property owners but not before acknowledging the strides made since 1998. According to Kane, 25% of all Western Cape businesses were based in the Cape Town CBD, with 81% of those businesses happy to be located in the city. Investment by business into the city was about R4,6-billion. Other successes included a reduction in crime, material increases in property values and the employment of hundreds of formerly homeless persons to repair the streets. There was also the pedestrianisation of areas such as Green Market and Short Market, as well the introduction of food retailers into the CBD – for example the Food Lover’s Market which uplifted the St George’s Mall area considerably. There were, however, ongoing concerns over lack of security visibility in the CBD, particularly between 10pm and 6am. Aggressive begging, often facilitated by gangs, have remained prevalent, as has the distribution of drugs on Long Street in particular. 52

SOUTH AFRICAN PROPERTY REVIEW

ABOVE Cape Town mayor Patricia de Lille

He commended the city’s by-law prohibiting the soliciting of drugs but lamented that there was “no-one with the power to implement it”. Informal traders continued to “crowd out” retailers, which resulted in a lack of visibility, further worsened by tight signage restrictions, which he recommended be relaxed to help landlords get more value.

Taking the lead Addressing those in attendance, De Lille expressed a need to shift perceptions about Cape Town not being a place for business, especially in terms of what the city has been doing to help the business and property sectors. “While we may be a place for unqualified audits and reliable services,

places such as Johannesburg are still seen as the places for doing hard business,” she said. The city had engaged in multiple processes in order to help make the right service-delivery decisions, she said. One result of such processes was the Economic Area Management Programme, which helps the city understand the performance of different economic nodes and areas around Cape Town according to certain criteria, which “range from rental rates to municipal valuations and incidents of crime, to provide a few examples”. With these performance indicators, the city was able to plot the performance and potential of particular areas, and tailor a tool kit of responses to help provide the right interventions for each.

meet the mayor series

TOP LEFT Rob Kane is the CEO of Vunani Investment Fund Limited, Cape Town Partnership board member and the chairman of the Cape Town City Improvement District TOP RIGHT Cape Town deputy mayor Ian Neilson ABOVE The SAPOA Cape Town team meets the mayors: (back row, from left) Peter Levett, Ian Neilson, Marius Muller, Patricia de Lille, Neil Gopal, Dr Sedise Moseneke; (front row, from left): Estienne de Klerk, Musa Ngcobo, Ipeleng Nonkululeko Mkhari, Amelia Beattie

“For example, an area suffering in potential may require safety interventions at the level of City Improvement Districts and the like.” De Lille also said the programme would become fully operational online in 2014, with a web platform being made available so that users in the marketplace can make informed decisions. In addition, the city wanted to encourage investment in particular areas of the city via a series of incentives. “Somewhat uniquely for a metro, we have developed a layered incentives policy to attract city-wide and area-specific investments by the use of soft and hard incentives,” said De Lille.

Soft incentives include accelerated planning and approval times, dedicated area media campaigns, a one-stop-shop model for dealing with the city, area-specific information and interventions, direct development facilitation, advice on other incentives from different levels of government, and red-carpet treatment through the use of the investment facilitator in the mayor’s office. At the level of area-specific interventions, the city was focusing on Atlantis to try to encourage investment in an area which “in terms of infrastructure and skills levels in the population, has great potential,” De Lille said. “Not only have we made large tracts of land available at municipal valuation rates, we’re also offering job-creating investors mixed-use rate

electricity tariffs at the 2012/2013 tariff, as well as capped development facilitation fees.” The mayor said the city would also be undertaking a review and rationalisation exercise of city facilities and amenities to increase the potential for leasing and sales opportunities for interested buyers. “When and if such measures occur, they will be available via open and public tenders.” Directly addressing Kane’s concerns, she assured that, although policing may not be visible at certain hours, the city had CCTV cameras on every street as a means of security. Signage was no longer as restricted as it had been previously, she added, before availing herself and her office for further support and interaction. SOUTH AFRICAN PROPERTY REVIEW

meet the mayor series

Going for gold By Candace King Photographs by Michael Glenister

City of Johannesburg mayor Mpho Parks Tau

Director of iProp Pty Ltd and past chair of the SAPOA Developers Committee Richard Bennet

he city of Johannesburg was born out of the gold rush of 1886, a period that catapulted the once-dusty mining dorp into an “African El Dorado” of wonder, fame and fortune. Fast-forward to 2014 and Johannesburg is experiencing another gold rush in the form of rich new development and promising infrastructure plans that, much like the attraction of the historical gold rush, is magnetising both public and private investors and property developers. However, the relationship and communication between the public and private sectors has actually been highly strained over the past few years, which has culminated in the desperate seeking of reconciliation between the two parties. SAPOA has recognised this concern and, in an effort to bridge the gap between the two sectors, the organisation and its members have engaged with the government. This has set the ball of collaboration rolling, and the concerns surrounding the communication and relationship between the public and private sectors are diminishing as both parties are becoming more actively involved with each other, engaging in meaningful dialogue, and working together to improve business and infrastructure in South Africa. 54

SOUTH AFRICAN PROPERTY REVIEW

In light of this, SAPOA hosted a “Meet the Mayor” dinner on 21 November 2013 at Vilamoura restaurant in Sandton, which was attended by CEOs and key role players of the property industry. The dinner guests included the City of Johannesburg’s Honourable Mayor Mpho Parks Tau, SAPOA CEO Neil Gopal, current SAPOA president Estienne de Klerk and immediate past president Dr Sedise Moseneke.

“The reality of Johannesburg and all other cities in the country is the isolation of certain communities, race groups and sectors. This is not how efficient cities work” The dinner shed some light on the relationship between the sectors, future plans of infrastructure development in the City, current challenges and possible solutions, as well as the way forward.

Most importantly, the dinner served as a platform to further cement the relationship between the property sector and the local government. In his opening address, director at Growthpoint Properties and SAPOA president Estienne de Klerk highlighted the role that the private sector plays and the efforts made thus far by SAPOA. De Klerk is most concerned about increased municipal rates and the correct levying of rates. He said that about 70% of the overall rates/taxes bill is paid by the property sector, and thus this sector is most affected by increases through inflation. By improving the relationship and between government and the property industry, such issues can be alleviated. Director of iProp Pty Ltd and past chair of the SAPOA Developers Committee, Richard Bennet, presented an insightful presentation on SAPOA’s achievements as well as the importance of the relationship between business and the municipality. As facilitator of the evening, Member of the Mayoral Committee of Planning Roslynn Greeff noted that Johannesburg is currently leading in terms of commercial property investment, and that over the next 10 years, R110-billion will be invested in the city in terms of infrastructure upgrades and new infrastructure development.

meet the mayor series

With grandiose business and development plans in place, the bustling metropolis of Johannesburg is on the path towards becoming a world-class city, with the public and private sector in tow

Member of the Mayoral Committee of Planning Roslynn Greeff

BACK ROW, FROM LEFT: SAPOA CEO Neil Gopal, MMC Cllr Ruby Mathang, SAPOA board member Peter Levett, past chair of the SAPOA Developers Committee Richard Bennet, immediate past president Dr Sedise Moseneke, executive director: development planning Yondela Silimela, city manager Trevor Fowler FRONT ROW, FROM LEFT: MMC Roslynn Greeff, mayor Parks Tau, MMC Cllr Tshidi Mfikoe, current SAPOA president Estienne de Klerk

The highlight of the evening was Honourable Mayor Parks Tau’s presentation, which addressed the city’s many issues: ageing infrastructure, damaged roads, faulty traffic lights, hygiene problems and high electricity costs. Mayor Tau presented solutions to these issues, including the rollout of extensive road resurfacing, improved traffic-light systems, further infrastructure development, prepaid electricity metering and the implementation of alternative sources of energy. One of the biggest issues that the city faces is the fragmentation of populations and industries. “The reality of Johannesburg and all other cities in the country is the isolation of certain communities, race groups and sectors. This is not how efficient cities work,” said Mayor Tau. He noted that the city continues to be shaped by its apartheid past – it’s a city still divided into rich and poor areas, white and black areas, townships and suburbs. Most in the black community continue to live far from the workplace, and haves to travel far distances to reach their places of work, schooling and leisure. Amid the many problems, the City of Johannesburg is embarking on a new spatial vision for the city in line with the Joburg 2040 Growth and Development Strategy (GDS),

based on corridor transit-orientated development. This plan will be responsible for redefining and re-stitching the city to create a new future. The City of Johannesburg has identified six important and well-planned transport arteries dubbed the “Corridors of Freedom”, which will be linked to interchanges where the focus will be on mixed-use development – high-density accommodation supported by office buildings, retail development and opportunities for leisure and recreation. Currently, the city is working on three of the six – the Louis Botha, Perth/Empire and Turffontein corridors. These corridors will transform the entrenched settlement patterns that have shunted the majority of residents to the outskirts of the city, far away from economic opportunities and access to jobs and growth. Apart from physical infrastructural challenges, Mayor Tau noted that one of the biggest flaws is the communication between government and other role players. “What we haven’t done well is communicate policy to all stakeholders. Part of government’s success is due to the partnership with private business. This is only the beginning of the conversation,” he said.

The challenge for the city is to successfully attract corporates into new areas of development and investment. Furthermore, the efficiency of public transport needs to be improved, and the issue of rates and taxes needs to be dealt with. In his closing remarks, Gopal highlighted that the relationship between SAPOA and the city is definitely growing and that together, the public and private sectors can achieve more for the greater good of our revived City of Gold.

THE TARGETED NODES OF THE CORRIDORS OF FREEDOM In the medium term: 2016 l Soweto to CBD along Perth/Empire l CBD to Alex l Alex to Sandton l Turffontein l Mining belt In the long term: 2040 l Sandton/Randburg to Diepsloot l Alex to Ivory Park SOUTH AFRICAN PROPERTY REVIEW

workshop

Werksmans to the rescue Business rescue was thoroughly unpacked at the SAPOA and Werksmans Attorneys workshop, leaving attendees with some legal food for thought By Candace King Photographs by Michael Glenister

he SAPOA Gauteng Provincial Council and Werksmans Attorneys recently hosted a breakfastsession workshop on business rescue, a provision that has begun to revolutionise the South African business landscape. Held on 29 October 2013 at Werksmans Attorneys’ offices in Sandton, the workshop was led by director Eric Levenstein and associate Lauren Barnett of Werksmans Attorneys, who provided an insightful presentation on the general understanding of how the business rescue process works, the manner in which a company is supervised under business rescue, and the way in which property owners and landlords are caught up in the process. The discussion included the consequences of the business rescue process on leases, sureties and guarantees. Chapter 6 of the new Companies Act No 71 of 2008 became operative in South Africa on 1 May 2011, and with its promulgation came the introduction of some novel provisions into South African law. These included business rescue, which has captured the attention of creditors, employees, directors, shareholders, property owners and landlords as a result of the far-reaching effects that it has had on the stakeholders of companies placed under supervision. Business rescue has been introduced due to the globally increasing trend of the restructuring of companies that are in financial distress.

SOUTH AFRICAN PROPERTY REVIEW

Business rescue affords South African companies that are financially distressed or that trade in insolvent circumstances in South Africa an opportunity to reorganise and restructure. This has far-reaching effects on creditors, financial institutions, shareholders, employees and restructuring specialists. Each stakeholder affected by business rescue would be well advised to understand the process and how it affects them.

Levenstein noted that business rescue is inevitable for an attorney to come across today and that liquidations are on the decrease. “Approximately 840 companies have been placed under business rescue since 1 May 2011, and currently there are 160 practitioners that have been accredited by the Companies and Intellectual Property Commission,” he said. He added that the average turnaround time is around six months and the success rate is estimated at 55%. “Business rescue is a stakeholderinclusive approach – in order to achieve the efficient rescue of a company, all parties need to be involved,” said Barnett. She noted that business rescue should be applied when the first signs of financial distress arise. In closing, Levenstein and Barnett advised that landlords and property owners need to keep an eye on their tenants. If they delay in payments, ascertain why – are they candidates for business rescue or liquidation? “Perfect your tacit hypothec prior to the commencement of business rescue, if possible, in order to become a secured creditor.” If business rescue commences, engage with the business rescue practitioner and ensure that the provision of your premises for the duration of business rescue is treated as PCF and paid in preference to other creditors. Note that the lease cannot be cancelled without the practitioner making application to court – but it can be suspended unilaterally by the practitioner for the duration of business rescue. If a lease is cancelled or suspended, the landlord will have a concurrent claim for damages.

THIS PICTURE Werksmans Attorneys associate Lauren Barnett ABOVE, FROM LEFT Werksmans Attorneys director Eric Levenstein and Shepperson Attorneys owner and SAPOA Gauteng regional chairman Gareth Shepperson

workshop

PROCSA in focus Through an informative workshop, SAPOA and PROCSA shed some light on the importance of written professional service agreements in the property industry By Stanley Karombo Photographs by Michael Glenister

n 13 October 2013, about 50 SAPOA Gauteng members attended a workshop on the importance of written PROCSA professional service agreements. The workshop was organised to provide property developers and professionals in the industry with a detailed understanding of the application of the new PROCSA professional client/consultant agreements. Ian Alexander of Ian Alexander Architects Network welcomed everyone with a brief anecdote about his educational background and when he cut his teeth in the field of architecture. He then outlined the importance of the PROCSA written professional service agreements. He said that professional service providers should “understand that there is a great deal going for them by contracting for their services using properly composed PSA agreements”. Significantly, the interests of clients and developers are protected, because PSAs such as these set out to be balanced and provide for equity, in a fair allocation of the associated risks, rights and obligations. As an example, Alexander highlighted that the architects’ code of conduct requires professionals to contract properly, as provided for in the architects’ Board Notice 154 of 2009. He noted that “the key issue comes into play when work at risk is requested. It is then even more important that there be a professional services agreement in place.” A series of important reasons exists to allow professionals and their clients to contract properly. These include the establishment of the authority of the professionals to empower them to bind the contracting parties in building contracts. Furthermore, the principal agent in particular has a significant series of “obligations” to fulfil with respect to building contracts, many of which were repetitive. The PSAs provide for the clarification of the role of the professional. Now, with the definition of the role of the development manager, the role of the client is also defined: the development manager is in fact the client – or another agent, should the client not be able to fulfil this function. Alexander’s co-presenter was Cliff Hayim of Contracts on Demand, who familiarised the delegates with the PROCSA Electronic Service (e-PROCSA). Hayim demystified e-PROCSA, which is a documents collaboration service, by going through the entire process thoroughly. “This service is an ‘add-on’ to the PROCSA service

within the e-Cloud construction suite of productivity services,” said Hayim. “Each project is managed by a project administrator. This person is authorised by the ‘office administrator’ to create new PROCSA documents for a particular project. This can be achieved by copying Annexure A of an existing document (if necessary), and by viewing and editing the documents.”

The project administrator can also set up “document collaborators” with definable access permissions for viewing only, or for editing on a once-off or time-for-time basis. Hayim talked the delegates through all the processes, including e-Cloud, construction, enhancing productivity in the stage of work, reference and printing, payas-you-go printing and document collaboration service. He said that documents can be completed collaboratively from different geographical locations. PROCSA documents for a particular project are available to the project administrator online 24/7. Access to the PROCSA project documents is controlled for security purposes, but documents can be edited any number of times before they are finalised, without additional payment. Documents can also be printed any number of times without incurring additional costs. Alexander distributed a comprehensive series of PROCSA documents to the workshop attendees. These included the workshop workbook with copies of all the PowerPoint slides, the PROCSA development manager PSA form of contract and the PROCSA Matrix document. Everyone returned to their business having gained insight into the newly developed series of PROCSA PSA agreements, which Alexander emphasised are “consensus” documents drafted by representatives of the major built environment professions in conjunction with SAPOA. In the process they enjoyed good food, interactive conversations and passing an exciting milestone.

THIS PICTURE Cliff Hayim of Contracts on Demand ABOVE Ian Alexander of Ian Alexander Architects Network

SOUTH AFRICAN PROPERTY REVIEW

networking kwazulu-natal

Breakfast with Dr Moyo Tongaat Hulett was the sponsor of the KZN SAPOA networking breakfast, where speaker Dr Naledi Moyo, the Deputy City Manager of eThekwini Municipality, drew a large crowd keen to hear about “Durban City’s 10-Year Plan Going Forward” By Anne Schauffer Photographs by Val Adamson

he Durban Country Club was a fitting venue for the last – and very much oversubscribed – SAPOA KZN breakfast meeting of 2013. As KZN regional chairman of SAPOA, Edwin van Niekerk, thanked Tongaat Hulett for the loyal support of SAPOA, he looked out at the crowd and said, “We clearly chose the right draw-card in Dr Moyo.” In his introduction, he described her as “not a desk-bound executive but an activist executive, ready to do the toughest jobs in the trenches.” To confirm her roll-up-your-sleeves reputation, as she took the microphone, Moyo stated, “By 2030, eThekwini will be Africa’s most caring and liveable city.” That had everybody sitting up and paying attention; from then on, she had the room in the palm of her hand. Positive and straightforward, Moyo laid out plans for the city of tomorrow – not just pipe dreams but actual action plans. The past 20 years have seen municipalities tasked primarily with service delivery, while economic development has been a “nice to have” – a stepchild hovering in the background. That’s about to change, she explained. “You cannot continue to provide service delivery at the expense of job delivery and economic development,” she said. “You will soon see a changed budget.” And, clearly, a changed focus. When Dr Moyo was appointed to her post, she was tasked with making that happen – and that’s exactly what she’s doing. It was an excellent event, with a full house of property professionals who enjoyed not only the superb breakfast served up by the Durban Country Club but also the opportunity to network and interact with colleagues and principals. As Van Niekerk said, “We want to leave the room today feeling motivated.” And everybody did. 58

SOUTH AFRICAN PROPERTY REVIEW

networking kwazulu-natal

sss

SOUTH AFRICAN PROPERTY REVIEW

Februa EVELOPER TY D PROPER in-depth for an h ion wit discuss Moyo di Dr Nale

s s s ss

s See the of ry issue

ss s s ss

s s s ss

networking - sapoa western cape golf day

1st place: Plascon

2nd place: Arcus Gibb

3rd place: Albert Carpets

APOA Western Cape hosted a very successful golf day on 10 October at Rondebosch Golf Club. All the elements played along on the day to ensure that all 108 players had a good time – although we cannot take responsibility for everyone’s scores… 60

The top prize went to the team from Kansai Plascon with a score of 99, and second and third place went to Arcus Gibb and Albert Carpets respectively. All the winning players walked off with generous Golfers Club vouchers compliments of SAPOA. Eris Property Group sponsored

SOUTH AFRICAN PROPERTY REVIEW

prizes for fourth to ninth place, and supplied us with fantastic wines to hand over to the bestdressed four-ball on the day, which went to the team from Baker Street Properties. We would like to thank the team from Rondebosch Golf Club for the excellent service, as well as

NMC (Pty) Ltd, The DoubleTree by Hilton Hotels, Koreserve Group, Bidvest Prestige Cleaning and Grindrod Bank for sponsoring holes on the day. Thank you to all the member companies that participated in the event – we hope to see you again next year!

networking - sapoa gauteng golf day

1st place

2nd place

Longest-drive winner

Towerbridge team

3rd place

Nearest-the-pin winner

Plascon final SOUTH AFRICAN PROPERTY REVIEW

networking - mpumalanga gala dinner

A milestone celebration

At its first gala dinner,

the Mpumalanga regional branch celebrated in style while reviewing key issues By Candace King Photographs by Richard Burger

n less than nine months, the Mpumalanga regional branch has grown tremendously on all fronts. To celebrate its achievements and existence, the region held its first gala dinner on 29 October 2013 at the sumptuous La Villa Vita, which was sponsored by Glenn Bayford and Rob Mclagan of First National Bank, as well as co-sponsors HL Hall & Sons and Kellaprince Properties. The dinner was attended by a host of SAPOA members, including CEO Neil Gopal and president Estienne de Klerk. Pianist Nita Lombard and violinist Anneke Coetzer entertained the guests while regional secretariat Samantha le Grange attended to everyone’s needs through the evening. Mpumalanga regional chair James Aling addressed the guests about the region’s achievements to date. Discussions about setting up a regional branch first started at the end of 2011, and were followed by a number of formal engagements with SAPOA’s head office in 2012, culminating in final board approval in December 2012. After the recruitment of a suitable secretariat, the regional branch was officially launched on 1 April 2013. “Our focus has been to formalise our committee, increase membership through the promotion of the SAPOA brand and offering to the local property industry, bring down the SAPOA offering to our members and folk in the industry, and advocate on key issues affecting our members,” said Aling. “We have also been focusing on obtaining critical mass and capacity at a Nelspruit/Mbombela level before actively expanding to the rest of the province.” Since its inception, the Mpumalanga regional branch has made exceptional progress. Membership has doubled with 11 new members (44%) joining since the beginning of the year, nine of whom joined after the launch. Current membership is 25, and the region is striving to get to 40 members by April 2014. Networking functions have also taken off, with the region having already hosted a breakfast briefing as well as a second MOMFA educational workshop. In terms of communication, the region has ensured media coverage of its events, releases on issues such as instituting a Services Appeal Board, and a bi-monthly newsletter to its members. 62

SOUTH AFRICAN PROPERTY REVIEW

Regional council members FROM LEFT Samantha le Grange, Don Lagerwey, Neil Gopal, Kleinste van Rensburg, Derek Todd, Keith Kellar, Wesley Tendaupenyu, James Aling, Estienne de Klerk, Bennie van der Merwe

Main sponsors FROM LEFT Regional chair James Aling, SAPOA CEO Neil Gopal, SAPOA president Estienne de Klerk and regional vice-chair Keith Kellar, with Glenn Bayford, Rob Mclagan and Hendrik Ferreira (First National Bank)

Co-sponsors FROM LEFT James Aling with Joe Izeboud, Craig Lewis and Wimpie de Beer (HL Hall & Sons)

Co-sponsors FROM LEFT Colin Potgieter, Charlotte Snyman, Derek Todd, Keith Kellar, Grant Campbell and Amanda de Langa (Kellaprince Properties)

In terms of advocacy and lobbying, Aling noted that SAPOA has recognised several key issues that require immediate attention. These include the need for a representative on the Rental Housing Tribunal; formal written input into the provincial SPLUM bill; and servicing issues ]with Mbombela Local Municipality and Sembcorp and Silulumanzi, especially bulk service contribution policies.

In closing, Aling noted that, across the board, there seems to be a very strong call and push for improving the social contract and strengthening the partnership between the government and the private sector. “If we want to get our growth trajectory onto another level, closer to five percent, organisations such as SAPOA provide a platform for this in the property sector,” he said.

networking - kzn gala dinner

Sarah van Niekerk

SAPOA President Estienne de Klerk, Councillor Logie Naidoo, SAPOA CEO Neil Gopal and KZN regional chairman Edwin van Niekerk

Danny Govender

Tiffany and Rory Wilkinson

Entertainer Cat Simoni

Caressa Perumal, Sedise Moseneke, Lorentha Covenden

Greg Bath, Surita Vithal, Paul Haselau

Nokwazi Mlambo, Andrew Church, Sam Daykin

Ben and Hilda Potgieter SOUTH AFRICAN PROPERTY REVIEW

off the wall

Saving Private Zadar What can dying towns do to revive their population numbers and tourist visits? One town, off the Adriatic Sea, may have the answer By David A Steynberg

The Sun Salutation is a large circular series of solar panels paved into the walkway. During the day the panels collect and store energy; at night they light up in sequence to the sounds of the Sea Organ, in much the same way as musical fountains operate

ourism remains one of the planet’s biggest contributors to global GDP, requiring a very low investment injection to get it going. And once it’s running, it’s very hard to stop. Take the Croatian city of Zadar. It was inhabited by the Illyrian Liburnian tribe in the 9th century BC. The Romans then began a 200-year struggle at the end of the 3rd century BC, and by the 1st century BC, Zadar became a Roman municipality and colony. Braving occupation by various colonists

SOUTH AFRICAN PROPERTY REVIEW

and World War II – during which it was blown to pieces by the Allies (Zadar was occupied by the Germans at the time) – it is today a city that boasts some of the world’s best-preserved Roman architecture. This in itself is – and will always remain – a tourist drawcard. But what if you’re not interested in Roman relics? The city, which is home to 72 000 people, is then only able to attract a very small portion of the greater tourism pool.

The spring of 2005 changed the city’s status. Zadar’s name became more spoken about, and Google searches became more frequent. But what was causing the sudden interest? A brilliant marriage between nature and modern technology was formed. The Sea Organ quite literally put Zadar back on the tourism map. It is, as its name suggests, an organ powered by the sea. Thirty-five pipes below the white steps on the Adriatic quayside emerge on the surface of the walkway. As the sea undulates, the water pushes air through the pipes, creating a random, but beautiful, whale-like sound. The architect behind the design is Nikola Bašic – a tough man to track down. Soon after the Sea Organ, Bašic came up with a complementary installation: the Sun Salutation. It is a large, circular series of solar panels paved into the walkway. During the day the panels collect and store energy – but at night they light up in sequence to the sounds of the Sea Organ, in much the same way that musical fountains operate. These two attractions have certainly helped to boost tourist numbers, and thus investment. Which of our seaside cities or inland towns could do with a Sea Organ or a Sun Salutation of sorts to revive its tourism sector?

All accounted for Every time

Financial Viability

Value Management

Procurement Documentation

Acknowledgement: SAOTA â&#x20AC;&#x201C; Stefan Antoni Olmesdahl Truen Architects

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

DISPUTE RESOLUTION

PROPERTY VALUATION