South African Property Review July 2015 by SAPOA

South African Property Review

PROPERTY SOUTH AFRICAN

July 2015

REVIEW

FURTHERING EDUCATION The SAPOA Bursary Fund’s biggest achievement NEW KID ON THE BLOCK Newtown Junction takes top honours Financial and Investments

THE PULSE OF THE BAY Baywest Mall opens its doors

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monthly cou n Our

Th e WOR

FINANCE AND INVESTMENT FOCUS Deconstructing investing in property

by-country focu try-

July 2015

Ireland: Celtic Tiger rises

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development

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contents

July 2015

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

July 2015

REVIEW

FURTHERING EDUCATION The SAPOA Bursary Fund’s biggest achievement NEW KID ON THE BLOCK Newtown Junction takes top honours Financial and Investments

THE PULSE OF THE BAY Baywest Mall opens its doors

series

s●

Abreal

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monthly cou n Our

The WOR

FINANCE AND INVESTMENT FOCUS Deconstructing investing in property

ON THE COVER The R1,4-billion Newtown Junction mixed-use development in the Jo’burg CBD took top honours and scooped multiple awards at the 2015 SAPOA Annual Innovative Excellence in Property Development Awards

by-country focu try-

July 2015

Ireland: Celtic Tiger rises

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From the CEO From the Editor’s desk Industry news Legal update DTI turnaround on Broad Based Empowerment Education, training and development Planning and development Planning education in South Africa Theme leader Deconstructing investing in property Eye on the world Ireland SAPOA Bursary Fund Interview Durban in the hot seat Feature The pulse of the bay REIT investments Eco-mobility breakfast Investors to increase acquisitions in 2015 Workshop Collaborating with government Inspired over breakfast Mingling at the Michelangelo Breakfast session at Umhlanga Rocks Statistics Proﬁles What’s on Upcoming events Fun & quirky JT Foxx Q&A Off the wall Designing to keep the lights on

Oilgro

FOR EDITORIAL ENQUIRIES email nthabiseng@mpdps.com 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 Copy Editor Ania Rokita Production Manager Dalene van Niekerk Designers Wade Hunkin, Dirk Knoesen Sales Riëtte Stevens Finance Susan du Toit Contributors Anne Schauffer, Eugenia Makgabo, Lekgolo Mayatula, Martin Ferguson Photographers Mark Pettipher, Xavier Sauer, Pierre van der Spuy

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

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Printed by Designed, written and produced for SAPOA by MPDPS (PTY) Ltd e: mark@mpdps.com

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e: david@rsalitho.co.za

2015/06/15 11:38 AM

from the CEO

Commercial property rates and taxes – a comparison SAPOA CEO Neil Gopal highlights the comparisons regarding commercial property rates and taxes across South Africa’s eight metropolitan municipalities

APOA’s comparison of the level of rates and taxes levied in each of the eight metropolitan municipalities reveals some variance in the cents in the rand rate across the main property types. The latest rates and taxes research from SAPOA highlights the huge disparity between the country’s major cities in terms of the resources available to deal effectively with ongoing urbanisation, unemployment, poverty and inequality. Within the context of the National Development Plan’s emphasis on major cities being the engines of economic growth, these disparities and the shortcomings they reveal need to be addressed as a matter of urgency. The research also confirms that over the last decade, rates and taxes have consistently increased at a rate higher than inflation, with a rates and taxes annualised rate of inflation of +8,2% during the period from 2005 to 2014. Although prior to this the increase in rates and taxes exceeded inflation, acceleration in growth has been more noticeable since 2005. From solely a rates randage perspective, for the fiscal year of 2014/2015, the highest level of commercial property rate randage was levied in the eThekwini Municipality, where a rate of 3,053 cents in the rand applied to industrial property. Commercial and business property saw a slightly lower tariff of 2,36 cents in the rand being applied.

The City of Tshwane reported the secondhighest cents in the rand rate, with industrial and business property both taxed at 2,71. The lowest rates applied to the City of Cape Town, with both industrial and commercial property taxed at 1,25 cents in the rand. The largest municipality in terms of revenue, the City of Johannesburg, applied a rate of 1,73 cents in the rand, while Nelson Mandela Bay, Buffalo City and Mangaung (the three smaller metros) had comparatively high commercial property rate randages. It must be noted that the rate randages do not necessarily result in higher property rates as this is predominantly affected by the actual property value. The case of the eThekwini Municipality is therefore instructive. While the eThekwini Municipality’s rate randages come out as the highest, the number of rateable properties is more than 60% less than both Cape Town and Johannesburg, and the value of commercial and industrial properties is more than half that of Johannesburg and nearly half that of Cape Town. This can be seen with eThekwini having the least quantum of rates revenue of the three major cities. Furthermore, within eThekwini, more than 90% of the total rateable property is residential, resulting in a major challenge for the municipality. The nett effect is therefore a higher rate randage than in the other major cities but not necessarily higher property rates. Rates revenue is a critical source of revenue within every municipality, and the huge challenges within eThekwini force it to rely heavily on such revenue. Presenting the highlights of the city’s budget, eThekwini Municipality Mayor James Nxumalo said a large portion of the municipality’s R6,1-billion capital budget will be pumped into low-cost housing and infrastructure development throughout the city, with the aim of creating an enabling environment for new investments and other activities that lead to job creation. Mayor Nxumalo confirmed the city’s commitment to building a sustainable city for future generations, based on infrastructureled growth, unlocking investment, economic

development and job creation. Investments include more than 65 flagship projects across the city, from manufacturing, construction and real estate to tourism, information communication technology, agriculture, maritime and logistics. The projects are expected to create about 680 000 permanent jobs in the long term and bring in potential revenue of about R9-billion for the city. The municipality has established a projectmanagement office whose main role is the facilitation of the implementation of catalytic projects such as inner-city renewal in addition to building capacity. Mayor Nxumalo said that in drafting the tariff increases, the city took cognisance of economic conditions, input costs and the affordability of services to ensure the financial sustainability of the city. Rates and taxes form a significant percentage of overall municipal revenue, with the eight metro municipalities collecting R29-billion in rates and taxes – 17,9% of total revenue. During the 2013/2014 fiscal cycle, commercial and industrial property rates billings amounted to 54,5% of overall rates revenue in the country’s metropolitan municipalities, with significantly lower levels of arrears than commercial clients. Of the eight metro municipalities, six reported increases of more than 30% in the value of commercial and industrial properties. Mangaung reported the largest increase, with the valuation of its commercial property almost increasing, while eThekwini reported a municipal valuation increase of 50%. Tshwane and Buffalo City were the only municipalities with a valuation increase close to inflation, with 5,6% and 4,7% respectively. The increase in rates and taxes comes in a much tougher macroeconomic environment, with economic growth currently at levels of only about half of that during the period between 2004 and 2007. As a result of this tougher trading environment, it is becoming increasingly challenging for landlords to deal with the additional tax burden. Neil Gopal, CEO

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from the CEO

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from the Editor’s desk

STRONG RELATIONSHIPS ARE BUILT ON SOLID FOUNDATIONS We know the importance of relationships. Working together allows us to understand your needs so we can offer the best real estate solutions for you. With over 152 years of banking experience, this is how we’re moving real estate forward.

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from the Editor’s desk

Signing off In her ﬁnal issue of the South African Property Review, SAPOA Publications Editor Candace King reﬂects on her journey

n February 2014 I wrote my very first editor’s letter for SAPOA’s South African Property Review. Now, 18 months later, I’m writing my last. I dug up my first editor’s letter and reminisced on what was written. “With a passion for writing and expression and a piqued interest in current affairs, I always knew I would be involved in the media industry. But I never imagined that I would become the editor of a commercial property magazine – two, in fact.” The letter continued with, “The South African Property Review and the Property Developer are exceptional titles that have helped to shape my career as a journalist. Property is a fascinating thing. It not only represents our built environment but it defines our existence as humans.” Property still remains fascinating to me and my time as Editor of the South African Property Review has been a phenomenal experience. I have grown and learnt a great deal about the property industry in South Africa, its people and its passions. I would like to thank Immediate Past President Amelia Beattie for teaching me about the REAL in real estate, SAPOA Chief Executive Officer Neil Gopal for his leadership, and the SAPOA staff for their assistance with the publications. I would also like to extend a warm thanks to the publishing and sales team of SAPOA’s publications – without you, this product wouldn’t be the success that it is. Lastly, I want to thank all those who play a role in the property industry. Thank you for your guidance, your insight and the wonderful stories that you helped shape for the South African Property Review and Property Developer.

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February 2014

Modderfontein metropolis

Introducing

Tongaat Hulett

Addressing Africa: RICS Africa Summit

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Towering feat: a catalyst for investment

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May 2014

Mall of Africa

Shanghai Zendai’s city plan

Lords View: A green view on things

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PROPERTY

May 2015

Farewell, Property Developer SAPOA Publications will also be bidding a farewell to the quarterly Property Developer. The May 2015 edition was the last stand-alone issue of Property Developer. But this isn’t goodbye: the publication will be incorporated into the South African Property Review. Once every quarter, the magazine will be beefed up with development content, adding further value to SAPOA’s core monthly publication. SAPOA would like to thank all clients who have advertised in the Property Developer. Your support has been unrelenting.

PROPERTY

Developer

I wish the next editor all the best and hope that they will carry and nurture this baby into the future. My journey has been fun – and it’s definitely not the end.

Atterbury’s retail roll-out: the sky’s the limit

Developing an oceanic fairy tale

Cornubia: Durban’s mixeduse marvel

2014/01/15 10:03 AM

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A work in progress

2014/04/08 8:45 AM

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OR F S IE LOBB U YO The Director Land Use and Soil Management Department of Agriculture, Forestry and Fisheries Private Bag X120 PRETORIA 0001 4 June 2015 SAPOA COMMENTS: ENT OF AGRICULTURAL LAND FRAMEWORK DRAFT POLICY AND BILL ON PRESERVATION AND DEVELOPM INTRODUCTION

sentative body and official voice of the commercial and 1.1. The South African Property Owners Association is the repre industrial property industry in South Africa. rty investment organisations to bring together all 1.2. SAPOA was established in 1966 by the leading and large properful platform for property investors. role players in the commercial property field and create a powe of the commercial and industrial property voice 1.3. SAPOA is recognised as the representative body and officialof R500 billion. SAPOA members control approximately s exces in lio portfo ined industry in South Africa, with a comb 90% of all commercial and industrial property in South Africa. the bill under discussion. st in 1.4. It is thus clear that SAPOA has a direct and substantial intere t to the subdivision and rezoning of agricultural land is respec with bill the of ure struct 1.5. From what follows it is clear that the ) and 41(ÂŁ) of the Constitution as read with schedule unconstitutional in that it falls foul of the provisions of sections 156(1 of municipal planning, as explained more fully below. 4 Part B, whereby municipalities have executive authority in respect by national government and the legislative and where 1.6. It furthermore falls foul of section 155(7) of the Constitution municipalities of their functions in respect of inter alia by e rmanc perfo ective eff the executive authority are to see to executive authority, already alluded to above. The schedule 4 by regulating the exercise by municipalities of their respect to their executive function in respect of bill does not do so but seeks to disempower the municipalities with responsible for agriculture, the MEC responsible for municipal planning and to vest the power to do so in the Minister agriculture and bodies created in the bill. statute in that section 44(2) of the Constitution applies 1.7. Furthermore, the bill does not profess to be a section 44(2) of section 44(3) of the Constitution, the bill will have to only to functional areas listed in schedule 5; indeed, in terms for or incidental to the effective exercise of a power be regarded as regulating a matter that is reasonably necessary be unconstitutional for the aforegoing reasons. concerning a matter listed in schedule 4, and will to that extent itution in that it seeks to provide for expropriation of 1.8. It further falls foul of the provisions of section 25(3) of the Const ble compensation at a lower price than would be paid agricultural land in certain circumstances at less than just and equita for agricultural purposes (clause 54(3)(c) and 151 (a)). for similar land in the same geographical area which is used optimally Act 16 of2013 is completely ignored by the Bill. nt 1.9. Furthermore the Spatial Planning and Land Use Manageme ing final promulgation. The bill, if legislated in its await is and ent Presid the by This act has been assented to substitutes the processes described in the act present form, deals largely with the same subject matter, but the bill duplicates town planning processes but with new processes and new decision makers. In many respects,over any other land uses. If the bill is legislated in within the context of the supremacy of agricultural use of land ds to amend the SPLUMA statute, because the its present form, the question arises whether the legislator inten rs granting applications in respect of the very two statutes cannot exist side by side with different decision make same land uses and matters.

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from the CEO’s desk

ING WITH RESPECT TO THE FUNCTIONAL AREA THE CONSTITUTIONAL DIMENSIONS OF DECISION MAK OF MUNICIPAL PLANNING 1 itutional Court had to decide on the meaning of 2.1. In Johannesburg Municipality v Gauteng Tribunal the Constitution. It decided that the term municipal planning municipal planning as used in part B of schedule 4 of the Const ing which includes the zoning of land and the is a term which assumed a particular, well established mean used to define the control and regulation of the establishment of townships. In that context, the term is commonlywhere the word carries a meaning other than its use of land. It decided that there is nothing in the Constitution the use of land.2 common meaning, which includes the control and regulation of sphere of government by stipulating that one of each 2.2. Section 41(f) of the Constitution confirms the autonomy except those conferred on them in terms of the other the of ion funct or r sphere may not assume any powe in the affairs of another is the context in which the Constitution. The limited scope for intervention by one sphere national and provincial spheres enjoy concurrent powers conferred on each sphere must be construed. While the neither of them can by legislation give itself the legislative authority over matters listed in part B of schedule 4, ister municipal affairs.3 power to exercise executive municipal powers or the right to admin 1995 were thus declared inconsistent with section 156 2.3. Chapters V and VI ofthe Development Facilitation Act 67 of granted powers to the DFA Tribunal to grant rezoning of the Constitution read with part B of schedule 4 in that it and decide and grant applications for establishment of townships. gned chapters V and VI of the Development impu 2.4. The bill under discussion follows the same structure as theexclusive executive power to control and regulate the their of es ipaliti munic the Facilitation Act 67 of 1995 divesting and may I add in this context, the subdivision use of land, the zoning of land and the establishment of townships, the Minister responsible for agriculture as well as of land. It falls foul of section 41(f) of the Constitution by having ions of municipalities whilst those powers and the MEC responsible for agriculture clothed with the powers or funct n. functions were not conferred on them in terms of the ConstitutioAfrica fall within the jurisdictional area of some South of lic Repub the within 2.5. It must be realised that all land executive authority and administration conferred municipality and the effect of the bill will be that the exclusive municipal areas will not only be interfered with, upon municipalities with respect to agricultural land within theirt and the provincial government. but will become subject to decisions by the national governmen BILL ASSUMPTION OF MUNICIPAL PLANNING POWERS IN THE thereof. Clause 2 provides for the object to regulate the 3.1. The very object of the bill illustrates the unconstitutionality the object expressed in clause 2(b)(ii) is inter alia to subdivision, rezoning and protection of agricultural land whilst agricultural land including urban and other nonprohibit land uses unrelated to agriculture from taking place on established or proposed protected agricultural agricultural developments that are likely to create conflict with theland that results in fragmentation of farming areas and to prohibit the subdivision and rezoning of agricultural. systems, reduced agricultural productivity and land degradationl agricultural resources and maintain the agricultural 3.2. Clause 2(e) has the object to ensure the sustainable use of natura es from agriculture to other forms of development. landscape through the prohibition or discouragement of land use chang on heritage of all the people of South Africa and the 3.3. Clause 3(1) then declares agricultural land to be the commAfricans. This declaration seems to be modelled on the department as custodian thereof for the benefit of all South as the National Water Act, 1998. However, the Mineral and Petroleum Resources Development Act, 2002 as well law and the Declaration on Permanent Sovereignty “custodianship” expressed in those acts derive from international such instrument exists with respect to agricultural over Natural Resources adopted by the United Nations in 1962. No convoluted way of stating that the Department is land and the expression of custodianship in this section is a rather , the kind of regulation with respect to municipal entitled to regulate agricultural land; however, as pointed out above the department or the national government. planning as set out in the bill does not fall within the power of either ’s agricultural land, the department’s power nation 3.4. Therefore clause 3(2) which states that as custodian of the ing or subdivision of agricultural land, is simply rezon any ge mana and ister to approve, reject, control, admin unconstitutional. at par 57 p 203

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from the CEO’s desk

FOR S E I LOBB U YO

at par 43-44 and 49 pp 199E, 200 A-B and 204 D-D See Johannesburg Municipality v Gauteng Development Tribunal suprapotential cropping land, and on provincial level high 3.5. Chapter 2 of the bill sets about to regulate on national level, subdivision of the relevant land is prohibited, unless the ces instan both In land.4 medium potential agricultural Again, the rezoning with associated subdivision, if approved by the minister and/or the MEC, as the case may be. tal committee. A similar structure is created with required, is prohibited unless approved by the inter-governmen respect to medium potential agricultural land in clauses 31 to 52. and the high water mark of the municipality’s ipality 3.6. In all of this the ultimate decision is not taken by a munic . ations applic upon ent involvement is the right to comm es should take into account in formulating their IDP’s 3.7. However, the bill goes further by prescribing what municipaliti and SDF’s. rtment of Agriculture, the minister, the MEC’s and the 3.8. All these provisions, read in conjunction, make the Depa makers who may prescribe to the municipalities structures created in terms of the bill, the ultimate decision how their planning must be done, all of which are unconstitutional. with respect to medium potential land, clauses 31 to 52 4 See with respect to high potential cropping land clauses 5 to 40 and MISUSE OF POWER TO EXPROPRIATE

power to expropriate has to be exercised according 4.1. A power to expropriate may be created in legislation, but thatand it must in general conform with the requirements to the procedures set out in the Expropriation Act 63 of 19755 of section 25 of the Constitution. d and deviations from section 25(3) as far as just and 4.2. The power to expropriate ought to be closely circumscribe onal. The only space which exists to supplement the equitable compensation is concerned, will be unconstituti have to be taken into account in order to arrive provisions of section 23(3) of the Constitution lies in factors which seek to grant less compensation than would at just and equitable compensation. However, legislation which itution, will be completely unconstitutional. otherwise have been payable in terms of section 25(3) of the Const ensation norm is to be at a price lower than the comp 4.3. In clauses 34(3) and 15l(a) there is a strange notion that ltural land optimally for that purpose or heeding a agricu using not for ion sanct a market value, apparently as directive issued in terms of clause 151.6 ensation and the time and manner of payment must 4.4. On the other hand clause 65(3) provides that the amount of comp . The other sections are therefore contradicted. be determined in accordance with section 25(3) of the Constitution See Section 26( 1) See clause 151(9), 34(3) SALE OF A PORTION OF AGRICULTURAL LAND

al farm has already been subdivided into portions, each 5.1. The use of the word “portion” is ambiguous. When an origin are also described as portions ofthe farm. It should be existing as a separate cadastral unit, those cadastral units tral unit. made clear that what is intended, is an undivided portion of a cadasfor agricultural purposes. Was that the intention? land 5.2. Section 58 does not strike at the sale of a portion of agriculturalfor agricultural purposes now be unregulated? land ltural agricu of n portio vided Will the sale of an un subdi high potential cropping land? Previously no consent 5.3. Does clause 59(1) also strike at existing undivided shares in ht, sold or registered. As formulated in clause 59(1)(c) was necessary where existing undivided shares were boug of another, will also need the relevant consent. the registration of transfer of existing undivided shares in the name two or more portions of land need the consent of the 5.4. In this context the question also arises why consolidation of minister in terms of clause 61. the criteria would be on which the minister or the MEC 5.5. As with other consents, there is no indication in clause 61 of what

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section is overbroad and grants an absolute discretion must grant consent or must consider an application. In that sense thisonal in terms of section 2 of the Constitution. with respect thereto. This is against the rule of law and is unconstituti between a right in land and a servitude which iation 5.6. The same difficulty which existed with respect to the different by clause 68 as read with clause 59 of the bill. For ued existed in the Subdivision of Agricultural Land Act is contin personal servitude, while servitudes are separately example, a habitatio as mentioned in clause 59(1)(d) is indeed a rities which have to grant consent are different dealt with in clause 68. Are these provisions cumulative? The autho or may in specific instances be different. VIOLATION OF THE RULE OF LAW ent. 6.1. There is a further constitutional dimension which needs comm vision, consolidation and the like, the relevant subdi ing, 6.2. In all the provisions concerning applications for rezon the MEC representing the relevant province, is granted official or body representing the national government or ations. absolute discretions in respect to the granting or dismissing of applic nt factors are which the decision maker releva the what 6.3. No criteria are laid down in the bill which prescribes the circumstances and criteria applicable which has to take into account. Furthermore there is no indication of would oblige the decision maker to grant the applications. a position where the law with respect to the granting in 6.4. In this regard the bill is thus overbroad and leaves the applicantcan handle the matter according to his own whims. r or refusal of applications is so vague that the decision make n and the exercise of discretions must be circumscribed. 6.5. In order to comply with the rule of law, the law must be certai avention of section 2 of the Constitution. 6.6. In this respect the bill is contrary to the rule of law and in contr OF AGRICULTURAL LAND THE POWER TO ENFORCE OPTIMAL AGRICULTURAL USE to enforce the active use of development of agricultural 7.1. In part IV of chapter 2 from clause 54 onwards the bill seeks n of the land. land and the optimal utilisation thereof on pains of expropriatio opment potential, even with the consent of the devel 7.2. The members of SAPOA, after having bought land with ct farming operations optimally on such land or face minister, will thus be in a position that they will have to condu oped. the possibility of being expropriation until such land has been devel best use of land and simply accepts that the and st highe 7.3. This illustrates how the bill does not take into account the g purposes. highest and best economic use of land would be for farmin for future development in the spatial development 7.4. That would be the position even if the land is demarcated framework of the relevant municipality. MISCELLANEOUS REMARKS

problems arising from the bill which are not dealt with 8.1. There are various formulation problems and other practical is impractical and will in practice take years to compile. in this comment, such as the agricultural land register which once the unconstitutional aspects thereof are excised 8.2. Broadly speaking, the bill is structurally unconstitutional and there remains very little. aspects which fall within the functional area of 8.3. The bill should be withdrawn and reformulated on those the Department. Yours faithfully

Neil Gopal

Chief Executive Officer SAPOA The South African Property Owners Association

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industry news

Atterbury wins big as Newtown Junction takes top honours

tterbury Property Developments’ new R1,4-billion Newtown Junction mixeduse development in the Jo’burg CBD took top honours and scooped many awards at the 2015 SAPOA Annual Innovative Excellence in Property Development Awards. Newtown Junction was declared the overall winner at the coveted awards, after also receiving accolades for best mixed-use development and the overall transformation award. Atterbury was the big winner at this year’s SAPOA Excellence Awards with another two Atterbury developments – the West Hills Mall in Ghana and the Westcon Offices and Warehouse development at Waterfall Industrial Park – winning the international development award and the industrial development award respectively. “We are delighted to secure multiple awards, including the main overall title at the 2015 SAPOA Innovative Excellence in Property Development Awards for our Newtown Junction development,” says Cobus van Heerden, Director of Retail Developments at Atterbury. Newtown Junction – an 85 000m² mixeduse shopping, leisure and office development in Jo’burg’s trendy Newtown precinct – was opened in September 2014. It was developed by Atterbury Property Developments for

Atterbury Property Holdings and JSE-listed Attacq Limited. Newtown Junction includes a 38 000m² retail component, about 39 000m² of prime office space, basement parking for 2 400 cars and a new City Lodge Hotel, which is under development. “These awards are regarded as the Oscars of South Africa’s property industry, so we are truly proud that our Newtown Junction project has been recognised as the overall best property development in the country,” says Van Heerden. “This is a great achievement for a great development, which is transforming the Jo’burg CBD’s historic Newtown precinct into a vibrant mixed-use shopping and leisure destination with prime office space.” Newtown Junction’s development represents the first significant injection in the Jo’burg CBD in 40 years and is part of a key urban regeneration initiative in the Newtown node. The office component of Newtown Junction is largely taken up by Nedbank in a landmark building that has achieved a 4-Star Green Star SA rating from the Green Building Council of South Africa. Newtown Junction has to date created about 2 700 jobs during the construction phase of which 850 were jobs for local unemployed people. It is estimated

that about 4 800 people will be working at Newtown Junction when it’s fully operational on the retail, office and hotel components. “Newtown Junction is anchored by its retail component, which includes more than 70 stores and restaurants, a Ster-Kinekor cinema complex and a gym,” says Lucille Louw, Managing Director of Atterbury Asset Managers. “Atterbury is committed to the success of the Newtown node and urban regeneration within the Jo’burg CBD. The Newtown Junction mixed-use development offers shoppers, office workers, residents and visitors a first-rate, trendy and safe shopping and leisure destination in the Jo’burg CBD. With the introduction of FATTi, Atterbury’s new shopping centre analytics and technology solutions service, in Newtown since December 2014, we can accurately say that the current footfall at Newtown Junction is nearing 500 000 per month.” “Winning the SAPOA international development award for the 27 700m² West Hills Mall project is another feather in the cap of Atterbury,” says Van Heerden. “Atterbury is a leading developer of prime and world-class property projects not just in South Africa but also in other parts of the continent.” +27 (0)12 471 1600, Atterbury.co.za

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industry news

Nedbank makes R323-million commitment to the Cape’s retail sector

edbank Property Finance has granted R323-million to FPG Group for the purchase of the Cape Gate Lifestyle precinct from Hyprop, Africa’s leading specialist shopping centre real estate investment trust (REIT). The acquisition comprises 30 000m2 GLA, which includes a lifestyle and decor centre, an Engen service station, drive-thru Steers and KFC, and a Toyota dealership. The six properties are located along Okavango Road in Durbanville, Cape Town, adjacent to the Cape Gate regional mall and in close proximity to the successful Makro development, which is partly owned by Nedbank. Tenants of the lifestyle and decor centres include Super Spar, Virgin Active, Build-It Hardware, Cash Converters, Pure Plastics, Postnet and Tafelberg Furniture. Richard Thomas, Nedbank Property Finance’s Regional Executive for the Western Cape, says the bank was enthusiastic about funding the development not only because of its long-term relationship with the FPG Group, but also because the properties are well located and tenanted by quality national tenants on long-term leases. “We have been the FPG Group’s financier of choice

for more than five years and we are proud to partner with them once again in this transaction,” he says. “The Group is an experienced retail operator and we feel sure it will add value to this key property in Cape Town’s northern suburbs.” The FPG Group – then known as Foodprop – was established in 1989 as a wholly owned subsidiary of the Foodworld Group, which was then the largest independent retail group in the Western Cape, consisting of 13 supermarkets and four wholesale outlets, which was sold to Shoprite. Foodprop was created to build a propertyowning entity to source new sites for its retail division, and

to build a diverse property portfolio to include the industrial and office sectors. In 2006, the Group concluded its largest single property development – the R300-million The Claremont, which consisted of 322 apartments. In 2013, the Group rebranded to become the FPG Group to reflect the broader focus across all property sectors, and made its first international property acquisition in the UK. Today FPG Properties has grown to include 38 properties, primarily in the retail sector, with limited exposure in the office, industrial and residential sectors. The portfolio comprises a GLA of more than 160 000m²

and more than 70% of this space is occupied by national tenants. “With the latest IPD results confirming that the retail sector has held its ground, Nedbank Property Finance continues its ongoing commitment to the sector by providing agile and relevant financial solutions that realise opportunities for quality retail property clients such as the FPG Group,” says Thomas. “This, coupled with our strong partnership approach, is a strong proposition that ensures we remain the market leader in the commercial property finance sector.” +27 (0)11 295 8045, Nedbank.co.za

Newmark Hotels scoops multiple awards

outique hotel group Newmark Hotels, Reserves & Lodges has scooped a total of 10 TripAdvisor Certificates of Excellence and one sought-after Hall of Fame award. TripAdvisor’s Certificate of Excellence awards are based on consumer reviews and take into account the quality, quantity and most recent reviews and opinions submitted by travellers over a 12-month period. The 10 Newmark properties awarded are The Dock House

Boutique Hotel & Spa, the Victoria & Alfred Hotel and the Queen Victoria Hotel in the heart of the V&A Waterfront in Cape Town; and, also at the Waterfront, Dash restaurant at the Queen Victoria Hotel and Oyo restaurant at the Victoria & Alfred Hotel; Nkomazi Game Reserve in Mpumalanga; The Five-Star Drostdy Hotel in Graaff-Reinet; Motswari Private Game Reserve in the Timbavati – part of the greater Kruger National Park; The Nyungwe

Forest Lodge in Rwanda; and Coral Lodge 15.41 in Northern Mozambique. Another coup is that Newmark’s Victoria & Alfred Hotel has been included in the TripAdvisor Hall of Fame, which is a new award for properties that have won the Certificate of Excellence for five years consecutively. This is some achievement because only nine percent of total winners qualify for the Certificate of Excellence

Hall of Fame by consistently doing well over five years. “Our hotels and lodges appeal to travellers – we give them the service and the overall good experience they are looking for,” says Newmark Hotel’s Managing Director Neil Markovitz. “TripAdvisor keeps us on our toes – the public doesn’t lie – so these 10 awards confirm we’re determined to get it right on every level. We’re delighted.” +27 (0)21 427 5900, Newmarkhotels.com

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industry news

V&A Waterfront rental accommodation offers affordable and vibrant luxury living

he iconic V&A Waterfront has contributed about R227-billion towards the GDP of South Africa’s Western Cape province between 2002 and 2014, with forecasts revealing that this growth will continue for the next 10 years. Despite the perception that the V&A is predominately a retail and tourism hub, the residential property component is a significant contributor towards GDP growth. According to David Rebe, Chief Executive Officer of Sandak-Lewin Property Trust, in the recent past the V&A has become a thriving residential area, providing residents with convenient and vibrant accommodation. While in the past residential property within the V&A has been perceived as only catering to the ultraluxurious high-end market, the area now offers careerdriven entry-to-high-level professionals vibrant urban residences at reasonable prices.

An example is the recently completed long-term residential rental complex, the Ports Edge, which is the first of its kind in the area. This is the first residential building wholly owned by the V&A that is being offered for rental. With easy access to the city centre, highways and MyCiti bus stops, the residential complex is ideal for professionals who want to live and breathe the buzz of the city. Rebe says that apartments across the V&A Waterfront, CBD, Green Point and Sea Point remain

in huge demand because of the central and scenic location – and the lack of affordable, reasonably priced accommodation in the region means developments such as Ports Edge are fast gaining popularity, with the building’s occupancy rate at almost 100%. “Areas such as the V&A Waterfront remain attractive because of the vibrant lifestyle that residents can enjoy,” he says. “Perks of being situated in the area include easy access to the city, limited traffic congestion and amenities such as live

entertainment and an assortment of restaurants, cafés, bars, local and international retail outlets, as well as safe running tracks and bicycle lanes for residents to enjoy.” He adds that the R50-million development of the Watershed – which is situated next to the Ports Edge, offering arts and craft workmanship exhibited by local artists – provides residents with an opportunity to indulge in the creative landscape at their own leisure. In addition, the Watershed features Workshop17, a collaborative shared working space. “Other than the soughtafter living experience at the V&A, residents are also attracted to the rental aspect of the accommodation as they prefer not to be tied down with a mortgage,” says Rebe. “Moreover, residents are able to enjoy the urban and vibrant environment knowing that they have 24-hour security.” +27 (0)21 408 7500, Waterfront.co.za

Stable interest rates provide affirmation for home buyers

espite the current economic environment characterised in part by muted growth, subdued business and consumer confidence, reduced disposable income and ongoing energy constraints, South Africa’s housing market continues to demonstrate noteworthy stamina and resilience across all segments in the face of these challenges, says Dr Andrew Golding, Chief Executive of the Pam Golding Property Group. “With rising inflation a growing concern, the decision by the Monetary Policy Committee (MPC) to keep the repo rate steady was positive news, although it is likely that the increasing fuel price and proposed further hike in electricity tariffs may bring pressure to bear on the MPC’s future stance,” he says.

Property market resilience can be demonstrated in a number of ways. One example is that of first-time buyers who continue to exhibit an increasing appetite to transact, and as a result enjoy a long-term benefit of investing in their future through home ownership. “In addition, we remain confident that in the coming months we will begin to see the positive impact of the 2015 National Budget announcement that no transfer duties are payable on property transactions below R750 000 (as opposed to the former R600 000 threshold),” says Golding. “The lending climate and affordability of a deposit and bond repayments play a significant role in the firsttime home-buyer segment of the market. Also encouraging is what

Dr Andrew Golding, Chief Executive of the Pam Golding Property Group

is generally perceived as a more favourable lending environment, with mortgage originator Ooba reporting higher approval rates (76% in April 2015) and more competitive rate concessions by financial institutions. These are critical factors in supporting growth in this sector of the market.

“Despite socioeconomic and political challenges, confidence in real estate as an investment prevails across all sectors of the market, with some clear trends evident. These include a desire to reside in economic nodes and transport corridors with easy access to the workplace and schools; a growing demand for convenient apartment living, both in terms of sales and rental accommodation; and a shift towards secure estate living in integrated communities where there is a strong emphasis on sustainability and self-sufficiency. The latter undoubtedly reflects a direct response to rising energy, water and other municipal costs as well as a growing environmental awareness.” +27 (0)21 710 1700, Pamgolding.co.za

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2015/06/15 11:42 AM

legal update

DTI turnaround Don’t be left inonthe dark Broad Based Empowerment

Landlords are cautioned to heed against the cutting off of tenant’s electricity

In light of the recent uncertainty regarding the DTI’s Broad Based Empowerment notice, the department has made some revisions

L T

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

This legal opinion is only a guide and should not be copied with the expectation that it will serve each party’s individual circumstances. Most of these recommendations have not been tested in our courts. SAPOA cannot guarantee any success in any court if any of these recommendations are put to use.

andlords are constantly faced with frustration when tenants of Trade and do he notDepartment fulfil their contractual Industry caused widespread obligations. This leaves the uncertainty confusion in its landlord in and a situation where Notice 396 inpotentially the Government they could be left Gazette of 5 MayA2015, which out of pocket. scenario that stated that black participants is popular is the non-payment inofbroad-based employee electricity byand tenants. share ownership schemes could In the Anva Properties CC only contribute a maximum of v End Street Entertainment three points (out of the total available 25 BBBEE ownership points) to a firm’s BBBEE score in terms of the Codes of Good Practice issued under the Broad Based Black Empowerment Act. On 8 May, the Department issued a statement that BBBEE transactions concluded before 1 May 2015 would not be affected and that the Department would appoint a technical task team to explore the “appropriate balance between active (direct) and passive (broad based schemes) ownership”, and report to the Minister within 30 days. On 12 May 2015 in a radio interview, the Minister of Trade and Industry Rob Davies clearly and unequivocally announced that the DTI will withdraw paragraph (d) of the clarification notice, and as such dispense with the three-point cap on broad-based empowerment schemes and employee share ownership schemes. On 15 May 2015, the department Enterprises issued CC casea further (hereinafter notice in the Government referred to as the case), Gazette, there is which withdrew 396. evidence of the Notice above-mentioned Itconduct accordingly appears by anow tenant. thatAnva the status quo has Properties CCbeen restored and that broad-based (hereinafter referred to as and ownership the employee applicant)share sought an order schemes are again eligible authorising it to terminatetothe contribute all (and just electricity to supply to not premises three) of the 25 available BBBEE in a building situated at 34-36 ownership points in the Codes. Riebeeck Street, Cape Town. The applicant owns the building and

Landlords are constantly faced with frustration when tenants do not fulfil their contractual obligations. This leaves the landlord in a situation where they could potentially be left out of pocket. A scenario that is popular is the non-payment of electricity by tenants

End Street Entertainment of close corporations, and CC (hereinafter referred to even if these had been taken, would thus appear ●● Thethe transitional period asItthe respondent) wasthat one restoration of a close the team that was to beit. forcorporation the alignment of Sector oftask the tenants occupying under the Close created this respect would Codes has beenAct extended Theinapplicant pays electricity Corporations No. 69 of 1984, notolonger be of necessary. to the end of October the City Cape Town and The Revised Notice of 2015. From 1 November recovers that cost from the Clarification has, however, 2015, Sector Codes that are tenants. The respondent retained the following: aligned shall be effective occupied the basement ●● The Amended Codes in accordance with the of the building since 2012, of Good Practice came 1 May 2015 effective date. from where it conducted into effect on 1 May 2015. A consideration shall be business as a bar and nightclub. made for Sector Codes The respondent used not aligned by the end electricity for its air-conditioning, of October 2015 to refrigeration and lighting be repealed. facilities, which were the primary ●● All valid BBBEE certificates requirements for the business to issued under the old Codes be functional. It was established as well as the relevant Sector that the tenant had not paid its Codes should remain valid, electricity bill since September accepted and treated as 2014; and that it is in arrears empowering suppliers. in excess of R300 000. ●● All EME (Exempted Micro Enterprises) certificates Considerations issued without Empowering The respondent raised two Supplier Status will be defences. The first related automatically recognised to the validity of the lease as Empowering Suppliers. and the second to the right to bring an action by the landlord. readproclaimed with the Companies SPLUMA ● Firstly, it was contended Act No. 71 of 2008, does not Thenecessarily Spatial mean that all of its that on the applicant’s own Land showing, the respondent was Planning activitiesand during the period finally deregistered in 1998, when it was deregistered Use Management Act long before it purportedly automatically validated. (ActareNo. 16 of 2013) into a lease agreement ● Given the above-mentioned ●● Allentered BBBEE verifications is now in effect. conducted using the financial with the applicant on 7 May established facts it was year ending before 30 April 2012 to hire the premises. recognised that no valid lease Dear Members, please note 2015 can stillthe be verified using Secondly, applicant agreement was entered into that the Spatial Planning the oldno Codes Goodto Practice, has locusofstandi claim between the parties, and and Land Use Management and all BBBEE payment of verifications any debt from that the applicant’s claim for Act (Act No. 16 of 2013) came conducted using the financial the respondent because the relief based on a lease into effect on 1 July 2015. year ending after 1 May 2015 it has ceded all its rights to purportedly entered into In terms of Section 61 of must be verified using the Nedbank Limited. Consequently between the parties the Spatial Planning and Land amended with the any it has noCodes, right to recover cannot succeed. Use Management Act (Act exception the Sector Codes. amount of under the ceded debt. No. ● Further, given(“the that the 16 of 2013) Act”), a welcome clarification, ●This It isissettled law that respondent has been South African President Jacob asderegistration companies with a financial puts an deregistered that the Zuma determinedand 1 July 2015 year end in 2014 or prior end to the existence of a lease agreement as the date on whichpurportedly the Act tocorporate 30 April 2015 mayNo stillsteps be entity. is invalid, it is shallconcluded come into operation. rated under the old Codes. have been taken to restore unnecessary to deal with the respondent to register respondent’s second defence. SOUTH AFRICAN PROPERTY REVIEW 13

It accordingly now appears that the status quo has been restored and that broad-based and employee share ownership schemes are again eligible to contribute to all (and not just three) of the 25 available BBBEE ownership points in the Codes

The only defences available to the landlord would be that the tenant failed to prove one of the two essential spoliation requirements, namely possession or dispossession, which would be a mammoth task

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education, training and development

Property programmes at UJ A look at property valuation and management qualifications available at the University of Johannesburg

Martin Ferguson is SAPOAâ&#x20AC;&#x2122;s HR, Education, Training and Development Manager

For more information, please contact: Martin Ferguson Human Resources, Education, Training and Development Manager t: +27 (0)11 883 0679 e: martin.ferguson@sapoa.org.za

he purpose of the property valuation and management programme at the University of Johannesburg is to prepare students to be well-rounded prospective employees once they enter the property industry. To achieve this, property valuation and management modules were introduced as electives in the BCom Finance degree. After a generic first year, students can register for property valuation and management modules in the second and third year of their undergrad studies. The primary purpose of the BCom Finance degree is to provide students with applied competencies in the mastering, analysis, interpretation and application of financial and investment management, financial planning, accounting principles and property valuation and management in preparation for a career in the property industry as well as to provide a basis for further learning. Consistent exposure to realworld situations provides students with opportunities to reflect on their ability to apply financial, investment, financial planning, accounting and property valuation and management decisions, and to assess the effect thereof in the holistic context of the property industry. Exposure to the different disciplines provides a sturdy foundation to support the multidisciplinary nature of the property industry. After successful completion of the BCom Finance degree, students can specialise in one of four honours degrees: Financial Management, Investment Management, Financial Planning, or Property Valuation and Management.

The purpose of the BCom Honours in Property Valuation and Management degree is to strengthen studentsâ&#x20AC;&#x2122; knowledge and comprehension of the disciplines of property valuation and management. The programme consists of a broad-based curriculum to prepare the postgraduate student for a wide range of property-related specialities. The curriculum topics range from property valuation and property law to property finance and property management. The programme emphasises application, analysis and evaluation within each topic area, and the application of integrity and ethics in a professional environment. Mastering the curriculum will provide students with the skills to synthesise complex valuation, management, financial and legal principles in order to add value to the entities that employ them. Although the BCom Finance degree with property valuation and management modules is the preferred route of entry into BCom Honours in Property Valuation and Management, there are other routes for prospective students who completed other qualifications. One such route is the Bridging Programme in Finance, intended for prospective students with any bachelorâ&#x20AC;&#x2122;s degree, related BTech degree or a related national diploma, excluding the National Diploma: Real Estate, who intend enrolling for BCom Honours in Property Valuation and Management. The learning material repeats the core topics and outcomes covered in the second and third year of Financial Management, Financial Planning, Investment Management, and Property

Valuation and Management modules. The content of these modules provides students with the foundation necessary for the successful completion of honours studies in the field property valuation and management. The Advanced Diploma: Property Valuation and Management offers progression for National Diploma: Real Estate students to NQF Level 7. Successful completion of this programme will provide students with property valuation and management knowledge and may lead to articulation into the BCom Honours Property Valuation and Management programme. The formal qualifications described above were all accredited by the South African Council for the Property Valuers Profession in 2014. Students who successfully complete any one of these qualifications will be able to register as candidate valuers, and those who complete the BCom Honours in Property Valuation and Management as professional valuers. In addition to the formal qualifications, the University of Johannesburg also offers a number of extracurricular qualifications, which include well-known SAPOA courses such as the Introduction to Commercial Property Programme (ICPP), the Essential Commercial Property Programme (ECPP), the Property Management Programme (PMP), and the Property Financial Programme at basic, intermediate and advanced levels. The PMP programme with UJ is run over two separate weeklong block sessions (total of 10 contact days), followed by an examination.

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education, training and development

Partnering with UJ University of Johannesburg Annual Prize Giving Breakfast in the spotlight

APOA has a close relationship with the University of Johannesburg, especially the Department of Finance & Investment Management, under which the Property Valuation and Management qualifications and the SAPOA Educational Short Learning Programmes fall. On 23 April, the Department of Finance & Investment Management honoured its top-performing students for the 2014 academic year at the Johannesburg Country Club. Various associations – including the South African Council for Valuers, SAPOA and the South African Institute of Chartered Accountants, and others that are involved in the allocation and sponsoring of bursaries, providing internships and graduation programmes, serving on the Department of Finance & Investment Management advisory committees, and sponsoring top performance awards – were present.

FROM LEFT Martin Ferguson, Nichole Leigh Maroun and Andrè Kruger

For the Property Valuation and Management qualifications, Martin Ferguson from SAPOA and Andrè Kruger from the Property Division of the Department of Finance & Investment Management were invited to present the award to

the Top Performing Student, Nichole Leigh Maroun, who achieved the highest marks in Property Valuation and Management 2 during the 2014 academic year. We wish Nichole all the best with her future studies and trust

that she will be rewarded again next year for her 2015 academic achievements. We congratulate the Department of Finance & Investment Management on this great initiative and wonderful event in honour of their top achievers.

SAPOA Valuations Workshop series for 2015 SAPOA in partnership with the University of Pretoria is planning a series of Valuations Workshops for 2015

he Valuation Workshops will be offered monthly for the remainder of the year. They will be full one-day workshops and will deal with the following topics on the indicated dates. Venues will be confirmed and will either be at the University of Pretoria or in Midrand: ●● 3 July 2015: Advanced income capitalisation valuations ●● 21 August 2015: Commercial property economics

●● 18 September 2015: Principles of discounted cash flow valuations ●● 23 October 2015: Highest and best use valuations ●● 13 November 2015: Valuation of properties under construction ●● 4 December 2015: Principles of feasibility studies The workshop fees for SAPOA members will be R2 150 per workshop (including VAT).

The workshop fees for nonmembers will be R2 500 per workshop (including VAT). If delegates register and pay for all workshops before commencement of the first workshop, they will receive a 10% discount per workshop. The workshops have been vetted by the Engineering Council of South Africa and SA Council for the Property Valuers Profession, and CPD credits will be allocated. See Sapoa.org.za for more details.

For enquiries please contact: Mafonti Morobi SAPOA Training Coordinator t: +27 (0)11 883 0679 e: hr-education@sapoa.org.za To register or for enquiries, please contact: Banele Senatla Course Coordinator t: +27 (0)012 434 2630 e: banele.senatla@ce.up.ac.za

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education, training and development

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education, training and development

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planning and development

Planning education in South Africa The South African Council for Planners places education in the spotlight By Martin Lewis

Lekgolo Mayatula is SAPOA’s Planning and Development Manager Sources SACPLAN Consolidated Report on Competencies and Standards: December 2014; SACPLAN Guidelines for Competencies and Standards for Curricula Development: December 2014

SACPLAN has identified the need to re-evaluate the current planning competencies to ensure that the competencies enable registered planners to meet the challenges they face. What is clear is that the definition of planning in South Africa has evolved over time 18

he South African Council for Planners (SACPLAN) is the statutory council responsible for regulating the planning profession in terms of the Planning Profession Act No. 36 of 2002 (the Act). In addition to the typical functions of a statutory professional council, this includes the setting of standards and the accreditation of planning schools for ensuring and promoting a high standard of education and training in planning. As a result of ongoing transformation since 1994 and the implications of the need for planning to be “reinvented”, in 2009 SACPLAN commissioned a consortium to undertake research into the process of preparing new competencies and standards for the planning profession. SACPLAN has identified the need to re-evaluate the current planning competencies to ensure that the competencies enable registered planners to meet the challenges they face. What is clear is that the definition of planning in South Africa has evolved over time. Planning was widely viewed as a technical activity concerned mainly with layouts, infrastructure design and control of land use and the built form. This was followed by a period during which planners needed conceptual and technical skills to enable them to operate effectively in an increasingly complex world where change is less predictable than in the past. The formulation of competencies and standards for the planning profession needed

to be informed by four contextual factors. The first is recognising the diversity of local needs and choices: how planning can improve people’s lives while taking cognisance of diversity of cultural, gender and ruralurban relationships as well as the formality-informality continuum. The second is the need for planning to promote sustainable patterns of development. Sustainability can be broadly understood to mean social, economic and environmental sustainability. The role of planning is to harmonise the three dimensions of economic efficiency, social equity and environmental sustainability. The third relates to the high level of economic inequality in the country. How can planning reinvent itself and become a catalyst for providing economic and livelihood opportunities? Different forms of investment need to reflect local needs and choices, and not only represent the dominant public and private drivers of investment. This not only requires a substantial understanding of the dynamics of land markets and regulatory instruments used to influence the forces at play in those markets but also an understanding of the nature of the economies at local and community levels. The fourth relates to the complexity of our rural history and land use practices. Planning education needs to ensure that planners are mindful of the rich history of traditional land practices and that they incorporate these into planning approaches in a way that builds on and supports indigenous practices while also

recognising the role formal and informal land markets and planning practices play in a global economy. To achieve the above, three inter-related sets of competencies have been identified for the planning profession. These are generic, core and functional competencies. Generic competencies are the essential skills, attributes and behaviours that are seen as important for all planners, regardless of their function or level. Generic competencies are the basic competencies common in all the built and natural environment disciplines. Core competencies, on the other hand, include the specific knowledge, skills, abilities and experience that a planner must possess to successfully perform the work and activities central to professional planning practice. This is the set of competencies that distinguishes planning from the other professions with which it interfaces. Functional competencies are the basic skills and behaviours needed to do a job successfully. These are competencies that relate to the “how to do” aspects of planning. Accredited qualifications must cover the competencies at either a diploma level (NQF Level 6), a three-year bachelor’s degree level (NQF Level 7), or a four-year professional bachelor’s degree level, honours degree level or master’s degree level (NQF Level 8 or 9). A professional planner (a person who holds a qualification on NQF Level 8 or 9 with at least 24 months of post-qualification

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planning and development

experience) must demonstrate a good conceptual grasp of the field of urban and regional planning as practised in South Africa and an ability to assess a situation that requires planning intervention and formulate appropriate responses; provide leadership to fellow professional planners, professionals in related fields, communities and other stakeholders in the planning processes; and possess some specialist planning knowledge or skills. As indicated, SACPLAN is mandated to accredit planning schools with the aim of ensuring and promoting a high standard of education and training in planning. There are eleven institutions of higher education that offer planning at NQF Level 6 or higher. SACPLAN has accredited qualifications of the following institutions: ●● Cape Peninsula University of Technology (National Diploma: Town and Regional Planning (ND TRP) and Bachelor of Technology: Town and Regional Planning (BTech TRP)); ●● Durban University of Technology (National Diploma: Town and Regional Planning (ND TRP) and Bachelor of Technology: Town and Regional Planning (BTech TRP)); ●● North-West University (Bachelor of Arts ET Science (Planning)); ●● University of Cape Town (Master in City and Regional Planning (MCRP)); ●● University of the Free State (Master in Urban and Regional Planning (MURP));

●● University of Johannesburg (National Diploma: Town and Regional Planning (ND TRP) and Bachelor of Technology: Town and Regional Planning (BTech TRP)); ●● University of KwaZuluNatal (Master of Town and Regional Planning (MTRP)); ●● University of Pretoria (Bachelor of Town and Regional Planning (BTRP) and Master of Town and Regional Planning (by coursework) (MTRP)); ●● University of Venda (Bachelor of Urban and Regional Planning (BURP)); and ●● University of the Witwatersrand (Bachelor of Science Honours in Urban and Regional Planning (BSc Hons (URP), Bachelor of Science in Town and Regional (BSc TRP), and Master of Science in Development Planning (MSc (DP)). Property developers who wish to appoint an urban and regional planner must ensure that such a planner is registered with SACPLAN. Registration with SACPLAN as a professional or technical planner validates a person’s professional knowledge, experience and commitment to working to highest standards, and indicates that the person is a responsible member of the planning profession, working under a Code of Ethics and Professional Conduct. If a planner is successfully registered with SACPLAN,

property developers can expect that person to have a knowledge of urban spatial structure or physical design and the way in which cities work; an ability to analyse demographic information to discern trends in population, employment and health; a knowledge of plan-making and project evaluation; an understanding of local, regional and national government programmes and processes; an understanding of the social and environmental impact of planning decisions on communities; an ability to work with the public and articulate planning issues to a wide variety of audiences; an ability to function as a mediator or facilitator when community interest conflict; an understanding of the legal foundation for land use regulation; an understanding of the interaction between the economy, transportation, health and human services and land-use regulation; an ability to solve problems using a balance of technical competence, creativity and pragmatism; and an ability to envision alternatives to the physical and social environments in which we live.

For more information, please contact:

Martin Lewis is the Chief Executive Officer of the South African Council for Planners

Registration with SACPLAN as a professional or technical planner validates a person’s professional knowledge, experience and commitment to working to the highest standards, and indicates that the person is a responsible member of the planning profession, working under a Code of Ethics and Professional Conduct

Martin Lewis Pr. Pln, MRTPI, CEO South African Council for Planners t: +27 (0)11 318 0460/0437 e: mlewis@sacplan.co.za w: Sacplan.co.za

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theme leader

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theme leader

Deconstructing investing in property The South African property sector has been a huge winner over the last decade, returning 22% per year compared with 18% for the FTSE/JSE All Share Index (ALSI). Allan Gray discusses how the sector has managed to perform so well, why this performance is unlikely to be repeated, and why property companies may be more risky than they appear at ďŹ rst glance By Allan Gray Associate Portfolio Manager Jacques Plaut and Investment Analyst Yusuf Mowlana

he past decade has been a very good one for property investors. Those investors, ourselves included, who were underweight in the sector, lost out. Looking back, we underestimated the extent to which interest rates would decline and stay low under a very accommodative monetary policy in developed countries, and we underestimated the ability of some management teams to add value to their portfolios. On top of this, the resulting tailwind to valuations allowed listed property companies to benefit from earnings-enhancing acquisitions in South Africa and overseas. While this past decadeâ&#x20AC;&#x2122;s performance has been fantastic, it is unlikely to be repeated. Investors who buy into the sector today are only getting a 5,1% initial dividend yield. This might not seem so much more expensive than the 8,7% yield they would have received in 2005, but it equates to a 70% price increase. The sectorâ&#x20AC;&#x2122;s eight percent growth over the last 10 years is better than inflation, which has averaged six percent, but worse than the average JSE-listed company, which has grown dividends at about 16% per year over the same period. Even this relatively modest eight percent is an overstatement of underlying growth because it has been boosted by acquisitions and by property companies paying less interest on their debt. More generally, the upside of owning a property share is limited compared to other businesses. Some companies can reinvest earnings at a 30%-plus return on equity; property companies tend to do single digits.

This is probably partly the result of the different competitive position. Despite location advantages, most malls and offices can be replicated, but it is harder to compete with an established brand such as Cartier or the technology and commercial innovation expertise at work in Tencent. In the last five years, there have been 29 new property listings, more than in any other sector. These have been driven not only by favourable valuations but also by recent changes to regulations that now favour listed property over unlisted property. Large new offices are under construction in Sandton, Johannesburg, despite already-high vacancies, generally low levels of net space uptake and a trend towards more efficient use of space. In most industries, high levels of investment coupled with more competition equal lower returns for existing players. With capacity expanding ahead of demand growth, certainly one should expect lower growth in dividends for the next part of the industry cycle. Lastly, re-valuation has added six percent to overall returns over the past 10 years but this may not be the case over the next 10. Because interest rates are currently zero in many countries, investors are paying high prices for risky assets such as shares, junk bonds and property. This has benefited South African property companies, which are currently trading at record-high valuations. The large South African property companies in the sector currently trade at a premium to the 10-year rolling bond yield, which was previously only surpassed in 2007 during the last decade.

SOUTH AFRICAN PROPERTY REVIEW

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2015/06/15 10:26 AM

theme leader If property valuers became more conservative, the ratio of debt to property value would increase, and property companies would

Investors appear to be pricing in future growth, which is higher relative to history. The risk is that the growth disappoints. One could argue that this will continue but on a balance of probabilities, we think it is more likely to reverse and turn into a headwind.

have to raise more money Risks in the sector from shareholders One explanation for

the sector’s high valuation could be that investors see very low risk to current earnings. We think this view is optimistic. Many companies use debt to boost their returns. There is nothing wrong with this, but the extent to which it happens in the property sector can be somewhat disquieting. Some property companies have a debt balance that is seven times larger than annual income. To put this another way, if a company in such a position applied all its income to paying off debt – and paid no dividends – it would take seven years to pay off all the debt. The only other sector that is more geared than this is the banking sector. It is no coincidence that both sectors have long-term contracts with their clients and relatively stable income. But in times of stress, the large debt balances will become more prominent in investors’ minds. Economically stressed tenants can’t always meet their commitments nor easily renew their leases. If debt holders suddenly required higher interest rates or safer covenants, equity holders would be in trouble. If property valuers became more conservative, the ratio of debt to property value would increase, and property companies would have to raise more money from shareholders. We saw this all happen to a dramatic extent in Australia in 2008. Property companies do not account for the replacement cost of assets like other companies do: there is no depreciation charge on the income statement. In this respect, long-term earnings are overstated, and property companies normally need to issue debt or shares to be able to pay for capital expenditure.

Take Growthpoint Properties Ltd, the largest South African property stock, as a typical example. It is clear that capital expenditure – some of which was for growth, and some of which was for replacing or upgrading of old buildings – has been paid for by borrowing money and by issuing shares. It is striking that the company has raised R7-billion more from shareholders than it has paid to the shareholders. As a result, Growthpoint Properties Ltd’s shares in issue have increased by 14% per year over this period. To a large extent, these shares have been issued to make acquisitions – and, mostly, Growthpoint Properties Ltd has bought companies trading on a higher dividend yield than itself – in other words, companies that the market has placed on a cheaper valuation than Growthpoint Properties Ltd itself. This operation has the effect of boosting earnings per share even when there is no actual organic improvement. We believe Growthpoint Properties Ltd has added real value by issuing all those shares in order to make acquisitions; however, we don’t think this is something it will be able to repeat given its current size.

Beware of paying a premium In hindsight, there were times in the past 10 years when we should have been more positive on property. But right now, we think that investors are paying a premium multiple for property stocks that is not justified by the fundamental prospects. The re-valuation tailwind is not likely to repeat, and may even reverse. Dividend growth has been boosted by acquisitions. We think the market does not fully appreciate all of the risks in the sector, especially the high level of gearing. Unlike in the late 1990s, when more than 20% of our clients’ balanced portfolios was invested in property and the dividend yield on the property sector went as high as 23%, we continue to have an underweight position in the sector.

Growthpoint cumulative cash flows (R-bn)* Cash profits from property rentals

17,6

Dividends to shareholders

-16,5

Capital expenditure

-37,2

Debt raised

12,7

Equity raised

23,6

Saints BRDSC1504

*July 2004 to June 2014 Source: Growthpoint Properties Ltd ﬁnancial statements, Allan Gray research SOUTH AFRICAN PROPERTY REVIEW

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theme leader

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40 690 kilograms of icing sugar, 81 380 litres of milk, 162 760 kilograms of flour and 406 178 drops of vanilla essence, in order for her business to flourish.

As one of South Africaâ&#x20AC;&#x2122;s largest urban lifestyle developments, Savanna City gives thousands of South African entrepreneurs access to over 18 000 homes, 16 educational facilities, 9 retail and 32 institutional sites. So itâ&#x20AC;&#x2122;s not surprising that Phumza chose Savanna City as the community in which to grow her enterprise.

REALISE your potential INVEST in Savanna City

Saints BRDSC1504

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Theme Leader_JULY_SUBBED.indd 23

SOUTH AFRICAN PROPERTY REVIEW

2015/06/15 10:30 AM

series ●

s●

monthly cou n Our

Th e WOR

by-country focu try-

Did you know? Ireland is the third-largest island in Europe and the 20th-largest in the world.

After taking a ﬁnancial knock, Ireland is rising from the ashes By Candace King

Key facts ▼ Population 4,8-million (July 2014 est.) ▼ Major cities Dublin, Cork, Limerick, Galway, Waterford ▼ Currency Euro (EUR) ▼ Total area 70 273km² ▼ GDP growth 3,6% (2014 est.) ▼ Key industries Pharmaceuticals, agriculture, chemicals, computer hardware and software, food products, beverages and brewing, medical devices 24

The Celtic Tiger rises T

he Republic of Ireland is the quintessential phoenix story. Born out of political and religious conflict, Ireland became an independent state and transformed into one of Europe’s economic success stories in the final decade of the 20th century. With a history characterised by religious tension and bitterness between Protestant and Catholic communities, Ireland’s past is filled with clashes and uprisings. Situated in Western Europe, occupying five-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain, the Republic of Ireland occupies most of the island of Ireland, off the coast of England and Wales. Boasting a beautiful environment and an international cultural presence, Ireland is known as a prime tourist destination. It’s nicknamed the "Emerald Isle” because of its lush landscape of rolling green hills.

In 1948, all ties to the British monarchy were severed and the modern-day Republic of Ireland formed. In 1973, Ireland joined the European Community and the Eurozone currency union in 1999 – it was a founding member of the euro. Thereafter the country transformed from a largely agricultural society into a modern, high-technology economy. Tax cuts, deregulation and a policy of negotiated pay restraint introduced in the late 1980s transformed Ireland’s economy. With an influx of foreign investment, it became one of the top economies of the time and unleashed a period of rapid growth. The country became known as the “Celtic Tiger” from the mid-1990s onwards, boasting an average GDP growth of six percent between 1995 and 2007. The boom attracted a growing number of incomers, creating a new multiculturalism.

SOUTH AFRICAN PROPERTY REVIEW

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eye on the world

Did you know? Ireland is the only country in the world that has a musical instrument – the harp – as its national symbol.

The Samuel Beckett bridge in Dublin spans the river Liffey (© B Olfers | Flickr.com)

After 2000, Ireland’s growth was characterised by a property boom, which was fuelled by large bank lending. This boom collapsed as a result of the 2008 global financial crisis, sending Ireland into one of the Eurozone’s deepest recessions. The country also suffered public debt and heightened unemployment, while also experiencing a subsequent collapse of the domestic property market and construction industry. In return for agreeing to implement strict austerity measures, the Irish government had to accept an EU/IMF bailout of €85-billion in 2010. Between 2010 and 2013, Ireland relied heavily on international lenders. In 2009, the country introduced the first series of draconian budgets in order to stabilise its fragile banking sector. It was in 2013 that things finally began to turn around for Ireland: the country’s economy pulled out of its second recession since the 2008 crisis, and became the first Eurozone nation to leave the bailout scheme.

From the ashes Ireland is slowly beginning to recover. The turnaround is largely being stimulated by growing foreign direct investment, especially from US multinationals. In 2014, Ireland’s economy improved rapidly – it was one of the fastest-growing economies globally that year, with the GDP growth of approximately five percent representing the highest in the Eurozone. Foreign direct investment continued to perform strongly last year with the IDA recording 197 investment projects realised, of which 88 were entirely new to the country. The recovering economy assisted in lowering the deficit to 4,2% of GDP. Towards the end of 2014, the government introduced a fiscally neutral budget, resulting in the end of the austerity programme. Amid the collapse of the construction sector and the downturn in consumer spending and business investment, Ireland’s export sector has become an important aspect of its economy.

The Spire of Dublin rises behind the statue of Jim Larkin (© Jaqian)

Characterised as a small, modern, tradedependent economy, Ireland’s high birth rate has made it demographically one of the youngest populations in the EU. The country is also active in international peacekeeping and pursues military neutrality. One of Ireland’s key issues is unemployment; Ireland’s low corporation tax of 12,5% has been at the heart of the encouragement of business investment. Once steered by agriculture, Ireland’s economy is now dominated by its IT sector. According to the Harvard Business Review, Ireland has been listed alongside Israel and Singapore as a “standout” country – where the digital economy is moving at its fastest. The situation in Ireland is becoming more positive. Consumer confidence is at its highest since 2006, unemployment is decreasing steadily and the attractive improvements to taxation have resulted in increased disposable income. In light of this, Ireland’s property market is starting to show signs of positive growth. SOUTH AFRICAN PROPERTY REVIEW

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2015/06/15 11:13 AM

eye on the world

prime industrial rents under 500 sq.m.

+34.4%

Dublin region prime industrial rents under 500 sq.m. at €82 per sqm (+34.4%) and €74 per sqm (+42.3%) prime industrial rents over 500 sqm.

Industrial rents remain relatively unchanged in Leinster (€36 per sqm) and Connaught/Ulster (€46 per sqm) for prime rents under 500 sqm.

+27% Office at development Saint Anne’s Church the eastern land values increased by 27% end of Anne Street in downtown Dublin in the Dublin Region (© Bjørn Christian Tørrissen)

7.8%

11%

Munster region Industrial net yields return to 2012 levels as yields fall to 11.17% (-0.3%) for prime units (over 500 sqm.)

+16% Retail development land values increased by 16% in the Leinster Region

+42.3%

prime industrial rents over 500 sq.m.

Industrial

Fall in industrial yields to 10% (-1%) in Connaught/Ulster Region for prime units over 500 sqm.

Industrial yields 7.8% in Dublin Region for prime units over 500 sqm.

+32%

Residential development land values increased by 32% in the Dublin Region

+24%

Development Land

-1%

Residential development land values increased by 24% in both the Munster Region and the Leinster Region

+4%

Residential development land values increased by 4% in the Connaught/Ulster Region

Key Summary Outlook 2015

Legend

SCSI members expectations for 2015

% Change in Office Sector Rents % Change in Retail Sector Rents % Change in Residential Development Land Values

Connaught/Ulster Prime ‘Grade A’ Office Rents

+9%

Prime Retail Rents

.6%

+10

.3%

+12

Residential Development Land Values

Dublin Prime ‘Grade A’ Office Rents

+12

Residential Development Land Values

Munster Prime ‘Grade A’ Office Rents

+9.

Prime Retail Rents

+5%

Prime Retail Rents

Leinster

5.5%

Residential Development Land Values

.5%

+17

4.5%

Prime ‘Grade A’ Office Rents

+5%

Prime Retail Rents Residential Development Land Values

+5.

.6%

+16

Source: IPD/SCSI Ireland Quarterly Property Index, Q1 2015 results

SOUTH AFRICAN PROPERTY REVIEW

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2015/06/15 11:15 AM

eye on the world Did you know? The longest place name in Ireland is that of Muckanaghederdauhaulia, in County Galway.

IPD Global Property Index 2014 25 IPD measured markets for the year to December 2014 Total Returns to 2014 Across Global Markets All Property Annual Returns

% pa 40

Ireland, 40.1

30 20

Global 9.9

10 0 -10

IPD GLOBAL PROPERTY INDEX (GPI)

-20

— NATIONALMARKETS

-30 -40 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Sources: MSCI; KTI; OECD

INCOME RETURN VS BOND YIELD Income return vs bond yield Ireland has the largest spread %

Relative Pricing in 2014 For Selected Countries

Spread Between All Property Income Return and 10 - Year National Bond Rate

8 7 6 613 bpts

5 4 3 2

Austria

Sources: MSCI; KTI; OECD SOUTH AFRICAN PROPERTY REVIEW

Eye On The World Ireland_SUBBED.indd 27

Switzerland

Sweden

Denmark

France

Canada

USA

Germany

Italy

Spain

Hungary

Norway

Portugal

Netherlands

South Korea

Poland

Belgium

Finland

Czech Republic

Ireland

Australia

In 2014, the performance of the commercial sector exceeded all market expectations, with end-of-year commercial market investment in excess of €4,5-billion. A record figure of €4,5billion was also invested into the Irish property market. In 2014, the Irish property market outperformed both Irish bonds and equities, which in isolation performed very strongly, with returns of 23,1% and 16,9% respectively. In the final quarter of 2014, overall returns from the Irish commercial property investment market grew by 40,1% year-on-year. This is according to a recent IPD/SCSI Property Index. In Q4, the Irish office sector led the overall market, returning 8,7% and 45,3% year-onyear, compared to 18,3% in 2013. In terms of retail, the returns reached 8,8% in the final three months of 2014 and 34,7% over the year as a whole. While the first months of 2015 showed a decline in Ireland’s residential property market, recent property data has shown an upward price trend. According to the Residential Property Price Index, average house prices increased nationally by 0,6% during April. According to the data, April saw national average property prices at 15,9% higher than a year earlier, with Dublin’s prices inflating by 20,2% for the same period. The rental market has also shown signs of improvement: the country has experienced considerable growth in rents, with the data showing that private rents increased 8,7% year-on-year in April. Ireland’s capital Dublin has been earmarked as an investment hotspot for property investors in 2015. The upliftment of commercial property in the capital has also begun to be seen in other areas. However, there are concerns regarding the health of the property industry in Ireland. The core concern is that prices will continue to rise, driven by a severe lack of supply, which could lead to instability in the housing market. Furthermore, the bottleneck in supply together with an improved lending climate and increased investor interest will result in the market combusting. There have been warnings that the supply of homes in the Dublin area could be depleted by 2015. The number of new housing units to be built in 2015 is expected to increase to 10 000, following 8 800 completions in 2014. Property experts estimate that supply needs to at least triple to catch up with demand.

South Africa

Property in luck

The shortage of houses and commercial property in Dublin is resulting in rising prices and rents, while on the other side, significant oversupply and falling populations in rural areas are depressing prices in other parts of the country. An important aspect of the Irish commercial property sector is the recent introduction of the real estate investment trust (REIT) system. The first Irish REIT launched on the Irish Stock Exchange in July 2013. Since its inception, substantial funds have been raised by various REITs, including Green REIT and Hibernia REIT PLC. The latter recently said that its first full year marked a period of intense activity in Ireland’s recovering property market, as the REIT invested €445-million and committed €43million to 14 transactions. Looking towards the future, there are mixed forecasts regarding the outlook of the Irish property market – only time will tell where the luck will go.

New Zealand

Property investors, esepcially those in dollardenominated countries or with currencies pegged to the dollar, can find Ireland attractive, with purchasing power rising as the euro moves closer towards parity.

2015/06/15 11:20 AM

SAPOA Bursary Fund

Big Bursary announcement Still remaining focused on raising funds for its bursary scheme, SAPOA announced at Convention that R40-million has been approved for the organisation’s Bursary Fund

BACK ROW, FROM LEFT Meshack Phiri, Ntwanano Hlekane, Andile Chabani, Abdullah Sidat and Edwin Ndlovu FRONT ROW, FROM LEFT Neil Gopal, Joy Rakgoale, Wendy Ngomane, Katlego Maboko, Nokulunga Lushaba, Martin Ferguson, Matimba Ngobeni, Nomzamo Radebe

APOA announced at the Annual SAPOA International Convention and Property Exhibition in Durban that it has raised R40million for its Bursary Fund. “Over the next four years, R40-million has been approved for 100 bursary students,” said Head of STANLIB Direct Property Investments and Outgoing SAPOA President Amelia Beattie. “We have surpassed our original goal of 50 students.” The money was raised through a contribution by the Services SETA (SSETA), after negotiations with SAPOA took place over the previous seven weeks. Pamela Snyman, a board member of the SSETA who represented the Chair of the SSETA at the Convention, said, “My wish and goal is to see, through SAPOA, these students

partaking in postgraduate degrees after the next four years.” Passionate about real estate and education, Snyman highlighted that initiatives such as the SAPOA Bursary Fund are exactly what the country needs. “We need skills today and we all need to stand up together and do something – we need to fly high and we need aspiration,” she said. Through education, training and skills development, SAPOA can assist the youth and budding entrepreneurs in becoming independent. “They also need to be focused and relentless in their goals and dreams,” she said. “The youth need to stay current and up to date, and face challenges head on.” In an effort to address transformation in the property industry and to alleviate the

skills shortage in the country, SAPOA established a bursary fund scheme five years ago, which has garnered much success since its inception. “The SAPOA Bursary Fund was initiated with the sole objective to create a fund in the commercial property industry for scholarships and bursaries for previously disadvantaged individuals,” says SAPOA Chief Executive Officer Neil Gopal. “These students are taken through a four-year BSc degree, with the fund fully managed at the SAPOA head office, which takes the intensive administrative matters out of our members’ hands. On completion of their degree, the students are placed with member companies by SAPOA. The future of our nation depends on how we invest in our youth.”

Other current SAPOA Bursary Fund students (not pictured): Nomahlubi Ndziba

BSc Honours Property Studies

First year

University of Cape Town

Happy Boy Mnisi

BCom Honours Property Valuation & Management

First year

University of Johannesburg

Olebogeng Moagi

BCom Finance

Third year

University of Johannesburg

BSc Town and Regional Planning

Final year

University of Pretoria

Irene Tsotetsi Lehlohonolo Mosotho

BSc Town and Regional Planning

Third year

University of Pretoria

Bianca van Niekerk

BSc Honours Urban and Regional Planning

First year

University of the Witwatersrand

Itumeleng Nambo

BSc Property Studies

First year

University of the Witwatersrand

BSc Honours Real Estate

Second year

University of Pretoria

Nande Kizza

SOUTH AFRICAN PROPERTY REVIEW

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2015/06/15 10:15 AM

SAPOA Bursary Student 2015 Intake

Wendy Ngomane

Matimba Ngobeni

Nokulunga Lushaba

BCom Honours Property Valuation and Management (first year), University of Johannesburg

BSc Honours Urban and Regional Planning (first year), University of the Witwatersrand

BCom Finance (final year), University of Johannesburg

Edwin Ndlovu

Andile Chabani

Abdullah Sidat

BSc Urban and Regional Planning (third year), University of the Witwatersrand

BSc Construction Studies (third year), University of the Witwatersrand

Joy Rakgoale

Katlego Maboko

Ntwanano Hlekane

BCom Accounting (second year), University of Johannesburg

BCom Honours Economics (first year), University of Johannesburg

BCom Honours Property Valuation and Management (completed), University of Johannesburg SOUTH AFRICAN PROPERTY REVIEW

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2015/06/15 10:15 AM

SAPOA Bursary Fund

OBJECTIVES OF THE SAPOA BURSARY FUND ◆ To transform the commercial property industry demographics to reflect the population demographics in South Africa. ◆ To redress the past by offering black disadvantaged individuals funding for property related education. ◆ To have financially sound solid governance structure and processes. ◆ Promote the Commercial Property Industry at both school and tertiary levels to students from black disadvantaged backgrounds to ensure growth into the future. ◆ Address the current and future skills shortage levels in the Commercial Property Industry.

The SAPOA Bursary Fund is audited by PriceWaterHouseCoopers

AREAS OF STUDY SAPOA offers bursaries for full-time South African University and University of Technology studies in the following disciplines: ◆ Property Studies ◆ Legal Studies ◆ B Com – Accounting and Finance ◆ B Com – Property Valuation and Management

INVESTING IN THE FUTURE OF PROPERTY LEADERS

◆ Studies in the Built Environment ◆ BSc Quantity Surveying ◆ BSc Town Planning

The South African Property Owners Association (SAPOA) is a member driven organisation that aims to represent, protect and advance its members’ commercial and industrial property interests within the property industry in terms of ownership, management and development. Its objectives are based on the principles of the free enterprise system, as the only workable economic system and the inalienability of property ownership, not only for its members but also for the future of South Africa, and its competitiveness in the world arena. SAPOA is committed to searching for the most talented people who will add value to our members and the industry in its entirety by providing tertiary educational support through the SAPOA BURSARY FUND. The SAPOA Bursary Fund was established in 2009.

SAPOA The SAPOA Bursary Fund is funded primarily by SAPOA members. External bursary funding from any non-member companies and Government will be welcome as it will assist in transforming the commercial property industry and up-skill the nation.

Further information can be obtained from SAPOA Bursary Fund PO Box 78544 Sandton 2146 hrdmanager@sapoa.org.za t: +27 (0)11 883 0679 www.sapoa.org.za 30

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VALUE

W HAT IS IN Bursary IT FOR SAPOA BURSARY PARTNERS SAPOA Student 2015 Intake

Study bursaries may provide the following:

SAPOA will administer the bursary fund and the students on behalf of

◆ Registration fees

the funding partners.

◆ Tuition fees

◆ Partners can concentrate on running their core businesses.

◆ Exam fees

◆ Partners can determine the skills shortage and have an input in

◆ Accommodation and Meals fees (within reason)

specifying the qualifications required to address the skills shortage.

◆ Mandatory books / papers where they are listed as

◆ Partners can offer vacation work and provide practical experience.

recommended reading ◆ Other training courses that will assist the student

◆ Partners will qualify to claim points on their BBBEE scorecards under Statement 300 (Skills Development) or Statement 500 (Socio-Economic Development).

WORK OBLIGATION All bursars will be required to perform vacation work or in-service training, whichever applies, in their field of study at the funding SAPOA member company. After obtaining the degree, bursars must work for the funding SAPOA member company for years in respect of each year for which they received a bursary or repay the bursary costs incurred by the bursary fund.

CONTRACTUAL OBLIGATIONS A contract will be entered into between the SAPOA Bursary Fund and each successful applicant, reflecting the terms and conditions of the bursary. An important condition of the bursary is that bursars who fail to complete their designated course of study will be required to repay the bursary costs incurred by the SAPOA Bursary Fund.

WE ARE LOOKING FOR SAPOA is seeking sponsorship and funding assistance from our members, non-members and government for the SAPOA Bursary Fund to provide

◆ A certificate confirming the SAPOA Bursary Fund is compliant in accordance with the B-BBEE Codes, (Skills Development and Socio-Economic Development), will be issued to contributing partners. ◆ Skills shortage of PDI’s in the industry will automatically be addressed. ◆ Partners will be able to monitor how and where their money is spent. ◆ Partners will be in a position to employ students once they graduate. ◆ Being registered, bursary fund partners will be issued with a Section 18 (a) certificate that will allow TAX deductions from SARS.

SAPOA PARTNERSHIPS The SAPOA Bursary Fund wishes to partner with its members, non-member companies and Government in investing in the future of property leaders. There are three options available to contributors:

OPTION 1

Companies who contribute for the full degree of one or more student will have first option to take one or more students for vacation work and to offer a full-time position after the student has successfully completed the degree.

OPTION 2

graduates who are skilled in commercial property for placement in the

Companies who contribute for a full academic year will have an option to take a student for vacation work and to offer a full-time position after the

public and private sector.

student has successfully completed the degree.

CLOSING DATE FOR APPLICATIONS The closing date for bursary applications is 31 July of each year. Study bursaries are open to all Grade 12 students with a minimum of a C symbol / 60% in Mathematics, Science and Accounting. This also applies to students who are already studying at a University or University of Technology. The Universities have different requirements for the symbol needed in these two subjects. Students therefore need to contact them directly for further information.

OPTION 3 Companies who contribute smaller amounts are not excluded from participating in providing vacation work for students however; the exposure to students will be less. These companies may offer full-time employment to the bursary student at the end of the bursary period. When potential partners choose their contributing option we urge them to take the following into account.

◆ If you provide funding for only one year, who will fund the balance of the years for the student to obtain a degree?

◆ In these instances the bursary scheme can only fund final year and honours students and not full degrees.

SOUTH AFRICAN PROPERTY REVIEW

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2015/06/15 AM 2015/06/09 10:17 5:04 PM

interview

Durban in the hot seat South African Property Review caught up with eThekwini Municipality officials Russell Curtis, Head of Durban Investment Promotion (DIP), and Dr Ajiv Maharaj, Deputy Head of the Policy, Strategy, Information and Research Department (PSRI), part of the Economic Development and Investment Promotion Unit, to discuss the City of Durban’s investment strategy and its way forward By Anne Schauffer

Q What is Durban planning to

do to raise its profile nationally and internationally?

Durban came out as the number-one city on the African continent and number one in South Africa by default (higher than Cape Town and Johannesburg)

There’s a strong thrust on both the tourism front and investment promotion front. The tourism one is perhaps a bit more public, easier to see. Through the city’s own interventions and also private business success, in the last six months Durban has won four or five key accolades. One, we’ve been included in the new 7 Wonder Cities of the World; two, The New York Times rated Durban number seven on its list of top 50 places to go; three, there’s a global consulting company called Mercer, which does a quality-of-living index of 230 cities, and Durban came out as the number-one city on the African continent and number one in South Africa by default (higher than Cape Town and higher than Johannesburg).

We sit at position 85 out of a total 230. That also puts us in the top five of the whole of the Middle East and Africa. By comparison, the quality of living in Dubai – the “haves” – is at 74. The suggestion is that when we sort out crime and grime, we will rocket from 85 into the top 50. Then, National Geographic has rated its top 10 metropolitan port cities globally – we’re rated at number seven. On the investment side, the city continues to attract investors, and we’re having probably our best success of late both in the CBD and the surrounds. The Durban Investment Dashboard has about 65 projects – in excess of R650-billion worth of investments. Interestingly enough, a fair number of foreign investments are in there as well. Samsung is a public one we can talk about, but we’re also engaged with other multinationals that want

SOUTH AFRICAN PROPERTY REVIEW

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interview

to relocate their manufacturing, commercial or other facilities. It’s reflected in other areas too, such as the number of tower cranes in the centre of Durban (currently six or seven, which we haven’t had for 20 years). Durban is doing a collective job of both the private and public sector. Government can’t take credit for this because it’s a combination of what private investors and the public sector people are doing to raise the profile of Durban on both the leisure-tourism front and the business-investment one.

Q What is Durban doing or

planning to do to put itself on the investment map ahead of Johannesburg and Cape Town?

Of the new developments that the city has on the Durban Investment Dashboard, the city leadership has decided to take the top

20 projects, pull them into an elevated structure under the deputy city manager, and attach more senior project managers to those flagship investment projects to accelerate them through the regulatory processes. That’s just happened in the last month. It’s been a concerted six-month effort to raise the priority of projects, to raise the reporting of projects, and to add additional human and financial resources to accelerate delivery of these projects. At the same time, there’s been a nice resonating partnership with national government, particularly in the form of the national treasury, national economic development and the DBSA, who have recognised that our growth in job numbers and in property rates can principally come through catalytic flagship projects. The likes of the national treasury and the DBSA have started to apply some of their own funding to these projects to help accelerate them, thus creating additional resources and platforms for the private sector to come on board with its land, its ideas and its capital, and to start to accelerate not only the scale and number of projects, but also the pace at which they move forward. The city’s also looking at creating a kind of one-stop shop for investors – certainly for your key kind of investors initially and then rolling them out further – to improve the bureaucratic process of submitting plans, getting approvals and so on. Another initiative that will be going through to council quite soon is the development of an incentive policy – looking at how we can incentivise certain types of development to meet different objectives for the city, such as job creation and so on. There are a lot of potential partnerships with the city and the different spheres of government, particularly the national treasury. There is also an approach that the treasury is promoting, and Durban has translated that into the local context. I think there is also a need for more detailed interaction between the city and SAPOA members to help understand all of that and to see that we’re promoting and directing development.

FROM LEFT Dr Ajiv Maharaj, Deputy Head of the Policy, Strategy, Information and Research Department (PSRI) and Russell Curtis, Head of Durban Investment Promotion (DIP)

Q How can the private sector work more collaboratively with the city?

There was a question around rates – not a question from us. We don’t see it as a question of local government, administration and the private sector. It’s one problem, a joint problem; we need to sit together to see how we can solve such problems and find the best way of solving them. SOUTH AFRICAN PROPERTY REVIEW

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interview “On the investment side, the city continues to attract investors, and we’re having probably our best success of late, both in the CBD and the surrounds. The Durban Investment Dashboard has about 65 projects – in excess of R650-billion worth of investments”

It’s not just a question of the city dictating what it thinks its approach should be but also a way for the private sector as a collective to understand the total problem that the city is facing and to discuss possible solutions. That’s critical. Other elements where the private sector is already coming closer to partnering with the city’s infrastructure? I think we all concede inside the city leadership what the private sector has known for a lot longer – that we cannot continue to roll out bulk infrastructure in the same way. We can’t continue to finance it in the same way, construct it in the same way, manage it in the same way. It’s great that there are partners in the private sector – many may not want to be named, but SAPOA is one – and there are others who are coming, helping to herd us all closer to alternative bulk infrastructure financing options and alternative bulk infrastructure contracting, construction, operating and maintenance. I think that’s a key space, one that Durban has not explored or delivered on in the past. We have a forum which has come together, which I’m happy to say is led by the private sector – although it does have the support of provincial government and some parts of eThekwini Municipality’s leadership. It’s focusing on some potential pilot projects, not work done in a vacuum; it’s not an academic or theoretical exercise. We’re trying to target some very specific projects where we can get these alternative forms of bulk infrastructure financing put in place. And it’s a key spot where the private sector and the public sector must come closer together. To add to this, I think that in the past, the way in which we’ve done planning in the city was based on certain principles. The private sector, on the other hand, develops according to where it thinks the market is going. But the two haven’t necessarily come together – so we end up doing plans that look very nice, but that don’t work in terms of implementation. There seems to be a meeting of minds, there seem to be market forces coinciding with city plans. I think for us to take our vision and focus forward, we need to share as much information as possible with the private sector because ultimately the success of those plans depends on the private sector coming to the table. There’s another, or rather, a few other new structures in which the city hasn’t had as much focus. We have an urban renewal steering

committee which started a year or so ago, and that’s playing a key role in helping to accelerate some of the urban CBD regeneration. It covers things such as social housing, port partnerships, private sector investment in the Point and other places. For the first time in a long time, there seems to be a convergence of minds around the fact that we need to accelerate the scale and pace of our investment, and we need to do it in partnership with the private sector.

Q There is a dire need for one form

of one-stop-shop philosophy within the city where key investment and development decisions can be dealt with efficiently, proactively and professionally, and with a single city voice. Are there plans in place to implement such an approach?

There are many ways to get things done. That “one-stop shop” is a work in progress; some people want it, others remain unsure about it. Being a work in progress, it’s the direction we’re moving towards; the shape, form and timing of it I can’t specify. To add to that, the city’s incentive policy (still in draft form) and the industrial land strategy, which was done by the city in consultation with SAPOA members, are both pointing in the direction of a single point of entry for particularly strategic types of developments.

Q Greenfields development

is inherently risky, but it’s what grows the rates base, and facilitates new investment, new commercial opportunities and new jobs. Is there space for some form of “assistance” by the city, around firstly, punitive rates charges on vacant land rates during the pre-occupation stages of development, and secondly, to look at alternative funding and financing models for procuring major new road infrastructure that open up new development areas?

That’s absolutely something we’re looking at. I’d like to talk a bit about the incentive policy because it absolutely speaks to these kinds of issues. One, I think, is the “nonfinancial” incentives, which is your onestop shop improvement, speeding up the process of approvals, and so on. That’s part of the incentive policy as well. Your financial incentives look at precisely what you mentioned, addressing the issue of punitive rates – where developers intend to develop.

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interview

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interview “We need to concede that load shedding is going to be a threat for the next three to four years. In that time, what does business suggest we do with regards to managing that load shedding? Some technical solutions have begun to come forward from business”

Provided there’s a case on the table – some sort of definite development proposal – the city can look at the issue of punitive rates. Those issues are covered within the proposed incentive policy. There are also other issues around financial incentives. The city is trying to promote a particular spatial plan, so the incentives are not going to be just anywhere in the city; they’re going to be promoting nodes of development and corridors of development (transportation corridors, built areas, and so on), not the whole municipality. Infrastructure costs are a huge constraint to the City. Another thing that the incentive policy provides for is partnerships in terms of infrastructure. Where developers and the private sector are willing to come to the party in terms of providing bulk infrastructure, there is definitely provision for some kind of incentive around that.

Q The electricity situation

has a hugely negative impact on the property sector. Load shedding is said to remain part of daily operations for at least two more years. What plans is the municipality putting in place to assist the property industry?

First off, we’re a little disadvantaged in as much as we don’t have our own localised generation taking place, so we need to acknowledge that – like many other places – we’re at the mercy of Eskom. Having said that, what we do have an advantage as the City of Durban, is that we own and control the distribution network – so at least on that score, we’re better off than other places. They have to rely on Eskom’s energy, and they have to rely on Eskom being the controller of the distribution and the billing. We don’t have the latter challenge. We run our own infrastructure and own it, and we want to expand it quite significantly. We run our own pricing – yes, subject to the Eskom pricing – so that’s the first acknowledgement. What the city leadership (through the mayor, the city manager and deputy mayor) has realised is that we can no longer stand by and do nothing with regards to load shedding, so they have formed an ad hoc committee on load shedding. That committee has looked at two things: Firstly, the critical installations of the municipality also get load-shed, for which we need to find solutions. Take our clinics, for example: you have temperature-sensitive

vaccines and so on. So there’s a whole body of work inside the city. In terms of waste-water treatment works: when the power goes out, you can’t do what you need to do with waste water. The other stream of work I’m happy to say involves and engages business. We have engaged with the Durban Chamber of Commerce, the KZN Growth Coalition, a range of the industrial clusters – Durban automotive cluster, chemicals cluster, maritime cluster, textiles and clothing – and on that leg of the business front, what we want to do, what the mayor, city manager and deputy mayor want to do, is to communicate to business that this structure at the highest level of the city exists. To broaden the channel of communication for business, business needs to tell the city leadership two things: one, what are the potential impacts of load shedding from job loss or revenue point of view, so we can start to aggregate that information and use it as a tool to get certain changes we want to take place; and two, things we want from business are technical recommendations – so from big business in different sectors, technically, what are the technical engineering, electrical, management suggestions that business wants to make to Durban Electricity and to Eskom, as to how we can better manage load shedding. We need to concede that load shedding is going to be a threat for the next couple of years. In that time, what does business suggest we do with regards to how we manage that load shedding? Some of those technical solutions have begun to come forward from business; one of the terms is “load curtailment”, so certain businesses are able to voluntarily curtail their load in exchange for not necessarily being switched off (i.e. absolutely shed). We want to communicate to business that the ad hoc committee for load shedding exists; we want to broaden the communication with business to get technical solutions; and together, we can go as both the City of Durban and business to Eskom with our complaints, concerns and technical recommendations. There are things that Eskom needs to hear from us, things that Eskom needs to do that we ask them to do, from both the public and private partnership perspective. That is all managed by the city manager’s office and the mayor, and there is a full-time senior business continuity manager who’s been attached to this task to develop new plans. He has already engaged with the business structures, and SAPOA is welcome to engage with them.

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development

The pulse of the bay Set to be a game-changer in retail, the much-anticipated Baywest Mall in Port Elizabeth is ﬁnally open for business

About Baywest Mall • • • •

•

Size: 90 000m² (GLA) Parking area: 3 500 vehicles Construction value: R1,7-billion Road infrastructure: R300-million was spent on developing the road network in the area in conjunction with SANRAL and the NMB Metro. The road network includes an interchange onto/off the N2 freeway, as well as Baywest Boulevard, linking the suburbs of Sherwood and Rowallan Park/Bridgemeade via a road over the N2 The mall is central to the development of the greater Baywest City project, which will be similar in concept to Cape Town’s Century City development About 25% of the 320-hectare Baywest City site has been allocated for environmental preservation and will not be developed at all

egarded as South Africa’s “most advanced mall”, the super-regional, R1,7-billion Baywest Mall welcomed more than 38 000 eager shoppers during its first official day of trade on 21 May 2015. Just 24 months after ground broke on the 90 000m² mall, Eastern Cape Premier Phumulo Masualle declared it officially open, saying it would be a major boost for the province’s economy. Baywest Mall is located on the western side of Port Elizabeth along the N2 national highway. It is the catalyst and first phase in the development of the multi-billion-rand greater Baywest City Precinct, which is being undertaken by the Billion Group and Abacus Asset Management. The 320-hectare R6-billion Baywest City Precinct will be mixed-use, encompassing retail, office parks, residential nodes, private schools with associated sporting facilities, hotels, a hospital complex, a motor city, a light industrial node and a lifestyle centre. It is a greenfields project, and it is estimated to be fully developed over the next 15 to 20 years. To coincide with the opening of Baywest Mall, a new interchange over the N2 and other road infrastructure to the tune of R250-million have been completed, which will allow for direct access to the mall and future Baywest City Precinct. The road infrastructure, which will also alleviate traffic congestion experienced in the area, is jointly financed by the developers and national roads agency SANRAL.

Baywest’s bells and whistles Currently the largest shopping centre in the Eastern Cape, the mall boasts about 250 stores, restaurants and entertainment attractions such as an ice rink, an eightscreen Ster-Kinekor cinema complex with an IMAX screen, a tenpin bowling alley, a hitech games arcade and an indoor dodgem cars offering. Co-developers Abacus Asset Management and the Billion Group are celebrating the economic boost the development has given the region, having overshot their employment targets by 81%. According to an independent audit by BTKM, instead of 3 000 direct jobs being created during the construction of Baywest Mall, 5 418 direct jobs were created, 76,8% of which involved Eastern Cape locals. Almost 95% of employees were classified as previously disadvantaged individuals (PDIs).

Signalling the official opening of Baywest Mall is (from left) General Manager Sonja de Necker; Eastern Cape Local Government MEC Fikile Xasa; Eastern Cape Premier Phumulo Masualle; Baywest City co-Chairman and Billion Group Chief Executive Officer Sisa Ngebulana; and Abacus Asset Management Executive Chairman Jaco Odendaal (© David Dettmann)

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development Heralding the opening, Masualle addressed a crowd of VIP stakeholders and media inside the mall. “This development is a reflection of the hard work which has gone into the project over time,” he said. “A development of this magnitude has the potential to spur other developments in the manufacturing sector, and downstream industries will flourish. I am encouraged that more than 75% of people employed during construction came from the province. It is something worth celebrating. We are looking forward to the further 2 500 permanent jobs that the operation of this mall will create.” Baywest City co-Chairman and Billion Group’s Chief Executive Officer Sisa Ngebulana said the mall was a game-changer within the national retail landscape, heralding a significant shift in investor sentiment in the Eastern Cape. “This mall is the epitome of modern architecture with an exciting tenant mix. It offers an unparalleled shopping experience,”

Ngebulana told a delegation of political and private business stakeholders shortly before the mall’s doors opened at 10am. “The mall is a first development for a mixeduse precinct; it is the catalyst for more development to come. This has been a long journey; one which started all the way back in 2006.” Fellow co-Chairman of Baywest City and Executive Chairman of Abacus Asset Management Jaco Odendaal said he could not help but recall the early days of the project. “We had to deal with many challenges, from relocating sensitive rocky outcrops to planning the R300-million road development around the mall,” he said. “This mall represents some staggering statistics, such as 54km of electrical cabling used, a team of 22 architects involved in development, and a whole host of fashion tenants,” said Odendaal. “We are looking forward to having our international tenants –many of whom are firsts for the province – trade very well in this region.”

ABOVE Baywest City co-Chairman and Chief Executive Officer of project co-developer Billion Group, Sisa Ngebulana (© David Dettmann) BELOW An aerial view of the R1,7-billion Baywest Mall development in Port Elizabeth, which opened on 21 May 2015. Full-service retail leasing and development specialist Retail Network Services led the leasing on the 90 000m² super-regional shopping centre

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development

ABOVE A new interchange over the N2 has been completed together with other road infrastructure to coincide with the opening of Baywest Mall. It will allow for direct access to the mall and the future Baywest City Precinct BELOW Gavin Tagg, Managing Director of Retail Network Services (©David Dettmann)

Project architect Joe Struwig of dhk Architects, described the mall as “new look at retail architecture”. “What excited us was putting this rather large building gently into the [virgin] landscape,” he said.

Catalyst for growth According to Nedbank Property Finance, which financed the development, Billion Group and Abacus Asset Management “saw the potential of such an establishment to inject sustainable benefits and growth into Port Elizabeth and the Eastern Cape economy as a whole”. “Financing the development of Baywest Mall remains one of our biggest partnerships to date, and we believe that it will make a significant contribution to the socioeconomic enhancement of the people and communities of Port Elizabeth,” said Ken Reynolds, Gauteng Regional Executive for Nedbank Property Finance. “I will be bold enough to say that this is the most leading-edge, world-class shopping development in South Africa,” says Gavin Tagg, Managing Director of Retail Network Services, the full-service retail leasing and development specialist that’s leading the leasing at Baywest Mall. “It’s arguably the most innovatively designed mall, and it differentiates itself by being one of the most compact super-regional shopping centres. It has a totally unique architectural design in the shape of a square, which is unlike

any other super regional mall in South Africa. Most mega malls are expansive, and shoppers have to walk a long way from one end to the other. Baywest Mall has a compact layout with prime parking at every corner, always keeping the shopper in mind.” Tagg believes the convenience of this layout sets it apart from other super-regional malls in South Africa. The comprehensive mix of 250 tenants, in addition to attractions such as the mall being home to the only ice rink in the Eastern Cape, are integral aspects of the overall world-class offering at Baywest Mall. “Baywest Mall is ground-breaking – and while it will cater for the under-served retail market in Port Elizabeth as well as its surrounds within a 90km radius, the Baywest City development is certain to become a key part of its market and growth over the next decade,” says Tagg.

About the developers The Baywest development is a joint venture between two major South African developers, Abacus Asset Management and Billion Group. Between them, the developers have more than 25 years of experience in retail, commercial and mixeduse developments located in major South African cities. With super-regional shopping centres, landmark office towers and golf course developments, the developers have successfully completed malls such as Hemingways in East London, Mdantsane City in East London, Forest Hill City in Pretoria, Eikestad Mall in Stellenbosch, Cape Gate in Cape Town and Mooirivier Mall in Potchefstroom.

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feature

REIT investments What global monetary policy means for your REIT investments By Zandile Makhoba, Head of Research: South Africa at JLL

lobalisation and technology have made it possible for links to appear in unexpected places. This interconnectedness of economies makes it important for businesses decision-makers and investors to understand how changes in the world affect the local market. In the wake of the European Central Bank’s announcement to introduce monetary stimulus to improve the economy, one is interested in how this will impact the local REITs. The EU’s policy to introduce quantitative easing (QE) is important, given South Africa’s experience in the past six years of US quantitative easing, which is clearly visible in the performance of the local stock exchange, as well as the REITs during this time. Since the announcement of the QE programme in 2008, South Africa saw an average 21% annual growth in foreign portfolio inflows, coupled with the rand strengthening. The REITs gained a 13,9% annual growth during this period. This set the tone for a chain of events with weaker performances in the REITs when QE sessions ended, and recoveries whenever the programme was renewed. In December 2013, The Fed announced that it would begin tapering the QE programmes. This has seen the rand weakening against the dollar, lower growth in portfolio inflows into the economy and, subsequently, a lower performance in the local REITs index. One could argue that the timing of the European Central Bank’s introduction of a QE

programme is likely to have come just at the right time for the local stock market, as the economy deals with the outflow of US capital. However, the EU’s approach to QE is notably different to that of the US programme, and it is likely to have a different impact. The magnitude of the initial programme is an example: the US’s QE programme was introduced at US$800-billion in 2008. In contrast, the EU’s €60-billion programme, valued at US$65-billion, is a mere eight percent of the US’s initial programme. The question is, to what extent the European Central Bank’s programme will lend itself to the carry trade – and if it does, to what extent these flows will be directed to the South African stock exchange. Aside from the magnitude of the programme, the investment culture in the US versus that of Europe is very different. Clive Ramatibela-Smith describes Europeans as more cautious and risk-averse in contrast to their American counterparts. Hence the culture of riding in the carry trade is less likely to take place in Europe. Worse still, even if Europeans were less riskaverse, the decline in investor confidence in South Africa is likely to have played against South Africa as an option. Investor confidence has been challenged as a result of labour unrest, power issues and a generally weaker

growth prospect than similar countries. Ratings agency downgrades will no doubt play a role in contributing to weaker investor sentiments. Finally, the exchange risk would likely crowd out any potential gains from quantitative easing, with the rand now trading above R12 to the US dollar. On the upside, the absence of speculative investment flows could contribute to stability in the local stock exchange as opposed to the volatility seen in the past. Furthermore, the JSE has continued to show a strong performance in 2015, irrespective of the unfavourable climate. Narrowing this down to the REITs, it is clear that share appreciation will not develop from carry trade activity, or the change in monetary policy at the European Central Bank. The REITs remain investable assets, attractive for their own value more than being carried by the market. Even in a weaker economic climate, the top 30 REITs by market capital showed an average profit growth of 62% yearon-year, with an overall vacancy of less than six percent in 2014. As with any industry, the performance of listed REITs has not been balanced across sectors, and selecting the best investment boils down to the property assets in each company’s portfolio. More than sub-industry, the word in the real estate market is now “quality”.

Source: Grindrod, South African Reserve Bank, Standard Bank SOUTH AFRICAN PROPERTY REVIEW

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eco-mobility breakfast

The temporary transformation of the Sandton CBD The Sandton CBD will become Africa’s only car-free CBD for the month of October as many roads will be closed to allow for cycling and pedestrian activities, pop-up restaurants, entertainment stands and food stalls

he City of Johannesburg is the host of the EcoMobility World Festival 2015, which aims to show that the urban eco-mobile lifestyle can be implemented in cities across the world. The festival, which takes place over South Africa’s Transport Month, is the City of Johannesburg’s endeavour to encourage the use of public transport, cycling and walking as alternative modes of transport. Activities to encourage healthy living, such as aerobics and daily walks, will also take place in selected areas. City of Johannesburg Executive Mayor Parks Tau outlined the concept behind the festival at the Sandton Sun Hotel in Sandton during a breakfast event held in conjunction with SAPOA on 28 May 2015. The Sandton Central Business District (CBD), the second-busiest in the City of Johannesburg, is the host of the international event, which will temporarily transform the CBD into an urban EcoMobility neighbourhood, featuring selected road closures, park-and-ride facilities, increased pedestrian activity as well as a more intense usage of public transport.

Neil Gopal, Chief Executive Officer of SAPOA, supports the city in its efforts as he recognises the gridlocking and traffic congestion in Sandton. “While we are concerned about the operational issues of the functioning of retail facilities in Sandton and the resultant impact on shopping centres, we are working with the city on these issues,” he says. “I call on other CEOs to join the mayor in this important endeavour aimed at changing people’s behavioural patterns.” The first EcoMobility festival was organised in 2013 by the City of Suwon in South Korea and attracted more than a million visitors. This year’s event is also expected to attract a large number of visitors. The primary objective of the festival is to enable behavioural change from private car use towards other transport. As such, drivers visiting and working in the CBD will be provided with park-and-ride facilities. This year’s instalment of the festival will showcase the Rea Vaya Rapid Bus Transit system and Metro buses as alternative modes of transport; promote Jo’burg as

a cycle-friendly city; show off and promote non-motorised and alternatively powered vehicles; promote walking; and show the benefits of reduced congestion on productivity, quality of life and emission standards. The month-long festival will have different components, including legacy projects, EcoMobility dialogues as well as street festivals and pop-up events. A transport management plan has been adopted by the City of Johannesburg to encourage the CBD’s users to participate in the festival. For the duration of the festival, there will be additional public transport in the form of the Gautrain, which will be travelling at 10minute frequencies and increased availability of Metro buses. Accredited minibus taxis, tuk tuks, pedi cabs and electric vehicles will also be accessible to commuters. The festival is not only expected to gear vehicle users’ minds closer to considering alternative means of commuting but also to significantly alter the travelling routine of the daily Sandton CBD commuter.

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eco-mobility breakfast

ABOVE City of Johannesburg Executive Mayor Parks Tau with SAPOA Immediate Past President Amelia Beattie and SAPOA Chief Executive Officer Neil Gopal OPPOSITE Parks Tau discusses the role of alternate modes of transport in the Sandton CBD BELOW Delegates networking

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Ernst & Young takes the building industry to new heights.

interview

Ernst & Young’s new building stands out as an iconic addition to Sandton’s skyline with its futuristic protruding glass design that is unlike anything you’ve seen in the vicinity. Consisting of two conjoined buildings that rise to 8-storeys, Ernst & Young’s new head office embodies the firm’s commitment to building a better working world for all. The site is located at 102 Rivonia Road, a stone’s throw away from the iconic Sandton Gautrain station. The new innovative 8-storey workplace is more than just a visually appealing design but one that embodies the firm’s commitment to sustainability and connection to Africa. “It transforms our vision into reality by demonstrating who we are and what we stand for,” says Ajen Sita, CEO for EY Africa.

Achieving a 4-star green rating with Dulux Ecosure. The 38000 sqm of open plan architecture is registered with the Green Building Council of South Africa for a 4-star rating. Among several elements designed to collectively achieve a 4-star green rating, the building makes the most of innovative opportunities to harness natural light and ventilation, and to conserve energy. All paint, adhesives and sealants used in the indoor environment have low VOC content to mitigate the impact of internal pollutants. Dulux Ecosure was therefore selected as the paint range of choice for the world-class building. A quality, water-based paint that’s trusted around the world to meet sustainability targets and maintain a professional finish. The building design has already achieved early recognition at the World Architecture Festival held in Singapore, where the project was shortlisted for an award in the Future Commercial Office category. “This green design is a first for the South African environment,” says Bob van Bebber, director at Boogertman + Partners. “It is significantly different from any other building in the area and will certainly become a local landmark.”

32162

For more information visit www.duluxtrade.co.za or contact the Dulux Careline on 0860 330 111

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editorial

Investors to increase acquisitions in 2015 A survey shows that 53% of global investors plan to increase their investment purchases in 2015. In Africa, investments are also increasing as investors search for better yields

ABOVE Elaine Wilson, Divisional Director: Research & Marketing at Broll Property Group BELOW The Delta Mall in Nigeria is set to open soon OPPOSITE, FROM TOP Jonathan Yach, Chief Executive Officer and Head of East Africa Operations at Broll Kenya; Broll Nigeria Chief Executive Officer Bolaji Edu

ccording to the CBRE Global Investor Intentions Survey 2015, 53% of global investors plan to increase their investment purchases this year. Investor appetite for cross-regional acquisitions has increased significantly, with 38% of respondents intending to invest outside their own region in 2015, up from 28% in 2014. In Africa, investments are also increasing as investors search for better yields, says Elaine Wilson, Divisional Director: Research & Marketing at Broll Property Group. “Investments in South Africa are mostly driven by the strong local listed property sector, while in other countries, real estate investments are driven by international companies looking to invest in the oil and gas industries as well as natural resources.” She explains that in the SADC region, countries such as Mozambique and Angola (because of oil and gas) have seen renewed interest from international investors, while South Africa is still seen as the gateway into Africa. Political stability, sound economic policies and investor-friendly legislation are of

utmost importance in attracting and retaining investors in any part of Africa. Kenya in east Africa continues to see an influx of investors, especially those looking for real estate assets to apply to their REITs, says Jonathan Yach, Broll Kenya Chief Executive Officer and Head of East Africa Operations. Yach says they anticipate an increase in property developments in various counties as government continues to drive the devolution process. County land values and opportunity are within reach for investors looking to make a difference in the market. Nairobi County remains the key business hub for major organisations because of the higher levels of development and infrastructure in place. Despite macroeconomic challenges and currency depreciation, Nigeria in West Africa shows that long-term economic and demographic fundamentals are a strong attraction for institutional investors. Lagos’s office sector, which was heavily under-supplied a few years ago, has seen sizable additions of prime office space in the

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editorial past year, with a further 80 000m² expected over the next 12 months, says Bolaji Edu, Chief Executive Officer of Broll Nigeria. “We expect that there will more investment activity this year than in recent years, with a focus on the retail and office sectors from international and indigenous investors,” he says. The CBRE Global Survey notes that although London retains its position as the top city for investment, there is also a marked increase in appetite among investors from Europe, the Middle East and Africa and North America for value-add and opportunistic investments. “The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year,” says Chris Ludeman, Global President of CBRE Capital Markets. “Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields – a trend that will result in a stronger focus on value-add and opportunistic investments.”

As in the SADC region, Kenya’s retail sector is experiencing exponential growth while the industrial sector is seeing a much higher demand for modern warehousing (which currently outstrips supply). Meanwhile in Nigeria, office and retail properties remain the most preferred asset classes for investments. Edu says the office sector has seen strong demand in the past few years. A number of developers and investors are taking advantage of the lack of prime properties with the addition of A-grade office properties onto the market. However, increased supply is creating a more competitive, tenant-friendly environment in a market that was previously dictated by landlords. “Rents in Lagos are among the highest in Africa and attractive to prospective investors,” says Edu. Retail is an attractive investment opportunity, particularly for investors who wish to benefit from the growing middle class and increased disposable income, he says.

Which investors buy in Africa?

Price and availability of investment assets

According to Wilson, investors generally enter the African market through formal retail, thanks to increasing numbers of consumers and increasing retail facilities leading to increasing demand for warehousing space and distribution centres. In Kenya, office and retail properties are sought-after, with many international companies either looking to set up offices in Nairobi or expanding their current office holdings.

On price and availability of assets, Wilson notes that good quality stock is scarce. As a result, most investors look at developing their own assets – but a lack of infrastructure, land tenure issues and high construction costs have put a damper on new developments and increased the price of assets, she says. In Nigeria, availability is often a concern for investors looking to buy prime assets because currently there is limited investment-grade stock available for purchase, with a small number of transactions taking place annually. “Price is also an issue,” says Edu. “High rentals mean that the capital value per square metre is high compared to other similar locations and countries.” Overall, Broll anticipates an increase in investments in sub-Saharan Africa – but challenges of doing business in some countries remain. For example, South Africa has recently introduced new BroadBased Black Economic Empowerment (B-BBEE) codes; up north, Zimbabwe’s economy is failing; falling oil prices have led to infrastructure projects being put on hold in Angola; and political unrest in the northern gas-rich areas of Mozambique may make investors have to rethink their investment strategies. “In general African markets are still immature,” says Wilson. “However, given time, growing investor interest will increase the state of the commercial property market.” SOUTH AFRICAN PROPERTY REVIEW

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workshop

Collaborating with government The City of Tshwane engaged with the private sector via a Development Investment Incentives Policy workshop

he City of Tshwane, in association with SAPOA and High Street Auctions, recently hosted a Development Investment Incentives Policy workshop at the Centurion Council Chambers. The workshop was an opportunity to meet with SAPOA for a discussion of the draft 2015/2016 Medium-term Revenue and Expenditure Framework (MTREF) Property Rates. The workshop is aligned with the City of Tshwane’s goal to engage with the private sector in terms of development. The city, in collaboration and association with SAPOA and High Street Auctions, hosted an investor summit on 19 February 2015. The City of Tshwane Inaugural Investor Summit aimed to engage business as potential strategic partners on the City of Tshwane’s Key Catalytic Capital Projects – the Incentive Framework Programme and Public Auction of Council-Owned Land Project.

In terms of the city’s Incentive Framework Programme, long-term local economic development within the boundaries of the city will be stimulated. The City of Tshwane Inaugural Investor Summit 2015 marked the official launch of the city’s incentives programme. The Development Investment Incentives Policy, read in conjunction with the City of Tshwane 2015/16 Rates Policy, was approved on 28 May 2015. The approval has granted the City Planning & Development Department and the Chief Economist the mandate to develop administrative guidelines for the implementation of the Development Investment Incentives Policy. In addition to this approval, the City of Tshwane will submit an application to the Minister of the Department of Cooperative Governance and Traditional Affairs to include additional sub-categories with respect to the city’s rates policy in terms of Section 8 of the Municipal Property Rates Act.

City of Tshwane Chief Economist Shaakira Karolia

City of Tshwane Head of Budget Nthabiseng Mokete

Ben Espach, a professional valuer and Director of Valuations at Rates Watch (Pty) Ltd

The City of Tshwane, together with SAPOA and High Street Auctions, hosted a Development Investment Incentives Policy workshop at the Centurion Council Chambers

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Getting your brand noticed by South Africa’s leading property industry decision-makers

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With a monthly average exposure of more than 5000 readers, the South African Property Review is a growing and recognised news platform and go-to source of important industry information, interviews as well as in-depth African and regional reports.

For advertising opportunities and rates contact Riëtte Stevens t: +27 (0)71 877 5520 e: sales@sapoa.org.za SOUTH AFRICAN PROPERTY REVIEW

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SAPOA events

Inspired over breakfast Emerging leader and businesswoman Kate Moodley brought motivation to the table at the SAPOA Women’s Annual Breakfast in Durban

Amelia Beattie and Kate Moodley

Briget Grosskopff and Louise O’Raw

Nicky Chetty, Subashnee Moodley and Lee-Anne Bac

Pumla Mlondo and Rakhi Nundkoomar

Desiree Rabie, Janet Glendinning and Nnema Byrd

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SAPOA events

Shivani Rooplal and Zithobile Jiji

Helen Seymour and Anne Schauffer

Carla Delaney and Amelia Beattie

Nonkululeko Ntshona and Mpume Nkabinde

Nomzamo Radebe, Portia Tau-Sekati and Amelia Beattie

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SAPOA events

Mingling at the Michelangelo With cheese and wine in abundance, SAPOA hosted a sumptuous networking session for its Gauteng members at the Michelangelo Hotel on West Street in Sandton Photographs by Xavier Sauer

Jenna Robertson, Christopher Woolcott, Lezanne Burger and Nandan Patel

Tsietsi Madonsela, Mike Sithole and Brian Mncube

Philip Buchner, Robert Fleming and Nicholas Levesley

Cindy McMillan and Nannette McMillan

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SAPOA events

Jonathan Klimek, Roye Oâ&#x20AC;&#x2122;Brien, Trevor Spencer-Crooks and Clive Grundlingh

Rene Styber and Richenda Mostert

Ian Broli, Tony Walsh and Bruce Clark

Matshidiso Pilane and Gareth Shepperson

Yuliana Swartz, Bronwynne Wood and Davin Giddish

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SAPOA events

Breakfast session at Umhlanga Rocks SAPOA KZN Regional Council – in partnership with MAXPROP – recently held a lively breakfast session in Umhlanga with the informative and entertaining Professor Francois Viruly By Anne Schauffer Photographs by Val Adamson

Lorentha Covenden, Cheryl van Niekerk, Shivani Rooplal and Caressa Naicker

Louise Gibson, Steve North and Di Frank

property economist with more than 20 years of experience in the analysis of the South African property market, Professor Francois Viruly lectures in urban economics, property development and portfolio management at the Department of Construction Economics and Management at the University of Cape Town. Among numerous other projects and consultancies, he’s undertaken extensive research into South African property cycles, the drivers behind the South African property market, and the relationship between urban economics and the property market. As KwaZulu-Natal’s property industry put down its knives and forks on a lively networking breakfast, Professor Viruly’s presentation certainly gave everybody more food for thought. His topic, “Why the state of our cities is important for the real estate sector in South Africa”, packed out The Square Boutique Hotel with property professionals from across the broader industry, including key municipality figures. Edwin van Niekerk, SAPOA KwaZulu-Natal Regional Chairman and Executive Director at MAXPROP, opened the event by recognising that everybody present was concerned with the same issue: that of growing the rates base.

Nuthan Maharaj, Nina Saunders, Aurelia Albert, Takalani Rathigaya, Ajiv Maharaj and Russell Curtis

“The only way we can achieve this is by working together,” he said. One of the major themes of the breakfast was the sense of importance attached to high-quality, authentic private-public sector collaboration in KwaZulu-Natal. Professor Viruly began by posing the question he puts to his university students every year: “What will the South African property market look like when you guys retire in 40 years’ time?” He sends the students off to mull it over, and says the response is often, “I type in ‘SA property market in 40 years’ and nothing comes up. And if nothing comes up on Google, it doesn’t exist!” The other questions he asks include, “What would have told us that places like La Lucia were coming? What were the indicators that told us about Century City? What is the next big thing in our urban environment? What should we be thinking about? Will it be spatially somewhere, or will it be a sector? Will it be the residential sector, for example, rather than where it will be physically?” It was all about an ability to understand and read, to some degree, the way forward. Professor Viruly sees a greater recognition across the country of the importance of our cities. “If our cities don’t function, the economy won’t function,” he says. “Two-thirds of South Africans currently live in cities. We are starting to see the National Treasury emphasising the importance of cities, and the two big-ticket items are transportation and housing. The National Treasury will be questioning how to integrate those two components as efficiently and cost-effectively as possible.” After another cup of coffee, a catch-up with a colleague or two, and discussion around the concept of transit-oriented development, the breakfast drew to a rowdy close, with Professor Viruly having left the professionals with a great mix of questions, answers and perhaps even tools to see into the future.

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SAPOA events

Musa Shabane, Geoff Ball, Craig Dohne and Mogie Naidoo

Sonet Viljoen, Samantha Anderson, Seamus Holmes and Sue Hudson

Sharendra Bedesi, Mohsin Shaik, Noel Steven and Stephen Lawson

Edwin van Niekerk, Professor Francois Viruly and Doug Ross

Justin Haines, Patrice Masson and Chris Tattari

Lindy Haworth, Kevin Dunkley and Cheryl Johnson

Jack Kirton, Marc Binns, Gareth Bowman and Cebo Gama

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statistics

Market update JLL South Africa Q1 2015 research reports

he JLL South Africa research team has released its Q1 2015 research reports with the addition of a new offering: an analysis of the Johannesburg retail property market. In addition, the Johannesburg office market, Johannesburg industrial market and Cape Town office market reports have also been released, boasting several highlights. In the Johannesburg retail market, South African consumers have seen a more challenging start to the new year, putting a dampener on the prospects of retail sales growth. However, the outlook is not likely to be balanced across all sectors, with centres located in more affluent areas expected to perform much better than those in lower income areas. Developer confidence remains high on the back of a growing city and the longer term outlook is more encouraging for investors. In the Johannesburg market, demand for office accommodation remains unchanged in the current climate, contributing to slower growth in rental rates, but the long term outlook is encouraging for the city. The development pipeline will see an additional 430Â 000mÂ˛ being added to overall office stock within the next two years. The overall vacancy rate in Johannesburg showed a marginal increase attributable to an increase in supply rather than a decline in demand. It is anticipated that the Johannesburg office market will continue to be tenant-driven. Industrial occupation has continued to be supported by local trade activity in Johannesburg, despite having come under increased pressure in recent months. Industrial vacancies increased notably from Q4 2014, while the average rental rate for industrial properties remained largely unchanged in Q1 2015. Economic conditions forewarn of a further deterioration in industrial activity in the economy but still present an opportunity for tenants to position themselves for the long term. The first quarter of 2015 has seen a continuation of flat market conditions in the Cape Town office market. The overall vacancy rate in Cape Town remained stable the quarter, with pressure on rental rates is most visible in Grade P properties. It is anticipated that low demand will see rental rates declining in some of the best buildings.

Cape Town office market outlook Q1 2015

Sources: Baker Street, JLL, SAPOA

Johannesburg industrial market outlook Q1 2015

Sources: JLL, SAPOA

Johannesburg office market outlook Q1 2015

Sources: JLL, SAPOA

Johannesburg retail market outlook Q1 2015

Source: JLL

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interview

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people in profile

Lucille Louw

Adelene van der Westhuizen

Heloise van Niekerk

Managing Director

Asset Manager

Atterbury Asset Managers

Lucille Louw, Managing Director of Atterbury Asset Managers, says that getting into the property market (and asset management specifically) was circumstance. She went from being a restaurant owner to working as an executive at one of the top companies in the industry within 15 years. “It all started accidentally,” she says. “I had just sold my shares in my business; Atterbury was looking for a salesman for its first residential development, Woodlands Lifestyle Estate… I got the job on the day of the interview. Now I cannot see myself working anywhere else.” Louw insists that asset management requires constant energy, all-rounder skills and the ability to always look at an old asset as if it were new. This University of Pretoria alumnus learnt all her skills on the job while bringing the company to new heights. “This company has been my first child for so long but it has grown because of the people in it,” she says. “We find and keep people who can really move on things, who have the confidence to make decisions and move on. Our tenacity and integrity have only helped us to still be here, in business after 21 years.” Louw can see that new goals will always be reached when you are part of a company that keeps and manages buildings with care and energy.

Adelene van der Westhuizen detoured from studying BCom Accounting at NorthWest University to obtaining her CA at the University of KwaZulu-Natal and working various banks as a commercial property investor, until she found her niche as an Asset Manager at Atterbury, where she happily settled in 2013. “What I love about working here is that you are expected and encouraged to do everything,” she says. “You’re expected to know every angle of managing a property from legal, negotiation, finance and operational to the finer daily details that form part of it. You always learn something new, most times by having to be proactive. This is why I’m proud of being a part of developing three centres in 14 months, including the Grove Mall in Namibia, the largest regional retail development in that country.” It doesn’t matter how much Atterbury has grown, it still keeps to the same values. Van der Westhuizen says that because of the close-knit, family culture within the company, you can happily keep your social and work life balanced. “Like our slogan says, ‘It’s a matter of association’,” she says. “We will always choose to work with those who have the same principles and values for the simple reason that it makes business sense.”

Heloise van Niekerk has come a long way from working in telecommunications: she is an Asset Manager at Atterbury, which has more than 800 000m² of property assets to manage – a number that will continue to grow. “I was fortunate to be invited to join Atterbury after 10 years as a manager in telecommunications, and I couldn’t be happier,” she says. “Here, the search is always on to find the right people to work with – people who are passionate and who aim to be successful by sticking to their principles. Atterbury prides itself on having a workforce that is ethical and honest. “We’re constantly reminded that we must not be arrogant about our success and that keeping the human factor in business will ensure longevity in the property sector,” says Van Niekerk. She focuses on the company’s various property assets in Africa and is known as a hard-working, passionate person. “As a company, we always support each other in both the personal and the work sphere,” she says. “This is why we make it look easy even when we’re hard at work behind the scenes. Atterbury has reached so many goals as a company already, from expanding into Africa and Europe to getting Attacq listed on the JSE. I can’t wait to see what milestones are achieved next.”

t: +27 (0)12 471 1600 adelene@atterbury.co.za www.atterbury.co.za

t: +27 (0)12 471 1600 heloise@atterbury.co.za www.atterbury.co.za

t: +27 (0)12 471 1600 / +27 (0)82 415 9949 lucille@atterbury.co.za www.atterbury.co.za 58

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people in proﬁle

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

Catherine Bosman Asset Manager Atterbury Asset Managers

Architects

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CHAMELEON

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

P.O.Box 12932, TI ARCHITECTS CHRIS CC P.O.Box OWTRAM ARCHI Eastern Cape, Centrahil, Port Elizabet TECTURE 1926, Pinegow h, 6006 t: +27 (0)41 rie, Gauteng, 373 4340 2123 f: +27 (0)41 t: +27 (0)11 373 4324 022 6260 f: +27 (0)86 648 8262

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P.O.Box 52685, Saxonwold, Gauteng, 2132 t: +27 (0)11 326 5000 f: +27 (0)11 326 5002

CO-ARC INTER ARCHITECTS NATIONAL INC

P.O.Box 52604, Saxonwold, Gauteng, 2132 t: +27 (0)11 447 1344 f: +27 (0)11 447 1343 BENTEL ASSOC P.O.Box 87619, IATES INTERNATIO CONSU NAL P.O.Box LT THREE ARCHI ACG ARCHI Gauteng, 2041 Houghton, TECTS TECTS CC 71671, P.O.Box Cape t: +27 (0)11 Eastern Cape, Central, Port Elizabet Town, 884 7111 h, 6006 The Western f: +27 t: +27 (0)11 884 Cape, 7915 (0)41 585 7110 0086 t: +27 (0)21 f: +27 (0)86 448 6615 513 2278 f: +27 (0)21 BILD ARCHI 448 6621 TECTS (PTY) LTD P.O.Box 95664, CSAR 3 ACTIVATE Gauteng, 0145 Waterkloof, Pretoria P.O.Box 52673, ARCHITECTU , P.O. Box 321, t: +27 (0)12 Gauteng, 2132 Saxonwold, Roseban Saxonwold, RE (PTY) LTD 346 1295 k, Gauteng, f: +27 (0)12 t: +27 (0)11 2132 346 1249 880 2466 t: +27 (0)11 f: +27 (0)11 788 8095 447 3441 f: +27 (0)11 BLACKSHEEP 788 8097 DESIGN 223 Tribella, DAKOTA DESIG 166 ADENDORFF N (PTY) LTD Gauteng, 2192 Rivonia Road, Morning P.O.Box 1356, side, Rivonia, INTERIORS ARCHITECTS & t: +27 (0)87 Gauteng, 700 8291 2128 P.O.Box 40301, CC f: +27 (0)86 t: +27 (0)11 225 6665 803 0000 Eastern Cape, Walmer, Port Elizabet f: +27 (0)11 h, 6065 803 0000 t: +27 (0)41 BNM 3 BHISH 581 4765 f: +27 (0)86 P.O.Box 5, Bhisho, O DAVID CRAIG 618 2183 ARCHITECTS Eastern Cape, P.O.Box 153, CC Louis AMA 3 (PTY) t: +27 (0)40 5605 Louis Trichard Trichardt, Makhad 635 1951 o, t, P.O.Box 1299, LTD f: +27 (0)40 Limpopo, 920 635 1961 Gauteng, 2052 Gallo Manor, t: +27 (0)15 516 2460 t: +27 (0)11 f: +27 (0)86 807 7505 524 3827 f: +27 (0)11 807 7509 Gauteng, 1457 Randhart, t: +27 (0)11 907 2015 f: +27 (0)11 907 2020

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TECTS & ASSOC P.O.Box 51838, IATES The Western Waterfront, Cape, 8002 t: +27 (0) 21 448 3955 f: +27 (0)21 448 5910

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

OWNERS

DEVELOPERS

Developers

South Africa

Catherine Bosman never followed the crowd. With a degree in quantity surveying from the University of Pretoria and a PrQS, she moved to the UK to work for the Atkins Group for three years. When an opportunity to work for Atterbury came along in 2010, she took it and never looked back. “Life as an asset manager is never dull,” she says. “You start off as a ‘jack of all trades’ and attempt to master of all of them. This is facilitated by a company attitude that looks to add value to every asset over the long term, ensuring optimum operational management and not just looking for a way to cut costs.” Bosman recently returned from Mauritius with accolades that included managing a portfolio of which the Mall of Mauritius development formed part, as well as the expansion and training of new staff at Enatt, Atterbury’s asset and property management company on the island. “Atterbury provides a platform for us to take pride in who we work with,” she says. “Every single person, both within and outside the company, is the best at what they do and contributes a unique skills set to the team. Even when the company grew to 100 people, the same ethical family-like culture has been maintained. In the 21 years that Atterbury has been in business, what we commit to is always what we deliver.”

2015 - 2016

2014/10/10 11:00 AM

DBM 3 JHB

P.O.Box 69535, (PTY) LTD Gauteng, 2021 Bryanston, Johanne sburg, t: +27 (0)11 467 5299 f: +27 (0)11 467 6067

DBM ARCHI

TECTS

PTA (PTY) P.O.Box 95780, LTD Gauteng, 0145 Waterkloof, t: +27 (0)12 809 3941 f: +27 (0)86 619 6662 DESIGN THREE

P.O.Box 15721, SIXTY (PTY) LTD The Western Vlaeberg, Cape, t: +27 (0)2146 8018 f: +27 (0)21 26630 462 6634 SAPOA Proper ty

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● 53 categories ● Full- and part-category page sponsorship ● Highlighted data entries ● Data entries with logos ● Affordable small advertisements (half- and quarter-page) ● Boxed column and part-columns

BOOKING DEADLINE: 7 Sept 2015 Material deadlines: Logo entries 21 Sept 2015 Column entries 21 Sept 2015 Display deadline 5 Oct 2015

For advertising opportunities and rates contact Riëtte Stevens t: +27 (0)12 471 1600 / +27 (0)72 743 4117 catherine@atterbury.co.za www.atterbury.co.za

c: +27 (0)71 877 5520 t: +27 (0)11 883 0679 f: +27 (0)86 216 9026 e: sales@sapoa.org.za SOUTH AFRICAN PROPERTY REVIEW

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July Region

Date

Event

Gauteng

2 July 2015

Negotiation Skills Masterclass Programme

Mpumalanga

3 July 2015

Networking Event

Gauteng

7 July 2015

Introduction to Brokering Seminar

Gauteng

15 July 2015

Regional Meeting

East London

23 July 2015

Networking Event

Gauteng

23 July 2015

Legal Breakfast

Gauteng

28 July 2015

Golf Day

KwaZulu-Natal

31 July 2015

Breakfast Presentation

August Region

Date

Event

Gauteng

4 August 2015

Research Breakfast

Gauteng

6 August 2015

SAPOA Audit Risk

Gauteng

11 August 2015

PWC Breakfast

KwaZulu-Natal

11, 12 and 14 August 2015

ECPP Training

Polokwane

12 August 2015

Breakfast: Town Planning Scheme

Polokwane

12 August 2015

Breakfast Session

Gauteng

13 August 2015

Lease Agreement Workshop

East London

14 August 2015

Golf Day

Gauteng

14 August 2015

PWC Power Hour Breakfast

Gauteng

17 to 21 August 2015

FMP Training

East London

19 August 2015

Introduction to Brokering Seminar

Port Elizabeth

19 August 2015

Regional Meeting

TBC

20 August 2015

Introduction to Brokering Seminar

Gauteng

20 August 2015

SAPOA HR Meeting

Mpumalanga

20 August 2015

Networking Breakfast

TBC

20 August 2015

SAPOA Board Meeting

KwaZulu-Natal

25 August 2015

Golf Day

Gauteng

25 to 28 August 2015

ECC Training

Gauteng

27 August 2015

Networking Event

Gauteng

28 August 2015

MOMFA

September Region

Date

Event

Port Elizabeth

1 to 3 September 2015

ICPP Training

KwaZulu-Natal

3 September 2015

Negotiation Skills Masterclass Programme

Gauteng

7 and 8 September 2015

ICPP Training

TBC

7 to 11 September 2015

ECPP Training

Port Elizabeth

8 September 2015

Golf Day

Western Cape

8 to 11 September 2015

ECPP Training

Polokwane

10 September 2015

SANS 10400 Workshop

Gauteng

15 September 2015

Retail Trends Report Breakfast

Port Elizabeth

16 September 2015

Council Meeting

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Events and dates subject to change.

September Region

Date

Event

Port Elizabeth

17 September 2015

Networking Event

Mpumalanga

17 September 2015

Golf Day

TBC

17 and 18 September 2015

National Council Meeting

Port Elizabeth

22 September 2015

Golf Day

Mpumalanga

23 September 2015

Networking Dinner

Western Cape

26 September 2015

Property Development Workshop

Gauteng

28 to 30 September 2015

IPMP Training

Gauteng

29 September 2015

Legal Breakfast

KwaZulu-Natal

29 September 2015

SANS 10400 Workshop

KwaZulu-Natal

30 September 2015

SACSC Annual Congress

October Region

Date

Event

Gauteng

1 and 2 October 2015

IPMP Training

Western Cape

6 to 8 October 2015

ICPP Training

Gauteng

7 October 2015

Media Lunch

Gauteng

8 October 2015

Legal Breakfast

KwaZulu-Natal

15 October 2015

Breakfast Presentation

Polokwane

15 October 2015

Golf Day

Gauteng

17 October 2015

Research Breakfast: Industrial Industry Report

Gauteng

20 October 2015

Industrial Vacancy Report Breakfast

Gauteng

23 October 2015

Brokers Economic Update

KwaZulu-Natal

23 October 2015

Networking Breakfast

Gauteng

26 to 30 October 2015

BCTP Training

Port Elizabeth

29 October 2015

Gala Dinner

November Region

Date

Event

Gauteng

4 November 2015

ECPP Training Course

TBC

5 November 2015

SAPOA Board Meeting

Gauteng

6 November 2015

Legal Power Hour

TBC

10 November 2015

Research Breakfast

Gauteng

11 November 2015

Negotiation Skills Masterclass Programme

KwaZulu-Natal

11 November 2015

Gala Dinner

Gauteng

12 November 2015

Networking Event

TBC

13 November 2015

Networking Evening

Gauteng

16 to 20 November 2015

FMP Training

Gauteng

17 November 2015

FM and IAMP Training Courses

Port Elizabeth

18 November 2015

Council Meeting

KwaZulu-Natal

19 November 2015

Gala Dinner

Gauteng

20 November 2015

Brokers and Legal Update

Polokwane

20 November 2015

Council Meeting

Western Cape

21 November 2015

Property Development Workshop

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November Region

Date

Event

Mpumalanga

25 November 2015

Gala Dinner

Polokwane

26 November 2015

Gala Dinner

Gauteng

27 November 2015

PwC Half-Day Workshop

Port Elizabeth

29 November 2015

Gala Dinner

December Region Buffalo City

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Date 3 December 2015

Event Developersâ&#x20AC;&#x2122; Gala Dinner

2015/06/15 8:23 AM

fun & quirky

JT Foxx We explore the eccentric mind of the world’s number-one wealth coach JT Foxx in 10 questions By Candace King

Q What gets you going every morning?

The desire to become a better person today than I was yesterday. I live by two mottos: how can I be number one and how can I make my product, services and investments better.

Q What inspires you?

People succeeding. Our motto is powered by your success. The more successful you are, the more successful I will be. If you take care of your clients, your clients will take care of your profits.

Q The motto of your life would be? Go big or go home.

Q Passions and hobbies? Golf, movies and kite surfing – or any water sports.

Q Favourite destination in the world? I have been all over the world and South Africa is truly the best … except for the traffic on William Nicol.

Q Who are your role models? Donald Trump and Steve Jobs.

Q If you had to liken yourself to any animal, what would it be and why?

The lion – because I like being the king of the jungle.

Q Best thing that has ever happened to you?

Getting coaching. Without it I wouldn’t be where I am today.

Q One place that you’re dying to visit? Tahiti.

Q What’s on your bucket list for 2015? ● ● ● ● ●

Buy a fly-board Buy a plane Donate lots more to charity Become a better me everyday Get on the cover of the South African Property Review.

SOUTH AFRICAN PROPERTY REVIEW

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off the wall

Designing to keep the lights on With concern looming around South Africa’s energy and water resources, the time to go back to the drawing board – literally – is upon us

he widespread effects of South Africa’s energy crisis and its evil twin, the impending water crunch, may be difficult to quantify accurately but two things are absolutely certain: constrained electricity supply and limited access to water aren’t going away any time soon and only bold, innovative solutions can make a difference for South African businesses. Reserve Bank figures suggest that the energy crisis could slash production by as much as 25%. Economists believe 500 000 potential jobs have been sacrificed as a result of the power shortages. Predictions range from bleak to catastrophic. As average South Africans gets a first-hand look at just how disruptive an unstable power supply can be, there is growing awareness that for businesses to operate successfully in this environment, self-sufficiency and energy efficiency are critical. Business parks and industrial developments that were designed and constructed during an era of steady supply have ceased to be relevant. Ample water and cheap, unfailing power can no longer be relied upon as a mainstay of local businesses. “South African developers need to move away from industrial and commercial construction modelled on ideals,” says Marius Esterhuyze, Major Accounts Manager at Autodesk. “Buildings, manufacturing plants and business parks have to be designed to withstand the infrastructural challenges that face our country. Sustainable ecosystems are the new reality, and going ‘green’ is no longer a nice-to-have – it is a matter of ultimate survival.” The role of design in this build revolution is key. Bolted-on quick fixes such as generators are not enough to negate the effects of limited infrastructural resources. Long-term solutions for an energy constrained environment have to be developed from the ground up. The national grid and limited water resources have to be considered in every phase of construction, from structure and systems right through to the technology that brings a building to life.

Werner van Antwerpen (left), who heads up Growthpoint Properties’ specialised sustainability division, with Brian Wilkinson, CEO of the Green Building Council of South Africa (GBCSA) at Kirstenhof Office Park in Johannesburg – the 100th building to achieve Green Star SA certification. Kirstenhof, which is owned by Growthpoint Properties, secured a 5-Star Green Star SA: Existing Building Performance Pilot (EBP) rating

“Today’s software technology allows architects and engineers to iteratively test, analyse and improve on building design,” says Esterhuyze. “This means that performance – including energy consumption, airflow ventilation, solar radiation, water use, etc – can be optimised before a single brick is laid.”

Why does any of this matter? The United Nations Environmental Programme (UNEP) Sustainable Buildings & Climate Initiative estimates that the building sector is responsible for up to 30% of global greenhouse gas emissions annually and consumes up to 40% of all energy. These figures indicate that how we design and build in South Africa can have a significant impact on our limited resources. “Good, sustainable building design starts with a clear understanding of the climate of the building site,” says Esterhuyze. “Building information modelling (BMI) allows for data to be captured and displayed through visualisation tools that can help to consider factors such as temperature, humidity, wind conditions and sky conditions in a design. The achievement of a net zero energy build should always be the end goal.”

Reducing water use is the next step in sustainable design. Skilful system design and a suitable specification of products can easily reduce water use by 50% or more. There are several ways to get the most out of every drop: water-efficient fixtures and equipment, water-efficient irrigation and landscaping, recycling water so it can be used more than once, and capturing rainwater. Purification of water on site with living machines or advanced septic systems can also be highly effective. Biomimicry (the design and production of materials, structures and systems that mimic biological processes) is becoming increasingly popular for rainwater harvesting designs. Various plant species (some of which exist in our local environment) are being studied as a blueprint for the design of new rainwater capture methods. Nature is an outstanding source of information and inspiration in the pursuit of innovative ways to generate heat and light and create a sustainable future. “Although design on its own cannot solve the energy crisis, it has the potential to change the way in which we use energy, significantly decrease energy wastage and reduce our dependence on the overloaded national grid,” says Esterhuyze.

SOUTH AFRICAN PROPERTY REVIEW

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development

AFRICA’S FIRST GREEN CITY

BROUGHT TO YOU BY WSP.

Menlyn Maine is being dubbed as Africa’s first green city – striving to stimulate a paradigm shift in how South Africans live, work and play through the single biggest development project in Pretoria. It was with this philosophy in mind, and given our solid reputation for innovation and expertise in structural and civil engineering as well as sustainability that WSP has been a key partner to bringing this vision to life. As one of the largest engineering consultancies in Africa, WSP plays an important role in our country’s sustainable development. We aim to future proof our projects, helping our clients to achieve their sustainable development goals and approaching everything we do with passion and caring.

31,500

500

EMPLOYEES

OFFICES

COUNTRIES

www.wspgroup.com Image courtesy of Boogertman + Partners Architects.

SOUTH AFRICAN PROPERTY REVIEW

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development

Proactive Quantity Surveying 3

1 Head office for Ecobank in Accra, Ghana. Architects: Arc Architects 2 West Hills Mall in Accra, Ghana for a subsidiary of Atterbury Properties. Architects: Arc Architects 3 Student accommodation in Pretoria for the Feenstra Group. Architects: Boogertman + Partners 4 Vdara Office Park in Johannesburg for Bakos Brothers. Architects: Integrale Architectural Design

Our track record speaks for itself. DelQS was established in 2000 and has since built up a remarkable track record. We have provided quantity surveying services for almost all building types ranging in construction cost from relatively small to multi-billion Rand developments. Building and property economics is a specialty.

QUANTITY SURVEYING

Gerhard de Leeuw

Akopo Africa

Nico Roos

Dr CornĂŠ de Leeuw

DISPUTE RESOLUTION

PROPERTY VALUATION

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