South African Property Review October 2015 by SAPOA

October 2015

REVIEW

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series

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monthly cou n Our

Th e WOR

South African Property Review

PROPERTY SOUTH AFRICAN

by-country focu try-

Legal: attorneys and advisers

Massachusetts: Harvard Yard to Fenway Park The Property Charter Levelling the ground for economic activity Urban regeneration Government ministers on investment partnerships

October 2015

Cliffe Dekker Hofmeyr

FROM POWERFUL PARTNERSHIPS COME POWERFUL SOLUTIONS

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ON THE MOVE We’re moving professional property services in Africa forward with fully integrated and self-performing solutions that deliver quality, cost-effective results.

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contents

October 2015

PROPERTY SOUTH AFRICAN

Abland

REVIEW

October 2015

REVIEW

s●

series

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monthly cou n Our

The WOR

South African Property Review

PROPERTY SOUTH AFRICAN

by-country focu try-

Legal: attorneys and advisers

Massachusetts: Harvard Yard to Fenway Park The Property Charter Levelling the ground for economic activity

ON THE COVER Cliffe Dekker Hofmeyr believes in partnerships. As one of the largest business law firms in South Africa, the partnerships that are cherished and valued the most are those forged through time and experience with clients, staff and communities

Urban regeneration Government ministers on investment partnerships

Abreal

October 2015

Cliffe Dekker Hofmeyr

FROM POWERFUL PARTNERSHIPS COME POWERFUL SOLUTIONS

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From the CEO From the Editor’s desk Industry news Feature The voice of commercial property Education, training and development Legal update Update EcoMobility Fest Human settlements Minister Lindiwe Sisulu hones in on pivotal issues Conference Repositioning cities as the engines of our economy Conference An integrated approach to urban investment Eye on the world Massachusetts Interview Levelling the ground for economic activity Research The investment case for sub-Saharan Africa Interview Taking calculated risks on the international market Opinion When security poses a threat SAPOA events KwaZulu-Natal educational initiatives SAPOA events Retail trends report Frankly speaking Andrew Konig redeﬁned What’s on Upcoming events Off the wall A case of mirror, mirror on the wall

Oilgro

FOR EDITORIAL ENQUIRIES, email nthabiseng@mpdps.com or mark@mpdps.com 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 Editor in Chief Neil Gopal Editorial Advisor Jane Padayachee Managing Editor Mark Pettipher Editor Nthabi Nhlapo Copy Editor Ania Rokita Production Manager Dalene van Niekerk Designers Wade Hunkin, Dirk Knoesen Sales Janine Ramey e: janine@mpdps.com; Riëtte Stevens e: sales@sapoa.org.za Finance Susan du Toit Contributors Eugenia Makgabo, Helen Seymour, Lekgolo Mayatula, Martin Ferguson, Maud Nale, Merisca Scott, Tony Stokes Photographers Jabu Nkosi, Mark Pettipher, Xavier Sauer 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.

P R O P E R T Y

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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

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from the CEO

A focus on human settlements Construction has great potential for being an economic growth factor

n July 2014, the Minister of Human Settlements Lindiwe Sisulu announced her 100 Days Programme, which included a commitment by the Department of Human Settlements to identifying and implementing 50 national priority catalytic projects using different tenure options to deliver high-impact integrated and sustainable human settlements that clearly demonstrate spatial, social and economic integration. The identification and implementation of these projects will align to the Human Settlements Master Spatial Plan (MSP) and will form part of the outcomes of the MTSF in terms of ensuring adequate housing and improved quality living environments, and will be implemented during the five-year MTSF period (targeting the implementation of 10 projects per year). Human settlement catalytic projects range from mega-scale inclusionary neighbourhoods to seemingly small but high-impact interventions. The underlying principle of all of these is that they are spatially targeted interventions whose main objective is to intervene to deliberately restructure settlement patterns and impact on the environment. The introduction of the comprehensive plan for development of sustainable human settlements, commonly referred to as Breaking New Ground (BNG), emphasises the need for all role-players within the housing delivery chain to take a holistic approach to the provision of human settlements.

This translates to the delivery of human settlements that deliberately focuses on transforming the spatial context of our country through integration and the sustainable use of resources. In October 2014, a social contract was signed between the department and the private sector. The social contract for rapid housing delivery is an agreement entered into by various role-players in the housing value chain (including SAPOA) and the Department of Human Settlements. This agreement can be described as one of the foundation blocks for the implementation of the BNG, and it has allowed for all parties to work from a similar understanding. The implementation process of the agreement has allowed for continuous learning and interaction with the various role-players. This contract emphasises the need for all role-players involved in the housing delivery chain to take a holistic approach to the provision of human settlements. A follow-up from this memorandum of understanding culminated in the Developers and Contractors Workshop held last month by the department, which focused around catalytic projects. Minister Sisulu highlighted the projected delivery from the proposed catalytic projects over a five- to 10-year period of each project’s lifespan, with a total of 77 targeted projects between the public and private sector yielding more than 1,2-million housing opportunities. Benefits for the private sector, highlighted by the Minister, included: ●● Prioritise, target and focus resources (financial and other) in the human settlement sector towards scale delivery; ●● Mobilise inter-governmental support, coordination and alignment – both vertical and horizontal ●● Demonstrate impact and integrate in terms of the spatial environment as envisaged by the MSP; ●● Measures to fast-track projects through collaboration between government and private sector; ●● Integration in delivery; and ●● Promotion of job creation, especially among the youth and women located in the project areas.

The Minister of Human Settlements raised concerns around the outputs in the human settlements delivery chain, especially in light of the poor performance in the year to date and previous financial year in the outputs for houses and serviced stands. The department proposed implementation of a “regionalised operational war room” as a remedial response to the current under-performance in the sector. The war room is considered a one-stopshop approach that will ensure optimum performance of the human settlements programmes and projects, unblock the human settlements delivery value chain and provide “real time” intervention in problem areas, identify and mitigate risks in the delivery value chain, provide responsive support to provinces, metros, human settlement entities and private sector developers, and ensure improved monitoring and reporting on the performance of the sector outputs, outcomes and targets. The one-stop approach will further be regionalised, with a head appointed for each region and the main focus area will be catalytic programme planning and implementation. Various organisations within the private sector, including SAPOA, tabled the projects they’re undertaking, as well as the underlying challenges with these. Some of the challenges include high development charges, the approval process in relation to environmental and re-zoning applications, lack of provision of schools, clinics and provincial road implementation from a provincial perspective, and WULA approvals. Although SAPOA is the voice of the commercial property industry, our members are also involved in a number of mega projects around the country, and are faced with such challenges themselves. The Department of Human Settlements has committed to reshaping South Africa’s human settlements landscape through the partnership, collaboration, and cooperation with the private sector through creating both an enabling environment for the construction industry and making the necessary funding available for the implementation and changing of South Africa’s spatial patterns. Neil Gopal, CEO

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greenbuildingconvention.org.za SAPOA events Principal Sponsor

Keynote speaker

JOCHEN ZEITZ Meet the businessman who uses his millions to change opinions on climate change...

The annual Green Building Convention is the major event leading the sustainability journey in Southern Africa through inspirational thought and action. Dear SAPOA Member, You will, I’m sure, know of my involvement with the GBCSA as a director and of my personal commitment to transforming the way we design, build and operate buildings to ‘tread lightly’ on our already-stressed environment. Green Buildings not only ‘do good’ at an environmental level, they ‘do well’ at an economic level. In this period of a constrained electricity grid and exponentially rising energy costs, green buildings outperformed the IPD 2014 property performance benchmark by almost 30%, clearly demonstrating the business case for green. We are great supporters of the annual Green Building Convention in Cape Town from 2-6 November as SAPOA are founding sponsors of the GBCSA. This year, the event is appropriately themed Inspiring Better Buildings because green buildings are exactly that – better in every way. Thanks to the generosity of Growthpoint and Nedbank we are very excited to have been able to secure Jochen Zeitz as our international keynote speaker. He will be joined by an impressive line-up of both national and international speakers and this year promises to be yet another milestone in our history of curating an outstanding event. The GBCSA has allowed me to extend a personal invitation to my network and has offered a concessionary rate to my invitees. This represents a discount of 25% on the standard convention rate which you can access by using the promo code BOARD001 when booking online. I hope you will be able to join me at the event and get inspired to become more involved in this exciting and critically important movement of ours. Kind Regards, Neil Gopail Chief Executive Officer SAPOA

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from the Editor’s desk

Changing urban skylines Urbanisation is a global trend to be embraced through dynamic and visionary investment partnerships

he recent Urban Investment Partnership Conference held by the National Treasury, the Department of Cooperative Governance and the Development Bank of Southern Africa highlighted some of the most pivotal questions that the rapid urbanisation of the country poses. It is indisputable that urbanisation is a trend that will continue to grow, on the continent and globally. With an increasing number of people moving away from rural areas, developers are forced to come up with new concepts that will encourage liveability in the hope of reducing congestion and providing more spacious living. This has made the roll-out of mixed-use developments across the country inevitable. Melrose Arch became one of the first mixed-use developments in the country when it was developed back in 1997. Just a year before that, Cape Town’s Century City – now home and work to more than 50 000 people – had been established; since then many other similar precincts have written their own success stories. Currently there are a number of mixeduse developments under way across the country, including Waterfall Estate, which will be home to Mall of Africa, the biggest mall development on the continent. There are also other exciting projects such as Steyn City, located on the edge of Sandton and a short distance from Deinfern and Midrand. Steyn City boasts commercial parks, a golf course, an equestrian centre, educational

facilities, residential clusters, retirement residences and many other amenities. KwaZulu-Natal also holds a prominent position in the development of mixed-use precincts. Cornubia, one of the most highly anticipated developments on the north coast of KwaZulu-Natal, is a massive mixed-use and mixed-income precinct, which is expected to change the skyline between Durban and King Shaka International Airport. The R25-billion development will see more than 24 000 mixedincome and 15 000 subsidised homes being developed over the next few years. Add Johannesburg’s vibrant Newtown Junction to the list of recent developments and the picture of what future living looks like becomes more vivid. When one observes all the developments, it is quite clear that South Africans are looking for liveability, convenience and ways to be as close as possible to some of their favourite activities and pastimes. Due to this changing landscape, issues of green building are a strong consideration and it is imperative to consider what fittings and elements of green buildings to implement in the common property to ensure sustainability and the preservation of the environment. It will be interesting to watch the effect that the rise of mixed-use living will have on existing residential areas, office parks, industrial sites and retail spaces. Commercial industry experts report that South Africa is not in danger of over-development as supply follows demand; however, it is inevitable that some older commercial and residential areas may find themselves with high vacancy rates as tenants move to newer, greener spaces and perhaps more enticing precincts. This will indeed be an exciting change in the real estate industry, and we can only hope that the dramatic shift towards mixed-use living spaces does not have negative ripple effects for those who have not yet embraced the changing city landscape.

Forging ahead in advocacy initiatives In commercial property development there is a lot of legislation to consider when making development decisions and in the urban planning processes. The laws that govern property are complex and need to be exercised with caution so as to ensure that property

owners, managers and all stakeholders involved in the development and management of a property are compliant with what the legislation requires. It becomes essential for property professionals to understand the law and how it should be applied. The challenge is that legal processes can often be tedious and hard to understand. That is one of the reasons why in this issue of South African Property Review we look at the professionals within the legal space and at issues of advocacy. As things stand, doing business in South Africa can be complex, and research shows that South Africa is one of the most difficult places in which to do business in the world. A firm understanding of the legal framework for the built environment can improve the ease of doing business and market penetration. In addition, SAPOA is excited to announce the upcoming launch of the newest addition to its member offerings, PROvocate: The SAPOA Property Advocate Magazine. SAPOA is very concerned about legislation; as such, advocacy is one of the organisation’s cornerstones as members need to be kept updated about issues that may have dire consequences for their business if they’re not addressed on a relevant, accessible platform. The magazine is a tool that will highlight and delve into issues of property law in its entirety by conversing with legal professionals, including lawyers and advocates. Property professionals cannot exist in isolation, and often issues of governance dictate how certain projects may or may not be carried out. Wherever possible, SAPOA takes the opportunity to address and make recommendations on Bills that affect the commercial property industry before they are passed into legislation. PROvocate is the new tool for members to liaise with and take active action in SAPOA advocacy projects, and to keep informed of the latest events within property’s legal space. I look forward to being part of PROvocate, which is a necessary addition to SAPOA’s already exceptional products. I ask you to join us as we interact though our publications. Until next time, Nthabi Nhlapo, Editor

SOUTH AFRICAN PROPERTY REVIEW

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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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industry news

SAPOA supports upgrades in the inner city of Johannesburg

n an effort to create an efficient city, the City of Johannesburg engaged with property owners and managers, investigating the feasibility of implementing managed lanes within the inner city. The project is due to start around October, before the financial year-end. SAPOA supports the City of Jo’burg’s proposal to effectively manage access within the inner city, and commends the work done thus far.

Managed lanes are designated lanes in which operational strategies are implemented and managed (in real time) in response to changing conditions. They will increase roadway efficiency by packaging various operational and design actions. Site visits and traffic counts were conducted by the City of Jo’burg; the municipality believes that the introduction of

these lanes will not only save on travel time but will also increase roadway efficiency and maximise transportation infrastructure. Principles, as outlined in the City of Jo’burg Managed Lanes Policy (2012), were used as a benchmark when deciding which interventions would be suitable at the selected streets being investigated. The principles were further strengthened with design guidelines such as the City

of Johannesburg Complete Street Design Manual as well as the minimum JRA roadway standards. The investigation focuses include traffic reduction, redesign of the existing managed lanes, and the creation of new managed lanes. Traffic reduction is being proposed on Albertina Sisulu, Commissioner, Mooi and Troye Streets in the inner city by the formalisation

Risk measures to preserve sector that feeds the nation

n recent years there’s been a rise in inconsistent weather patterns, which has negatively impacted consumers and businesses around the world. The Southern African Development Community has not been exempt from these patterns, which had a negative impact on the agricultural sector in the region as a result of unreliable rainfall, unusually high temperatures and floods. Ryno du Toit, Business Development Executive at Risk Benefit Solutions, one of South Africa’s largest independent insurance and risk specialists, says these weather patterns are taking a toll on the agriculture sector, and subsequently financial losses are on the rise, which is resulting in damaging consequences for the industry and consumers. Stats SA recently revealed that South Africa’s economy contracted by 1,3% in the second quarter of 2015, with the agriculture sector contracting by 17,4% quarter-onquarter. The UN has warned the country is facing its worst drought since 1992. “The government’s Crop Estimates Committee reported recently that the country’s current maize harvest, a staple food source for millions, is the lowest since 2007,” says Du Toit. Coupled with this shortage, the prolonged dry 6

spells have also reduced grazing land and feeding for livestock.” According to the South African agricultural industry association AgriSA, crop production and livestock farming is expected to decrease by 30% in 2015, and that the decline could cost farms at least R10-billion.

Ryno du Toit, Business Development Executive at Risk Benefit Solutions

Local farmers are worried about the sustainability of the industry. “We believe there is a need for government and industry players to collaborate and find viable, sustainable solutions to mitigate risks associated with catastrophes in the sector,” says Du Toit. “The possibility of creating a fund especially for this sector of agricultural risk needs to be investigated. It is no secret that being insufficiently insured can result in foreclosure, and we need to make sure the sector that feeds the nation is adequately protected when disaster strikes.”

Tongaat Hulett Developments releases land at Sibaya

aving identified growing demand for soughtafter coastal developments, Tongaat Hulett Developments has released the first parcels of land for development within the much-awaited Sibaya precinct. The eastern component of the Sibaya precinct (nodes 1 and 5) has full development rights that will effectively pump R8-billion into the local economy, create 7 000 permanent jobs and generate R100-million in annual rates. The unprecedented growth of the KwaZulu-Natal north coast, specifically the region between Umhlanga and Ballito, has led to the development of some of the most soughtafter investment destinations in South Africa. The Sibaya precinct comprises 750 hectares across five development nodes, with all the rights in place for the nodes situated east of the M4 highway, allowing for an immediate start on development and construction.

“The vision is for a compact, mixed-use urban development, enhancing sustainability by reducing the spatial footprint of the overall development and reinforcing the natural landscape with generous open spaces,” says Tongaat Hulett Developments’ Managing Director Mike Deighton. The development seeks to encourage a real integration of urban and natural environment where each element reinforces the others to provide an entirely new urban identity and way of life for residents and visitors. It’s surrounded by three pristine forests over 350 hectares, some of the only coastal dune forests found outside of the Isimangaliso Wetland Park in northern KwaZulu-Natal. “Sibaya, quite simply, provides the platform for the last word in elegant, stylish and sophisticated living,” says Deighton. “It is the promise of superior levels of privacy and unobtrusive security, as well as extraordinary views of the ocean and Durban’s coastline.”

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industry news of public transport stopping areas along these streets, upgrading the intersections, and widening sidewalks and installing pedestrian friendly features. Redesign of the existing managed lanes on Miriam Makeba Street will consist of converting the section from Anderson to Albertina Sisulu Streets to BRT lanes only, widening sidewalks and installing pedestrian friendly features. Other proposed changes include:

●● Converting to a two-way public transport street only between De Villiers and Anderson streets through the redesign of the existing managed lanes; ●● Removal of selected on-street parking (not loading areas); ●● Widening sidewalks and installing pedestrian friendly features on Eloff Street. Although these upgrades reflect high levels of strategic thinking around decongesting the inner city, SAPOA is deeply concerned that there is a lack

of enforcement within the current transportation management system. Therefore, if there isn’t a collaborative effort to deal with the current situation, it will be most challenging for the city to deal with the proposed solutions. In addition, the long-term viability of the proposed managed lanes to facilitate behavioural change, the enforcement via technology (automated enforcement), as well as the human intervention will be

an ongoing challenge. “SAPOA wholeheartedly supports any upgrades that will make Johannesburg inner city a commercially viable business area,” says SAPOA Chief Executive Officer Neil Gopal. “It is important that the process is closely guarded, that law enforcement is strongly imposed from implementation to completion of the project, and that property owners and managers within the affected areas are actively involved in the process”.

Dipula secures 80% stake in R860 million property portfolio

ipula Income Fund Limited recently concluded a transaction to acquire an 80% interest in an R860-million portfolio of retail and industrial assets from members of the Moolman Group. The Moolman Group will retain the remaining 20% interest in the portfolio. The portfolio consists of 28 properties with a low vacancy of about 2,5% of gross lettable area. It features strong tenancies from national businesses such as Pepkor,

Dipula CEO Izak Petersen

Nedbank, Absa, Truworths, Shoprite, Game, Boxer and the Foschini Group. The largest single investment in the portfolio is the 50% stake (equivalent of R112,9-million) in the 15 166m² Seshego Circle in Polokwane, Limpopo, which opened in 2013 and is anchored by Shoprite and Cambridge Food. It also includes a 10 400m² value centre in Soweto anchored by Builders Warehouse, and the Game centre in Groblersdal. Izak Petersen, Chief Executive Officer of Dipula Income Fund Limited, says the transaction is in line with Dipula’s strategy of acquiring retail and industrial assets in its chosen markets. Most of the assets complement the Dipula portfolio but, Petersen notes, some rebalancing through sales may be required in order to optimise the portfolio. “The portfolio has excellent occupancy levels and is yield-enhancing for investors,” he says. “The Moolman Group is a respected industry player with assets and expertise focused on the same market segment as Dipula. We believe that this new joint-venture

relationship may be a source of further opportunities. The transaction increases the geographic diversity of the Dipula portfolio, especially in Limpopo and the North West, where we are currently underweight.”

Dipula Income Fund Limited is a JSE-listed REIT with exceptional B-BBEE credentials. It is managed by a 100% black-owned management company. It originated from two majority black-owned property funds, Mergence Africa Property Fund and Dipula Property Fund.

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industry news

Tripartite alliance creates waves in the property sector

aunching the powerful trio of Lushaka Investments, Mota-Engil Africa and Mercantile Bank, the three companies have created a partnership for the Central Square development in Sandton. As Sandton’s skyline becomes higher, residential buildings are being sold and earmarked for AAA-grade commercial properties. As the demand for office space grows, so a shortage of quality residential property to meet the growing demand has become a new challenge. Central Square, a mixed-use development headed by Sergio Aquino, Chief Executive Officer of Lushaka Investments, is situated in the exclusive suburb of Morningside, Sandton, and ushers in a new era in elegant living. The refined apartments and convenient retail space will soon become the frontrunner in the ultra-luxury category of residential property in South Africa’s business nucleus. “I believe that we’ve selected the best of the best in construction with Mota-Engil Africa,” Aquino says. “Their quality is way ahead of others in the market and they have an incredibly innovative approach. We want to make a noise in the market and inspire others with our best-of-the-best partnership.” “This represents the rising sun of Mota-Engil Africa’s activities in South Africa,” says Gilberto Rodrigues, Chief Executive Officer of MotaEngil Africa. “The project has all the ingredients to match with our quality and standards. We are very pleased to be associated with it.”

Karl Kumbier, CEO of Mercantile Bank; Sergio Aquino, CEO of Lushaka Investments; and Bruno Machado, Executive Director of Mota-Engil Africa

Lushaka’s investment in this development, including the World Trade Centre, is in excess of R3-billion. Mercantile Bank’s R600-million loan to Lushaka for this development was funded 50/50 by its sister bank in the Caixa Geral de Depósitos (CGD) Group. CGD is the largest bank in Portugal, and a global financial services group with a presence in 23 countries on four continents. In the last 30 years, most major companies have moved away from the Johannesburg CBD to Sandton, which is considered by many to be the “richest square mile in Africa”. Many major firms have invested in Sandton property, and this has brought many JSE-listed companies to neighbouring addresses. In the process, this has transformed the area into Johannesburg’s new business and residential hub. The Gautrain Sandton Station, which has a direct route to OR Tambo International Airport, has attracted commuters, international travellers and business people who have set up local offices and are now conducting business in the area with ease.

New shopping centre for Botshabelo

ccupier Services, a specialised real estate service offering for corporate real estate portfolios, continues to expand, in partnership with the growth of multinational occupiers in sub-Saharan Africa. According to Jess Cleland, Head of Strategy and Consulting: Occupier Services at Broll Property Group, this migration of multinational occupiers into the continent is driven by the dynamics of demand, supply and growth. A young and growing population, rapid urbanisation, and the emergence of a perceived “middle class” with rising income and changing spending patterns all point to an appealing

consumer market with largely untapped potential in many areas, often largely driven by growth around minerals and natural resources. Soughtafter markets include Ghana, Nigeria, Mozambique, Tanzania and Kenya. Multinational corporates have specific requirements from their occupied real estate portfolios with a set of needs criteria focused on quality, safety and alignment with the company’s global brand. Business continuity risks are top of mind in Africa, so resilience of services must be built into property solutions, particularly where basic infrastructure is unreliable.

“Occupiers expect that a property should facilitate flexibility, productivity and efficiency, with a definite move away from the traditional closed office to a modern, collaborative open plan layout,” she says. For client retention and growth, multinational occupiers look for the future hub of business activity within the rapidly shifting and dynamic nodes of many African cities, where proximity to competitors and clients is crucial. Furthermore, Cleland points out that expectations from international standards are driving building quality improvements, especially in Kenya, Ghana and Nigeria.

On challenges, she says business growth is unpredictable so defining future requirements for occupiers is difficult, while justifying the financials in most cases is tough in relation to South Africa. “Perceptions of Africa have changed somewhat in the past year as an appetite for perceived risk has been put into a more sober reality by a number of shifts in the market,” says Cleland. “This creates a case for more professional and sophisticated corporate representation to empower corporate occupiers to navigate around these risks in partnership with the investor and developer segments of the market.”

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feature

The voice of commercial property Among its many roles within the commercial industry sector, SAPOA places high value on its advocacy function By Nthabi Nhlapo

he role of active involvement in the formation and amendment of legislation is pivotal in sustaining a free business environment within the commercial property sector. SAPOA thus recognises and prioritises its role as a legal advocate. The organisation is a source of information that’s useful not only to members but also to government at various levels and the industry as a whole, through a significant involvement in the collection and dissemination of property data. As such, the organisation is consistently involved in advocacy matters across the board as the authoritative voice of the commercial and industrial property industry. SAPOA Chief Executive Officer Neil Gopal answers three crucial questions on the organisation’s advocacy undertakings.

How crucial is advocacy to SAPOA? Government regulations and laws have a significant and powerful impact on every sector of society. Being an advocate means that you hope to influence public-policy within existing social, economic and political frameworks and institutions. Strong businesses and communities result when people contribute in many ways to overall economic, environmental and social success. This is crucial to our industry and to society as a whole. Collaborative efforts carry more weight, so it is important for SAPOA to find ways to become part of a solution,

not part of the problem. Collaborative efforts further broaden our understanding of the issues affecting our industry and country and help us achieve long-term prosperity in sustainable, integrated ways.

What are some of the most memorable landmark advocacy matters to which SAPOA has contributed? SAPOA has been instrumental in engaging with government positively at national, provincial and local level. We have made a positive contribution to the amendment of by-laws in the Expropriation Bill, Outdoor Advertising regulations, SPLUMA, the amendment of Thresholds for Mergers and Acquisitions, and others.

Gerrit Grobler was part of the SAPOA delegation that presented the organisation’s recommendations on the Expropriation Bill in parliament

What would you say to SAPOA members about their role as change-makers and contributors to the industry? A non-profit organisation such as SAPOA is not subject to self-interested motivations but is driven instead by a commitment to the interests of the commercial property sector, the members of which share common interests. Advocacy involves educating others and being educated about a policy or legislation that is affecting our constituency. Our members’ participation on our committees is critical to make us aware of these issues as we get to understand the practical implications of such matters.

ANNIVERSARY CONVENTION

& PROPERTY EXHIBITION

21 - 23 June 2016

Sandton Convention Centre

A non-proﬁt organisation such as SAPOA is not subject to self-interested motivations but is driven instead by a commitment to the interests of the commercial property sector, the members of which share common interests. Advocacy involves educating others and being educated about a policy or legislation that is affecting our constituency

Look out for the November issue of South African Property Review for further information SOUTH AFRICAN PROPERTY REVIEW

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education, training and development

Unlocking opportunities Relevant training is the cornerstone of any progressive company

he question is often asked about the purpose of an education department at a membership-based property association such as SAPOA. Here are some of the reasons professional development is an imperative for SAPOA.

Martin Ferguson is SAPOA’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

SAPOA educational programmes SAPOA members (and the property industry in general) provide SAPOA with operational training and development needs and requirements to have competent and knowledgeable employees to support their business and operational strategies. The Education, Training and Development Department, in conjunction with various universities in South Africa and several other professional bodies, designs and develops educational programmes to address those industry needs All of SAPOA’s educational programmes are qualityassured by the universities via the Higher Education Quality Committee of the Council for Higher Education. Thus our programmes are also always presented in partnership with the various universities. Our members must beware of training institutions that offer commercial property-related training without the necessary accreditation: you will not be able to claim back your skills levies from the relevant SETAs. The Education, Training and Development Department further reviews and updates these programmes at least every three to five years to ensure the programmes incorporate changes in the property industry and remain relevant at all times. SAPOA’s educational programmes are designed

to create a career path for employees in the commercial and industrial industry, from entrylevel employees to executives.

●● Debt Funding and Property Investments ●● Continuous Professional Development (CPD)

Breakfast workshops and seminars

Several of SAPOA’s educational programmes already carry CPD credits for those delegates who are currently members of a professional body falling under the Council for the Built Environment. SAPOA will be submitting all of its educational programmes to the relevant professional bodies for accreditation. The South African Institute of Architects has allocated CPD credits to the SAPOA PDP Educational Programme in several CPD categories. The Association of South African Quantity Surveyors has also allocated CPD credits to the PDP Educational Programme. The Estate Agency Affairs Board has allocated five CPD credits for professional development (elective; non-verifiable category) to our programmes. On the Valuation Series of workshops, CPD credits are awarded through the Engineering Council of South Africa and SA Council for the Property Valuers Profession.

SAPOA runs various breakfast workshops and seminars nationally, providing the ideal forum for everyone in the property industry to keep up to date with current trends. SAPOA runs the following workshops: ●● Negotiation Skills Masterclass Programme ●● Lease Agreement Workshop ●● Sectional Title Workshop ●● Method of Measuring Floor Areas ●● SANS 10400 Building Regulations ●● Occupational Health and Safety Act (legal liability) ●● Green Building Workshops with the Green Building Council of South Africa ●● Introduction to Brokering Seminar SAPOA also runs the following workshop series: ●● Valuation Workshops (Gauteng) ●● Time Value of Money for Property Practitioners ●● Commercial Property Economics ●● Advanced Income Capitalisation Valuations ●● Principles of Discounted Cash Flow Valuations ●● Principles of Feasibility Studies ●● Valuation of Properties under Construction ●● Highest and Best Use Valuations ●● Investment Series Workshops (Western Cape) ●● Understanding the Property Investment Environment ●● Property Cash Flows and Tax ●● The Valuation of Property Investments

E-learning The methods of education keep on evolving. Today’s generation is dependent on technology and the use of internet when interacting with the world and learning. In keeping up with new educational trends, SAPOA has developed an e-learning training method. SAPOA has a training platform that enables the delivery of training materials to audience groups who are then able to access those training materials on their desktops, tablets and mobile devices.

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education, training and development With SAPOA member companies under continuous pressure from their clients to perform, financial constraints companies are facing and the lack of time to afford employees extended time off to attend training seminars, SAPOA’s e-learning programme can empower its members and non-members using the internet because: ●● Training content is available at any time and anywhere, and optimised for computers, mobile phones and tablets; ●● Employees have three months to complete the programme, and are not out of the office for three to five days at a time; ●● Educational training programme cost is reduced by almost 50%, making it more affordable for both our corporate members and individuals; ●● Incidental costs such as travelling, accommodation and meals are eliminated.

E-learning programmes SAPOA’s popular Essential Commercial Property Programme has been converted to the e-learning platform; we currently have delegates registered on the programme. SAPOA’s Introduction to Commercial Property Programme has been developed and is being tested. It will be available before the end of the year. The Property Management Programme will be developed soon, and will be available by January 2016. SAPOA is currently finalising an agreement with the University of the Free State Business School to roll out Management Development Programmes on an e-learning platform.

SAPOA Bursary Fund The SAPOA Bursary Fund was established in 2009 with the objective of creating a fund in the commercial property industry for scholarships and bursaries.

For the 2015 university academic year, SAPOA member companies assisted the organisation in sponsoring 17 students through the SAPOA Bursary Scheme (the total since 2009 is at 25). The administration of the fund is done by the SAPOA Education, Training and Development Department. The fund has six students left on the Bursary Scheme.

Services SETA SAPOA Bursary Fund SAPOA approached the Services SETA for bursary funding and was very fortunate to have R40-million granted to us for bursaries by the Services SETA. The following criteria applies to the allocation of the bursaries: ●● Applicants must be current learners in Grade 12 who will start their studies next year (2016) as first-year students.

Graduate Listing Programme The Graduate Listing Programme is a service to the industry where SAPOA introduce students (especially those with commercial propertyrelated degrees) and SAPOA members to one another with a view to potential full-time employment, graduate programmes and internships. The Graduate Listing Programme is active on SAPOA’s website under the tab Human Resources. Graduates register and list their CVs on the website. SAPOA members can then access the graduates’ listings through the website.

Student on-boarding programme The purpose of the on-boarding programme is to assist the final year students, SAPOA/Pareto bursary fund students and interns who will be starting their employment career in the property industry with an understanding of: ●● The basics of the commercial property industry;

●● Workplace conduct and business etiquette. It serves as a basic practical and theoretical tool to equip/ familiarise the students when they join the working world. The programme is presented by members of the SAPOA Education, Training and Development Committee.

SAPOA Property Student Forum The SAPOA Property Student Forum is represented by built environment students from various universities, to promote property education and careers in property. The Forum creates an interface between property students and the property industry. This generation of students represents an exciting generation, tipped to add more value to global development across the board than any generation before it. It is this potential and the fresh ideas and perspectives that we tap into.

With SAPOA member companies under continuous pressure from their clients to perform, financial constraints companies are facing and the lack of time to afford employees extended time off to attend training seminars, SAPOA’s e-learning programme can empower its members and non-members using the internet

Career days On a national basis, SAPOA actively participates in promoting careers in the property industry at high schools and universities. The objective of the exhibitions and promotions is to expose students to different careers in the property industry. The SAPOA regional committees must identify and visit at least five schools in their region every year. The schools are visited during the course of year, and presentations are made to Grade 10, 11 and 12 learners to introduce them to the commercial property industry and the various careers in it. SAPOA has developed a “Careers in Property” booklet that is handed out at the career days. SAPOA has also developed the “Student Handbook”, which is distributed to students at university career days.

For more information, please contact: Fiona Kahn Education Manager t: +27 (0)11 883 0679 e: edmanager@sapoa.org.za

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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 24

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VALUE

WHAT IS IN IT FOR SAPOA BURSARY P ARTNERS interview

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.

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legal update

Promotion and Protection of Investment Bill The latest version of the Bill was published for public comment recently. It is a watered-down version of the Bill that was previously submitted to Parliament in 2013

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

The differences in approach taken by the different municipalities are very marked. Some regard a development charge as an additional source of revenue, without the need to revise all of the other service charges to ensure that there is no doublecharging. Others simply do not understand the link between the charge and a quantiﬁable municipal service 14

he Promotion and Protection of Investment Bill (Bill) was first published for comment in November 2013 and was open for public comment until January 2014. In terms of the Bill, an investment may not be expropriated except in accordance with the Constitution, in terms of law of general application, for public purpose or public interest, under due process of law, with just and equitable compensation effected in a timely manner. However, the ultimate concern would be the constitutionality of the Bill and the provisions made in the Constitution that are incorporated in the property clause, should not be deviated from. As a result of comments received, the Department of Trade and Industry worked on redrafting certain clauses of the Bill. The latest version of the Bill was published for public comment on 22 July 2015. It is a watered down version of the Bill that was previously submitted to Parliament in 2013. The Bill has its origins in the government’s wish to reassure foreign investors who were alarmed by South Africa’s decision three years ago to terminate its bilateral investment treaties (BITs) with several European countries. The Bill must be seen within the context of: ● The decision by government to not renew the bilateral investment treaties, which it had signed in the 1990s, protecting foreign investors; ● Certain foreign investors challenging BEE policies and the transfer of mineral rights

from private hands to the state as being in violation of bilateral investment treaties; and ● The debate around the Walmart case in its acquisition of Massmart, where there was a great deal of talk of the state establishing an investment screening agency.

The latest version of the Bill was published for public comment on 22 July 2015. The Bill has its origins in the government’s wish to reassure foreign investors who were alarmed by South Africa’s decision three years ago to terminate its bilateral investment treaties (BITs) with several European countries Its main reassurance to foreign investors is the undertaking that “subject to national legislation, foreign investors and their investments must not be treated less favourably than South African investors in like circumstances”.

The Bill provides for the legislative protection of investors and the protection and promotion of investment; to achieve a balance of rights and obligations that apply to all investors. The primary purpose of the Bill is to provide a legislative framework for all investments, including foreign investments. The intention is to put local investors on the same footing as foreign investors who were previously advantaged under the BITs. The aim of the Bill is to ensure that investments, both local and foreign, must be protected and promoted equally to ensure job creation, economic growth, sustainable development and the wellbeing of the South African people. The purpose of the Bill is, among others, to promote and protect investment in accordance with and subject to the Constitution in a manner that balances the public interest and the rights and obligations of investors. According to one of the provisions of the Bill on security of investment, the Republic must accord foreign investors and their investments a level of security as may be generally provided to domestic investors, subject to the availability of resources and capacity. The Bill purports to protect foreign investors in the same way that domestic investors are protected. This must be seen within the international investment law principle that there must be a minimum standard of treatment. Section 8 of the Bill states that the Republic must accord

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update foreign investors and their investments a level of security as may be generally provided to domestic investors and subject to available resources and capacity. The qualification of available resources and capacity insinuates that if resources are not sufficient then the state will not be liable. Investors will have the right to property in terms of the Constitution, and a foreign investor may, in respect of an investment, transfer funds – subject to taxation and other applicable legislation.

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. The balance in the legislation makes it clear that the idea is not to just protect local investors at the expense of foreign investors. Section 9, which is the expropriation clause, has been substantially changed and is now acceptable. It states that investors have the right to property in terms of Section 25 of the Constitution. The old sub-section 2 has been deleted. The old Section 8(2) contained a list of acts which did not amount to expropriation. This included measures that resulted in the deprivation of property, but where the state does not acquire ownership of

such property and there is no permanent destruction in the economic value of the investment. The provisions relating to a “review” by a competent court (as opposed to determination by a court) have also been deleted. The Bill brings foreign investors in line with all the constraints of local investors. The potential disadvantage is where members want to encourage foreign investment in South Africa in the property market. Such foreign investment may be discouraged under provisions of the Bill that will allow the legislature to protect black economic empowerment, cultural heritage, and domestic laws that are designed to regulate foreign ownership. The ability to legislate foreign ownership permits the government to implement laws to restrict the amount of property that can be owned by foreign investors. An investor who has a dispute in respect of action taken by the government, which action affected an investment of such foreign investor, may with six months of becoming aware of the dispute request the department or any other competent authority to facilitate the resolution of the dispute by appointing a mediator or another competent body. The government may consent to international arbitration in respect of investments covered by this Act, subject to the exhaustion of domestic remedies. Such arbitration will be conducted between the Republic and the home country of the investor in question. SAPOA supports the aim of the Bill to ensure that investment, both local and foreign, must be protected and promoted equally to ensure job creation, economic growth, sustainable development, and the wellbeing of all South African people.

legal update

EcoMobility Fest EcoMobility is an environmentally friendly way of moving that aims to decongest major cities

he goal of the EcoMobility festival is to reduce the number of private cars on the roads to allow free movement of people around our cities. It is designed to give the cities back to the people, so they have the freedom to cycle, walk, jog and stroll around. It is also intended to reduce the amount of air pollution and make our world a cleaner place to live in. The EcoMobility World Festival is where the idea of EcoMobility is celebrated. The Sandton CBD in Johannesburg will be the second global city to celebrate EcoMobility after Suwon in South Korea. More than 100 000 people travel to and from Sandton every day, with more than 75 000 vehicles driving into Sandton in the mornings. This makes it one of the most congested growing city centres. In an effort to help change mind-sets, the EcoMobility festival will be held throughout the month of October. Below is some information pertaining to the festival.

5th Street (between Fredman Drive and Rivonia Road) ● Part of the public-transport loop ● Bus lane, which can also be used by private vehicles needing to make a left turn into buildings such as the Da Vinci hotel ● Public transport stops near Maude Street and opposite the library ● Open to all vehicles

Alice Lane (between West Street and 5th Street) ● Will operate as a cul-de-sac ● Only local vehicle users and SCC exhibition trucks will have limited access at a managed access point on the corner of 5th Street ● More pedestrians and cycling encouraged ● Some holding for metered taxis

Fredman Drive (between Rivonia Road and 5th Street) ● Part of the public-transport loop ● Bus lane, which can also be used by private vehicles needing to make a left turn into buildings such as 24 Central ● Public transport stops near the corner of Rivonia Road, between Gwen Lane and Protea Place, and between West and 5th Streets

Gwen Lane ● Open on all weekdays but will operate as a cul-de-sac ● Entry/exit on Fredman Drive only ● During weekday peak hours the JSE, HSBC and Deutsche Bank will be able to exit onto Maude Street towards Rivonia Road via the current dedicated channelised island lane ● On Sunday 25 October, managed access will be provided from Fredman Drive for the Discovery Duathlon

Maude Street (between West Street and Rivonia Road) ● One-way street from West Street to Rivonia Road ● Only accessible from West Street’s east carriageway intersection ● No access to Gwen Lane SOUTH AFRICAN PROPERTY REVIEW

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update Maude Street West (between West Street and 5th Street)

* If the street you’re looking for isn’t listed here, it is not a direct part of the EcoMobility Festival. Local vehicle users are people who work, live or need to visit one of the buildings along a controlled street. This information may be subject to change.

● Will operate as a cul-de-sac ● Entry/exit only on 5th Street ● Only local vehicle users will have limited access at managed access points on the corner of 5th Street

Events

Rivonia Road (between Fredman Drive and 5th Street) ● Part of the public-transport loop ● Bus lane, which can also be used by private vehicles needing to make a left turn into buildings such as Nedbank ● Public transport stops near the corners of 5th Street, West Street and to the north of Maude Street ● Open to all vehicles

Stella Street ● Only local vehicle users and construction vehicles will have access from West Street’s eastern carriageway ● Users are encouraged to use Maude Street East to exit to Rivonia Road

West Street (between Rivonia Road and Fredman Drive)

hrough and Citibank mentioned hey will be et or Stella

● Dedicated pedestrian zone for the EcoMobility Festival on western carriageway from Citi Bank near Maude Street to Fredman Drive ● The eastern carriageway is open for local vehicle users and construction vehicles only from the Fredman Drive intersection. It will provide limited access to Maude Street East (which is a one-way from West Street and Rivonia Road) and Stella Street, but cannot be used as a through-route to Rivonia Road at its southern end ● Managed access points at Fredman Drive and Rivonia Road

● 1 October 2015: Media briefing and Jo’burg Shopping Festival & Fashion Show ● 4 October 2015: Streets Alive: We-R-1. Come walk, ride your bike or skateboard between Alexandra and Sandton, and be present at the opening ceremony ● 4 to 25 October 2015: Exhibitions. Find out about the history of transport in Johannesburg, view and try out innovative vehicles, and experience travel options beyond private cars ● 11 October 2015: Participate in the fourth Freedom Ride, followed by a Family Fun Day along West Street. There will be food, music and a focus on road-safety education with various activities ● 18 to 19 October 2015: Play sports on the closed-off streets, including action netball and action soccer ● 23 to 25 October 2015: Participate in or watch the Discovery Duathlon along the streets of Sandton and Alexandra ● 31 October 2015: Rugby meets Soccer Derby. Join us for double-header sporting entertainment; view an adrenalinepacked Rugby World Cup Final and the never-ending rivalry between Orlando Pirates and Kaizer Chiefs. Lots of fun-filled activities, including a battle of the DJs

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human settlements

Minister Lindiwe Sisulu hones in on pivotal issues The Department of Human Settlements hosted a developers and contractors’ workshop with the aim of formalising the basis of the contractual obligation with regards to catalytic projects, and solidify the much-anticipated partnership between government and the private sector on human settlements By Maud Nale

The opening address at the workshop by Minister of Human Settlements Lindiwe Sisulu commenced with context around the overall challenges regarding the department’s backlog

n October 2014, the private sector and the Department of Human Settlements signed the Social Contract. The Social Contract for Rapid Housing Delivery is an agreement between various role-players in the housing value chain, including SAPOA, and the Department of Human Settlements. This agreement can be described as one of the foundation blocks for the implementation of the Breaking New Ground Plan (a comprehensive plan for the development of sustainable human settlements), and it has allowed all parties to work from a common understanding. The implementation process of the agreement has allowed for continuous learning and interaction between the role-players. The opening address at the developers workshop by Minister of Human Settlements Lindiwe Sisulu commenced with context around the overall challenges regarding the department’s backlog. According to Statistics South Africa, based on results of Census 2011, South Africa has 2 700 informal

FROM LEFT Minister of Human Settlements Lindiwe Sisulu, SAPOA CEO Neil Gopal and workshop facilitator Yusuf Patel

settlements dotted across the country. These comprise 2,2-million households, and are a combination of informal settlements and back-yard dwellers. The Minister noted that the department is facing many challenges against a backdrop of an inordinate increase in the subsidy quantum and a worrying trend of steadily diminishing capacity and skills at all spheres of government.

Catalytic projects Human settlement catalytic projects can range from mega-scale inclusionary neighbourhoods to seemingly small but high-impact interventions. The underlying principle of these is that they are all spatially targeted interventions whose main objective is to intervene to deliberately restructure settlement patterns and the impact on the environment.

Benefits and incentives for benefits catalytic projects For the private sector: ● Prioritise, target and focus resources (financial and otherwise) in the human settlements sector towards scale delivery; ● Mobilise inter-governmental support, coordination and alignment, both vertical and horizontal; ● Demonstrate impact, and integrate in terms of the spatial environment and as envisaged by the MSP; ● Create measures to fast-track projects through collaboration between government and the private sector; ● Integrate delivery; and ● Promote job creation, especially among the youth and women located in the project areas. For government: ● Projects that offer the scale delivery of housing opportunities (10 000 houses and 5 000 serviced stands over the next five years);

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human settlements Although SAPOA is the voice of the commercial property industry, our member companies are involved in a number of large-scale residential projects nationally. As a model of good practice, SAPOA Chief Executive Officer Neil Gopal made reference to the Cornubia integrated human settlement development, which is a joint venture between the eThekwini Municipality and Tongaat Hulett

●● Projects need to clearly indicate the nature and type of government support required; ●● Projects that demonstrate and promote innovation in terms of the master spatial plan criteria and intentions, and other areas where innovation can be activated.

Mbulelo Tshangana, Acting Director General of the Department of Human Settlements

●● Projects that include a variety of housing types and cover a variety of housing programmes, plus the projects’ contribution to MTSF; ●● Projects that provide mixed income and/ or mixed development; ●● Projects that will maximise job creation opportunities locally, and specifically assist with the mobilisation and utilisation of the youth brigades; ●● Projects that can demonstrate a maximum gearing of overall government investment and human settlement-specific investment; ●● Projects that promote and impact the creation of sustainable and integrated human settlements; ●● Projects that promote collaboration between the private sector and government in order to facilitate efficiency and effectiveness, and fast-track project development and delivery;

Various organisations within the private sector (including SAPOA) tabled their perspective on the challenges faced. “The Financial Implication of Human Settlements” by the Banking Association of South Africa tabled in detail the Gap Market Challenge, which is the affordability gap for first-time home buyers who cannot afford an entry-level home. Similarly, “Access to Good Quality Housing” by the South African Affordable Residential Developers Association focused on the time frame for environmental approval and WULA with regards to water use applications, roads and transport, and engineering services agreements. The association believes that in order for the majority of South Africans who are lower-income earners to access good-quality housing, both the public and private sector investment mix has to be appropriate and aimed at containing costs.

Perspective from SAPOA Although SAPOA is the voice of the commercial property industry, our member companies are involved in a number of largescale residential projects nationally. As a model of good practice, SAPOA Chief Executive Officer Neil Gopal made reference to the Cornubia integrated human settlement development, which is a joint venture between the eThekwini Municipality and Tongaat Hulett. Cornubia is a mixed-use, mixed-income, 1 200-hectare development, with 80 hectares earmarked for industrial development and the rest for commercial, housing and other social and public facilities, including schools, creches, clinics, multi-purpose halls, police stations and post offices. Cornubia will see more than 24 000

new mixed-income homes being built over the next 10 years, 15 000 for subsidised housing and the balance for a wide range of affordability levels. The development is expected to create 48 000 new sustainable job opportunities over a period of 15 years, and a further 15 000 during the construction phase. Some of the challenges being experienced by our members include: ●● High development charges; ●● The approval process in relation to environmental and rezoning applications; ●● Lack of provision of schools and clinics from a provincial perspective; ●● Lack of provincial road implementation from a provincial perspective, and hence funding of major new interchanges on the provincial road network; ●● Sustainability of the “free housing” model as a result of costs of housing because of municipal standards, high densities and founding conditions – subsidy levels not coming to close to actual costs; and ●● WULA approval(s). Gopal expressed SAPOA’s commitment to human settlements through constructive engagement and collaboration with the government. The property industry is one of the key contributors to GDP, job creation and poverty alleviation, and new injections and interventions must all be part of a consistent set of policies aimed at urban transformation. Sisulu noted the challenges of the private sector, and committed to partnership and collaboration with a common commitment to deliver a new determination and a new national ethos to all South Africans by creating an enabling environment for the construction industry and making the necessary funding available for implementation and changing of spatial patterns. These will reshape South Africa’s human settlements landscape and help the department to realise its target of 1,5-million houses. SOUTH AFRICAN PROPERTY REVIEW

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WORKING ANY WHICH WAY YOU LOOK 19 years ago Craig Cockburn, the now MD of HUB Parking was part of the team that switched on the first Zeag Pay on Foot parking system in South Africa, at Sterland, Pretoria, in September 1996. Since those early days it’s been quite the journey and he’s watched the industry grow and transform – with Pay on Foot parking systems being considerably more commonplace these days.

“We now boast 165 sites across the country and we keep growing,” says Craig. “Historically we’ve always been seen as offering an incredibly reliable product that goes the distance. Together with the International HUB parking team, a great service offering and a reliable development platform we are certainly looking forward to an exciting future.” HUB Parking, a business division within the International Automation Group, FAAC was formed in 2012, with a view to consolidating the various parking companies in the group into one division and leveraging off the combined expertise of its team members. The division, headed by Enrico Nardi out of Bologna, Italy comprises equipment manufacturers Zeag Parking, ParQube as well as Datapark, a product range specifically developed for the North and South American market. Magnetic Autocontrol (est. 1946), the number one manufacturer of Parking Barriers worldwide, and another group company provides high speed barriers to the stable.

“As a group we are acutely aware of the need to offer the latest technological advances to our respective markets, and our new product range has been designed to allow us to do this. An example of this is our ability to communicate with various different payment platforms simultaneously and the potential to seamlessly link into new payment technologies as they come along.” With the banking, and other sectors offering a range of new cashless payment systems like MasterPass, Zapper, SnapScan and mobile wallets it’s become increasingly important that parking systems look to incorporating these technologies into their offering. The New Zeag system has the flexibility to do this.

What's On_OCT_rev1.indd 68

The Crown Jewel in the new product range is JMS, Janus Management System. Being part of an Italian Group company, celebrating 50 years in the industry HUB have used Janus, a Roman god as their inspiration for their latest back end software offering, for those of you who aren’t familiar with Janus, he’s the god with two heads – one that looks behind him and one that looks forward. Appropriately he is the god of doorways and transitions – and now of course in a modern application, parking too.

“It’s very symbolic of the communication capability of our systems,” says Craig.” In essence our new software is fully compatible with our older parking equipment, while at the same time it is able to integrate with our newer technological offerings as well, looking both back and forward at the same time. “The software is Windows 8 based and allows for the management of multiple carparks at once, on a control, reporting, and management level – so it’s a product designed with the future very much in mind.” Customer facing wise the product range also sports a cutting edge new look that is very much in keeping with today’s trends. The lane stations and APS’s (Automatic Payment Stations) have been designed with a modern look and feel and incorporates additional features such as touch screens and IP based High Definition Advertising Displays as options. As part of its customer assistance program they also come complete with a Customer Guidance LED system to assist users through the payment process. So far our new stations have been rolled out at The Glen Shopping Centre, Sunninghill Hospital as well as Hosea Kutako airport in Namibia with many more on order.

Another new offering being introduced by Zeag (SA), HUB’s South African entity is ParQube. This Pay on Foot solution is a well-priced range suitable for small to mid-size applications comprising of 2-8 peripherals. “It’s designed for sites that need to be JMS compatible, but may not require all the flexibility of a fully fledged ZEAG system.”

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The other new development that has been successfully tried and tested is a retailer based incentive scheme linked to our parking systems. “In 2013 we were approached by both the one of our larger clients and PicknPay with a view to offering them a parking system discount solution for PicknPay’s new flagship store in Cape Town. This validation system was to be flexible in operation and was to be designed so as to inconvenience the customer as little as possible, recalls Craig. After initial meetings with both the client and PicknPay we agreed on integrating Zeag’s Valiscan encrypted barcode offering into their Point of Sale system. The reason for choosing this solution is that it offered the most convenient method of validation (discounting) of parking for PnP’s customers in that the validation barcode was automatically incorporated into all till slips. Working together with The Client, PnP and PnP’s Point of Sale developers we integrated the decryption and barcode generation software into their cash registers in time for the stores opening in December 2013. The software incorporated features where various discounts, such as Time off (minutes), Cost off (Rands) or Percentage discount (50%, 100% etc.) could be applied to the barcode. Included into the software configuration was an additional feature allowing for a minimum spend criteria for each POS transaction before the barcode would be printed. “It’s simple to use,” says Craig who explained the steps. “Take a ticket at an Entry station when you enter the car park and once you have finished shopping at PnP you take your ticket and till slip to the APS. You insert the parking ticket into the APS station and present your parking discount barcode to the barcode scanner on the APS face to facilitate your discount, and away you go.” This solution has proven to be very successful in operation and has met and exceeded both the clients and PnP’s expectations. It has also proven to be a viable local solution that can easily be rolled out by other large retailers such as Shoprite Checkers, Woolworths and Spar, amongst others. The initial software integration costs are certainly offset by the improved discount process and customer ease of use. PicknPay together with various property owners have now rolled this system out to East Rand Mall, East Point as well as Westville Junction. Other stores are also in the pipeline for rollout.

CONTACT: +27 11 794 4525 www.hubparking.co.za

It’s proven to be a win-win any which way you look at it. Janus would no doubt approve.

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conference

Repositioning cities as the engines of our economy Speaking on urban investment partnership, the Minister of Finance gave an address at a recently held conference By Minister of Finance Nhlanhla Nene Photograph by Xavier Saer

he purpose of this conference is to initiate a long-term engagement between all stakeholders in urban infrastructure investment and land development, especially in the eight Metropolitan Municipalities represented here. South Africa needs successful cities. As most countries, cities are the engines of our economy. A relatively small group of only 27 urban municipalities constitutes seven percent of municipalities in the country but generate 80% of our national economic activity. Although these municipalities occupy less than six percent of South Africa’s land area, they are home to more than half of our population. Furthermore, these municipalities will account for the overwhelming majority of our economic growth in the decades ahead. The ability of these eight municipalities to invest wisely in urban infrastructure, to support and enable efficient forms of urban economic and population growth, will be a major determinant of South Africa’s economic future, perhaps maybe even the biggest contributor. These cities need adequate and effective investment to ensure that they are vital, sustainable, equitable and economically productive. Today, our Metropolitan Municipalities provide a stable, successful platform of democratic local government that is able to manage ongoing urban growth and economic development. They collect close to 93,7% of their billed revenue, notwithstanding the growth in debtors resulting from the economic downturn that all spheres of government are actively addressing. Our metros report consistently on their in-year performance during the municipal financial year, providing a far greater degree of transparency than ever before. Audit outcomes have improved in the last two years; and in the two cases where audit qualifications remain, the National Treasury and Department of Cooperative Governance are working closely with these cities to resolve both the immediate and underlying causes of these findings.

Lastly, most Metropolitan Municipalities are experiencing stable political leadership, under the guidance of my colleague Minister Gordhan, who spearheads the “Back to Basics” initiative. With the end of apartheid, many people worried about the financial health of our cities, given that they were required to extend services throughout their territory, and many of the new customers were poor. These concerns caused most lenders, including

The National Development Plan recognises the role that urban municipalities must play in creating an enabling environment that will attract investment through forward planning, and the provision of strategic infrastructure and land management arrangements necessary to support economic growth and the social fabric of communities fund managers and insurance companies who invested for the long term, to limit their exposure to the municipal market. Now, more than 20 years into the democratic era, the Metros have proved themselves. Of course, tremendous challenges remain, but the fact is that these cities have made remarkable progress in extending the availability of water, electricity and other services. Some backlogs remain but this is a small part of the investment that our cities need. Today, most of the investment that Metros need is related to growth – both economic and population growth – and to the renewal of the ageing infrastructure.

The challenges that we face in energy supply highlight the importance of investing in strategic infrastructure that supports economic activity. Our nation’s economic growth, our ability to create decent jobs and our ability to compete in the global economy all depend on successful cities that are channelling investment into infrastructure for our common future. Economists such as Professor Ed Glaeser of Harvard University argue strongly that urban growth, if correctly managed, will produce powerful agglomeration economies. But to benefit from this “urbanisation dividend”, we must pay close attention to where and how we build our cities. We cannot continue to place poor people on the outskirts of our cities, far from jobs and opportunities, and we must physically integrate our townships into the mainstream of urban economic and social life. The National Development Plan recognises the role that urban municipalities must play in creating an enabling environment that will attract investment through forward planning, and the provision of strategic infrastructure and land management arrangements necessary to support economic growth and the social fabric of communities. It recommends that we break away more decisively from our past of divided, inefficient cities and pursue investment in the infrastructure, housing developments and transport services that will build more compact, productive and inclusive cities. The Integrated Urban Development Framework provides clarity and a broad outline of the policy levers necessary to achieve this mandate. Given the central role that municipalities play under our Constitution, the government has worked consistently over time to establish a sound legal and regulatory framework for financing municipalities. Allow me to briefly highlight that history. Our system for local government finances is rooted in the 1996 White Paper on Local Government, which stressed the importance of bringing in private investment, and of using capital markets to do so.

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conference Urban growth 7 6 Million Households

Since the adoption of the White Paper, the National Treasury has been working consistently with representatives of the Banking Council, South African Local Government Association, and various institutional investors to ensure a sound business environment. We have ensured a legal framework under which municipalities’ debt repayment commitments are enforceable, and we have put systems in place to deal with financial problems in municipalities. To ensure that a municipal council would have the power to bind its successors, we went so far as to amend the Constitution. In 2001, we added a new section (Section 230A), which authorised a municipal council to legally bind future councils to repay loans. We did this to ensure that lenders would be secure in lending to municipalities. In addition, in 2003, we again amended the Constitution in order to have an effective law that deals with any municipalities that experience financial problems. In Chapter 6 of the Municipal Finance Management Act (MFMA), we codified the rules around municipal borrowing, which was done in collaboration with municipalities and lenders. The remainder of the MFMA establishes strict rules around municipal revenues, expenditures, and assets. The implementation of the MFMA has seen major improvements in the transparency of municipal finances. Regular reporting is now the norm, and ongoing improvements to the quality and comparability of information is currently being introduced through the Municipal Standard Chart of Accounts. These reforms and the regulations that accompany them should be taken into account as they are important in ensuring confidence in the long-term health of municipal financial sustainability. The same road has brought us here today for the next generation of consultations, discussions and actions. The work that our colleagues at the Department of Cooperative Governance do to facilitate municipal planning and structures together with the work that we do in the Treasury to regulate the financial instruments and frameworks with which cities operate, come together at the city level. Together, we have launched the Cities Support Programme as an “all of government” initiative that works with our largest urban municipalities to further strengthen their governance arrangements, align development planning systems, seek

Metros Secondary cities

Largetowns

Smalltowns

Rural municipalities

Population +26%, Households +36% 1996

2001

2007

2011

2001 - 11

Source: Urban Investment Partnership Conference presentation

out appropriate reforms to create a more enabling regulatory environment, and assist them to prepare and finance investment programmes that will support inclusive urban economic growth. In February, I announced a new package of fiscal measures to support our largest municipalities, including: ●● A renewed focus on and support for project preparation; ●● The strategic alignment of the Development Bank of Southern Africa behind our metropolitan municipalities; ●● Reforms to the system of infrastructure grants to municipalities; and ●● Specific measures to enhance their ability to finance their infrastructure investment needs through improvements to the system of Development Charges.

These reforms and the regulations that accompany them should be taken into account as they are important in ensuring confidence in the long-term health of municipal financial sustainability

In terms of the Constitution, municipalities are the face of service delivery while national government is responsible for the provision of a solid regulatory environment. The work of building inclusive, compact and efficient cities must be done at ground level by the municipalities, and especially the metropolitan municipalities represented here. This conference is opportune for all of us to exchange ideas as private sector and government on how we can work together to build vibrant cities that will help us put all of our citizens to work, and provide inclusive and dynamic spaces for all of our people. This conference is the start of a regular, structured and results-focused partnership. It will not provide us with all the answers, but I hope we can move beyond re-stating our challenges and commit to work together to reposition our cities as engines of inclusive growth. SOUTH AFRICAN PROPERTY REVIEW

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conference

An integrated approach to urban investment The Urban Investments Partnership Conference highlighted some challenges and potential solutions for the development of vibrant, world-class cities in South Africa By Nthabi Nhlapo

he conference, co-hosted by the Department of Cooperative Governance, the Department of Finance and the Development Bank of Southern Africa aimed to facilitate discussion around urban investment, renew and strengthen dialogue between government and the private sector, and leverage deeper and results-focused partnership between all stakeholders on urban investment needs and opportunities. South Africa’s large metros host a significant proportion of all national economic activity, and with the ongoing patterns of urbanisation, urban investment and development is a pivotal goal of both the government and the private sector.

Ministry of Cooperative Governance Raising the question of what transforms a project on government’s wish list to a SAPOA President Mike Deighton, Minister of Finance Nhlanhla Nene and SAPOA Chief Executive Officer Neil Gopal profitable, investable acquisition for a private sector entity, Pravin Gordhan, the Minister of Cooperative Governance, spoke about urban urbanised areas, in some cases contributing development and partnership opportunities development and spatial transformation. about 80% of a country’s GDP. in these areas. He spoke of the rapid urbanisation of the In addition, he alluded that the metros “Our urban areas remain segregated and world’s population and highlighted thatneeds more are twice as as other parts of our cities continue to face service delivery Expected infrastructure bygrowing category forfastmetros: than half of the global population is living in the country, making it imperative to find challenges,” he said. “Several interrelated factors

2014 Rbillion

Infrastructure development requirements in metros until 2025 50 45 40 35 30

Renewal

Growth

Backlogs

15 10 5 2016

2017

2018

2019

2020

2021

2022

2023

2024

Source: Urban Investment Partnership Conference (UIPC) Presentation

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conference require attention if we are to harness the full economic potential of our cities. As a South African community, we are working with a common vision to jointly plan and deliver a new South Africa. The relationship between government and the private sector is marred with distrust; as government we need to understand the requirements of the private sector, which requires a return on investment and to ensure that policy certainty and other requirements are met. “There has been much talk about spatial transformation but very little action has been taken. We have to ensure that we keep in touch with the global discourse in order to remain profitable and realise the notion of prosperous cities by gearing ourselves into action.” Gordhan emphasised the importance of managing urban development and pointed out that spatial transformation is not a luxury but an imperative we must pursue if future generations are to reach their full economic potential. “It stands for us collectively as South Africans to raise the bar and create opportunities for partnerships and not only to talk about them,” he said.

Annual Change in Gross Value Added (1997-2012)

Annual change in gross value added (1997-2012) 7%

6% 5% 4% 3% 2% 1% 0% -1% -2% -3% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

8 x Metros

Rest of RSA

Source: Urban Investment Partnership Conference (UIPC) Presentation

Ministry of Finance Minister of Finance Nhlanhla Nene concurs that South Africa’s cities need development. He says cities will account for the country’s overall economic growth and therefore need adequate and effective investment to ensure they are profitable. “Our nation’s economic growth, ability to create sustainable jobs and compete on the economic market, and urban development growth need to be managed by recognising the role of municipalities in managing urbanisation,” says Nene. “We have to focus on building more inclusive, compact and efficient cities. Given the central role of the municipalities, government has worked tirelessly to form and manage a sound legal framework that encourages private partnerships.”

Minister of Cooperative Governance Pravin Gordhan with Neil Gopal

“There has been much talk about spatial transformation but very little action has been taken.

National Treasury Director General of the National Treasury Lungisa Fuzile spoke about the needs and opportunities for urban investment. He highlighted the importance of creating cities conducive to the improved livelihood of all South Africans. He believes South Africa has an established, globally recognised model of strong city governments within a clear policy and regulatory framework. “We need to work very hard to form strong partnerships between banks, financiers,

We have to ensure that we keep in touch with the global discourse in order to remain profitable and realise the notion of prosperous cities by gearing ourselves into action” Director General of the National Treasury Lungisa Fuzile

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conference

ABOVE Director General of Cooperative Governance Vusimuzi Madonsela RIGHT SAPOA’s Eryk Wood, the Development Bank of Southern Africa’s Sinazo Sibisi and Mike Deighton

SAPOA perspective Speaking on behalf of the organisation, SAPOA President Mike Deighton and Erky Wood presented the commercial property industry’s perspective and challenges as far as investment and planning is concerned in metropolitan areas. As the voice of commercial property, SAPOA: ● Recognises the importance of urban investment and development, and will promote it, as far as it can, on all its platforms; ● Recognises the need for urban transformation and will participate in the building of a sustainable system; ● Is committed to the performance of the commercial property industry and ensuring that it continues to add to the GDP of South Africa; ● Remains committed to constructive engagement with all city authorities, and government and management bodies; ● Can assist in preparing consistent models of how we pay rates, taxes and contributions and the creation of strategic partnerships with local government.

Infrastructure development requirements in metros until 2025

2014 Rbillion

developers and the government, supported by development finance institutions, to ensure infrastructural development financing,” he says. Urban development initiatives should assist the private sector in providing investment and earning fair returns, and assist government in reaching a predictable inter-governmental fiscal regime as well as enable cities to achieve national targets of productive employment, low rates of inequality and shared prosperity.

50 45 40 25 30 25 20 15 10 5

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Budget (MTREF)

Infrastructure investment requirement Source: Urban Investment Partnership Conference (UIPC) Presentation

Commitments Participants confirmed the appropriateness of the conference objective of initiating resultsfocused partnerships between cities, government and the private sector to facilitate inclusive urban growth. Three commitments were made to follow through on the momentum achieved at the event: ● Setting up regular engagements on urban financing: A commitment was made for continued regular engagement on urban investment between government, cities and

●

investors to develop joint solutions and build a strong foundation for collaborative initiatives. Improving project preparation support: Opportunities for collaboration on project preparation will be explored. Promoting city-level engagements: Specific engagements on a city level were desired by all participants; it became clear that these engagements should be driven by cities and be supported by National Treasury and the DBSA.

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monthly cou n Our

Th e WOR

series ●

s●

by-country focu try-

Harvard Yard as seen from the Smith Campus Center (formerly Holyoke Center) (© Wikipedia.org)

Rich in cultural history, education opportunities and economic activity, this state is the home to some of the US’s most signiﬁcant inventions and discoveries By Merisca Scott

Key facts ▼ Capital Boston ▼ Other important cities Worcester, Springfield, Lowell, New Bedford, Cambridge, Brockton, Fall River, and Quincy ▼ Motto Ense petit placidam sub libertate quietem (By the sword we seek peace, but peace only under liberty) ▼ Population 6,745-million (2014) ▼ Name for residents Massachusettsans ▼ Minimum wage US$9 per hour (January 2015) ▼ Major industries textiles, electronics, publishing, education, tourism, fishing 28

Walking Harvard Yard M

assachusetts in the US has a strong history. Plymouth was the site of the first colony in New England, founded in 1620 by the Pilgrims, passengers of the Mayflower. Officially called the Commonwealth of Massachusetts, this state is in north-eastern US, bordered by Rhode Island and Connecticut to the south, New York to the west, Vermont and New Hampshire to the north, and the Atlantic Ocean to the east. Massachusetts was a leader in resisting British oppression. In 1773, the Boston Tea Party protested unjust taxation. The Minute Men started the American Revolution by battling British troops at Lexington and Concord on 19 April 1775. The state retains a lot of its historic sites and buildings, making it very attractive to international tourists.

Population Massachusetts is the seventh-smallest state by land area, but the 14th most populous and third most densely populated of the 50 states.

It is the most populous of the six New England states and has the nation’s sixth highest GDP per capita. The state features two separate metropolitan areas: the Greater Boston area in the east and the Springfield metropolitan area in the west. Approximately two-thirds of the Massachusetts population currently lives in Greater Boston. In 2004, Massachusetts became the first US state to legally recognise same-sex marriage as a result of the decision of the state’s Supreme Judicial Court. Massachusetts has contributed many prominent politicians to national service, including members of the Adams family and the Kennedy family.

Economy This state is a major industrial, financial, and educational hub and has one of the finest ports in the world. Its banking and financial services, insurance and real estate sectors continue to drive the its economy. Its many diverse manufacturers include electrical and

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eye on the world

ABOVE The Massachusetts Turnpike (© Ville Miettinen | Flickr.com) BOTTOM Full moon over the Eliot Bridge and a frozen River Charles (© EandJsFilmCrew | Flickr.com)

electronic equipment, industrial equipment, technical instruments, plastic, paper and paper products, machinery, and metal and rubber products. Shipping, printing and publishing are also important, and the jewellery industry dates back to before the American Revolution. Leading agricultural products include cranberries, greenhouse and nursery items, apples, and milk and other dairy goods. Commercial fishing, chiefly from Gloucester and New Bedford, and fishing for shellfish have declined in recent years. Lime, clay, sand, gravel and stone dominate the state’s small mineral output. Hi-tech research and development, finance and trade are all prominent in the state’s economy. The service sector, in which tourism is primary, now employs more than one-third of Massachusetts’s workers. Originally dependent on fishing, agriculture and trade, Massachusetts was transformed into a manufacturing centre during the Industrial Revolution. In the 20th century, the Massachusetts economy shifted from manufacturing to services; today, the state is an international economic leader in

life science, the finance industry, information technology, manufacturing, renewable energy, the defence industry and maritime trade.

Education Massachusetts is historically the capital of US higher education. Many of the US education firsts took place in this state. These included the first American public secondary school, Boston Latin Grammar School in Boston; the first American university, Harvard in Cambridge; the first American printing press, which was set up in Cambridge; the first free American public school, the Mather School in Dorchester, as well as the first American public library. The first American novel, William Hill Brown’s The Power Of Sympathy, was published in Worcester, making it clear that most of the population is highly educated. Massachusetts is home to 150 public and private institutions of higher learning, and is recognised worldwide for its academic heritage and reputation. Some of the wellknown ones include Harvard, MIT, Holy Cross, Tufts, Boston College, Boston University SOUTH SOUTHAFRICAN AFRICAN PROPERTY PROPERTY REVIEW

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eye on the world Peculiar facts about Massachusetts t Goatees are illegal unless you pay a special licence fee for the privilege of wearing one in public. t Duelling is so frowned on in the Bay State that it’s even illegal to do so with water pistols. The city of Marlboro takes it further – it’s illegal to buy, sell or possess a squirt gun there. t It’s illegal to make clam chowder using tomatoes in Massachusetts. t Snoring is prohibited unless all bedroom windows are closed and securely locked. t The Webster Lake’s real name is Lake Chargoggagoggmanchauggagoggchaubunagungamaugg, the longest geographic name in the US and the longest lake name in the world. t Only 34 of Boston’s 840 restaurants serve fast food. t The Boston University Bridge on Commonwealth Avenue in Boston is the only place in the world where a boat can sail under a train driving under a car driving under an airplane. t The first US Nobel Prize Winner was Albert A Michelson of Worcester. Michelson was the chairman of Clark University’s Physics Department, whose prize-winning work concerned the measurement of light.

BELOW Bartlett Mall in Newburyport (© Massachusetts Office of Travel and Tourism | Flickr.com)

Unemployment rates in Massachusetts and the US (July 2014 to July 2015) 7.0% 6.5%

US 6.2%

6.0% US 5.3%

5.5% MA 5.7% 5.0% 4.5%

MA 4.7% 4.0% Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Seasonally Adjusted

and the University of Massachusetts. About 250 000 college students reside in Boston.

Culture, history and tourism No city in the US is richer in historical associations than Boston, and no city has retained more of its original buildings as memorials to America’s past. In 1692, the town of Salem and the surrounding areas experienced one of America’s most infamous cases of mass hysteria, the Salem witch trials. More than 550 original documents pertaining to the Salem witch trials of 1692 have been preserved and are still stored by the Peabody Essex Museum. Boston then became known as the “Cradle of Liberty” for the agitation there that led to the American Revolution and the independence of the US from Great Britain.

As a recreation and vacation land, Massachusetts has great stretches of seashore in the east and many lakes and streams in the wooded Berkshire Hills in the west. There are numerous state parks, forests and beaches, and Cape Cod is the site of a national seashore. Provincetown on Cape Cod and Rockport on Cape Ann are artist colonies; Marblehead is a noted yachting centre. From award-winning destination restaurants to intimate neighbourhood bistros, there is a wealth of dining choices. The Freedom Trail winds through Boston sites that played a key role in the American Revolution; the AfricanAmerican Heritage Trail explores Boston’s 19th century African-American community. Riding the Swan Boats in the Public Garden is a unique Boston experience.

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eye on the world

Tourist attractions in Boston include the Faneuil Hall Marketplace, the JFK Library and Museum, the Museum of Fine Arts, the New England Aquarium and the USS Constitution. The Lowell National Historical Park showcases the city’s heritage as a centre of the textile industry. The coastal communities – Newburyport, Rockport, Gloucester and Marblehead – all have rich maritime traditions. Waterfront restaurants offer fresh lobster rolls, fried clams and fishing boats’ catch of the day.

Sports In the late 19th century, the Olympic sports of basketball and volleyball were invented in the western Massachusetts cities of Springfield and Holyoke, respectively.

Massachusetts’s Red Sox baseball team plays at Fenway Park, and season tickets are hard to come by as residents are fanatics of the sport. Boston is the site of the oldest and most prestigious annual marathon in the world – the Boston Marathon attracts more than one-million spectators and usually about 25 000 runners, a far cry from the 15 runners who took to the course for the inaugural race in 1897. In 2013, two bombs exploded near the finish line of the race. Three people were killed, including an eight-year-old boy, and more than 260 people were injured. There is much to do and learn about in Massachusetts, and many around the world, including South Africa, study at this state in an integrated cultural and educational experience.

ABOVE The Institute of Contemporary Art in Boston (© Emivel2003 | Flickr.com)

Invented in Massachusetts t Dunkin Donuts started here, in Quincy. t The world’s first computer that operated in real time was invented at MIT. t White chocolate was developed and first sold by Hebert’s Candies in Shrewsbury in the early 1950s. t The first US lighthouse was built in the Boston harbour in 1716. t Alexander Graham Bell, who invented the telephone, first demonstrated it in Boston in 1876. t The first newspaper, lighthouse and subway all originated in Boston. The sewing machine was also invented in Boston in 1845.

Precentage change in inflation-adjusted median usual weekly earnings of women and men, by educational attainment, 1979 to 2013 Women

Men

-12

Less than a high-school diploma

-34

High-school graduate, no college

-21

Some college or associate degree

-13

Bachelor’s degree and higher

18 -40

-30

-20

-10

Percentage change Source: US Bureau of Labor Statistics (Data relate to earnings of full-time wage and salary workers, 25 years and older) SOUTH AFRICAN PROPERTY REVIEW

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interview

Levelling the ground for economic activity The Property Transformation Charter strives for transformation in the property sector, and SAPOA and all other property associations in the country are committed to it By Nthabi Nhlapo Photograph by Mark Pettipher

he organisations that are members of the This is something that Property Charter Council acknowledge was put in place to help that despite significant progress the property South Africans reach their sector remains characterised by income and social inequalities, which require a positive full economic potential. and proactive response from the sector As a result, there are through the implementation of Broad-Based Black Economic Empowerment (B-BBEE). areas where we have overachieved and other The role of B-BBEE Portia Tau-Sekati, Chief Executive Officer of the areas where we have Property Sector Charter Council, explains that underachieved – hence B-BBEE is a mechanism aimed at addressing inequalities and mobilising the potential of all the recent revision of South Africans to enable them to contribute the legislation towards sustained economic growth, development and social transformation.

About the CEO Portia Tau-Sekati came into the property sector in 2006 as the Chief Operations Officer for the National Association of Real Estate Agencies (NAREA), which seemed to not have much of a voice within the property industry at the time. “That was at a time when the real estate market was at its peak and we saw a lot of development in both residential and commercial property.” This is also when the National Credit Act (NCA) was implemented, and there was much vibrancy in the country especially in terms of real estate. “The NCA is one of those Acts that really saved us from the consequences of the economic recession that other countries experienced because banks were made to be accountable for their lending decisions,” she says. “I am a marketer by profession and used to do a lot of strategy and planning for branding both international and local companies before I entered the property industry.” Tau-Sekati came from the Thebe Investment Group, where she was the Group Executive Marketer involved with 23 of the group’s companies. She also worked in marketing for an international company, at the company’s New York office and the South African office.

She explains the evolutionary role of the B-BBEE Act. “This is something that was put in place to help South Africans reach their full economic potential,” she says. “As a result, there are areas where we have overachieved and other areas where we have underachieved – hence the recent revision of the legislation.” B-BBEE is a time-bound Act that will cease to exist once all its objectives of “levelling the ground for economic participation” have been reached. Thus close monitoring and measuring of progress is necessary. She explains that sector codes are aligned to priorities of governments, which include job creation, skills development, localisation and industrialisation. Tau-Sekati says the property sector is divided into two sections – commercial and residential property – and one of the Property Charter’s strengths is that all associations in South Africa that are involved in the property industry, both residential and commercial, are members of the Property Charter. “We also have a very strong governance system,” she says, adding that the Property Charter is made up of various sectors, which include government as one of its members as well as organisations from the private sector, making it very influential in the transformation of the country. Her role as a former international marketer has made Tau-Sekati a social advocate of note. “The advocacy role is about understanding stakeholder relations,” she says. “The current and future needs of stakeholders must be understood in order for them to be serviced appropriately and through the right channels. You have to understand the strategy of the stakeholder so that you are in a position to craft the stakeholder management programme.”

Transformation in the commercial sector Although not transforming rapidly enough, the commercial side of the property sector has transformed much faster than residential, mostly because of its close integration with government when developments are in their embryonic stages.

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interview Tau-Sekati is proud of the fact that, out of the 27 commercial property sectors that are listed, four plus one are black-owned entities. She mentions Rebosis Property Fund, Dipula Income Fund, Ascension Property, and Delta Property Fund and Encha Properties which have bought into Vukile Property fund. “These establishments arose because of a public works strategy that links a company’s B-BBEE status to its lease tenure,” she says. “We still need to grow these companies; although they are billion-rand companies, they are still susceptible to the threat of a hostile takeover.” Development in under-resourced areas is also one of the Property Charter’s milestones that has reached. “We were able to develop a lot of shopping centres and other commercial projects in those areas, which helped create employment and encourage entrepreneurs,” says Tau-Sekati. “This has effectively taken people out of the grant system as they are now able to create incomes for themselves.” She explains that all sector codes use B-BBEE as a tool, and looks at the seven elements – ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socioeconomic element – to drive transformation. But the Property Charter also uses economic development as a measuring tool. “We are very concerned about economic development,” she says. “Thus we are also seeing the mushrooming of affordable housing, among others.”

The Property Charter ●● Constitutes a framework and establishes the principles upon which B-BBEE will be implemented in the sector. ●● Is a transformation charter as contemplated in the Broad-Based BEE Act No. 53 of 2003 (B-BBEE Act) and the DTI Codes of Good Practice on B-BBEE, and lays the basis for the development of a code of good practice for the property sector, as envisioned in Section 9(1) of the B-BBEE Act. ●● Establishes targets and qualitative undertakings in respect of each element of B-BBEE. ●● Outlines processes for implementing the commitments contained in the charter, as well as mechanisms to monitor and report on progress. SOUTH AFRICAN PROPERTY REVIEW

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Ernst & Young takes the building industry to new heights. 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.”

32700

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

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research

The investment case for sub-Saharan Africa Global real estate markets have witnessed a marked increase in liquidity, cross-border capital flows and values in recent years, with competing investor groups having to broaden their horizons to seek out new markets and opportunities

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research

Night falls over Nairobi, Kenya’s capital and East Africa’s largest city with a population of four-million people © Joshua Wanyama | Dreamstime.com

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research

Cape Town is globally renowned as a premier tourist destination

s home to some of the world’s fastestgrowing city economies, with rapid rates of urbanisation and expending middle class, sub-Saharan Africa is now firmly on the radar of an increasing number of multinational corporations, hotel operators and investor groups. International capital is responding to the opportunities available and beginning to address sub-Saharan Africa’s real estate potential. There has been an acceleration in the number of new real estate fund platforms created to focus on the sub-Saharan African commercial real estate market, and there is also a broad range of new equity sources – including private equity, sovereign wealth and pension funds, REITs and other institutions – becoming increasingly available and active. While the region’s rapidly-expanding economies offer a compelling long-term growth story, significant challenges to investment in sub-Saharan Africa’s real estate remain. Investment-grade stock is still limited, and the lack of liquidity, low transparency and various short-term uncertainties in many markets will deter investors who have limited appetite for risk. Nevertheless, there is tangible progress and momentum as developers respond to the urgent need for modern commercial real estate, and political and economic governance continues to improve selectively across the region.

Why investors are turning their attention to sub-Saharan Africa Sustained economic growth, favourable demographics and increased investment from domestic and international corporations are all fuelling accelerating demand for high-quality commercial real estate across sub-Saharan Africa. The region’s economy has doubled in the past 15 years, driven not only by commodities, resources and more stable governance but, increasingly, by financial and business services’ growth and consumer spending. It is the only region to have substantially increased its share of global FDI over the past decade, with 17% of global FDI volumes in 2014 flowing to the African continent.

At the same time, rapid urbanisation and growth in the working-age population are contributing to an expanding middle-class population that is overwhelmingly urban and expected to rise from 140-million households currently to 250-million in 2030. Economic and demographic growth are combining to create urban markets of global scale and generating a need for significant investment in the region’s urban infrastructure. As demand from corporations and consumers for modern office, retail and commercial infrastructure increases, sub-Saharan Africa is entering a high-growth period of development. Many of the funds currently investing in commercial real estate have a development focus and infrastructure investment across the region is expected to expand by 10% per year over the next decade, reaching an annual total of US$180-billion by 2025. Business operating environments are also selectively improving across the region: although still at relatively low levels, subSaharan Africa has demonstrated the greatest improvement in real estate transparency globally over the past two years in JLL’s Global Real Estate Transparency Index. In addition, the region is making progress in improving its political stability and economic management, with countries such as Mauritius and Rwanda now scoring ahead of some EU members (Italy, for example) in the World Bank’s Ease of Doing Business Index. There are now 17 subSaharan countries in which it is considered easier to do business than in India. Improved governance, economic growth and a rapidly increasing middle class are driving demand for modern office and retail stock in markets across the region, most of which remain severely undersupplied with high-quality commercial real estate.

Durban is one of South Africa’s rapidly developing cities

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research

As current funds exit from developments, there will be an uplift in investment-grade stock (from relatively low levels), yet investor demand in the world’s fastest-growing region will continue to outstrip supply.

Short-term challenges remain While there is no doubt that the real estate market environment is improving in selective cities across the region, investors’ concerns about a wide range of short-term shocks and risks remain as the market is still a challenging environment in which to execute transactions. Some of these short-term risks are: ●● Strict central bank regulations within individual countries and the volatility of local currencies against the US dollar; ●● Complex legal considerations, such as property ownership rights, investment restrictions and tax controls; ●● The impact of political instability and changing government policy; and ●● Local country instability such as over-dependence on natural resources (for example, recent fluctuating oil prices), terrorism and social instability resulting from inequality. However, these challenges are not unique to sub-Saharan Africa – they are faced by many other emerging and mature markets.

Taking a longer-term view and having strong local partners are essential to succeed in this market, but beyond short-term shocks and uncertainties, the long-term growth potential for the region remains significant and the potential rewards compelling.

Taking steps to improve real estate transparency There are five core markets in sub-Saharan Africa’s real estate transparency: Findings from JLL’s 2014 Transparency Survey reveal that sub-Saharan Africa has made the world’s strongest progress in real estate transparency. Five markets – Kenya, Ghana, Nigeria, Zambia and Mauritius – demonstrated significant improvement in transparency scores since 2012; all have secured a position in the global top 10 improvers. Key drivers of transparency improvement in sub-Saharan Africa include: ●● A growing presence of corporations, investors and real estate advisors, which is encouraging the start of market tracking and performance measurement; ●● Launching of the Investment Property Databank performance index in Botswana (first direct real estate performance index outside South Africa); ●● Increasing quality of and ease of access to land registry information, as shown by the

progress on land registry digitisation in Kenya, Ghana, Uganda and Nigeria; ●● Passing of REIT legislation in Kenya and South Africa. ●● Improvement in enforceability of contracts and professional standards of agents. The work of the Lagos State Real Estate Transaction Department illustrates a process of better regulation in the sector; ●● The sheer size of the region and the wide range of market differentials and operating conditions.

Conclusion Sub-Saharan Africa presents a challenge for prospective investors. Where does one start to unpick the opportunity, and understand the relative risks and merits of investing in each country and city? It is clear that Lagos, Nairobi and Johannesburg are established as “gateway” cities to west, east and southern Africa respectively. These cities have the necessary critical mass of services, proximity and access to the markets surrounding them and, in the case of Nairobi and Lagos, emerging regional capital markets hubs that will complement Johannesburg’s long-held role as the financial capital of sub-Saharan Africa. Source: Emerging Beyond the Frontier Research Paper; www.africa.jll.com

Improvement in transparency level (2012-2014)

South Africa ●● REIT legislation introduced in 2013 ●● Increased data availability

Kenya

Nigeria

Ghana

Zambia

●● REIT legislation ●● Land registry expansion and digitisation ●● More international consultants present and increasing data availability

●● Compliance with regulations ●● Lagos State Real Estate Transaction Department created to oversee regulations compliance ●● Land registry digitisation

●● Enhanced land registry coverage ●● More international consultants present and greater data collection by market participants

●● Increased foreign investment encouraging international standards of service provision ●● Better data collection and availability from market participants

Source: Jll.com/GRETI SOUTH AFRICAN PROPERTY REVIEW

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advertorial

PROCSA: making its mark Background The PROCSA committee of representatives of its constituent bodies devised professional client consultant services agreements. These consist of a suite of documents prepared to regulate the terms of engagement between the client and consultants being employed on a development project. They are compiled for the purpose of standardisation, harmonisation and good practice in the construction industry, on a mandate from the constituent bodies. The constituent bodies are: ●● Africa Association of Quantity Surveyors ●● Association of Construction Project Managers ●● Association of South African Quantity Surveyors ●● Consulting Engineers South Africa ●● South African Black Technical and Allied Careers Organisation ●● South African Institute of Architects

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Continued Professional Development (CPD) It should also be noted that the participating constituent bodies have accepted PROCSA workshops/webinars as an accredited CPD learning process for their registered members, and are granting the appropriate CPD credits. The accreditation is a Category A/Core Category 1 accreditation; it equates to a full day of learning in each instance. The next PROCSA webinar is Series 3; its three Sessions will be held on 29 October and 5 and 12 November 2015, starting at 8am for a two-hour period on each morning. Members of various PROCSA constituent bodies receive a discount on the webinars.

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Regional Distribution and demand for the PROCSA Agreements 1 Gauteng 2

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04/2015

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18,4%

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SOUTH AFRICAN PROPERTY REVIEW

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PROCSA Client/Consultant Agreements Webinars 2015 This Series of training webinars is organised to provide professionals working in the built environment with a detailed understanding of the application of the PROCSA client/ consultant agreements, harmonised across the professions to reduce project risk for both client and consultant. The webinars speciﬁcally address the risks involved in not having a client/consultant agreement in place for your projects. The presenters are respected individuals in their professions, with a wealth of experience in applying their knowledge to maximum effect.

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interview

Taking calculated risks on the international market Renowned international property investor Johan Hamid shared his insights during his recent trip to South Africa, where he was on a mission to network, ﬁnd potential partners and investors – and hopefully some lucrative investment opportunities By Nthabi Nhlapo Photograph by Mark Pettipher

ohan Hamid is a property investor with more than 30 years of real estate investment experience – and he’s helping to revolutionise the way investors think of foreign investment.

Early life Hamid started out with property investments in Belgium and a few in France. At the time, he made returns of about 18% on average annually. He bought property, renovated and re-sold it; but when he noticed a shift in trends where agents attempted selling him property on appreciation, he started rethinking his strategy. Real estate agents tried to sell him property on the premise that values would increase in future – but because of his need for cash flow at the time, he did not buy into many of these offers. “I lost a lot of good deals that way because a lot of the properties did, in fact, appreciate in value, but it was not part of my strategy to take that kind of risk,” he says.

He also dabbled in traditional stock trading before going on to the more speculative business of vintage cars and advancing through a variety of property investment styles, including buy and hold, flip, auctionsold and foreclosures. “Many of today’s entrepreneurs, investors, companies and individuals are limited in their ability to monetise their assets or grow the value they already possess whether it is capital, a brand, a company or just an idea,” says Hamid on the home page of his official website. He also says that, when searching for lucrative investments, he seeks out profitable, efficient and effective strategies and opportunities.

Property investments His company Property Invest Partners (PIP) is a growing group of investors who focus on the Florida foreclosures market in the US and who, through the process of right evaluation of those foreclosed houses, adapted renovation and quick reselling, achieve above-average yearly return on investment (ROI). “As an average, through this strategy we achieve an annual return on investment of about 30% – and as any investor will know, that is quite a big return in comparison to other more traditional investments,” he says. One always needs to have an exit strategy on any investment but Hamid says that, at any given time, he has two or three exit strategies that will still yield returns (although these may be lesser than had his original investment strategy worked). He has extensive experience in the US property market where most of his assets are located. He says that California, Arizona and Florida are undergoing a boom of people moving in for retirement. Beyond the actual process of finding the right properties, renovating and reselling foreclosures in Florida, Hamid is constantly

sharing advice and insights on real estate property investment around the world, and sharing the stage with celebrities in the business, branding and investments world, such as Robert Kiyosaki, Sylvester Stallone, JT Foxx, George Ross and Michele Mone at events such as National Achievers Congress, the Rich Dad Tour, and Mega Partnering in Asia, South Africa, Europe and the US.

Investing in South Africa When it comes to investing in South Africa, Hamid admits to not having got into business dealings in the country – yet. He is, however, planning on testing the waters by starting a Belgian-chocolate manufacturing and distribution business on South African shores. “When looking at long-term investment opportunities, the potential in this country is huge,” he says. “However, it requires a strategy that is linked to long-term investments, the correct business partners and a thorough knowledge of the South African market.” He explains that a country’s ease of doing business and the ease of moving assets from a country play a pivotal role in deciding whether to invest in that particular country or not. “Often there is also a lot of red tape when doing business in some countries; as a result many investors go to countries where doing business is simplified and where they are able to move their assets with more ease,” he says. Hamid is also involved in various other businesses, including the Branding Company, which offers full branding services for global clients. “Those services include everything from start to finish, whether that is the analysis of the brand itself, its positioning and unique selling proposition, or the creation of designs, online and offline tools and the implementation of those tools on the market,” he says.

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opinion

When security poses a threat Cash in transit is a common service that spans many decades but it may be a threatening operation for both consumers and business owners By Tony Stokes

Tony Stokes, Centre Manager for JHI Properties

Because of hijacking prevalence nationally, cashin-transit vehicles do not make planned collections or

ash in transit services have been around for hundreds of years but the dangers associated with this operation at commercial sites is getting more apparent on a daily basis. At the time of writing, there had been three attempted robberies at malls around the country in a space of 24 hours. This service can be so unpredictable that there have even been movies made of cashin-transit heists on aeroplanes, ships, trains and road transport. It is also clear that over the years robbers have become braver – to the extent where they do not care about risking their own lives or those of others. The heists are carefully planned and usually carried out by gangsters that may be part of syndicates. This gives them access to highpowered weapons, including assault rifles, hand guns and explosives, so there are no boundaries when it comes to the actual operation. The robbers’ mind-set is “Get the money at all costs”. Unfortunately we live on a continent where crime is one of the highest in the world. Robbers have the ability to scheme and plan heists where the stakes are high and the chances of getting away are worth the risk. Shopping centres, big and small, have become easy targets because of high volumes of customers, especially on busy days. It is often very difficult to detect and avert successful robberies in broad daylight.

What are the real risks? Cash-in-transit vehicles entering and exiting shopping centres are a prime target as they carry large sums of cash. Having observed many centres, it is undeniable that there is a real risk to members of the public in the presence of cash-in-transit vans. The cashin-transit vans collect cash from tenants and service the ATMs. Because of hijacking prevalence nationally, cash-in-transit vehicles do not make planned collections or deliveries with specific time frames, and therefore make erratic trips, which on many occasions may involve more than one vehicle at the centre at the same time. As I have experienced on many occasions there can be up to three security personnel from one cash-in-transit van patrolling the area with AK47s, walking between vehicles in the parking lots, and often brushing up against customers and members of the public. Should this result in an attempted armed robbery, the public and the tenants could be at risk. Some questionable concerns that I believe should be addressed include: ● What is the responsibility of the landlord? ● What is the responsibility of the cash-intransit company? ● What plans or systems are in place to combat robbery and hijacking incidents at centres?

deliveries with speciﬁc time frames, and therefore make erratic trips, which on many occasions may involve more than one vehicle at the centre at the same time

A cash-in-transit van in action

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SAPOAopinion board ● In the event that there is an attack, what emergency systems are in place to protect the public?

The landlord In many of the big cities, landlords are working with the cash-in-transit companies and putting plans in place for installations where there is only one distribution point at large shopping centres where cash is handled. This eliminates the exposure of transit vehicles. This is a costly installation and in cases where the centre is small this intervention may be out of reach financially. Landlords have to face the fact that there is a real threat to tenants, customers and the public, and that systems such as providing a more secure area for cash collection are something that should be considered seriously.

The cash-in-transit company Most cash-in-transit companies do have integrated systems, including on-board vehicle monitoring, vehicle route tracking, and CCTV and command centres where all of the transit movements are monitored. But this is not always the solution when vehicles are on the premises of a shopping centre either collecting tenants’ cash or working on the ATMs. There must be communication with the cash-in-transit companies to establish operation strategies – and while this is confidential and not for the general public’s knowledge, it is crucial that there is some comfort in knowing that every precaution is taken to eliminate the possibility of an attempted heist or robbery (and the measures there are in place). In an unfortunate situation where there is an incident, what is the accountability of the cash-in-transit company and what is the role of the landlord in the event of serious injuries, damage to public property and (more importantly) loss of life? While it is not possible to predict every eventuality, it would be good to know that the safety in every transit operation is of paramount importance and that there are processes in place.

Centre management Centre managers and the centre security have an ongoing important role to play – to monitor and evaluate cash-in-transit activities and to be vigilant, looking out for: ● Persons who sit in their vehicle for a longer-than-usual period; ● Groups of persons who pretend to be shoppers, in some cases wearing hoodies;

● Persons who may be paying attention to cash transfers; and ● The transfer of cash when cashin-transit vehicles are in the centre. Unfortunately we live in an era where the possibility of incidents of this nature is prevalent; therefore we need to be forwardthinking and vigilant in our role in the prevention of crime, rather than having to deal with the aftermath of incidents where there is loss of life.

Being prepared

of a threat and eliminating

Being prepared for an eventuality can only be based on a “what if” scenario, and in some cases on history, case studies and the results thereof. What is crucial in the preparedness planning are two things: reducing the possibility of a threat and eliminating the threat altogether. Some advice on being prepared: ● Landlords, property management companies and centre managers must be competently prepared and ensure that there are plans in place. ● Centre security must be trained in the essential skills of handling high levels of incident probabilities and administering safety and security measures. ● Cash-in-transit companies must prove that they are in a position to efficiently and professionally manage cash transport and know the protocols when entering a centre. More importantly, they must know how the safety of shoppers is ensured.

the threat altogether

Tony Stokes is a Centre Manager for JHI Properties. SOUTH AFRICAN PROPERTY REVIEW

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people in proﬁle

Attie Pretorius: a lifetime of achievements in real estate law A

ttie Pretorius is the Chairman of Cliffe Dekker Hofmeyr, the firm’s director and the National Practice Head of the Real Estate Practice. When he started doing his articles in 1978, he was only ever interested in property law. Over the years he’s learnt a lot – not only about real estate law but also about the business of real estate. He makes sure he reads the business section of newspapers every day and takes a keen interest in developments in the market, including the latest property-related transactions. Pretorius graduated from the University of the Free State with a BCom LLB in 1978. He then served articles with a firm of attorneys in Bloemfontein, and was admitted in 1980. In 1984, he made his best career move by joining Hofmeyr van der Merwe (now Cliffe Dekker Hofmeyr). Since being admitted, he has followed his passion for real estate. As the National Practice Head of the Real Estate Practice, he oversees approximately 100 people in the firm’s Sandton and Cape Town offices. Pretorius is a highly respected and recognised real estate lawyer in South Africa and globally. He was listed in Who’s Who Legal: International Who’s Who of Real Estate Lawyers from 2011 to 2015. The International Who’s Who of Business Lawyers in 2014 nominated him as the exclusive leading lawyer in real estate in South Africa. Best Lawyers International South Africa (2008 to 2014) listed him as “best lawyer” in real estate law, and he was also named “Lawyer of the Year” in Johannesburg real estate in 2013. Last year, he was awarded a Lifetime Achievement Award for Excellence in Real Estate at the SA Professional Services Awards in the same week that his team won the Legal Week Africa Real Estate Team of the Year. The latter won the award for work done on the Waterfall development’s use of leasehold property ownership. Leasehold property ownership is common around the world but South African property developers have avoided it. The brave few who’ve tried it are finding the headway difficult. The Waterfall development is one of the first developments in South Africa to be successful in using leasehold property ownership. The development is located on land owned by Witwatersrand Estates Limited

(which is owned by the Waterval Islamic Institute). In 1934, the farm was sold to Moosa Ismail Mia, who registered it in the name of Witwatersrand Estates Limited. The Waterval Islamic Institute is a charitable organisation dedicated to providing resources for the education of underprivileged children. A large portion of the income generated from the leasing of this land goes towards feeding and educating children across southern Africa. By making portions of the farm available for development on a lease basis, they continue to generate income which is utilised for charitable purposes.

In 1984, Pretorius made his best career move by joining Hofmeyr van der Merwe (now Cliffe Dekker Hofmeyr). Since being admitted, he has followed his passion for real estate. As the National Practice Head of the Real Estate Practice, he oversees approximately 100 people in the ﬁrm’s Sandton and Cape Town ofﬁces When the decision to develop the land was made, it had to be done within the framework of their religious requirement not to sell the land. The owners used various special-purpose vehicles to establish and manage the development on a 99-year leasehold basis. All of the properties in the Waterfall development are leased for a period of 99 years. The differentiating factor of this 99-year lease product from previous market offerings is that, in the event of a resale of the lease, the new lessee acquires the rights under the lease for a full 99 years. With previous 99-year lease mortgage products, the new lessee would have assumed the rights only for the remaining number of years.

The Waterfall Development is further unique in the sense that the leaseholders of the development land are responsible for the management of the income, assets and infrastructure in respect of their individual portions. This lease is the first of its kind in South Africa and has the legal status of a lease – but while it retains the nature of a lease, the agreement is as close to ownership as possible. Waterfall is also the first development project in South Africa where the developers have used a method of creating bankable leased land. As a result, the land has been broken into portions, and for the first time ever major banks are financing the property development as well as end-user residential property purchases on a leasehold basis. Pretorius was on the panel of experts who attended to the drafting of the initial agreements pertaining to the structure of this development. John Webber, a director in the Real Estate Practice was involved in the drafting of end-user lease agreements relating to the commercial and residential properties that form part of the Waterfall development, and was further involved in approaching all of the major banks/financial institutions so as to obtain their approval in respect of the lease structure and standard terms of the lease. This was a crucial step in creating bankable leased land. The Cliffe Dekker Hofmeyr Real Estate Practice was instructed to attend to the coordination, execution and registration of all the initial (and often the subsequent) residential and commercial leases in the Waterfall development. To date, the practice has registered approximately 2 900 leases. The team also provides legal advice in respect of the development and any ancillary matters, and was instrumental in setting up the Waterfall Trust Fund.

t: +27 (0)11 562 1101 attie.pretorius@cdhlegal.com www.cliffedekkerhofmeyr.com

SOUTH AFRICAN PROPERTY REVIEW

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Profile Goldberg De VilliersADVERTS_速C.indd with ad_SUBBED.indd 10748 ACSA PROPERTY 1 50

2015/09/18 2015/09/07 9:41 2:27 AM PM

people in proﬁle

people in proﬁle hing Launcber 2015 Novem WEST

T h e S A P OA P r o p e r t y A d v o c a t e M a g a z i n e

A’S NE RT Y SAPMOONTHLY PGRAOLPUEPDATE

SAPOA, a member driven organisation – reaching the industry

BI- AND LE ION ASSET PUBLIC AT

Ninety percent of South Africa’s commercial property owners are SAPOA members. They are the industry’s decision-makers. Published bi-monthly, the SAPOA Property Advocate Magazine PROvocate offers a unique opportunity to be the one-stop communication ADVOCATE tool for all things legal in the property industry. PROvocate promises to be the platform ALBERT MURPHY Sectional title that informs the property industry about the constant changes in South Africa’s developments and the reality property legislation. Like its sister publication South African Property Review, the of Murphy’s Law magazine’s targeted distribution will ensure it lands on the right decision-makers’ desks. PROvocate is aimed at legal professionals in the commercial property space, the lawyers and advocates who deal with property, and developers, owners and asset managers in both the retail and residential property arenas. Property ownership is not restricted to “bricks and mortar”; it includes diverse subjects such as intellectual property law and property as a brand. We are committed to developing a platform that will showcase property advocates, attorneys and the firms in which they practice. We will examine the pitfalls that developers and property owners face, from planning through to execution and handover. In addition to the professionals who already work in the property industry, we aim to work closely with educational institutions suchWe as the University of Pretoria, the keep you in perfec t register University of the Witwatersrand and the University of Cape Town. These established centres of learning are the incubators of our future property practitioners, and a RSA Litho is the prefe rred PROVOCATE magazine choice of printer for the number of their professors sit on South Africa’s legislative boards. Weandwill lookpublaticati some our niche ons of their graduates and identify, as well as publish, extracts from their studies that sectional title schem e developments could benefit the professionals in this exciting sector. 1 T R PA PROvocate will also be available online through its dedicated portal, Gordon’s Bay’s Harbour Island: Murphy’s Law in Provocate.co.za, further expanding its reach across international boarders. practice in sect

11-2015

ADVOCATE MAGAZINE THE SAPOA PROPERTY

Adriane Sarah Ludorf Managing Director Goldberg & De Villiers Inc

Adri Ludorf (BJuris, LLB, LLM (Tax)), Managing Director at Goldberg & de Villiers Inc, is a qualified attorney and conveyancer who has been practising since 1992. Property law is Ludorf’s main focus and passion. The Goldberg & de Villiers property law department, headed by Ludorf and fellow directors Tracey Watson-Gill and Nicholas Mitchell, has been involved in various exciting developments in the Eastern Cape and nationally. She is proud to have acted for various corporate clients, property developers, government departments, local authorities and private individuals. Goldberg & de Villiers serves as panel attorneys for all major financial institutions, with a particular focus on the specialised needs of the private clients of these financial institutions. Ludorf is particularly interested in the conversion of share block schemes to sectional title schemes or freehold property. Various apartment blocks and developments in the Eastern Cape are still run as share blocks (which was the popular development system in the 1970s and 1980s). It is surprising that many of these share block schemes still exist in this area and have never been converted. Ludorf and the Goldberg & de Villiers property law department can assist and guide clients through the conversion process. Ludorf is committed to offering her clients personal service excellence as well as practical advice and tailor-made, proactive solutions.

t: +27 (0)41 501 9810 adri@goldlaw.co.za www.goldbergdevilliers.co.za

Mike Gregory, Henkel Gregory Inc

WLOTZKASBAKEN A strange case of property ownership in the Namib desert

focus on attorneys

Jos Hooyberg, Hooyberg Attorneys

Desiree Nafte,

Hyprop Investments Henkel Gregory Inc (formerly Craig Henkel & In April Associates) is a two-director 2005, Jos Hooyberg law firm that has been started operating from offices Hooyberg Attorneys, Desiree Nafte joined a boutique firm specialising in Fourways, Johannesburg the commercial property in since 1995. Craig Henkel property law. Hooyberg industry in 2001 as a legal adviser specialising and Mike Gregory, acknowledges the each importance in have more than 30 property law after of interpersonal relationships, years of experience practising as an attorney in the internal both in property and conveyancing private practice for and external, and several years. In 2011, fields, and are both of nurturing these. Desiree are acting with integrity In experienced in all aspects Nafte was appointed and ensuring the best the National Legal of property law. Executive for the client, Hooyberg creates at Hyprop Investments Gregory, who joined Henkel in 2010, heads a culture of mutual Limited and is the loyalty current up between the the property and commercial Chairperson of the company and its clients, SAPOA Legal Committee. law departments at the as well as its firm. Having spent professionals and business She obtained a BA a number of years and an LLB degree partners. The result in the UK comprehensiv from is a practising as a solicitor, the University of the e and collaborative he has gained valuable Witwatersrand in 1989. approach towards insight addressing and associations in the Regarding the challenges her role for SAPOA, Nafte property markets there. and opportunities faced says, “As by its clients. Chairperson of Every property transaction, the Legal Committee, however large or small, relies for its success I have endeavoured Hooyberg is the legal force behind several on a speedy and problemto steer the Committee upscale free conclusion. Henkel mixed-use property towards providing developments in Gauteng. the commercial Gregory’s “hands-on” property The approach and personal firm has been involved industry with practical involvement at senior in precedent-setting information relating policy level adoption by to throughout the transaction legal issues facing the municipalities in respect industry.” process ensures this of bulk service is contributions, achieved consistently. Nafte has comprehensiv as well as in the e knowledge of the constitutional challenge to the Development property industry and “We have been associated experience in property for many years with Facilitation Act. law, the law society in training and she believes women Hooyberg Attorneys is a small firm that and mentoring attorneys are a significant part offers of who wish to qualify its clients direct, helping grow the economy one-on-one attention as conveyancers, and of the country. and has we a strong skills regularly present lectures “Women can contribute set across various areas to students wishing to the South African of the law, to from contractual write the conveyancing economy by drafting to conveyancing examination,” says Gregory. developing a culture and “Having qualified and international transactions. of entrepreneurship,” practised in the UK, she says. “More These complement we have offering South its strong connections African women need in commercial property in the UK and to participate in law and property European litigation, new property markets. business creation, in both Johannesburg We regularly introduce as this will be and Cape Town. a major South African clients driver in the growth The law of property to property opportunities in South Africa needs of our economy. Women to be there and have introduced understood within tend to be very the context of the opportunities innovative and oversees clients to creative; property opportunities and challenges facing we need to channel this energy into new, in South Africa. We the country. On one successful go out the growth hand, of our way to build businesses.” of the South African lasting relationships economy requires a with our close look clients and key players Unfortunately, many at how government in the property industry. women in South Africa policy and legislation With our years of facilitates and protects are not yet recognised experience in property, property values, as well for the impact, growth we are acts such as how and able to provide a level opportunity they as the Spatial Land can provide to our of service equal to any Use and Management economy, of the Act 16 of big law firms without Nafte says. “Greater 2013 affect property the ‘big law firm’ price support structures development more need to be tag.” broadly. On the other put in place to New legislation affecting develop this culture hand, it is necessary the property industry to of is being passed all understand the challenges entrepreneurship the time, and the among women,” faced by South Africa criteria for ensuring she says. in success in property “Female entrepreneur equitable access to land development or speculation s face huge challenges and housing, and is specifically how in becoming increasingly South Africa because the right to property stringent. As a result, of the increasing regulatory interfaces with the legislation and inexperienced property environment, limited case law, which often access developer will struggle to financial subordinate resources, to succeed without experienced property in favour of gender inequality, other concerns. gender stereotyping advisors. and lack of skills.”

Please email your request to quotes@rsalitho.c 71 Stewart Street, o.za Goodwood, 7460. Tel 54+27 (0)21 592 1224 www.rsalitho.co.z a

rsi litho ad.indd

+27 (0)11 684 1111 jos@hooyberg.com www.hooyberg.com

www.henkelgregory.co

.za

April 2015

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

April 2015

2015/03/26 7:46 AM

ional title develop ments

PROvocate’s pillars By examining various aspects of property law, PROvocate will focus on: ● Regular town planning, legislation and advocacy updates; ● Doing business in Africa: the legal requirements of setting up business in various African countries, in particular when setting up commercial property development partnerships; ● Emerging markets and global growth, financial and economic trends, emerging markets within and beyond South Africa, the impact of legislation on property development at home and abroad. (As the magazine grows, opinions from leading law-makers and financial gurus will be sought and featured); ● Ownership, mergers and acquisitions, leasing, management agencies, REITs, tax, property ownership laws, and development of the property ownership sector in South Africa; ● Development plans approval, subdivisions, town planning, re-zoning, high-density developments, mixed developments (business/residential, IDZs), and sectional title developments;

In this series of articles, Adv Albert why developm J Murphy will discuss ents can become how and a maelstrom of financial ruin and disaster. By Advocate Albert J Murphy

● Engineering: storm water, roads and bridges within the concept of connecting cities and supporting the commercial property sector. Leading experts in the engineering world will be interviewed and featured; ents scheme developm sectional title ● Environment: innovative building technology, environmental impact assessments, carbon tax policies, and safety and health regulations at building sites; ● Private and public sectors: useful contact numbers and specific topics on municipal planning and the Department of Public Works projects; ● Education: the institutions that offer property as a profession, the innovative methods that are being developed and their application in practice; ● Attorney and industry profiles, movers and shakers: the people behind the industry; and ● Leading advocate profiles. 12

for common amenities nt schemes allow title developme owner. Above: Sectional a single property ble luxuries for may be unafforda

April 2015

Sectional t – ownership

so why wou land area, t of a large Professor C has the benefi ete ownership? South Africa over compl ownership de Cornie van By Professor

a wise u ily housing. By p for single-fam purchaser title ownershi , potential of the sectional go land resources of acquiri f the growth is anything to opportunity past 40 years afforded the market over the Africans prefer inexpensive accommo the way South ity and relatively and home by, this will be Such commun nt urban location, in the future. share convenie of lower in to own property title schemes, within the reach sectional brought schemes include associations and in society. es, homeowners’ o block compani there are the less Then of course for retired persons. of has beco housing schemes are, the aims title ownership were, and still why sectional ical ne But what exactly a number of the psycholog concept whereby each it satisfies a certain this rather strange or even know p, which has often don’t like by ownershi achievement. people, who on one property symbolising personal closely together p allows another, live ners overcome Apartment ownershi home classes of homeow as the of such es choice? Can these issues of of the advantag s posed by a host r of pets, more the challenge to lessees and areas, the keeping are now available t use of common It spreads block schemes. kids, etc.? managing noisy home owners associated with population, links modation segment of the Providing accom n to a fixed plac the populatio e levels for all incom t aim of sectional titles was, of not only sociolo thereby attains residential The most importan political stability.” urgently needed also but provide to and still is, levels within played a par This aspect for all income Euro employment. accommodation post-war Western of centres of and role in commuting distance families had n due to births of homeless in populatio The increase n to the cities, Hermann Weitna the flow of populatio living space recorded by mgesetz immigration, for more in Wohnungseigentu of individuals the demands materials and cost of building shortage of and the escalating vs bond repay ted to an acute over the Rent choic land all contribu the centres to city When it comes proximity of housing in the your own vs paying off past century. the benefits arguments for the buffer it provide a , examining Why it works al title ownership does than paying a mo third rather goals of section for it at titles create a nothing to show place, sectional an apartment, In the first pays h a house or renting sectional owner alternative to buying apartment. ts and thereby purchasing an of instalmen to option related namely the he can lat would be closely the unit which A second objective c titles promote hoped that sectional is that It namely n the previous, to be a and a wiser utilisatio would prove construction l purposes more efficient ownership . Land for residentia conventional of land resources d metropolitan values. and rising land of a densely populate supply. The near the centre and in short the area is expensive rea titles provides Sociological soci of sectional institution of the available use There are definite make optimum opportunity to of construction. choice of sectio the high costs ent, the the land and to spread n of a single residential developm unit occupatio In a high-rise the cost of each life, addit far higher and d closer social density can be the land is develope less than when would be far

that

April 2015 April 2015

For advertising, contact Janine Ramey: t +27 (0)79 428 5380 / e janine@mpdps.com or Mark Pettipher: t +27 (0)21 856 1276 / e mark @ mpdps.com SOUTH AFRICAN PROPERTY REVIEW

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CSOS al Long-awaited section by title dispute resolution ck Prof Graham Paddo

RTY INTELLECTUAL PROPE s when Developers, be cautiou al naming your section pment develo title

2015/09/18 9:38 AM

SAPOA events

KwaZulu-Natal educational initiatives SAPOA KZN has hosted a number of educational workshops and networking events, which have been well supported and received with a great deal of enthusiasm By Helen Seymour

This workshop was aimed at anyone who manages any type of property or facilities, as well as at landlords and property and retail owners

Professor François Viruly at a SAPOA breakfast presentation sponsored by Maxprop

APOA KZN kicked off the year in March with a SANS 10400 building regulations workshop, which was extremely informative and received much positive feedback from the attendees. The workshop covered the philosophy and intent behind the regulations to allow attendees to interpret and understand the requirement of the National Building Regulations. Various sections of SANS 10400 were covered to ensure that attendees were made aware of the basic requirements for the development and maintenance of buildings to ensure health and safety. This workshop was aimed at anyone who manages any type of property or facilities, as well as at landlords and property and retail owners. During the month of April, a breakfast presentation was sponsored by Maxprop on the topic, “Why the state of our cities is important for the real estate sector in South Africa”. The presentation was delivered by Professor François Viruly, who was flown to KwaZulu-Natal from Cape Town for the event. A career day was hosted at the UKZN Howard Campus in Durban. More than 670 students attended the career day and a great

deal of interest was shown in the SAPOA stand, with a total of 280 student handbooks and 94 career brochures being distributed to provide awareness of the need for property professionals. Law students were interested in the need for specialists in this field. A workshop covering the Methods of Measuring Floor Areas in buildings (MOMFA) took place in July 2015. This workshop explained measuring methods for offices, retail, commercial, industrial, residential, etc. Also in July, we hosted the Lease Agreement Workshop, with more than 30 delegates in attendance. The Lease Agreement Workshop is an intense one-day workshop that looks into the rights and obligations of the parties of a lease, new legislation and case law affecting lease agreements. The workshop covers essentials for a lease agreement and is aimed at professionals who have to implement lease agreements and/or are responsible for negotiating, renewing, drafting and managing leases and lease agreements. At the end of July, Tongaat Hulett Developments joined SAPOA as sponsors of a breakfast presentation on the draft City Planning Commission storyline and key strategic city issues related to the property industry. The topic of the presentation was “Durban: City on the Edge?” SAPOA KZN is looking forward to hosting a new networking event in the form of a breakfast and mountain bike challenge, to be held at the Sugar Rush Centre in Ballito. This event will offer our cycling enthusiasts the option of a 40km or 18km ride, and the opportunity to engage with their team members and other property professionals in a sport that has become extremely popular. Rodel Financial Services has offered to sponsor this event, and prizes have been sponsored by Nedbank Private Wealth. The event is scheduled to take place on 2 October 2015.

SOUTH AFRICAN PROPERTY REVIEW

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SAPOA events

Retail trends report SAPOA recently held a research breakfast on its most recent retail trends report, presented by Phil Barttram, Vice President of MSCI South Africa Photographs by Jabu Nkosi

Patricia Mahlangu and Winget Sikoya

Sifiso Modiga, Matshepo Mafafo and Mogomotsi Khumalo

Sian Cohen, Kieron van Rooyen and Colin Sher

Richard Lineveldt, Klaus-Dieter Kaempfer, Stephen Walters and Jannie van Rensburg

Delegates at the workshop were intrigued by the research reportâ&#x20AC;&#x2122;s findings

SOUTH AFRICAN PROPERTY REVIEW

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frankly speaking

Andrew Konig redeﬁned His younger self would be proud of his vintage car collection but completely unimpressed by his hairstyle. South African Property Review ﬁnds out more about this exceptional CEO By Nthabi Nhlapo

Q You have a dream job – but if you

could change your career, what field would you enter and why?

I’d become a farmer for the country lifestyle.

Q Of the world’s politicians, who

would you choose to be an architect working in your office? Why?

Winston Churchill, who once said, “Out of intense complexities intense simplicities emerge.”

Q Your favourite construction/ engineering/buildings joke?

The strong young man at the construction site was bragging that he could outdo anyone in a feat of strength. He made a special case of making fun of one of the older workmen. After several minutes, the older worker had had enough. “Why don’t you put your money where your mouth is,” he said. “I will bet a week’s wages that I can haul something in a wheelbarrow over to that outbuilding that you won’t be able to wheel back.” “You’re on, old man,” the braggart replied. “Let’s see what you got.” The old man reached out and grabbed the wheelbarrow by the handles. Then, nodding to the young man, he said, “All right; get in.”

Q What is your favourite colour of socks to wear?

Most mornings I pack my gym bag in the dark; as a result, my socks of choice are all black so that I never have to worry whether they clash with my clothes.

Q Where is your favourite place to eat? At home. I love my wife’s cooking.

Q Does your family have pets? Do you speak to them?

We have five dogs. There are two I am particularly fond of: a border collie who I am convinced is parthuman and can talk, and a German shepherd who whines like a baby when I speak to him. [Ed’s note: I’m glad I’m not the only one – I’m also convinced my dog is half-human!]

Q If you could move Table

Mountain to any other province, where would you take it and why?

Capetonians have the mountain and the Jo’burgers have the money. By moving Table Mountain to Johannesburg, we could have the best of both worlds.

Q Name five uses of a pen without ink. Q What fascinates you about life? Peashooter, marker in the ground, bookmark, ruler and desk drumstick.

Q If we gave you a giraffe, would you keep it?

I would. Giraffes are my youngest daughter’s favourite animals.

Q Your favourite pastime? Spending time with my family and driving my vintage cars.

Q How lucky are you and why?

I am not lucky, I am blessed. To be leading a company in these turbulent times, where once-in-a-lifetime events have become regular occurrences, creates once-in-a-lifetime opportunities.

As I get older I start sounding more and more like my parents – fascinating!

Andrew Konig, Chief Executive Officer of Redefine Properties Andrew Konig is a qualified chartered accountant with 22 years of commercial and financial experience, and was previously Redefine Properties’ Financial Director. He is responsible for the management of Redefine and for ensuring the board’s strategy is implemented, as well as all aspects of regulatory compliance, corporate activity and communications. He is supported by three executive directors and mentored by the

legendary Marc Wainer, Redefine Properties’ former Chief Executive Officer and current Executive Chairman. Redefine Properties grew through a series of acquisitions since its inception in 1999 to become one of the leading property owners in the southern hemisphere. In September, Redefine Properties was for the first time included in the FTSE/JSE Top 40 Index, making it one of the 40 largest listed companies in South Africa by market capitalisation.

SOUTH AFRICAN PROPERTY REVIEW

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October Region

Date

Event

East London

1 October 2015

Buffalo City Golf Day

KwaZulu-Natal

2 October 2015

KZN Mountain Bike Challenge

Western Cape

4 October 2015

SAPOA/SAPVIA Roadshow

KwaZulu-Natal

9 October 2015

SAPOA/SAPVIA Roadshow

Limpopo

17 October 2105

Limpopo Golf Day

East London

20 October 2015

SAPOA/SAPVIA Roadshow

Port Elizabeth

22 October 2015

SAPOA/SAPVIA Roadshow

November Region

Date

Event

Gauteng

3 November 2015

GP Research Breakfast: Topic TBC

Gauteng

3 November 2015

GP Networking Event

Gauteng

6 November 2015

Legal Power Hour

Polokwane

10 November 2015

SAPOA/SAPVIA Roadshow

Nelspruit

17 November 2015

SAPOA/SAPVIA Roadshow

KwaZulu-Natal

17 November 2015

KZN Golf Day

Mpumalanga

25 November 2015

Mpumalanga Gala Dinner

Gauteng

27 November 2015

PWC Half-Day Workshop

Port Elizabeth

29 November 2015

PE Gala Dinner

December Region East London

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Date 3 December 2015

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

2015/09/17 4:56 PM

off the wall

A case of mirror, mirror on the wall Located amid apple orchards and surrounded by the spectacular Dolomite Mountains of Italy, the mirror houses provide remarkable views

rom a distance, it’s almost as though they are not there – but tourists and locals who have been to the mirror houses in Bolzano in northern Italy know that the houses are as solid as any other guest house in the world. The holiday homes are a contemporary, high-class accommodation venue set in the marvellous surroundings of the South Tyrolean Dolomites, and were designed by architect Peter Pichler. They each feature separate balconies as well as their own gardens and access paths. The walls are made of full-height glass, providing expansive views to the orchards and mountains, and sliding open to connect the living spaces with the outdoor terraces. Operable skylights are located above the bed and bathroom for illumination and ventilation.

The mirrored exterior surfaces have been laminated in UV coating to mitigate bird collisions. Each unit contains a kitchen and open-plan living room, a bathroom, a bedroom and a small basement that serves as storage space. The houses also have all amenities needed for a comfortable stay, including a flatscreen TV, Wi-Fi, a dishwasher, a washing machine and a microwave oven. A night’s stay in one of these houses will set you back €200 per night, with a policy of two nights’ minimum stay. Each of the units ideally accommodates two guests but can take up to four guests. Peter Pichler Architecture is a north-Italian architecture and design firm dedicated to developing an innovative, contemporary approach towards architecture, urbanism and design. On its website, the firm says that “The project’s initial volume was split in two units that are slightly shifted in height and length in order to loosen the entire structure and articulate their differentiation. Both units are floating on a base above the ground evoking lightness and offering better views from their cantilevering terraces to the impressive surrounding landscape.” Mirrored glass on the west façade borders the garden with the units and catches the surrounding panorama and pool while making the units almost invisible. The region where the houses are located is famous for breathtaking landscapes, culinary delights, exquisite wines and countless possibilities for outdoor activity – that is if you are able to resist the urge to stare at your image on the wall.

SOUTH AFRICAN PROPERTY REVIEW

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