South African Property Review July 2013 by SAPOA

South African Property Review

PROPERTY SOUTH AFRICAN

REVIEW

SA REITs The dream becomes a reality

Architects in focus

PROPERTY EYE CANDY Excellence winners announced

THE TALENTED MR NOMVETE Deltaâ&#x20AC;&#x2122;s rise and rise

July 2013

SHINE ON, SAPOA Our Convention report back

July 2013

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11th Annual IPD Property Investment Conference

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from the CEO

SETA regulations alienate the private sector SAPOA CEO Neil Gopal says that, while the SETA grant regulations stand to estrange the private sector from contributing to the skills gap, SAPOA is working together with BUSA to lobby against the restrictions

ddressing the skills gap will go a long way towards reducing unemployment. It’s both a public and private sector priority, and should be something government and civil society work together to achieve. It is therefore of great concern that the new SETA grant regulations have effectively alienated those private companies trying to address the skills shortage through education and training programmes offered to employees. Much of the unhappiness centres around levies, focusing on the key provisions of the Grant Regulations. The Regulations mainly govern the SETA allocation of mandatory and discretionary grants from the skills levy contributions paid by employers. The provisions of the regulations that have major implications for the funding of training for workplace competence are: 1 The mandatory grant paid to employers for submitting their Workplace Skills Plans is reduced from 50% to 20% of their levy contribution. 2 The SETAs will pay the remaining skills levy funds to employers as discretionary grants, after deducting 10,5% for administration costs. 3 The Regulations require SETAs to spend 80% of the discretionary grants on PIVOTAL (professional, vocational, technical and academic learning) programmes which result in qualifications or part qualifications registered on the NQF. 4 The SETAs will have to set out in their Discretionary Grant Policy “how PIVOTAL programmes can be delivered through public education and training institutions’” This reduction in the grant will only go so far as to discourage employers from supporting the national skills development programme. To quote Skillsportal.co.za, which published an editorial in January regarding the shortcomings of the new regulations, “Government will not be able to address the diverse national, sector, company and individual skills needs by ‘nationalising’ the skills levy and using it only for national training priorities and for funding public training providers. “The national skills development system should strive to achieve a balance between often-competing demands and objectives on national, sector, organisational and individual levels, such as improving

workplace productivity, increasing employment, addressing inequalities, promoting Black Economic Empowerment, ensuring social upliftment, providing workplace exposure and mentorship to inexperienced graduates, and strengthening competitiveness to grow companies and the economy.” The editorial also listed other unintended consequences that existed: there would be a detrimental impact on skills development, public institutions were not geared to address the diverse skills gap, and many private training providers could be forced to close. Property, like a range of other sectors, makes use of and needs SETAs for training everyone from bricklayers to specialised service providers. With the regulations focusing on formalised education, it has lost sight of the continued need for short, focused training programmes that fulfil the need for specific skills. They have the benefit of being required in the wider job market and can be acquired quickly. One cannot expect public learning institutions to possess all the skills required in the various workplaces, such as banking, mining, construction, local government, health and even insurance. It is disingenuous to remove the employer from the continued training of the employee – especially in small and medium-sized businesses, which rely on grant funding. SAPOA has therefore partnered with BUSA to lobby against the restrictions in the regulations by stressing the valuable contribution we make to skills development in areas that are not covered by public universities and colleges. SAPOA would like to congratulate all the role-players who have worked for the past few years to ensure REITs became a reality in South Africa. With the official launch of the SA REIT Association in May, listed property, and indeed South Africa, stands to benefit massively from foreign investment. Turn to page 38 for more on this ground-breaking development.

Neil Gopal

SOUTH AFRICAN PROPERTY REVIEW

contents

July 2013

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

July 2013

REVIEW

SA REITs The dream becomes a reality

Architects in focus

Abreal

SA REIT Association chairman Norbert Sasse – we talk to him about the launch of the association in South Africa

THE TALENTED MR NOMVETE Delta’s rise and rise

July 2013

Oilgro

PROPERTY EYE CANDY Excellence winners announced

ON THE COVER

SHINE ON, SAPOA Our Convention report back

4 12 16 20 30 32 38 40 44 49 54 62 64

News Education, training and development Legal update Shine on, SAPOA Our Convention report back Collaborating the future GGDA workshop Property appraisal Excellence award winners Road to REIT-dom REITs launch Africa: the last frontier Looking at prospects in Africa Interview Ekurhuleni Mayor Mondli Gungubele Feature Retail in the fast lane Interview Sandile Nomvete Proﬁle Architects Off the wall Doggy digs decadence FOR EDITORIAL ENQUIRIES email editorial@sapoa.org.za or managingeditor@sapoa.org.za. Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 e: sales@sapoa.org.za Editor in chief Neil Gopal Editorial advisor Jane Padayachee Managing editor Mark Pettipher Consulting editor David A Steynberg Deputy editor Candace King Copy editor Ania Rokita Sales Riëtte Stevens Finance Susan du Toit Contributors Advocate Portia Matsane and Martin Ferguson Photographer Michael Glenister

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

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Pam Golding Properties An international Asssociate of Savills

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R45-million acquisition for Ascension Properties

R45-million loan from Nedbank Corporate Property Finance has been finalised for Ascension Properties Limited. The substantial loan enables the black-owned and blackmanaged property income fund to acquire Swiss House in Marshalltown, Johannesburg for a total asking price of R66-million, adding to its growing portfolio. Founded in 2006 and successfully listed on the JSE in June 2012, Ascension Properties focuses on acquiring and investing in commercial office buildings in centrally located areas of South Africa, with a means to handle demand

from government and other empowerment-sensitive tenants. “While this is the first time that Nedbank Corporate Property Finance has funded an Ascension Properties acquisition, our two organisations clearly share a similar vision for the future of the country’s property industry,” says Richard Thomas, Cape regional executive for Nedbank Corporate Property Finance. “We hope that this will be the beginning of a long relationship that will deliver benefits for all stakeholders at Nedbank and Ascension.” +27 (0)21 418 3977, Ascensionproperties.co.za

Redefining Webber Wentzel Attorneys’ new head office

Changes in A & B Grade office vacancies A in Cape Town CBD

s reported in the Q1 2013 SAPOA Office Vacancy Survey, office vacancies in several nodes show slight change to the previous quarter’s figures. Total vacancy in the Cape Town CBD is on par with the previous quarter’s figures at 12,8%, along with Claremont at 21%, Bellville at 7,9%, Century City at 5,8%, Rondebosch/Newlands at 9,3%, Pinelands at 3,3% and the V&A Waterfront at 1,2%. “It is important to note that the buildings surveyed underwent a re-grading at the beginning of the year, resulting in a noticeable change to the CBD figures, where the total A grade area decreased and the B grade area increased,” says Dave Russell, director at Baker Street Properties. “The subsequent reduction in the A grade and increase in the B grade vacancy should not be taken as a market trend but merely a result of the re-grading. Top-quality buildings in all nodes continue to enjoy little or no vacancies, with the bulk of the vacancies located in secondary buildings. It is in this secondary space, where the landlords compete most for tenants, that very favourable lease terms are being achieved. The Portside office tower is on schedule with 50 000m² due for completion in March 2014 and 22 Bree Street is looking very impressive as it heads towards completion and the move to the building of Bowman Gilfillan.” Russell says that Baker Street Properties does not anticipate any change to present office market conditions for the remainder of the year because of the prevailing economic conditions. +27 (0)21 461 1660, Bakerstreet.co.za

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fter receiving several tender submissions by some of the industry’s giants (including Growthpoint and Zenprop), Webber Wetzel Attorneys awarded Redefine Properties the opportunity to develop its new headquarters at its 90 Rivonia Road property in Sandton. “This project continues Redefine’s strategy of investing in high-grade properties with blue-chip tenants,” says Mike Ruttell, head of development at Redefine Properties. “We’re excited to develop 90 Rivonia Road to become one of Sandton’s flagship buildings and another quality asset for Redefine.” Redefine is to invest R895million in the redevelopment, which is expected to be valued at about R1,1-billion after completion. The new 90 Rivonia

Road will comprise 34 500m² of space, developed in two wings. One wing of 26 000m² will be occupied by Webber Wentzel Attorneys while the other will be developed for future expansion. The prime offices feature seven levels of parking with three different entrances and exits off Rivonia Road and Katherine Street, and the ground floor plus seven levels of offices will be constructed. The redevelopment also aims to achieve a Green Building Council of South Africa Green Star four-star rating. “We look forward to welcoming Webber Wentzel to the Redefine family,” says Ruttell. “They will occupy their new offices from 2014.” +27 (0)11 283 0000, Redefine.co.za

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Jo’burg inner-city set to welcome new strategic property partnership Retail space in demand in outlying towns of Eastern Cape

am Golding Properties (PGP) and Propertuity have entered into a strategic partnership whereby PGP will market residential accommodation in the trendy Maboneng Precinct, and provide strategic guidance and advice. “We have been very interested in the rejuvenation of the inner city for some time because it is a key development node in which we plan to become increasingly involved,” says PGP chief executive Dr Andrew Golding. “We’ve been looking to partner with appropriate developers in this area for several years and are extremely pleased to have formed an alliance with Propertuity, the development arm of Maboneng. “The Maboneng Precinct is the most sustainable and ambitious private development initiative taking place in the Johannesburg city centre today. The project is encouraging impressive economic growth as well as social cohesion in the area. It is also growing at a phenomenal rate. While the precinct currently involves around one square kilometre on the eastern fringe of Johannesburg’s inner city and no fewer than 32 buildings, the developers have enormous vision and are constantly looking for opportunities for further development beyond the current boundaries of the project.” Five new developments will be launched in 2013, some largely residential, but all with a retail component on the ground floor, adding even further to the lifestyle spaces that already give the neighbourhood a dynamic flavour. The developers are already looking north towards Ellis Park for further expansion opportunities over the next five to 10 years, and there are additional plans to expand the University of Johannesburg’s campus, which is also likely to boost development in the area. It is expected that there will be a total of 40 buildings transferred to the project by the end of 2013. +27 (0)11 380 0000, Pamgolding.co.za

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According to JHI Properties, outlying towns in the Eastern Cape – such as Sterkspruit, Mthatha and Tsolo – are experiencing an increased demand for retail space. “Currently we are receiving a large number of enquiries for retail space as a result of pent-up demand and growing passing trade,” says Amanda De Lange, a portfolio manager at JHI Properties based in Port Elizabeth. “It also appears that national retailers who may have saturated the market in major centres, are now looking at outlying areas with potential.” Over the years, JHI has significantly expanded its footprint in the Eastern Cape with a sizeable portfolio of office and retail properties managed on behalf of property funds that

include Capital, Fortress, Resilient, Vukile, Dipula, Arrowhead, Matlotlo, Khula, Intaba Investments and Nvest Properties. De Lange notes that there has been an improvement in market sentiment, especially in Port Elizabeth. She adds that there is no doubt that Coega is attracting business to the Eastern Cape. She says trends noted in the East London market include a current higher demand for retail rather than office accommodation. “There is an increase in small-business development and incoming entrepreneurs seeking retail space, while national retailers are tending to seek smaller space than previously.” +27 (0)41 363 2440, Jhi.co.za

New trends show improved commercial property fundamentals Amid a strongly competitive commercial leasing market, it’s wise to assist businesses in managing their cash flow in order to attract and retain tenants for a well-managed property portfolio. “The aggressive leasing campaigns witnessed in the commercial property arena are a function of the market,” says Emira Property Fund CEO James Templeton. “It is hugely attractive if property owners can aid new tenants to reduce pressure on cash flows with incentives such as rent-free installation periods. This helps accommodate expenses such as moving costs. Landlords offering

these incentives are likely to prevail in the present aggressive market.” Templeton notes that Emira, which is likely to be one of the first listed property companies to become an SA REIT, is achieving improved leasing metrics with 92,8% of its portfolio occupied (up from 92,2% in December 2012) and more than 37% of its leases expiring in 2016 and beyond. In the second half of 2012, Emira secured leases with blue-chip tenants accounting for some 135 000m² of commercial space, for an average period of five years. +27 (0)11 775 1401, Emira.co.za

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CHARLIE BRAVO #181-12

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2013/04/23 1:43 PM

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Mega retail for growing Tembisa community

he growing community of Tembisa on the East Rand is set to gain a 14 600m² MegaMart by November 2013 as a result of a R238million finance deal between Nedbank Corporate Property Finance and developers Enigma Property. The development funding was provided on the basis that the development had been presold by Enigma Property to property loan stock company Dipula Income Fund Limited. The end-user funding was provided through a further loan agreement between Dipula and Nedbank.

The proposed retail mix for the new mall is set to consist of at least 80% national tenants and franchises. The centre will be anchored by Pick n Pay. “The location of the new MegaMart puts it in the middle of a fast-developing industrial and residential area in Tembisa,” says Ken Reynolds, Nedbank Corporate Property Finance’s regional executive for Gauteng. “An independent demographic study revealed space demand in excess of 85 000m² of retail in Tembisa, which means this new MegaMart is likely to be very well supported from the outset. While our lending

criteria obviously focus heavily on financial viability and effective risk management, the decisions we reach also have a strong social sustainability component and the proposed Tembisa MegaMart meets these criteria by bringing leading retail outlets within

Pretoria to welcome Savannah Mall

n a burgeoning area just east of Pretoria, a new retail development, Savannah Mall, is being developed by Group Five Property Developments at a total investment of nearly R600-million, with retail space being marketed by JHI Properties. Strategically situated within one kilometre of access to the N4 highway, the 66 025m² Savannah Mall is being developed on a prime vacant site on the corner of Solomon Mahlangu Drive and Bronkhorstspruit Road (R104). “This retail development will connect the communities

along the key M10/Solomon Mahlangu development corridor as the Tshwane metropole expands and seeks to densify to the northeast,” says Simon Thirsk, development manager for Group Five Property Developments. Savannah Mall will be a significant retail anchor for the communities of Nellmapius and Mamelodi to the north and Silver Lakes to the south. It will also provide much needed shopping facilities to those living in the immediate surrounds.” Comprising 38 000m² in

SOUTH AFRICAN PROPERTY REVIEW

the first phase, the singlelevel mall project has received a very positive response in the marketplace, with firm interest from major retailers as well as banks, restaurants, fast-food outlets and clothing stores, among others. The intention is for a major food anchor to be located at either end of the mall, with two department stores as further strategic anchors. Construction is expected to commence on site in early 2014 with completion anticipated around April 2015. +27 (0)11 911 8000, Jhi.co.za

easy and convenient reach of members of local communities, many of whom would otherwise face difficult and expensive transport challenges when doing their shopping.” +27 (0)11 294 4444, Nedbank.co.za

Seshego Circle Shopping Centre comes full circle

eveloped by the Moolman Group along with Polokwanebased businessmen Jaco Nel and Sam Mabotja, the new Seshego Circle Shopping Centre in Seshego, Polokwane is developing on time and is scheduled to open in late October. About 90% of the space at Seshego Circle has already been let, with anchor tenants including Shoprite and Cambridge as well as national retailers such as Edgars Active, Pep, Totalsport, Markham, Truworths, King Pie, Debonairs, a KFC drive-thru, Standard Bank, Nedbank, Capitec and African Bank. The centre will not only provide retail for the Seshego community but will also serve other outlying areas such as Makgofe, Mobokele and Perskebult. Every effort has been made to ensure that locals from the community are being employed, and that underserviced areas are being satisfied in terms of retail demand. +27 (0)15 291 4700, Moolmangroup.co.za

M&CSAATCHI ABEL /4953/E Nedbank Limited Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).

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When it comes to commercial property finance, we look at every angle.

Cell C Headquarters | Under construction | Midrand, Gauteng | Atterbury Property Developments (Pty) Ltd. At Nedbank Corporate Property Finance we understand property. In fact, our service-based solutions have made us the market leader with a proven track record across the board. So, regardless of your property needs, be they commercial, industrial or retail, give us a call. Ken Reynolds 011 294 1649 | Richard Thomas 021 416 7100 | Anand Joseph 031 364 2082

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2013/04/25 4:32 PM

news

Cleaning chemicals go green

ith sustainability high on everyone’s agenda, the need to utilise new, advanced green chemicals becomes more important. “When green chemicals first became available on the market there was a two-week waiting period before they made an impact. Now there is instant impact and continued use further enhances the result,” says Barrie Steyn, chief operating officer of Sterikleen, a subsidiary company of Excellerate Property Services. “While the entire industry has been moving in this direction for a number of years, during the past five years there has been a concerted drive among customers and suppliers to utilise green products that not only have an immediate impact but that are also sustainable. This increasing demand has resulted in significant innovations as well as in the use of chemicals that work not only while the cleaning process is taking place but also long after the process had come to an end.” He says the latest innovations in cleaning technology have many benefits for businesses, particularly manufacturing and other industrial operations and those in which hygiene is critical, such as food production. As part the KZN-iSimangaliso Coast Care Programme, Sterikleen cleans the beaches for iSimangaliso from St Lucia on the KwaZulu-Natal north coast all the way up to Kosi Bay on the Mozambique border. The iSimangaliso Wetland Park is South Africa’s first World Heritage Site, and it encompasses almost nine percent of South Africa’s coastline. Its beaches include Maphelane Beach, First Rocks, Mission Rocks, Cape Vidal, Leven Point, Sodwana, Nine Mile, Mabibi Beach, Island Rock, Manzengwenya, Lala Nek, Rock Tail Beach, Black Rock, Dog Point, Boteler Point and Bhanga Nek. +27 (0)11 699 8604, Epsgroup.co.za

Residential demand in Kenya

ccording to Kunaal Samani, a director at Pam Golding Properties in Kenya, both existing and new residential development properties are currently in demand in that country. He adds that there is high demand among business executives and young professionals who seek to boost their standard of living and experience a more luxurious lifestyle. “The most sought-after properties are located in areas such as Muthaiga, Kileleshwa, Runda, Gigiri, Loresho, Lavington and Kitisuru, in the approximate price range of between KSh (Kenyan shilling) 20-million and 100-million,” he says. “Positively, the development sector is

currently experiencing the most growth in demand as many apartments and townhouses are coming to fruition and becoming available for purchase, helping meet a high pent-up demand from the domestic market.” Samani notes that activity in the property market is gradually picking up as most buyers and investors had put their decisions on hold until the aftermath of the elections. “We expect to see prices rise now that the elections have taken place, and already we note an increase in stock coming onto the market as well as a good demand for property,” he says. +254 (0)20 237 0090/1/2, Pamgolding.co.za

Synergy to acquire Atlantis City Shopping Centre

Broll opens new offices in Africa

ith its sights already firmly set on the African continent, Broll is expanding its African footprint by opening three new offices in Africa this year, now increasing its activity in 15 African countries. “There’s been a positive shift in investors’ attitudes to the fortunes of the African continent,” says CEO of Broll Malcolm Horne. “More and more multinational companies are tapping into sub-Saharan Africa’s fast-growing consumer markets and Broll is positioning itself as a service provider of choice operating across sub-Saharan Africa. The lack of a formalised approach to property management and

maintenance in many African countries opened the door for Broll to replicate its South African offering elsewhere on the continent. With our new African offices, Broll will bring its specialised services and unique capabilities to these markets. With more multinational companies showing interest in Africa, professional leasing and corporate real-estate services are making inroads into previously undeveloped markets.” This year, Broll has opened offices servicing Mauritius, Madagascar, the Seychelles and Rwanda. It will also open an office in Nairobi, Kenya before the end of the year. +27 (0)11 441 4000, Broll.co.za

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s its largest single property investment since listing in December 2011, Synergy Income Fund Limited is to acquire Atlantis City Shopping Centre in the Western Cape for about R334-million. The 22 077m² shopping centre will become the fund’s third-biggest property asset and is expected to transfer to Synergy on 1 September 2013. “Acquiring Atlantis City Shopping Centre continues Synergy’s strategy of growing a specialised retail property investment fund,” says CEO of Synergy William Brooks. “Atlantis City will enhance our well-diversified portfolio of properties located in strong demographic nodes

with good growth opportunities. It also meets our objective of property portfolio growth with quality retail assets.” The Atlantis City Shopping Centre acquisition takes Synergy’s property portfolio to 15 shopping centres valued at approximately R2,1-billion. “This acquisition progresses Synergy’s growth strategy with a quality retail asset that meets our investment criteria,” says Brooks. “We will continue to identify further opportunities to increase our portfolio and provide sustainable, growing returns for our investors.” +27 (0)21 673 3300, Synergyincomefund.com

company profile

Foreign direct investment stimulates appetite for real estate exposure in the African market D

emand for retail and commercial property in sub-Saharan Africa, particularly in the growing emerging economies of Ghana, Nigeria and Mozambique, is fuelling growth in Standard Bank’s real estate finance portfolio. Standard Bank has committed to provide real estate funding in excess of R2,5-billion in sub-Saharan Africa in the past year – a significant increase on previous years. “Many South African developers and investors are seeing various African countries as attractive propositions at the moment, a viewpoint Standard Bank fully shares,” says Gary Garrett, head of Real Estate Finance for Standard Bank. “However, in these markets, it is essential to have local partners in order to fully understand the socioeconomic and legal environments that are unique to each jurisdiction – and this is something we can provide through our extensive in-country infrastructure across Africa.”

According to the International Monetary Fund, real gross domestic product (GDP) growth in sub-Saharan Africa is forecast to be 5,5% According to the International Monetary Fund, real gross domestic product (GDP) growth in sub-Saharan Africa is forecast to be 5,5%, while the World Bank says the region’s economic growth over the next three years should significantly outpace the global average. “Africa, for Standard Bank, is clearly a part of the expansion strategy of South African and other multinational corporates,” says Stewart Shaw-Taylor, head of Real Estate for Standard Bank. “As African specialists with a presence in 18 markets, we have geared ourselves to align with property investors and developers moving across the continent. Standard Bank expects to see continued growth, particularly in the formal retail sector, for years to come. Across the continent, South African retailers and developers are combining forces with Standard Bank’s Real Estate team to execute some of the most sophisticated developments yet seen in many African countries.”

“Standard Bank can see strong growth prospects in a number of countries, such as Mozambique, where the rapid development of the resources sector is driving the need for quality real estate,” says Fergus Mackintosh, Standard Bank’s head of Real Estate for Africa. Similarly, we are experiencing an increased appetite for real estate financing in Uganda and Tanzania.”

Real estate is a high-risk, high-reward proposition, as the costs of construction and logistics are far higher in Africa Major developments for which Standard Bank has provided funding in Ghana and Nigeria underscore the bank’s approach to development funding across Africa, whereby it’s offering increasingly sophisticated funding solutions across the capital spectrum. “Real estate is a high-risk, high-reward proposition, as the costs of construction and logistics are far higher in Africa (by multiples rather than by a percentage), and returns have to be sufficient to accommodate such costs for the project to be viable,” explains Mackintosh. “As financiers to many projects in multiple jurisdictions, there are several capabilities we offer our clients through our on-the-ground teams. We can assist with identifying land, navigating the legal and regulatory processes, and securing local partners for developers and retailers. Without the latter, few developments would be able to get off the ground.” “The risks vary from country to country,” says Garrett. “You can’t simply transplant expertise or practices from one region or country to another. Each country is unique, and local expertise and knowledge is crucial.” “The increasing transparency and political stability in sub-Saharan Africa makes the region more attractive for foreign direct investment into projects,” adds Shaw-Taylor. “The social and economic impact of investments will, in turn, make additional real estate investment more feasible into the retail sector.

Reinforcing the interest in Africa, Garrett points to the number of South African property players – listed and unlisted, developers and investors alike – who are diversifying their real estate portfolios with holdings in Africa, including major real estate funds such as Resilient, Atterbury and Hyprop. “Standard Bank expects to see continued growth in the real estate sector across the region and is well-positioned to develop these opportunities with clients using our expertise and local knowledge,” says Garrett.

www.standardbank.co.za Authorised financial services and registered credit provider (NCRCP 15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). SBSA 126413/R - 3/13

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education, training and development

The SAPOA operational team In the May/June 2013 edition of the South African Property Review, we listed the functions of the SAPOA Education, Training and Development Department and its service offerings to our members. In this edition we wish to proﬁle the SAPOA operational team, committed to actively and responsibly representing, promoting and protecting the interests of our members’ commercial activities within the property industry FRONT ROW, FROM LEFT: 1 Paul Nicholson Regional secretariat: Port Elizabeth Is responsible for dayto-day running of the Port Elizabeth region; provides a secretariat function to the regional council; grows the membership; arranges and coordinates SAPOA training, workshops, seminars, networking events, golf days and gala dinner. 5 Mitta Ndaba Meeting coordinator SAPOA has 17 committees that deal with various areas of commercial property. The meeting coordinator sets up meetings, invites the committee members to them, takes the minutes and distributes those to the members.

2 Eugenia Makgabo Legal officer Supports the legal service manager in achieving all legalrelated requirements set out by the SAPOA board.

3 Noluthando Sithole Receptionist Manages headoffice reception and switchboard.

4 Mafonti Morobi Training coordinator Supports the HRD manager and education manager in the administration and coordination of educational programmes, workshops and seminars.

BACK ROW, FROM LEFT: 1 Adrian Berry Debtors administrator Keeps records of SAPOA customers, issues invoices to SAPOA members on services rendered and recovers all outstanding money.

6 Nthabiseng Kubheka Education manager Supports the HRD manager in achieving the education-related requirements; schedules all education, workshop and seminar events.

7 Lameez Alexander Events coordinator Manages SAPOA’s golf days, networking functions, gala dinners and exhibitions nationally according to the requirements of the various regions.

8 Portia Matsane Legal services manager Monitors and timeously reports on legislation impacting the property industry, and provides comprehensive support on current and future legal queries, requirements and legislation; responds to current member and colleague queries regarding the property sector; performs the role of the SAPOA company secretary.

7 Neil Gopal Chief executive officer Is responsible for the overall performance and management of SAPOA in order to meet the requirements set out by the SAPOA board.

We trust this profiling of the SAPOA operational team will help you to identify the person you wish to speak to, either at the SAPOA head office or in specific region, so they can be of service to you.

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education, education,training trainingand anddevelopment development

2 Martin Ferguson HRD manager Manages the Education, Training and Development Department on a national level; acts as a human-resources manager for SAPOA employees in terms of the requirements set out by the SAPOA board.

3 Susan du Toit Financial manager Oversees and manages SAPOA financial performance and risks; ensures adequate controls are maintained over the financial affairs as required by the SAPOA board.

4 Glynis Heger Regional secretariat: East London Is responsible for dayto-day running of the East London region; provides a secretariat function to the regional council; grows the membership; arranges and coordinates SAPOA training, workshops, seminars, networking events, golf days and gala dinner.

5 Helen Seymour Regional secretariat: KwaZulu-Natal Is responsible for dayto-day running of the KwaZulu-Natal region; provides a secretariat function to the regional council; grows the membership; arranges and coordinates SAPOA training, workshops, seminars, networking events, golf days and gala dinner.

6 Beryl Tshaka Membership administrator Administers the SAPOA membership portfolio and the membership database nationally.

8 Roshni Loganathan Book-keeper Performs the bookkeeping and accounting functions, and provides support to the financial manager.

9 Samantha le Grange Regional secretariat: Mpumalanga Is responsible for dayto-day running of the Mpumalanga region; provides a secretariat function to the regional council; grows the membership; arranges and coordinates SAPOA training, workshops, seminars, networking events, golf days and gala dinner.

10 Melissa Mohamed Regional secretariat: Western Cape Is responsible for dayto-day running of the Western Cape region; provides a secretariat function to the regional council; grows the membership; arranges and coordinates SAPOA training, workshops, seminars, networking events, golf days and gala dinner.

11 Jane Padayachee Acting marketing manager Manages SAPOA’s marketing and advertising requirements as set out by the SAPOA board; fulfils public relations and branding roles.

12 Rechelle Jevon Executive personal assistant to the CEO Manages the secretarial and administrative requirements of the CEO’s office in the context of corporate governance criteria.

The SAPOA operational team’s contact details Head office and Gauteng region T: +27 (0)11 883 0679 Western Cape region T: +27 (0)21 530 5943 E: melissa@sapoa.org.za KwaZulu-Natal region T: +27 (0)82 873 0090 E: sapoa.kzn@sapoa.org.za East London region T: +27 (0)43 748 1156 E: sapoa.el@sapoa.org.za Port Elizabeth region T: +27 (0)41 373 3662 E: sapoa.pe@sapoa.org.za Mpumalanga region T: +27 (0)13 745 7232 E: lowveld@sapoa.org.za Limpopo region T: +27 (0)11 883 0679 E: sapoa.limpopo@sapoa.org.za SOUTH AFRICAN PROPERTY REVIEW

education, training and development

SAPOA is expanding! We now have an office in Nelspruit, Mpumalanga

FROM LEFT Keith Kellar (Kellaprince Properties), Samantha le Grange (Lowveld secretariat), Derek Todd (Kellaprince Properties), James Aling (HL Hall & Sons Properties) and Bennie van der Merwe (Umsebe Development Planners)

pumalanga property developers and practitioners now have all the ammunition they need to strengthen relationships with government and promote the interests of the private property sector, with the launch of SAPOA’s Mpumalanga branch. Property owners and developers, estate agents, property practitioners and members of the Mbombela Local Municipality (MLM) attended SAPOA’s launch at the Pinnacle conference centre on 7 May 2013. According to the acting chairperson of SAPOA Mpumalanga’s interim regional council, James Aling, the launch of a regional office provides a truly exciting opportunity for the local and regional property industry in the province to work together and tap into SAPOA’s offering. Aling explains that some of the main reasons for (and benefits of ) establishing a regional office stem from the urgent need in the local property sector to strengthen relationships with local government, in an effort to create an enabling environment for investment into property development, streamline legislation affecting the industry and promote more transparency in the market.

“The regional office and representation affords us the opportunity to work more effectively as a collective on communal issues that affect the industry as a whole, whether it is engaging with provincial government on legislation such as the new SPLUM bill (currently out for public comment) or engaging with MLM on the matter of bulk service master planning and the sustainable funding thereof. We are currently in discussions with MLM and their LED department on how we can strengthen and formalise a partnership,” he says. Those who join SAPOA have access to various offerings from the organisation, including extensive educational workshops and training programmes, as well as the added bonus of access to SAPOA research and market information. “We have been successful in getting Nelspruit onto the IPD’s [SAPOA’s research partner] list of cities that are surveyed regularly for indicators such as vacancy rates and retail trends,” says Aling. “SAPOA has also recently completed a comparative development cost study of 17 municipalities, including Nelspruit, on the cost of developing in these cities. This study allows us to benchmark Nelspruit against other cities,

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and in so doing improve market transparency and efficiencies.” One of the greatest advantages of becoming a member of SAPOA is the legal advocacy work being done by the organisation. SAPOA tackles policy and legislation that is detrimental to its members and the industry. Recent examples include the challenge of the unilaterally imposed development levy by the eThekwini Metro and the rates hike by the Jo’burg Metro, both of which SAPOA successfully overturned. The success of the organisation will, however, depend on building the membership in Mpumalanga to be able to sustain the running of a regional office that can start broadening its reach across the entire province.

To this end, SAPOA’s CEO Neil Gopal has agreed to a 25% discount on annual membership fees to anyone in our region interested in joining the organisation before the end of June 2013. ”The stronger our membership, the more representation and clout we can have as a sector when engaging with government and other players,” says Aling. The regional office is run by a full-time regional secretariat, Samantha le Grange, who can assist with membership matters and communication with the regional committee. “Once we have increased our membership, we will hold an AGM to formally constitute the new committee,” says Aling. “This is planned for September 2013.” Article courtesy of The Lowvelder.

ATTENTION ALL PROFESSIONALS: IF YOU NEED CPD CREDITS, WE HAVE GOOD NEWS FOR YOU!

he popular and prestigious SAPOA Property Development Programme (PDP) will be running from 21 July to 2 August 2013. Fifty-nine delegates have already registered. We still have space in the programme for architects and quantity surveyors, at a discounted registration fee. Don’t miss this opportunity: this programme now also carries CPD credits! Participating architect professionals will earn 8 Category One CPD credits, which is the maximum number that can be allocated in any Category One activity in any one year. SAIA recommends that participants also consider making an appropriate claim for at least 6 CPD credits in Category Three (B), as part of their portfolio claim to SACAP. For quantity surveying professionals, we are pleased to announce that the Association of South African Quantity Surveyors has assessed and assigned 17 CPD hours to the programme.

What are you waiting for? Email Mafonti Morobi at hr-education@sapoa.org.za or call her on +27 (0)11 883 0679, and enrol now for the Property Development Programme class of 2013. Remember: the programme can only accommodate 64 delegates so make sure you apply right now!

company profile

Crane Construction Consultants: new look, same quality

s the new millennium approached, the economy internationally, and especially in South Africa, faced a downturn. Siva Veeran was taking a risk when he established Crane QS. “The market was saturated with consultant firms and a new entrant was seen as high-risk to clients,” he says. “To earn revenue, we worked for subcontractors, measuring and finalising their project claims. This continued for the better part of two years, and only through perseverance and faith did we manage to secure our first golden opportunity.” This break came in the form of PDNA Consulting Engineers. “The men at the helm believed in our organisation,” says Veeran. “We leveraged this major project opportunity and built what is known today as a dynamic, vibrant, cutting-edge construction consultancy. We compete head to head with the largest and best established players in South Africa and have ventured into Africa with clear intent: to establish a dominant position in every territory that we enter.” For 13 years Crane QS’s corporate image was that of the South African national bird portrayed as origami. Recently, though, Crane QS was renamed to Crane Construction Consultants and its corporate logo was transformed.

Crane founder Siva Veeran “Recognising changing client requirements for single delivery platforms, Crane now offers complete project management, cost management and lead consultancy services,” says Veeran. “We deliberately wanted the logo of Crane Construction Consultants to be timeless, so we chose the Blue Crane. It is our hope that when people associate it with the success of the organisation, they acknowledge the legacy in the making.” Crane used the biggest and most prominent platform on the commercial property calendar to launch its new brand: the 45th annual SAPOA International Convention and Property Exhibition.

“As a silver sponsor we received brand exposure on all pre- and post-marketing collateral for the convention,” Veeran says. “We relaunched the website – www.craneqs.co.za – and will be utilising social-media networks to carry our new vision through the industry. One of our key focal points this year will be social development, with various initiatives planned. We will invest in the human-capital aspect of the business, as people are our biggest brand ambassadors.” Today’s commercial property industry is a fast-paced, dynamic sector experiencing rapid growth and delivering key services to South Africa’s development. Far from only being about its new image, Crane has moved into the social-media space to extend its service offerings to a global market. “Online marketing has quickly become the preferred method, worldwide, to purchase goods and acquire professional services, and it’s revolutionising the ways companies market their businesses,” says Veeran. “Social media specifically connects people from various backgrounds on a digital platform, and gives us more exposure than traditional marketing avenues. Social media is also the most efficient way for our company profile to reach a larger audience. Digital is definitely the way to go and whether we’re marketing a product

or a service, the principle of internet marketing remains the same: content is indeed key.” With an office in Mauritius and the final stage of plans for establishing a presence in the UAE this year, Crane is going directly to the market where customer demand exists. “We have a competent team of specialists to ensure that delivery on projects is always exceptional, consistent and on time,” says Veeran, adding that his organisation is constantly on the lookout for more opportunities. “Our primary focus is growth into Africa, and we are currently considering establishing a West African entity on the back of strong growth in the region and significant project involvement. We will consider growth and expansion into new regions where we recognise the opportunity to provide a value-added service to our clients, and where we see an opportunity for meaningful market penetration and sustainability.”

Block A, Wierda Court, 107 Johan Avenue, Sandton 2146 T: +27 (0)11 783 8220 F: +27 (0)11 783 9205 E: siva@craneqs.co.za

SAPOA Calendar 2013 Breakfasts & seminars

Courses & education ICPP: Introduction to Commercial Property Programme ICPP Wits KZN 4 – 6 June ICPP NMMU George 12 – 14 June ICPP NMMU Port Elizabeth 25 – 27 June ICPP NMMU East London 18 – 20 September ICPP UFS 5 – 7 August 6 – 8 November ECPP: Essential Commercial Property Programme ECPP KZN TBC ECPP Wits 11 – 14 June ECPP NMMU East London 18 – 21 June ECPP UFS 12 – 15 August PMP: Property Management Programme February – November

CCPP: Certificate for Commercial Property Practitioner for the built environment February – November FMP: Facilities Management Programme FMP UFS 19 – 23 August FMP UFS 18 – 22 November IPMP: Intensive Property Management Programme 22 – 26 July PDP: Property Development Programme 21 July – 2 August BCTP: Building Construction Technology Programme 11 – 15 November Career day UP 14 May Career day UJ 25 July Career day Wits 19 September

Gala Dinner Western Cape 19 September

Method of Measuring Floor Areas Breakfast 6 June: Gauteng

Gala Dinner East London 16 October

Research Breakfast 30 April Business Rescue Breakfast IPD Research 14 May Property Finance Breakfast 20 June Legal: FICA Workshop 29 August Property Investment Workshop 18 September Research Breakfast 3 October Brokers’ Econ Update 23 October Legal SPLUMB 7 November Brokers’ Legal Update 21 November

Gala dinners

Gala Dinner Limpopo 31 October Gala Dinner KZN 14 November

Conferences 13 – 14 June BOMA Conference (INT) 24 – 26 June SA Council of Shopping Centres Convention (NAT) 11 – 13 September Green Building Council of South Africa (NAT) 16 – 18 October AFRES Conference (INT) 23 – 25 October MAPIC (INT) 14 – 16 November

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legal update

Judgment and legislation The legal update highlights judgments, Bills and key decisions that have been passed, published and made in as far as they may affect the property sector or members of SAPOA in their various capacities. Citations have been provided to ensure members can fully apprise themselves of the facts of relevant reported matters By Portia Matsane

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JUDGMENTS

1. TRANSFER OF PROPERTY AND MUNICIPAL DEBTS, CITY OF TSHWANE METROPOLITAN MUNICIPALITY VERSUS THOMAS MATHABATHE & NEDBANK LIMITED: CASE NO 502/12 The law (section 118 (3) read together with section 118 (1) of the Local Government: Municipal Systems Act 32 of 2000) requires that a registrar of deeds may not register the transfer of property except on production to that registrar of deeds of a prescribed certificate issued by the municipality or municipalities in which that property is situated, and which certifies that all amounts that became due in connection with that property for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties during the two years preceding the date of application for the certificate have been fully paid. However, that prescribed certificate issued by a municipality is valid for only a period of 60 days from the date it has been issued. It is important to note that an amount due for municipal service fees, property rates and other municipal taxes, levies and duties is a charge upon property in connection with which the amount is owing and enjoys preference over any mortgage bond registered against the property. In the above case, an owner of property appointed a bank (mortgagee of the property) through a special power of attorney to sell the property by public auction on his behalf. An auctioneer was appointed by the bank. An offer was made at the auction by a third party, which was subsequently accepted.

During the registration process of the property, the appointed Conveyancer applied for a clearance certificate. The municipality provided the Conveyancer with the total amount outstanding in respect of municipal rates and services, which included “the historical debt” consisting of charges levied for the provision of municipal services to the property prior to the two years envisaged by section 118 (1)(b). The municipality refused to exclude historical debt, and the purchaser and the bank launched a high court appeal in the North Gauteng High Court to request the Court to order the Municipality to limit the amount that became due in connection with the property. The application was opposed by the Municipality. The Court ruling in favour of the Purchaser and the Bank was appealed against by the Municipality. The Supreme Court of Appeal clarified that the municipalities were obliged to collect the monies that become payable to them for property rates and taxes and for the provision of municipal services. The Court continued by making a distinction of the manner in which municipalities can fulfil that, i.e.: ● There is security given to municipalities for repayment of the debt, in that it is a charge made on that property. ● They are accorded powers to block the transfer of ownership of the property until debts are paid in certain circumstances. The Supreme Court of Appeal referred to observations of Judge JA Brand in the matter of BOW Ltd versus Tshwane Metropolitan Municipality 2005 (4) SA 336 (SCA), in which the court stated that the security provided by the subsection amounted to a lien having the

legal update

LEGISLATION effect of a tacit statutory hypothec, and that no limit was placed on its duration outside of insolvency. It was further stated that its effect was to create in favour of the municipality a security for the payment of the prescribed municipal debts so that a municipality enjoyed preference over a registered mortgage bond on the proceeds of the property. Subsection (3) according to Judge Brand does not refer to a category or class of debts but to the aggregate of different debts secured by a single charge or hypothec. It follows that the amounts of all debts arising from the stipulated causes are added up to become one composite amount secured by a single hypothec, which ranks above all mortgage bonds over the property. The Court of Appeal noted that the security given to a municipality by section 118 (3) is a charge upon property, which signifies that it is security for the payment of a debt or performance of an obligation. What is critical is to note that any amount that is due for municipal debts which are not limited by the mentioned two years and which have not prescribed is secured by the property. If it is not paid and an order of the court is made, then the property can be sold in execution and the proceeds can be applied in payment of the debts. The Court held that the municipality failed to draw the distinction in the manner in which a municipality can fulfil its obligation of collecting monies payable for provision of municipal services, and further that it was wrong in its contention that upon registration of transfer of the property, the municipality loses it rights under section 118 (3) of the Act. The appeal was dismissed with costs.

2. EDUCATION

On 3 December 2012, the Government Gazette Notice 35940 published the Sector Education and Training Authorities (SETAs) Grant Regulations regarding monies received by a SETA and related matters No 990, for implementation from 1 April 2013. The Regulations introduce two primary material changes. A SETA may not use more than 10,5% of the total levies paid by the employer as allocated in the Act, received in any year, to pay for its administration costs in respect of that financial year. The previous law allowed a SETA to use up to 10%. The present Regulations introduce an increase of only 0,5%. From 1 April 2013, the law states that a SETA will transfer, as part of its administration costs and as approved in the annual SETA strategic plan, an amount that does not exceed 0,5% of the total levies paid by the employer to the QCTO for quality assurance function, and the actual quantum of funds to be transferred will be determined by the Minster by 31 July of each year. A SETA must allocate a mandatory grant to a levy-paying employer. Twenty percent of the total levies paid by the employer in terms of section 3 (1) as read with section 6 of the Skills Development Levies Act during each financial year will be paid to the employer who submits a Works Skills Plan and an Annual Training Report. The previous law stated that a SETA must pay 50% of the total levies paid by the employer for skills development of its employees.

INTENT BEHIND THE REGULATIONS

Provide for Sector Education and Training Authorities (SETAs) to contribute to the cost of the work of the Quality Council for Trade and Occupation Discourage the accumulation of surpluses and the carryover of unspent funds at the end of each financial year

Improve the quantity and quality of labour market information received by SETAs in the form of workplace skills plans, annual training reports and PIVOTAL training reports, to inform planning

Create a framework within which expanded use is made of public education and training providers for the provisions of skills development programmes

Promote National Qualifications Framework registered and quality assured PIVOTAL programmes that address scarce and critical skills needs identified in sector skills plans SOUTH AFRICAN PROPERTY REVIEW

company profile

Alexander Forbes: a winner in collaboration W

alking away with the 2013 SAPOA Innovative Excellence Award in the Corporate Office Development category, as well as the Overall Award for the new Alexander Forbes building in Sandton means a great deal, according to Paragon Architects’ Anthony Orelowitz. “The judging panel for the awards is filled with our clients and leaders in the property industry, so winning the award is significant,” he says. “It’s a validation that our clients, the professionals on the team and the contractors have delivered a product that has been deemed to be of excellence. So it’s a fantastic feeling. A lot of our life force has gone into that job.” Though there was no shortage of excellent submissions in the Corporate Office Development category, according to Orelowitz, one of the things

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he admits to being a bit embarrassed about is that “you and your client get this prize but what people don’t realise is how the contractors had to get their act together to deliver this building in such a short space of time.” Almost two years ago, Alexander Forbes was split across two separate buildings and the end of their lease was approaching. The multinational corporate opted not to renew its lease, but instead wanted a bigger space to house its 2 500 employees in a single headquarters. It also wanted a space that reflected its corporate culture of transparency, values and putting its own people first. Following a submissions process, Paragon was appointed lead architect and so began one of the most ambitious projects the South African landscape has ever witnessed.

Time frames were incredibly tight; contractors appointed sub-contractors and Alexander Forbes had no other option. The company would be moving into its new offices in 18 months. “SAPOA really does acknowledge us and our developments, but there’s actually a myriad of people who delivered this building at the level of excellence that I don’t think we’ve seen in this country before,” says Orelowitz. “They built that top structure in 18 months. It’s almost unheard of. It’s virtually building seven days a week, 24 hours a day.” The basement itself was a feat in forward planning. “If you stood on that site when the ground floor was being cast, some portions of the surface basement had not been cast yet,” Orelowitz says. “So what they were doing was rotating plates down below each other in order to get that building up. That minimises queuing time.”

Paragon’s senior project architect, Amir Livneh, says that this project really changed the way the practice designs. “Things were always on the critical path so when we had to do something it wasn’t good enough to have one-offs because they couldn’t keep up with the programme,” he says. “We had to have a lot of duplication of things such as custom formwork so that they could keep up with themselves.” Everything about this project is extraordinary: the shutters are eight metres high and had to be cast on site; during the peak period up to 1 500 workers were on site at any given moment; Paragon worked with 35 different consultants, excluding their sub-contractors. “This kind of building and its level of complexity and quality is one of the fastest to be built,” says Orelowitz. “Its internals are far more complicated than its external facades. So from the outside you may look at it and think it’s a nice building, but inside you go ‘wow, this interior is really different from other

buildings’. Building that internal mechanism is complicated and taxing. And to be able to deliver that quickly at that quality with that kind of finish, despite relative snagging, was excellent.” According to an associate at Paragon, Vivien Yun, this project would not have come together in the way that it did were it not for the efforts of the team. “It was a collaborative effort between ourselves and the contractors, including their sub-contractors, to get that level of design and resolution for some very custom-designed, bespoke pieces in the building that wouldn’t have been possible if it was just the architect driving the agenda.” For successful completion to take place, even the rain had to be factored into how the building was constructed. “We even had to take cognisance of the rainy season,” says Livneh. “Certain parts were designed to be waterproof in order to not be caught out by the rain during construction. The building was not

closed and we could not stop building on account of the weather. A lot of the structure was sacrificial in a way in that it had to be pulled away as we couldn’t wait for the roof to come up.” This was the contractor’s responsibility, according to Orelowitz. “This is why a building like this cannot be created by any primary entity; it had to be done as a collaborative,” he says, with Livneh adding, “It took a lot of trust.” “While we had a lot of pressure and tight time frames, no-one is going to see that,” says Livneh. “And it’s not important because it needs to be of a quality that stands up to the quality of any other building. The building has to stand alone regardless of the challenges we had. That’s the big success and that’s why it’s nice to win the award.”

+27 (0)11 482 3781 info@paragon.co.za www.paragon.co.za SOUTH AFRICAN PROPERTY REVIEW

45th international convention report back

Shine on, SAPOA Apart from the high volume of networking and events, the 45th annual SAPOA International Convention and Property Exhibition meant serious business: two mayors, an ex-politician, an honourable judge, a past and new SAPOA president, and the Quest By Candace King

lmost 35 years ago, a first-of-its-kind luxury resort was built in South Africa – a development that was, and still is, regarded as a milestone for property development in the country. Developed by hotel tycoon Sol Kerzner as part of his Sun International group, this powerful property known as Sun City officially opened in December 1979 and soon became one of South Africa’s premier holiday destinations. Forty-seven years ago, a humble property organisation emerged and took on the mission to act as a transparent and accountable body, serving as the voice of the property industry in South Africa. It was in 1966 that the South African Property Owners Association (SAPOA) was established by the leading and large property investment organisations of the day, to amalgamate all role players in the commercial property sector and to create a powerful platform for property investors. In the same vein as the iconic success story of Sun City, SAPOA has risen to become one of South Africa’s most prolific property organisations. Today, SAPOA’s members control about 90% of all commercial and industrial property in South Africa, with a combined portfolio in excess of R150billion. In celebration of both the organisation’s standing in the property arena as well as the achievements of various property players in the industry, SAPOA decided 45 years ago to establish and host a premier property convention to bring the industry together – an annual convention that, today, holds as much attention and weight in the industry as it did in the beginning. The 45th annual SAPOA International Convention and Property Exhibition took place from 14 to 16 May 2013 at Sun City and was attended by more than 1 200 delegates. Sponsored by 16 heavyweight property companies, this year’s convention featured 85 exhibition stands and seven international speakers. As it has every year since its inception, the 45th convention brought together the most influential local and international commercial property professionals under one roof.

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ABOVE, FROM LEFT Tony Leon, Daniel Silke, Justice Malala, Chris Gibbons and master of ceremonies Richard Quest BELOW Dr Sedise Moseneke, Neil Gopal, Estienne de Klerk OPPOSITE, CLOCKWISE FROM LEFT The opening ceremony; golfers at the Gary Player course; enjoying the Lost City Golf Course

45th international convention report back

A warm Sun City welcome Nestled near Pilanesberg in the North West Province, against the backdrop of undulating hills and dense bushveld, the majestic Sun City awaits visitors like a hidden archaeological gem for diggers to uncover and relish – something which the attendees did at this year’s convention. For three days, delegates enjoyed the opportunity to mingle and network; play golf; rub shoulders with key property players and companies; explore exceptional exhibition stands; listen to and engage with an abundance of speakers on a number of topics; become enriched through educational workshops; celebrate with the Journalism and Innovative Excellence Awards winners; learn more about the industry; and most importantly, party up a storm. Things were in full swing on day one as delegates took part in a game of golf, Gary Player-style. Sun City is home to two world-class 18-hole golf courses – the Gary Player Golf Course and the Lost City Golf Course – both designed by South Africa’s golfing legend Gary Player. The golf day was cohosted in association with Liberty Properties, JHI Properties and Growthpoint Properties. Following their drives and birdies with property costs and business rescue, delegates also attended two insightful workshops on the first day – SOUTH AFRICAN PROPERTY REVIEW

45th international convention report back the SAPOA IPD Training Workshop as well as the Business Rescue Workshop. The Business Rescue Workshop featured as speakers attorney Yolinda Freimond, managing director and senior partner at Masilo Freimond Inc Attorneys and advocate Portia Matsane from SAPOA, and dealt with several legal issues pertaining to the property industry as well as business rescue proceedings. The SAPOA IPD Training Workshop, on the other hand, focused on the topic of Cents & Sensibility: Strategies for measuring and managing property costs. With speakers Jess Cleland, research director at IPD and David Khasebe, facilities manager at DKMC, the workshop addressed how cost patterns have changed over the past decade as well as other burning topics – something which was not lacking for the duration of the convention. “There are elephants in the living room,” boomed CNN international anchor and reporter Richard Quest, this year’s master of ceremonies and convention facilitator, as he brought fiery humour and straightforward talk to the floor. These “elephants” are topics that need to be debated but are ignored in Africa, noted Quest, likening the globe’s continents to animals – the Asian “tigers”, European “dodos”, African “lions” and the American “eagles”. “The property industry is like the impala, constantly being consumed,” said Quest. He noted the existence of corruption, negligence and poor administration. The retail sector is saturated with all the good stuff being hoarded. In the last two years, the rand dropped by 25%. Despite all this, Africa holds massive opportunities.

Our history: a reminder and a teacher It was the US astronomer, writer and scientist Carl Sagan who said, “You have to know the past to understand the present.” Looking back into the past was the opening theme of the convention on day two, which officially got under way with a compelling song-and-dance performance choreographed and written especially for SAPOA. The official opening speech was presented by former SAPOA president Dr Sedise Moseneke, who noted that history not only reminds us but also teaches us. Looking back over the past 350 days of his reign as SAPOA president, Moseneke reminisced about his time and efforts spent as a proud ambassador of the organisation. He spoke of the hard work done in the industry during his term, including the improvement of relations with government, the development of local and international relationships, and the road travelled towards greater transparency. “Public works needs to work,” he said. He added that the industry should healthily debate and challenge the government in order to move forward. He said that the convention is about an overview of the industry and its progress as well as about the political landscape and how it comes into play. But it’s also about collaboration in the property industry. “A joint and shared vision is important for growth and change,” he concluded. Sun City is a place that echoes our continent’s ancient past, a tribute to the African kingdoms of yesteryear. For some, it’s also an ugly reminder of our country’s tumultuous history.

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TOP, FROM LEFT Patrick Sumner, Andrew Brooking, Lesiba Maloba, Estienne de Klerk, Anton de Goede MIDDLE, LEFT Tony Leon MIDDLE, RIGHT Patricia de Lille ABOVE Richard Quest

45th international convention report back

ABOVE Parks Tau ABOVE RIGHT, FROM LEFT Richard Greninger, Estienne de Klerk, Lisa Prats, Peter Merrett BELOW, FROM LEFT Jeremy Kelly, Richard Quest, Peter Merrett BELOW RIGHT, FROM LEFT Estienne de Klerk, Patricia de Lille, Parks Tau, Neil Gopal

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45th international convention report back At the time of its development, it was located in the Bantustan of Bophuthatswana. Although Bophuthatswana had been declared an independent state by the apartheid government, Sun City was allowed under the South African law at the time to provide a particular type of entertainment that was banned in South Africa. Addressing our past, honourable Judge Dikgang Moseneke, the Deputy Chief Justice of the Constitutional Court of South Africa, narrated the history of our land, discussing the hundred years after the Natives Land Act of 1913 and how our Constitution has embraced land reform and property rights. “It has been a struggle for more than a century,” he said. “There has been war, division and oppression. However, it’s a story of renewal. We seek to achieve good governance and a democratic society.” After a century of fighting for freedom and the right to access land, there are still problems that we face today, noted Moseneke. “There is still much to be done – there is still poverty, unemployment and inequality,” he said. He added that the cities of Johannesburg and Cape Town need to find alternative homes for squatters, and that rural development needs to be funded. When one compares South Africa’s problems with those of the rest of the world, it seems that Europe in particular is still stuck in the economic mud. Patrick Sumner, head of Global Indirect Property of Henderson Global Investors addressed the trends in the international and local listed sector. With varying degrees of growth and performance across Europe, Sumner said that growth will remain difficult in 2013, as 6,8% of total return is expected over one year. Henderson Global Investors predicts a one percent growth increase in the Eurozone in 2014. However, sentiment is improving and the risk of extreme outcomes in Europe is diminishing. On the local front, the South African listed property sector has performed exceptionally well. SAPOA’s newly elected president Estienne de Klerk noted that, in the last four years, South Africa has outperformed global currency, and that yield compression and fixed income growth drives the market. With headway being made in the local REIT arena, the future of the South African listed property sector looks bright. However, De Klerk warned that danger to the market may arise in the form of political and economical risks that can affect direct foreign investment.

Politics and economics As we move from a “hopeless continent” to “aspiring Africa” (according to The Economist), we have come a long way. But the political and economic landscape of the continent still faces challenges. This was addressed by South African ambassador to Argentina, Tony Leon, who spoke of the current situation in the country, post-Mangaung, mining strikes, cash-strapped municipalities, and where South Africa is going. South Africa reached a sort of nirvana-like state in 2010 with the successful hosting of the FIFA World Cup, which was coupled with an all-time-low crime rate. This was forgotten as a result of recent negativity surrounding South Africa – the tragic Marikana mine strike, the Oscar Pistorius shooting, Zuma’s Nkandla development, shoddy political shenanigans and the “Guptagate” scandal.

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45th international convention report back Networking cocktail parties went on into the night, culminating in a beach party and live entertainment at the Valley of the Waves

SAPOA SONG Oh Property Just so much more Than simple bricks And mortar A foundation for growth Building dreams Funding freedom A pulse of power that Ignites progression Our bold Ambition now Is to venture forth beyond borders First world in our knowledge And true skill To stand up tall For the captains of our Industry Shine on Property This prominent industry In Africa And round the globe Yes shine, Property Driving growth In Africa And round the globe

Represent, promote, protect For four decades and five We have earned Your respect Shaping Sharing Education This is a Professional Property collaboration The proof of strength In allied cooperation Shine on SAPOA For 45 years Bringing excellence And one strong voice Yes shine, shine on SAPOA For 45 years Bringing excellence And one strong voice Forty-five years Congratulations SAPOA Convention

For the success We have obtained We have our own vision to thank And SAPOA Together We will strive To build the local economy And create an enduring Property legacy

SAPOA Property Journalism Awards winners Property News Journalist of the Year: Micel Schnehage, Moneyweb Property Feature Journalist of the Year: Kerry Dimmer, Earthworks South Property Printed Publication of the Year: SA Real Estate Investor Magazine Property Online News of the Year: SA Commercial Prop News

SOUTH AFRICAN PROPERTY REVIEW

45th international convention report back The former politician (now businessman) put forward three track options into the future: the fast track, the collision track and the dirt track. South Africa will either perform very well with big corporates boasting high foreign investment; hit rock bottom with further unemployment, poverty, inequality and corruption; or play it safe and become an enclave state. One answer to this is for the public and private sectors to work together and align business and politics. The economic landscape of South Africa was addressed on day three by economist and political and trend analyst JP Landman. Landman noted that the public and private sectors need to pick things up in order to reach National Development Plan 2030 targets. The target for the public sector is 10% of GDP and the target for the private sector is 20% of GDP. Landman also proposed three economic scenarios for South Africa: the “make-it-work” scenario (5,4% growth), the “muddle-through” scenario (three percent growth), and the “decline-and-failingstate” scenario (one percent growth or less). Apart from future forecasts, what is currently being done for our country? The Mayor of the City of Cape Town Patricia de Lille and the Mayor of the City of Johannesburg Parks Tau presented plans for their respective cities. “We are working to make our great city even greater by building the city on five pillars: the opportunity city; the safe city; the caring city; the inclusive city; and the well-run city,” said De Lille. “We need to create the kind of city where people can find opportunities, and where we can truly address the historical injustices of the past and create a brighter future for all our citizens.” She noted that the private sector needs to be a partner and that business is key to enriching our future. She added that the City of Cape Town has been measuring itself on efficiency and economic benchmarking in terms of international indicators. “We have such prudent financial management that, in the coming financial year, we will be offering financial incentives to those investors who want to move into the Atlantis area. Our hard financial incentives include the proposed waiving of development contribution fees in Atlantis and the proposed provision of time of use electricity at 2012/2013 tariffs, subject to NERSA approval. In other words, no increase in this financial year for time of use tariffs in the Atlantis area.” De Lille noted that her office has established a broad incentives package that focuses on urban management, areaspecific marketing, faster zoning applications and a general restructuring of how the City approaches people who want to do business with them. This is part of their “one-stop shop” model. She added that there will be one user interface for the private sector to hand in business applications. “We are completely overhauling our back office and internal development procedures to enable e-submissions of planning and building-plan applications by next year. The beta version will go live in July 2014 and I want to encourage you all to use it before we finalise the system. In addition to this, by next year you will also be able to self-track the process of those applications on the internet.” City of Johannesburg mayor, Parks Tau, addressed the City’s plan to develop along the Gautrain routes in order to narrow the gap between the “haves” and the “have-nots”. He said there needs to be streamlined decision-making processes

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with regards to improved clearance certificates as well as revenue and billing. The City is looking at defining a different future based on five indicators: income, employment, health, education, and the living environment. He noted that the BRT system will act as a backbone of a road-based mass-transit system that functions to knit the City together. “Spatial inequality is a problem. People cannot access urban amenities due to their location,” said Tau. He suggested six corridors of freedom that will alleviate this problem.

Celebrating African style In the meantime, Africa is showing signs of prosperity on all fronts – and especially in the property industry. Irrespective of the negative stigma, social ills, and political and economic challenges, the African continent is a thriving place. Keynote address speaker Jeremy Kelly, director at Global Research Programmes, Jones Lang LaSalle, in London in the UK said that international retailers are treating South Africa as a tester market for retail. He added that African retail is the possible catalyst of the next wave of globalisation. Kelly also mentioned that Africa is showing the fastest rates of economic growth, with 20 African cities making their mark on the retail industry. Furthermore, the rural retail development story is also something for developers to watch. Amelia Beattie, chief investment officer, at Direct Property Investments of Stanlib presented the idea of Africa as an acronym:

45th international convention report back

For more images from this incredible event, visit www.sapoaconvention.co.za.

A – The aspirational emerging middle class will drive growth on the continent. F – The fundamentals are that property demands outweigh supply. R – The rewards are still difficult to measure but sound underlying drivers of return do exist. I – There needs to be investment in infrastructure and investment in time doing work on the ground as well as learning about the cultural barriers. C – However, caution still needs to be taken. There are still challenges that need to be addressed and resolved. A – When it’s time to take action, ensure you have a balanced perspective, build partnerships, plan – and celebrate Africa’s people. Celebrating in true African style, the 45th annual convention concluded with a bang – quite literally. The final day ended with an evening beach party at the Valley of the Waves, where delegates enjoyed live music and entertainment, including dancers, fire entertainers, and a performance by Dr Victor and the Rasta Rebels. The crystal-clear water of the wave pool lit up as a spectacular fireworks display exploded into the night sky, leaving everyone breathless. In 2014, the SAPOA International Convention and Property Exhibition will be held at the real beach front in the Mother City of Cape Town. There is little doubt that SAPOA will host another highly successful convention, with more top-of-the-agenda topics to discuss, more exciting speakers, more razzle-dazzle, and more property achievements to celebrate. SOUTH AFRICAN PROPERTY REVIEW

workshop

Collaborating the future With municipalities and property developers engaged in a development juggling act, the need to streamline services and costs becomes more dire. A new report tries to smooth over the cracks By Candace King

s South Africa attempts to align itself with the rest of the globe in terms of worldclass development and economic viability, the need to decrease invisible (and sometimes imagined) walls of division between the public and private sectors becomes paramount. This was one of the focal topics at a recent joint workshop between SAPOA and the Gauteng Growth and Development Agency (GGDA). Sponsored and facilitated by the South African Cities Network (SACN), the workshop was attended by SAPOA and GGDA members as well as National Treasury representatives and key officials from several municipalities across the country, including eThekwini, City of Cape Town, Mogale City and Ekurhuleni.

Initiation of policy debate The workshop served as a platform for the initiation of policy debate as a public and private sector collaboration in relation to a report that was done by SAPOA and GGDA. The two bodies appointed Urban-Econ Development Economists to conduct a study to comparatively investigate municipal-services costs of property-related business within 18 municipalities, including nine metropolitan municipalities. The purpose of the comparison is to identify areas where specific fees are more expensive and others where they are more affordable. The study was spurred on by concerns raised by stakeholders and developers within the property-development industry as well as municipal representatives. The concerns are focused around the need for a comprehensive guide and assessment of municipal services costs impacting and hampering development. “Poles apart we may be – and different we may be seen to be. But we have a nucleus that permeates through the societies that we are all part of, that compels us to seek each other out – to gather together and begin strategic conversations that understand that business requires effective municipalities and that municipalities require successful cities and urban areas that attract and retain growing, profitable and sustainable businesses for socioeconomic growth,” said outgoing SAPOA President Dr Sedise Moseneke, who opened the workshop with a strong message focused

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Advocate Portia Matsane

on achieving growth and development through mutual understanding and efficient collaboration between public and private parties. “Where possible, such walls must be broken down and unearthed from their deeprooted, entrenched positions to make way for a South African citizenry and allegiance that aspires to witness successful planning and development of our urban spaces, and a distinctive inclusionary but unique approach towards our rural areas.” “There is a greater need by the property sector to be recognised as an essential, critical contributor to the overall gross domestic product (GDP) of South Africa,” said SAPOA chairperson of the Property Developers Forum Lionel Kisten, who was also a speaker at the workshop. “The recognition will then allow us as collaborators to assess the overall and cumulative costs, fees and taxes that are being imposed on a property developer by various organs or entities of our government. SAPOA conducted a study in 2010 through IPD, a company that is well known for its research materials. The research focused on the economic impact of the property sector in South Africa. In 2009, the property sector contributed 8,3% of the total South African GDP, and the buildingconstruction sector contributed R20,6-billion to the national wage bill.” Moseneke noted in his opening speech that SAPOA concurs with what the National Development Plan 2030 refers to as “policy making in a complex environment”, saying that

“a common theme emerging in the debate is the need for a more nuanced balance in the roles of government, the private sector and the market to achieve dynamic economic growth”. “In 2012, SAPOA took the opportunity to sit around a table with the mayors of nine metropolitan municipalities in an effort to start contributing towards building successful cities and municipalities,” said Moseneke. “In 2013, we signed a memorandum of understanding with SACN and we committed to a partnership between the public and private sectors to collaborate on issues that, to a large extent, must complement the aspirations of the National Development Plan.” These issues include climate change, human settlements, public transport, land usage, acquisition, and management and infrastructure.

Benchmark towards property-related business The study served as a benchmark to determine the estimated costs of doing property-related business, and to assess possible limitations posed by municipalities that impact propertydevelopment progress and feasibility, as well as the possibility of deterred investment within a municipality. The report could then inform focus areas for incentive development or possible negotiations between developers and municipalities to assist development promotion and investment retention as far as possible. The essence and findings of the research were presented by SAPOA’s Advocate Portia Matsane and Thokozani Thwala of the GGDA. Several facets of the report were then debated, including the research methodology, the accuracy of the data and the results of the research. Other key topics discussed included the costs and whether they were fairly based on a good financial model in view of various socioeconomic and political factors, as well as to what extent municipal services can be seen as inherently critical in creating a healthy economic and social environment within which commercial property and business can thrive.

Outline of service costs The report outlines the service costs that contribute to the establishment of residential, retail, office, and industrial property for each

workshop

FROM LEFT Nico van der Berg (Ekurhuleni), Michael Kihato (SACN), Krish Kumar (eThekwini), George van Schalkwyk (City of Cape Town), Portia Matsane (SAPOA), Thokozani Thwala (GGDA), Brian Young (IMFO), Lionel Kirsten (SAPOA), Veronica Nepfumbeda (Ekurhuleni), Sedise Moseneke (SAPOA)

of the selected municipalities. These cost components include EIA and township establishment costs; municipal application fees for zoning and subdivision; building-plan fees; connection fees for water, electricity and sewerage; consumption charges for water, electricity, sewerage and refuse removal; vacant-land rates for residential, commercial, and industrial zoned land; property rates for residential, commercial and industrial developments; and rebates for vacant land and property rates. A key observation was that there appears to be a significant imbalance in costing and fees, with wide-ranging fee structures for standard services provided by the various municipalities. It was found that transparency regarding the rationale on the rates and fees and the logic to develop formulas to calculate the amounts were lacking. Several municipal responsibilities and challenges were also highlighted in the report, including the turnaround time for applications, whether overregulation and availability of land stymies development, the level of education and skills within the relevant departments, and infrastructural maintenance and development. It was found that sufficient suitable land is lacking in areas boasting high demand and rapid development, limited staff is a major capacity issue as municipalities can’t keep up with rapid development, delayed delegations of power from top government structures are contributing to municipalities not being able to perform their duties, and outdated infrastructure that requires maintenance and upgrades is a driver of tariff and cost inflation. Several municipalities raised queries about the report’s findings in response, particularly with regard to the fees and costs. “SAPOA understands there will be diversified views about the research and encourages healthy debate around these issues, which form some of the major costs that our developers carry,”

said Moseneke. From this, the report is set to be the first of a series of reports that will be updated annually, with the workshop having set the ball in motion. For future studies, it has been envisioned that more municipalities will be selected, thus expanding the municipality scope of the report. “It is our intention to broaden the research scope to indicate cities or areas that attract development and the development costs

Dr Sedise Moseneke

related thereto to ensure that the dialogue that has begun today cements a platform on which both sectors are ad idem in ensuring that development costs do not stifle business growth or economic activity,” added Moseneke. Through the report and its outcomes, the GGDA aims to improve the competitiveness of Gauteng municipalities by ensuring fees within the municipalities are fair and market-related, as well as to inform possible interventions to promote municipal competitiveness. SAPOA’s objective is to understand the current fees and charges, and to find possible interventions or lobbying information to use in future discussions and interactions with municipalities. As a way forward, the report recommends that a method of standardisation applicable

to all municipalities needs to be investigated and developed. In addition, an index on the development costs should be created as a useful tool for the public. The option of an information technology administration system, if agreeable to municipalities and government, should also be investigated. Furthermore, an online calculator tool should be developed as a quick solution to calculate the specific costs.

Justification of municipal service charges “The reality that is sitting like an elephant in this workshop, and one that needs to be considered and debated with the interests of our socioeconomic structures and ideals, is not whether there is justification to charge for municipal services but whether the extent thereof is causing a worrying trend that is slowly witnessing a migration of business to other municipalities or countries,” said Kisten. “It is the reality that may be saying to all of us, including those departments that are not part of this study, that if the unemployment rate continues to rise and if the low income class category continues to increase, then substantial increases in municipal service fees or costs for the commercial property sector will not be sustainable in the medium to long term. The reason is that this cost cannot be passed wholly to tenants or to purchasers of properties, so the pyramid will ultimately collapse.” “Our journey together is without an end and it should be marked by a common vision and a desire to complement our respective aspirations and objectives,” said Moseneke in closing his speech. “Our journey together should be undertaken with the common vision to elevate our nation, through our municipalities and provinces, to an envied global ‘stage’, and within the African continent as an impetus that restores faith that these sectors can contribute towards a thriving socioeconomic reality.” SOUTH AFRICAN PROPERTY REVIEW

excellence awards

Property appraisal

The 2013 SAPOA Innovative Excellence Awards once again recognise significant contributions made by property players to South Africa’s built environment By Candace King

howcasing and honouring innovation and excellence in property development, the 2013 SAPOA Innovative Excellence Awards recognised several outstanding property developments at this year’s successful 45th annual SAPOA International Convention and Property Exhibition, held at Sun City in the North West Province. This year, 38 entries were received – a 65% increase from 2012. Entries were open to developments in 10 project categories, including office, retail, industrial, mixed-use and residential. “The awards honour innovators who contribute significantly to strengthening the property industry in South Africa,” says SAPOA Awards Committee chairman Pieter Engelbrecht. “Perhaps most importantly, the awards are respected as a credible measure of genuine creativity in South African property development. They recognise developments that enhance their location in an integrated way, and which effectively identify and address the urban challenge and any direct impact that it might have on communities and the environment.” The awards were sponsored by PD Naidoo & Associates, Crane Construction Consultants, Encha Properties, Standard Bank, Dube Trade Port, Remote Metering Solutions and Capital Property Fund. Here are the innovative excellence awards winners for 2013…

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Commercial Office Development Winner: Sage VIP Head Office The new head office for Sage VIP is an intriguing development that takes sustainability very seriously. Located on the corner of Aramist Avenue and Southern Cross Street in Pretoria, the 14 200m² building was developed for Sage VIP in order to consolidate all their departments into one space. Designed to be simplistic in nature and to limit maintenance costs, the building is custom-designed around the needs and requirements of the owner, while still allowing for future flexibility. It has been awarded with a 4-Star Green Star SA Design certification and also aims to achieve a 4-Star As-built certification. With an encompassing ground level and four floors, the building also features an 800m² Urban Farm on the roof, where the herbs, fruit and vegetables that are used daily in the staff canteen are grown. Developer: Menlyn Maine Investment Holdings Architects: Boogertman + Partners Architects Project managers: Pro Arnan Quantity surveyors: Pentad Quantity Surveyor Civil and structural engineers: WSP Mechanical engineers: C3 Consulting Engineers Other consultants: Cairnmead Industrial Consultants, Golder Associates Africa, ILA, SJ Franklin Principal contractors: WBHO

Corporate Office Development Winner and Overall Award Winner: Alexander Forbes Headquarters Situated in a prime position opposite the Sandton Gautrain station on 115 West Street, the new headquarters for Alexander Forbes is an iconic 36 000m² office building that pushes the boundaries of a modern working environment. It also showcases the customs of Alexander Forbes, such as transparency, trust and a healthy working environment. On the sustainability front, this chic energy- and resource-efficient building is the largest 4-Star Green Star building completed by Paragon Architects. The light and airy space introduces vegetation into the atria and provides a stimulating place to work. Developer: Zenprop Property Holdings Architects: Paragon Architects Project managers: Capex Projects Quantity surveyors: Schoombie Hartmann Civil and structural engineers: Sotiralis Consulting Other consultants: A Riley, Pure Consulting, Ramsden Consulting Principal contractors: Tiber Bonvec Construction, WBHO

The judges Pieter Engelbrecht – Growthpoint Properties Ken Reynolds – Nedbank Corporate Property Finance Dr Corné de Leeuw – Del QS Chris Lawrence – Independent consultant Hashim Bham – BTKM QS Anthony Orelowitz – Paragon Architects Rudolf Nieman – JHI Properties Sam Silwamba – Old Mutual Properties Craig Sutherland – Sutherland Engineers Wessel van Dyk – Boogertman + Partners Architects John Truter – WSP John Williamson – MDS Architecture Henk Boogertman – Menlyn Maine Zinon Marinakos – RSL & DSA International Beata Kaleta – RSL & DSA International Richard Cottrill – Abland

Retail Development Winner: Nicolway Shopping Centre With around 23 000m² of GLA, Nicolway Shopping Centre is a spacious, contemporary retail development that provides a variety of top-notch stores, restaurants, a gym and ample parking. Prominently situated at the intersection of William Nicol Drive and Wedgewood Link, the shopping centre offers superb visibility from the street. It features a tunnel around the back of the building for all the servicing for the development. The striking entrances extend the mall towards the road and create porte-cochere features, with restaurants connected to the exterior by high, sliding stacking doors that provide ventilation and natural light. The mall features two levels and is designed so that the lower level has an abundance of natural light, channelled through atrium voids that link the floors. Developer: Rodrigues Group Architects: MDS Architecture Quantity surveyors: Brian Heineberg & Associates Civil and structural engineers: Kantey & Templer Consulting Engineers, L & S Consulting Mechanical engineers: WSP Other consultants: Orion Projects Principal contractors: WBHO

Industrial Development Winner: Ellerines Hi-tech Distribution Facility Furniture retailer Ellerines was seeking a new hi-tech distribution facility in Port Elizabeth for distribution in the greater Eastern Cape area, and found the perfect site at Greenbushes, a recently established industrial node in the city. Situated near the N2, which acts as the main arterial for distribution, this promising industrial node is proving to be a suitable locale for medium-to-large tenants. The hi-tech facility was designed for the user to have competitive market rentals and to benefit from reduced operating costs. This was achieved by implementing dimmable fluorescent lighting with motion sensors, a heat pump for hotwater reticulation, sun-protection blinds on the glazed offices and external insulation for flat concrete roofs. Developer: Growthpoint Properties Architects: Loudon Perry Anderson Architects Project managers: Growthpoint Properties Quantity surveyors: MLC Quantity Surveyors Civil and structural engineers: Aurecon Mechanical engineers: Solution Station Principal contractors: WBHO

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excellence awards

Residential Development Winner: Waterfall Valley Mature Lifestyle Estate Situated in the plush Waterfall development area, the Waterfall Valley Mature Lifestyle Estate is a revolutionary lifestyle concept aimed at the mature homeowner who seeks relaxation and possible retirement. Consisting of 244 stands at an average of 800m², with a variety of customisable home-design options, Waterfall Valley boasts a commendable host of amenities, and indoor and outdoor activities that include a restaurant, pub, deli, movie theatre, bowling green, chip-’n’-putt course, horticultural centre, arts-and-crafts studio, heated indoor pool and outdoor swimming pool, hairdresser, spa, business centre, library, multipurpose hall, two gyms, and a comprehensive Frail Care Centre.

Developer: Century Property Developments Architects: Century Property Developments Project managers: Century Property Developments Quantity surveyors: Davis Langdon Civil and structural engineers: C-Plan Mechanical engineers: QMech Consulting Engineers Principal contractors: WBHO

Refurbishment Winner: The Maslow Hotel

Developer: Sun International Architects: Dakota Architecture Project managers: Proman Quantity surveyors: MLC Quantity Surveyors Civil and structural engineers: ConsulTauri Design Mechanical engineers: WSP Other consultants: Dakota Interior Architecture Principal contractors: WBHO

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With the extensive upgrading of the bustling Sandton area, The Maslow Hotel is a prime example of a move towards an even more modern business and entertainment hub. The hotel upgrade consists of an entire architectural and interior makeover, which has transformed a once-outdated building into a contemporary hotel haven. All spaces were reinvented. External redesign includes a slick new porte-cochere, a multilevel pool area, extended public areas and entertainment terraces, and a new administration building. Other redesign aspects include the introduction of contemporary bespoke furniture and finishes, and the transformation of all existing guest rooms and public spaces as well as the main and conferencing preparation kitchen with the addition of a chef’s kitchen.

Mixed-Use Development Winner: University of Pretoria ENG III & Cultural Precinct

Developer: University of Pretoria Architects: ARC Architects Pretoria Project managers: ARC Architects Pretoria Quantity surveyors: Pentad QS, Davis Langdon Civil and structural engineers: Aurecon Mechanical engineers: Spoormaker Other consultants: Delport du Preez and Associates Principal contractors: Stefanutti Stocks

As a response to the national requirement to produce more engineers in South Africa, the University of Pretoria development project combines several aspects into one vibrant cultural and educational precinct. The project saw the strengthening of a precinct that features ancillary facilities, including a new entrance, parking for 1Â 000 vehicles, auditoria, seating for 1Â 800 students, and hi-tech research laboratories. The project also includes the integration into the cultural precinct via the upgrade of the campus main theatre, the Aula, which includes the expansion of the foyer, the revitalisation of the Rautenbach multipurpose exhibition space, a new foyer/performance space for the Musaion theatre, and the provision of restaurants.

Other Development Winner: Thuto Building In light of the increasing need for new lecture halls against the backdrop of a growing demand in tertiary education, the University of Pretoria decided to have four 600-seat lecture halls developed on a small footprint on the Hatfield Campus. The site is situated in a high-pedestrian-use area on Roper Street between three buildings and large trees. The heritage impact of the site was assessed, and approval was obtained regarding the existing trees, buildings and pedestrian routes.

Developer: University of Pretoria Architects: Impendulo Design Architects, Jeremie Malan Architects Quantity surveyors: Del QS Civil and structural engineers: Civil Concepts, Egmont Furstenburg & Associates Mechanical engineers: QMech Consulting Engineers Other consultants: Delport du Preez and Associates, Marian Louw Landscape Architect, Pro Acoustic Consortium Principal contractors: Boogertman Smit Building

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excellence awards

Heritage Development Winner: Freedom Park Phase 2 Steeped in history, culture and spirituality, Freedom Park is a place of healing and remembrance, with architectural designs that pay tribute to the rocky landscape and reflect the essence of traditional, indigenous knowledge systems. It highlights an African story of creation, related by the late Dr Harriet Ngubane, which led to the inclusion of rocks and reeds in the design as crucial visual motifs. The venue features large rocks with healing properties, which lie in the landscape as large outcroppings. It was the advice of traditional healers that the rocks be placed against the hillside, where the ancestors are said to reside. Freedom Park also features a new interpretive centre and Pan-African archive that captures South African history going back about 3,6-billion years.

Developer: Freedom Park Architects: Office of Collaborative Architects Project managers: PMSA Quantity surveyors: Davis Langdon, Chauke JV Civil and structural engineers: Aurecon Mechanical engineers: Uhuru-Wetu

Innovative Property Solution Winner: Vodacom Century City Solar Power

Developer: Vodacom Project managers: WSP

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This sustainable innovative project involved the installation of a 542kWp photovoltaic array to the existing 3Â 600mÂ˛ rooftop area of the Vodacom Century City building. The yield is expected to be up to 830MWh of energy per annum. The existing ceiling tiles on the pitched section were removed and replaced with roof sheeting upon which the solar panels are mounted. The old tiles were donated to community projects. The flat roof sections are waterproofed and have an insulation layer covered by stones. The solar-panel mounting for these areas incorporated 100%-recyclable materials, which utilised the existing stones to hold them in place and therefore required no penetration to the insulation or waterproofing, and resulted in a fast installation time.

Overall Transformation Winner: Afrika Tikkun Uthando Community Centre

Developer: Afrika Tikkun Architects: The Cook Lipschitz Partnership Project managers: Afrika Tikkun Quantity surveyors: Russel Ions & Associates Civil and structural engineers: Norman Caplan Principal contractors: Esprit

The transformation story of this project is a touching one. In 2011, Afrika Tikkun concluded an agreement with the Department of Infrastructure Development, enabling them to lease part of the old Transvaal Memorial Children’s Hospital building. The building had been abandoned for more than 30 years as a result of mysterious deaths of some children. It was later discovered by Afrika Tikkun that this was because of the blue asbestos in the interior walls. Afrika Tikkun removed all the blue asbestos and restored the building. Located at 10 Joubert Street Extension in Braampark, opposite Constitution Hill, the Afrika Tikkun Uthando Community Centre comprises 1 944m² of classrooms, office space spread over five floors, external parking, two playgrounds and a vegetable garden. It provides education, health and social services to children, youth and their families, and aims to empower communities to develop new generations of productive citizens.

Overall Green Award Winner: The Lakeside Office Building Situated on the north bank of Centurion Lake, directly opposite the Gautrain, the refurbished Lakeside office building is designed for a 4-Star Green Star office v1. The five-floor lowrise redeveloped office building consists of 5 223m² of A-grade office space. Fundamentally, the transformed redevelopment embodies sound principles of liveability and environmental preservation through the intelligent reuse of the existing building structures. It encloses its core space through a new glazed atrium, with an openplan office configuration arranged around the atrium. All internal fire-escape stairs and vertical service shafts were stripped out to free the floors for exceptional and efficient space planning layouts.

Developer: Growthpoint Properties Architects: AMA Architects Project managers: CPD Construction Projects & Developments Quantity surveyors: Davis Langdon Civil and structural engineers: PDNA Mechanical engineers: ACAS Other consultants: Solutions for Elevators S4E Principal contractors: Exabuild

SOUTH AFRICAN PROPERTY REVIEW

launch

Road to REIT-dom South Africa’s REIT journey began seven years ago. It has now come to fruition with the launch of the SA REIT Association – and this is only the beginning By Candace King

Consolidating and replacing the Property Loan Stock Association and the Association of Property Unit Trusts, the SA REIT Association is a representative umbrella body consisting of voluntary members of all the listed SA REIT companies and trusts. The association is modelled on NAREIT (National Association of Real Estate Investment Trusts) in the United States and EPRA (European Public Real Estate Association) in Europe. With a current market capitalisation of about R250-billion, the South African listed property sector has grown exponentially. Over the past 10 years it has consistently outperformed local equities, bonds and cash. It has been forecast that, in 2014, the sector will become the eighth-largest REIT market in the world, with about 26 REIT entities and counting.

SOUTH AFRICAN PROPERTY REVIEW

ith a collaboration of hard work and long hours, the road to REITs has finally culminated in the much anticipated and equally celebrated launch of the SA REIT Association. Officially launched on 23 May 2013 in Sandton, the SA REIT Association is set to boost the listed property asset class and is tasked to represent the listed property REIT sector, one of South Africa’s most active and innovative sectors on the JSE. We caught up with Norbert Sasse, SA REIT Association Chairman and CEO of Growthpoint Properties about the REIT dream and what it means for South Africa.

Q Now that REITs is finally here and the association has been established, how will the South African listed property industry change in your opinion? What are the focal benefits and positives of REITs in our country? The SA REIT has opened up new potential for the SA listed property sector. The SA REIT gives the listed property sector an internationally-recognised structure, in which good governance and best practice is ingrained, which will allow the sector to grow with tax certainty. It is also flexible enough to adapt to various models while encouraging best-ofbreed practices. This is attracting new listings to the sector, which are set grow its market capitalisation even further. South Africa’s new REIT structure has also put the listed property sector more firmly on the radar of international investors. Q What are the challenges within the South African listed property sector and how can the SA REIT Association address these challenges? Some of the headwinds we face are not unique to the listed property sector but impact on all property owners and businesses. Issues we are faced with include availability, reliability and cost of electricity supply, increases in rates and taxes coupled with deteriorating infrastructure and service delivery, ineffective town planning processes and generally poor town planning decisions to mention but a few. We will continue to lobby regulatory bodies on matters of common interest or concern, and

Norbert Sasse

raise awareness of SA REITs with the media, wider investment community and individual investors. As the unified voice of SA REITs, the new SA REIT Association plays a pivotal role in communicating about our sector. We aim to make the SA REIT clearly understood. For members, the SA REIT Association will offer knowledge-driven opinion and policy, emphasising global best practice and provide representation on various commercial property working groups. Already the SA REIT Association and its members are turning the spotlight on best practice for accounting and reporting, which will provide investors with improved reporting quality and assist them in comparing and understanding the different REITs.

Q The JSE has been tasked to act as a regulator of REITs, how will the JSE go about doing this and are there any perceived challenges around this? The JSE will regulate Company REITS in same way that they regulate any other company listed on the JSE. This is great for the sector’s investors as it means shareholders are active participants. They enjoy the full protection of the Companies Act and Takeovers Regulations Panel and can vote on specific issues in a general meeting. Shareholders also get to vote for the company to convert to a REIT. All this should provide investors with a great sense of comfort and ensure transparency and accountability.

launch

FROM LEFT Andrew Brooking, Estienne de Klerk, Richard North, Norbert Sasse, Nic Morris and Laurence Rapp.

Q Do you believe that the ‘no entry tax to become a REIT’ benefit will attract more listed companies to ‘REIT-dom’? Absolutely, yes. The market is already buzzing with potential new REIT listings. Although, for existing listed property companies, the benefits of the SA REIT dispensation alone, and the sustainability that this tax certainty provides, is incentive enough to seek a REIT listing on the JSE. The only deterrent will be the recent volatility in interest rates and listed property share prices. Q What happens if a particular REIT company over time loses steam and its rental income decreases below 75% of its total gross income, will their REIT status be taken away from them? It’s highly unlikely that any REIT would allow this to happen because of the heavy tax burden they would face if they lost access to the SA REIT tax dispensation. But, theoretically, yes, it would no longer qualify as a REIT on the JSE and would lose access to the SA REIT tax dispensation. All of the JSE Listings Requirement criteria must be met, and sustained, to be listed as a REIT. Q What are your thoughts and hopes for REITs in South Africa? Our new SA REIT legislation and tax dispensation is a significant development for South Africa’s publicly traded real estate sector. It achieves the goals that we set out to realise when we took the first steps of this journey seven years ago: tax certainty, simplicity, transparency and flexibility. The listed property asset class has a rich and respected history in South Africa, dating back to 1969. Our sector is defined by good performance - even in troubled times - innovative and excellent management, conservative levels of gearing and solid financials and, with the advent of the SA REIT its growth is set to continue. Introducing the SA REIT is likely to place South Africa in the top 10 REIT jurisdictions in the world. In fact, should all the JSE listed property companies and trusts convert to SA REITs on the first day of their next tax year, South Africa could

become the 8th largest REIT market in 2014. The listed property asset class has notched up standout performance in South Africa over the past 10 years. It has outperformed all other local asset classes. It also notably outperformed REITs from the developed world. It has also grown significantly in this time. The new SA REIT dispensation should drive continued growth of the listed property sector, with several new listings expected. The sector offers high forward yields. According to local analysts, the sector’s average forward yield is presently just over 6.5% as at May 2013.

Sponsored by Rand Merchant Bank, the launch was attended by key figures who make up the Association’s representative body. Also present were representatives from the National Treasury, the South African Revenue Service (SARS), the Financial Services Board (FSB), the Johannesburg Stock Exchange (JSE) and various sector stakeholders.

Benefits of REITs l The unique structure of the SA REIT asset class, provides two possible ways of beating inflation: capital investment growth and regular income distributions that grow. l SA REITs have equity and bond characteristics. SA REITs offer investors the best of both worlds. A reccurring cash distribution yield like a bond as well as growth in income like equity. l Your investment is underpinned by lease agreements with tenants in property assets. l Importantly, most rentals escalate annually at around 8% on average in the current market, creating sustainable growth. l The entry cost for a REIT investment is the price of a single share. Investors can also buy or sell shares in SA REITs at any time, without the costs and delays involved with physical property ownership. l The management of SA REITs is performance driven and entrepreneurial. This means they are driven to get the best sustainable performance from property assets. Listed property has outperformed physical property due to

professional focused management. Also, SA REIT investors don’t have the headache of managing the properties in which they are invested. l Because SA REITs earn income from property lease income that escalates each year, they have relatively predictable earnings. So you know what to expect from your investment with reasonable certainty. l SA REITs also provide a lower-risk property investment model because investors are exposed to a diversified portfolio of properties that are actively managed by companies which have strict governance requirements. l The SA REIT is an effective diversification tool in an investment portfolio. Correlations with the broader equity market are low, at around 0.3%, therefore adding SA REITs to an equity portfolio will enhance return, for the same level of portfolio volatility. l If you are invested in SA REITs as part of your retirement annuity or pension, provident and preservation fund, you will pay no tax on your capital gains or distributions.

SOUTH AFRICAN PROPERTY REVIEW

eye on africa

Africa: the last frontier With Africa in the fast lane, seamlessly overtaking Asia, there’s prime property opportunity for South African property moguls who are grabbing the continent by the horn By Candace King

anadian motivational speaker and author Brian Tracy once said, “The future belongs to the risk takers, not the security seekers. The more you seek security, the less of it you will have; and the more you pursue opportunity, the more security you will achieve.” When it comes to investing in Africa, they say that perceived risk is far greater than real risk. With Africa fast becoming Asia’s rival as the continent with the second-largest population growth rate, it is proving to be a place of potential. According to leading international organisations such as the Overseas Private Investment Corporation and the UN Trade Agency, Africa boasts the opportunity for the highest return on foreign investment in the world – foreign direct investment has increased by about 50% since 2005. “Since I’ve been involved in real estate in Africa over the past couple of years, I’ve heard a consistent mantra of Africa as the next big thing,” says Neil Jarvey, business development executive (Africa) at JHI Properties. “I think the more people repeat this, the more likely it is to become a self-fulfilling prophecy. I also think that there’s a huge need for collaboration in developing Africa.” JHI manages properties on behalf of developers Report and is involved in new projects as well as existing developments. JHI Properties continues to expand its base and service offering in African markets, and already operates offices in Botswana, Zambia, Namibia, Nigeria, Lesotho and Ghana. Last year,

2013

AFRICA

“Since I’ve been involved in real estate in Africa over the past couple of years, I’ve heard a consistent mantra of Africa as the next big thing” Neil Jarvey, business development executive JHI Properties

of Sanlam Properties, a division of Sanlam Capital Markets Limited. “This is where Africa is offering that yield. Capital in the rest of the world is tight, and investors have to find a home for their capital. Although off a low base, Africa presents opportunities to get returns that are well above what the developed world is experiencing. On a risk-adjusted return basis, the returns are compelling.” Reilly also notes that the South African market has been very liquid and has grown tremendously over the past 15 years, especially in the listed space. He also believes that the African continent is currently going through a metamorphosis, with many retailers and developers pushing into the space quite aggressively.

Africa’s turn JHI made further inroads into the Zimbabwean market and is to manage the property portfolio of a new, unlisted property investment fund, Ascendant Property Fund. With 54 countries and more than 30-million square metres of land, the “overlooked” continent is relatively untapped and serves as a paradise for FMCG companies as well as retailers and property developers. With a market that’s starting to come into its own, Africa presents opportunities for diversification from the over-debted growth margins of the European and American markets. “If one looks at the developed world there’s no doubt that there’s a struggle to find yield,” says Thomas Reilly, the CEO

Since the global economic meltdown, Africa has performed an output of six percent or more GDP growth with minimal debt/GDP ratios. Nearly 28% of African countries achieved growth rates above six percent, with some rivalling the growth rate of China. Standard Chartered Bank predicts that Africa’s economy is set to grow at an average annual rate of seven percent over the next 20 years – slightly faster than China. According to www.worldbank.org, the combined GDP of the African countries in 2008 was close to US$1,6-trillion. Africa’s real compound GDP growth between 2002 and 2009 was about five percent per annum, a figure significantly higher than those of developed countries.

Figure 5

Foreign direct investment inflows to Africa 40 35

US$ billion

30 25 20 15 10 5 0

2000

2001

2002

2003

2004

2005

Sub-Saharan Africa

Source: United Nations Conference on Trade and Development (UNCTAD)

40 6 Figure

SOUTH AFRICAN PROPERTY REVIEW

Prime retail rents 140

2006

2007

North Africa

2008

2009

2010

2011

2013

After averaging growth of less than 3% per annum during the 1980s and 1990s, Africa’s GDP has risen by more than 5% per annum, on average, since 2000, outpacing most other global regions. During this period, countries such as Nigeria, Angola and Equatorial Guinea have been among the fastest growing economies in the world, each expanding by over 8% per annum. As a reflection of Africa’s growing wealth, the World Bank now classifies 27 of Africa’s 54 nations as either mid or high income countries, 12 more than was the case in 2000. Zambia and Ghana were both upgraded to mid income status in 2011.

CAPE VERDE (4.3)

SENEGAL BU GAMBIA (3.7) (-1.6) GUINEA GUINEA (4.8) BISSAU CÔTE (-2.8) D’IVOI (8.1) SIERRA LEONE LIBERIA (21.3) (9.0)

AFRICA Report

TUNISIA (2.7)

GDP per capita by purchasing power parity (PPP), 2012

ALGERIA (2.5)

Figure 5

eye on africa

KEY:

MOROCCO (2.9) LIBYA (121.9)

Foreign WESTERN direct investment inflows to Africa

EGYPT (2.0)

US$14,000 or above

SAHARA

US$7,000-13,999

US$4,000-6,999

US$ billion

CAPE 35 MALI SUDAN ERITREA VERDE MAURITANIA US$2,000-3,999 (-4.5) (-11.2) (7.5) (4.3) (5.3) NIGER (14.5) US$1,500-1,999 30 SENEGAL CHAD DJIBOUTI (3.7) BURKINA FASO (7.3) US1,000-1,499 (4.8) GAMBIA 25 (7.0) BENIN (-1.6) GUINEA Below US$1,000 ETHIOPIA GHANA (3.5) GUINEA CENTRAL (4.8) SOMALIA SOUTH (8.2) (7.0) 20 BISSAU NIGERIA AFRICAN CÔTE SUDAN No data available (-2.8) (7.1) REPUBLIC D’IVOIRE (-54.9) (4.1) TOGO (8.1) 15 SIERRA CAMEROON (0.0) = GDP growth estimate, 2012 (%) (5.0) LEONE LIBERIA (4.7) (21.3) (9.0) UGANDA KENYA EQUATORIAL GUINEA Source: International Monetary Fund 10 (4.2) (5.7) (5.1) GABON RWANDA (6.1) SÃO TOMÉ & PRINCIPE 5 KEY: (7.7) BURUNDI (4.5) DP per capita by purchasing (4.2) SEYCHELLES DEMOCRATIC REPUBLIC 0 ower parity (PPP), 2012 (3.0) TANZANIA 2007 2000 2001 2002 2003 2004 2005 OF 2006 2008 2009 2010 2011 REPUBLIC OF CONGO (6.1) (4.9) THE CONGO (7.1) US$14,000 or above Sub-Saharan Africa North Africa US$7,000-13,999 MALAWI ANGOLA Source: United Nations Conference on Trade and Development (UNCTAD) (4.3) COMOROS ZAMBIA (6.8) US$4,000-6,999 (2.5) (6.5)

US$2,000-3,999Figure 6

ZIMBABWE MOZAMBIQUE (7.5) (5.0) MADAGASCAR (1.9)

US$1,500-1,999 Prime retail rents US1,000-1,499

NAMIBIA (4.0) BOTSWANA (3.8)

140

Below US$1,000 US$ per sq m per month

No data available

120

LESOTHO (4.2) SOUTH AFRICA (2.6)

100 (%) 0.0) = GDP growth estimate, 2012

ource: International Monetary Fund 80

MAURITIUS (3.4)

SWAZILAND (-2.9)

Tunis

Lilongwe

Dakar

Harare

Kampala

Khartoum

Douala

Dar es Salaam

Addis Ababa

Gaborone

Nairobi

Lusaka

Casablanca

Durban

Cape Town

Maputo

Kinshasa

Johannesburg

Accra

Abidjan

Algiers

Lagos

Abuja

Tripoli

Cairo

Luanda

20 0

Source: Knight Frank Research

“Nigeria is certainly receiving a lot of attention,” says

“The formalisation of the Africa property and

Investment in property set to grow infrastructure sectors in general, especially in sub-

investors Atterbury and Sanlam. Both Atterbury and Sanlam are planning Reilly. “It’s a large, resource-driven economy that’s further property investments outside of South Africa, while RMB Westport, Although Africa is receiving increased investment growing at a rapid rate and, as such, it cannot be Saharan Africa, is paramount,” says David Kinyua, a from overseas, there as Nigeria, with affiliated to the Johannesburg-based Rand Merchant Bank, is also active remains activityfinancial involving international investors in the property ignored.” regionallimited infrastructure advisor and director in the region, a population sizehaving completed the raising of US$250 million for its Real sector. TheGroup continent’s largest and most According to the March 2012 Goldman Sachs at Acorn Africa. “Globally there’s anmature aversionproperty investment Estate Development Fund in 2012, which will principally focus on the market by some Africa, than triple Equity Research Report, the time to do business in to risk is, given events distance, in the WestSouth G7 states, butwhere Africaover US$800 million of moredevelopment of office and retail projects in Ghana, Nigeria and Angola. commercial property transactions were completed during 2012, according

“Markets such

remains a beacon of hope, largely insulated from the

that of South

and institutional debt.”

particular will need an Africa strategy sooner rather for quality closing retail its first real estatethan fund in 2006, Actis has been involved in the later.”

Africa is now. The editor of the report, Hugo Scott-

to Real Capital Analytics data. Domestic funds dominate the South African Actis and the Russia-based Group aremeaningful the best known a Gall,Renaissance noted, “There is both growthofand financial risks that have plagued those markets Africa, have a market, with investors such as Dipula and Vukile being among the most small number of emerging market specialists from outside Africa that change [in Africa], and consumer companies in because of its comparatively low levels of household healthy appetite active buyers in 2012. are actively developing and investing in property in the continent. Since Outside of South property markets remain small and Samuel Ogbu,Africa, CEO of Liberty investment Properties, notes opaque, although there is evidence of increased that investment in African real estate has tripleddemand for property from South African looking to gainasexposure between 2010 and funds 2012. “Markets such Nigeria, to markets elsewhere inwith Sub-Saharan Africa. This is demonstrated by the sale of the UK-based a population size more than triple that of South investor Actis’s 85% stake in Accra Mall in 2012, Africa, have a healthy appetite for quality retail outlets.to the South African

Ghana also presents opportunities, particularly if you consider its high ranking among African countries 8with regards to ease of doing business, as do Kenya, Uganda and Tanzania in the east,” he says.

MAURITANIA (5.3)

development of ten projectsThe in five countries, including The Junction outlets” report also states that “Africa’s exceptionally shopping centre in Nairobi and The Palms mall in Lekki, Lagos. late robust growth over the last decade is Inprobably Samuel Ogbu, 2012, Actis confirmed that it had raised US$278 million for its second understated, but not being able to measure this CEO Liberty Properties African fund, Actis Africagrowth Real Estate 2, which will invest in retail office precisely shouldn’t detract fromand Africa’s potential, which is about much more than resources With a population size almost equalling that of as it evolves and climbs the consumption, urbanisation Brazil, Nigeria has proved to be the continent’s and perhaps industrialisation curves that the BRICs golden boy in terms of both growth and opportunity. have climbed.” SOUTH AFRICAN PROPERTY REVIEW

AFRICA Report

eye on africa Figure 4

Prime office rents 150

Tunis

Lilongwe

Harare

Gaborone

Nairobi

Addis Ababa

Durban

Kampala

Cape Town

Lusaka

Johannesburg

Dakar

Dar es Salaam

Abidjan

Douala

Khartoum

Casablanca

Maputo

Kinshasa

Tripoli

Cairo

Accra

Algiers

Abuja

Lagos

Luanda

US$ per sq m per month

120

Source: Knight Frank Research

the witnessing benefit of scale that attracts so development many foreign The Report broadlytechnology classified African The growth of Africa’s sectorcountries is creating demand for office Both Luanda and Lagos are considerable office “The strategy investors,of and been forecast that with Nigeria will activity, and the recent delivery new it’s buildings, combined a slight under from four categories: driving, and space, occupiersthriving, including largestriving multinational IT companies such createofademand from international occupiers throughout the global overtake South Africa’s economy at some point in first as category, includes South assurviving. IBM andThe Oracle, well aswhich African telecom giants including MTN and is toeasing economic helped cool the rental growth which was for downturn, hasthe future.toGhana, onrapid the other hand, is having quite Africa, involves thoseSmaller countries that arecompanies performinghave been supported platform Kenya’s Safaricom. start-up at its strongest during the the supply a 2007-2009 leg-up from period. oil and Nonetheless, gas finds in recent years. Inof well and boast ofrelatively good byexceptionally the establishment of dozens innovation centres and technology institutional good quality office spaceNorth remains highly constrainedAfrica, and ispeople unlikely Africa and francophone are to still infrastructure, natural and in Nairobi, Hive Colab incubators over brimming the last three years,resources such as iHub investors – be sufficient to satisfy demand for some time. While Luanda and Lagos very shy of investing due to political and language economies. The “driving” category includes These hubs provide instable Kampala and ActivSpaces in Buea, Cameroon. not only South cases, high quality are extreme space built specifications barriers.office I think it will taketo athe while before people countries thatwork are expected be entrepreneurs the drivers of Africa’s collaborative spacestofor and investors and are expected by international companies is scarce in many other African invest in such areas.” African but also potential over the next decade but needclusters, to atgrowth the heart of Africa’s emerging technology which include cities, and there are limited choices of quality space available tenants Many of these real-estate assets in Africaforwill form improve their Lagos governance, infrastructure andrespectively as “Silicon international” those in Nairobi, and Cape Town, known securitised and income-producing education. The third category includes those that are looking to enter markets part suchofas Lusaka and Dar es Salaam. funds such Savannah”, “Silicon Lagoon” and “Silicon Cape”. lagging behind on development and wealth but could

Kenya is at the forefront of Africa’s technology boom and its Thomas Reilly, be lifted from the broader growth and development of ambitions to establish itself as a global centre for the tech sector CEO Sanlam Properties the continent. The final category is made up mostly are encapsulated by Konza Technology City, a US$10 billion project of the big, land-locked countries that need political marketed by the Kenyan government’s ICT Board, which is planned stability to progress. for construction over the next 20 years on a 2,000 hectare site, 60 km Several factors present in Africa’s numerous In addition, historic constraints to large-scale south east of Nairobi. The project is directly modelled on California’s countries are contributing to the continent’s growth. development of property are being removed as banks Silicon Valley and is designed to include a technology park, university These include improved governmental competence begin to offer debt at more attractive levels, and the campus, science park and central business district, alongside and political stability, favourable demographics, a market is becoming institutionalised. The listed residential properties.

natural-resources boom, infrastructure development property space in sub-Saharan Africa (outside of and increased urbanisation, a communications and South Africa) is virtually nonexistent and will create Demand outstrips supply keyand property internet upswing, an emerging middleinclass a large markets market for existing developments once it growing population, of equal wealth to take off.” While theworking technology sector creation is an emerging source of begins office demand, and an increase in spendingfrom power, In related light oftothis, the recent improvement in multinational companies theincreased bankinginternal sector and firms consumption, improvement in education, the return quality, availability and affordability of real estate in the oil and gas industry remain key drivers of activity in some of Africa’s of a large number of people who had previously left Africa is driving the continent’s growth. With this most dynamic office markets. In Luanda and Lagos, particularly, the the continent to live/work/study abroad, and the need growth, demand is also driving the need for more strength of demand from these sectors, combined with a severe lack and demand for quality property stock. high-quality real-estate stock in Africa, which in turn of high quality office space suited to the requirements of international presents opportunities for property developers and occupiers, creates some of the highest office rents in the world. Prime peripheral property services companies. Currently on Real estate, office rents in Luanda are currently US$150 per sq m per month, higher the continent there exists a land gap, and new real investment than in London, Hong Kong or New York, while prime rents in Lagos are are proving to be There are more than 50 African cities with populations developments across the board Nairobi US$85 perthan sq m month. of more oneper million people. Two thirds of these sound investments. “In terms of growth and performance in real cities are in dire need of real-estate and infrastructure improvements, and of these at least 50% do not have estate, Southern Africa is relatively stable with a 6 a single shopping mall. “Greater Johannesburg, by modest level of growth and returns, while a few comparison, has approximately 70 malls,” says Johan countries (such as Zimbabwe) are still in limbo,” says van der Merwe, chief executive of Sanlam Investments. Jarvey. “East Africa, and Kenya in particular, has seen “As sub-Saharan Africa develops we will experience some fairly high growth, and West Africa – especially a convergence towards these levels, which implies that Ghana and Nigeria – seems to be the area with a demand will exceed supply for well over a decade. huge amount of focus at the moment. Nigeria has 42

SOUTH AFRICAN PROPERTY REVIEW

as the exciting, first-of-its-kind Sanlam Africa Core Real Estate Fund (the Fund), a listed REIT-type fund focusing exclusively on Pan sub-Saharan African real estate. “This is not just a first for Sanlam, it’s also a first for the market,” says Reilly. “The strategy is to create a platform for institutional investors – not only South African but also international – in order to have the opportunity to access African real estate.” The objective of the Fund is to create a Mauritian listed investment vehicle catering for investment in sub-Saharan African core commercial real-estate assets. Properties chosen for inclusion in the Fund will be completed properties of investment grade with little or no development risk associated with them. The Fund is a first in terms of being one of the very few African real estate funds to exist outside of South Africa. Those that do exist are mainly property development funds, which are highly exposed to development risk. The Sanlam fund avoids such exposure. The Fund size is unlimited, with multiple capital raisings and returns that involve a mix of income distributions and capital gains. The Fund will make direct investments in specific sub-Saharan African countries outside of the South African Common Monetary Area (CMA), which consists of South Africa, Namibia, Swaziland and Lesotho. Apart from listed funds that are making headway, the leader of the real-estate pack is retail. “South African retailers are really trying to drive and expand their offerings into the rest of sub-Saharan Africa. To

eye on africa will be able to own houses, which will lead to growth in this sector,” says Jarvey. “The office market is not showing a huge amount of growth but it varies from country to country. And industrial is in a relatively similar situation.” “There’s a market for select office space where one has blue-chip tenants coming in with longterm leases,” says Reilly. “As time goes by, I think there will be demand and growth in the industrial sector, with examples including large distribution centres.”

To Africa and beyond

ABOVE Amani Place is an Actis office building in Dar es Salaam, Tanzania, with Barclays, FNB and other banks as tenants BELOW An office development in Accra, Ghana – currently under construction

a large extent, the South African developers are also spearheading such development projects across the continent,” says Reilly. “There’s also an ever increasing aspirational class of people in Africa that want to go shopping in nice shiny shopping malls,” says Jarvey. “With regards to retail, there’s huge demand and opportunity. In Lagos, for example, there are basically only two notable malls that are considered on par with South African standards and size, so a lot of South African

developers are entering into West African retail.” The likes of Shoprite, Massmart, Checkers and Mr Price are now moving north of the South African border in an effort to become involved in the African real-estate opportunity. The other property sectors are not far behind. “Residential has a huge amount of growth potential in Africa. The number of people who have access to a mortgage is exceptionally low, so once some of the credit lines become more open, more people

Developing investment opportunities and establishing real estate assets in Africa are not without challenges. Developers and investors face various obstacles, including proof of ownership, property rights, high building costs, poor town planning, shortage of skills and limited infrastructure. Lack of infrastructure and road congestion are major problems in Africa. There are a number of developments that aim to overcome this problem, including the urban development of Tatu City in Kenya, which aims to alleviate congestion in the main cities. Tatu City is an exciting multimilliondollar satellite town planned on the outskirts of Nairobi. It is set to cover more than 1 000 hectares and will comprise more than 22 000 residential units and two million square metres of office, retail and light industrial spaces, as well as community facilities such as public service transport interchanges, health facilities and recreational parks. “These types of developments are interesting – they are not only investments but also long-term solutions to Africa’s problems,” says Jarvey. Another factor is access to finance. “If you look back at the last five years or so, finance along with capital was a relatively scarce commodity,” says Reilly. “What we have seen of late is that the playing field as far debt financiers are concerned has definitely grown – so I think the barriers that were previously experienced in terms of debt finance have definitely dropped and there are a lot more players coming to the market.” However, taking the risk is far greater than steering clear. “We see Africa as a really exciting space, particularly the CMA area of sub-Saharan Africa. The levels of opportunity are enormous, with levels of growth aligned to that,” says Reilly. “As long as one focuses on countries that are experiencing high growth, countries that are politically stable and democratic, and countries that have legal frameworks that are comfortable to operate in, then there will be immense opportunities.” “You need to know your market and you need to have local presence in that market,” says Jarvey. “It’s not something you can just dip your toes into and then get the returns or a risk-free investment. The next five to 10 years are positive for Africa. There’s a new level of movement of people who want to make things happen.” SOUTH AFRICAN PROPERTY REVIEW

interview

Ekurhuleni Mayor Mondli Gungubele on Gauteng’s aerotropolis T

he biggest challenge of creating an airport city is integrating the infrastructure and development in the nine separate towns that make up Ekurhuleni. What drives us are the opportunities that lie in airport economies. The economy has evolved from high mass to value to an increased value in low mass. Today, you have a lot of products with high value to mass (computer chips and car parts) and, because they’re small, have high value and are in greater production, their means of passage is via air. In this kind of economy, the airport becomes a strategic location. The opportune moment for Ekurhuleni is that OR Tambo International Airport is the closest to the actualisation of this potential based on the kind of infrastructure we have: we host the rail hub of Africa in Germiston with the rail network moving along the airport; and we are also crisscrossed by a series of highways (N23, N12, N3, R24 and R21). This type of economy functions on the multimodal transport connectivity. Once you integrate the roads with the rail and link the aviation, then this kind of economy will begin to thrive.

The aerotropolis is happening in Gauteng. We speak to the Mayor of Ekurhuleni, Councillor Mondli Gungubele, about how the airport city – its nucleus – holds this ambitious project together By David A Steynberg

SOUTH AFRICAN PROPERTY REVIEW

Building the airport city Historically, our infrastructure put us in an opportune position based on where the airport is situated. But the challenge we have is to reorganise it so that the potential is there and is actualised. The airport city is built around the airport, with the airport being its centre. The key strategic stakeholders are the airport, the airline and the region. In our context, the region is Gauteng. Because the impact of this type of economy has an influence on a 60km radius from the airport, this economy makes the entire Gauteng an aerotropolis, with Ekurhuleni being the airport city. The challenge we have when advancing in this direction is that the centre must be constructed to be a viable anchor so that everything else relies on it. With Ekurhuleni in the east of Gauteng, the biggest challenge we have is a seamless movement of passengers and goods throughout Gauteng towards the airport.

I’m happy to say the stakeholder buy-in and participation that is key to the success of ensuring a seamless Gauteng towards the airport, is intact and powerful. We enjoy the support of all the other metros around us. Therefore building the network towards the airport is key. But to us, the challenge is to build the centre. The question is, how do we reorganise Ekurhuleni – in particular, the airport – into a compact city? Naturally, we have to identify strategic land parcels around it and think: if we were to make Ekurhuleni a compact city, but starting from the airport centre to the periphery, how would we reorganise the land parcels and their use in a manner that would help us build a compact city?

Strategic locations Our technical team has been able to expose us to the fact that there are 145 strategic land parcels in the entirety of Ekurhuleni. There are strategic ones around the airport as well. We are working on a process of configuring the commerce with regards to the land parcels around the airport. How do we configure it in such a manner that, whichever developer comes (be they a Type 2 industry or IT), we can determine the type of city they are leading us to while they’re busy developing it? We believe that, to the developers, our vision must be clear so that there will be no losers. It must be a win-win: they want to make money and must be able to do so; we want to build a completely sustainable city that is strategic to render Gauteng a successful aerotropolis.

interview

The stakeholder buy-in and participation, which is key to the success of ensuring a seamless Gauteng in the area around (and leading to) the airport, is intact and powerful Very soon we’ll be going towards the tail end of the process requesting proposals to develop the strategic land parcels around the airport. We don’t want this to happen haphazardly. We want to arrange it spatially to maximise its commercial viability.

Reinventing the township Right now, the historically disadvantaged townships around the airport are one of the biggest challenges. We are finalising a township regeneration plan, which seeks to organise these townships so that when this economy begins to fly, they are able to take advantage of it. Within this township regeneration plan we have identified economic nodes that investors can use to go to the townships, linking them with the airport so that there’s a movement of goods between the settlements and the airport. Being in the township should not be a disadvantage. At the same time, once the economy of the township takes off, it will breathe life into the broader community as people begin to see hope and become part of the bigger value chain. For this to be popular for our people they must also be able to extract benefits from it. Ekurhuleni has three principles: sustaining high service delivery, transforming the city (ensuring the disadvantaged come into the economy, and re-landscape the city and reorganise it to exploit the growth path of the airport city), and making Ekurhuleni a preferred destination for wealth creation, happiness and enjoyment.

For the townships to become a preferred destination, they must first be preferred by investors, tourism and entertainment. In other words, entertainment must take place in the townships, economy must live in the townships, and tourism must take place in the townships. The nodes that we have identified must be dominated by hospitality objectives. Altogether, they must turn each township into a modern city.

Gearing for chance Our people must be ready to grab opportunities as they emerge. To ensure that this happens, our economic planning unit is developing entrepreneurs and promoting interest in the entrepreneurial economy. Our unemployment rate sits between 27% and 29%. The scary thing is that, within this number, 92% of the people are unskilled. For Ekurhuleni to compete it must zoom in on the smart economy, which must absorb skilled people. Yet our intention is also to kill unemployment. If that 92% stays as is, those people will remain unemployable, and the purpose of developing the economy will not be achieved. So we are moving in the direction of a memorandum of agreements with our FETs. These include: 1 We want to work with the FETs to orientate their curriculum within the needs of Ekurhuleni’s industry. 2 We are moving heavily in the direction of incubation with the DTI. We need to ensure our memorandum with the FETs is in line with the incubation.

3 Our other objective involves research and development. All of the above are supposed to prepare young people to be entrepreneurs. At the same time, those who are already struggling need to be trained and equipped with capabilities that they did not have before. Through our programme of recognition of prior learning we have found that there are many people in the townships who are semithis and semi-that. We are absorbing them to be trained in what they know already so that they are no longer semi-skilled. What this does is pull in a huge chunk of township residents to give them capabilities to be viable competitors in the mainstream economy. We’ve also recruited 165 students and we’ve trained them; within the next 15 months they will be employable and channelled into various fields. The point is there are various interventions taking place in the townships and investors need to take advantage of the opportunities that exist there.

Not a trade port Since we strengthened the call for the aerotropolis in 2011, the movement around the airport has been amazing. The challenge we have now is not to be flooded by pure distribution. There must be a balance between distribution and original production around the airport. In the corridor between the airport and Pretoria, our ambition is to have Type 2 industry (IT and so on) dominate the area. SOUTH AFRICAN PROPERTY REVIEW

interview

But we want a healthy balance of distribution and production centres because if we do not watch this, we stand to become the global basket for these technologies, which would render us a mere trade centre. That’s not our intention nor what we aim to be. We will ensure that once the land parcels are available, approval of applications is quick. We are working towards an investment and development facilitation framework to ensure that we take less time to approve applications. In other words, if a developer wants to develop, it must not be his problem to make sure he develops there. We want to accept the primary responsibility of helping him to do his work because his work is not approving applications, it is developing.

Bulk infrastructure The aerotropolis is taking off and once it flies, if we are not ready in terms of infrastructure, the whole dream will be blown away. In 20 years we have developed a healthy clarity in terms of providing infrastructure. But we still have a huge backlog. We are busy with a complete plan that involves energy, water and sanitation, roads and infrastructure. Spatial planning is quite advanced. It’s a question of road infrastructure because, as the saying goes, it’s not businesses competing in economies, it’s supply chains. In other words, if you invest in Ekurhuleni the cost of doing business must be competitive. There must be no confusion: if you’re a supplier, your customer must receive your goods at the right price, at the right time and at the right quality. All those talk to supply-chain management – roads, energy, water, infrastructure. Combining those will go a long way to ensuring our supply chain is a competitive one. We are equal to the task in terms of infrastructure in the next 20 years, though there is a lot of work that needs to be done in the long term. We are currently conducting a capital investment framework to guide the strategic investment parcels. We want to make a bold move and say 60% of our capex/budget must go towards strategic economic infrastructure.

SOUTH AFRICAN PROPERTY REVIEW

If you look at the number of major strategic infrastructure proposals that form part of our “Look North” plan (the entire R21 corridor), it is massive. Take water: to catalyse and sustain some of the developments we have to inject bulk to the tune of about a billion cubic metres. But if you look at the returns on that particular investment over short to medium term, they far surpass the investment. We are using gearing to say that for every rand we put in, we must attract at least five rand back.

Businesses ripe for the picking? We are home to nearly all sectors of industry. For Type 1 industries (heavy industry), for which we are the main location in Africa, the challenge is to consolidate the KZN-Gauteng corridor. We will also cater for all types of light industry when the strategic land parcels are released. Agriculture will be developed towards the east of the airport but within the 60km radius to render the airport close enough. Nigel is already near enough, and there is also a move to incorporate Heidelberg into Ekurhuleni. We are provisionally looking towards that direction as our main agricultural area in terms of both raw and agroprocessed material that will end up at the airport. The point is, we will cater for as many of these industries as we can. But we want the industries to come now, because for Jo’burg and Pretoria to benefit from the aerotropolis, Ekurhuleni must be healthy first. Without a healthy Ekurhuleni, there is no aerotropolis in Gauteng.

Balancing the needs of the people with the aspirations of the airport city In addition to our township regeneration programme, there are nine flagships that seek to support the direction we are taking. We are involved in the revitalisation of our manufacturing industry; we are involved in the regeneration of the entire city; we are involved in the digital city plan; we are involved in the lakes and dams in Ekurhuleni. There are more than 200 lakes and dams in

Ekurhuleni and this is a lever for lifting our economy: nature, besides being critical, attracts hundreds of species of birds, so we could become a destination for bird-watching tourists. The lakes offer opportunities for water sports and recreational fishing, and enhance the beauty of the city. If all the lakes are developed, they will change the landscape of the city. Another major project that we are trying to catch up with in Jo’burg and Pretoria is BRT. The operational plan is complete and construction of the route between Kempton Park and Boksburg will start next year. In 2016, our first BRT bus will be moving.

The aerotropolis is a logistic and a movement economy These projects are all medium and long term. So what is the situation of the people? We have a one-million-per-ward project. Each year there must be short-term things done for the people so that they maintain their hope in the long-term things in which we are investing. Every year, in each ward, something must be happening. We will look at projects that are going to leave a legacy, and promote commercial participation in terms of planning and budgeting. In other words, we will aim to link people with the vibe of the city. We are also busy with a public-works programme that trains people every year to help them gain independence. We are moving to consolidate the policy on high-rises. Ekurhuleni, much like Jo’burg, receives people from outside the city every month. We have accepted they will continue to come here for economic opportunities. About 76 out of 198 informal settlements can’t be developed for formal housing. But what we are doing is rendering quality service so self-worth is retained in these areas. We have installed 8 000 solar lights into households so they no longer use candles or buy matches and don’t have to pay for charging their cellphones. It improves their disposable income. We are even looking at putting in bulk infrastructure where townships are being established so that, while people wait for their housing, this infrastructure exists. In the short term we have a lot of initiatives so that our people do not become disgruntled or unhappy, becoming a problem to our bigger plan. We need their buy-in. Business must be assured that disharmony is minimal and positive attitudes prevail. To achieve this, we must give our people a future that secures hope and cooperation.

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feature

Retail in the fast lane As consumers become more demanding in a fast-paced society, retail developers are stepping up with novel fast-food developments By Candace King

he rat race never slows down, and modern society finds itself constantly on the move. There’s no doubt that technology and time management are essential to the modern human. All aspects of our life depend on modern technology and how fast we can get things done. Our smartphones are our constant companions: today we are one click – or rather one touch – away from connecting with friends, family and colleagues. In addition to socialising and securing business deals, technology and time are also important when it comes to our appetites. The franchise fast-food industry in South Africa has boomed over the past few years, with a fast-food restaurant on every corner peddling everything from pizza to chicken, and our billboards and television advertisements dominated by monster hamburgers in the hands of smiling, happy people. When we’re on the go, we want our food in five minutes, served in square cardboard boxes and preferably housed in ecofriendly brown bags. And these rather intricate consumer needs are being met by the property industry’s on-the-ball retail developers. An exciting new market-driven fast foodorientated retail development dubbed the Crystal Clear

Kieron van Rooyen

Drive-Thru Food Court is set to be developed in Roodepoort at the busy intersection of Christiaan de Wet and Hendrik Potgieter Roads, directly opposite Clearwater Mall. It’s aimed at the bulk of shoppers who visit the mall, as well as the residents of the densely populated and rapidly growing Strubens Valley area.

“The prominent position of Crystal Clear assures high visibility to passing traffic and to those visiting the sizeable shopping mall across the road,” says JHI Properties retail broker Kieron van Rooyen. “The success of the well-established Clearwater Mall attests to the consumer spend of the large catchment area of greater Roodepoort and high volume of commuters using this busy road, particularly those commuting between the West Rand and Sandton.” To simplify things, the Crystal Clear Drive-Thru Food Court is a one-stop drive-thru that caters for a variety of tastes, from fish and pizza to burgers and chicken. It provides the option to order, collect and go, or to stay and eat – either in an attractive seating area or in a restaurant. Although frequently found overseas, this concept is a first for the South African consumer market. Van Rooyen explains that the idea behind the development is really to cater for several needs all at one venue – for example, mom wants something healthy from a salad bar, the kids want something else so they get a free toy, and dad wants a pizza. Originally a showroom, the novel development has welcomed extremely positive responses and has been well received by the marketplace. “We went to

The Crystal Clear Drive-Thru Food Court is a one-stop drive-thru that caters for a variety of tastes, from fish and pizza to burgers and chicken. It provides the option to order, collect and go, or to stay and eat – either in an attractive seating area or in a restaurant

SOUTH AFRICAN PROPERTY REVIEW

feature

The added appeal for families, groups of people and individuals is the spacious communal seating area on the roof, with a large play area for children, a restaurant section and spectacular views over the West Rand

market, and the feedback we received was that consumers want more food,” says JHI Properties retail broker Romy Altmann. “We’ve had a huge uptake. We have about eight different outlets that we are in discussions with. There will be space for nine outlets in the end.” “We didn’t conduct market research; the market came to us and kind of dictated that this was the need,” says Van Rooyen. “People want convenience – so this development is offering more of it.” The project was developed by a private consortium, and the professional team behind it includes VHS Architects and Levelheads property consultants, as well as JHI Properties on the leasing side. The development is set to be a long, narrow, modern building and make extensive use of glass panes. With a total gross lettable area of 1 095m² at ground level and 538m² on the rooftop level, Crystal Clear Drive-Thru has already received firm interest from several fast food retailers, including Mochachos, Skippers, Bacini’s, Kauai, Subway, Maxi’s and Roman’s Pizza. There will also be a total of 98 parking bays provided on site. Access to the top level is via two staircases and a lift.

Romy Altmann

“Originally, the architect designed the area with several buildings and we thought that it wouldn’t be a sufficient way of utilising the space,” says Van Rooyen. “A more efficient way would be to have one building with shared areas for the outlets.”

Altmann and Van Rooyen explain that there will be a central ordering point catering for all the outlets, and individual dedicated pick-up points for each outlet. “The added appeal for families, groups of people and individuals is the spacious communal seating area on the roof, with a large play area for children, a restaurant section and spectacular views over the West Rand,” says Altmann. “This is a novel approach to the ‘drive-thru’ concept – it will offer the option of just the drive-thru, or of lingering, relaxing and socialising while enjoying a full meal or a snack and the view.” Looking at the retail market in general, Van Rooyen feels many retailers are on an expansion path and are actively looking for space. “Funnily enough it’s not all the brands that you would expect,” he says. “There are smaller brands that are trying to expand quickly. Many of the national retailers are under pressure from an investment point of view. People are invested in the listed sector and retailers need to expand to show a return. That being said, I think that good retail space in central Gauteng is certainly running out.” Conversely, Altmann says that “there’s also a lot more caution than there was two or three years ago in terms of expansion and development.” In a fast-paced world and a tough consumer market, it’s important for retail property developers to think efficiently and develop cleverly and cautiously. Both Altmann and Van Rooyen hope that this concept is adopted by other developers going forward. They believe it’s a great concept for small, prime pieces of land, and that land owners could possibly look into this as a way of getting a better return. With construction expected to commence on site by mid2013, Crystal Clear is expected to open in the first quarter of 2014.

The project was developed by a private consortium, and the professional team behind it includes VHS Architects and Levelheads property consultants, as well as JHI Properties on the leasing side. The development is set to be a long, narrow, modern building and make extensive use of glass panes. It’s expected to open in the first quarter of 2014

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On the rail again

PRASA CRES is modernising train station environments in South Africa By Candace King

APOA caught up with the Passenger Rail Agency of South Africa (PRASA)’s property-management division – PRASA CRES – at the 45th Convention to talk about how our public transport is transforming. Thanks to the efforts of PRASA, South Africa’s rail transportation system is about to embark on a national makeover in order to improve the lives of all and to solidify modern transport and sustainable development for the future.

SOUTH AFRICAN PROPERTY REVIEW

PRASA was established five years ago, merging the operations, personnel and assets of the South African Rail Commuter Corporation, Metrorail, Intersite Property Management Services, Shosholoza Meyl and the long-distance bus company, Autopax (Translux and City to City). As part of the process of integrating these entities, the role of Intersite was redefined in order to more effectively support PRASA’s new strategic direction and objectives. PRASA

CRES was then established to look after the group’s property assets and perform the property management function. PRASA aims to promote efficiency, innovation and accountability. It also aims to ensure sustainability of passenger-rail service delivery; improvement of passenger-rail services in terms of quality and service levels; improved efficiency in service delivery; improved effectiveness of asset management; effective targeting of subsidies to achieve socioeconomic and transport objectives; and improved oversight by government. PRASA’s organisational structure boasts several divisions, including the PRASA Corporate Real Estate Solutions (PRASA CRES) division. PRASA CRES manages the company’s property portfolio, which includes destination stations serviced by PRASA’s trains and buses, as well as corporate campuses, workshops and depots. PRASA CRES is responsible for the optimisation and commercialisation of space as well as for the improvement and upgrading of these spaces.

company proﬁle PRASA CRES offers real estate asset management, facilities management, energy management and strategic portfolio project management. Based on these services, PRASA CRES manages the ownership of PRASA’s buildings and generates revenue out of them; manages the facilities of each building; conserves energy; and upgrades and improves PRASA stations. The company is currently creating world-class station precincts that not only transport passengers from A to B, but also act as pedestrian-friendly retail and social hubs that serve our cities and towns across the country. PRASA CRES aims to turn our stations into key mixed-use destinations that feature services such as shops, banks, restaurants, and conference venues. As part of its strategic portfolio project management service, PRASA CRES features several key programmes:

National Stations Improvement Programme (NSIP) Done in several phases, this ongoing programme focuses on maintenance and aesthetic improvement of all the stations. This involves painting, tiling, roof and window repairs, and so on.

“We look forward to having blue-chip companies as tenants in our stations”

National Stations Upgrade Programme (NSUP) This programme manages PRASA’s investment of millions of rands in the development of its over 600 stations nationwide. This development includes the creation and improvement of commercial spaces in its station precincts, building of new foot bridges, walkways and ticket offices, as well as refurbishment of station amenities. Apart from the upgrading and improvement of the stations, PRASA has also spurred on a major project to replace the current fleet of old rolling stock with new trains. The new rolling stock will be launched in line with the revamping of the rail priority corridors – a total of 134 national stations that have been selected for refurbishment. Furthermore, PRASA is serious on beefing up security at its stations with the implementation of in-house security as well as the on-site presence of members of the South African Police Service. PRASA is also placing great emphasis on the development of kiosks at the stations for the empowerment of small-scale businesses that need the support in order to grow. PRASA is upbeat about the future of our country and its rail transportation system. Development, improvement and efficient management of South Africa’s rail transportation system are crucial for the sustainability of our future for the benefit of our people.

TOP AND MIDDLE Rendered concepts for the Park Station Gautrain link ABOVE The recently completed Durban Railway station’s concourse OPPOSITE The PRASA delegates at SAPOA’s 45th International Convention and Properrty Exhibtion, LEFT to RIGHT Kenny Ramuthivheli, (Senior Manager: Marketing and Business Development), Vivian Sera (Senior Manager: Portfolio Management), Jerita Motshologane (Chief Financial Ofﬁcer), Tara Ngubane (Chief Executive Ofﬁcer), Jacob Molefe (Executive: REAM), Langa Ngcobo (Regional Manager: KZN)

SOUTH AFRICAN PROPERTY REVIEW

interview

Making a case for government Many people have exited the government-tenanted business, citing bad press and perceived challenges as reasons. But Delta Property Fund’s Sandile Nomvete and Bronwyn Corbett see more opportunities than pitfalls By David A Steynberg

t’s a growth story even the most talented writer could not conceive. In November last year, Delta Property Fund listed on the JSE, more than doubling its assets from just seven to 20. It needed to raise R980-million to use as gearing and ended up oversubscribed with just over a billion rand. “Listing was a growth story: it was about taking advantage of capital available in the listed environment,” Delta CEO Sandile Nomvete tells us. “We felt the time had come to enter the capital markets to raise sufficient funds for growth. It’s fairly competitive, so going the traditional route of getting debt funding was no longer sustainable.”

Delta is by virtue a government and quasigovernment landlord. With the rough time the state has had in the media recently, banks have become more cautious about lending to unlisted companies dealing with government

The need for capital Delta is by virtue a government and quasi-government landlord. With the rough time the state has had in the media recently, banks have become more cautious about lending to unlisted companies dealing with government, especially given the high debt ratio required. “The market had shifted and we needed new sources of funding,” says Nomvete. “Being listed offers access to capital, even though equity is the most expensive form of capital. But it’s a viable opportunity as long as we’re giving our unit holders more than they would have had if they’d just put that money into the bank. And that speaks to the yield with which we came onto market – 9,6%. If you’re getting 5,5% on cash and 9,6% with property, that was the rationale for coming to market.” The fund was significantly oversubscribed on listing, which according to chief financial officer Bronwyn Corbett was “an obvious indication that the market had turned and there were significant capital in-flows; and that, to some extent, the market was becoming more confident with the sovereign exposure of the fund.”

Understanding the risks Prior to listing, Corbett and Nomvete travelled across the country, educating potential investors about the risks and rewards of investing in a government-tenanted landlord fund. Perceived risks relating to Delta’s inability to collect rent, the enforceability of lease agreements and whether those agreements meant anything were questions the Delta team had to address. “As Delta, we have never shied away from the fact that those risks exist,” Corbett says, adding that Delta emerged out of Motseng Investment Holdings, which has extensive facilities-management experience. “You need to understand the risks and be geared to deal with them.”

SOUTH AFRICAN PROPERTY REVIEW

Delta CEO Sandile Nomvete

interview

The government connection

Asset management

But it’s the sovereign underpin of government Nomvete believes much of the fund’s success lies not that makes Delta worth its salt, and it’s one of the only in who the tenant is but also in the kind of buildings reasons for its amazing growth in just six months Delta has. after listing. “As long as we continue to have big, bulky assets, “The reason we like the sovereign and considering that most of our assets range in underpin from a fund perspective is value between R95-million and R100-million because private-sector companies (which for us is a defensive strategy), this can get affected by the economy will mean less time spent managing roller coaster,” explains Nomvete. those assets,” Nomvete says. “If you have “Government, on the other hand, 400 small assets scattered everywhere, provides critical services whether getting to them and having feet on the the economy is booming or bust. ground costs additional money and There are key services government time. That dilutes the distribution one just can’t do without: we still need a can achieve. If you’re going to solidify transport, health and police all your resources in fewer but better department. For us it’s a very stable buildings, you should be able to income. With this in mind, generate better returns.” perhaps the discount the market Delta owns, among others, the has been placing on government Randburg SARS building, where it could be smaller. You can’t has sweetened the deal by adding compare a government lease with a value. “We spent time with our lease on a coffee-shop owner. How professional teams and we’re going can you think it’s better than to add another 176 parking bays to supplying government? The individual the property as parking has always who has a coffee shop in a shopping been an issue in the area,” says Corbett. centre must be riskier than “SARS has agreed to renew the lease for government, surely? But this is true another five years.” Delta COO only as long as you as the fund have It’s through measures such as this, Bronwyn Corbett the right systems and people in as well as transforming C- and B-grade place to collect rentals.” buildings to A-grade specs, that Delta Since the listing, the fund has has experienced much of its bulked up its asset-management success. “There is value in buying a “There is value in buying a C-grade asset team to ensure consistent C-grade asset in Bloemfontein, in Bloemfontein, taking it up to an A-grade efficiencies with 45 properties taking it up to an A-grade building building and signing a 10-year lease where from its previous 20. “Our costand signing a 10-year lease where to-income ratio of 18,8%, which you can renegotiate rentals,” says you can renegotiate rentals” we achieved with 20 assets, is Corbett. “We have managed to do very competitive on average that very well.” and is something we are proud of,” says Nomvete. “We will try and use A bright future? With Delta being an office fund, it has not experienced the same market this as a competitive advantage.” depression as the private listed sector has (with its vacancies of 12%). Significant returns “Our vacancy rate is four percent and we’ve often been asked how Wherever this fund can save money, says Nomvete, it will give it back to we’ve managed this,” says Nomvete. “The fact is it’s government; you its unit holders. But it’s not only savings investors can look forward to cannot compare us to a traditional office fund nor its economic cycles – Nomvete predicts aggressive forecasts for 2014 and 2015. because we have the sovereign underpin of government. Our lease “In terms of distribution for February 2015, we’re sitting at a 20% profile is sitting at seven years, with escalations of between seven return,” he says. “This is significant.” Corbett concurs: “This is actually percent and nine percent. Delta offers investors nine percent yield unheard of in a market where the sector averages are sitting.” while the sector average sits at 6,2%.” Nomvete again attributes this to having a stable tenant in the form of Due to its generous yields and distributions, it’s not surprising that government. “We have long-term leases and stable income, and because Delta has captured interest from foreign investors hungry for yield – we’ve managed to control our costs well, there’s a huge benefit,” he says. including Switzerland, Germany, Hong Kong and Namibia – as well as “Through the new acquisitions we have zero-rated the vacant space in huge interest from South African pension funds. those properties. That’s a potential value uptick we can give back to “Our third-largest investor it the PIC, while Stanlib has a 25% stake,” unit holders who are looking for even better distribution than we have says Nomvete with a smile, explaining that the good shareholder forecast, which is significantly above the sector average. A 20% growth spread creates good liquidity for the fund. “This is especially important in distribution is just unheard of. And it’s not from a low base.” for property.” SOUTH AFRICAN PROPERTY REVIEW

architects in profile

South African architects are making incredible strides both at home and across our borders. The sustainability objective remains paramount, as does marrying beautiful design with fit-for-purpose spaces and façades

Adrian Maserow, AMA Architects Celebrating its 20th year, the AMA Architects group was established by Adrian Maserow and has been a leading architectural firm in the new South Africa. The three directors and entire design team are committed to architecture that appropriately creates visionary solutions to property development challenges. Each project is engaged through a vigorous and inspirational process, leading to an uplifting built environment. AMA incorporates the interior design services of D12 Interiors into its service function, forming a driven and professional team. The firm has excelled in the design and delivery of head office buildings, specialised retail projects, residential developments, commercial refurbishments, office parks, motor showrooms, luxury homes, office relocations and distribution-warehouse facilities. AMA won the 2013 SAPOA Award for Innovation Excellence (overall Green Building Category) with their entry of the Lakeside Office Park in centurion. Environmentally sustainable design is a high priority of the group’s ethos and AMA Architects seeks like-minded developers and professionals who are interested in promoting the long-term view of well-considered building design and construction. The designs of AMA Architects reveal the hidden structures of a creative design intuition that is largely spatial. It embrace intelligence, history and the mental space of shared communities in order to add value to architecture.

+27 (0)11 807 7505 +27 (0)11 807 7509 www.amagroup.co.za

By design

Marco Fanucchi, AMA Architects Marco Fanucchi joined the team of AMA Architects in November 2005 and became a director during 2008. AMA Architects’ motto is to maintain a strong balance between architectural aspirations and the commercial demands of projects, regardless of the size of the projects in question. They strive to deliver projects that not only contribute to the greater built environment and enrich the lives of their occupants, but also meet (and often exceed) the financial expectations of the owners and the developers. One of Fanucchi’s most recently completed prestigious projects is the Kaya House in Rosebank. This was built for the extremely ambitious radio station Kaya FM. The entire team – consisting of the radio station, the developer, the consultants and the contractors worked extremely hard to create Kaya FM’s fantastic new home. Fanucchi recently began construction on his first high-rise project, the Sandton Skye hotel and apartment development, which is extremely exciting. The key to AMA Architects’ success is the company’s willingness to embrace the latest technology, which gives it a competitive edge with regards to design, documentation and delivery of projects.

+27 (0)11 807 7505 +27 (0)11 807 7509 www.amagroup.co.za

Gerald Pereira, AMA Architects Gerald Pereira joined AMA Architects as a director in 2007. The members of the AMA Architects team see themselves as consultants that deliver a key service to their clients, which is extremely important to them. At the same time, they try to set themselves apart by understanding the property climate at any given time. They deliver projects that aspire to a forward thinking type of architecture any embrace any specific requirements of the project, site, client or current market. AMA’s most recent achievements are a result of collaboration with forwardthinking consultants and developers. “You have to have conceptual vision but without a willing team and a willing client, the initial idea can quickly fall apart,” says Pereira. The achievements include the Overall Green Building Award from SAPOA for the Lakeside Office opposite Centurion Gautrain station and the completion of Volkswagen Group South Africa’s sales and marketing operations office in Katherine Street. When asked what sets AMA apart from their competitors, Pereira refers to “conceptual brilliance in terms of forwardthinking architecture and the requirement – on a planning level – to fulfil the client’s brief and the demands of the market. But the ability to deliver on projects is key. Without that ability, many similar businesses fail.”

+27 (0)11 807 7505 +27 (0)11 807 7509 www.amagroup.co.za SOUTH AFRICAN PROPERTY REVIEW

architects in proﬁle

Michael Magner, Activate Architecture

Anton de Jongh, Arc Architects

Martin Lardner-Burke, Rick Brown & Associates

Since he was 10, Michael Magner knew he wanted to be an architect. Fulfilling this aspiration, he graduated from Wits University and co-founded Activate at the end of 1997. Activate’s mission is to design highperformance buildings to meet clients’ specific needs by giving each project the attention it deserves, through collaborative teamwork and the use of building information modelling (BIM) software. And Activate has achieved much success, receiving 12 awards in the past six years from institutions such as SAPOA, SAIA and the Loeries. The practice is celebrating its 15th year, and this year it is looking forward to a number of projects, including a new green office building and control centre for City Power Johannesburg; the refurbishment of the 1960s modernist Innes Chambers office building in the Johannesburg CBD; and Phase 2 of Lebone II College (a SAPOA award-winning project). Energy efficiency remains important to the teams, affecting the whole design process and transcending old conventions. This is an exciting era for architecture and our cities, and the drive for energy efficiency is closely associated with the growing demand for green buildings. Looking to the future, two challenges will affect us all: water (its availability, appropriate use and inevitable soaring cost) and building affordable urban environments for the poor. Population growth is high among the poor, resulting in more people having less. How do we design good urban environments that meet this demand while reducing the negative environmental impact of urban expansion?

For the past 15 years, Arc has focused on commercial, retail and institutional/educational architecture. Arc operates on a national basis but is extending its footprint into Africa. Retail is top of mind and projects range from greenfields developments such as the West Hills Mall, Accra, to the redevelopment of existing malls with fresh innovation. Head- and commercial-office development is a second arena in which Arc Architects is quite active. The Ecobank regional head office in Accra deserves a mention here as a winner of an international competition. In the redevelopment of existing office complexes, the new JHI head office in Sandton serves as torch-bearer. The University of Pretoria’s engineering precinct rewrites the urban landscape. This project received the 2013 SAPOA Award for Innovative Excellence for mixed-use submissions. In the secondary-education field, Arc has built a legacy of designing premier private schools. “The real challenge to produce excellent architecture lies in the cross-pollination and delicate balance between commercialism, cultural preference, sustainability and innovative architecture,” says De Jongh. Arc believes that dedication, passion and pushing boundaries while adhering to project parameters and each client vision sets them apart. This goal can only be achieved with dedicated designers, integrated systems and technology as the backbone of the practice, affording the company the time for innovative conceptual design and hands-on management.

Martin Lardner-Burke’s passion for architecture and all things 3D began when he was a young boy. After studying fine art, he changed his focus to architecture, graduating from UCT with distinction in 1999. After qualifying, he decided to look at opportunities abroad. He then won several scholarships to study an MPhil in environmental design for architecture at the University of Cambridge. After completing this degree, he felt it was important to gain international experience and stayed on in the UK to establish a solid environmental design framework. During his time there, he won several awards, including RIBA’s best educational building and best environmental sustainable university building 2008. One of his UK highlights was developing a lively relationship with the building contractors in the north of England, whom he describes as “hard-hitting f-ing and blinding, no-nonsense kind of characters”. Lardner-Burke joined Rick Brown & Associates in 2010 after returning from the UK. Since then, he has assisted with the design of large-scale public and commercial buildings. In June 2012, he became a partner in the firm, bringing in his experience in green building and sustainability design. Apart from architecture, he enjoys lecturing and has done so at both Cambridge and UCT. His primary focus for the future is on implementable, high-quality, environmentally responsible design within the South African socioeconomic climate.

+27 (0)83 308 7929 michael@activate.co.za www.activate.co.za

SOUTH AFRICAN PROPERTY REVIEW

+27 (0)82 446 3626; +27 (0)12 362 7370 ant@arc.co.za www.arc.co.za

+27 (0)21 424 3064 info@rba.co.za www.rba.co.za

architects in profile

Zenzeleni Ndlovu, The Creative Axis Architects

Bhavik Ranchod, The Creative Axis Architects

Yogesh Valla, The Creative Axis Architects

Zenzeleni Ndlovu studied architecture at the University of Johannesburg and joined The Creative Axis Architects as a junior technologist while he was still a student. His passion for design, his commitment and his strong desire to make a difference in society has seen him being appointed as director of the firm’s Free State regional branch. Ficksburg Magistrate Court and a major upgrade to the Bloemfontein train station are the most exciting and challenging projects he has lined up for 2013. Both buildings are heritage sites, making them unique in terms of approach, planning, execution and completion of the projects. At the moment, the most popular phrase in the building industry is “green building”, and the biggest challenge when designing is to comply with the SANS 10400 requirements. All elements of a building are dictated by the SANS requirements and play a major role in the final design of a building. Green concepts are challenging and fairly new in the industry. Determined to identify with green-building theories and principles, all Creative Axis Architects projects are reviewed and adapted to include the relevant technologies. Passive energy is a favourite concept, developed in most building designs. Commitment to recycling and minimising operational cost, and including energy efficiency in the building are two of Ndlovu’s primary goals. At The Creative Axis Architects (formerly Naren Mistry Architects), the team strives for client satisfaction. It is committed to products that exceed clients’ expectations and designing signature buildings for the future, within the available resources and budgets.

Bhavik Ranchod is a director at The Creative Axis Architects, which was founded in 1993 as a small, one-man practice. The company has experienced a huge transformation and today has developed into a small medium enterprise offering a variety of services. Through commitment and hard work, the firm has evolved into a brand committed to creating a leading African design consultancy that is among the top fully empowered practices in South Africa. The practice has its headquarters in Johannesburg, with regional offices in Limpopo, North West Province, KwaZuluNatal, Free State, Mpumalanga and the Eastern Cape. The Creative Axis also has an international office primarily focusing on projects in Africa, UK, the Middle East and Asia. Ranchod explains that it is common for the character or spirit of an architectural practice to be distinguished by the style of its buildings. However, The Creative Axis strives to create contemporary and sustainable buildings that support both client and environment, meeting commercial and functional targets while contributing to local quality. The company’s proud achievements include the current upgrade to the Park Station Northern Course, 88 Grayston Drive refurbishment and the FIFA 2010 Loftus Versfeld stadium upgrade. “We have no preconceptions in terms of design, but respond overall to our client’s brief and to the social, physical and historical context in order to determine the appropriate design solution,” says Ranchod.

Yogesh Valla is a partner at The Creative Axis Architects, which is a Level 1 BEE-accredited architectural firm. The firm is an amalgamation of design and technical expertise that ensures an all-encompassing product in architecture with a national footprint. The company’s expertise is based on design excellence and innovation. In 2010, the firm decided to re-brand and change its strategy to align itself with the growth it had experienced. To date, the brand has received a positive reaction from both existing and new clients. The principles on which The Creative Axis grounds itself are an extension of the company’s slogan, which refers to “a commitment to our clients’ aspirations and needs by delivering innovative and sustainable ideas through a creative process”. The Creative Axis Architects strives to be conscious of the environment and field trends in an attempt to create the best possible solutions and architectural innovations for clients within a specific South African context. The firm prides itself on its design and technical creativity within the commercial environment. “The North West regional office specialises in public buildings in the government sector,” says Valla. “The office boasts projects such as Mini Garonas in Vryburg for the Department of Public Works, refurbishment and renovation to 10 SAI Battalion in Mafikeng for the defence force, and a new library in Hartbeesfontein for the municipality of Matlosana.” The firm is filled with young professionals who are in touch with the current local and international trends in architecture.

+27 (0)51 430 6323 nick@creativeaxis.co.za www.creativeaxis.co.za

+27 (0)76 460 8401; +27 (0)11 854 5922 bhavik@creativeaxis.co.za www.creativeaxis.co.za

+27 (0)82 927 2826; +27 (0)18 381 8640 yogesh@creativeaxis.co.za www.creativeaxis.co.za SOUTH AFRICAN PROPERTY REVIEW

architects in profile

Tim Hughes, Tim Hughes Architect Tim Hughes has always enjoyed understanding what makes a space successful. His love for how humans create comfortable spaces was enhanced in the 1970s and 1980s, when he accompanied his father on trips to Soweto, and in early 1994 at UCT, when he and four other students insisted on studying township settlements rather than historical buildings. “Understanding how people use their space has been a huge help with the designing of commercial buildings, where every square metre costs the client,” he says. “We have done many projects over the years where we have managed to reduce the client’s budgeted areas for owner-occupiers or tenant-driven projects.” Hughes, a UCT graduate, founded his firm in 2000. The firm has been fortunate in developing lasting relationships with its commercial clients, and has even designed a few of the directors’ homes. Hughes has extensive commercial and industrial experience in and outside of Cape Town, and has designed numerous buildings in notable precincts. He believes that the way in which one services the client body is a fundamental aspect of the modern profession. Timing, presentation and competence are key.

+27 (0)21 702 1818 tim@timhughesarchitect.co.za www.timhughesarchitect.co.za

SOUTH AFRICAN PROPERTY REVIEW

Zinon Marinakos, DSA & RSL Architects

Beata Kaleta, DSA & RSL Architects

Despite being only 27 years old, DSA & RSL Architects International is one of the most experienced architectural practices in South Africa, with an increasing international presence. Zinon Marinakos joined DSA in 2001 and is currently the deputy MD of the South African office. Marinakos’s early influence was a result of a combination of a dynamic, interactive student environment during his bachelor’sdegree studies, and invaluable experience gained as a research understudy to Clive Chipkin. “This entrenched a sense of appreciation and understanding of the urban environment in which I had spent most of my life,” he says “I started my professional career in the world of commercial architecture with Moross and Partners,” says Marinakos. “In 2001 the changing local environment and a yearning for international experience, resulted in me joining DSA Architects International. “In our industry, we find the building type and products constantly changing, which is what excites us. And then there is the green and sustainability issue: with the introduction of the green rating tools for a host of building types, there is more of an incentive for developers and owners to design buildings that meet these important objectives.” Marinakos says that, in addition to a recovering local market (which forms the core of RSL’s work), there’s great potential on the African continent. The practice also experienced increased demand for mixeduse developments internationally. “We opened up our Azerbaijan office late last year in Baku and are in the process of registering our Qatari office in Doha. These are additional to our established offices in Sandton, Dubai and Lisbon.”

Beata Kaleta left for South Africa after completing her degree in Poland in 1986. “My architectural profession began in a large commercial practice, where women architects were rare. Since then I have learnt that being a woman in a ‘man’s world’ can be challenging. “With every new project and client, women have to demonstrate our professionalism and skills clearly.” Kaleta has been with DSA & RSL Architects International for 12 years. “As the creative director, I’m focused on new opportunities and conceptual design. Being involved in design development and administration of mostly leisure developments gave me an insight into the exciting world of business and leisure travellers, and the complexity of hotel developments and hotel operations. DSA has been active on different continents and in many countries over the years. “Recently, we have noticed a huge growth of untapped opportunities across Africa. The need for new developments, including good hotels in African countries, is tremendous. However, as they say ‘Africa is not for sissies’. The lack of understanding of the construction process, the scale of cost and the professional fees are completely strange to many new entrepreneurs wanting to build and improve their countries. The entire process takes much longer to complete. But by the same token witnessing this wonderful growth and transformation is exciting. “Our company prides itself on exceptional design and service. Our technical documentation and project execution remain among the best in the industry. We continue to train students and upcoming architects to develop the allround much-needed skills in our industry.”

+27 (0)82 886 8039 zinon.marinakos@dsa-arch.com www.dsa-arch.com

+27 (0)11 779 1600 beata.kaleta@dsa-arch.com www.dsa-arch.com

architects in profile

Henning Rasmuss, Paragon Architects Henning Rasmuss was born in Johannesburg and completed his architectural studies at Wits University. He spent time working in Germany and Hong Kong, later returning to Johannesburg. Rasmuss, together with Anthony Orelowitz, established Paragon Architects in 1997. His involvement in architecture extends well beyond the practice to support for Sharp City, an exhibition and architectural educational facility. Paragon Architects displays South African architecture around the world. Rasmuss travels obsessively between South Africa, Brazil and the rest of Africa. His collection of travel photographs would fill a book. Rasmuss believes in the company’s young, dynamic practice. “We combine the energy, innovation and passion of youth with the skill of experience,” he says. He values the relationships the company has developed in the property and construction industries, who support the company’s bespoke approach to architectural design. “In each project, we explore new opportunities for crafting great contemporary architecture in a number of architecture genres, using the latest software available,” he says. Our interest in and excitement for the development of Africa’s built future is exceptionally strong.” He‘s optimistic about this year, with a number of large projects on site due for completion.

+27 (0)11 482 3781 info@paragon.co.za www.paragon.co.za

Thulani Sibande, Paragon Architects Thulani Sibande was born in Breyten, Mpumalanga and schooled at Masizakhe Secondary School. He completed a national diploma in architecture and later finished his BTech through TUT. He has worked at Paragon for the past five years on a wide range of projects, including Motorola in Woodmead and 4 Sandown Valley for Zenprop in Sandton. Currently, he’s the project architect for Hans Grohe in Kramerville. He particularly enjoys site work and the challenges associated with a constantly developing building. He is a co-director of Paragon South Africa and is invigorated by its opportunities for growth. The challenges that face local architectural practices notwithstanding, Sibande notes that Paragon Architects is optimistic about economic growth during 2013. He hopes that the building industry will grow too. However, he bemoans the lack of skilled labour available. He believes this impacts negatively on sub-contracting and reduces the choice for building contractors and ultimately increases building costs. Skills development across the property industry is critical. Commenting on the current and future trends in global architecture, Sibande believes that “green elements” will become absorbed into standard building practices and will longer be seen as a “nice to have” approach. Meanwhile, Paragon Architects has completed two Green Star rated buildings and intends building on this experience. “We are also researching ways to integrate our buildings into the urban fabric of South Africa, to make the streetlevel experience more human.”

+27 (0)11 482 3781 info@paragon.co.za www.paragon.co.za

Anthony Orelowitz, Paragon Architects Anthony Orelowitz was born in Johannesburg and studied at Wits University. He and Rasmuss remain co-directors of Paragon International. He has made a significant contribution to the Sandton skyline, with a number of his designs now defining the urban fabric of this bustling area. Relationships are important to him, and with 15 years’ experience in his field he has developed the necessary skills vital to ensuring a successful project. Through a process that involves the crafting of a building using current software and material development, he embarks on the road to creating beautiful buildings that work. “At Paragon Architects, we pride ourselves on our dynamic, bespoke approach to commercial architecture, focusing on crafting remarkable buildings and spaces, despite constraints of budget, time and construction skill,” he says. “We are now perceived to be one of the leading commercial practices in South Africa. “We see ourselves as pan-African and are enthusiastically seeking to expand into other countries on the continent.” He also disclosed that in 2012 Paragon completed a (4 Star) Green Star Building in the Alexander Forbes Head Office in Sandton. He believes that the experience and skills gained can be transferred into all future projects. Meanwhile, a number of large projects are already under way, and due for completion during the year. These include the 18 000m² Marsh head office building on Alice Lane, set for completion in August this year; and the Fluxmans Attorneys head office at 30 Jellicoe Avenue in Rosebank, due for completion in November.

+27 (0)11 482 3781 info@paragon.co.za www.paragon.co.za SOUTH AFRICAN PROPERTY REVIEW

architects in profile

Alexander Hahn, Geyser Hahn Architects (Pty) Ltd

Andre Wright, Boogertman + Partners

Bob van Bebber, Boogertman + Partners

Geyser Hahn Architects is a specialist healthcare practice and was established in 2000 by Liezel Geyser-Hahn and Alexander Hahn. The practice joined forces with Boogertman + Partners in 2012 to pair big practice capacity with the highly specialised service offering of Geyser Hahn Architects. It is anticipated that this association will create a unique alliance of expertise and capacity that will offer unrivalled service excellence in the healthcare industry. The company is excited to be short-listed for two university health-science campuses, one in South Africa and one in Kenya. In addition, the practice is expecting several new projects in the private sector, ranging from small alterations to a new 200-bed hospital in Soweto. Geyser Hahn Architects collaborates with specialist consultants to create a complete service with enough flexibility to create a custom-made service solution for specific project needs. The practice developed its expertise in the healthcare industry and has strived to provide innovative solutions supported by detailed research, value management and innovative design. Alex Hahn, MD at Geyser Hahn Architects, has developed a professional understanding of hospital design, service coordination, construction and costing for hospital buildings and specialist units such as burns units, bone-marrow-transplant units and others. These are all part of many “first in Africa” projects in terms of specifications and the use of cuttingedge medical technology.

After finishing his architectural studies and spending six years with MV3 Architects on projects such as Sun City, Armscor etc, Wright set his sights on the international scene. He spent two years gaining working experience in London and New York, working on several building sites as a site labourer, which provided both valuable life and career lessons. Wright was appointed Director in 2000. His primary focus: strategic business development and planning, Masterplanning, Strategic Spaceplanning, Marketing and Technology. He believes strongly in the importance of a well-connected industry network with the same focus on identifying potential development opportunities. Team effort. “Our team is motivated by the same challenges and values that drive us to excel at what we do best. The challenges and risks involved in identifying new opportunities, bidding on large PPP (public private partnership) as well as complex private projects requires specialisation and we have subsequently assembled a group of people with specific expertise that focus on these projects.” Wright is currently involved withthe new head offices for the Department of Environmental Affairs (recently awarded a 6 Star Green Star rating for Largest Green rated Office Development in SA), Land Reform, Statistics SA (bidding stage), transaction advisor for the new Tshwane House (Old Munitoria) and the new Tshwane Convention and Exhibition Centre. Focus is currently on Educational Campus Planning, student accommodation and self-sustainable Green business park masterplanning. Boogertman + Partners has subsequently been selected to assist the Mayor and council members on The Capital City 2055 vision, identifying new development nodes in the City as well as areas in desperate need of rejuvenation in the greater Tshwane metropolitan area.

Boogertman + Partners architects has a large footprint that has now extended into Nairobi, Kenya. This is recognised by the BD practice survey of last year, where Boogertman + Partners was rated top in Africa and 8Oth in the world. This is a fact director Bob van Bebber is extremely proud of, having joined the practice in 1998 after working in both medium-sized and small practices focusing on retail, residential and school projects. “My architectural passion remains with a particular focus on corporate offices, preferably within mixed-use environments; and naturally a continued passion for sports facilities, having been fortunate enough to lead the architectural team on the Soccer City stadium and Nasrec precinct,” says Van Bebber. “I’m currently busy with the new Ernst & Young head office in Sandton on behalf of Eris Properties. The site is opposite the Gautrain station and the design comprises an eight-storey block and a 14-storey tower, both with very organic floor plates that do not relate to each other along their edges, thus creating a dynamic statement on such a prominent site. I’m also busy with the extensive renovation of the BMW head office in Midrand.” The sustainability agenda will remain on the list of priorities at Boogertman + Partners. “We are seeing a significant increase in complex shapes aided by the more advanced design, documentation and production techniques, “ says Van Bebber. “This is evident locally; so is the increase in the use of glass as buildings get taller. In some cases I hope to see a simplification of form, paired with an increase in the use of enduring products, as I feel that many buildings have too short a life span.”

+27 (0)12 429 7300 +27 (0)82 554 8098 andrew@boogertmanpta.co.za www.boogertmanandpartners.com

+27 (0)11 790 1600 +27 (0)83 289 4200 bob@boogertmanjhb.co.za www.boogertmanandpartners.com

+27 (0)12 665 3462 +27 (0)82 718 9980 www.gharchitects.co.za

SOUTH AFRICAN PROPERTY REVIEW

architects in profile

Francois Bredenkamp, Boogertman + Partners

Lianie Minny, Boogertman + Partners Interiors

Rechelle le Grange, Boogertman + Partners

Boogertman + Partners offers its existing and potential clients diversity: a team approach to most of its projects, an open forum where input is welcome, 30 years of experience in almost all building typologies, and young architects with strong conceptual ideas. By combining these aspects the practice produces innovative solutions and architecture that moves the country forwards. This is according to Jo’burg-born Tukkie (architecture) and Wits (urban design) graduate Francois Bredenkamp, who has worked for the practice since 2005 after living and working in London for HOK International. Bredenkamp is excited about the company’s work in Africa, specifically in south Sudan where Boogertman + Partners is designing at all scales: from new cities in remote areas to a multitude of buildings in response to a rapidly developing economy. Locally the company boasts a strong base in Pretoria with a focus on Menlyn as the new urban node. “I would love to do more work in the Johannesburg CBD, which contains such a rich heritage and potential for architectural exploration,” he says. Bredenkamp explains that the fine balance between architectural ingenuity, technological advancement, client commitment and making a living has always been the challenge of the architectural profession. He believes that if one produces work of excellent quality that satisfies all the constraints and requirements of a project, more work will come. Architects are innovators, he says, with ideas on which society is built; without these there is little progress. “Then again, architects have survived hundreds of years through war, famine and depression – we are still here,” he says.

Interior architect Lianie Minny believes that the “local is lekker” concept refers not only to locally sourced material but also to talent. “I believe two of South Africa’s biggest challenges are the under-utilisation of hand-crafted talent and the lack of skills development,” she says. “It would be greatly beneficial to our profession to train and develop young minds.” Having studied interior architecture at the University of Pretoria, Minny was given the opportunity to work for Boogertman + Partners while completing her studies. She is now a senior interior architect at the firm’s interior-design department, B+P Interiors. “For architects, there are few things worse than designing an incredible building, only to have the interiors devastated by design that has no understanding of or connection to the original concept. Having an in-house interior-design department allows us to team up with the architects, delivering holistic solutions from the inside out.” B+P Interiors is a vibrant, dynamic interiordesign team that focuses on design in the commercial, retail, refurbishment, hospitality, and health and leisure sectors, as well as space planning and furniture procurement. Its portfolio includes projects such as the Absa Towers North refurbishment, Nestlé head office, Basil Read head office, Intercare Medical Facilities, Softline VIP head office, Outsurance head office and the City Lodge Hotels. “I am currently working on the exciting new head office for the Department of Environmental Affairs in the heart of Tshwane,” she says. “Due to the department’s deep connection to nature, the interiors, together with the architecture, become a platform of awareness through which the department’s principles and policies are conveyed via a myriad of technology and materials, creating an opportunity for public discussion.”

Architecture by its nature is intended for human occupation and should allow for this in a manner that enhances the human experience. Architecture can no longer afford to respond to fashionable trends but must consider its long-term value to society. This is according to architect Rechelle le Grange who has worn the director’s hat at Boogertman + Partners for the past 18 years. “There is currently no clearly defined direction in architecture, as evidenced by the different approaches followed by leading architects worldwide,” says Le Grange. “These range from the explorations of complex form made possible by sophisticated design and production technologies to the investigation of essential issues such as the social responsibility of architecture. There are, however, common concerns that are influencing current thinking. The two that are most prominent is architecture’s response to the current global economic situation, and the issue of sustainability. These are linked in the sense that it is now imperative that architects respond to these issues by using resources as sparingly as possible, consider design principles that are sustainable rather than relying on technology, and view sustainability in its widest possible definition. This includes adding value through design that considers the social dimension of architecture rather than only limiting environmental impact.” Looking ahead, apart from a variety of projects (retail, fitness centres, industrial and corporate offices), Le Grange’s focus at Menlyn Maine will be to establish the green precinct as an extensive mixed-use development. Having completed the 4 Star-rated Green Star credited Nedbank and Softline VIP office buildings during the past year, she will be involved in an office development and a hotel as the next extension of the precinct.

+27 (0)12 429 7300 +27 (0)72 347 5398 francois@boogertmanpta.co.za www.boogertmanandpartners.com

+27 (0)12 429 7362 +27 (0)82 562 9539 lianie@boogertmanpta.co.za www.boogertmanandpartners.com

+27 (0)11 790 1600 +27 (0)82 455 7649 rechelle@boogertmanjhb.co.za www.boogertmanandpartners.com SOUTH AFRICAN PROPERTY REVIEW

off the wall

Doggy digs decadence The guys at Chateau Poochie had one thing in mind when designing and building this hotel: to ensure it met with total canine indulgence By David A Steynberg

roperty development has come a long way. From huts and caves to homes and skyscraper living, property developers have literally catered for every human want and need. It is therefore not unfounded or strange that a unique hotel has been built and expertly furnished for its discerning guests. Chateau Poochie in Pompano Beach, Florida, is the world’s most upscale pet resort. This five-star hotel created specifically for dogs features spacious Crown Jewel luxury suites that are replete with individual flatscreen TVs and private webcams, as well as designer sleigh beds and panoramic glass walls. Each plush suite is uniquely decorated in sophisticated jewel tones and accessorised with chandeliers, artwork and amenities such as Arthur Court water bowls. It’s no wonder this hotel took US$2,5-million to create. For US$100 per night, doggy guests can either choose private play or fun-filled Social Lounges and Fitness Clubs, where they can frolic all day with other furry friends. Because the dog world is full of Great Danes, Foxies and Chihuahuas, Chateau Poochie offers a big-dog playroom and separate small-dog playroom. In addition, there is a Tea Cup playroom for tiny “teacup” pooches. Playtime incorporates activities in

both the indoor playrooms and the outdoor Le Jardin area for fresh-air games. The sparkling lobby at Chateau Poochie, with its magnificent chandelier, mirrored reception desk, antique-inspired displays and glistening white marble floor, says “your pooch has arrived”. The haute doggy boutique is known for select fashion and pet accessories from around the world, as well as holistic healthy food and treats. Canine guests are treated to gourmet meals such as roast tenderloin,

All rooms are furnished with flatscreen TVs, sleigh beds and the best in creature comforts

SOUTH AFRICAN PROPERTY REVIEW

roast chicken and salmon, fresh steamed vegetables and whole-grain brown rice. Pampering is taken into overdrive at the hotel’s salon, where four-legged guests can be groomed and styled, and get pedicures and even facials. Thanks to the hi-tech facilities, no request is too small to accommodate at Chateau Poochie. Whether it’s providing a steak dinner or a relaxing massage in the Zen room with a licenced chiropractor, they really do do it all.

CALL FOR PROPOSALS: 1. COMMERCIAL, OFFICE AND HOSPITALITY SITES IN DUBE CITY 2. INDUSTRIAL AND LOGISTICS SITES IN DUBE TRADEZONE

DUBE CITY:

ZONE:

03 MIN

TO KING SHAKA INTERNATIONAL

HECTARES AVAILABLE

500

TRADE

DTP

BULK APPROVED FOR COMMERCIAL, OFFICE AND HOSPITALITY DEVELOPMENTS

SECURED INVESTMENT

26 HECTARES

KZN

150 000 SQM

MILLION

FOR THE DEVELOPMENT OF:

DBN

OF INDUSTRIAL LAND IN PHASE 1

65% LAND

LET IN PHASE 1

Proposals received by 30 June 2013 will be evaluated by 30 July 2013. Proposals received thereafter will be evaluated as and when received, subject to the availability of sites. To secure a prime location – contact Hamish Erskine or Tim Hudson (T) +27 32 814 0000, (F) +27 32 814 0103, (E) property@dubetradeport.co.za

Cube/319/Prop

To receive a pdf of the submission details go to:

www.dubetradeport.co.za/proposals www.dubetradeport.co.za

36266_sapoa_210x297_fin.indd 1

25/04/2013 11:25

All accounted for Every time

Financial Viability

Value Management

Procurement Documentation

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

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