South African Property Review April 2016 by SAPOA

South African Property Review

PROPERTY SOUTH AFRICAN

April 2016

REVIEW

SAPOA and afﬁliates Mandated for excellence

Developer section Erecting commercial powerhouses Professional associations

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series D L

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monthly cou n Our

Th e WOR

An economic outlook SA in dire straits?

by-country focu try-

April 2016

A Venezuelan adventure Home to the world’s tallest waterfall

Strategic planning Public Works Minister meets property sector

SAPOA events

OPPORTUNITY KNOCKS Africa offers great opportunities for those who have the vision, flexibility and determination to adapt and succeed.

With over 30 offices across the continent, staffed by dedicated professionals with extensive local knowledge, JHI Africa is ideally positioned to be the catalyst for that success. We leverage off Excellerate’s extensive knowledge and experience, technical capabilities, group synergies and entrepreneurial drive to support our client base by providing services that realise strategic goals, support efficiencies and protect the bottom line. •

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Transactional Management

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Corporate Real Estate

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Facility Management

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Valuations and Advisory

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contents

April 2016

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

April 2016

REVIEW

SAPOA and afﬁliates

Mandated for excellence

Developer section Erecting commercial powerhouses Professional associations

ON THE COVER Professionals in the property industry need the expertise and support of organisations such as SAPOA and its affiliates to stay on trend, develop new skills and reach their full potential

Abreal

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series

Strategic planning Public Works Minister meets property sector

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monthly cou n Our

The WOR

An economic outlook SA in dire straits?

by-country focu try-

April 2016

A Venezuelan adventure Home to the world’s tallest waterfall

2 4 6 11 12 14 16 20 30 32 34 38 40 44 46 50 54 55 56

From the CEO From the Editor’s desk Industry news Education, training and development Investing in the future of property leaders Education, training and development On top and on trend Planning and development The planning profession and its transformative role Legal update The exercising of an option parameters Theme leader The pursuit of excellence News Global economic outlook News Creating signiﬁcant opportunities Eye on the world Venezuela Developer Introducing Monte Circle Education Increasing the property management pool Event Leadership Conference Research Ofﬁce Vacancy Report SAPOA events Frankly speaking A fascinating journey with Thierry What’s on Upcoming events 2016 Off the wall Here today, gone tomorrow

Oilgro

FOR EDITORIAL ENQUIRIES, email nthabi@mpdps.com or mark@mpdps.com Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 Editor in Chief Neil Gopal Editorial Advisor Jane Padayachee Managing Editor Mark Pettipher Editor Nthabi Nhlapo Copy Editor Ania Rokita Production Manager Dalene van Niekerk Designers Wade Hunkin, Eugene Jonck Sales Robbie Pansegrauw e: rob@mpdps.com; Riëtte Stevens e: sales@sapoa.org.za Finance Susan du Toit Contributors Eugenia Makgabo, Lekgolo Mayatula, Maud Nale Photographers Charmaine Rowe, Jabu Nkosi, Mark Pettipher, Xavier Saer 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. Printed by Designed, written and produced for SAPOA by MPDPS (PTY) Ltd e: mark@mpdps.com

e: llewellyn@rsalitho.co.za

P R O P E R T Y

F U N D

from the CEO

SAPOA concerned over increase in municipal holding deposits It has come to our attention that the municipalities have recently started requesting significant increases of the municipal holding deposits, which our members only become aware of upon receipt of municipal invoices ●● Set out the criteria to be applied by the council if it increases rates and levies differential rates on different categories of property.

t appears that in terms of municipal bylaws, holdings deposits equal to the total consumption charges of three months may be levied. According to the Property Rates Policy as it relates to the City of Johannesburg, the Constitution of the Republic of South Africa empowers the Council to impose rates on property. In terms of Section 4(1)(c) of the Systems Act, the council may levy rates on property to finance operational expenditure of the council. The key objectives of the Property Rates Policy are to: ●● Ensure that all owners of rateable property are informed about their liability for rates; ●● Specify relief measures for rate-payers who may qualify for relief or partial relief in respect of the payment of rates through exemptions, reductions and rebates as contemplated in Section 15 of the Act; ●● Empower the Council to specify a threshold at which rating in respect of residential properties may commence as provided for in Section 15 of the Act read with Section 17(1)(h), which it is hereby authorised to do; and

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To determine the level of increases in rates, the criteria to be applied may include the following: ●● The inflation rate as indicated by the consumer price index, excluding mortgage bonds; ●● The financing of increased operating expenditure; ●● The financing of additional maintenance expenditure; ●● The additional cost of servicing debt included in the operating budget of the council; ●● The augmentation of any revenue shortfall; ●● The financing from the annual operating budget of expenditure related to anything the council is lawfully empowered to do for which provision must be made in the budget; and ●● The taking into consideration of the medium-term budget growth factors as determined by National Treasury. In addition to the criteria specified above, the need to promote economic development, any administrative advantages in applying a differential rate and the need to alleviate the rates burden on the owners of any particular category of property are taken into account. SAPOA members have various leased and owned premises that may be affected by this, and we anticipate many other companies to be in a similar position. The amounts are disconcerting and have the potential of hugely affecting the sustainability of businesses. SAPOA requested a meeting with the City of Johannesburg in March to discuss the matter in detail, and awaits feedback from the city regarding this. Neil Gopal, CEO

SAPOA events

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from the Editor’s desk

Leveraging on the potency of the property industry The country’s economy might not be at its best but opportunities still abound

LEADERS IN ECONOMIC & REAL ESTATE MARKET INSIGHT INCORPORATING

GIS TECHNOLOGY FOR ADVANCED GEO-SPATIAL ANALYSES Market Studies • Retail Studies • Centre Repositioning • Consumer Surveys Special Projects • Mixed Use Developments • Inclusionary Housing Projects • Economic Impact Assessments Africa & Far East • Real Estate Feasibility Studies • Economic Assessments • Socio-Economic Surveys • Impact Assessments

HEAD OFFICE (Gauteng) Tel +27 12 460 7009 Fax +27 12 346 5883 Cell +27 82 898 8667 hein@demacon.co.za www.demacon.co.za Gauteng | Western Cape |Free State North West | Vaal Triangle

he global financial outlook has not been very positive in recent times and, as a country that participates in international trade, South Africa has been affected. Along with our own internal snags – such as the severe drought that’s hit the country, political challenges and high unemployment – international financial difficulties have put a damper on the country’s economy. Over the last few years, this country was seen as Africa’s “land of opportunity” but with these and other developments, the future of South Africa as an investible destination that’s attractive to international investors became questionable. It is no surprise, then, that there was of panic among South Africans when they anticipated the budget speech delivered by Finance Minister Pravin Gordhan last month. Some suspected that VAT would be raised to supplement national revenue; thankfully this drastic measure was averted. After the speech, it became apparent that although South Africa might not be going through its best days, we are not at our worst either. One of the reasons why some industries manage to remain buoyant even in tough

SOUTH AFRICAN PROPERTY REVIEW

DEMACON SHOPPING SA - 8 AUGST 2013.indd 2 08/08/2013 12:59

economic times is the professional associations, such as SAPOA, that support industries through various initiatives. SAPOA is committed to keeping its members informed through various initiatives, taking part in advocacy issues and ensuring that the commercial property sector reaches its full potential. SAPOA is affiliated with other organisations that have a similar mandate in an effort to strengthen the country’s commercial space while promoting certain business values and ethics. In this issue of the South African Property Review, we honour and celebrate the work of other such organisations and recognise the pivotal role they play. We live in a world that’s a rat race, in which there is little time to stop to think about regulatory issues, advocacy or even the professional development of employees. This is where professional organisations come into play: they bridge the gap between industry professionals managing their daily regimes, and being active players in training and development initiatives while taking part in and influencing regulations that govern their industries. We also take a look at the global economic outlook according to STANLIB Chief Economist Kevin Lings and STANLIB Head of Listed Property Funds Keillen Ndlovu. They explain some of their company’s investment decisions and talk about the factors that are affecting the global economy. Lings explains that although the economy of this country has been less than ideal in the last few months, last year the retail sector saw increased consumer spend. This is a very small yet significant statistic – and a ray of hope indicating that even through these challenging times, South Africa remains Africa’s golden child, regardless of the ebb and flow of the economy. Until next time. Nthabi Nhlapo, Editor

INVITATION TO STEP INTO THE VOORTREKKER ROAD CORRIDOR

ABOUT US: The Greater Tygerberg Partnership (GTP) is a catalytic champion for the Greater Tygerberg Region, working in partnership with the City of Cape Town towards the redevelopment and revitalising of the Voortrekker Road Corridor (VRC).

SERVICE: We take on the role of a development facilitating agent, with various services on offer to investors, business owners, building owners, developers and the community in the area: ● Identification of development opportunities ● Due diligence studies of properties ● Area specific knowledge of the built environment ● High level pre-feasibility studies at attractive rates ● Liaising with City departments to address issues hampering development.

OPPORTUNITIES THE VOORTREKKER ROAD CORRIDOR BOASTS WITH: ● 9 tertiary institutions, 7 hospitals and 100 000 plus students in the area. ● Significant demand for affordable housing ● Urban Development Zone (UDZ) Tax incentive ● Proximity to Transport services. ● Opportunity to be an inclusive “Live, Work and Play” corridor in the City of Cape Town. ● Highest concentration of employment opportunities in Cape Town.

Making progress possible. Together.

CONTACT DETAILS: Tel: (021) 823 6713 Website: www.gtp.org.za Facebook: http://www.facebook.com/thegtp Twitter: @gtp_the Email: Kirsten Sloth Nielsen – kirstensnielsen@gtp.org.za / Lyle van der Merwe – lyle.vdmerwe@gtp.org.za

industry news

Somerset West development gives R135-million construction boost to Western Cape

he economic development of Somerset West will receive a boost with the commencement of R135-million in new housing at the Somerset Lakes development. The project has been buoyed by the opening of the Reddam House Somerset, which was constructed on the property and is designed to service the estate and the schooling requirements of the greater region. Curro Castle Kindergarten will be following soon. “This year we will see a transformation of this area of Somerset West with the construction of the new housing on the estate,” said newly

appointed sales director at Somerset Lakes Jan Minnie. “Property values in this area remain strong because there is demand for well-priced, low-density family housing on a security estate served by onsite schooling. The first residents took transfer this month. The development company will commence with additional landscaping elements during

the wet season and by the end of the year, the estate with the new school and hundreds of residents will be firmly established.” This year will also see the launch of two new products in the price range, one of which will serve as the flagship of the estate. “The Lakes” is a combination of threeand four-bedroom family-sized homes, set above an expansive six-hectare private lake.

The Somerset West development

Estates opt for waterefficient Easigrass

he five-star Fairmont Zimbali Lodge on the KwaZulu-Natal North Coast chose to install the natural-looking Easigrass in shaded areas around the pool to accommodate guests who want to relax in comfort. Easigrass is an artificial turf brand with headquarters in London; in South Africa it is part of the Durban-based Van Dyck Carpets’ portfolio, part of the PFE International Inc group of companies. Commenting on the decision to use Easigrass, Director of Operations for Fairmont Zimbali Resort Evan Harrington said, “We wanted to investigate the use of artificial grass because of the difficulties our landscaping team was experiencing in getting grass to grow lushly within the shaded areas surrounding our main swimming pool.“ Mehran Zarrebini, head of Easigrass South Africa, said they were seeing more hotels and up-market estates opting for the artificial turf over lawn, particularly in common areas such as pools and children’s play areas. “There are infinite cost-saving benefits because the grass does not need to be cut or tended to in any way,” said Mehran. According to Zarrebini, the severe drought being experienced across the country, with areas such as the KwaZulu-Natal North Coast being particularly hard-hit, has many people opting for Easigrass. In addition to Fairmont Zimbali, Easigrass Durban, an accredited partner and installer, has installed Easigrass at a number of high-profile hotels and resorts. These include the Elangeni Hotel (poolside area landscaped), the Umhlanga Sands Hotel and Cabana Beach Hotel (multi-sports court areas) and the Oysterbox hotel (outdoor massage cabanas).

This prime area of the estate is slightly elevated, allowing for views of the lake and sea, while longer-distance mountain views surround the estate with an amphitheatre effect. “Kingfisher Terrace”, a stylish collection of modern two- and three-bedroom sectional title duplex townhouses, will also be released onto the market.

SOUTH AFRICAN PROPERTY REVIEW

Emira CEO Geoff Jennett

Emira plays to its strengths as a medium-cap diversified REIT

mira Property Fund is strongly positioned for responsible growth, notwithstanding the adverse economic environment in South Africa. Emira CEO Geoff Jennett confirms the JSE-listed SA REIT (real estate investment trust) has refined its strategy to make the most of opportunities in this market, generate distribution growth, gain in size and create value for its shareholders.

Emira has a diversified portfolio of South African commercial real estate, and an offshore investment in Growthpoint Properties Australia (GOZ). Right now, GOZ comprises about seven percent of Emira’s assets. Jennett says that while many listed property funds are targeting all their growth offshore in the current market, Emira will take a more cautious approach to growing its international investments. As a company with its sights set on growth, Emira has targeted growth in both the local and international markets. For offshore investment, Emira is aiming for the progressive growth of its international property holdings up to about 10% of its asset value. However, Jennett stresses the importance of specific market knowledge for offshore investment. As a balanced REIT, Emira’s South African portfolio comprises 45% office, 40% retail and 15% industrial assets – a mix it is confident is within optimum levels.

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industry news

New asset management division at SMEC South Africa gets GM T New sectional title units The Paddocks completed unit

he newly-formed asset management division of SMEC South Africa is being headed up by GM Tom Bürge, as of January this year. Bürge’s experience covers a range of industries and geographies. He has worked in South Africa, Botswana, Malaysia, Sudan, Lesotho, Switzerland and Brazil. This broad exposure within his field has helped to form a global view on asset management in developing economies. Bürge has been an Associate Member of the South African Institution of Industrial Engineers (SAIIE) since 2007. He has spoken on subjects ranging from information systems to asset registers, asset management and strategy at various industry and academic events, including SAPICS, IERM, SAAMA and SAIIE. He was a representative in the Development Bank’s infrastructure dialogues,

established to discuss infrastructure management shortfalls within the South African context. “At SMEC South Africa I have access to many of the world’s best and most innovative engineers, and I intend to capitalise on this impressive intellectual capital,” he says. “This is a real market differentiator for us, especially compared to the other asset management service providers in Africa. It positions SMEC South Africa to make a significant difference to the bottom line of our clients.”

GM of SMEC South Africa’s asset management division Tom Bürge

snapped up in Clarens

strong demand for brand-new homes in secure complexes in the scenic town of Clarens in the Free State has seen half the units in the 24-unit new sectional title development, the Paddocks, sell within a few months of being brought to market, despite this including the traditionally quiet trading period during the recent December/January festive season. So says Anne Maree, Pam Golding Properties area principal in Clarens, who says competitive pricing, with semi-detached units of 105 to 125m² with private patio or garden selling off-plan priced from R995 000 including VAT, has attracted buyers from Bethlehem, Gauteng, Bloemfontein and further afield from KwaZuluNatal (mainly Pietermaritzburg). “The fact that purchasers are acquiring value-for-money new homes in a prime location not only within the town but also in a nationally sought-after country

getaway where they can enjoy a tranquil lifestyle is driving brisk sales in The Paddocks,” she says. “The development is north-facing, with scenic views of surrounding mountains, including the landmark Titanic Rock and Mount Horeb. Buyers are across a range of age groups, from retirees to a younger generation seeking a prime lock-up-and-go property for weekends, where no maintenance is required.” Homes in Clarens have remained in high demand despite the country’s current economic challenges, with a constant flow of enquiries for residential property – especially in the price range between approximately R1-million and R1,5-million. During the past year, Clarens has seen commercial development around the town square, including the upgrading of older buildings.

GROHE publishes first Sustainability Report

ROHE, the world’s leading supplier of water fittings, is committed to enhancing and optimising sustainability at all its worldwide locations on an ongoing basis. Being an integral element of the company’s growth strategy, sustainability forms part of all its processes, activities and products. GROHE has now published its first Sustainability Report, which highlights not only the

company’s long-standing experience and expertise in this field but also its ability to innovate and its focus on the future. At the same time, GROHE is the first company in this industry to issue a declaration of conformity with the German Sustainability Code, thereby providing comprehensive insight into its activities in this field. This inaugural Sustainability Report marks a new milestone

SOUTH AFRICAN PROPERTY REVIEW

in the history of the company. It was prepared in accordance with the fourth and latest version of the guidelines of the Global Reporting Initiative (GRI). The GRI has developed a framework for sustainability reporting that is applied worldwide. Key sections of the report cover sustainable fields of activity, products and processes, employees, customers and suppliers as well as social responsibility.

Based on the Sustainability Report, GROHE has also issued a declaration of compliance with the German Sustainability Code, which has been accepted in full. Comprising the core sections of “Strategy”, “Process Management”, “Environment” and “Society”, the declaration provides detailed information on the sanitary manufacturer’s multifaceted sustainable activities.

industry news

Atlantic Leaf properties raises R1,14bn to expand offshore portfolio A

tlantic Leaf Properties Ltd, the Mauritian domiciled property company with secondary listing on the AltX in Johannesburg, raised £49,5-million (R1,14-billion) in capital from investors during the first week of February 2016. This brings the total funds raised since listing in April 2014 to £135-million. Chief Executive Paul Leaf-Wright and Head of Asset Management and Operations Shaun Fourie founded Atlantic Leaf Properties in response to the growing demand for international property investment alternatives. “Our strategy and investment criteria are intertwined,” says LeafWright. “We invest directly into quality, durable assets in key Western Europe economies, with a particular focus on secondary nodes in the United Kingdom, using a mixture of equity and debt funding. Our risk appetite is relatively low and therefore we favour properties that have longterm leases with blue-chip tenants in place.” The management team has been very active – prior to this transaction, Atlantic Leaf has acquired 48 properties (let to seven tenants) valued at £158million. The existing portfolio consists of a mixture of retail warehousing and industrial distribution centres in England, Scotland,

and Wales. All but one of the current tenants are part of a FTSE-listed group. The new capital raised will immediately be deployed into six UK-based property assets, including three industrial properties and three commercial office properties, for a gross consideration of £107,8million (including costs). New debt, representing 55 to 60% loan to value (LTV), has been negotiated on attractive terms. These properties have low credit risk, single-tenant occupation and long unexpired lease terms, consistent with the overall investment philosophy. According to Fourie, the new office properties not only provide diversification within the portfolio, but also provide a solid base of stable income which will allow management to extract value from the current portfolio through strategic asset management. “Atlantic Leaf has only been in operation for 22 months, and as a management team we are very pleased with what we have been able to accomplish in a relatively short time,” says Leaf-Wright. “However, there is much to be done as we look for further opportunities to expand our model further into the UK and other Western European and selected developed markets.”

Development Management Project Management Quantity Surveying Leasing Tenant Co-ordination

t: (012) 346 4744 – www.illungile.co.za SOUTH AFRICAN PROPERTY REVIEW

industry news

Baronetcy Estate home front exterior view

Homes in up-market Baronetcy Estate rapidly rising out of the ground

hree homes are now completed with a further 11 homes in the final phase already well under construction in the up-market Baronetcy Estate, situated in prime position in Plattekloof in Cape Town’s popular northern suburbs. Plenty more homes are scheduled for building to commence this year, according to Pierre Nel and Andre Leask, Plattekloof area principals for Pam Golding Properties.

“Selling quickly by word of mouth, plots in the final phase 9 have been snapped up by affluent buyers – mainly from the business elite,” says Nel. “Of the 81 plots marketed exclusively by Pam Golding Properties, only five remain available for purchase, with a few of these currently reserved. Prices of available plots in the final phase 9D range from R3,1-million to R3,975-million including VAT for erven from just under 1 000m² to 1 252m² in size.”

RMB Westport launches new Africa property development fund

fter the success of RMB Westport’s first African real estate development fund, which closed in August 2012, the property development and investment group announced the first close of its second fund, the RMB Westport Real Estate Development Fund II, raising just under US$250-million. RMB Westport, a joint venture between the FirstRand group and Westport Property Group, will manage the fund, the proceeds of which will be used to invest in real estate developments in sub-Saharan Africa, with a focus on Nigeria, Ghana, Angola and the Ivory Coast. “Despite a number of macroeconomic headwinds in certain territories in which we operate, strong long-term growth prospects and favourable demographics, and the pleasing

trends of increasing urbanisation and consumer spending have all led to high demand for retail, industrial and commercial property space,” says RMB Westport CEO Simon Fifield. “It’s a credit to both the capital-raising abilities of our joint venture partner, Ashburton Investments (FirstRand’s asset management business), as well as the mature, long-term view adopted by our investor base that we have been able to secure such a substantial amount of capital on the first close.” The new funds raised will be used to finance the business’s very strong pipeline. To date, Fund II has attracted 8 investors comprising mostly international institutions, although increased interest from South African investors is evidenced by the notable rise in commitments from South Africa, relative to Fund I.

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Phase 9 of the Baronetcy Estate development is situated high on top of the Tygerberg Hills, with plots backing onto the 300-hectare nature reserve and thereby enjoying elevated height restrictions that exceed the current 7,5m, allowing properties extending as high as 11m and offering triplestorey modern living space. “In our view, this mountain strip of luxurious properties will comprise some of the world’s most modern architectural masterpieces,” says Nel. “With the introduction of the new South African National Standard XA regulations, which aim to

regulate energy use and encourage the energy efficiency of buildings, and the yearly increase in building costs and the expensive prices of land, these properties are not cheaply built, and home owners are investing considerable amounts in truly building their dream.” With the first phase in Baronetcy Estate launched to market in 2004, on land which was formerly part of the acclaimed De Grendel wine estate (which remains its immediate neighbour), the estate is blooming with some of Cape Town’s most modern, luxurious homes.

First phase of York Commercial Park, Zambia delivered P

roperty and construction solutions company Profica is the project manager for the newly launched York Commercial Park development in Lusaka, Zambia. Strategically located six kilometres south of Lusaka’s central business district, on Kafue Road, this ultramodern logistics, warehousing and distribution park brings a unique “built-for-you” concept to Lusaka in response to the demand for modern, flexible warehouse space with good access, circulation and loading facilities. “Profica is proud to be involved in this major development in a pivotal distribution hub at the centre of the sub-Saharan Africa’s logistics routes,” says Profica Group Managing Director Tim White. “We have managed this development from inception, overseeing and managing the pre-development and land enablement as well as the construction of the services and infrastructure to turn agricultural land into a hi-tech logistics park.” York Commercial Park, initiated by private equity investor Actis, is now being developed by Improvon and Actis in two phases over five years. The park’s first 5 000m² building is now complete, as is the park infrastructure and gatehouse. The park will be fully serviced with all infrastructure, including roads, paved areas, electricity, water, and the highest standard of security with monitored and controlled 24-hour access. York Commercial Park is targeting both local and multinational companies with a unique business model of selling or leasing warehousing and light industrial units designed and constructed to clients’ own specifications. In addition, the park will offer space for every size of business by introducing them to the mini-unit format, allowing smaller companies to lock into modern and bespoke storage and warehousing facilities, while larger businesses can consolidate multiple mini-units.

education, training and development

Investing in the future of property leaders SAPOA is committed to searching for the most talented people who will add value to our members and the industry in its entirety by providing tertiary educational support through the SAPOA Bursary Fund

he SAPOA Bursary Fund was established in 2009, and is funded primarily by SAPOA members. External bursary funding from any non-member companies and government will be welcome – it will assist in transforming the commercial property industry and up-skill the nation. The objectives of the SAPOA Bursary Fund include: ● To transform the commercial property industry demographics to reflect the population demographics in South Africa ● To redress the past by offering historically disadvantaged individuals funding for property-related education ● To have financially sound, solid governance structure and processes ● To promote the commercial property industry at both school and tertiary levels to students from historically disadvantaged backgrounds to ensure growth into the future ● To address the current and future skills shortage in the commercial property industry. SAPOA offers bursaries for fulltime South African university and university of technology studies in the following disciplines: ● Property Studies ● BCom Finance with property valuation and management as a major ● Studies in the built environment ● BSc Quantity Surveying Study bursaries may provide for: ● Registration fees ● Tuition fees

● Exam fees ● Accommodation and meals fees (within reason) ● Mandatory books/papers where they are listed as recommended reading ● Other training courses that will assist the student. All bursars will be required to perform vacation work or in-service training in their field of study at the funding SAPOA member company. After obtaining the degree, bursars must work for the funding SAPOA member company for years in respect of each year for which they received a bursary or repay the bursary costs incurred by the Bursary Fund. A contract will be entered into between the SAPOA Bursary Fund and each successful applicant, reflecting the terms and conditions of the bursary. An important condition of the bursary is that bursars who fail to complete their designated course of study will be required to repay the bursary costs incurred by the SAPOA Bursary Fund.

SAPOA Partnerships The SAPOA Bursary Fund wishes to partner with its members, non-member companies and the government in investing in the future of property leaders. There are three options available to contributors: ● Option 1: Companies who contribute for the full degree of one or more students will have first option to take one or more students for vacation work and to offer a full-time position after the student has successfully completed the degree.

● Option 2: Companies who contribute for a full academic year will have an option to take a student for vacation work and offer a full-time position after the student has successfully completed the degree. ● Option 3: Companies who contribute smaller amounts are not excluded from participating in providing vacation work for students but the exposure to students will be less. These companies may offer fulltime employment to the student at the end of the bursary period. When potential partners choose their contributing option we urge them to take the following into account. ● If you provide funding for one year only, who will fund the balance of the years for the student to obtain a degree? ● In these instances the bursary scheme can only fund finalyear and honours students, and not full degrees.

What’s in it for SAPOA Bursary partners? SAPOA will administer the Bursary Fund and the students on behalf of the funding partners. ● Partners can concentrate on running their core businesses. ● Partners can determine the skills shortage and have an input in specifying the qualifications required to address the skills shortage. ● Partners can offer vacation work and provide practical experience. ● Partners will qualify to claim points on their B-BBEE scorecards under Code 300 (skills development)

●

or Code 500 (socioeconomic development) Skills shortage of PDIs in the industry will automatically be addressed. Partners will be able to monitor how and where their money is spent. Partners will be in a position to employ students once they graduate. Being registered, Bursary Fund partners will be issued with Sec 18(a) certificate that will allow tax deductions from SARS.

SAPOA is seeking sponsorship and funding assistance from our members, non-members and the government for the SAPOA Bursary Fund to provide graduates skilled in commercial property for placement in the public and private sector. The closing date for all bursary applications is 31 July of each year. Study bursaries are open to all Grade 12 students with a minimum of a C symbol/60% in mathematics, science and accounting. This also applies to students who are already studying at a university or a university of technology. Universities have different requirements for the symbol needed in these subjects. Students therefore need to contact them directly for further information. The SAPOA Bursary Fund is independently audited by PricewaterhouseCoopers. Further information can be obtained at Sapoa.org.za

SOUTH AFRICAN PROPERTY REVIEW

education, training and development

On top and on trend SAPOA E-Learning promotes efﬁciency and simplicity in education

APOA has developed an e-learning training method for its members. This training platform includes the filming and production of video content, which enables SAPOA to manage the delivery of training material to audience groups who will be able to access training on their desktop, tablet or mobile devices at any time. The Introduction to Commercial Property Programme (ICPP) and the Essential Commercial Property Programme (ECPP), in conjunction with the University of Johannesburg, are two courses being offered on the e-learning platform. University of Johannesburg is a comprehensive accredited academic institution. As required by the Higher Education Act, the university is registered with the Department of Education as a public higher-education provider, and its qualifications are accredited by the Council on Higher Education and recognised by the South African Qualifications Authority. Delegates will have three months in which to complete either programme on the e-learning platform.

The Introduction to Commercial Property Programme (ICPP) This Introduction to Commercial Property (ICPP) training programme is aimed at people who have no experience or formal knowledge of the commercial or industrial property industry. At the end of this training programme learners will be able to demonstrate their basic knowledge of the:

● South African property terms (glossary) ● Legislative environment that impacts upon the property market ● Trends in the South African property market ● Property industry role-players ● General principles of contract law ● General principles of immovable property law ● The conveyancing process ● How building plans are passed ● Subdivisions and consolidations ● What is included in the sale of immovable property ● Principles of property marketing The course outline and topics of discussion include: ● Module 1 Glossary of SA property terms ● Module 2 The legislative environment that impacts on the property market ● Module 3 Trends in the South African property market ● Module 4 Role-players within the property industry ● Module 5 General principles of contract law – ◆ What constitutes a valid contract ◆ Breach of contact ◆ Remedies of breach of contract ● Module 6 ◆ General principles of immovable property law ◆ What is included in the sale of immovable property ◆ The conveyancing process ● Module 7 ◆ How building plans are passed ◆ Subdivisions/consolidations

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● Module 8 The principles of marketing property

The Essential Commercial Property Programme (ECPP) The Essential Commercial Property Programme (ECPP) offered on the e-learning platform targets people who have had some experience or formal knowledge of the commercial or industrial property industry, or have completed the Introduction to Commercial Property Programme. This programme deals with introduction of property developments, valuations, feasibility studies, property finance, and so on. At the end of this training programme, students will be able to demonstrate their basic knowledge in their current work environment. This programme is focused on commercial and industrial property or real estate. The course outline and topics of discussion include: ● Module 1 ◆ Property economics ◆ Analysis of the South African property market ● Module 2 ◆ Transformation issues within the South African property environment, including the impact of the Property Charter ◆ Important legislation such as the Capital Gains Tax Act and the Property Rates Act ● Module 3 ◆ Property viabilities ◆ Property law – contracts, agency law, legislation update ● Module 4 Valuation of residential and income-producing properties

● Module 5 ◆ Valuation of residential and income-producing properties ◆ Special aspects of contracts of sale, including passing of risk, defects and voetstoots ● Module 6 ◆ Use of a financial calculator ◆ Calculating NPV and IRR ● Module 7 ◆ Overview of town planning ◆ Understanding the principles of town planning to be able to plan a development ● Module 8 ◆ Being able to complete a basic financial feasibility, and to calculate yields and returns ◆ Understanding the difference between capitalisation rates, IRR and initial yield ● Module 9 ◆ The development process ◆ “Green buildings” – the impact on design and cost, as well as longterm cost savings ● Module 10 ◆ Financing a development/ property investment ◆ Dealing with financial institutions ◆ Understanding the listed property sector

For more information on these e-learning programmes, visit Sapoa.org.za Contact: Mafonti Morobi Training Coordinator t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 e: hr-education@sapoa.org.za

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planning and development

The planning profession and its transformative role Deciphering the proposed review and amendment of the Planning Profession Act, Act No. 36 of 2002

Lekgolo Mayatula is SAPOA’s Planning and Development Manager

The objective of the Act is to establish a mechanism for quality control within the planning profession to ensure that all registered professionals are held accountable to the same ethical standards and principles 14

he South African Planning Profession, like any other professions, is currently assessing whether it is appropriately responding to the changing needs of the country, and whether it remains relevant to its core purpose, which is to transform the spatial dynamics of the country in manner that achieves the following results: ● The eradication of inequality; ● The promotion of economic growth; ● Effectively addressing the issues of climate change; ● The successful promotion and implementation of sustainable human settlements; ● The facilitation and active participation of the marginalised communities/ stakeholders; and ● Valuing human diversity. This is no small order, especially for a profession that needs to mindfully craft its own identity within a range of dynamics, such as understanding and abiding by its founding principles and ethos, protecting and serving the public, regulating and managing the professional practice, ensuring the profession remains relevant through increased knowledge generation, and investing in solution-driven planning practices that would repair the disconnect between land use (and management) and social integration. Prior to 1994, the laws of the country promoted

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spatially segregated development, and the planning profession was one of the professions that was used to entrench this. The challenge is that the profession has always been tasked with the responsibility of making informed land use decisions (in the present) that would have an impact on the future. This has become even more evident in the current environment where the profession is required to rectify the errors of the past – this requires a planner to have expert knowledge of the spatial impact of different land use options, the principles of land economics, as well as the diverse range of forces that influence and impact on communities and society. The reality is that, without an expansive knowledge base and an agreed-upon code of conduct, the profession runs the risk of being unable to fulfil its legal obligations. These obligations are highlighted in the Constitution of South Africa, the Municipal Systems Act, the Spatial Planning & Land Use Management Act (SPLUMA), the National Development Plan, the Planning Professions Act (PPA, also to be referred to as the Act), and the South African Council for Planners. The PPA was legislated in 2002 and is under the custodianship of the Department of Rural Development and Land Reform (DRDLR). The objective of the Act is to establish a mechanism for quality control within the planning profession to ensure that all registered professionals

are held accountable to the same ethical standards and principles. SACPLAN is the statutory council responsible for regulating the planning profession in terms of the Act. Since the enactment of the PPA in 2002, there has been a number of significant developments within the planning sector that have brought about the need for the Act to be reviewed and amended. The broad areas of the Act that are being considered for review are listed below.

Definitions The current Act needs to be in alignment with the current legislative frameworks such a SPLUMA. There are minor reference errors that need to be corrected, and some of the definitions need to be expanded upon.

Registration system The current registration system that’s being implemented by SACPLAN needs to be aligned with the needs of the profession.

Membership registration categories The Act needs to make provision for new membership categories in order to align it with the professions competency standards. In addition, there is limited scope for formal specialisation for planners (i.e. specialist transportation planners, social planners and urban designers), so the competency and standards policy needs to address this aspect.

planning and development Registration of unregistered planners The Act needs to emphasise the obligation for all planners to be registered in order to ensure legitimate professional accountability.

Introducing continuous professional development The Act needs to ensure that the profession remains relevant and competitive both nationally and internationally. Therefore continuous professional development is essential. All registered members must be required to attend such training programmes once they are established and accredited.

Monitoring and compliance of SACPLAN to PPA The Act needs to ensure it capacitates SACPLAN to perform its mandatory functions; therefore the compliance and monitoring mechanisms should be constantly assessed and adjusted where required.

Registration and functions of supervisors To ensure that the profession provides work of exceptional quality, it is important to establish a process that facilitates the registration and functions of supervisors.

Setting up of a SACPLAN training fund The fund will assist with creating an awareness of the profession and attract entries into the profession.

Unfair dismissal and job losses of planners who abide by the code of conduct There is a need to protect and have a recompense clause for planners dismissed from work for failure to engage in unethical practice and/ or upholding professional ethics and standards.

Interim policy for facilitating registration of foreign qualifications The existing interim policy facilitates the recognition and registration of foreign qualifications. However, there is a need to introduce an evaluation/assessment mechanism that will gauge prospective candidates on their knowledge of local planning law, and so on. In addition to the aboveproposed PPA amendments, it is important to note that SACPLAN is in the process of defining competency

Since the enactment of the PPA in 2002, there has been a number of signiﬁcant developments within the planning sector that have brought about the need for the Act to be reviewed and amended. and standards for the planning sector. This process aims to further assist in identifying other areas of the Act that will require amendment. The current focus of the competency and standards process includes: ● Developing guidelines for the establishment of competencies and standards specifically for curriculum development at institutions of higher learning; ● Developing guidelines for registration within the different planning categories; and ● Developing job profiling documents with proposals that are linked to the competencies and categories of registration

in a format that considers and feeds into the occupationspecific dispensation document and processes of the Department of Public Services and Administration. Other work that SACPLAN is busy with that could require additional amendments to the Act includes: ● The identification and development of legislative amendments to the Planning Profession Act, 2002, Regulations and Rules; ● The development of accreditation criteria for the accreditation of planning programmes and planning schools/ departments as required in terms of the Act; ● The development of a Continuous Professional Development (CPD) policy and procedure, ● The development of a recognition of prior learning policy and procedure; ● The development of examination system(s) as part of the registration process of planners in terms of the Act; ● The development of qualifications in the format required for the registration of such qualifications with the South African Qualifications Authority. The South African planning profession has definitely evolved since its emergence in the 20th century, and has strived to stay relevant with the changing needs of the country and the world. The transition into democracy created an opportunity for the profession to evaluate and reassess its unique offering. In addition, the global lens was also on the country, which then allowed for the profession to take a holistic and mature view of how it intends to locate itself within

the property development arena. The result of this is evident in the establishment and implementation of various pieces of legislation and policies by the national government and by SACPLAN. The current process is part of the ongoing reinvention of the profession and requires the participation by all stakeholders to tackle the challenges raised and ensure that it facilitates the vision of a socially, economically and environmentally interconnected country. The review and amendment process was initiated by DRDLR last year. Countrywide presentations took place as part of the process, and the draft bill is most likely to be advertised for public comment within the next three months. From a property industry perspective, it is important that the planning profession takes the lead in creating a development foundation that stimulates economic growth, supports the needs of the various members of society and ensures that natural resources are used in a viable manner for the benefit of all. The progressive approach that the planning profession is taking (just like any other profession) is not an easy route. It requires the profession to open itself up, have a complete overhaul and let down its guard. It requires absolute maturity, which in itself is a daunting experience. But the beauty of it is that every single step, every single process that it pursues as long as it anchored by principles of human dignity, humility, respect and the interdependency of every living being than it can be stated for certain that the planning profession shall continue to prosper, serve and fulfil its purpose in society. Long live the planning profession. Additional Source: Kena Consulting: Review & Amendment of the PPA – 2015

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legal update

The exercising of an option parameters Contracts of sale or lease allow certain ﬂexibility when it comes to the exercising of an option

In the matter of Clicks Retailers (Pty) Ltd v Killarney Mall Properties (22362) (2015) ZAGPPHC, the exercising of an option was analysed and emphasis was placed on the wording of the option.

n option is in and of itself a contract that is ancillary to the main agreement. It is essentially an agreement to keep an offer open for a certain period of time. This form of negotiation and agreement affords the landlord the opportunity to keep a longstanding and reliable tenant on their premises and the lease intact. It also allows the tenant to have the freedom of choice for the duration of the option as to whether or not they would like to continue with the main agreement as well as with occupation. In the matter of Clicks Retailers (Pty) Ltd v Killarney Mall Properties (22362) (2015) ZAGPPHC, the exercising of an option was analysed and emphasis was placed on the wording of the option.

Background This legal opinion is only a guide and should not be copied with the expectation that it will serve each party’s individual circumstances. Most of these recommendations have not been tested in our courts. SAPOA cannot guarantee any success in any court if any of these recommendations are put to use. 16

Killarney Mall Properties, hereinafter referred to as the Respondent, let premises in its shopping complex to New Clicks South Africa (Pty) Ltd trading as Clicks, hereinafter referred to as the Applicant. In accordance with the original lease agreement, the Applicant was entitled to renew and occupy the premises for a further period of five years commencing 1 April 2015. The commencement date of this agreement was 1 April 2005, and in terms of Clause 4.1 of the contract shall continue for an initial period of 10 years (“the Initial Period”). Specific clauses of the lease agreement made reference to the way in which the option

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could be exercised. This included the following: Clause 4.2, which stated that, “Should the tenant have diligently honoured its obligations hereunder, throughout the Initial Period, it shall have the right to renew this lease for a further period of five years, commencing immediately after the expiry of the initial period (“the Option”). Further, Clause 4.2.1 of the lease agreement set out the manner as to how the option must be exercised, and stated the following: “Should the tenant desire to exercise the option, it shall give written notice to the landlord to that effect, not less than six calendar months before the expiry of the Initial Period, failing which the option shall lapse and shall be of no force and effect.” Finally, Clause 4.3 of the agreement set out the terms and conditions that would apply during the option period: “Save that the tenant shall have no further option rights, the tenant’s tenancy during the option period referred to in Clause 4.2 above shall be governed by the terms and conditions contained in this Lease”. The Applicant contended it had exercised its right to renew the agreement in writing by sending the below correspondence. “Request for renewal proposal: agreement of lease between Killarney Mall Investments

(Pty) Ltd, and New Clicks South Africa (Pty) Ltd t/a Clicks Killarney, in respect of Shop U49, Riveria Road, Killarney Mall. Our records indicate that the existing agreement of lease for the Clicks premises in Killarney

There was also no need to consider a new rental proposal as such a new proposal was not envisaged by the existing lease agreement. The second paragraph detracts from the unequivocal exercise of the option. It contains an indication that further terms would have to be inserted or could be inserted or may be inserted in the new proposal expires on 31 March 2015. As required in terms of the renewal option, we advise that it is our desire to renew the lease for a further period. Kindly forward a rental proposal to […]@clicks. co.za for our consideration. Please note that all negotiations will be subject to final approval by our board.”

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legal update Considerations The dispute in this application relates to whether the Applicant has properly exercised its right to renew the agreement “for the further period of five years, commencing immediately after the expiry of the Initial Period’. The Applicant’s counsel contended that the reference to a rental proposal in the letter written by the Applicant was a reference to an existing dispute between the parties – the “turnover rental dispute”. The Respondent further contended that Clause 5 of the original agreement specifically stipulated that rental “for each and every following year including the option period shall be a sum equivalent to seven percent more than the aggregate monthly rental payable for the preceding year”, therefore supporting the fact that there was no need to negotiate rentals. The Respondent was of the view that the Applicant clearly failed to exercise the option in accordance with the lease and that the Applicant sought to renegotiate the terms for a renewal period as opposed to actually exercising the option. It was argued that the subject heading of the correspondence makes plain at the outset that it constitutes a “request for renewal proposal” and further also states “kindly forward a rental proposal to […]@clicks.co. za”. Of importance is the requirement of an unequivocal, unconditional and clear exercise of the option on the terms set out in the lease agreement. The Respondent made reference to Judge J Nicholls in the matter of JG Rabin Port Elizabeth Props, who laid down the following rules pertaining to the interpretation of written communication: “It is only the intention as expressed in a written communication that must

be considered. This must be expressed in such a manner that a reasonable person in the shoes of the lessor would understand it as an unequivocal acceptance of the offer. The court must be satisfied that the party communicating this intention must be making an unconditional offer of acceptance and not a counter-offer. Whether the word ‘intention’ constitutes an actual exercise of the option or a notification to the lessor of a future objective is entirely dependent on the context in which the intention is relayed to the lessor.’’

Judgment The judge held the following: ● The heading of the letter starts off with the wording “request for renewal proposal”. This clearly indicates that what the applicant had in mind was a new proposal for a further lease agreement. This finding is confirmed in Annexure GL5, where it is specifically stated that Vick confirmed that “Clicks will be sending the landlord a renewal proposal”. ● The words in the first paragraph reading “it is our desire to renew the lease for a further period” may be similar to the wording contained in Clause 4.2.1 of the lease agreement but fall short of the requirement to state clearly that the applicant accepts the offer as contained in the lease agreement as well as the terms and conditions of the existing lease agreement to be applicable during the Option Period. ● If it was the Applicant’s clear intention to accept the offer contained in the lease agreement, there was no need for a further rental

proposal. The existing lease agreement would merely continue for the next five years, i.e. the option period. ● There was also no need to consider a new rental proposal as such a new proposal was not envisaged by the existing lease agreement. The second paragraph detracts from the unequivocal exercise of the option. It contains an indication that further terms would have to be inserted or could be inserted or may be inserted in the new proposal.

The applicant’s counsel contended that the reference to a rental proposal in the letter written by the applicant was a reference to an existing dispute between the parties – the “turnover rental dispute” ● Further, that a reasonable man reading the contents of the correspondence will merely conclude that the letter contains a desire by the Applicant to renew the existing lease for a further period on such conditions as to be negotiated between the parties, and which would be subject to the approval of the board of the Clicks Group. ● Having regard to the intention of the Applicant, it cannot be inferred from the contents whether the letter contained a clear intention to be bound by the terms and conditions of the existing lease agreement for the ensuing option period. ● The Applicant’s communication regarding the acceptance of the option

●

to renew was ambiguous and did not satisfy the requirements for a valid exercise of the option. It is common cause that the Applicant is still occupying the leased premises notwithstanding the termination of the lease agreement. The Applicant’s occupation of the leased premises is therefore unlawful and the respondent is entitled to an eviction order. The Judge’s order states that the Applicant’s application for a declaratory order is dismissed with costs. The Respondent’s counterapplication succeeds and it is confirmed that the agreement of lease entered into between the Applicant and the Respondent is terminated. The Applicant or any person or entity claiming title through or under the Applicant is to be evicted from the immovable property. The Applicant is ordered to pay the costs of this application including the cost of the two counsels representing the respondent.

Conclusion It is important for parties entering into a lease and/or sale agreement to take cognisance of the juristic nature of an option, namely that an option comprises an offer to enter into the main agreement as well as an agreement to keep the main offer open for a stipulated period of time. Over and above the aforementioned elements, it has become clear the requirements of the original lease agreement must be adhered to when a party has opted to renew the lease agreement. A mere expression of a desire would not suffice or be compliant. The main requirement is that the option must be an unequivocal, unconditional and clear exercise based on the terms set out in the lease agreement.

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The pursuit of excellence The role of professional associations is pivotal in helping professionals reach their full potential and continuously develop their skills and expertise By Nthabi Nhlapo

S SAPOA CEO Neil Gopal

Continuous professional development (CPD) will remain a critical component of the overall training and educational offerings. It refers to the process of tracking and documenting the skills, knowledge and experience you gain both formally and informally as you work, beyond any initial training

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APOA is an organisation that is committed to the advancement of excellent commercial property development by providing advocacy services, education, research, networking and workshop opportunities, youth development and other services. Managing Director of Tongaat Hulett Developments and SAPOA President Mike Deighton recognises this role and the importance of industry stakeholders taking part in associations within their industries. He says the roles that these organisations play often differ according to the needs of the members. “SAPOA has articulated key strategic pillars of its strategy as being research, education, advocacy for the industry, fostering relationships, developing leadership capacity and transformation of the industry,” he says about the organisation. “SAPOA membership holds significant benefits for individuals in terms of their own growth and access to the services of the association, while also empowering the industry to articulate and advocate for its own interests.” Deighton believes that although SAPOA members are industry professionals, additional training is crucial to keep abreast with developments and trends. “Theoretical, academic education has one context for a student choosing and embarking on a career – but the depth of perception and insight achieved by this exposure once experience of an industry has been gained is far greater,” he says. “Furthermore, the value gained through active learning in the company of other practitioners in the chosen profession, such as can be achieved through SAPOA’s flagship PDP course, together with relationships established through such processes, cannot be underestimated or replicated.” SAPOA CEO Neil Gopal concurs. “In nearly every country there are numerous industry and professional associations that represent

the interests and organise the activities for these industry segments,” he says. “Voluntary associations such as SAPOA are essential to the fabric of the community, the ‘glue’ that holds together many disparate parts of our industry. Central to the association should be a strong belief in the benefits that the industry brings to individuals, businesses and society.” He adds that the role of industry associations has remained critical to representing the unique role and contribution to the national and city GDP as well as to national employment. The role of industry associations such as SAPOA is to ensure we have a distinct representative voice that remains critical, and should be understood by policy-makers and by the industry itself. In addition to this, Gopal believes, “Continuous professional development (CPD) will continue to remain a critical component of the overall training and educational offerings. It refers to the process of tracking and documenting the skills, knowledge and experience you gain both formally and informally as you work, beyond any initial training. It’s a record of what you experience, learn and then apply.”

Managing Director of Tongaat Hulett Developments and SAPOA President Mike Deighton

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Africa’s pockets of glory Despite the current deterioration in emerging markets, Africa is still a growth story with a billion-strong young market

espite Africa’s slowing growth on the back of global financial conditions, there are still economic opportunities for long-term sustainable investment in property and the broader built environment for investors with an understanding of local economies on a continent with a billion-strong consumer market. With the current global deterioration in emerging markets, African economies have also been affected. But there are pockets of glory, particularly in East Africa, and investors need to do their homework before venturing in. These were some of the key points to come out of discussions at the Royal Institution of Chartered Surveyors’ (RICS) 2016 Africa Summit in Sandton, Johannesburg recently. Opportunities and challenges in the real estate sector and broader built environment of sub-Saharan Africa were thrashed out by speakers and delegates at the conference, which was attended by key property and investment players, and academics and government representatives from across Africa. Speakers and delegates zoned in on subSaharan Africa’s current shift in economic growth and the impact of sustainable investment, market credibility and the winning of business. Kganya Kgare, an economist at STANLIB, said the IMF predicts that sub-Saharan Africa would grow about 3,7% in 2016. While this is lower than the growth of about 10% between 2004 and 2013, it is still positive growth, driven by good growth expected in East Africa in countries like Kenya, Ethiopia and Tanzania. “These countries are benefiting from not being commodity-reliant,” said Kgare. “Kenya, Tanzania and Ethiopia have done a lot right on the infrastructure-investment side in terms of deliberate planning and execution of planning, and this is paying off with higher economic growth expected. The African growth story is still there but the best opportunities are in East Africa.” In addition, there were opportunities in the real estate market around private finance initiatives and public-private partnerships. Anthony Lewis, a director at Jones Lang LaSalle, said the availability of local-currency leases in East Africa, plenty of real estate in private hands and an established platform

for investors also helped. He noted that uncertainty around US dollar leases was a primary concern for markets in West Africa. “While the African narrative now seems quite negative from afar, this is a wider emerging-markets problem,” he said. “It is worth noting that even in centres such as Lagos, with a slightly uncertain office market, there are great assets up for grabs.”

Sean Tompkins, Chief Executive Officer of RICS

Rand Merchant Bank Africa analyst Neville Mandimika said the reality was “pain would be felt, but the fundamentals are there in the long term”, adding that Africa is not a short-term play. “You need to get in there, boots and all.” Nnema Byrd of STANLIB’s Africa Direct Property Development Fund said that although sub-Saharan economies have seen significant headwinds, his was temporary and there was a case for long-term investment. She pointed out the importance of specialised training, transparency and data to “connect

the dots”, make predictions and provide a level of comfort to investors. Byrd said unlocking the value of land contributed hugely to the GDP of economies and, to achieve this in Africa, countries needed to create something desirable to invest in. She said organisations such as RICS could help to promote standards and transparency. Strong messages emerging from the interactive discussions at the RICS summit on challenges in land and the natural environment included that developers investing in Africa often found it hard to access information regarding ownership. Land rights and tenure were major challenges and there was no one-size-fits-all solution. Mark Walley, RICS Regional Managing Director: EMEA, pointed out that, like Europe, Africa is not homogeneous, with differing levels of maturity and challenges. However, the key to success was having proper standards in place, with governments acting as enablers. Sustainable and innovative solutions were becoming more important. “Standards backed by effective regulation will give confidence to the markets,” he said, adding that those who help build the capacity of the youth will win. RICS Chief Executive Officer Sean Tompkins said it was important to create an environment where government, regulators and professional bodies hold one another to account. He stressed that Africa had a competitive advantage in its young population – its greatest asset. “There is a role for professional bodies such as RICS to set the competencies to ensure that we’re creating the workforce of the future,” he said.

About the Royal Institution of Chartered Surveyors The Royal Institution of Chartered Surveyors’ (RICS) is a professional body that accredits professionals within the land, property and construction sectors worldwide. It regulates and promotes the profession, maintains the highest educational and professional standards, protects clients and consumers via a strict code of ethics and provides impartial advice and guidance. RICS accredits 118 000 professionals. Any individual or firm registered with the institute is subject to its quality assurance.

RICS professionals are required to keep up to date with current practice through a programme of lifelong learning. RICS has offices in major political and financial centres of the world. This means it’s ideally placed to influence policy and embed standards at a national level. RICS also works at a cross-governmental level, delivering a single, international standard to support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all. SOUTH AFRICAN PROPERTY REVIEW

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SA: a top green building performer South Africa is one of the world’s leading green building nations

GBCSA CEO Brian Wilkinson

reen building is forecast to double globally by 2018, according to new research, which showcased South Africa as one of the top performers worldwide, reporting the highest percentage of green building projects currently under way. Even more impressive is the fact that South Africa’s commitment to green building isn’t triggered by regulatory requirements, as is the case in many other jurisdictions but by “doing the right thing”. Dodge Data & Analytics and United Technologies published World Green Building Trends 2016 recently, on which the World Green Building Council

was a research partner. “[In South Africa], respondents believe the green activity so far is just laying the groundwork for an overall shift in the market,” says the report. “If this degree of commitment to green building holds, South Africa will be a leader in the global green market in the next three years.” The report finds that, internationally, twice as many companies are expecting their building projects to be certified green by 2018 – an increase to 37%. In comparison, respondents in South Africa indicated that 41% of their work is already green. “South Africa will continue to outperform, with almost two-

South Africa will continue to outperform, with almost two-thirds of respondents expecting more than 60% of their projects to be green by 2018

GBCSA CEO Brian Wilkinson on his electric bike as he commutes to work

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thirds of respondents expecting more than 60% of their projects to be green by 2018,” says Green Building Council South Africa (GBCSA) Chief Executive Officer Brian Wilkinson. Especially noteworthy is that South African green building is driven by an acknowledgement that green building is “the right thing to do”, rather than by regulations, according to the report. “In South Africa, there is currently an absence of regulatory requirements – which in countries such as the UK, Australia and Singapore are actually the trigger for green building,” explains Wilkinson.

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theme leader It’s testimony to the work that’s being done by the GBCSA. The GBCSA was founded in 2007, and in 2009 certified South Africa’s first green building project. In May 2015, the council certified its 100th building project – and today, there are 167 certified projects.

“It’s a clear sign that green building practices are gaining significant momentum in South Africa, along with an acknowledgment that Green Star-certified projects are not only world-class and innovative, but also of benefit to people, the planet and profits,” says Wilkinson.

Average 2015 green share of building project activity (for firms in South Africa) Dodge Data & Analytics, 2016 Green share Non-green share

41%

59%

CMY

Top triggers for green building (all respondents)

Dodge Data & Analytics, 2016 2015

2012

2008

Client demand 40% 35% 34% Environmental regulations 35% 23% 25% Market demand 30% 33% 35% Right thing to do 25% 26% 42% SOUTH AFRICAN PROPERTY REVIEW

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Representing SA’s valuers The umbrella body for South Africa’s valuers places a high value on cooperation and continuous professional development

The SAIV recently met with an Indonesian delegation to share notes and experiences about the management of the valuers’ profession

he South Africa Institute of Valuers (SAIV), representing the majority of registered valuers in South Africa, is dedicated to serving the public interest by advancing high standards for members of the valuation profession. The institute promotes its mandate by: ●● Setting and maintaining high standards of professional proficiency, ethics and education ●● Striving to provide the appropriate educational programmes, sources of data and information ●● Marketing and creating awareness of the benefits of the professional services of its members to existing and potential clients ●● Monitoring and making representations on relevant legislation in the best interests of its members and their clients.

The role of valuers Valuers are qualified to undertake valuations in all classes of property, including commercial and industrial property, all types of residential property, and agricultural and special-use property. Most valuers tend to specialise and do not undertake the full range of valuations.

It is therefore vitally important for clients to select and appoint a registered valuer with the relevant practical experience required to undertake the specific valuation.

The role of the Institute One of the SAIV’s high-profile projects is where it plays a leading role in the development of South African standards and guidelines for the Municipal Property Rates Act and the development of the proposed municipal assessor qualification. At the South African Council for the Property Valuers Profession (SACPVP) annual conference held in Durban on 1 and 2 October 2015, the Vice President of the SACPVP Chris Gavor announced the council’s intention to develop appropriate standards for the Local Government: Municipal Property Rates Act (MPRA). This announcement was welcomed by the profession as appropriate, relevant and long overdue. A technical committee was established for this project comprising of the SACPVP, SAIV and other voluntary associations. The Standards Technical Committee is chaired by Christopher Gavor, who was recently appointed as the Valuer General.

The SAIV and other professional valuers have already made a substantive and material contribution to the draft standards (Version 7). The SAIV has acknowledged that KwaZulu-Natal’s Cooperative Governance and Traditional Affairs Municipal Property Rates Act (KZN CoGTA MPRA) Monitoring Team is largely responsible for the work to date on the draft standards. The end product will be useful in evaluating service delivery and the performance of appointed municipal valuers.

Memorandum of Understanding with the voluntary associations The SAIV has approached the other voluntary associations to agree to a Memorandum of Understanding. Given the profile of both the MPRA Standards and the development of the proposed municipal assessor qualification it is agreed that the voluntary associations should collaborate regarding responses as the profession and speak with one voice. The MOU has been welcomed by, the Black Professional Valuers Association and the Professional Valuers Association thus far. SOUTH AFRICAN PROPERTY REVIEW

theme leader

Recognition for sustainable and innovative architecture In an effort to promote architectural excellence, the South African Institute of Architects will host awards to recognise top industry performers

he South African Institute of Architects (SAIA) recently announced that it will be hosting the prestigious bi-annual AfriSam-SAIA Awards for Sustainable Architecture. The initiative, first introduced in 2009, recognises outstanding achievement in sustainable architecture and creates

SOUTH AFRICAN PROPERTY REVIEW

public awareness and debate around architectural issues. The awards recognise contributions that bring sustainable innovation to human living environments through an integrated approach to communities, planning, design, architecture, building practice, natural systems and technology.

Two new awards categories have been added this year, significantly expanding South Africa’s most important built environment sustainability awards. The two mainstay categories of Sustainable Architecture and Research in Sustainability are now joined by Sustainable Products and Technology and Sustainable Social Programmes. This means that a full scope of visionaries working in the field of sustainable architecture, construction and innovation will now be recognised for their efforts. “The role of architects and their project partners in ensuring South Africa plays its part in the global journey to sustainability is really emphasised by these awards,” says AfriSam Chief Executive Officer Stephan Olivier. “It is also a recognition of the fact that we are now in a new era that understands that sustainable design has to be an integral part of the building industry from the very start of a project.” “The emphasis is no longer on just the architecture and building practices,” says Kevin Bingham, Vice President of SAIA. “It is now on the ongoing collaboration and innovation of these two key stakeholders

theme leader working with communities, natural systems, technology and planning across all levels. This is the only way to bring sustainable innovation to the inhabitable environments.” The broadening of the scope of the 2015/2016 AfriSam-SAIA Awards for Sustainable Architecture and Innovation to four categories demonstrates important advances both in South Africa and globally. SAIA and AfriSam support this global shift: SAIA through encouraging its members to incorporate sustainability in building design at an early stage and AfriSam by its commitment to sustaining the environment through responsible manufacturing processes. All four categories are geared towards the recognition of regenerative systems design. Project entries are required to demonstrate their positive impact through the embodiment of sound sustainable practices, carrying the hallmarks of great architectural or social design and demonstrating innovative thinking in the field of sustainability. In particular, projects should: ●● Harmonise the use of resources with the conservation and strengthening of ecosystems (natural, social, human, financial, infrastructure); ●● Address the dignity of people by creating a socioeconomic environment that is inclusionary, humane and selfsustaining, that maximises the financial viability and impact, and acknowledges life-cycle cost efficiency during and post the implementation process, and contributes towards developing an ongoing regenerative future; ●● Enhance the architectural landscape and contextual urban environment.

theme leader

Kevin Bingham, Vice President of SAIA

To support this, four key criteria will be considered by the adjudicators: harmonisation, people upliftment, evolutionary paradigm and place-making performance. The adjudicators for the awards are convener Kevin Bingham, Daniel Irurah (sustainable architecture academic), Llewellyn van Wyk (sustainable architect at CSIR), Sebasti Badenhorst (AfriSam representative), Eric Noir (Director for Africa at the International Union of Architects’ work programme Architecture for a Sustainable Future) and Richard Stretton (architect and furniture designer). Stretton’s Koop Design is a previous AfriSam-SAIA Award winner for Sustainable Architecture (2010 and 2014); it also received a Merit Award in the 2014 competition. In 2014, Koop Design’s Vukuzakhe, examining urban development in the municipality of eThekwini, won the category of Works of Social Importance, including research. That same year, the Alexander Forbes headquarters in Sandton, Johannesburg, designed by Paragon Architects and Paragon Interface, took top honours in the Built Work category.

About the South African Institute of Architects The South African Institute of Architects (SAIA) and the regional institutes are committed to maintaining the highest standards of professionalism, integrity and competence in architecture. Any member of the Institute, as defined in the Constitution, is required to: ●● Continually enhance their professional skills ●● Ensure that their work promotes sustainable development goals to the benefit of the South African community and the natural environment ●● Improve the standards of health and safety for the protection and welfare of all members of society

Members of the institute registered as professional architects subscribe to a code of ethics with established principles that remain core to members as they conduct their business, to continually elevate the architectural profession and support members as they strive to attain the highest standards of workmanship, SAIA ensures its members are educated and trained appropriately. Thus SAIA members are equipped to provide leadership and critical judgment, while also exercising their specialist knowledge, skills and aptitude for the betterment of design and development in the built environment. SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

SOUTH AFRICAN PROPERTY REVIEW

theme leader

Creating notable partnerships SAPOA recently signed a Memorandum of Understanding with the Black Conveyancers Association By Maud Nale

BCA President Zukiswa Ntlangula with SAPOA CEO Neil Gopal and SAPOA President Mike Deighton

he intention of the strategic partnership between SAPOA and the Black Conveyancers Association (BCA) is to address the issue of transformation in the property industry, in relation to capacity, resources and opportunities. One of the main objectives of the BCA is to represent and advance the interests of 100% black-owned law firms in South Africa that specialise in property law, conveyancing and commercial legal services, and that practise for their own account. The association also promotes compliance by all institutions with BEE legislation, regulations, charters and codes. Both SAPOA and the BCA highlighted the importance of transformation within the property industry, which – despite having been empowered by statutes, codes, charters and other enabling amendments to legislation – remains largely untransformed and has failed to meet the national transformation goals. “One of the strategic pillars that SAPOA has identified is the need to drive transformation in the industry,” said SAPOA President Mike Deighton, acknowledging the importance of the partnership. “Conveyancers play a substantial and sometimes not fully recognised role within the property industry, and I think this is a great opportunity for SAPOA to form a strategic alliance. This relationship represents a key set of suppliers in a central and important area of expertise. We look forward to how this will unlock value for both parties and for the industry,

and play a role in driving the transformation of the industry over the next few years.” “For BCA, this is a significant milestone,” said BCA President Zukiswa Ntlangula, echoing the sentiment. “We’ve had a relationship with SAPOA over the years but this signifies a marriage between our organisations and an opportunity for BCA members to network meaningfully with SAPOA members. On the transformation front, we do recognise that some of SAPOA’s members may be looking into aligning their procurement spend and patterns with the expectations of industry charters to comply with B-BBEE legislation. As BCA members, we’re available to work with SAPOA members not only for transformation purposes but also to ensure that the BCA provides the much-needed expertise, skills and experience within the property sector and the real estate industry in South Africa.” SAPOA has signed several such MoUs with various organisations, including the National Treasury, the Johannesburg Property Owners Association, South African Council for Planners, South African Planning Institute, Royal Institute of Chartered Surveyors and South African Photovoltaic Association Industry. These working relationships, according to SAPOA Chief Executive Officer Neil Gopal, are important within the property industry because they not only benefit SAPOA members but also enable combined strategy and the pooling of resources. SOUTH AFRICAN PROPERTY REVIEW

news

Global economic outlook South Africans are concerned about the weakening economy and the measures that need to be taken by government to avoid a recession and a junk status rating. We ﬁnd out more By Nthabi Nhlapo

STANLIB Chief Economist Kevin Lings

TANLIB’s Chief Economist, Kevin Lings and Head of Listed Property Funds, Keillen Ndlovu recently shared their insights on the global economic outlook at the start of 2016. Lings is responsible for domestic and global economic research and forecasts as well as providing input into the asset allocation processes, fixed income, property and various equity franchises at STANLIB. He demonstrated how in the US spending cuts stifled growth to the point that the US government is now beginning to increase spend, demonstrating that even in an attempt to control spend governments need to tread lightly. He also touched on emerging economies, saying that because of the growth of BRICS, emerging markets now constitute 40% of the world. “It is worth noting that foreign investors are now beginning to seek specific countries to invest in rather than making investments in the entire emerging-markets pool,” he says. In addition to this, emerging markets have shown disappointing growth, following steady decline since 2010. Speaking about South Africa’s economy, Lings says a recession is possible, especially if the drought that is currently gripping the country intensifies. In recent times, South Africa has had an average growth rate of four percent – but the forecasted growth rate for this year sits below one percent. This slowdown is the result of factors such as global environmental changes,

lack of consumer confidence and rising inflation. Yet even with this negative outlook, Lings says in 2015 retail spend increased because, on average, South Africans received salary increases of about seven percent while inflation was lower. According to the latest Andrew Levy wage settlement survey, the average wage increase in 2015 was 7,7% compared with an average rise of 8,1% in 2014. For 2016, most wage settlements are predicted to be in the range of 7,4% to 7,9%. This is likely to be only fractionally above the average inflation rate for 2016 of 6,4%, which will further dampen retail activity, especially if there are additional job losses, modest growth in consumer credit and a further increase in interest rates. For 2015, South African inflation averaged 4,6%, but there is concern about a sharp upwards trend in inflation during 2016 as it is expected to average 6,7% for the year as a whole, ending 2016 at about eight percent. “More interest rate hikes are expected and if we experience more job losses, this could see the country in an economic recession,” says Lings. “South Africa has one of the most volatile currencies in the world and it seems that we do not have a clear growth strategy, something that could discourage foreign investment. If the country’s debt continues to rise and we cannot show that we are not continuing to attract debt at the same rate, we risk having the ratings agencies take us to junk status.”

Brazil GDP growth

STANLIB Head of Listed Property Funds Keillen Ndlovu

SOUTH AFRICAN PROPERTY REVIEW

%y/y 10 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 2007

Brazil GDP

2008

2009

2010

2011

2012

2013

2014

2015

news He says that corporate sector confidence could assist in increasing job creation and notes some government fiscal pressures that the government needs to address while still retaining investment grade rating. These pressures include: ● A relatively large civil service ● The need to increase social grants, given the high unemployment rate ● Funding of the National Health Insurance (NHI) ● The demand for free education ● Potential funding for nuclear power ● Funding ongoing land reforms (land claims) ● Financial support for SAA, SANRAL, Eskom and others. Ndlovu, who manages the largest and most successful listed property fund in South Africa – the STANLIB Listed Property Fund – with assets under management of about R28-billion for institutional and retail clients (as at June 2015) delved into STANLIB’s global property investments.

He notes that the company is highly invested in the US, with an exposure of just over 58% as the outlook there is more positive than other markets. The US is followed by the UK and Europe, where the company has just more than 10% exposure in each country. “It would be diligent to encourage investors to diversify their money by looking at offshore property investments,” says Ndlovu. “Offshore property stocks have had a strong run over the past year and continue to stake their dominance in South Africa’s listed property sector.” He made special mention of the rise of self-storage properties. “With rising urbanisation, people are moving to smaller urban spaces and therefore need more storage space.” He also noted that globally there is a lowered appetite for department stores. With South African real estate’s total return tipped to barely beat inflation this year, fund managers are investing in real estate firms on offshore exchanges or buying into South African-listed firms that own properties abroad or have a dual listing.

In recent times, South Africa has had an average growth rate of four percent – but the forecasted growth rate for this year sits below one percent. This slowdown is the result of factors such as global environmental changes, lack of consumer

US contribution of government spending to GDP growth Percentage points, four-quarter moving average

conﬁdence and rising

0,2

inﬂation. Yet even with this

negative outlook, STANLIB Chief Economist Kevin

-0,2

Lings says in 2015 retail

-0,4

spend increased because,

-0,6 -0,8

on average, South Africans 2011

2012

2013

2014

2015

US consumer inflation

received salary increases of about seven percent while inﬂation was lower

%y/y 2,5 2 1,5

Core inflation

1 0,5

Headline inflation

0 -0,5

2014 Apr May Jun Jul Aug Sep Oct Nov Dec 2015 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

SOUTH AFRICAN PROPERTY REVIEW

news

Creating signiﬁcant opportunities The Property Management Trading Entity engages with property industry leaders By Maud Nale Photographs Jabu Nkosi

FROM LEFT SAPOA President Mike Deighton, PMTE head Paul Serote, SAPOA CEO Neil Gopal and Property Sector Charter Council CEO Portia Tau-Sekati

he Property Management Trading Entity (PMTE), the state property agency within the Department of Public Works responsible for management of state properties, engaged with property leaders on ways to rebuild skills and professional capacity of the state, and the building of mutually beneficial relationships with the construction and property sectors.

Minister of Public Works Thulas Nxesi

SOUTH AFRICAN PROPERTY REVIEW

The engagement was attended by SAPOA Board and members, the Property Sector Charter Council (PSCC), the South African Institute of Black Property Practitioners and other property sector leaders. In the keynote address, the Minister of Public Works Honourable Thembelani Thulas Nxesi highlighted the mandate of the PMTE and its role within the other priorities of government. “PMTE is about changing the way we do business, in line with the recent budget speech, to contain costs of government accommodation, stamp out corruption and create value,” he said. “We need to develop more creative and mutually beneficial partnerships with the private sector (and labour), to mobilise skills and resources to drive economic development and job creation.” Nxesi also pointed to a number of areas where the PMTE can make a contribution, including addressing the shortage of student accommodation, and support for SMMEs and rural development. “Part of the mandate of the department is to rebuild skills and professional capacity of the state, and the construction and property sectors,” he said. “We have focused additional resources on training and skills development, also with the intent of redressing historical imbalances.”

The Minister believes that there are significant opportunities for investment by the private sector with the Department of Public Works’ property portfolio, through the development of underutilised government land and buildings. “The relationships we build together need to be based on mutual respect and benefit: from the side of the

Head of PMTE Paul Serote

news

SAIBPP CEO Vuyiswa Mutshekwane with SAPOA CEO Neil Gopal

PMTE, providing opportunities and injecting resources; from the side of the property industry, providing skills, resources, quality service and value for money, as well as improving the service to clients and creating value from the state’s long-dormant property portfolio.” PSCC Chief Executive Officer Portia TauSekati highlighted the urgent need for

collaboration and combination of resources between the government and the captains of the property sector in obtaining the desired future for the property industry. “Planning for our collective future for the prosperity of the property sector requires the input of all, as full participants in this journey,” she said. “Today marks an important milestone

SAPOA Board member and Chairman of the Government Liaison Committee Dr Sedise Moseneke

in our ongoing endeavours to build and cement transformative partnerships between government, business and various members in our property sectors. Today also marks the start of a conversation in which all parties across the property sector can participate, thus contributing towards a collective set of ideas for our shared future.”

SOUTH AFRICAN PROPERTY REVIEW

erie

s●

monthly cou n Our

Th e WOR

eye onLD thes worlds ●

by-country focu try-

The city of Maracaibo in Venezuela

espite being one of the world’s top 10 oilproducing countries, more than a quarter of the Venezuelan population lives below the poverty line – something that makes this culturally rich country worth discovering. Venezuela was one of three countries that emerged from the collapse of Gran Colombia in 1830, the others being Ecuador and New Granada, which became Colombia. This baseball-loving country shares a land border with Colombia to the west, Guyana to the east and Brazil to the south. Off its Caribbean coastline lie the island nations of Trinidad and Tobago, Grenada, Curaçao and Aruba.

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Population It is estimated that about 90% of Venezuelans live in urban areas. The original inhabitants of Venezuela were Amerindians, predominantly Caribs and Arawaks. More than three-quarters of the present population is mestizo (mixed race). Approximately 21% are mostly Spanish, Italian, Portuguese and German. Blacks account for an estimated eight to 10%, and Amerindians for about two percent. The official language is Spanish but the largely Christian population also speaks numerous indigenous dialects.

About 99% are Christians; of these, 70% are Roman Catholic and 29% Protestants, while the remaining one percent profess other religions or are atheists. Although most of the people of this country are still living in poverty, there is a marked improvement. This is because social investment in Venezuela during the administration of controversial late president Hugo Chávez reduced poverty from nearly 50% in 1999 to about 27 % in 2011. This saw increased school enrolment, substantially decreased infant and child mortality and improved access to potable water and sanitation through social investment.

eye on the world

Oil-rich, highly literate “Missions” dedicated to education, nutrition, healthcare and sanitation were funded through petroleum revenues.

Housing According to the Heritage Foundation and the Wall Street Journal, Venezuela has the weakest property rights in the world, scoring only five on a scale of 100. In this country, expropriation without compensation is not uncommon. At the 2001 census, there were just over six-million housing units nationwide; about 83,5% of those were occupied. About two-thirds of all dwellings

The world’s tallest waterfall, Angel Falls, is located in Venezuela – but it is its oil reserves that make this country remarkably interesting to explorers

Key facts ▼ National name República Bolivariana de Venezuela ▼ Anthem Himno Nacional, beginning “Gloria al bravo pueblo” (“Glory to the brave people”) ▼ Capital and largest city Caracas ▼ Languages Spanish (official), numerous indigenous dialects ▼ Population 29 275 460 (July 2015 est.)

▼ Ethnicity Spanish, Italian, Portuguese, Arab, German, African, indigenous people ▼ Median age 27,2 years old ▼ GDP/PPP (2013 est.) US$407,4-billion; per capita US$13 600 ▼ Real growth rate 1,6% ▼ Unemployment 7,9%. SOUTH AFRICAN PROPERTY REVIEW

eye on the world Venezuela’s Hugo Chávez In 2002, Venezuelan politics overtook the economy. Populist president Hugo Chávez had been elected in 1998, with a term to run to 2006, a prospect seemingly all but intolerable to the opposition, which saw in his “Bolivarian democratic revolution” ruination for the economy. In January 2002, strikes were called against the government with the intention of forcing Chávez’s resignation. From 12 to 14 April 2002, Chávez was briefly ousted, with apparent close cooperation of the Bush administration – but then returned to power on a wave of popular and military support. After his return, however, no more oil was delivered to Cuba, allegedly for lack of payment, under a 2000 agreement that allowed Cuba to buy 53 000 barrels a day with 15 years to pay at low interest rates. Chávez had been accused of giving the nation’s oil wealth away. A new wave of strikes hit in December 2002, demanding an early referendum. The strike by oil workers lasted the longest – more than two months – costing the economy an estimated US$6-billion. By March 2003, oil production returned to normal levels. were detached single-family homes, and the average household had 4,4 members. Nearly 97% of all households had access to electricity, 90,7% had access to potable water and two-thirds had access to appropriate sanitation systems. Venezuela’s bond ratings have also decreased multiple times in 2013, and the outlook has also been deemed negative by most bond-rating services. ABOVE Angel Falls in Bolívar State BELOW, FROM LEFT A statue in the city of Maracaibo; the Basílica of Our Lady of the Rosary in Chiquinquirá; an example of a highly decorated residential property

SOUTH AFRICAN PROPERTY REVIEW

Education More than 95% of Venezuelan adults are literate because of the high priority given to education by the government.

Approximately 20% of the national budget is assigned to education. Public education from preschool through university is free, and compulsory for children between the ages of five and 17. This includes a year of preschool, followed by nine years of elementary school. Children then undergo two to three years of secondary school, which comes in two stages: the first is designed to provide a general education in the sciences and the humanities; the second prepares students for university and offers specialisation in philosophy and literature, physical science and mathematics, or biological science. Technical and vocational schools provide secondary instruction in

eye on the world However, agriculture now accounts for only about five percent of the GDP. For more than 40 years the economy has been completely dominated by the petroleum industry. In the mid-1980s, oil exports accounted for 90% of all export value, and in 2002 petroleum accounted for one-third of the GDP, and three-quarters of exports and half of government revenue. Since the economy was largely dependent on oil (in 2003 it accounted for approximately 80% of exports and nearly 50% of fiscal revenue), Venezuela neglected other domestic industries for decades in favour of importing goods to satisfy consumer needs. The government has recently encouraged industrial diversification and development through protective tariffs and tax exemptions for reinvestment. Although much of Venezuela’s petroleum is exported in crude form, petroleum refining

is a major industry. Poverty and inflation began to increase after 2010. Venezuela devalued its currency in February 2013 as a result of the rising shortages in the country – these included milk, flour and other necessities – and malnutrition then increasing, especially among children. In 2014, Venezuela entered an economic recession. In 2015, Venezuela had the world's highest inflation rate, surpassing 100% and becoming the highest in the country’s history. The country ended 2015 with an estimated 10% contraction in its GDP, 160% inflation, widespread shortages of consumer goods, and declining central bank international reserves. The International Monetary Fund forecasts that the GDP will shrink by another six percent in 2016 and inflation may reach a high of 204%.

Venezuela: Export of goods from 2004 to 2014 (in billions US dollars)

Economy The Central Bank of Venezuela is responsible for developing monetary policy. During the colonial era and until the development of petroleum resources, the export of coffee and cocoa and the raising of cattle and goats provided the main support for the economy.

100% Exports in billions US dollars

industry and commerce, the trades, nursing, and social welfare. The academic year runs from September to July. There are 14 universities (national and private) and more than 47 institutes of higher learning, colleges and polytechnic institutes that offer at least 180 different fields/professions.

92,81

95,02

80% 65,58

60%

55,72

69,98

97,34 88,96

80,47

65,75 57,6

40% 39,67 20% 0%

2004

2005 2006

2007 2008 2009 2010 2011 2012 2013 2014

Source: WTO © Statista 2015; additional information: Venezuela; WTO

SOUTH AFRICAN PROPERTY REVIEW

developer

Introducing Monte Circle Businesses looking for A-grade ofﬁce space in the highly desirable Fourways node may not have to look any further than Monte Circle ofﬁce park

The first building at Monte Circle is complete and is 60% let. The second building is under way at present and interest from prospective tenants has been good. Although the office market is fairly well supplied, it can still be a challenge to find quality office space in the right location 38

SOUTH AFRICAN PROPERTY REVIEW

onte Circle is an attractive new office park located just off William Nicol Drive, across the road from the Montecasino complex. Developed by Abland, this 77 000m² office development ticks all the boxes when it comes to giving the modern occupier everything they need. Monte Circle’s prime location gives it excellent accessibility (particularly from the northern access routes) and visibility.

It is situated on a Gautrain bus route, which effectively links it easily to OR Tambo International Airport. Furthermore, as infrastructure upgrades continue to take place in and around Fourways – including the extension of the Gautrain route and the development of a new Gautrain station – its accessibility will only improve. Monte Circle will also form an integral part of the surrounding neighbourhood, located

developer as it is within short walking distance of the Montecasino complex, where a variety of hotels, function venues and conferencing facilities are available. One of Abland’s development philosophies is the creation or encouragement of sustainable precincts of which the company’s developments form a part. The office park itself is designed to be pedestrian-friendly and will be attractively landscaped, making it an asset to the neighbourhood in which it sits. Its “village” feel with tree-lined boulevards and inviting outdoor spaces is intended for enjoyment by tenants and even a little social interaction. The completed development is expected to consist of about 10 buildings, although this number is flexible and will ultimately depend on the requirements of the tenants secured for the office park (within the allowable bulk). Monte Circle’s development manager Janet Glendinning explains that because Monte Circle is being developed in manageable phases and according to tenant demand, it is possible to accommodate different size requirements for tenants. In addition, the campus-style design makes it possible for businesses to expand into additional buildings within the park over time, giving them flexibility. The first building at Monte Circle is complete and is 60% let. The second building is under way at present and interest from prospective tenants has been good. Although the office market is fairly well supplied, it can still be a challenge to find quality office space in the right location. Abland believes that, in the immediate vicinity, there is very little by way of office space that can compete with the offering at Monte Circle. Adding to its appeal is the fact that the developers are fully committed to building

sustainably – something that is starting to command a premium in the market. Building 1 already has a 4-Star Green Star SA design rating from the Green Building Council of South Africa, with a particular focus on energy-efficiency aspects. The intention is to obtain certifications for all the buildings. A further advantage, which can be implemented at the request of a tenant,

is the possibility of including roof gardens on top of the buildings. These would also double as attractive social and entertainment spaces. It is now an Abland standard to install backup generators and to have a backup water supply at all its developments. All landscaping is done with indigenous and water-wise plants – as will be the case at Monte Circle. Tenants can expect the kind of security, hi-tech infrastructure and services that are part of a high-end office development. Abland will also be providing a tenant fitout allowance to assist with interior fit-outs. In addition, various value-adding facilities and services will be included in the park and offered to tenants. Overall, Monte Circle is undoubtedly one of the most attractive office parks available in the Fourways area. The Italian villagestyle will provide a welcoming and visually appealing environment for visitors and users, while its modern infrastructure and technology backbone will fulfil all the needs of a modern business. Abland is pleased with the positive response in the market so far, and welcomes all further enquiries from potential tenants. SOUTH AFRICAN PROPERTY REVIEW

education

Increasing the property management pool SAPOA and Wits University honour the Property Management class of 2015 By Maud Nale Photographs Xavier Saer

FROM LEFT Wits professors David Root, Samuel Azasu, Kola Akiasomi and Ian Jandrell with SAPOA CEO Neil Gopal at the certification ceremony

Professor Samuel Azasu

SOUTH AFRICAN PROPERTY REVIEW

he certification ceremony for the oneyear SAPOA Property Management Programme took place on 25 February in Johannesburg. The Property Management Programme is the result of a collaborative effort between SAPOA and the University of the Witswatersrand. According to SAPOA’s Chief Executive Officer Neil Gopal, the ceremony is a celebration not only for SAPOA and the university, but also for the graduates. “One of SAPOA’s main objectives is to provide professionally designed programmes to introduce prospective students to a career in the property industry,” he says. “In consultation with our members, it was necessary to revise and update the course contents for all of our courses. We are proud to have Wits as our strategic partner.

There is a serious skills shortage in this industry, and one of the ways that SAPOA is addressing this is through partnerships such as this one. Professor Samuel Asazu from the School of Construction and Economics management echoed this sentiment. “We wanted to provide courses that resulted in our graduates being the sources of innovation, new ideas products and services as well as reporting standards and formats in the industry,” he says. “We’re looking ahead with optimism at the possibility that Wits may finally be in a position to lead in developing talent as far as the next captains of industry are concerned. Our history with SAPOA has just entered a new chapter – this is the beginning of an ongoing partnership with SAPOA.”

education

Stakeholders, including SAPOA and Wits University representatives, and award recipients

SOUTH AFRICAN PROPERTY REVIEW

ENGINEERS

people in proﬁle

SOUTH AFRICAN PROPERTY REVIEW

people in proﬁle

Michael Bennett

Ian van Rooyen

Technical Director: Structures, Johannesburg

Technical Director: Structures, Durban

Sutherland Structural, Civil Mechanical, Electrical and Façade

Sutherland Structural, Civil, Mechanical, Electrical and Façade

Consulting Engineers

Michael Bennett originally born in England, was schooled in South Africa and then returned to the UK to study Civil Engineering. Bennett worked for Arup Consulting for six years, and then joined Sutherland in Cape Town when they only had nineteen staff back in February 2003.” (Sutherland currently employs over 110 fulltime staff members in five branch offices). Bennett says, “One of the large challenges we are currently facing in our industry is rising costs and pressure on project financial feasibilities. Sutherland continuously explores all the different options available to reduce the construction costs as well as the construction programme.” “A core value has always been to design all engineering aspects optimally. Ensuring all engineering component costs are fully explored and thoroughly understood and the best possible engineering solutions then provided is critical to our clients” Bennett took up the challenge to head Sutherlands Johannesburg Structural Division in 2013. His favourite projects include Crystal Towers Hotel, offices, apartments and bridge at around R700 million construction cost at Century City a few years ago, V&A Waterfront Phase 2 apartment buildings, the mega Clocktower precinct in the V&A Waterfront and the 90 Grayston, A-grade office building in Sandton. He is currently engineering various exciting large apartment, retail, hotel, industrial and office building projects in Gauteng, Nairobi and surrounds.

Ian van Rooyen was born in Durban and studied for a B. Sc. Degree in Civil Engineering at the University of Natal. Van Rooyen joined Sutherland in 2005 in their Cape Town head office and moved back to his roots in Durban in 2008 to open the Sutherland Durban office, which he says was a very exciting opportunity and challenge for him. He adds, “The Durban office has grown over the past eight years to seven full time technical staff members. On the larger projects, technical teams from Sutherland’s other branch offices assist with production. We have successfully completed many challenging projects in Kwazulu Natal during this time whilst still maintaining the Sutherland core values and culture. Some of these projects include the Unilever Distribution Warehousing and Processing Plant at River Horse Valley, FNB and PWC regional head offices on the Ridge in Umhlanga, the Westwood shopping centre in Westville together with numerous industrial buildings.” Van Rooyen says that the Sutherland Durban office is currently hard at work on the design phase of a mega mixed use development in Umhlanga which consists of two twenty-eight story residential towers, large retail component and hotel over multi-level, deep basements. “There is a shortage of engineering skills in the country which provides both challenges and opportunities. The commercial building sector engineering market is fast paced and dynamic,” says van Rooyen.

+27 (0)11 268 1412 Cape Town, Johannesburg, Durban, TygerValley, Nairobi www.sutherlandengineers.com

+27 (0)31 566 3435 Cape Town, Johannesburg, Durban, TygerValley, Nairobi www.sutherlandengineers.com

people in proﬁle

Thys de Vries

Jonathan Edwards

Graeme Page

Mechanical Director: Head of Mechanical

Electrical Director: Head of Electrical

Managing Director

Sutherland Structural, Civil Mechanical, Electrical and Façade

Graeme Page Consulting Engineers CC (GPCE)

Consulting Engineers

Thys de Vries was born in Paarl in the Western Cape. He studied mechanical engineering at the Cape Technikon and completed his BTech degree cum laude in 1996. He obtained his Professional registration in 2005. De Vries started Sutherland’s mechanical division in Cape Town in 2004, which has grown to a team of 37 and continues to grow strongly nationally and into Sub Sahara. De Vries says, “The challenges with building services engineering is to ensure that you remain the engineer who is the most up to date on available technologies which change constantly. Our industry offers fantastic opportunities to be part of a multidisciplinary design team internally and a larger professional team externally, working closely with the main and subcontractor team that together create the clients and architects vision.” “Any large project which is fast track by nature and needs to be completed in record time is a personal favourite. The more sustainable complex and fast-track, the better.” “In being genuinely focused on all sub-disciplines within the mechanical building services engineering field such as rational fire, fire reticulation, wet services, HVAC, energy modelling and vertical transportation, it is possible to offer complex integrated and co-ordinated designs in the 3D environment, which gives Sutherland an edge in this industry”. He remains very thankful of the loyal support of his existing clients and the projects across Southern Africa and Sub-Sahara that they are appointed to engineer.

Jonathan Edwards, an Electrical Engineering graduate from the University of Cape Town, was born in Johannesburg 35 years ago. Edwards started his career in Johannesburg in 2004 managing the Pfizer head office in Sandton and certain Gautrain station projects. He says, “Craig Sutherland approached me in 2010 to head up the new electrical engineering division at Sutherland, an opportunity, which does not come around every day, and something I grabbed. The Sutherland electrical division officially opened in January 2011 and in five years, has grown to a division of nine full time staff.” Being able to offer the full multidisciplinary engineering design disciplines of structural, civil, mechanical, electrical, electronic and specialist façades all drafted, designed and modelled in the 3D environment, is a huge benefit to clients. Edwards and his electrical design team are active on a range of exciting building projects across SA and Sub Sahara. Recent projects that Edwards is really proud of, include The Hub (30,000m² GLA Retail Centre) in Nairobi, Kenya as well as the new 17 story A-grade Kings Tower office development in Lagos, Nigeria. Sutherland has handled the full multidisciplinary engineering services on both of these Sub-Saharan projects. Edwards and his team are also currently handling the electrical, electronic and automation designs and co-ordination on the Radisson Red Hotel, V&A Waterfront and various apartment buildings and luxurious homes on the Atlantic Seaboard in Cape Town.

Graeme Page Consulting Engineers CC (GPCE) is a Johannesburg firm of specialist heating, ventilation and air-conditioning (HVAC) consulting design engineers servicing the built environment. The firm was founded in 2002; it specialises in retail, commercial, hotel, leisure, entertainment and residential projects. Special emphasis is placed on personal client-focused delivery. The GPCE staff, led by Graeme Page, Steven Barrett and George Arnold, are flexible in their approach to change, ensuring the fastest turnaround of project deliverables. GPCE makes use of the latest design, CAD and thermal modelling software to ensure each project is delivered a solution of the highest quality, and are investigating the use of 3D CAD software and REVIT, linked with AUTOCAD. The service offering from GPCE includes (but is not limited to): ● Smoke and toilet ventilation/extraction ● Air conditioning ● Office areas ● Data – close control ● HVAC efficiencies ● Tempered fresh air ● Tenant-specific requirements ● Kitchen extract systems ● Additional lighting loads The GPCE staff have more than 50 years’ total experience, maintaining a philosophy that in all circumstances, they’ll be able to provide the client with the service the project deserves. This is reached by ensuring all projects are handled by one of the partners or a senior engineer. Project feasibility and early planning is always undertaken by one of the directors.

+27 (0)21 425 0065 Cape Town, Johannesburg, Durban, TygerValley, Nairobi www.sutherlandengineers.com

+27 (0)11 794 1907 info@gpce.co.za www.gpce.co.za SOUTH AFRICAN PROPERTY REVIEW

event

Leadership Conference The Women’s Property Network hosted its second annual Leadership Conference

Genevieve Naidoo, National Chairwoman of the WPN

Leadership Conference guests

SOUTH AFRICAN PROPERTY REVIEW

he Women’s Property Network (WPN) recently hosted its second annual Leadership Conference. The half-day event, which was sponsored by Standard Bank, was targeted at women working across the real estate sector value chain. This year’s theme – “Game Changers” – encourages women to become such by taking an out-of-the-box approach to their role in the industry. This includes the way they think, position themselves and transform the sector. “It is our intention to provide our members with the tools needed to alter their business strategies so they can enhance their business and be successful within the sector,” says WPN National Chairwoman Genevieve Naidoo. Entrepreneur Donna Rachelson was the host, and the line-up of speakers included Phil Barttram (Vice President: Real Estate at MSCI); Zola Ntwasa (winner of the Entrepreneur Award in the 2015 SA Women in Property Awards); Shaun Rozyn (Director at Rozyn Economic Advisory Services); and Cuan Chelin (founder and CEO of Super-Brands Holdings). The programme included a panel discussion with leaders in the real estate sector, including Vuyiswa Mutshekwane, CEO of South African Institute of Black Property Professionals; Bronwyn Corbett, CEO of Delta International; Yondela Silimela, Executive Director of the Development Planning Division in the City of Johannesburg, and Naidoo, discussing gamechanging strategies in the sector. A key focus for the WPN is to help the real estate sector understand the importance of

the role of women in their businesses. For those companies not yet ready to invest in women, it is worth noting that gender diversity is critical to bottom lines. According to the World Economic Forum, companies that include women at top levels of leadership tend to outperform those that don’t. It also ranked South Africa 18th in the 2014 Gender Gap Index, with Iceland in first place, the US in 20th and the UK in 26th. “The development of leaders in our sector is crucial, and our involvement in this event in a small way allows us to be part of the growth and development of those leaders,” says Gary Garrett, Head of Real Estate Finance at Standard Bank. “We are also incredibly proud of our association with the WPN. Its focus on education and on promoting the role of women in real estate is fundamental to diversity in the sector – and key to its success.” Naidoo, also Head of Credit for Real Estate at Standard Bank, a board member of RICS and a former WPN Rising Star Award Winner, maintains that educational and mentorship initiatives are key in WPN’s drive to bring about demographic change across the entire spectrum of the real estate sector. Since 2008, the WPN has awarded more than 43 bursaries to previously disadvantaged female students studying towards a propertyrelated degree or diploma. With the increasing financial support of the WPN Educational Trust, in 2015 a total of 11 bursaries were awarded to students studying at various institutions across the country.

event

MC for the day, Donna Rachelson

Vice President of MSCI, Phil Barttram

Executive Director of Development Planning at the City of Joâ&#x20AC;&#x2122;burg, Yondela Silimela

Conference panelists (from left): Genevieve Naidoo, Vuyiswa Mutshekwane, Bronwyn Corbett and Yondela Silimela

SOUTH AFRICAN PROPERTY REVIEW

research

Ofﬁce Vacancy Report The last ﬁve years have been a sustained period of static vacancy and zero real rental growth By Maud Nale Photographs by Xavier Saer

FROM LEFT Stan Garrun, MSCI; David Rice, Redefine Properties; John de Klerk, DHK Architects; Aram Lello, DHK Architects; Jeffrey Jalink, Redefine Properties; and Thabang Kekana, Investec

The ofﬁce sector remains in recovery mode with a sustained improvement in the ofﬁce vacancy rate relying on a strengthening

s at Q4 ending 31 December, the national office vacancy rate was 10,5, which is virtually unchanged on the 10,6% recorded for Quarter three. The sideways trend of the last five years remains firmly intact. According to Stan Garrun, Executive Director for MSCI, the last

quarter of 2015 also saw asking rentals continue their aboveinflation trend by posting a yearon-year growth of 6,5%, down from 7,1% in Q3. The rise is more of a product of supply-side dynamics than it is demand-driven. The office sector remains in recovery mode with a sustained

Effect of slow growth-supply overhang Growth needed to soak up excess demand

of macroeconomic

6,0 5,0 4,0 3,0 2,0 1,0 0,0 -1,0 95 -2,0

drivers such as economic growth, business conﬁdence, and

Real GDP growth

IPD total return (RH axis)

Growth Supply overhang

Supply overhang

Demand shock

15,0

ﬁnancial and

35,0 30,0 25,0 20,0 1,3 15,0 1,1 0,8 10,0 15 17 5,0 0,0

All property vacancy rate

10,0

business service

Sample size: 20,5m sqm

5,0

capital investment

0,0

Sources: SARB, World Bank, MSCI Real Estate

improvement in the office vacancy rate relying on a strengthening of macroeconomic drivers such as economic growth, business confidence, and financial and business service capital investment. The latest report saw an improvement in all office grades with the exception of

SOUTH AFRICAN PROPERTY REVIEW

research A-grade offices, which saw vacancy rates weaken by 40bps. On a municipal level, the lowest office vacancy rate at quarter end was recorded for the City of Cape Town, with seven percent. Inner City office vacancy rates remain high, and at almost double the level of decentralised nodes. Office development activity remains at a historic high, having overtaken the high of 1998 and 2007 during the third quarter of 2015. Slightly concerning is the recent drop in the development pre-let rate to 64% from 72% in Q3. The office sector is still firmly entrenched in its recovery phase, given the recent decline in vacancy rates (although the trend is not yet firmly established) and stabilisation of rental levels. However, the future trend depends largely on the strength of growth drivers, most notably financial and business services employment growth and capital investment.

research

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

THE SA POA PRO PER TY

ADV OCATE

MA GA ZIN

02- 201 6

ENSafrica ’s ANDREW BEMBRID GE

Decoding the intricate w orld of Propert y Law JOINT OW NERSHIP Sectional titles unde r the spotlig ht

COMMU NITY SCH EMES OMBUD SER Dispute re VICES solution si mplified NAMIBIA ’S WLOTZK ASBAKEN A peculia r case of owner ship PENSION S, AND ANN PROVIDENT FUN DS UITIES New Tax Laws exp lained Cover feb

SUBBED

.indd 1

2016/02

/08 9:51 AM

Reaching leading legal professionals within the property industry David Rice, Redefine Properties

Sunir Goven and Michelle Needham of Strategic Real Estate Managers

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

● Engineering: storm water, roads and bridges within

●

● ●

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

For advertising, contact Robbie Pansegrauw: +27 (0)21 856 0321 / rob@mpdps.com or Mark Pettipher: +27 (0)21 856 1276 / mark@mpdps.com SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

In discussion with experts In an effort to harness a collaborative spirit, SAPOA Port Elizabeth recently held a networking event for members Photographs by Charmaine Rowe

Ilke Ontong

SAPOA Port Elizabeth recently held a networking event. Hosted by Investec, the event included presentations by a panel of experts on pertinent matters, and a brief background and update on the Spatial Planning and Land Use Management Act No. 16 of 2013 (SPLUMA), and heritage preservation and town planning matters. Various industry stakeholders attended the evening and participated in an open discussion with the panel on these relative issues. The following representatives generously offered their valuable knowledge and time to form part of the panel: Mthulisi Msimanga (NMBMM), Maartje Weyers (South African Planning Institute); Simiso Thebe (Metroplan); Elwyn HarlechJones (ECIA & HJA); and Hubert Sieg (ECIA & IMBONO FJA). 50

SOUTH AFRICAN PROPERTY REVIEW

Mazan dos Santos

FROM LEFT Rob Edelson, Thamsanqa Futha and Eldrid Uithaler

SAPOA events

Muriithi Kiugu and Kevin Kimwelle

FROM LEFT Robert Montgomery, James Parker and Nicole Deschamps

Jacques Wessels and Sandra Lottering

FROM LEFT Azi Nkonki, Bev Apsey and Cheryl Jonker

FROM LEFT Mthulisi Msimanga, Cindy Dickson, Mark Bakker, Maartje Weyers, Hubert Sieg, Simiso Thebe and Elwyn Harlech-Jones

SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

Durban mountain bike challenge As part of a membership drive, with the aim of developing relationships with the local Msunduzi Municipality and the property industry in the Pietermaritzburg area, the SAPOA KZN Regional Committee hosted a mountain bike networking challenge. The event took place in February at the Karkloof Mountain Bike Club, and was jointly sponsored by the Pietermaritzburg branch of Kantey & Templer and Cochrane Steel Products

FROM LEFT Noel Stevens, Neil Greyling and SAPOA KZN Regional Councillor Edwin van Niekerk

Stakeholders, including SAPOA representatives, sponsors and participants

SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

Networking in the Cape SAPOA Western Cape recently held a members-only networking event at the Century City Conference Centre and Hotel, which was the main sponsor of the event, with GVK Siyazama Construction as co-sponsor

FROM LEFT Johan de la Querra, Andrea van Niekerk and Christelle Wait

Bafafikile Bonke Simelane and Fatgie Moos

FROM LEFT Refqah Ho-Yee, Alan le Roux, Caroline Coates and Paolo Viotti

Charmagne Monk and Chris Bam

FROM LEFT Gary Koetser, Jeremy Stewart, Elisabeth Lotz, Glyn Taylor and Mardre Meyer

SOUTH AFRICAN PROPERTY REVIEW

frankly speaking

A fascinating journey with Thierry He is an executive who doesn’t wince at the thought of eating frogs’ legs and has a keen interest in the workings of the ancient man’s mind. We chat to Thierry Giannone, Managing Director: East Africa for Proﬁca By Nthabi Nhlapo

Q What do you like most about being French?

The fact that I can eat snails, frogs’ legs, smelly cheese and onion soup without question. I think my background also brings a certain alternative, ascetic yet humorous view on life, which helps through the testing periods of one’s day.

Q If you weren’t in your profession, what would you be doing and why?

Anything creative such as design, painting and making is a fantastic mind trip.

Q You have many years of experience in high-profile and complex projects in property and construction. Have you been devoted to anything else for as long?

Life. There are a number of interests that I engage with periodically, which culminate in the hobby of life.

Q What are the main things

you’ve learnt during your career?

Everything is different, yet the same. One of my passions when I get the chance to travel is visiting ruins, anything up to the Middle Ages. When you stand in a Gothic cathedral, it’s not difficult to imagine the stonemasons laying stones and the discussions that took place on that site. I always wonder whether they were that different from the issues we face today.

Q What are the most positive

things about working in East Africa?

As global business interest in Africa grows, secondary hubs to the Middle East and South Africa are being earmarked for East and West Africa. There are a few countries vying for the position of East African hub in terms of ease of business, airlifts and political stability.

SOUTH AFRICAN PROPERTY REVIEW

This is providing a platform for international product to be developed within the region, which is positive for East Africa as a whole.

Q Would 18-year-old Thierry be proud of you today?

I was once told that truth is the constant search for knowledge; anyone who claims to have found it has missed the point. That rings true for personal achievement – if we ever get satisfied with what we’ve achieved, we’ve missed the point.

Q Name five things you can do with

microwave oven without a power cord.

Pull, open, hold, push and click.

Q If you could move the Statue

of Liberty to any other part of the world, where would you take it?

I would cut the statue up into various body parts and locate them in strategic places around the world that have significant meaning. These would then be the object of a world tour that could be undertaken, which at the end would signify the journey to liberty.

Q If we came to your home and looked inside the refrigerator, what would we find?

The inside of a refrigerator.

Q What fascinates you about life?

Life is a continuous cycle of the same thing at different times, affected by the necessities of opposites. It is only through the bad that good comes, and only through the good that bad comes. We think that the one is the counter to the other when perhaps each needs the other in order to progress. This trend is inherent in every aspect of life, from nature to business.

Profica is a professional construction project management company that provides stand-alone consulting solutions to the property and construction industries. The company has established offices in southern Africa, and East and West Africa, with permanent staff on the ground throughout sub-Saharan Africa. Profica’s project managers have delivered complex, high-profile projects across many sectors and across Africa and the globe, taking them from planning through design and construction to successful completion. “Profica is going through a growth phase,” says Giannone. “This stage of a business life cycle typically means that a business needs to expand and shed some of its entrepreneurial flair while adopting corporate processes. The personalities that drive the business have strong views on various aspects, and that creative tension moulds the business direction and culture. We have a passionate team that’s focused on success on the African continent. Our context is complex and everchanging, and we have to work tirelessly to navigate a path through this based on our experiences.”

UPCOMING

EVENTS

2016 April

Region

Date

Event

East London

7 April

Power Hour Breakfast

Mpumalanga

8 April

SANS 10 400 Workshop

Gauteng

13 and 14 April

Negotiation Skills Masterclass Programme (NSMP)

Port Elizabeth

18 April

SANS 10 400 Workshop

KwaZulu-Natal

19 April

Sectional Title Workshop

Mpumalanga

21 April

Networking Event

Limpopo

21 April

Limpopo Golf Day

Gauteng

TBC

Gauteng Golf Day

May Region

Date

Event

KwaZulu-Natal

10 May

KZN Golf Day

Port Elizabeth

18 May

Networking Event

Gauteng

23 to 27 May

Property Management Programme (UJ)

Port Elizabeth

25 May

Lease Agreement Workshop

Gauteng

27 May

SANS 10 400 Workshop

KwaZulu-Natal

TBC

Research Breakfast

Gauteng

TBC

Research Breakfast

June Region

Date

Event

KwaZulu-Natal

7 June

Method for Measuring Floor Areas in Buildings

Gauteng

9 June

Method for Measuring Floor Areas in Buildings

East London

9 June

Networking Event

Gauteng

21 to 23 June

SAPOA Annual Convention and Property Exhibition

Limpopo

29 June

Broker Networking Cocktails

Dates are subject to change. Please see Sapoa.org.za for regular updates.

off the wall

Here today, gone tomorrow South Korea anticipates becoming home to the world’s ﬁrst invisible tower

he answer to a fairly straightforward question is often just as obvious. But it seems one simple question will soon have a very surprising answer. Can a building be invisible? Well, according to GDS Architects (a US-based firm) and the South Korean government, the answer is a resounding yes. The South Korean government has granted approval to begin construction on the world’s first “invisible” tower to the architectural firm. The building, dubbed Tower Infinity, will top out at 450 meters, be the world’s sixthtallest tower and have the third-highest observation deck in the world.

SOUTH AFRICAN PROPERTY REVIEW

Height isn’t its main selling point but Tower Infinity is expected to come sixth on the list of the world’s highest towers, behind Tokyo SkyTree, Guangzhou’s Canton Tower, Toronto’s CN Tower, Moscow’s Ostankino Tower and Shanghai’s Oriental Pearl Tower. Residents of Seoul near the Incheon International Airport are anticipating the arrival of this innovative building, although a completion date for the project has not yet been released. Cameras will be placed at three different heights on six different sides of the building to capture real-time images of the surroundings. Three other sections, each filled with 500 rows of LED screens, will project the individual digital images. Through digital processing, images will be scaled, rotated and merged to create a seamless panoramic image that appears on the LED rows to create the illusion of invisibility. In essence, whatever is going on behind the building will be projected onto the front of the building. According to GDS, managers will be able to alter the level of power used to give the building different levels of invisibility. The development will be used primarily for leisure activities. It will include a series of observation decks, a movie theatre, a roller coaster, a water park and numerous food and beverage outlets.

SAPOA events

APPRECIATING PROPERTY INVESTMENT

NAA GLOBAL WINNERS

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Appreciating Property Value Tel. 011 684 2707 I www.highstreetauctions.com A member of the National Auctioneers Association (NAA)

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SAPOA events

Proactive Quantity Surveying 3

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

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

QUANTITY SURVEYING

Gerhard de Leeuw

Akopo Africa

Nico Roos

Dr CornĂŠ de Leeuw

DISPUTE RESOLUTION

PROPERTY VALUATION

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