South African Property Review August 2016 by SAPOA

South African Property Review

PROPERTY SOUTH AFRICAN

REVIEW

Innovation, Journalism & Excellence Awards and Post-Convention Report Back

The SAPOA 50th Anniversary Convention & Property Exhibition roundup Meet the SAPOA Executive Board Norbert Sasse

SAPOA’s ﬁrst Lifetime Achievement Award Recipient

August 2016

Winners of the 2016

SAPOA Property Development Awards for Innovative Excellence

August 2016

SAPOA events

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contents

August 2016

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

August 2016

REVIEW

Innovation, Journalism & Excellence Awards and Post-Convention Report Back

The SAPOA 50th Anniversary Convention & Property Exhibition roundup

ON THE COVER Reporting back on SAPOA’s 50th Anniversary Convention and Property Exhibition Photograph by Mark Pettipher

Abreal

Meet the SAPOA Executive Board Norbert Sasse

SAPOA’s ﬁrst Lifetime Achievement Award Recipient

August 2016

Winners of the 2016

SAPOA Property Development Awards for Innovative Excellence

2 4 6 8 11 12 14 19 20 22 24 26 29 30 32 42 49 50 54 61 62 63 64

From the CEO From the Editor’s desk President’s speech Taking up the presidential reins SAPOA partners GladAfrica partners with SAPOA Interview GladAfrica Group’s founder and Executive Chairman Noel Mashaba MOU signing Forging partnerships through collective collaboration Industry news Education, training and development SAPOA-Wits partnership in executive education Planning and development Connecting South Africans to their cities Legal update Competition Commission’s market inquiry into the grocery retail sector Lifetime Achievement Award SAPOA Board Report back Annual Convention CEO’s dinner City tour Johannesburg Report back SAPOA 50th Anniversary Convention and Property Exhibition Property Development Awards for Innovative Excellence Building bricks bound with beauty SAPOA Journalism Awards for Excellence Exhibitor stand winners Eye on the world New Zealand Events Frankly speaking Value Added! What’s on Upcoming events Off the wall Broadcasting an iconic image

Oilgro

FOR EDITORIAL ENQUIRIES, email editor@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 Adviser Jane Padayachee Managing Editor Mark Pettipher 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 Anne Schauffer, CBRE New Zealand, Collier’s International New Zealand, Maud Nale, Lekgolo Mayatula, Mumtaz Moola, Thandiwe January-McLean, Wits Commercial Enterpriser Photographers Jabu Nkosi, Loïc Lagarde/Flickr.com, Val Adamson 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: philip@rsalitho.co.za

P R O P E R T Y

F U N D

from the CEO

BOMA’s annual conference a monumental success With more than 3 000 attendees and 450 trade-show exhibits, this year’s Building Owners and Managers Association (BOMA) International Conference & Expo was one of the best yet. Industry professionals from around the globe gathered in Washington DC for best-in-class education, unmatched networking opportunities and solutions to meet every operational challenge and enhance asset performance

n my second year as Chair of the International Regional Council (IRC), it has been an honour to represent the South African commercial and industrial property industry on a global platform, especially one as influential as BOMA. The role provides an exceptional opportunity to learn from colleagues around the globe, in addition to sharing our knowledge and experience from South Africa, in ensuring that we build and strengthen bi-lateral relations between international organisations and BOMA International. The International Council consists of real estate associations from around the world that have affiliated with BOMA International. Its mission is to advance global cooperation within the world community of commercial real estate by creating a more informed marketplace. It is specifically tasked with facilitating more robust engagement between the international affiliates to share not only global best practice, but also information and knowledge resources. To achieve this goal, it provides opportunities for high-level networking to exchange information, best practices, research, standards, education and training, and public policy strategies, and to facilitate business opportunities among members. Second, and more important to the mission of the Committee, is our desire to have committee members engage in multilateral endeavours that would be of benefit to either the group at large or large segments of the Committee. These items would include, but would not be limited to: 1. Developing joint education programmes or entering an agreement to offer the programmes of others; 2. Sharing emerging trend information; 3. Contributing to quarterly newsletters; 4. Benchmarking expertise; 5. Developing standards and international codes information; 6. Selling each other’s publications;

SOUTH AFRICAN PROPERTY REVIEW

7. Sharing best-practices ideas; and 8. Providing networking opportunities. We would appreciate hearing of any additional items you might have to add to this list. My experience has been amazing in that I have met and dealt with a huge number of international affiliates and this has assisted in building relationships and creating networks for SAPOA members to use. For example, SAPOA is an active participant in the International Property Measurement Standards Coalition, a group of 47 real estate associations from around the globe that have come together to develop and implement a global standard for measuring property. My role also involves the facilitation of the workshops. None of this would be possible without the assistance of BOMA staff and management, with particular support from Lisa Prats, who is Vice President of Marketing and International Affairs at BOMA International. As an organisation, BOMA’s mission is to advance a vibrant commercial real estate industry through advocacy, influence, and knowledge. This aligns closely with SAPOA’s own strategic goals. This year, BOMA also welcomed a new International Chair – Brian Harnetiaux, who served as Chair Elect last year and was sworn in as the new BOMA International Chair at the Toby Awards. As Chair of the IRC and Chief Executive Officer of SAPOA, I’m delighted that

the many years of service he has given the organisation have been rewarded in this way. We wish him everything of the best for his tenure and look forward to strengthening the relationship between BOMA and SAPOA, which spans about 44 years. Our newly elected SAPOA President Nomzamo Radebe was part of the esteemed panel of women who gathered to discuss how to bridge the confidence gap, mentoring, risktaking and more at the BOMA International Women in Commercial Real Estate Breakfast. Confidence is something that many women professionals struggle with, so it was a topic that piqued the interest of the 225 attendees. There were numerous speakers at the conference addressing several issues. Among them was renowned journalist David Gregory, former moderator of NBC News’ Meet the Press and now a political analyst for CNN, sharing his thoughts on the current political climate and how we got here. It has lead to what Gregory called a “strange year in which the ultimate insider is running against the ultimate outsider”. “It’s refreshing, dangerous and entertaining,” he said. “We’re at a crossroads.” But despite political turmoil, he believes the US will remain strong and resilient. “I am still hopeful about our future.” Neil Gopal, CEO

FROM LEFT Neil Gopal, Nomzamo Radebe and BOMA International Chair Brian Harnetiaux

SAPOA events

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from the Editor’s desk

Another celebration over, and solar power enters the annals of history There was much talk at this year’s Convention about the changing economy, the UK’s exit from the European Union (EU), water shortages, water puriﬁcation and the preservation of our dams. And by the second week of August, the municipal elections will have taken place, potentially heralding local government changes as well

e are pleased to report back on another successful Convention, its awards and SAPOA’s new people. SAPOA’s new President Nomzamo Radebe is known to many for her leadership of JHI and for steering SAPOA’s education policy through the SAPOA Bursary Fund. She is SAPOA’s fourth female President and first black female President. We also welcome two new members to the SAPOA Board – Nnema Byrd of Stanlib and Pieter Engelbrecht of Growthpoint Properties. Succeeding Radebe as President Elect, Peter Levett of Old Mutual Properties now steps into the limelight. SAPOA’s 50th Anniversary Convention and Property Exhibition’s amazing opening extravaganza enthralled us with the transition of the old SAPOA logo into its new look – truly a logo and brand built to live on long into the next 50 years. This unforgettable Convention culminated in a spectacular gala dinner – all we needed was a director’s call of “Lights, camera, action” to make it an event worth broadcasting. Our thanks once again to our sponsors – Joburg Property Company as this year’s Platinum Sponsor, GladAfrica Holdings (Pty) Ltd as Gold Sponsor, and to our Silver Sponsors Tongaat Hulett Developments, RMS Remote Metering Solutions, Fortress Income Fund Limited and Nedbank. Our corporate sponsors included Schindler (notebooks and pens), JHI Properties (Journalism Awards), Growthpoint Properties (the Golf Halfway House), AECOM (mini programme) and Bidvest Bank (the internet cafe). Last but not least, we’d like to thank our supporting sponsors: Standard Bank, Operation Hydrate and PwC. After the Convention, SAPOA CEO Neil Gopal and President Radebe went to the US to represent the South African property industry at the annual BOMA Convention. The ideas and networking opportunities will no doubt find their way into SAPOA’s events and policies in the coming months.

SOUTH AFRICAN PROPERTY REVIEW

This month is Women’s Month, and we’re celebrating their involvement in the property industry with our annual Women in Property supplement. This year sees a growing number of participating companies – we welcome them to our publication and thank them for their support. I have been following with wonderment a project launched in 2003: the progress of Solar Impulse 2’s solar-powered flight around the world. During our Convention (and about 71 hours after taking off from New York), Solar Impulse 2 made history by landing in Seville, Spain on 23 June – the world’s first solo transatlantic crossing in a solar airplane. Bertrand Piccard, the project’s initiator, joined famous long-distance aviators Charles Lindbergh, Amy Johnson and Amelia Earhart in the US National Aviation Hall of Fame. Project co-founder and CEO André Borschberg started the epic journey on 9 March 2015, piloting the first 13-hour leg from Abu Dhabi in the United Arab Emirates to Muscat in Oman. Piccard and Borschberg’s message is clear: demonstrate the potential clean technologies have for energy saving and renewable energy. The two pilots have been alternating legs of the plane’s east-west journey. In June 2015, Borschberg broke the first of many records. Taking off from Nagoya in Japan, he flew for four days, 21 hours and 52 minutes across the North Pacific to land in Hawaii, breaking the world’s record for the longest continuous solar flight. The final leg of the journey will take the aircraft back to Abu Dhabi in an estimated 120 hours. Could there be another world record in the making? In the September edition, we will explore new developments in retail and construction of shopping centres, and we’ll delve further into green technology and the environment in the November issue. Till then, keep educating – and keep thinking green! Mark Pettipher, Managing Editor

SAPOA events

SOUTH AFRICAN PROPERTY REVIEW

President’s speech

fter thanking sponsors, VIPs, delegates, speakers and guests, Radebe, SAPOA’s fourth female (first black female) President said, “I stand before you, a Zulu girl from eSikhawini, a township in KwaZulu-Natal”, alluding to her humble upbringing. “Where I come from, property is not known as a career. I am pleased to have been lured to join the property sector many moons ago. Like many of you, I was bitten by the property bug and simply love being part of this industry. “I feel very humbled to have been nominated by my peers, and I stand before you today as the President of SAPOA as it proudly celebrates its 50th Anniversary. “It feels good. I am excited – and let me assure you, I take this new responsibility very seriously. I am completely committed to upholding the high standards that members of SAPOA have become accustomed to. “Property touches the life of every South African. It is a unique sector. It is also a complex and multi-disciplinary industry. It has its own set of dynamics; sometimes, it even has its own language. “The real estate sector is a dynamic and valuable contributor to our economy. It is constantly evolving and becoming more sophisticated – especially now, in tough economic times, when we are compelled to find new ways to make property investment continue to outperform other investment classes. “Property is among the most exciting and innovative industries in South Africa, across the continent and around the globe.”

SAPOA an internationally recognised association

Taking up the presidential reins After the ﬁrst day’s enthralling opening ceremony and being entertained by tongue-in-cheek political satire and enlightening discussions, day two saw Nomzamo Radebe, Chief Executive Ofﬁcer of JHI Properties, take to the podium to give an emotionally charged inaugural speech 6

SOUTH AFRICAN PROPERTY REVIEW

“SAPOA is a nationally accepted and internationally recognised leading property association. Its mission is to actively and responsibly represent, promote and protect the interests of its members’ commercial activities within the property industry. “An important part of its mandate is to promote relevant education, provide meaningful research, be the advocates for our industry and be thought leaders. “I am very proud of what SAPOA and its leadership has achieved in ensuring that it fulfils its mandate.”

Passionate about education “I feel very strongly that education should continue to have a sharp focus in our current environment and industry. Education is lifechanging and the quality of our education drives the quality of our sector for the future. “The educational efforts of SAPOA are aimed at:

President’s speech ●● Increasing knowledge and skills of the property industry among employees within the industry; ●● Raising the employability and competence of practitioners and professionals in the industry; and ●● Affirming property as a career. “SAPOA provides continued growth and development opportunities to its members and the property industry at large by offering various educational programmes through its collaboration with leading universities across the country. “SAPOA has chosen the University of the Witwatersrand (Wits) as a strategic partner to provide the industry with a one-stop service for all real estate courses. This is an exciting new initiative in which I will be personally involved, and I am positive that it will yield phenomenal results for the industry. “The SAPOA Bursary Fund is another tool that tackles the skills shortage in the commercial property industry and in our country at large. This initiative is a passion for me, having been a bursary student myself more than 20 years ago. “As the Chairperson of the Bursary Fund since its inception, I have been fortunate to see the 33 students that it has funded over the years succeed and prosper in their own right. Of the 33 students funded, only two failed. In May 2015, the Services SETA partnered with SAPOA, contributing a R40million grant to sponsor 100 students across South Africa with bursaries for a four-year degree in property-related studies. With the addition of the 55 bursary students funded by this grant, the compliment of students being sponsored by SAPOA has now increased to 88. We continue to aspire to reach the targeted number of 100 students. “‘Education is the most powerful weapon you can use to change your world.’ These are the words of Nelson Mandela and, with its education programmes, SAPOA strives to build a better world and transform our industry.”

Transforming the property sector “The transformation of the property sector is essential for its sustainability. We are committed to the principles of social and economic transformation and empowerment on all levels. SAPOA will continue to pursue these objectives, work with industry partners and support our members in achieving greater transformation. “The property industry needs more transformation, as is very much the case with other economic sectors in our country.

I feel positive that there is a greater awareness now, compared to the past, that the industry should be inclusive and open to previously disadvantaged individuals and communities. “I am pleased that we have the Property Sector Codes in place. With the delays on the alignment of the Property Sector Codes, I encourage us all to remain committed to the objectives and the intended spirit of transformation of our industry. “Being progressive requires the ability to think beyond the impossible and outside the obvious. I hope that we can all take these wise words to heart and put them into action.”

“We are thrilled to announce that we have secured a R6-million, three-year deal with GladAfrica for the SAPOA Convention as the Platinum Sponsors and our ‘Meet the Mayor’ dinners. Advocacy pivotal to SAPOA “Advocacy is pivotal for SAPOA as it provides targeted participation in legislative development that will affect our members directly. It also gives SAPOA an authoritative voice that participates in matters relating to the laws that govern South Africa’s built environment. “In 2015, SAPOA strengthened its conversations with the private and public sector. We participated in several engagement events with the departments of Public Works, Human Settlements and Cooperative Governance, as well as the National Treasury, among others. “Through advocacy, SAPOA aims to influence decisions within political, economic and social systems and institutions where the interests of our members and the economy as a whole are impacted. This will be a continued focus during my tenure as President, with the goal for SAPOA to form a closer liaison with some of the important regulatory bodies, such as the Estate Agency Affairs Board and others. “Advocacy goes hand in hand with networking.”

Networking an integral part of SAPOA’s communications “We are thrilled to announce that we have secured a R6-million three-year deal with GladAfrica for the SAPOA Convention,

as the Platinum Sponsors and sponsors of our ‘Meet the Mayor’ dinners. “Almost 1 400 delegates are attending this landmark conference. This affirms the high esteem in which our members hold the Convention and the value they continue to derive from this gathering. “SAPOA is not only recognised in South Africa. The acknowledgement of our work and influence extends beyond our borders. Thus SAPOA attends and participates in externally hosted industry events that are of value to our members.”

Attendance at BOMA “In 2015, we took part in the Building Owners and Managers Association (BOMA) international conference, where SAPOA CEO Neil Gopal is Chairperson of the International Regional Council. The International Regional Council consists of real estate associations from around the world that are affiliated with BOMA International. “The mission of the International Council is to advance global cooperation within the world community of commercial real estate by creating a more informed marketplace. “Neil and I will be going to Washington to again participate in the BOMA Convention. This a prime opportunity to continue to build awareness of South African REITs as well as facilitate any introductory discussions our members may require in the US markets. Opening doors for our members in the US markets, and other markets where we have relationships, is crucial to us.”

Valued contributions “For their valued contributions and collaboration, I would like to thank SAPOA’s directors for their tremendous support on the board, and for their generous contribution at committee level too. It is also important to acknowledge the valuable work performed through SAPOA’s 14 committees, led by the National Councillors. This work is crucial to the success of the association and the fulfilment of its mandate. Thank you all. “As leadership guru Warren Bennis once said, ‘Leadership is the capacity to translate vision into reality.’ “It is a remarkable achievement for SAPOA to celebrate its 50th anniversary. Since its inception, SAPOA has grown in size, esteem and influence. Today, it leads the commercial property industry with a trusted membership of about 1 200 members. To celebrate our 50th anniversary, SAPOA has introduced a modern new logo. We are proud of this new look and feel. It is fresh, bold and crisp!” SOUTH AFRICAN PROPERTY REVIEW

President’s speech

SAPOA partners

Strong future vision “Building on its solid foundation, SAPOA has a strong vision for the future. It aspires to: ●● Continue to be recognised as an authority in specialised fields; ●● Be a trusted source of information and research in property; ●● Constantly evolve and innovate as a dynamic organisation; ●● Promote and enable the transformation of the property industry; and ●● Always unwaveringly serve its members. “I would like to thank Neil Gopal and his team for the great work that they do in running SAPOA as a highly professional organisation that always puts the interests of its members above all else.

I look forward to the year ahead as President of SAPOA with excitement. The full responsibility of what lies ahead weighs heavily on my thoughts, but I am confident it will be a phenomenal year. “I would also like to compliment SAPOA for once again organising a successful Convention. The work that goes into this Convention is astounding. It involves long hours and the ability to perform under high pressure. Not everyone can do this job – it takes very special people. Thank you all. “I look forward to the year ahead as President of SAPOA with excitement. The full responsibility of what lies ahead weighs heavily on my thoughts but I am confident it will be a phenomenal year. “Last but certainly not least, I would like to recognise and thank my mother, who has come to join us this morning. “Mom, I thank you for all the support and care that you have given me over the years. I would not be standing here if it weren’t for the sacrifices that you have made for me. “Thank you Mom. ‘Whatever good things we build end up building us.’ These words, spoken by entrepreneur and motivator Jim Rohn, are particularly true of our industry, our country and our people. Together, we can build great things.” Nomzamo Radebe, SAPOA President

SOUTH AFRICAN PROPERTY REVIEW

GladAfrica Executive Chairman Mr Noel Mashaba with Neil Gopal SAPOA CEO

GladAfrica partners with SAPOA

APOA is pleased to announce that leading engineering consulting and project management company GladAfrica will be the exclusive main sponsor of the SAPOA Annual Convention & Property Exhibition for the next three years. The sponsorship, which will commence in 2017, will also include the three-times-a-year Meet the Mayor dinners and the Methods of Measuring Floor Areas book. The partnership with SAPOA will serve to contribute more meaningfully to the property development landscape of the country by, among other initiatives, creating synergies and collaborations with existing members. SAPOA is the representative body and official voice of the commercial and industrial property industry in South Africa. It aims to represent, protect and advance its members’ commercial and industrial property interests within the property industry in terms of ownership, management and development. GladAfrica brings to the industry a wealth of knowledge through its highly proficient professionals who are passionate about creating and delivering viable and sustainable built environments. Combining knowledge,

skills and expertise with its partners, GladAfrica engineers business solutions for the public and private sector at corporate and technical level. Because of the company’s holistic understanding of the infrastructure development framework, GladAfrica is well placed and thoroughly equipped to provide clients with strategic solutions. According to Kulani Lebese, Group Chief Executive Officer of GladAfrica, “In the property sector, consulting services play an important role in fuelling growth, adding jobs and building communities.” The partnership is part of GladAfrica’s ongoing commitment to providing the property sector with skills and expertise around the country. SAPOA CEO Neil Gopal says his organisation looks forward to working with GladAfrica. “There’s a strong alignment between us and our commitment to promoting high-impact property solutions throughout South Africa,” he says. GladAfrica will continue to actively support SAPOA’s strategic events, which are held throughout the year. The SAPOA Annual Convention & Property Exhibition 217 will be held from 20 to 22 June 2017 at the Cape Town International Convention Centre.

SAPOA events

SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

The dawn of a new era for the City of Johannesburg and its people The Office Space Optimisation (OSO) Programme is a flagship programme of Joburg Property Company (JPC), an agency of the City of Johannesburg (CoJ) that aims to leverage spatial development to provide for this exceptional growth, stimulate economic activity and accelerate service delivery. 50

SOUTH AFRICAN PROPERTY REVIEW

SAPOA events

900 000 m2

R12 billion

±10% – 15%

Space to be developed

To be spent on direct construction activities

Increase in operational efficiency for enhanced service delivery upon completion

±R39 billion

100 000

An induced investment output

Creation of temporary jobs

±R35 billion in ±20 years CoJ to own debt free accommodation

Diepsloot

Kya Sand

Midrand Ivory Park

Fourways Northgate

Sandton

Constantia Kloof Roodepoort

Core

Dobsonville

Wynberg p

Soweto

Johannesburg CBD City Deep

Diepkloof

Protea Glen

Southgate

Lenasia

Ennerdale

OFFICE SPACE OPTIMISATION

Orange Farm

Building our Future

Uniting our City

SOUTH AFRICAN PROPERTY REVIEW

interview

GladAfrica Group is a multi-disciplinary built-environment engineering consultancy and project management company We chat to GladAfrica Group’s founder and Executive Chairman Noel Mashaba about his vision for the organisation and the announcement of the three-year Platinum Sponsorship with SAPOA By Maud Nale Photograph by Jabu Nkosi

Q What does your role as Executive Chairman of GladAfrica Group entail? As Executive Chairman, I provide leadership, chair the board, participate in strategy formulation and provide support to the management team. The management structure has the board, which is responsible for policy formulation, direction and strategy. It consists of myself as the Chairman, four non-executive directors, the Group CEO, Group CFO, three MDs (heads of business units) and the secretary. The GCEO has an EXCO who looks at the day-to-day running of the business.

Q In your opinion, what role do engineering consulting services play within the property sector, and how do you ensure that the work offered by GladAfrica maintains the same quality throughout the country? I think engineering consulting services play a huge role, with great potential to play an even bigger role. Consultants provide the necessary details in any development, and offer insight and professional clarity to developers. All GladAfrica Group companies are ISO 9001:2008 certified by SANAS for Quality Management Systems. We have an in-house quality department that constantly monitors our quality systems.

Q GladAfrica Group has extensive experience in the public and private sector. What are some of the major projects that you have been involved with, and how has such exposure benefited the organisation? What characterises GladAfrica as a group is the importance of the projects the clients have entrusted us with. The group currently has more than 100 active projects in and around South Africa. We are currently active in sectors such as healthcare, education, financial services, retail, commercial property, infrastructure and transport. Some of the projects include: ●● Project managing Telkom’s infrastructure when it needed to break into the cellphone-network business

●● Project management support for infrastructure monitoring and for the Department of Transport during the 2010 World Cup Infrastructure roll-out. We’re currently working on the following: ●● The Bus Rapid Transit System (BRT) for Mangaung Metropolitan Municipality and Rustenburg Municipality ●● The FNB 5-Star Green Star Building (FNB call centre) ●● Managing the development of Mpumalanga University.

Q GladAfrica Group recently announced the acquisition of Ariya Project Managers. What was the strategy behind the selection? Ariya had a very impressive profile, a good brand and a great culture. The acquisition also enables GladAfrica to expand its project management footprint and add significant value to its already comprehensive offering of customised project management services. The move also created a uniquely African-born organisation with the expertise and capacity to meet market expectations in the built environment locally and in Africa.

Q GladAfrica Group has just signed a major deal as exclusive main sponsor of SAPOA’s annual Convention for the next three years. What drove the decision, and what does this partnership signify? Positioning and alignment are very important in business. GladAfrica as a group is involved in a lot of community development, enterprise development and work done by the GladAfrica Foundation. SAPOA is the voice of commercial property, and is also involved in a lot of community and sector development. We found SAPOA to be a perfect brand match. For more information, visit www.gladafrica.com

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SOUTH AFRICAN PROPERTY REVIEW

MOU signing

Forging partnerships through collective collaboration SAPOA recently signed a Memorandum of Understanding with Consulting Engineers South Africa By Maud Nale

Chris Campbell CESA CEO and SAPOA CEO Neil Gopal.

he intention of the strategic partnership between SAPOA and Consulting Engineers South Africa (CESA) is to develop a mutually beneficial relationship that would serve the interest of all members as well as those of the community. As the “voice of consulting engineering”, CESA is a voluntary association of firms of consulting engineers that has been in existence for 64 years and has more than 500 member firms in South Africa. The primary business offerings of its members relate to independent technology-based intellectual services in the built, engineering, human and natural environment. Recognised by the Engineering Council of South Africa as a voluntary association, CESA represents its members as the body that promotes their joint interests both locally and internationally. With regards to the latter, it is a member association of both the Group of African Member Associations and the International

Federation of Consulting Engineers based in Geneva, Switzerland. Both SAPOA and CESA recognise the need to collaborate in order to foster a common vision and goal that will best serve their respective members. “We sign a number of Memoranda of Understanding with various organisations, and are pleased to be collaborating and developing a mutually beneficial relationship with such an important entity such as CESA,” says SAPOA Chief Executive Officer Neil Gopal. “About 30% of our members are professionals, so there are certain crossbenefits on both sides. We are opening up a communication channel between the respective memberships and the organisations, and sharing other initiatives that we feel our members and the country will benefit from.” “This MoU signing signifies a vehicle whereby two industry organisations with a common interest, and good and ethical

business practices can keep each other and our members honest about the interactions that they have with one another,” says Chris Campbell, Chief Executive Officer of CESA. “Our organisation seeks to develop these partnerships with various public and private entities with the aim of constructively resolving issues and areas of discomfort, as opposed to simply being critical and not solutions-orientated. Property development professionals have always enjoyed a good partnership with consulting engineering professionals, and we need to make sure this continues well into the future.” SAPOA has signed several such memoranda with various organisations. These working relationships, according to 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

industry news

SA property market grows to R5,8-trillion

Portia Tau-Sekati, CEO of the Property Sector Charter Council

he South African property sector is worth R5,8-trillion, according to results from the latest study undertaken to determine its size. The Property Sector Charter Council recently released reviewed market size estimation which provides a snapshot of the South African property sector using figures for the financial year 2014/2015. It reveals the sector’s size at R5,3-trillion, with a further R520billion zoned for commercial and residential development.

The study was compiled by MSCI. It was and remains the first and only research of its kind in the country, and its significance is far-reaching. The report builds on baseline research that measured the size of the property market in South Africa at a massive R4,9-trillion at the end of 2010. It shows a meaningful increase of nearly R1-trillion in four years. The study also supplements the Property Sector Charter Council’s SA Property Sector

Economic Impact Report that estimates the property sector’s contribution to GDP at R191,4billion in 2012 in terms of annual income and expenditure flows generated by the sector, as well as a R46,5-billion contribution to the fiscus. The research is part of a larger project by the Council, providing a point of departure against which the charter’s various transformation imperatives can be assessed. “For a sector this big and this important, it is crucial to have a hub of knowledge to consolidate information to support a common and consistent understanding of the sector,” says Chief Executive Officer of the Property Sector Charter Council Portia Tau-Sekati. By regularly updating this research, the Council creates a measure of the effect of property cycles on the sector’s value, which can be significant. Commercial property carries a value of about R1,3-trillion, up from R780-billion, with almost R790-billion held by corporates, R300-billion held by REITs, R130billion by unlisted funds, and R50-billion by life/pension funds. Of this, retail property has the highest value at R534-billion

(R340-billion in 2012), followed by office properties at R357billion (R228-billion) and industrial properties at R281billion (R187 billion). Hotels and other property account for R94billion in value (R25-billion). A key finding shows that formal residential property still accounts for nearly 75% of property owned in South Africa, and grew from an estimated R3-trillion at the end of 2010 to R3,9-trillion. For the first time, informal residential property, was considered, although it has no value – it was quantified by the number of households provided by the Department of Human Settlements. The public sector contributed a total of R237billion, of which about R102billion is estimated to be in the hands of the Department of Public Works, R66-billion is held by South Africa’s 19 largest state-owned enterprises, and R69-billion is owned by metros and selected local municipalities. Through this research, the Property Sector Charter Council continues to provide an updated scope of the sector and create a more accurate overview of the local economy.

Emira successfully upgrades its Gauteng property assets for growth

mira Property Fund is investing in the upgrade, redevelopment and expansion of its properties in Gauteng as part of its ongoing national programme of enhancing its real estate assets. “We’re investing strategically and recycling capital to strengthen our assets,” says Emira Chief Executive Officer Geoff Jennett. “This improves the quality and attractiveness of our portfolio and creates value that extends beyond our assets.”

Emira’s assets comprise 146 properties valued at R13-billion. Emira is a diversified mid-cap REIT invested in a quality balanced portfolio of office, retail and industrial properties. It is internationally diversified through its 4,9% direct holding in ASX-listed GOZ, valued at R942,7-million. Combined, its total assets are worth R14-billion. The JSE-listed REIT’s recent R65-million upgrade of five commercial buildings in

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Kramerville has injected them with new life and boosted the resurgence of this popular creative hub. Emira had planned to sell the 1980s-built B-grade offices, previously known as Sandgate Office Park, which were struggling to find tenants. Yet with the surrounding area experiencing a revival of interest as a design and decor quarter, Emira saw the potential to refurbish and re-brand these properties into

its classy and contemporary new showroom space at Kramerville Corner. “The benefits of this upgrade have been tremendous,” says Jennett. “Kramerville Corner is significantly let to premium tenants. The rentals achieved have doubled, the average lease expiry has improved fourfold and the value of the property has increased beyond our investment in the project. It is yield-enhancing for Emira.”

industry news The new tenants include Bakos Brothers, Design Plus Interiors, St Leger & Viney, Collaro Designs, Griffiths & Griffiths Fine Furniture, Nicci Boutiques, Pierre Cronje Fine Furniture, Paco and Illuso. The big change achieved with the refurbishment was the increase of the showroom space from 32% of the gross lettable area to 84%. The revamp also added 1 375m² of gross lettable area, including a Gorge Kramerville coffee shop, which is a welcome addition to the amenities in the precinct. The buildings were given glazed shopfronts and earthy natural finishes. Their chunky structural steel and faux-timber elements, expressed in highquality workmanship, have given them a trendy edge that resonates with the creative nature of the area. Emira also looked beyond its buildings to the surrounding urban fabric. It added raised and

Geoff Jennett, CEO of Emira

industry news

covered walkways, and realigned the main street and transformed it into an inviting pedestrianfriendly boulevard with carefully chosen street furniture, signage and parking layouts. The new design also makes the buildings’ operations more efficient, with lower-energy lighting and air conditioning throughout and a consolidated waste management plan for all of Kramerville Corner. It also benefits from a fibreoptic backbone that provides highspeed internet and runs its new CCTV system. Plus it has a new guardhouse, new bathrooms and better delivery access. The revamp has made Kramerville Corner a superior asset for its owners, tenants and neighbours. It is this innovative re-imagining that Emira is employing across its portfolio. In Midrand, Emira upgraded Lone Creek Office Park with new common areas, modern ablutions and a substantial improvement to the security and landscaping. The upgrade investment was R8,6-million and the project has already resulted in increased demand for the property. Extending Emira’s relationship with Millward Brown in Rivonia, the company undertook a total refurbishment of the south block at Bradenham Hall. After an investment of R9,4-million into the property’s major overhaul, the building now has new floors, energy-efficient LED lighting throughout and a modern, centralised airconditioning system. All this introduced more energyefficiency to the project. In Centurion, Emira has refurbished its Tuinhof building at 265 West Avenue. Bringing its common areas in line with its excellent location, the office received new lobby finishes for floors and walls alike, a major overhaul of its bathrooms and new efficient lighting. These updates have successfully boosted its lettability and reduced vacancies from 14% to less than three percent. SOUTH AFRICAN PROPERTY REVIEW

industry news Jeff Zidel is the new President of SACSC

SACSC President Jeff Zidel

eff Zidel has been appointed as President of the South African Council of Shopping Centres (SACSC). The highly regarded co-founder of Resilient has been involved in the property industry for more than 45 years. He is Deputy Chairman of Fortress Income Fund and a non-executive Director of New European Property Investment PLC.

“Zidel’s unique insight and experience in South African and international markets, combined with his passion for mentorship and his commitment to advancing our sector, will help to further the SACSC mandate,” says Chief Executive Officer of SACSC Amanda Stops. SACSC is the official umbrella body of all parties involved in shopping centres, including owners, developers, managing agents, brokers, professionals, retailers, marketers, service providers, financiers and researchers. It was launched in 1991 to advance the interests of the retail property sector in South Africa and internationally, and to address issues and challenges within the industry. It engages with associated sectors and other stakeholders

on behalf of its members, and highlights the role of shopping centres as a major resource for all communities in South Africa. Over his extensive career, Zidel has played a hands-on role in a number of landmark shopping centre developments and deals. As President of SACSC, he intends to build on the foundations already in place and find new ways to expand horizons for South Africa’s community of shopping centre owners and retailers. “South Africa has one of the world’s leading shopping centre industries,” he says. “There is an opportunity to capitalise on our growing international profile as we become more active in the arena of global retail. It’s important to showcase the exceptional calibre of

our capabilities and make it clear we should be taken seriously – South Africa, Africa as a continent, and our skilled professionals.” Leadership will take centre stage at the 20th South African Congress of Shopping Centres at the Sandton Convention Centre from 7 to 9 September 2016. The theme of this year’s congress, LEAD, is fitting in light of the contribution that retail and property make to South Africa’s economy and society. Hosted by SACSC and sponsored by Nedbank CIB, the retail sector’s flagship annual event will feature the latest insights on trends, technology and customer engagement. It is a meeting place for industry leaders, current and future, as well as leading retailers and brands.

Property Point gives green innovators a chance 15930

Proud sole funder of the Mall of Africa nedbank.co.za Nedbank Corporate and Investment Banking is a division of Nedbank Ltd Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).

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inking budding entrepreneurs with green building leaders at the 2016 Green Building Convention, Property Point is enhancing green innovation in South Africa while providing SMEs with an opportunity to develop their businesses. Property Point, a Growthpoint Properties initiative, has seen more than 100 businesses participate in its two-year programme, which aims to generate procurement opportunities for SMEs and boost their ability to create jobs. To date, the programme has generated more than R451-million in procurement opportunities for participants, who have reported a remarkable revenue growth of up to 54,5%. “Growthpoint has fully committed itself to preserving the environment and developing small enterprises,” says Shawn Theunissen, Head of CSR at Growthpoint Properties, and Head of Property Point.

“To this end, Property Point has sponsored two green small businesses to attend and exhibit at the Green Building Council of South Africa’s (GBCSA) annual convention. Green building in South African property has grown exponentially, and as a result we have seen the demand for ecofriendly,

Shawn Theunissen, Head of Property Point and Head of CSR at Growthpoint Properties

industry news resource-efficient development, management and maintenance of buildings in the industry increase as well. This provides numerous opportunities for innovative small businesses to make their mark on the property industry.”

Trueman Myeza, Managing Director of Imbewenhle Trading

This year’s GBCSA Convention was held from 26 to 28 July 2016, in Sandton. Property Point sponsored Kopano Ke Lesedi Construction & Projects and Imbewenhle Trading to attend. Based in Marshall Street, Johannesburg, Kopano Ke Lesedi Construction & Projects has been providing plumbing, landscaping and maintenance services for the past three years. Managing Director Linah Mogale started the business to provide a sustainable solutions service to the industry. With three fulltime staff members, Mogale believes innovation is the key to operating a successful business. Trueman Myeza is Managing Director of Imbewenhle Trading.

Boasting 100% black youth ownership, Imbewenhle is an air-conditioning and refrigeration company. The company’s name, which means “the good seed” in English, is indicative of the positive impact it hopes to make in the business environment. “Property Point’s main purpose it to identify these dynamic entrepreneurs and work with them to build more sustainable businesses,” says Theunissen. “In today’s climate, sustainable businesses need to take the environment into account. However, finding real procurement opportunities can often prove challenging for SMEs.

“By giving entrepreneurs such as Linah and Trueman access to decision-makers who are looking for sustainable solutions from sustainable businesses, we give them a greater chance to realise their full potential.”

Linah Mogale, Managing Director of Kopano Ke Lesedi Construction & Projects

Durban leads the charge towards a national spatial revolution

osted by the KZN branch of the South African Institute of Architects, a conference held at Durban’s historic city hall on 8 July aimed to put the radical transformation of South African cities, towns and villages at the top of the national agenda. In his keynote address, Minister of Finance Pravin Gordhan pointed out that the current urban sprawl, a legacy of the apartheid era, contributed towards low economic growth. In a new regime of spatial planning, a pipeline of catalytic interventions was required as part of well-coordinated urban development. Treasury was looking to new funding models

with public-private sector partnerships key to providing these and ultimately leading to faster, more inclusive economic growth, Gordhan said. Malijeng Ngqaleni, deputy Director General of the national Treasury, said that managing urbanisation correctly could turn the growth trajectory of the country around. She noted that planning methods had actually deepened the apartheid spatial legacy; as a result, South African cities were unproductive, unequal and unsustainable. A new approach, with citizens as part of the process, is needed. Although she cautioned that there could be no quick fix,

Mike Deighton, Managing Director of Tongaat Hulett Developments and Immediate Past President of SAPOA

she said that clear catalytic interventions were needed to create action. Speakers from national government, academics and private sector representatives highlighted one of the biggest problems emanating from apartheid cities – the extensive commuting distances between far-flung communities and places of work. Referring to a 2011 OECD study entitled “How’s Life”, Mike Deighton, Managing Director of Tongaat Hulett Developments and Immediate Past President of SAPOA, said that out of 22 countries analysed, South Africa had the longest average commute time of 58 minutes daily. Urban designers, in turn, demonstrated how in South Africa, unlike internationally, poverty is situated on the fringes of cities rather than at the centre, exacerbating this challenge for poorer citizens. Musa Mbhele, acting Deputy City Manager for Economic Development and Planning, presented Durban’s spatial concepts for the future, showing how these would address the historical imbalances in Durban

characterised by rural and township areas with minimal economic opportunities, long commuting distances, urban sprawl and low density. Key principles included a compact city model, with emphasis on accessibility and convenience in a compact urban area and along key growth corridors, support of small and localised businesses, and intermodal hubs promoting optimal use of infrastructure capacity. Felipe Leal, past Minister of Urbanism for Mexico City, shared his extensive experience in reshaping a city that in 1950 had 3,1-million inhabitants – fewer than Durban does currently – but in 2016 accommodated more than 21-million citizens. Using examples of how the improvement of public space through innovative and commercially robust, mutually beneficial relationships between the public and private sector delivered immediate and directly consequential economic activity, he showed how investment in public space triggered almost immediate small commercial activity.

SOUTH AFRICAN PROPERTY REVIEW

industry news

think beyond vision

• Program and Project Management • Property Development Management • Construction Project Management • Building and Civil Construction • Turnkey Developments • Tenant Fit Out and Coordination • Property Asset Registry • Research and Audits

PGP Cape’s metro rental division secures top leases P

Tel: +27 11 486 3315 Fax: +27 11 486 3314 info@akweni.co.za www.akweni.co.za

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am Golding Properties’ Cape rental division has concluded many leases since the start of the 2017 financial year, for up-market houses and apartments on the Atlantic Seaboard, in the City Bowl and in the Southern Suburbs. A Clifton apartment has been signed for R110 000 per month for the first year and R121 000 per month for the second year. A Bantry Bay apartment was leased for R100 000 per month, and a Clifton bungalow for R80 000 per month. In the Southern Suburbs, top rentals include two five-bedroom Bishopscourt homes for R89 000 and R65 000 per month respectively. In the City Bowl, a four-bedroom Higgovale house was rented for R44 000 per month, and an Oranjezicht penthouse is under negotiation for R42 000 per month.  Cape Metro Rental Manager Dexter Leite says strong demand is underpinned by factors that include South Africans’ migration from other provinces, the appealing lifestyle, established infrastructure, excellent schools and tertiary institutions, and Cape Town’s reputation as a well-managed city. “We have had a number of ‘buy-to-let’ investor enquiries and have been asked to do a number of rental valuations for developers, both in respect of new build and conversions/upgrading of existing blocks, particularly in the City

Bowl and surrounds,” said Leite. The rental division has also received foreign corporate enquiries for security or gated estates in the Southern Suburbs. This is a popular niche, with three Stonehurst Estate homes recently let by Pam Golding Properties. V&A Waterfront Marina apartments are also in high demand, with signings of two- and three-bedroom units for R42 000 per month, R50 000 per month and R55 000 per month. “We are a trusted name and can offer everything from long-term rentals of stately mansions to self-catering apartments close to all amenities at daily rates,” said Leite. Longer-term rental homes currently on the Pam Golding Properties books include a sevenbedroom (all en suite) traditional Cape Dutch house in Constantia for R130 000 per month and a magnificent doublevolume three-bedroom apartment in central Cape Town for R125 000 per month. A five-bedroom, five-bathroom Bakoven villa is also available for R85 0000 per month. More-affordable rentals for centrally located apartments include a trendy, renovated (unfurnished) Tamboerskloof one-bedroom unit for R13 500 per month and a three-bed, two-bath Vredehoek apartment for R17 000 per month.

education, training and development

SAPOA-Wits partnership in executive education The next stage of the SAPOA Wits partnership in executive education continued with two new courses for employees of the Johannesburg Property Company (JPC) between 4 and 8 July 2016 at the Professional Development Hub of Wits University

he courses form part of a sequence of courses selected in accordance with the career paths on which JPC has placed its employees. This means, for instance, that for employees in property and asset management, the foundation course was Real Estate Market Analysis, jointly delivered by Professor Samuel Azasu and Prisca Simbanegavi of the School of Construction Economics and Management. For employees on the facilities management (FM) track, the foundation course was in Building Services, jointly delivered by Dr Yomi Babatunde and Dr Nthatisi Khatleli.

Each of these courses typically lasts a week, followed by a mix of exams and assignments that are due not more than two weeks after the courses have ended The employees on the property/asset management track will follow this up in August with another course in Real Estate Investment Analysis and Commercial Real Estate Valuation, while their FM counterparts will study Project Management as well as Occupational Health and Safety. There are upcoming courses in Real Estate Corporate Finance and Strategic Corporate Real Estate Management, with the latter being delivered by Professor Karen Gibler of Georgia State University (Atlanta), who is also the Executive Director of the International Real Estate Society. There will also be a course in Facilities Management by Professor Brian Atkin, Director of the Facilities Society of the UK and the author of the FM standards of the UK.

According to Azasu, who is the director of the programme, even if these courses do not lead to a qualification, the idea is to create informal programmes that cumulatively ensure that participants develop working knowledge of their respective skills areas. In addition, it allows holders of National Diploma qualifications who excel in these courses to enrol in the Postgraduate Diploma programme without having to acquire an Advanced Diploma qualification. The School has found from experience that a combination of work experience and success in the short courses helps people without the usual qualifications – such as bachelor’s and honours degrees and advanced diplomas – to access higher qualifications and do well. According to Azasu, this has provided the School with a pedagogically sound tool to create a pathway that accelerates transformation through access to higher qualifications. It also enables a gradual re-entry into academic work for candidates who have been away from school for a long time by gradually re-acquainting them with the academic environment. “We are also ensuring this happens with an academic team that is global, providing a worldclass education to non-degree students,” says Azasu. Each of these courses typically lasts a week at a time, followed by a mix of exams and assignments that are due not more than two weeks after the courses have ended. Submitted by Wits Commercial Enterpriser t: +27 (0)11 717 9025 e: dimple.patidar@wits.ac.za

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planning and development

Connecting South Africans to their cities S Lekgolo Mayatula is SAPOA’s Planning and Development Manager

Wikipedia describes the history of transportation as one of technological innovation. In a nutshell, the essence of transportation is the ability for human beings to travel and move goods from one point to another in the most convenient and effective way 20

outh Africa is faced with the challenge of spatially integrating its various land uses. National, provincial and municipal forwardplanning documents continue to emphasise the need to spatially integrate our towns, cities and rural areas. One of the key components to addressing this challenge is the provision of sustainable transportation and associated infrastructure. As with most things in life, it is important to understand the historical context in order to explore possible solutions. Wikipedia describes the history of transportation as one of technological innovation. In a nutshell, the essence of transportation is the ability for human beings to travel and move goods from one point to another in the most convenient and effective way. Human feet – yes, walking – were the original form of transportation. It was only between 4000BC and 3000BC that animals were domesticated and used for transportation purposes. Transportation has contributed to great innovation through the centuries, allowing for people to travel and explore land, water, rail, air and space. It is through transportation that we are able to explore a variety of territories and expand our influence over larger areas. The fundamental connection between urban planning (town planning) and transportation cannot be ignored. Urban planning is described as a technical and political process concerned with the use of land and design of the urban environment,

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inclusive of air, water and infrastructure passing into and out of urban areas through the use of transportation and various distribution networks. The advances in transportation created the need for planners and architects to shift the manner in which they create and design urban environments. However, it was only at the turn of the 20th century that it became absolutely crucial for urban planning models to be explored in order to mitigate the consequences of the industrial age. Fast-forward to the 21st century, and we find ourselves having to go back to our past to rediscover the values and benefits of creating sustainable, vibrant, integrated, pedestrianfriendly cities. As previously alluded to, the innovation and technology associated with transportation constantly explore new avenues of improved movement. The development of rapid transport systems is one of the many examples that confirm this in the current era. So how does South Africa, given its ongoing challenges of population growth, the demand for adequate services, lack of economic opportunities and the undeniable need for transformation, navigate its way towards creating connected cities? The answer to this question requires that we again examine our history. As highlighted in the 2016 State of the Cities Report published by the South African Cities Network, South African cities are inefficient. This is the result of the apartheid legacy, which spatially displaced the majority of the population and neglected public transport.

Post-1994, developments have continued on this path; this has negatively affected productivity levels as people (especially the poor) have to travel long distances to reach their places of employment. The traveling comes at an enormous cost. According to the South African Income & Expenditure Survey conducted

Fast-forward to the 21st century, and we ﬁnd ourselves having to go back to our past to rediscover the values and beneﬁts of creating sustainable, vibrant, integrated and pedestrianfriendly cities by Statistics South Africa (for the period September 2010 to August 2011), the second-highest household consumption expenditure was transportation at 17,1% with the highest being 32% (which was spent on housing expenses such as water, electricity, gas and other fuels). Other research conducted by Statistics South Africa – “The National Household Travel Survey 2013” – interviewed a sample of 52 720 candidates (accumulated total sample across all nine provinces, with the main participants being based in the provinces of Gauteng, KwaZulu-Natal, the Eastern Cape and the Western Cape), and established that 85%

planning and development of the workers were based in metropolitan areas, with nearly 40% of them using public transport. Of the stipulated public transport users, one in five (21,1%) walked to work. A total of 3,7-million taxi trips were made on a daily basis; of these trips, 1,4-million were in Gauteng and 800 000 in KwaZulu-Natal. The study also revealed that 22,1% of workers left their residence before 6am in order to get to work on time; 14,7% of workers walked for more than 15 minutes before reaching their first public transport and, after being dropped off, about half of them walked for more than 15 minutes to reach their place of employment. The findings also revealed that in 2013 more households in the metropolitan areas travelled more than 60 minutes in order to reach their respective public transport facilities (taxi ranks, bus stops, etc), as compared to numbers in 2003. Added to this, the proportion of workers who received a travel allowance from their employer dropped from 3,4% in 2003 to 2,3% in 2013. This re-affirms the fact that our development patterns post-1994 have not been following a sustainable or economically viable path. More recent research conducted by the South African Cities Network, which intends to provide a more user-friendly overview of transportation and how it connects users to their cities, explored the “Gauteng Transport User” through the evaluation of a travel diary managed by a sample of 10 individuals. The following facts were gathered during this process: ● Seven out of 10 users of public transport are pedestrians at some point in their journey.

● In a five-day working week, 10 users of nine modes of public transport spend R3 000 and travel a collective time of 120 hours. ● The modes of transportation explored include walking, cycling, Bus Rapid Transport, Metrobus, Metrorail, Gautrain, Gautrain bus, minibus taxi and private car. ● The cheapest modes of transport are cycling and walking. ● The person who walks as their main mode of transport covers a distance of nearly 100km per week. ● Gautrain user travelling from Pretoria to Park Station can spend up to R3 500 per month. ● The BRT user pays three times more than the Metrorail user. ● According to the user feedback analysis, the favoured transportation modes (from best to leastpreferred) are BRT, cycling, walking, Gautrain, Metrobus, taxi and Metrorail. ● Even though a car users’ total weekly travel time is shorter (13 hours) compared to that of a Metrorail user (20 hours), the car user travels twice the distance of the Metrorail user. ● The longest individual daily travel time is five hours and 10 minutes. This user is an intern transport planner who travels 88km per day, who makes use of three different transportation modes (car, minibus taxi and walking) at a cost of R52 per day. ● The longest individual daily travel distance is 144km, with a daily travel time of four hours and 45 minutes at a total daily cost of R147, making use of four different transportation modes (walking, minibus taxi, car and BRT). ● The most expensive individual daily cost

is R168,64, spent on a total travel distance of 128km and a daily travel time of three hours and 23 minutes. The concerning revelation was that, of the various transportation modes, Metrorail fared the worst as the least-preferred – and this was as a result of its unreliability. When analysing the time and distance travelled between a cyclist and the Metrorail train commuter, it was evident that the cyclist (although travelling a longer distance than the train commuter) was likely to reach his place of employment earlier than the Metrorail train commuter. Why should the property industry take note of the discoveries mentioned? What impact do they have on businesses? For starters, with the country’s slow economic growth, the uncertainty created by Brexit and the impact of global rating agencies closely monitoring the developments in the South African economy, it is important for the industry to explore alternative ways of increasing productivity without the loss of income – for organisations and for employees. It seems as though there is no better way than to go back to basics, and make walking and nonmotorised transportation the preferred modes of movement within our cities. How do we get about doing this? A challenge was recently put to SAPOA at one of the engagements that our office attended. The challenge was as follows: “SAPOA members are involved in the development of our cities, but in many instances they are not aware of the impact their developments have on the various endusers and their associated modes of transport. Thus in order for the industry to actively engage in and

assess their developments, it would be a great idea for the members of the organisation to make use of public transport for a specific period. The end results will be of great benefit not only to the industry but also to the end-users.” Is the industry open to this challenge?

The fundamental connection between urban planning (town planning) and transportation cannot be ignored. Urban planning is described as a technical and political process concerned with the use of land and design of the urban environment, inclusive of air, water and infrastructure passing into and out of urban areas through the use of transportation and various distribution networks Before we shift the responsibilities of creating connected cities to an industry level, the same challenge is also an opportunity for us as individuals to reassess how we take ownership of our cities. What must we do to ensure that our cities are safe, interactive, multicultural and productive spaces? The answer lies in an ancient art of transportation – the art of walking.

SOUTH AFRICAN PROPERTY REVIEW

legal update

Competition Commission’s market inquiry into the grocery retail sector By Mumtaz Moola

n 30 October 2015, the Competition Commission, in the exercise of its powers under the Competition Act No. 89 of 1998, published a notice that it would conduct a market inquiry into the grocery retail sector. The official commencement date of the inquiry was 27 November 2015, and it is expected be completed by 29 May 2017. The Commission may, however, by notice in the Government Gazette, amend this time frame. The Commission has initiated the Grocery Retail Inquiry in order to: ● Understand how the grocery retail sector operates because the Commission has reason to believe that there exist features or a combination of features in this sector that may prevent, distort or restrict competition; and ● To pursue the purpose of the Act. In line with the Terms of Reference, the panel proposes to assess competition in the grocery retail sector under six objectives, namely: ● The effects of national supermarket chains moving into townships, peri-urban and rural areas and what the effect this move has on small and independent retailers and the informal economy in these areas; ● The effect of property developers, financiers and national supermarket chains entering into exclusive lease agreements that restrict landlords from being able to rent space within their developments to other retailers that may potentially compete with these national supermarket chains; ● The dynamics relating to competition between foreign- and South Africanoperated small and independent retailers (i.e. spaza shops, general dealers, etc) in townships, peri-urban areas, rural areas and the informal economy; ● The impact of regulations, municipal town planning and by-laws on small and independent retailers in townships, peri-urban areas, rural areas and the informal economy;

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● The impact of buyer groups on small and independent retailers in townships, peri-urban areas, rural areas and the informal economy; and ● The impact of certain identified value chains on the operations of small and independent retailers in townships, periurban areas, rural areas and the informal economy. These value chains are essential product supply chains, which will be identified during the course of the inquiry. The findings of the inquiry will provide a factual basis upon which its panel can make evidence-based recommendations to the Minister of Economic Development in order to promote competition and the purpose of the Act in the sector. On behalf of its members, SAPOA lodged a complaint with the Competition Commission and requested the Commission to investigate exclusivity clauses, and to give a definitive ruling regarding the anti-competitive nature of exclusivity clauses in leases once and for all. The recommendation from SAPOA is that the Commission must proceed with a market inquiry as this is the most suitable approach for SAPOA and its members. Pending such an inquiry, SAPOA has requested that the Commission suspend the complaint. In and during May 2015, SAPOA received a letter from the Commission confirming its decision to conduct a market inquiry into the grocery retail sector. The issue of exclusivity clauses is one that is fraught with difficulty. The Competition Act safeguards against restrictive horizontal practices, restrictive vertical practices and abuse of a dominant position. A restrictive horizontal practice is one where competitors cooperate rather than compete, with the result that a number of firms act in unison. Abuse of dominance occurs when one firm is so dominant that it gains an anti-competitive advantage over its competitors, customers and suppliers, and a restrictive vertical practice is one where a relationship exists between

different levels in the supply chain that has the effect of preventing or lessening competition in the market. Exclusive agreements could be classified under the restrictive vertical practice agreements. During his speech at the Budget Vote of Economic Development on 21 April 2016, Minister of Economic Development Ebrahim Patel announced that Section 12 of the Competition Amendment Act, 2009 insofar as it relates to section 73A of the Competition Act of 1998, will come into effect on 1 May 2016. This section of the Act makes it a criminal offence for directors or managers of a firm to collude with their competitors to fix prices, divide markets among themselves or collude in tenders, or to acquiesce in collusion. They expose themselves to time in jail if convicted. The Commission published draft Terms of Reference for the market inquiry in the Government Gazette on 12 June 2015, and called for public comment on the draft. SAPOA submitted that the anticipated scope of the inquiry stipulated in the draft was very broad and may therefore lead to a shallow inquiry on a great number of aspects of the market. It was therefore recommend that the inquiry be divided into two distinct phases and that the Commission set reasonable time frames within which the inquiry is to be conducted and concluded. Once again, the terms of reference for the inquiry are very broad in scope. This is now clearly emphasised through the draft statement of issues, which sets out the framework for approaching the inquiry by expanding on each of the six objectives identified in the terms of reference above. It is very clear that the investigating team and panel have an immense (and perhaps unmanageable) task ahead of them. However, SAPOA has already identified this in the submission made on the draft terms of reference. Guidelines and administrative timelines deal with the procedural aspects of participating

legal update

in the inquiry, such as practical requirements for providing written submissions and structure for the public hearings to be held next year. The administrative timeline seems particularly short in duration. Given the wide scope of the inquiry, we are unsure that the panel will manage to meet these deadlines. Once the above draft documents have been finalised, the panel will call for substantive submissions. This is currently scheduled for 15 July 2016 until 15 August 2016. SAPOA is not obligated to provide submissions. However, the panel has emphasised need to receive information from stakeholders in order for it to properly understand and analyse the issues in making appropriate recommendations. In general, the panel has invited submissions on: ● The structure, trends and players operating at each level of the grocery retail sector supply chain, and ● The degree of competition between the different players in the grocery retail sector supply chain. In relation to exclusive lease agreements, the panel has specifically outlined the following issues for consideration: ● The prevalence and duration of exclusive lease agreements – SAPOA is in a unique position to collect and collate information in this regard. ● The role of financiers in these agreements – SAPOA and its members have ongoing experience in the development of projects and the interaction with financiers. They can attest to what financiers require for a project in order to attract and secure financing. ● The extent to which exclusive lease agreements have: ◆ Excluded small businesses and large competitors or potential competitors, ◆ Contributed to the high level of concentration in the market, and ◆ Benefited or harmed consumers, and led to increased or decreased efficiencies. Pending the call for submissions, it is important to consider whether SAPOA (or its members) will make submissions on these issues – and, if so, how best to collect and frame the appropriate information. In addition to the issues identified by the Commission for submission as set out above, it would be very useful for the inquiry team

legal update

to be provided with suggestions as to how exclusive lease agreements could be best handled in future: ● How from a practical viewpoint current exclusive lease agreements could be phased out or adapted if found to be anti-competitive; ● What limitations (if any) should be imposed on new lease agreements regarding exclusivity that will deal with requirements of the financiers, developers and anchor tenants, while still ensuring competition in the development. As alluded to, SAPOA lodged a complaint on behalf of its members. The Commission fairly expects submissions from a complainant. Running parallel to this process is the Massmart interlocutory hearing. This hearing will not deal with the merits of the competition concerns, which included exclusive lease agreements, information exchange, category management and possible abuse of buyer power. This hearing does not affect SAPOA as: ● No relief is sought by Massmart against SAPOA; ● SAPOA is cited as a respondent by virtue of its interest in the matter only; ● SAPOA’s interests as set out in its complaint are strongly aligned with those of Massmart; ● Although any decision of the Competition Tribunal may impact exclusivity clauses, including those in agreements to which some members are party, the matter is not directed specifically at the members or the agreements to which they are party. We would like to thank Stephen Langbridge of Fasken Martineau Attorneys for his input on the topic.

This legal opinion is only a guide and should not be copied with the expectation that it will serve speciﬁc 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. SOUTH AFRICAN PROPERTY REVIEW

lifetime achievement award

In recognition of services rendered Norbert Sasse talks to the South African Property Review about his role in Growthpoint Properties’ growth, which ultimately resulted in his winning the lifetime achievement award By Mark Pettipher

APOA’s inaugural Lifetime Achievement Award was won by Norbert Sasse, Chief Executive Officer of Growthpoint Properties Limited. This new accolade, which will be awarded every three years, recognises and celebrates the exceptional contributions made by an individual who has changed the face of the South African property sector. “I was talking to my wife Janine during SAPOA’s 50th Anniversary Convention and Property Exhibition gala dinner, and we thought my chances of winning this award were slim,” he says. “Candidates such as Wolf Cesman and Colin Steyn have far more experience in the industry than I do – they are veterans.” “I was unaware that this was the first time the award would be presented, and I thought that a winner would come from within the industry – an architect, a quantity surveyor, someone like that. I certainly did not think that my background in chartered accounting would put me in the running! “It came as a complete surprise when my name was read out, and I’m humbled and honoured to have been recognised as the award’s very first recipient. My winning had been kept a complete secret. Only three people knew about it: SAPOA’s Chief Executive Officer Neil Gopal, SAPOA’s Past President Amelia Beattie and the event organiser Jane Padayachee.” Sasse’s road to attaining the top position at Growthpoint Properties Limited has been through his involvement in corporate finance, dealing with listings, de-listings, mergers, acquisitions and capital experience in the listed property market. His early career took him to Ernst & Young,

SOUTH AFRICAN PROPERTY REVIEW

before he joined Investec Corporate Finance in 1996. Because of the diversity of his client base, he was doing something different every day, dealing with the registration of a medical asset one day and that of an IT company the next. “Our clients always expected us to be knowledgeable about their industry and investment, and I found myself thinking that I’d love to specialise in a particular industry,” he says. “In those early days there was not much happening with property, so that was the furthest thing from my mind.” Working at Investec, which owned the management companies of Growthpoint Properties and a smaller fund called Metboard Properties, meant that Sasse became involved in those property funds as an advisor. After being invited by his mentors, Investec’s Sam Hackner and Sam Leon, he took a closer look into the groups’ activities. He effectively started influencing Growthpoint Properties direction in 2001. Since then, he has taken a relatively unknown organisation with an asset base of nine properties valued at R120-million and a market cap of about R30-million, to what Growthpoint Properties is today – a portfolio that owns and manages over 420 properties in South Africa and 40 in Australia, with a gross asset value of about R75-billion. Growthpoint Properties’ turning point came in January 2004, when Sasse advised and structured an acquisition deal to buy the property assets of the Sentinel Mine Employees Pension Fund for about R1,5-billion, overnight changing Growthpoint’s value from R120-million to R1,6-billion, with a market cap of more than R700-million. Even though he was the Managing Director of Growthpoint Properties, Sasse was still on Investec’s payroll until 2007, when the Boards of Growthpoint and Investec jointly agreed to internalise the management of Growthpoint. Growthpoint paid R1,6-billion to terminate Investec’s long-term management relationship, and Sasse became Chief Executive Officer,

lifetime achievement award taking on the reins and formalising the running of Growthpoint Properties. Over the years, Growthpoint Properties carefully acquired strategic portfolios such as Primegro (R2,5-billion in 2003), Metboard (R2,4-billion in 2006), Paramount (R3,4billion in 2007) and Orchard Industrial Trust – now Growthpoint Australia (R1,3-billion in 2009). Sasse’s next major deal (in 2011) was putting together the collaboration between Growthpoint and the Public Investment Corporation to purchase the V&A Waterfront in Cape Town. The R9,7-billion deal, 50% owned by Growthpoint, was at that time South Africa’s single biggest property transaction. As the property industry gained momentum in the early 2000s, it was the domain of the bigger life insurance companies such as Old Mutual, Sanlam and Liberty, mostly controlling the major developments in the property sector. Many pension funds needed to have more liquidity, and more tradeable assets. The sector had a cumbersome structure known as property loan stock companies, where share capital comprised shares and debenture capital. The revenue service did not really like the structure, and felt that the companies were not paying tax. To safeguard its assets, the property industry decided to formalise the listed property market. It realised it needed to be proactive and Sasse, along with a team of property stakeholders, looked at the best REITs structures available. “We brought in people from the UK and the US to South Africa,” says Sasse. “Our first conference was

held in 2007 – a notable speaker was Sam Zell, probably the US’s biggest and most well-known property investor. We began to put the necessary structures in place.” Sasse, South African REITs’ first Chairman, and the team representing South Africa’s property professionals led by Estienne de Klerk, also of Growthpoint Properties, worked tirelessly to get REITs legislation passed. It was not an easy path: they were dealing with the government, FSB, SARS and the National Treasury. They overcame many hazards but, eventually, tax laws to accommodate property as a listed asset base were passed. It was a transformational period for listed property as an asset base. From there, Growthpoint Properties’ last big transaction – and possibly its largest deal concluded last year – was the R8,3-billon takeover of Acucap Properties, which gave Growthpoint Properties access to a number of major retail assets, including Festival Mall in Kempton Park, Bayside Mall in Tableview, Keywest Shopping Centre in Krugersdorp and Greenacres Shopping Centre in Port Elizabeth. Acquiring these retail assets has helped to bring balance to Growthpoint’s heavily weighted office sector, worth approximately R14,6-billion, and has elevated Growthpoint Properties to being South Africa’s largest listed real estate investment trust. Looking to the future, Sasse plans to lead the Growthpoint group into Africa. The top 10 property players are looking at investing offshore, internationally and across Africa’s borders – and so is Growthpoint. However, the timing is important.

Norbert Sasse’s Directorships ●● Growthpoint Properties Limited: Chief Executive Officer and Executive Director since 2003 ●● Growthpoint Properties Australia Ltd: Non-Executive Director since 2009 ●● Metboard Properties Ltd: Director ●● Paramount Property Fund Ltd: Director ●● Sandton Business Improvement District: Director ●● South African Property Owners Association: Director ●● Growthpoint Management Services (Pty) Ltd: Director ●● V&A Waterfront Holdings (Pty) Ltd: Director ●● The South African Institute of Chartered Accountants: Director

“We are looking towards non-South African revenue streams and participating with a ‘funds management approach’ as opposed to us buying buildings,” he says. “We are collaborating to raise a fund in partnership with Investec Asset Management. Raising third-party funds and leveraging our expertise, we have committed US$50-million to the fund. “In the long term, we see massive opportunities in Africa, both in the retail and the office arena. Through the Africa fund, we look forward to being involved in achieving similar dynamics in the growth of property assets across Africa.”

And the nominees were… Colin Steyn (retired): former NonExecutive at Growthpoint Properties, Former Chairman at Barprop Limited, Former Managing Director at Rand Mines Properties Limited, Former Member of the Eskom Pension Fund and Former Director at Pareto Limited Erwin Rode: Chief Executive Officer of Rode & Associates (Pty) Ltd Gerald Olitzki: Executive Chairman of Olitzki Property Holdings Ipeleng Mkhari: founder and Chief Executive Officer of Motseng Investment Holdings, Promoter at Delta Property Fund John McCormick: Executive Chairman of McCormick Property Development Norbert Sasse: Chief Executive Officer of Growthpoint Properties Wolf Cesman (retired): Former Chief Executive Officer of Liberty Properties

With Norbert Sasse, (from left) SAPOA CEO Neil Gopal and SAPOA Past Presidents Kevin Roman, Amelia Beattie and Dr Sedise Moseneke

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SAPOA Board

Meet the SAPOA Board

Nomzamo Radebe, President CEO of JHI Properties, part of the Excellerate Property Services Group Radebe is the President of SAPOA and the Immediate Past President of the South African Council of Shopping Centres. Her career spans more than 18 years in senior roles in property, finance and treasury management. She was awarded the “Five Star Woman” award by the Women’s Property Network,

and is the Chairman and trustee of the SAPOA Bursary Trust and a non-executive member of the SAPOA Audit and Risk Committee. She is an Executive Director of Excellerate Property Services (Pty) Ltd and a non-executive Director of Munich Reinsurance Company of Africa Limited.

Peter Levett President Elect Managing Director at Old Mutual Property Levett has been a Director at Old Mutual Property since 2000, and the Managing Director since 2011. He is responsible for property investment and business strategy at Old Mutual, with property assets of about R18-billion, and participates in investment strategy as a member of the Executive Committee of the Old Mutual Investment Group. He is a qualified CA and has several degrees, including an MBA (with distinction) and a master’s degree in commerce (cum laude).

Mike Deighton, Immediate Past President Managing Director of Tongaat Hulett Developments Mike Deighton began his career with the Durban Municipality, later working in the consultingengineering profession. In 1995 he moved into property development, first joining Gough Cooper Homes, then Group Five Properties. He joined Tongaat Hulett Developments as a development manager in 2000, and was later promoted to Director of Commercial and Industrial Developments. In 2008, he was appointed as Managing Director, making him responsible for property development.

Ipeleng Mkhari CEO of Motseng Investment Holdings Mkhari established the first black woman-owned CCTV business, before founding Motseng Investment Holdings in 1998. She is now the company’s CEO. She has a bachelor’s degree in social science, has completed the Executive Development Programme at Wits Business School and is an Archbishop Tutu Fellow. She is currently a non-executive director at KAP Industrial, Nampak, Assore and SAPOA, and a board of governors member of St John’s Diocesan School for Girls.

Jeff Zidel Vice Chairman of Fortress Income Fund Jeff Zidel’s acumen as a property developer and investor has seen him involved in all aspects of the property industry for more than 40 years. The co-founder of Resilient is Vice Chairman of JSElisted Fortress Income Fund and non-executive Director of New European Property Investment PLC. He was three times Past President of the Roodepoort Chamber of Commerce and winner of the 2010 Absa Jewish Achiever Award for Listed Companies. He is the current President of the South African Council of Shopping Centres.

James Aling Managing Director of Halls Properties James Aling is Managing Director at Halls Properties (the property development business of the Halls Group) and the current Chair of the SAPOA Regional Council in Mpumalanga. He aims to get the regional council established and representative of the broader Mpumalanga region, and to see that urban management gets the necessary attention on the SAPOA agenda as a sustainable approach to developing and/or revitalising neighbourhoods and precincts in partnership with property owners and local government.

Neil Gopal Chief Executive Officer

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SAPOA Board

Regional Councillors and their respective regions ● East London: Robin Knott InvestPro Property East London ● KwaZulu-Natal: David Green Director at ProAfrica Property Services (Pty) Ltd David Green is a Director at ProAfrica Property Services, which assists international corporates with all aspects of real estate in South Africa and Africa. Projects have included the largest industrial sale and lease-back disposal in sub-Saharan Africa, and the relocation of large corporate head offices in South Africa, Kenya, Ghana, Nigeria, Mauritius and Angola. Green has been a member of SAPOA since 1982 and is currently the Chairman of the SAPOA Convention Committee, a position he has held for several years.

Dr Sedise Moseneke Executive Director at Vukile Property Fund Limited After completing his bachelor’s degree in dental surgery in 2000, Moseneke served in the SANDF as a lieutenant in the Burundi peacekeeping mission. Today, he is the Executive Director at Vukile Property Fund Limited. He is also the interim CEO of Synergy Income Fund. He is an elected board member of Nu-Way Housing Developments and Krisp Properties, and was a previous SAPOA President (2012/2013). In addition, he is a member of the Young Presidents’ Organisation (Pretoria chapter) and serves on the WHPS Old Boys’ Committee.

Vuyani Hako Executive Head at PIC Properties Vuyani Hako boasts 23 years of property industry experience; of those 23, he spent 12 in executive management. He’s had exposure to local authorities and the private sector. He’s worked as Managing Director at Metropolitan Property Services, Chief Executive Officer at Momentum Property Investments and Executive Director at Eris Property Group. He holds a BSc in town and regional planning from Wits and an MBA from the Stellenbosch Business School. He is a board member of the V&A Waterfront.

Edwin van Niekerk Max Prop ● Limpopo: Paul Altenroxell Knottrox Property Trust ● Mpumalanga: James Aling Halls & Sons (Pty) Ltd ● Port Elizabeth: Mark Bakker Bruce McWilliams Industries (Pty) Ltd ● Western Cape: Marlon Parring Par-Brokerage Services

SAPOA Committees ● Property Development

David Green

Pieter Engelbrecht

Pro Africa Properties Services

Growthpoint Properties ● Brokers Committee:

Pieter Engelbrecht (Elected) Head of Development at Growthpoint Properties Limited Engelbrecht is the Head of Development at Growthpoint Properties, the largest property REIT on the JSE. He began his career as a qualified quantity surveyor, and after three years of practice moved into the development field. He has more than 30 years of experience in the property industry and has been involved in mixed-use developments for various clients. He is a SAPOA Board member and the Chairperson of SAPOA’s Property Development Awards for Innovative Excellence Committee

Nnema Byrd, CFA (Elected) Investment Principal at STANLIB Nnema Byrd joined STANLIB in 2014, and has 16 years of finance and property experience in the US and across Africa. Her experience covers private equity, transaction structuring, property valuations, acquisitions, land development, asset management and property dispositions. She is a member of the CFA Institute, the Economic Society of South Africa, and the Women’s Property Network. She has an architecture degree and an MBA from the Massachusetts Institute of Technology, and is a CFA® charter holder.

● Convention Committee:

Awards Committee:

● REIT Committee: Lilian Barnard

Rene Styber

Metope Investment

Rosh Pinah Properties

Managers

● HR, Education, Training &

● Government Liaison

Development Committee:

Committee:

Bernadet Botha

Dr Sedise Moseneke

Eris Property Group (Pty) Ltd

Vukile Property Fund

● National Developers

● Property and Facilities

Forum: Warwick Lord

Management:

Lords Properties

Nicole Baumgarten

● Research Committee:

Broll Property Group ● Method of Measuring

Elaine Wilson Broll Commercial Property

Floor Areas (MOMFA):

Services Company

Sean Liebenberg

● Sustainability Committee: Josef Quraishi

Excellerate Design | and Projects ● Property Charter

Amdec Property Development Company

Alignment Committee:

● Legal Committee:

Musa Ngcobo

Desiree Nafte

Thelma Ngcobo

Hyprop Investments Limited

& Associates

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SAPOA events

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xxxxxxxxxxx report back

Annual Convention CEO’s Dinner Partnering with the public sector for sustainable development By Maud Nale

C “

ities and how they are governed and managed must be at the heart of the national economic growth and jobs debate. Interaction with cities and government departments is essential to ensuring economic growth in our cities. It is only through our ability to solve problems collectively that we will lead the change we need.” That was the underlying message presented by SAPOA CEO Neil Gopal at the Annual Convention CEO’s Dinner held at Summer Place in Johannesburg. The keynote address by Minister of Finance Pravin Gordhan emphasised the challenges the country is facing. “The past five months have been difficult for our country and continent,” he said. “Inequality and youth unemployment are some of the biggest challenges in the country.” After a recent visit to Paris for the meeting of the OECD Council at ministerial level, what is shocking, said the Minister, is what’s happening in the developed world, in particular in Europe. We are in a low growth trap, globally speaking. One of the main concerns the conference raised was on the point of inequality, and that the increase in inequality has not changed.

Minister of Finance Pravin Gordhan was a keynote speaker

“Inequality is a big issue in South Africa,” he said. “It is giving rise to the politics that you see in Europe, and it’s going to do the same here. What we see around the local government elections is something that, as leaders of the property sector, you need to take account of as well.” Another concern is youth unemployment. According to Gordhan, South Africa has one of the biggest challenges in terms of youth unemployment in the world. “The question is, as we go forward, where are young school graduates going to find jobs in the future? Compounding this problem is the new industrial revolution, led by all sorts of sophisticated technology. For the last 18 months, there has been extensive debate about the extent to which technology can replace human beings. How is society preparing for that kind of future?” There are many frightening scenarios that confront us at a global level and in the African context, particularly the volatility in the financial sector, the decrease in commodity demands, and the decrease in commodity prices (especially oil prices) that has done a fair amount of damage to the many countries. “As a consequence, growth is going to be pretty low. The anticipated growth is about three percent on the African continent. As it stands, the GDP growth is below one percent in South Africa, and each time we get a number, we get closer to 0,5%. Clearly, we’re not doing well enough. This is not in line with the expectations we would have for ourselves in terms of what the National Development Plan expects us to produce – you as the private sector and us as the government – and the five percent growth required to create the jobs that are needed.”

What is required in our country, according to the minister, is the creation of the right climate for economic and job growth. “I look forward to ideas from the property sector as to what initiatives you’ll be taking to help us move in the right direction far sooner than we are able to do at this point in time,” he said. Gordhan concluded his address by challenging the property industry on how it contributes to the growth of South Africa and to some kind of narrative. “What we desperately need in South Africa are leaders in each part of society and in the business sector that have a clear vision for their businesses, for their section of the economy and for the country as a whole. If we make the right choices now, then we’ll set South Africa off on a wonderful trajectory for the next 50 years.” Executive Mayor of the City of Johannesburg Parks Tau, MMC of Economic Development in the City of Johannesburg Councillor Ruby Mathang, sponsors, SAPOA Board members and various captains of industry were also in attendance.

MMC for Economic Development in the City of Johannesburg, Councillor Ruby Mathang

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city tour

Johannesburg city tour For those who live out of Johannesburg (and in other provinces), the city tour was an eye-opening experience. The tour was sponsored by the SAPOA 50th Anniversary Convention and Property Exhibition’s Platinum Sponsor, Joburg Property Company (JPC), and our tour guide for the excursion was its Senior Manager: Property Development, Alan Dinnie By Mark Pettipher

s we left the Sandton Convention Centre, Dinnie pointed out the area behind the Sandton Gautrain station – an area that is being developed by JPC called the Kgoro Gateway. It will consist of a mixed-use art precinct developed around a public square, situated above the new Sandton public transport interchange (PTI). The site is flanked by Rivonia Road (east), West Street (north) and 5th Street (south). The Sandton PTI consists of the existing Sandton taxi rank (relocated to this site), the meteredtaxi holding area, the Gautrain bus services, and the Sandton Gautrain station and associated parkade. The Rea Vaya Bus Rapid Transport and Metro bus services will operate on Rivonia Road to the east of Kgoro.

Kgoro will be the first point of entry for international visitors from OR Tambo International Airport via the Gautrain airport service. Sandton Gautrain Station is set to be a catalyst of phenomenal development in the city and Kgoro. To take advantage of this, a new public square and commercial development will be situated directly above the station. Kgoro will house the most integrated example of a formalised public transport interchange node on the African continent, where commuters may comfortably change between private cars, buses, rapid rail and/or taxi transport. Most importantly, it will link to OR Tambo International Airport. The Kgoro Contemporary Art Museum will be a rich resource, reflecting what is being dubbed as an example of Afropolitan life. From a retail perspective, Kgoro’s streetlevel stores are already actively targeting commuters, professionals and pedestrians, and skirt the Kgoro Central development on West Street and Rivonia Road. The heart of the development is Kgoro square and its periphery, which includes Kgoro West’s and Rivonia’s ground levels. These will host a mix of retail offerings that will define the square’s personality and will cater to visitors and residents. Kgoro’s Rivonia wing will house a mix of office, retail and luxury residential components, while the central, north, 5th Street and south

towers will largely be demand-driven, offering hospitality, office and retail functions with some residential capacity.

Our next stop: 27 Boxes, Melville 27 Boxes is South Africa’s first-ever retail centre built from shipping containers. Inspired by developments such as Box Park in London’s Shoreditch, 27 Boxes was created by Citiq Property Developers’ structural engineer and architect Arthur Blake to transform a disused park into 80 boutique stores, restaurants and kiosk spaces. It officially opened in June 2015. This space was designed with small, independent creative entrepreneurs in mind, with many of the stores focusing on local design and local production. Building this retail centre with recycled materials – the project cost about R32-million as opposed to R45-million for a traditional build – meant that construction costs were significantly lower. Therefore it follows that the rent is much more affordable, making it possible for local designers, artists and artisans to have their own permanent retail spaces. Not only is 27 Boxes cleverly designed and quite practical, it is also visually interesting, with bright colours and sharp shapes. There’s an airy amphitheatre, a garden area and a play park, where the plan is to host events and markets.

Hard hats and site tour Dinnie is particularly proud of JPC’s flagship Office Space Optimisation Programme, and while he explained the greater vision for the City of Joburg, we were given a tour of the new Council Chamber that’s currently under construction. The chamber will have a large entrance foyer with amenities, as well as seating for 361 councillors and officials on its ground floor (with a gallery to accommodate 158 people, press and visitors included on the second floor). Visually and spatially it also incorporates a generous circulation and informal caucus space behind the chamber and gallery.

SOUTH AFRICAN PROPERTY REVIEW

city tour To quote from the JPC website, the new Council Chamber has been designed based on key principles and inspirations: ●● Circular, traditional, Afrocentric structuring of meetings (lekgotla/ kraal), which gives rise to a circular, inclusive, flowing, structured chamber ●● The African drum and drumbeat as the rhythm of Africa ●● The gathering of resources, inputs and participation from throughout the city as a symbol that the council belongs to all citizens and had been made by all citizens, it involves the mobilisation of artists, artisans and craftspeople from all regions for the contribution of fittings and finishes to the chamber ●● Transparency of the Chamber to represent openness and accountability through the use of see-through façades ●● Incorporation of gold colours/elements into the finishes and fittings as recognition of the city’s heritage and status of the City of Gold ●● The building will be the pinnacle of green building practice, and will be the first publicly owned building to be Green Star-rated (it will be 5-star Green Star-rated) ●● The building will be “smart”, with up-to-date technical infrastructure ●● The chamber will integrate with its surroundings and connect to the city. This will be achieved both visually as well as via the broadcast of council events into the adjoining council squares and to all regional offices.

Set in the refurbished Newtown Junction across from the Nelson Mandela Bridge, this smokehouse-meets brewery occupies an incredible industrial space that used to be a potato shed in 1910 – and home to the original railway sidings and fresh-produce market. The space is big and full of textures and atmosphere, and includes exposed industrial rafters, copper panelling and down lighting, as well as chesterfield leather couches, wooden crates and a mix of flooring. The menu pays homage to the humble potato and sweet potato, both served in a variety of interesting ways. Meat dishes are mostly cooked within fire pits, pit smokers and wood-fired ovens. Since it is, essentially, a potato shed, vegetarians are well catered for with a tantalising array of options.

Last but not least As a concluding experience, we were taken to the Johannesburg Holocaust & Genocide Centre, yet to be open to the public, where we were given a glimpse of what will be a powerful memorial. The building is full of meaning and symbolism, housing everything from WWII railway tracks and cattle cars to embedded stones and pavers. It was designed by architect and project manager Lewis Levin. The site was provided by the City of Johannesburg and will house a permanent exhibition, venues for workshops and public events, a memorial garden and resource centre, a coffee shop and a bookshop. It’s not intended to be a museum but rather a “vibrant educational space”.

And so to lunch…

Last word

I’d heard of the Potato Shed all the way down in Cape Town, but what we saw was beyond what was described to me. Thanks to JPC for also hosting the lunch at a venue that, as a visitor to Jo’burg, I shall surely return to.

The tour gave each participant an opportunity to experience Jo’burg on a more intimate level – far from the madding crowd, so to speak. Many of us will use this experience to become “ambassadors” for the city.

SOUTH AFRICAN PROPERTY REVIEW

Convention report back

SAPOA 50th

Anniversary Convention and Property Exhibition

SAPOA’s 2016 Convention held in Sandton was a 50th-anniversary celebration, and has been hailed by delegates as the most successful ever. It was filled with more than 1 300 delegates, South Africa’s property, economic and political brains trust, and enough enlightenment, drama, humour, networking, golf and glamour to launch another successful 50 years By Anne Schauffer

SOUTH AFRICAN PROPERTY REVIEW

Convention report back

usebius McKaiser, master of ceremonies and the facilitator for SAPOA’s 50thanniversary Convention, put it succinctly when he took the microphone on day one to welcome the more than 1 300 delegates: “This is a Convention geared towards celebration. We’ve 50 years to look back on, and the first aim is to celebrate what the property industry has done for development in this country, and for the entire region.” Celebration was the golden thread that wound its way through the riveting, often hard-hitting and always challenging topics, speakers, panellists and discussions that ensued. The Convention’s overarching aim was to juxtapose a number of different themes, yet many roads led directly or indirectly to precisely where the property sector is situated in terms of the country’s macroeconomy, and the inescapable impact of the political landscape on just about everything in addition to property as the ripples of unrest in Tshwane filtered into the convention centre, and the UK’s Brexit votes were being counted. Everything impacts on property, and property impacts on everything. “We’ve chosen a number of speakers and panels that speak to the question of ‘How will we

get ourselves out of this rut of low economic growth?’ – because your fate, ultimately, is tied to the trajectory of the economic realities of our country and our region,” said McKaiser. Equally, “No company can afford not to care for political risk analysis – perhaps even more so than in previous years – so we have more top-notch political analysts who speak to the social and political context in which we’re operating. The reality is, if the regulatory environment isn’t sound, if the political risks are unduly high, it may not make rational sense to continue investing locally … even though at the CEOs’ dinner last night, Minister of Finance Pravin Gordhan almost begged for something like half a trillion rand over the next five years – and I don’t think he was joking – just from this sector of the economy.” McKaiser may have cut the ribbon but outgoing SAPOA President Mike Deighton, the Managing Director of Tongaat Hulett Developments, officially opened the Convention with a look at how SAPOA had measured up to its stated goals over the past year. And it was all good news, particularly around education and bursaries in the property sector, as well as advocacy.

He too, referred to Minister Pravin Gordhan’s presence at the CEOs’ dinner as a powerful indicator of the magnitude of the property sector’s contribution to the country’s coffers. “I think what’s so encouraging, and it’s played itself out in a number of areas – alluded to strongly by the Minister – is an increasing recognition that cities are both the drivers of the future, and the life and energy of this economy,” Deighton said. “Real estate lies at the very heart of that.

SOUTH AFRICAN PROPERTY REVIEW

Convention report back

Minister of Finance Pravin Gordhan

The opening ceremony

Equally, the interests of real estate – building owners and practitioners – lie in the cities, and there’s an increasing recognition of that. I see many, many areas where it’s not simply recognition, but real action.” Contrary to the general perception that the three Ps of property are position, position, position, Deighton contended that it’s people, people, people: “As we see, it’s really about the management skills, the people, your tenants, their mind-sets and their abilities,” he said. “I think it’s in that space that leadership is so profound and sacrosanct.” The Executive Honourable Mayor of the City of Jo’burg Parks Tau – also speaking on behalf of Helen Botes, CEO of Joburg Property Company, a Platinum co-sponsor with the City of Johannesburg – focused strongly on the city, its role and its spatial policy, particularly

in relation to social inclusion. He referenced a presentation of which he’d been a part, given to Dr Joan Clos (a former mayor of Barcelona), the Executive Director of the United Nations Human Settlements Programme, UN-Habitat, which promotes socially and environmentally sustainable towns and cities, with the goal of providing adequate shelter for all. “In this conversation, one of our colleagues threw in the concept of transit-oriented developments as one of the new urbanisms we were considering to influence spatial policy, and through spatial policy, of course, social process, in our city,” said Tau. “He gave us an interesting response to that: ‘Mandela spent 27 years in prison just so you can plan your cities for the car? You struggled for so many years simply so you can build cities for mobility as opposed to building them for people?’

FROM LEFT SAPOA CEO Neil Gopal and Executive Mayor of the City of Jo’burg Parks Tau

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And that’s stuck with us in the city – we ask ourselves what sort of cities we’re building. What underlines and underpins our spatial policy, and what are the policy objectives we seek to achieve? So it’s evolved to the point where we’re now talking about spatial policy in a manner that’s more inclusive of different uses in our city.” People matter. A central theme of the Convention became the apartheid legacy of how South African cities were laid out, and how this mitigates dramatically on the majority of the population who can’t access our cities’ economic possibilities: how to rethink our cities, address and redress the inequalities. Another recurring theme was the critical importance of improving communication, cooperation and trust between the private and public sectors – vital to unlock opportunities, generate jobs, and ensure a single vision. And then up stepped Evita. The lightness of powerful Evita Bezuidenhout – satirist, performer, author and social activist – who swanned onto the stage in one of her fetching little numbers and held delegates in the palm of her hand, drove home strong political points sugar-coated in her uniquely South African brand of humour – humour that touches South Africans in all the right (and wrong) places. She was on top form, wonderfully irreverent and delightfully biting. Among the seriousness of economics and politics of property, Evita’s fresh take was welcome as everybody enjoyed a laugh, essentially at their own expense. Kobus van der Vyver is the Property Development Manager for Urban-Econ Development Economists. He shared the

Convention report back company’s research report on how the property sector impacts the Gauteng economy, and how the relationship between key role-players impacts on provincial economic growth. He stressed the importance of role-players engaging in active conversations to better understand each other’s unique and opposite positions. “It’s only when we have a mutual understanding that we can make the right decisions and find the solutions we need for the benefit of us all,” he said. “Our conversation can’t only stay with spoken words; it must inspire our actions.” He used the analogy of a family: a mother, a father and a child, where the relationship between the parents (representing the private sector development fraternity and the public sector) impacts on the child (the market). He detailed their specific roles, and unbundled the good, the bad and the rather ugly. “This dynamic can be very effective if the relationship is healthy and the parties are communicating well – a partnership,” he said. “But it can only work well if both parties play their part – the child is the main beneficiary when mom and dad are working together as a team, and the biggest loser if they’re not. “In the Gauteng context, the property sector contributes about R50-billion to the GDP (2015 figures). That’s 7,5% of the provincial share and three percent of national. This sector sustains just under 350 000 direct jobs – eight percent of Gauteng’s total employment profile and two percent of national. And then there’s R2,5-billion in tax revenue from this sector – that’s a high 50,7% of the provincial tax base and 5,7% of national.” Van der Vyver’s report detailed the result of a disconnect between the public and private sector – distrust, poor communication, lack of understanding of each other’s needs

and limitations, blame shifting and being on the back foot. The result of that is significant delays in application administration. The impact? He gave an example. New business sales: 30-day delay = R2,8-million (R90 000 per day); GDP generated: 30-day delay = R770 000 (R25 000 per day); employment: two jobs per month; income: 30-day delay = R530 000 (R17 000 per day) Frankly, he said, “The property sector makes a huge contribution to the economy. It also has the potential to do more, and we should therefore seriously consider fixing anything that is restrictive to this sector.” The first of a number of thought-provoking panel discussions of the Convention was next, facilitated by François Viruly who is a Professor in Property Studies at the University of Cape Town’s Nedbank Urban Real Estate Research Unit. Alongside keynote speaker Kobus van der Vyver were guest panellists Mike Schussler (keynote speaker and economist); Rashid Seedat (Divisional Head: Gauteng Planning Commission at the Office of the Premier); Yondela Silimela (Executive Director: Planning & Development for the City of Jo’burg); and Andre du Plessis (Deputy Director: City Planning & Development for the City of Tshwane). Viruly initiated the discussion on the role of the real estate sector in the promotion of economic growth and development in South Africa. He raised a point that he alludes to frequently (and, he says, he’ll do repeatedly): “Still in South Africa we have people who live in 40m², 40 kilometres from where they spend 40% of their income on transport, and who sometimes live in a community that is 40% unemployed. The challenge we have in the public and private sector is how to change those numbers.”

FROM LEFT Kobus van der Vyver, Property Development Manager at Urban-Econ Development Economists; Yondela Silimela, Executive Director: Planning & Development for the City of Jo’burg; Rashid Seedat, Divisional Head: Gauteng Planning Commission at the Office of the Premier; Mike Schussler, keynote speaker and economist; Andre du Plessis, Deputy Director: City Planning & Development for the City of Tshwane

Evita Bezuidenhout

He added that the property sector is not just an outcome of the economy (as in “we have so much economic growth, hence we need so much space”) but that the property sector itself can be a catalyst for economic growth and development in terms of the type of space we provide and the urban design with which we are involved. Opinions came fast and furiously. Silimela made a point about design, and the challenges presented by the fact that the cities of 2050 will be nothing like we imagine, while Van der Vyver stressed the importance of the private sector’s active participation at city planning level to ensure that the city’s plans align with what the market wants. “The private sector has a depth of experience, and their input is important,” said Van der Vyver. Schussler referenced infrastructure, who pays for what, and the potential impact of this:

François Viruly, Professor in Property Studies at the University of Cape Town’s Nedbank Urban Real Estate Research Unit

SOUTH AFRICAN PROPERTY REVIEW

Convention report back “The public sector is saying to the private sector, you can build that shopping centre – but you’ve got to build the road to it.” The ramifications of that are complex, and became another theme at the Convention. For Schussler, public sector investment isn’t there; others disagreed, and still others had a Plan B – even a Plan C. In response to Viruly’s question about the system promoting larger developers rather than smaller, Du Plessis said this was certainly the case in Tshwane: “The spatial planning also focuses, just like Johannesburg, on nodes and corridors, and the development goes into that. From Tshwane’s side, we see that we have to look at the smaller developer and specifically the residential areas. Over time, suburbia can’t remain as it is – the single residential type of one house. We’ll have to allow much more uses with the densification.” It was then time for a visual presentation of the nominees for the SAPOA Journalism Awards for Excellence, sponsored by JHI Properties. Property journalism isn’t the poster child of the journalism world, but for the property sector it’s a vitally important

one, which certainly deserves recognition – and would receive just that, at the following night’s gala dinner, when the winners would be announced. “REITs: A Global View” was the topic presented to delegates by Ian Anderson, Chief Investment Officer of Grindrod Asset Management. Historically, he explained, few realise that many South African listed property companies or REITs have a longer track record than most of their US counterparts. “Today, I think most people are very much aware that an investment in South African REITs has been fantastic. The local REIT market has outperformed equities and bonds. I don’t even bother putting cash in there because it’s like a flat line,” he said. “I can remember back in May 1999, the first REIT in South Africa exceeded one-billion in market cap. Today, that’s where you have to start if you want a successful listing, and we’re waiting for the first R100-billion REIT. As we’ve seen in the US, the UK, Australia, Canada and other REIT markets, there’s been a significant surge in the growth of the public real estate market here.

But we’ve still got a long way to go in order to convert institutional quality real estate into public real estate. And South Africa is probably only about 12% to 15% of the total institutional property market represented by REITs. “Many people are critical of the South African REIT market, saying it’s significantly overvalued, but they’re using just one method – comparing the current yields on South African REITs to what they were able to achieve 10 or 15 years ago. What they’re not doing is fully appreciating the changes that have happened within the listed sector. “What we have today are operating companies, not funds. People still refer to these things as just vehicles that own property and you collect rentals on them. These are businesses. “Today, the capital-allocators and fund managers like myself – and I’m not advocating this, I’m just saying what my fellows are advocating – are telling users of that capital, that the REITs should go offshore. That’s where they see value. They’re worried about

FROM LEFT Bronwyn Corbett, Chief Operating Officer and Chief Investment Officer at Delta Property Fund; Laurence Rapp, CEO of Vukile Property Fund Limited; Steven Brown, Executive Director of Fortress Income Fund

Ian Anderson, Chief Investment Officer of Grindrod Asset Management

FROM LEFT Daniel Silke, Director of Political Futures Consulting; Pieter-Dirk Uys, satirist, performer, author and social activist; Mzwanele Manyi, President of the Progressive Professionals Forum; Victor Kgomoeswana, author, African business specialist and B-BBEE consultant

Political commentator and author Justice Malala

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Convention report back

Philip J Paphistis, CEO of Hamleys

the South African economy, the South African property market, about the ability of their tenants to pay their rent, to grow their rent. They’re worried about market rentals. What we’ve seen is an increase in the allocation by SA REITs to markets away from South Africa.” Talking REITs were panellists Bronwyn Corbett (Chief Operating Officer and Chief Investment Officer of Delta Property Fund), Steven Brown (Executive Director of Fortress Income Fund) and Laurence Rapp (CEO of Vukile Property Fund Limited), with Ian Anderson facilitating. Rapp concurred with Anderson about viewing themselves as CEOs of running businesses, not simply running a fund. “So as a business, we have to take a longer-term view as to where we see our business in five, 10, 15 years’ time,” he said. “We think it’s prudent to diversify out of the macroeconomic fundamentals in South Africa. You have to get into other markets as well.” To Anderson’s question about the market still not fully appreciating the opportunities in Africa (or being wary about them), Corbett said, “We see the growth coming out of the continent, not necessarily out of South Africa. The reality is that South Africans are fearful of what is going on on the continent.” Her point? Don’t confuse South Africa with Africa. “Our job is to find the opportunities that actually create the value in real estate, and I think that’s really what we’re looking for,” said Brown. “And that’s possibly moving out of the listed stuff into developments, into adding a lot of value in an asset class that we’ve come to understand really well in South Africa. Although there are a lot of differences, there are a lot of similarities, and I think South Africans have a tremendous experience in real estate and capital markets.” Session two began with Pieter Engelbrecht, Chairperson of SAPOA’s Innovative Excellence Awards Committee, who showcased the entries shortlisted for the various awards. SOUTH AFRICAN PROPERTY REVIEW

Convention report back

Creator of the now-legendary Tashas restaurants, Natasha Sideris

Once again, winners were to be revealed at the grand gala dinner the following evening. Political commentator and author Justice Malala stepped up to microphone with his metaphorical book in hand: “We Have Now Begun Our Descent: How to STOP South Africa Losing its Way”. All delegates were present and keen to hear his view on the way forward, and whether his printed word was still gospel. “Is there going to be another event that will have the sort of impact that December 2015 had on your properties, investments, currency and so on?” Malala asked. “What can we look out for to be able to navigate the world we’re in politically and be properly prepared for such an event?” How do we continue to build without being diverted by the noise of our politics … a noise, he said, that most of the time, we – like many others worldwide – (kind of ) like.

He highlighted a few key issues: for example, if our institutions are working, don’t worry about the noise. Our Public Protector works. FeesMustFall and Nenegate showed that civil society has a voice. But do worry about ninemillion unemployed – it’s a big issue at the heart of this society. So too is race. He also believes there’s a trend that says business has not come to the party and is not informed enough: “You’re going to see that more and more in our politics.” The panel that joined Malala was a diverse, lively and very vocal mix of Mzwanele Manyi (President of the Progressive Professionals Forum), Victor Kgomoeswana (author, African business specialist and B-BBEE consultant), Pieter-Dirk Uys (satirist, performer, author and social activist) and Daniel Silke (Director of Political Futures Consulting). Views converged as much as they diverged, with Pieter-Dirk Uys adding the necessary levity. “The elephant in the room here is the word leadership – on every level of our existence. Leadership in family, in community, in municipal government which, I think, at the moment, is the future. If on 3 August we involve ourselves as we should and must as citizens of a country and get proper professional incorruptible municipalities as a foundation to central government, we’ll be fine – because that’s what democracies do. If we don’t do that, I promise you, we will meet each other on the Croatian border with a Pick n Pay bag in our hands.” After heated exchanges all round, McKaiser said in frustration: “It seems that we have an intractable problem in this country just at the level of analysis if we can’t agree on the state of the State, if we can’t even have at least some decent overlapping consensus about the direction of the major challenges…”

FROM LEFT Simon Freemantel, Senior Political Economist at Standard Bank; Dennis Dykes, Chief Economist at Nedbank

SOUTH AFRICAN PROPERTY REVIEW

But Silke felt there’s a lot more that unites us as South Africans than divides us. “I suspect if you put us all together in a room, no matter what our political persuasion, we would be able to compromise,” he said. “We must keep a very broad mind and move away from narrow ideological paradigms that I think hold us back.” What better speaker to follow the world of politics than Philip J Paphistis, CEO of Hamleys in South Africa (Ensolor is the holding company) – “the finest and oldest toy store in the world”. He took SAPOA delegates on his personal business journey to today, as the somewhat surprised owner of a toy store – something he says he never imagined himself doing or being. Paphistis described the process behind Hamleys entry into the South African market, showed delegates the grand opening, and shared his vision for the future. It was a lively presentation and a joyful toy story with a very happy ending in Cape Town’s V&A Waterfront. And so it was a wrap for day one of SAPOA’s Convention – other than the wonderfully welcoming cocktail function sponsored by Remote Metering Solutions, Tongaat Hulett Developments, Fortress Income Fund and Nedbank Corporate Property Finance. It was a time for networking, raising glasses, digging into the magnificent spread and enjoying the live band; a fitting way to unwind at the end of a stimulating day. Bright and early the next day, the ladies’ breakfast took place at Tashas – or rather, Tashas came to the convention centre. The SAPOA Women’s Annual Breakfast was a glamorous, gourmet affair, the table decor and delectable eats topped only by the words of the inspirational creator of the nowlegendary Tashas restaurants, Natasha Sideris.

JP Landman, political/economic trends analyst

Convention report back

Mike Deighton hands over SAPOA’s presidential reins to Nomzamo Radebe

This energetic, passionate yet unassuming dynamo who has created a boutique brand now entirely synonymous with success (almost against all odds) and a unique franchise model that has raised the bar substantially, had everybody eating out of the palm of her hand. She calls Tashas “the anti-franchise franchise”. She was no trustfund kid with handouts, but rather somebody who – working alongside her chef and restaurateur father, who taught her almost everything she knew or knows about cuisine – arrived at a fork in the road. As the suggestion always goes, she took it. She saw an opportunity, barely paused and seized it. Today, there are 13 Tashas restaurants in South Africa, and one in Dubai. Within the next six months, there’ll be another two in South Africa, and six in the Middle East. Natasha made her breakfast guests walk in her shoes, and share her first driving force: “I just wanted to make people happy,” she said. “That’s all.” She worked from the inside out, with the why, then the how and finally the what. She shared her gems, which she believes are at the heart of her success. Two stood out: the 10 000-hour rule – you need to work that number of hours to succeed. The other one? “Don’t let a lack of funding deter you from pursuing your dreams.” She lived by that one, borrowing money from shady money lenders, and spent years and years earning little as she repaid the debt. Does she regret it? No. Today, she’s a legend in the industry and given her smart, intuitive approach to a creative industry, nobody was surprised to hear she’d originally wanted to study psychology.

Up stepped JP Landman, an analyst who specialises in political economic trends. He presented his views to the delegates on “Economic Presentation: Local, Macro and Global Perspective”. He was blunt: “I have a very limited view of economics. For me, economic growth means absolutely nothing – unless you can see it in the context of population growth. What is economic growth? It’s nothing else but a process of generating more cash flow, generating more income. What is the good of generating more income if you’re making babies at a much quicker speed? Then you’re not going anywhere. So the trick is to have economic growth in excess of your population growth.” He tidily proved we’re not. “So clearly we’re in a bad spot – and that affects not just the economic but also the political and social development context of our country,” he said. His description of where the economy is now, is “a phase of austerity-lite”. “I still put my faith in the fact that if we can restore electricity and we get good rain, those two factors alone can help to push our growth back to a substantial margin above population growth,” he said. “The story that South Africa is not investing in infrastructure is simply not true. What is true is that all the dividends have not come through yet – and they will in due course. That must materialise. “For us as individual businesses – and particularly for you – structural transformation is the thing on which you must focus. You can’t do much about electricity or the rain. But what is within your power is to build your own individual business, whether it’s farming or property development. Build in such a way that you see a constant improvement in productivity, either because you do new things or you do old things in a new way. That’s the way you’re going to leave the recession; that’s the way you’re going to ensure your own survival.” Facilitated by McKaiser, the panellists – in addition to Landman – included Simon Freemantel (Senior Political Economist at Standard Bank) and Dennis Dykes (Chief Economist at Nedbank). As Dykes said, “The political situation has definitely played into the economics, and it’s played through a number of different avenues. Even if you’re looking at the spending that JP is talking about – the significant spending on infrastructure – you’ve got to look at the effectiveness of it. Are you getting enough bang for your buck? I think there’s a strong case that it’s very delayed and you’re not actually seeing

an efficiency of spending coming through.” Freemantel pointed to the state entities, suggesting that not all of them are problematic. “But some of them are of substantial value in business, and the reform of those State entities – and the way they manage themselves – again rests on political decision. So SAA is increasingly being seen as a indicator as to how committed government is to take tough political decisions in the interest of lessening the burden on the fiscus.” Landman signed off with this: “In 1943, Cornelius de Kiewiet – looking at South Africa’s history up to that point – made this one absolutely profound comment: ‘South Africa is a country that progresses through political disasters and economic windfalls.’ I don’t think that has changed since 1943. Politics have always been a spoke in the wheel of South Africa’s economic growth. Could we have grown much more? Yes of course.” It was an opportune moment for delegates to take a step back from the present to see into the future, in the form of an uplifting inaugural address by the new SAPOA president Nomzamo Radebe, CEO of JHI Properties Pty Ltd. The next plenary session was shared by two eminent speakers: Robert McGaffin (senior lecturer in the Department of Construction Economics and Management at the University of Cape Town) and Gary Goliath (urban specialist at the World Bank. The topic? Delivering successful urban environments through property sector partnerships – based on the research done by the University of Cape Town and funded by Nedbank Corporate Property finance. McGaffin spoke about “Value Capture in South Africa: A Way to Overcome Urban Management Challenges and Unlock SAPOA Past President Mike Deighton with CEO Neil Gopal

SOUTH AFRICAN PROPERTY REVIEW

Convention report back Development Opportunities”. He had a noticeable response to the question he posed to delegates: “How many of you have had a project that’s been stopped, curtailed or constrained because of infrastructure problems?” He then presented the research with which the University of Cape Town had been involved, investigating why that’s the case and what could be done to address the issue. “Historically, we’ve had the State provide the infrastructure and recoup that investment over time, generally through developer contributions. This model is increasingly coming under pressure.” Enter the concept of “value capture”: “Really simply, value capture is the sharing between State and the private sector of increased property values that result on the back of public investment.” Dykes used the Gautrain as a good example. “There’s always been this big debate around ‘did the public sector get a return on the Gautrain?’ A lot of public investment went into that, and property values increased on the back of it. Should that value be distributed in a more equitable way? “In the past, the total value would have accrued to the private player, the private land owner. What they’re saying is that actually what you need to do is take off a portion of that value. Not all of it – just a portion to accrue back to the public sector. That can occur in a number of ways. I think they could help municipalities raise local revenue, which is critical. It enables the municipalities and the private sector to respond to development opportunities when they come along.” Is there an appetite for it? Sharing the stage, World Bank’s Goliath spoke about “Funding public sector infrastructure through real estate markets – an international perspective”.

He examined a specific case study involving tax increment financing (TIF), and how it played out at The Wharf in Washington. “Essentially everyone is supposed to win if a TIF is done correctly; all three parties,” he said. “The city expands its revenue base over a period of time. It is able to decrease the balance sheet pressure that seems to be increasingly problematic in South Africa. From a developer’s point of view, you have a site that would otherwise never have been used, and a new opportunity to develop. For residents, new public open spaces, perhaps better transitoriented development that could have happened, more affordable housing in an area. “It’s obviously an untested product in South Africa but it’s not specifically forbidden. There are ways to get it through, but there are going to be a few hoops that we need to jump through in order to make sure that it fits within our regulatory and legal framework. It’s a very new concept. We’ve got the right tools in place, the depth of financial markets and the expertise, but this in and of itself hasn’t been done, so there are going to be potentially high interest rates and potentially high transaction costs. And that’s just the reality of the environment.” Professor Viruly welcomed the panellists: David van Niekerk (The Neighbourhood Programme: National Treasury), Alan Dinnie (Senior Manager: Property Development at the Joburg Property Company) and Catherine Koffman (Head of Infrastructure and Telecommunications at Nedbank Corporate and Investment Banking), together with speakers Goliath and McGaffin. Koffman believed TIFs were an exciting concept, and one that had been done: “National banks are doing it quite actively in Europe. It’s all about the right legislative framework,” he said.

“I think it’s a great model.” McGaffin said that “We need to put it in place and actually see how it works – I’m interested to see what the appetite will be like as to how much of it will be sitting on(or off ) a balance sheet.” For Van Niekerk, “The focus on property in municipalities is certainly coming to the forefront, and that has two implications. One obviously that municipalities are becoming more property-savvy and understanding the values of property, but also it makes it easier for the private sector to interact with the municipalities because there is an understanding of the motives and processes within the municipality.” Next up on the podium was Professor Anthony Turton, Chairman of the Board of Gurumanzi and a water strategy specialist. He told it like it is about water security in “South Africa’s Water Crisis: Is the Water Crisis the Country’s New Eskom?” Bottom line, she says, is that water is not just about water – it’s about political power at localised level. “What is energy about? What is the Eskom crisis about? One thing only: reassurance of supply. Is there energy on the grid at any one moment in time? Absolutely. Can we guarantee that on Monday next week at 1.30pm at this particular location there will be electricity? No we can’t. If you basically drill down to assurance of supply, I believe this is the common link between energy and water. It comes down to the inability to plan, budget and procure it in time. “I don’t think there’s any company that can survive in South Africa today without a fairly sophisticated energy strategy, and I would argue that the same is going to hold true with water. “I’ve tried my very best to get the President to get up and say the following: ‘Our national economy is fundamentally water-constrained

FROM LEFT Catherine Koffman,Head of Infrastructure and Telecommunications at Nedbank Corporate and Investment Banking; Gary Goliath, Senior Urban Development Specialist, The World Bank; Alan Dinnie, Senior Manager, Property Development at the Joburg Property Company; David van Niekerk, The Neighbourhood Programme, National Treasury; Robert McGaffin, senior lecturer in the Department of Construction Economics and Management at the University of Cape Town.

SOUTH AFRICAN PROPERTY REVIEW

Convention report back

Professor Anthony Turton, Chairman of the Board of Gurumanzi and a water strategy specialist

therefore our future lies in recycling and recapture. Our target by 2035 is R1,65-trillion.’ That’s what has to be said. If you say that’s a national policy, then all this is going to go away and we’re not going to have a problem. The problem in water is the quality of expended water because water is an infinitely recyclable resource.” From the future of water to a different future: “The Future of the Telecom, Media and Technology (TMT) Workplace”, presented by Richard Golding, International Director/Head of Global Occupier Services UK & I, Cushman & Wakefield. “If you don’t have some element of technology, media and telecoms in your business, you aren’t necessarily growing. You’re probably going backwards.” And then, relating specifically to property, “The pace at which you have to adapt in real estate, you need to be visionary. Buildings take long, and you’re deciding on where the current 14-year-olds want to work, what type of building they want to work in, and so on. We need to be thinking smart as to what that means. And it’s all about cities, about building flexibility. I’m talking about potentially three or four generations in

Richard Golding, International Director/Head of Global Occupier Services UK & I, Cushman & Wakefield

one building – how do you do that? Everyone packed together, everyone wanting something different. Look at Google: what they’re all about is getting to something called the ‘20% me-time’ – getting people away from their desks into environments where they can actually do things other than just process what’s going on. It’s all about getting people into an environment where they can excel at what they do. One size doesn’t fit all – but one principle does.” Then the tide turned, and technology was taken to another level when John Vickerman, President of Vickerman and Associates LLC, took SAPOA delegates for a ride … to the Panama and Suez Canals. He shared the impact of the canal expansion projects and evolving global trade and transportation trends for Africa, in particular sub-Saharan Africa. Vickerman builds ports worldwide, and his astounding depth of knowledge around increasing transport needs, ships, and containers and the complexities of their routings made for fascinating viewing and listening. Vickerman explained the impact of the recent expansion of the Panama Canal, and how shifts in

John Vickerman, President of Vickerman and Associates LLC

routing opened any number of possibilities for trade. It was a riveting presentation, and like many of the presentations throughout the Convention, it took delegates away from the concerns within our borders and put South Africa in Africa – and in the world. The Convention examined local, but went global. And so SAPOA’s 50th Anniversary Convention & Property Exhibition drew to a close, barring the shouting, partying and final celebrations. The glittering SAPOA gala dinner and awards evening began at 7pm, and more than 1 000 delegates in ball gowns, traditional dress, black ties and jackets paraded up the red carpet into the magical venue. It was a night of stars, a grand celebration of those who’d excelled, a farewell to those leaving, a warm welcome to those arriving, and a heartfelt thanks to all those who’d contributed to make SAPOA’s 50th year – and this Convention – such a memorable one. Delegates dined, wined, danced and applauded SAPOA’s numerous success stories – half a century of serving the needs of the commercial and industrial property industry, a true milestone.

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Building bricks bound with beauty excellence awards

L WINNER OVERAL LL HERITAGE OVERA

T DEVELO PME ISHMEN URB NTS REF

Fifty-six entries made it to the ﬁnal stages judging. The 2016 winners of SAPOA’s Innovative Excellence in Property Development Awards prove that innovation, beauty, attention to detail and the environment win out

ach year the quality of the entries improves and the constant striving for excellence is more and more apparent. These awards go some way to recognising that dedication. Although the aesthetic appeal is a major consideration, the awards programme takes a holistic approach to evaluating the various design, innovation and efficiency elements that work together to marry corporate social investment, management and environmental policies, as well as the interior and exterior spaces. The panel looks for a “happy” marriage of skills to ensure that the built environment works for all who are involved with each building. The judging process is meticulous and rigorous. The panel consists of peers in the property industry, all experts in their chosen disciplines. To be awarded recognition by them brings much kudos. This year SAPOA has introduced an additional award to recognise the inner beauty of the work environments that we all are exposed to: an award for interiors. Congratulations to the winners as well as to those that did not get to the podium this year. The competition was tight. Don’t give up and enter again next year – the limelight may next fall on your innovative 2016-2017 achievements.

SOUTH AFRICAN PROPERTY REVIEW

International developments

Matola Raid Monument and Interpretive Centre

South African government’s forces, which attacked three strategically targeted houses

The Department of Arts and Culture appointed

used by Umkhonto we Sizwe, resulting in

the Department of Public Works to execute the

13 casualties.

design and construction of a monument and Interpretive Centre. The project commemorates the raid into Mozambique on 31 January 1981 by the then-

The project is located in Matola. It forms an urban space that has become a catalyst for upgrades in the area, and a communal space for the members of the community to meet.

Developer The Department of Arts and Culture Architects Impendulo Design Architects Quantity surveyors AECOM Civil engineers AECOM Structural engineers AECOM Mechanical engineers AECOM Other consultants Memory Inc Principal contractor Stefanutti Stocks Mozambique Lda Electrical engineers AECOM Fire consultants AECOM

L DEVELOP ATIONA MEN ERN TS INT

The judges Pieter Engelbrecht, Growthpoint Properties (Pty) Ltd Andries Schoeman, Delta Property Fund (Pty) Ltd Anthony Orelowitz, The Paragon Group Beata Kaleta, DSA Architects Andries Schoeman, Delta Property Fund (Pty) Ltd Christian Roberg, Abland Dean Narainsamy, AECOM

Corné de Leeuw, DelQS Quantity Surveyors and Property Valuers Craig Sutherland, Sutherland Multidisciplinary Engineers Hashim Bham, BTKM Quantity Surveyors Itumeleng Mothibeli, Vukile Property Fund John Truter, WSP Group Africa Structures John Williamson, MDS Architecture Ken Reynolds, Nedbank (Pty) Ltd

Winner and Overall Winner, Overall Heritage Award, Refurbishment Developments

combination of office space, cafes, medical

The Lion Match Office Park is a redevelopment

garage and a new building, designed

project that’s rejuvenated an old warehouse into

according to provincial heritage agency

a commercial space. The property is a heritage

AMAFA’s requirements and in keeping with

site and is unique in its historical architecture

the area. Nestled alongside the railway line

and iconic landmarks, so history and sustainable

with views of the ocean and rugby fields, the

design have formed the basis of the project.

new building has been a highlight of the project.

Lion Match Office Park

The original 21 000m² property contained a

Nonku Ntshona, Nonku Ntshona & Associates Quantity Surveyors Queen Mjwara, Eris Property Group Rudolf Nieman, Sterikleen Sam Silwamba, Old Mutual South Africa Sandi Mbutuma, Azzaro Quantity Surveyors Stuart Gibbs, Zenprop Property Holdings Wessel van Dyk, Bentel Associates International Zinon Marinakos, DSA Architects International

The now-26 000m² park is a wonderful facilities and various other services. The redevelopment included a new parking

The Lion Match Office Park is well positioned

mixture of commercial and industrial space. The

between Durban’s stadiums, close to transport

year 2013 saw the start of the development of

facilities and major routes, and central to the

this space into an urban business environment.

city’s “Golden Mile”.

Developer JT Ross Architects Dean Jay Project managers JT Ross Quantity surveyors JT Ross, MLC Quantity Surveyors Civil engineers Hatch Goba, May Houseman & Associates Structural engineers Hatch Goba, May Houseman & Associates Mechanical engineers BD&O, AECOM Principal contractor JT Ross Construction Electrical engineers BFBA Consultants Fire consultants Dynamic Fire Solutions, AECOM

Office Developments: Corporate MultiChoice City

Sited on the prominent corner of Bram Fischer

LOPMENTS COR DEVE POR ICE ATE OFF

Drive and Republic Road, the contemporary design of MultiChoice City comprises four parking basement levels and four office levels of approximately 35 000m², generously arranged around a striking central atrium. A subterranean tunnel links the new and the old part of the campus, and a bold angular pedestrian bridge (still under construction) will connect internal pedestrian traffic around the campus over Bram Fischer Drive. A noticeable feature of the new building is the curvilinear façade on an element of the scheme on the Bram Fischer frontage, nicknamed “the bean”. It is easily distinguishable with its swooping, glazed brise soleil providing sun control to this elevation. The edge of the bean morphs the rectilinear urban edge of the street block and draws in pedestrians from the street. Once inside the building, a multi-storey atrium covered with a long span ETFE (ethylene tetrafluoroethylene) roof floods the space with daylight. The atrium has several pause areas and breakaway zones, where staff and visitors alike can interact and animate the space.

Developer NMS Properties Architects Grosskopff Lombart Huyberechts & Associates Architects Project managers M Studio Quantity surveyors BTKM Quantity Surveyors Structural engineers Pure Consulting Mechanical engineers C3 Climate Control Consulting Engineers Other consultants Dsgn, Insite Landscape Architects, Izazi Consulting Engineers Principal contractor Group Five Electrical engineers OneZero Fire consultants TWCE Green/sustainable consultants Solid Green Consulting

SOUTH AFRICAN PROPERTY REVIEW

excellence awards Each unit has a private bathroom and kitchen, Telkom, internet and DSTV connectivity, as well as quality finishes and a prepaid electricity meter. TIAL DEVELOPME IDEN NTS RES

The quality is continued in the successful upgrade of the ground-floor retail area. The “Place” brand, established by City Property Administration (Pty) Ltd, is recognised in Gauteng for high-quality apartments, amenities, security, cleanliness and excellent service over its years of providing the market with excellent residential accommodation options. Frank’s Place is no exception, as attested to by tenants who are already living in the apartments. Occupation of the building commenced in June 2015, and it was already 77% let by December 2015. The demand levels being experienced have once again confirmed the owner’s strategy of continued investment in the inner city, providing high-quality affordable accommodation and retail.

Residential Developments Frank’s Place

It is well located in terms of public-transport routes, workplaces, shopping amenities and schools.

Frank’s Place (old Bosman Building) in the

The development is a conversion of a vacant

Johannesburg CBD epitomises contemporary city

office building into 225 modern apartments with

living and supports the owner’s strategy of urban

133 parking bays, boasting a communal braai area,

renewal in the Johannesburg and Tshwane CBDs.

basketball court and kids’ entertainment area.

Developer City Property Administration (Pty) Ltd Architects Gass Architecture Design Studio Quantity surveyors SSQS Trading (Pty) Ltd Structural engineers WSP Group Africa Mechanical engineers AConsult (Pty) Ltd Principal contractor Tri-Star Construction Electrical engineers CKR Consulting Engineers Fire consultants Building Code Consultants

Refurbishment Developments Four Seasons The Westcliff

It’s an iconic hotel reborn: the new Four Seasons The Westcliff in Johannesburg is a stylish urban

T DEVELO PME ISHMEN URB NTS REF

resort. Situated on Westcliff Ridge and offering panoramic views across Johannesburg Zoo and the suburbs of Forrest Town, Saxonwold and The Parks, the hotel is conveniently close to business, culture, shopping and leisure activities. Located just 40 minutes from OR Tambo International Airport and Lanseria International Airport, it serves as a gateway to all of southern Africa – ideal before or after a safari in Botswana or the Kruger National Park. The refurbishment of the hotel was extensive, and included the redesign of kitchens and food and beverage outlets, and the creation of a new spa and gymnasium on the site of the original tennis court and covered parking. A major new feature are the twin panoramic glass lifts, which take guests to the upper terrace and restaurants. The hotel has 117 guest rooms, which include executive suites and presidential suites. The five contemporary dining and bar venues generate a vibrant social scene. Embodying the excitement of Johannesburg’s urban revival, Four Seasons Hotel The Westcliff offers five-star luxury hotel accommodation in the city’s prestigious northern suburbs.

SOUTH AFRICAN PROPERTY REVIEW

Developer 80 Westcliff (Pty) Ltd Architects DSA Architects International Project managers 80 Westcliff (Pty) Ltd, HPL Properties (Pty) Ltd Quantity surveyors Theba Consultants & Quantity Surveyors Civil engineers WSP Structures Africa Structural engineers WSP Structures Africa Mechanical engineers Ace-Tech Design Other consultants Ashton Developments, Ferro Brothers, Jacket Interiors, Melamed, Promanser Electrical engineers Ace-Tech Design Fire consultants JM Consultants

Office Developments: Commercial Ridgeview Office Development

The Ridgeview commercial office building, developed and owned by Growthpoint Properties, was completed on 19 December 2015. It is prominently positioned alongside a busy traffic circle near the Gateway Theatre of Shopping and located in the prestigious Ridgeside Office Park, a sought-after office node in Umhlanga. It is one of two buildings on a shared site, designed with a shared super-basement and common facilities to maximise efficiencies in capital costs and operating costs, and minimise the impact on the environment. Ridgeview consists of four basement levels, with four levels of offices above. The total GLA of the building is 6 650m², of which about 50% has been let to key tenant AECOM South Africa (Pty) Ltd. Ridgeview is the first building in Durban to achieve a 5-star Design Rating from the Green Building Council of South Africa, and the AECOM LOPMENTS COMM DEVE ERC ICE IAL OFF

interior fit-out is currently being assessed for an official 4-star Green Star Interiors v1 Rating. Ridgeview is a frontier for green buildings in KwaZulu-Natal. With an optimum design and

Developer Growthpoint Properties Architects Elphick Proome Architects Project managers AECOM Quantity surveyors FWJK Civil engineers Hatch Goba Structural engineers Hatch Goba Mechanical engineers Aurecon Principal contractor WBHO Fire consultants Aurecon Green/sustainable consultants AECOM

an innovative filtered glass façade and glass fritted fins, it has set the industry benchmark for an iconic-looking and efficient green office building in South Africa

Mixed-Use Developments The Mirage

On the border of the historic De Waterkant and Bo Kaap districts in Cape Town, The Mirage is

SE ED-U MIX

DEVELOPM ENT S

a contemporary mixed-use development that faced the challenge of erecting a modern building in a sensitive heritage area. The building is on the very edge of the CBD zoning boundary, which has generous bulk and height allocations. Outside of this boundary, from Hudson Street onwards, the zoning allocations are more onerous, which highlights the contrast between the two zones – essentially the new city meeting the old. One of the major considerations was making a connection with the street. The upper storeys were an exercise in mitigation and balancing between the design and maximising the square meterage. The building is divided into a number of elements, including retail, hotel, luxurious private apartments, and rooftop terrace and bar. The street level is “capped off” by a horizontal glass light box that runs around the building and acts as an effective transition to the upper levels – especially when lit up at night – achieved largely by the inconspicuous parking levels within. Another vertical light box runs up the lift shaft on the outside of the building, emphasising

Developer The Nova Group, Careline Living Spaces Architects Kevin Gadd Architects cc Project managers The Nova Group Quantity surveyors Rubiquant Civil engineers Sutherland Engineers Structural engineers Sutherland Engineers (Pty) Ltd Mechanical engineers Sutherland Engineers Principal contractor Nova Build (Pty) Ltd Electrical engineers McAvinchey Consulting Engineers Fire consultants Sutherland Engineers Green/sustainable consultants Terramanzi Group

the corner of Strand and Chiappini streets.

SOUTH AFRICAN PROPERTY REVIEW

excellence awards

RANSFORMA TION RALL T OVE

R DEVELOPMENT S OTHE

Overall Transformation Award: Other Developments Mitchells Plain District Hospital

the Western Cape Health Directorate of the

which

Department of Transport and Public Works, local

orientation for sunlight and views, reduced

allows

for

the

building’s

optimal

clinicians and the local community.

walking distances, ease of control, and flexibility

Mitchells Plain District Hospital sets a new

The hospital is located on five hectares of

for change and future expansion. An interior

precedent for modern South African public

a unique nature reserve, which was rehabilitated

way-finding system was developed combining

healthcare design, environmental sustainability

and conserved during and after construction,

multiple languages, colours, pictograms and

and community-centred institutions. The design

allowing for the building to be integrated in a

artwork, created by community and staff,

combined the input of a professional team

lush greenfield site. The planning was based on

which imbue a clinical and sterile institution with

with the policy direction and experience of

a centralised “Mandala” compact repeating plan,

life and colour. A total of R97-million was invested in the

Developer Western Cape government: Department of Public Works, Department of Health Architects Magqwaka Associates Architects, Munnik Visser Architects, New Era Architects Project managers Stauch Vorster Architects Quantity surveyors Mahlati Quantity Surveyors, SIBA Civil engineers Hatch Goba Structural engineers BSP Consulting Engineers, Nadeson Mechanical engineers BMDS Consulting Engineers cc, NAKO Triocon Other consultants Cecily Rocher Design, Lovell Friedman Principal contractor Aveng GrinakerLTA Electrical engineers Jakoet & Associates, NAKO Triocon Fire consultants Keith Fletcher & Associates cc Green/sustainable consultants Amathemba Environmental Management Consulting cc, C2C Consulting Engineers, TKLA Landscape Architect

employment, training and skills development of local businesses, individuals, children, disabled persons, rehabilitated drug-users and ex-convicts during construction, integrating community involvement into the very fabric of the institution, and redefining the legacy and service of healthcare in South Africa.

Industrial Developments New Development for Hilti

Empowered Spaces Architects’ design for Hilti in Atterbury’s Waterfall Logistics Precinct consists of a

IAL DEVELOPME USTR NTS IND

1 700m² warehouse and a 2 000m² office building. Juxtaposed

against

the

surrounding

developments of the precinct, the entrance is a mirage of high-performance, environmentally friendly tinted glazing, fringed by spandrel panels. The glass façade allows for maximum natural light to illuminate the lobby and office space, while the spandrel panels limit the harsh western sunlight and allow for comfortable working conditions. Energy-efficient fittings and air conditioning are apparent throughout, with sufficient insulation in the walls and roof allowing for optimum conditions throughout the rest of the building. The unique angled roof aids in the modern aesthetic of the warehouse – it wraps over the office space, encapsulates the otherwise invisible warehouse and peaks over the north-facing façade. The interiors of the Hilti office building were imagined and created by Empowered Spaces’ counterpart Ispaces, whose concept was derived from Hilti’s corporate colours and equipment. This meant blending bright-red elements into subtle and understated monochrome surfaces. Hilti products formed part of the office decals as well as the signage.

SOUTH AFRICAN PROPERTY REVIEW

Developer Atterbury Property Architects Empowered Spaces Architects Project managers Empowered Spaces Architects Quantity surveyors IBP Central Civil engineers DG Consulting Engineers Structural engineers DG Consulting Engineers Mechanical engineers CKR Consulting Engineers Principal contractor Archstone Construction Electrical engineers CKR Consulting Engineers Fire consultants Specialised Fire Technology

property, construction and quantity surveying departments. The first Greenovate Awards were held in 2015, and were set up with the University of Cape Town, the University of the Witwatersrand and the University of Pretoria. Round one of the competition takes place internally, i.e. within each university – the internal selection and judging process here are up to each university to decide. Each university’s panel then selects the top two projects submitted by student groups from each university. The top two projects are invited to advance to the next round (round two), which takes place in Johannesburg. These top groups – the finalists – present to an external panel of judges consisting of industry

IVE DEVELOPME OVAT NTS INN

experts and compete against one another for a grand prize of R30 000.

Innovative Developments

The Growthpoint Greenovate Awards Programme

The intention behind the programme is to This programme, known as the Greenovate

expose students to key focus areas concerning

Awards, introduces university students to green-

sustainability within the industry, and introduce

Growthpoint Properties and the Green Building

building thinking and recognises excellence

the industry to available talent. The programme

Council of South Africa have initiated a joint

in application.

will also act as a platform for Growthpoint

project to explore ideas for the development and

The Greenovate Awards competition targets

Properties to recruit prospective students for

establishment of a Student Awards Programme.

students in their honours year of studies in the

graduate programmes and internships, culminating in potential job opportunities. Essentially, the

Developer Growthpoint Properties and the Green Building Council of South Africa Growthpoint Properties Werner van Antwerpen (Head of Sustainability and Utilities), Remy Kloos (Sustainability Manager) Green Building Council of South Africa Brian Wilkinson (CEO of the Green Building Council of South Africa) and Donne Atkinson (Education and Training Manager)

awards programme assists students in entering the market as advocates for green building with a passion to create better and more sustainable cities, towns and neighbourhoods.

IL DEVELOPMENTS RETA

Retail Developments

profile of shoppers in the catchment area, which

compromising on efficiency and convenience,

informed the overall design of the shopping centre.

culminating in the most exciting and luxurious

Zenprop Property Holdings, having identified

Zenprop is renowned for creating world-class

shopping centre Zenprop has developed to date.

the Mall of the South as a retail development

shopping centres, and the Mall of the South seeks

Mall of the South accommodates 164 tenants,

opportunity, commissioned market research that

to set the new standard in shopping centre design

anchored by Checkers, Pick n Pay, Game,

confirmed the need for a regional shopping centre

and construction. The double-volume design is

Woolworths and Edgars. South Africa’s top

within the catchment area of southern Jo’burg.

elegant and uncluttered, with wide walkways,

One of the specifics arising from the research was

abundant natural light and detailed finishes. The

national fashion retailers are complemented by international fashion retailers such as H&M,

the above-average prevalence of a higher-income

architecture is aesthetically stimulating, while not

family eateries and fine-dining restaurants and

Mall of the South

retail banks alongside a host of local operators.

Developer Zenprop Property Holdings Architects Vivid Architects Project managers WT Mcclatchey Quantity surveyors MLC Civil engineers Aurecon Structural engineers Sotiralis Consulting (Pty) Ltd Mechanical engineers Aurecon Principal contractor Aveng Grinaker-LTA Electrical engineers Aveng Grinaker-LTA Fire consultants TWCE Fire Protection Engineers

Mall of the South regional shopping centre is about 65 000m² GLA in extent, offers more than 4 200 parking bays for customers and is able to expand organically.

SOUTH AFRICAN PROPERTY REVIEW

excellence awards Interiors, Overall Green Award

Google Head Office South Africa The Google Johannesburg project challenged the design team at Boogertman + Partners Interiors with a very unique brief. The workplace design had to adhere to the Google corporate culture while being responsive to the office’s locality and the city’s charm. Furthermore, since Google is at the forefront of sustainable design, it was part of the interior brief to design a space that could achieve a LEED Gold as well as an SA Interiors 5-Star Green Star rating. The Google interiors successfully implemented all the requirements and illustrated that an interior project could incorporate an attentive and sustainable approach through upcycling, recycling and reusing local elements, and still produce an internationally acclaimed result. The innovative way in which the great variety of influences and flavours were incorporated into INTERIORS

a proudly South African interior was essential to the

OVERALL GREEN

project’s success. This project is a frontrunner in office interiors because of its avant-garde approach and authentic interpretation of a context-conscious

Interior architects Boogertman + Partners Architects Project managers Profica Quantity surveyors Turner & Townsend Mechanical engineers CKR consulting Principal contractor Trend Group Electrical engineers CKR consulting Fire consultants CKR consulting Acoustic engineers Linspace Kitchen consultants Talman & Associates Green/sustainable consultants Solid Green, Ecocentric, Ecolution Wet services CKR consulting

workplace design. Google Johannesburg not only complied with the requirements of the Green Star rating and LEED Gold certification, it also stepped up to a different level through its interpretation of the city’s riches within the interior.

Image credit: PE Timber Homes Image credit: Bosazza Rooﬁng

Creating and maintaining the highest standards in the engineered timber construction industry in South Africa ITC-SA CERTIFICATIONS

HEAD OFFICE SAFCA Building | 6 Hulley Road | PO Box 686, Isando, 1600 Tel: +27 (0) 11 974 1061 | Fax: +27 (0) 11 392 6155 | Email: enquiries@itc-sa.org BRANCHES

South / Eastern Cape | KwaZulu-Natal | Western Cape Institute for Timber Construction ®

www.itc-sa.org

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SAQA ACCREDITED

SAPOA Journalism Awards Excellence in reporting honoured at the SAPOA Journalism Awards for Excellence 2016 Dedicated, professional members of the media who excelled in reporting on the property industry and played a huge part in ensuring the public was kept informed were honoured at the SAPOA Journalism Awards For Excellence. The awards, sponsored by JHI Properties, serve to encourage journalists to strive to achieve the highest standards. A total of 35 entries were received this year

Ray Mahlaka from Moneyweb: Property News (Journalist of the Year 2016)

Compiled by Maud Nale Photographs by Xavier Saer

The categories, winners and runners-up Property News Journalist of the Year

Property News Website of the Year

More attention than ever before was paid to this category. Entries received were strictly judged against the following criteria to ensure that basic journalistic requirements are met: ●● Topicality ●● Insight ●● Pertinent comment ●● Writing style, and ●● Analysis

Websites in this category were rated on: ●● Ease of navigation ●● Up-to-date information and topicality ●● Newsworthiness ●● Overall visual appeal, and ●● Relevance of content to the property industry

The winner Ray Mahlaka from Moneyweb. It is his first award in this category. He won Feature Journalist of the Year in 2015.

The runner-up Joan Muller from Financial Mail.

Property Feature Journalist of the Year Entries in this category were judged on: ●● Originality ●● Relevance and value to the property industry ●● Depth and accuracy of researched information ●● Analysis of topic covered, and ●● Writing style

The winner Joan Muller from Financial Mail. It is her seventh win in this category; she’s previously received top honours in 1997, 1998, 1999, 2000, 2008 and 2011.

The runners-up There were two runners-up in this category, because of the quality of entries submitted: Francini van Staden from Earthworks and Anne Schauffer from Property Professional and Business Day Homefront.

Joan Muller from Financial Mail: Property Feature Journalist of the Year 2016

The winner SA Commercial Property News. This news website has won the category for five consecutive years.

The runner-up Africa Property News.

SA Commercial Property News: Property News Website of the Year 2016

Property Publication of the Year This was the most highly contested award. The quality of entries exceeded expectations, and the dedication of the editors and the teams that put these beautiful publications together did not go unnoticed. Publications, both print and digital, were judged on: ●● Immediate visual appeal and attraction ●● Constant engagement of interest of its target-market reader ●● Informative and educational ●● Readability of overall publication, and ●● Writing style There were a total of 10 entries in this category.

The winner Architect & Builder.

The runner-up Earthworks.

Architect & Builder: Property Publication of the Year 2016

The judging panel A mixture of property professionals and property journalists judged all entries received on both these aspects. They were: 1. Brian Azizollahoff, Managing Director of Capstone Property Group 2. Nomzamo Radebe, CEO of JHI Properties 3. Rob Rose, Editor of Financial Mail 4. Vernon Matzopoulos, Channel Head of Business Day TV 5. Mark Pettipher, Managing Director of MPDPS SOUTH AFRICAN PROPERTY REVIEW

exhibitor stand winners

Winning exhibitor stands Green stand Large stand Small stand Innovation stand 50

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Bidvest Bank: Internet CafĂŠ Tongaat Hulett The Creative Axis Architects Hub Parking Technology

Over r1billion SOLD

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2016/07/11 11:59 AM

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erie

s●

monthly cou n Our

Th e WOR

eye onLD thes worlds ●

by-country focu try-

Kia ora from the land

of the long white cloud With the ever-changing local economic climate, many South Africans are looking for pastures new, and this 268 021km² island escape has been a haven since the early 1990s. We take a look at New Zealand’s history and commercial real estate opportunities 54

SOUTH AFRICAN PROPERTY REVIEW

eye on the world

N The flag of New Zealand is a defaced Blue Ensign with the Union Flag in the canton, and four red stars with white borders to the right. The stars’ pattern represents the asterism within the constellation of Crux, the Southern Cross. New Zealand’s first flag – the flag of the United Tribes of New Zealand – was adopted in 1834, six years before New Zealand became a British colony following the signing of the Treaty of Waitangi in 1840. Chosen by an assembly of Māori chiefs at Waitangi in 1834, the flag was of a St George’s Cross with another cross in the canton containing four stars on a blue field. After the formation of the colony in 1840, British ensigns started to be used. The current flag was designed and adopted for use on Colonial ships in 1869, quickly adopted as New Zealand’s national flag, and given statutory recognition in 1902.

ew Zealand has been inhabited since the early 1300s, first by the Māori, then by the British (in the 1700s). Now, in a population of nearly 4,6-million, the Māori make up 14,6% of New Zealand’s people. Dutch navigator Abel Tasman was the first European to discover New Zealand during his voyage of 1642-1643, although he never set foot on the land. In 1769, explorer James Cook arrived and claimed it for Great Britain, but it wasn’t until the late 1700s that the first Europeans began to settle in New Zealand. The year 1835 saw the signing of the Declaration of Independence of New Zealand by 34 Māori chiefs. The Declaration asserted the independence of New Zealand, with all sovereign power and authority residing with its hereditary chiefs and tribes. A few years later, on 6 February 1840, Te Tiriti o Waitangi (the Treaty of Waitangi) was signed between the Māori and the Crown, guaranteeing the Māori full possession of their land in exchange for recognition of British sovereignty. The Treaty is regarded as New Zealand’s founding document and remains a core point of reference for Māori and the government.

New Zealand’s democracy New Zealand is a parliamentary democracy situated in the South Pacific Ocean, 6 500km south-southwest of Hawaii and 1 900km to the east of Australia. With a land area of 268 021km², it is similar in size to Japan and the UK. New Zealand proper consists of the following island groups: ● North Island, South Island and neighbouring coastal islands (Tokelau, Cook Islands, Bounty Islands, Antipodes Islands, Stewart Island, the Snares, Auckland Islands Campbell Islands, Niue), all contained within the 16 regions of New Zealand; ● The Chatham Islands to the east, contained within the Chatham Islands Territory;

● The Kermadec Islands to the north and New Zealand Sub-Antarctic Islands to the south, all outside local authority boundaries and inhabited by a small number of research and conservation staff ; and ● The Ross Dependency, which forms part of Antarctica, and is constitutionally a part of New Zealand.

Because these islands are widely dispersed, New Zealand has a large exclusive maritime economic zone of 4,1-million square kilometres. More than half of New Zealand’s total land area is pasture and arable land, and more than a quarter is under forest cover – including 1,8-million hectares of planted production forest. With a landscape that’s predominantly mountainous and hilly, 13% of the total area consists of alpine terrain, including many peaks that exceed 3 000m. Lakes and rivers cover one percent of the land. Most of the rivers are swift and seldom navigable, but many are valuable sources of hydro-electric power. The climate is temperate and relatively mild. With an estimated population of 1 570 500, the Greater Auckland Region is home to 34 out of every 100 New Zealanders, and is one of the fastest-growing regions in the country. New Zealand has a highly urbanised population, with about 73% of the resident population living in urban entities with 30 000 or more people. As at June 2015, more than half of all New Zealanders (53%) lived in the four main urban areas of Auckland, Hamilton, Wellington and Christchurch. The population is heavily concentrated in the northern half of the North Island (55%), with the remaining population fairly evenly spread between the southern half of the North Island (22%) and the South Island (23%). The least-populated regions, given their size in terms of land area, are the west coast (0,7%) and the southern half of the South Island (6,8%).

Key facts

Auckland skyline from the suburb of Devonport (Photograph © Loïc Lagarde/Flickr.com)

▼ Anthem God Defend New Zealand ▼ Capital Wellington ▼ Largest city Auckland ▼ Ethnic groups (2013) 73% European, 14,9% Māori, 11,8% Asian, 7,4% Pacific Islanders, 1,2% Middle Eastern Latin American and African, 1,7% other ▼ Demonym New Zealander, Kiwi (informal) ▼ Currency New Zealand dollar (NZD)

▼ Government Unitary parliamentary constitutional monarchy ▼ Legislature Parliament (House of Representatives) ▼ Land area 268 021km2 ▼ Population (2016, est.) 4 697 030 ▼ GDP (PPP, 2016, est.) NZ$173,2-billion (total), NZ$36 950 (per capita) ▼ GDP (nominal, 2016, est.) NZ$169,9-billion (total), NZ$36 254 (per capita) SOUTH AFRICAN PROPERTY REVIEW

eye on the world

Government Day-to-day political power is the responsibility of New Zealand’s democratically elected parliament, know as the House of Representatives. While the prime minister is the most important person in the national government, sitting above him or her on the constitutional hierarchy is New Zealand’s monarch – a non-partisan head of state – Queen Elizabeth II. In her absence, she is represented in New Zealand by a governor-general. The governor-general is appointed by the queen on the advice of New Zealand’s prime minister, usually for a term of five years. Taxes, borrowing and expenditure of the national budget must be approved by the parliament, which is re-elected every three years. Certain limits on government action are imposed by the Treaty of Waitangi, which governs the relationship between the indigenous people (the Māori) and everyone else. It ensures that the rights of both Māori and Pakeha (non-Māori) are protected. It does that by: ●● Accepting that Māori iwi (tribes) have the right to organise themselves, protect their way of life and to control the resources they own; ●● Requiring the government to act reasonably and in good faith towards Māori; ●● Making the government responsible for helping to address grievances; and ●● Establishing equality and the principle that all New Zealanders are equal under the law. There are other important organisations and officials that have various degrees of independence to scrutinise what the government is doing, including the ombudsman and the auditor-general.

SOUTH AFRICAN PROPERTY REVIEW

eye on the world Central government

Community level democracy

New Zealand’s central government is elected by a democratic vote every three years. It is the central government’s decision-making that affects New Zealand as a whole, while the local government looks after the interests and needs of specific communities through regional, city or district councils. Housing, welfare, education, health, justice, immigration and the police are all run by the central government, along with energy, the national road and rail systems, defence, foreign policy and public finances. Central government regulates employment, import and export, and workplace safety. Personal income tax, business taxes and GST (the goods and services tax that is added to almost all goods and services in New Zealand) are all levied by the central government. New Zealand elects about 120 members of parliament (MPs) to a single chamber of parliament known as the House of Representatives. Voters must enrol to vote in New Zealand if eligible. A voter is eligible if he or she is 18 years old or older, is a New Zealand citizen or permanent resident, and has lived in New Zealand continuously for more than a year. Enrolling to vote is compulsory, but voting is optional.

Regional and territorial councillors and mayors are all elected in local government elections, which are held every three years. Local government elections are held on the same day across the country but they are not combined with general elections for parliament.

Regional and territorial government There are two levels of local government: regional councils and territorial authorities (city and district councils). Local government bodies provide local services such as water, rubbish collection and disposal, sewage treatment, parks, reserves, street lighting, roads, local public transport and libraries. They also process building and environmental consents and administer other regulatory tasks. Regional councils are responsible for managing resources, biosecurity control, river management, flood control, controlling land erosion, regional land transport planning and civil defence in the event of an emergency. District and city councils are responsible for community wellbeing and development, environmental health and safety, infrastructure, recreation and culture, and resource management. There are a total of 12 city councils, 54 district councils, an Auckland council and 11 regional councils. One city council, four district councils and Auckland also have the powers of the regional councils: they are sometimes called “unitary authorities”. Many councils also have elected community or local boards.

Legal system In 2015, the World Bank ranked New Zealand second after Singapore in its 189-nation “Doing Business” rankings of how conducive the regulatory environment is to operating a local business. Also in 2015, the World Justice Project ranked New Zealand sixth out of 102 countries for the quality of our legal system – ahead of Australia, Canada and the UK. In December 2014, Forbes rated New Zealand third-best Country for Business (behind Denmark and Hong Kong) for reasons that included personal freedom and investor protection, as well as a lack of red tape and low corruption.

Independent judges Judges are appointed by the governorgeneral on the advice of the attorney-general, who is a Cabinet member in the government. Judges are expected to act independently. Only lawyers may become appointed judges, and only after they have held a practising certificate for at least seven years.

General and specialist courts Most legal issues are dealt with by “courts of general jurisdiction”. These courts decide criminal and civil matters. Criminal matters are offences usually involving the police that result in imprisonment or other penalties. Civil matters usually involve disputes, such as a breach of contract, defamation or claims for damages.

Four levels of general courts The “entry level” for most civil and criminal matters is a District Court. The next level up is the High Court. There are 40 High Court judges, including the chief judge. The High Court deals with major crimes and more significant civil claims. It also hears appeals from lower courts and specialist tribunals. At the next level is the Appeal Court. The Appeal Court determines the law of New Zealand and resolves conflicting court decisions. The “court of final appeal” in New Zealand is the Supreme Court. It hears appeals in both civil and criminal cases, although they must be of public or legal significance to reach this level.

eye on the world Specialist courts New Zealand has several specialist courts: ● The employment court deals with labour relations. ● Family courts deal with child custody, parental access, divorce, adoption, protection orders, and the care and protection of children. ● Youth courts deal with offences committed by young people (older than 12 but younger than 17). ● The Māori land court and Māori appellate court deal with Māori land matters. ● The environment court deals with resource management, planning and development matters. There are also more than 100 tribunals, authorities, boards and committees. These deal with a wide range of disputes involving issues such as censorship, taxation, tenancy and employment. Some of the better-known ones are the employment, disputes, tenancy, and Treaty of Waitangi tribunals.

Justices of the peace JPs are laypeople (i.e. not lawyers) who are well-respected in the community. They are nominated by members of parliament and appointed by the governor-general on the recommendation of the Minister of Justice. There are about 7 000 JPs in New Zealand. As well as witnessing documents, JPs are involved in a number of matters within the community and the courts. In the District Court, suitably trained JPs carry out functions such as adjudicating minor criminal and traffic charges. They can also grant search warrants.

Office of the Ombudsman If there is a problem with a local or central government agency or a request for official information, the Office of the Ombudsman may be able to help. It is an independent parliamentary authority that handles complaints against government agencies and undertakes investigations and inspections. There is no cost involved in taking a complaint or application to the ombudsman.

The three levels are: ● Early childhood education – from birth to school-entry age, ● Primary and secondary schools – from five to 19 years of age, and ● Further education – higher and vocational education.

the state education system. They are funded by the government and teach the national curriculum. You will pay compulsory attendance dues. Private schools get some government funding but are mostly funded through charging parents school fees.

Early childhood education

Māori-medium education (Kura Kaupapa Māori)

Children can take part in early childhood education (ECE) from birth to school-entry age. It is not compulsory but about 95% of children go to an ECE service. All ECE services in New Zealand plan learning using the national curriculum Te Whāriki. Between the ages of three and five, a child can go to an ECE service for 20 hours a week free of charge.

State, state-integrated and private schools

National curriculum

Most schools in New Zealand are owned and The national curriculum covers subjects that funded by the state. They teach the national are taught at primary and secondary schools, curriculum and are secular (non-religious). and the standards that students should reach There are two other types of schools: state- in each subject. integrated and private. They may have their Primary education focuses on foundation own set of aims and objectives to reflect learning across a range of subjects and their own particular values. They may teach competencies, but especially in literacy and a specific philosophy or religion. numeracy. At secondary school, students learn State-integrated schools are schools that Pacific a broad and balanced curriculum, with some Asia were once private in O years R E but A Lhave E Sbecome T A T EpartMof A Rspecialisation K E T O possible UTLO K 11 to 13.

NEW ZEALAND

Real estate market outlook

ECONOMY • Emerging structural imbalances through asset price inflation • Weaker growth momentum in Christchurch and Wellington

OFFICE

RETAIL

• Increasing Prime vacancy in Wellington and Christchurch • Greater cost and efficiency focus from MNC occupiers.

• Falling exchange rate squeezing margins • Dominant centres taking market share

LOGISTICS • Accommodating growth • Cost pressures through rising construction costs

SPACE EFFICIENCY & PRODUCTIVITY

STRUCTURAL IMBALANCES MORE FIERCE COMPETITION

COST CAUTIOUS

INVESTMENT • Cap rates compressing to previously uncharted territory • Relatively small market hinders liquidity

INSUFFICIENT STOCK TO INVEST

CH A L L E N GE S O PPO R TU N ITIE S APAC TRADE GROWTH

• Leveraging off infrastructure investments • Consumption and services driven growth

STRONG CAPITAL DEPLOYMENT MODE

TRANSFORMATION ON RETAIL-TAINMENT DESIRE FOR NEW OFFICE SOLUTIONS

Education New Zealand’s education system does not discriminate, but welcomes different abilities, religious beliefs, ethnic groups, income levels, and ideas about teaching and learning. It has three levels and reflects New Zealand’s unique and diverse society. School is compulsory between the ages of six and 16 and free between the ages of five and 19 at state schools.

Kura Kaupapa Māori are schools that teach in Māori, and whose education is based on Māori culture and values. They are owned and funded by the state, and teach the national curriculum for Māori-medium schools, Te Marautanga o Aotearoa. Many kura are composite schools – they have both primary and secondary departments (teaching years one to 13).

• New workplace practices • Tech and Education sector demand

E-COMMERCE TRANSFORMING LOGISTICS

• Global brands expanding in New Zealand

• Strong occupier demand, low vacancy

• Above average retail sales growth underpinning turnover

• New and emerging industrial locations

• Alternative assets • Capturing emerging capital sources

Source: CBRE Research, Q1 2016 Source: CBRE Research, Q1 2016.

SOUTH AFRICAN PROPERTY REVIEW CBRE RESEARCH This report was prepared by CBRE New Zealand Research Team, which forms part of CBRE Research—a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate. © CBRE Ltd. 2016 Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

eye on the world Schools that teach in the English language use the New Zealand curriculum. Schools that teach in the Māori language use Te Marautanga o Aotearoa.

National Certificate of Educational Achievement The National Certificate of Educational Achievement is the national senior secondary school qualification. Pupils are assessed during their last three years at school (years 11 to 13). They can achieve the National Certificate of Educational Achievement (NCEA) at three levels in a wide range of courses and subjects.

Further education Further education includes higher and vocational education. Courses range from programmes to help students into work, to certificates and diplomas, postgraduate study and research. Full- and part-time distancelearning options are also available from some further-education providers. The government partially funds state further-education providers. Students pay about 30% of the cost of their courses. New Zealand students can get a loan from the government to pay for their courses until they start earning. Further-education providers can be state- or privately owned.

Technical and vocational education At senior secondary school level, students may begin to specialise in vocational learning. They can get help into work or further education from a number of programmes and institutions, including: ●● Youth Guarantee, which gives young people further options to get NCEA Level 2 qualifications. Students plan their study to reach their career goals, including getting further education. ●● Trade academies, which teach trades and technology programmes to students in years 11 to 13 (ages 15 to 18). They are run through schools and other providers. ●● Institutes of technology and polytechnics, which teach professional and vocational education and training from introductory studies to degrees. ●● Industry training organisations that represent particular industries (such as agriculture, building and construction, motor trade, etc). They offer training and qualifications for those sectors, and are funded by the government and industry. ●● Private training establishments that offer specific vocational courses at certificate and diploma level (e.g. travel and tourism).

SOUTH AFRICAN PROPERTY REVIEW

Wānanga

Foreign relations and external trade

New Zealand has three wānanga (state-owned Māori teaching and research institutions). They teach according to āhuatanga Māori (Māori tradition) and tikanga Māori (Māori custom). They offer certificates, diplomas and degrees. Some teach in specialised areas up to doctorate level.

Trade is essential to New Zealand’s economic prosperity. Export of goods and services makes up about 30% of the gross domestic product (GDP). New Zealand’s trade interests are well diversified: Australia, China, North America, the European Union and the Association of South-East Asian Nations each take between nine percent and 19% of New Zealand’s goods-and-services exports. Other major trading partners include Japan and the Republic of Korea. Asia-Pacific regional linkages remain at the core of New Zealand’s political and economic interests. The countries of the Asia-Pacific Economic Cooperation (APEC) take more than 70% of New Zealand’s exports, provide 71% of tourism arrivals and account for about 75% of New Zealand’s foreign direct investment. However, New Zealand’s trade policy still has strong links with Europe, and successive governments have pursued opportunities in emerging regions such as the Middle East and Latin America. While New Zealand exports a broad range of products, it remains reliant on exports of commodity-based products as a main source of receipts, and on imports of raw materials and capital equipment for industry. At home and abroad, New Zealand remains committed to a reduction of trade barriers. Domestically, tariffs have been systematically reduced and quantitative controls on imported goods eliminated. About 90% of goods come into New Zealand tariff-free, including all goods from least-developed countries. Internationally, New Zealand was active in laying the foundations for the Doha round of WTO negotiations, and has been an active participant. Regionally, as a member of APEC, New Zealand is committed to achieving APEC’s goals of free trade and investment in the region. To this end it is contributing to ongoing discussions around a Free Trade Agreement for the Asia-Pacific (FTAAP).

Universities There are eight state-funded universities in New Zealand. Each of these offers degrees in a large choice of subjects, and each has strengths in specialised professional degrees. All are widely recognised internationally. They collaborate with universities in other countries on research and teaching programmes, and with the business community in New Zealand and overseas on research and development. New Zealand is committed to a multitrack trade policy, which includes the following measures: ●● Multilateral trade liberalisation through the World Trade Organisation, ●● Regional cooperation and liberalisation through active membership of forums such as APEC and East Asian Summit, and ●● Bilateral and multilateral trade arrangements, such as: – the Closer Economic Relations Agreement with Australia (in force since 1983); – the Trans-Pacific Partnership Agreement, a free-trade agreement concluded in 2015 with the aim to liberalise trade and investment between 12 Pacific-rim countries: New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the US and Vietnam; – free-trade agreements with Singapore, Thailand, Malaysia, Republic of Korea and Hong Kong, and the economic cooperation agreement with Chinese Taipei; – the ASEAN-Australia-New Zealand Free Trade Agreement; and – ongoing processes and negotiations on future free-trade agreements with several parties, including the Gulf Cooperation Council; India; ASEAN, China, India, Republic of Korea, Japan and Australia (in the context of the Regional Comprehensive Economic Partnership); and most recently the agreement with the European Union to seek negotiating mandates.

New Zealand’s economic outlook According to the Colliers New Zealand research report released in June 2016, there is reasonable momentum in the economy. Households and businesses have generally shown resilience. Net migration remains very strong, with the surge in population boosting demand across many sectors. New Zealand expects an annual average GDP growth to rise to about three percent in 2016, and average 2,8% for the following years as the persistent effects of strong net

eye on the world

migration filter through the economy. On a per-capita basis, however, GDP growth is expected to remain soft by historical standards. Occupier demand is strong in most sectors. Developers have renewed their appetite for construction, and sales activity is near the cyclical highs. The manufacturing and services performance indices from BNZ-Business NZ point to the recent strength in underlying fundamentals for the industrial and office sectors. The PMI and PSI (performance in manufacturing and services indices) are above 50, indicating expansion mode, and both series are above a decade-long average. The sub-sectors of the indices, which monitor forward-looking aspects such as production levels, sales and new orders, all seem relatively optimistic. An exception is employment, which is lower than other indicators, and is sub-50 in the manufacturing sector. Some of the lower confidence in the services sector reflects the inability to secure skilled labour in a low-unemployment market. In the retail sector, consumers are also confident, with a seasonally adjusted index of 115 in the ANZ-Roy Morgan survey. Houseprice growth seems to be a key driver of the sentiment. Although the survey result is fractionally lower than May, the respondents are a happy bunch of consumers who are returning to past habits of spending more than they earn. The survey notes that Wellington has taken first place in the confidence rankings, knocking Auckland off the top spot. A slight cautiousness has crept in from consumers as petrol prices start to edge up again, and lower interest rates for savers, rather than borrowers, dampen expectations for the remainder of the population who don’t own a home. Colliers’ confidence survey shows investors have cautiously modified their enthusiasm from last year’s record highs, from a net positive 31% in Q2 2015 to 27% in Q1 2016. Forecasts indicate that low interest rates are unlikely to change any time soon, fuelling asset price appreciation further.

Despite the positivity, there are some warning signals to monitor. Low interest rates reflect low inflation in low-growth economies. This may impact on New Zealand’s trading activity and business sentiment if detrimental and long-term imbalances arise in offshore markets – especially anything unbecoming in the financial sector. Another consideration involves the rising construction costs locally, which are impacting feasibility and inflating costs that are typically passed on to tenants. Non-residential sector build costs are up by 3,2% in the past year, with forecasts suggesting little relief in the medium term. Lastly, the cyclical growth in population, tourism and job growth is propping up economic prosperity and fuelling many parts of the economy. If this dynamic changes quickly, sentiment could alter abruptly, providing a case for businesses and investors to withdraw from the market.

Property investor preferences In buoyant periods of sales, industrial typically totals between NZ$2,2-billion and NZ$3-billion of sales annually, and in periods of slower activity it’s between NZ$1-billion and NZ$2billion. Despite the buoyant activity in the last few years, the total value remains below the 2007 peak of just over NZ$3-billion. This signals that activity in the industrial sector should keep rising over the next few years. In 2015, the industrial sector represented only 39% of total activity at the upper price band. This is another reason why there is limited offshore investment in the industrial sector as investors are typically looking to purchase at scale. Retail continues to be a solid performer. In 2015, retail accounted for 27% of sales turnover and 24% of the total sales value. Recent sales activity in the retail sector has eclipsed previous years as a result of the increase in assets available to purchase and the strong outlook in asset appreciation. Highlighting the buoyancy in 2016, large retail transactions such as the two former Westfield assets and the 50% share of The Base in Hamilton are expected to settle in 2016 for a combined value of approximately NZ$650-million. When broken down by price segment, retail sales turnover below NZ$5-million is twice as high as the office sector. However, the office sector punches above its weight in the NZ$5-million and over category, accounting for 23% of sales turnover and 33% of total sales value. This is a reflection of the flagship office premises sold, which are highly attractive to offshore parties,

especially for portfolios of buildings with strong fundamentals such as occupancy, lease terms and low capital expenditure requirements.

Geographical property hotspots Wellington recorded its best-ever year in 2015, reaching just over NZ$1-billion in sales activity for the first time. There was a relatively even spread between the three main commercial sectors in Wellington, with the retail sector eclipsing previous years. Last year NZ$304-million of retail properties were sold, almost double the last two peaks achieved in 2012 and 2007 of approximately NZ$172-million. In total Wellington provides approximately seven percent of national sales turnover indicating the tightly held nature of property in the capital. Auckland continues to provide the lion’s share of sales activity, accounting for 37% of all commercial sales activity by number of transactions. This is a reflection of Auckland also claiming approximately a third of the population, economic activity, employment, retail spending and residential property sales. The aggregate value of Auckland’s commercial property sales in 2015 was the second-highest recorded at NZ$3,9-billion, representing 53% of national sales value. Christchurch accounted for 14% of national sales turnover last year, with a total value of NZ$752-million. Almost two-thirds of sales activity by value and the number of sales was in the industrial sector. Signalling the continuation of the Christchurch market recovery, the office sector had its best-ever year with NZ$132-million of sales.

Sales activity breakdown The majority of property sold over NZ$2million was in Auckland, with 54% of all sales activity and 57% of values. The number of properties sold for less than NZ$2-million in Auckland was also much higher than in other main cities, but was dwarfed by the total for the rest of New Zealand. Auckland recorded 45% of all sales turnover below NZ$2-million. More sales activity should be expected outside the three main centres in the coming years. Hamilton and Tauranga on the North Island and Queenstown and Dunedin on the South Island continue to be regional hotspots.

Office property market Demand has outpaced the level of supply available, with the vacancy rate reducing to 5,7% from the 7,8% recorded 12 months ago. SOUTH AFRICAN PROPERTY REVIEW

eye on the world Prime vacancy has reduced to four percent from 5,8%, and secondary vacancy to 6,1% from 8,4% last year. Developers have picked up the pace to cater to the cyclically high levels of demand, but not enough to make a significant difference. Although there are some exceptions by precinct, the supply and demand balance has meant that landlords are more confident in their ability to increase rent at a higher rate than in previous years. Auckland metropolitan prime office face rent increased by three percent over the past year, while secondary rent has increased by 1,9%. New-build rent is increasing at the fastest rate, helped along by rising construction costs and resultant land values that make projects more commercially feasible.

New Zealand prime CBD retail indicators Prime rentals (% change)

12 months to Mar 2016

12-month forecast

Auckland

12,4%

3,4%

Wellington*

4,1%

1,9%

12 months to Mar 2016

12-month forecast

Auckland

17,2%

6,1%

Wellington

Prime capital values (% change)

CBD retail vacancy (%)

Dec 2014

Dec 2015

Dec 2016 forecast

Auckland CBD

2,5%

2,3%

Wellington CBD

8,2%

7,3%

7,2%

Source: Colliers International Research * Gross rent

New Zealand prime CBD office indicators Prime rentals (% change)

12 months to Mar 2016

12-month forecast

Auckland CBD

5,7%

3,6%

Wellington CBD*

2,3%

3,6%

Auckland Metropolitan

2,1%

Prime capital values (% Change)

12 months to Mar 2016

12-month forecast

Auckland CBD

14,1%

5,9%

Wellington CBD*

10,1%

3,8%

Auckland Metropolitan

7,5%

4,6%

Source: Colliers International Research * Gross rent

Retail property market In 2015, the retail sector accounted for almost a quarter of all property sales activity. This was steady across most price bands. Although this is second spot behind the industrial sector, there are a higher number of opportunities to purchase industrial properties than retail. In the less-than-NZ$2-million price band, which accounts for 85% of all of New Zealand’s commercial property activity, almost 1 100 sales were recorded in retail. This year, a number of high-profile retail property sales were settled or are expected to settle soon, including the two former Westfield shopping centres, Zone 7 in Westgate, the half share of The Base, Centre Place South, Shore City, Pukekohe Mega Centre, a national Progressive Enterprises portfolio and Papamoa’s Fashion Island. These add up to more than NZ$1-billion in sales activity already. This level of activity will likely place 2016 as the second-highest year across all retail property values but still some way off the NZ$3,2-billion year in 2014 after major purchasing activity in New Zealand for the first time by GIC and PSP Investments.

SOUTH AFRICAN PROPERTY REVIEW

Industrial property market Colliers’ industrial report on the six main industrial regions of Auckland, Hamilton, Tauranga & Mt Maunganui, Wellington, Christchurch and Dunedin shows that many markets are struggling to keep pace with demand outweighing supply. This is facilitating a strong round of development activity – but not all areas have sufficient or suitable land that is feasible to develop. Regions that do are faced with rising construction costs to complicate matters. Because of the strong demand environment, there is evidence now that demand is overflowing and spreading into the secondary sector as tenants and investors have diminishing choices.

New Zealand prime industrial indicators Prime combined rentals (% change)*

12 months to Mar 2016

12-month forecast

Auckland

4,2%

0,7%

Wellington**

6,9%

Christchurch

0,3%

12 months to Mar 2016

12-month forecast

Auckland

10,9%

3,2%

Wellington

13,9%

Christchurch

2,4%

2,7%

Prime capital values (% change)

Source: Colliers International Research * A combination of industrial office and warehouse space at a ratio of 20:80 ** Gross rent

Housing market As a result of a large inflow of migrants, housing is in huge demand, with housing construction unable to keep up with rising demand. Combined with lower interest rates,

interest in housing is returning – and broadening across the regions. The Reserve Bank of New Zealand’s additional restrictions on Auckland property investors requiring a 30% deposit came into effect last November, with investor interest in housing broadening beyond Auckland and the “halo” regions of Waikato and Bay of Plenty.

Offshore vs on-shore investment Offshore purchasing activity in commercial real estate in 2014 for properties worth NZ$5million or more will be noted as an outlier, with offshore purchases accounting for 56% of sales activity by value and 21% of the number of sales, reflecting high-value purchases by offshore parties. The balance between offshore and onshore purchasing activity normalised in 2015, with local purchases dominating offshore purchases. Typically, offshore purchasing activity has been below 15% of overall value and below 10% of the number of sales, which was mirrored in the 2015 results. Offshore investors continue to prefer investment in the office sector, albeit they have stepped up their position in the retail sector recently as opportunities have arisen. Instead, 2015 was the year of the listed property vehicles (LPVs) rather than offshore purchases. LPVs accounted for NZ$600million of purchases from 13 sales compared to offshore purchases for NZ$435-million from 17 sales. Private local investors continued to dominate all categories. Despite the LPVs squeezing out the offshore parties, there is still a sizeable “wall of money” from offshore purchasers looking to enter the New Zealand market. There was interest from international locations for the recent sell-down of two former Westfield retail assets and Antipodean’s 19-strong supermarkets portfolio, which sold in 2015 for NZ$730-million. The campaigns highlighted an estimated NZ$10-billion of capital looking for flagship assets in the New Zealand real estate market. Given the high level of domestic real estate investment within China, it’s also reasonable to assume that offshore investment in New Zealand from China could increase if the right stock and the right opportunity are presented. Compiled from various sources by Mark Pettipher. Property facts courtesy of Collier’s International New Zealand and CBRE New Zealand.

events

SAPOA KZN hosts breakfast with the eThekwini Municipality SAPOA KZN recently hosted a breakfast presentation at the Square Hotel in Umhlanga, Durban Photographs by Val Adamson

FROM LEFT Mohsin Shaik, Robin Westley, Barry Lewis, Subashnee Moodley

APOA KZN recently hosted a breakfast presentation at the Square Hotel in Umhlanga, Durban. Deputy City Manager of the eThekwini Municipality Musa Mbele presented the city’s Catalytic Projects, poised to elevate its positioning and competitiveness, as well as an introduction to eThekwini’s new One Stop Shop and the implementation of SPLUMA. “SAPOA is extremely relevant in the city at the moment and there is a lot of work happening on behalf of our members,” said Edwin van Niekerk, SAPOA KZN Regional Chairman and Executive Director at Maxprop. No stranger to development, Rory Wilkinson of Tongaat Hulett Developments closed the presentation with his own appreciation of the robust, united and transparent relationship between the city and SAPOA. “A fantastic story has been presented here today” he said. “I challenge you to start telling it.” The event was sponsored by Tongaat Hulett Developments.

FROM LEFT Rory Wilkinson (Tongaat Hulett Developments), Russel Curtis, Neville Matjie

FROM LEFT Deputy City Manager of eThekwini Municipality Musa Mbele, Regional Chairman Edwin van Niekerk, Nadeer Shahir

SOUTH AFRICAN PROPERTY REVIEW

frankly speaking

Value Added! Tongue-in-cheek questions for the Valuator Group’s Chairperson Thandiwe January-McLean

Q After coming home after a hard day Q Being the wife of jazz musician

Q What is your favourite colour?

When I get home after a long day, I take a bath, get into my pyjamas and have a hot cup of tea – or Milo in winter. I must reluctantly add that I automatically turn the TV on to catch up with the news. I flip through channels all the time.

Actually, he is usually the funny one. Really, really funny. He still makes me laugh. My jokes are always very dry compared to his.

Q Who’s your favourite

Q If we opened the top drawer

Q If we gave you a camel

at work, what is the first thing you do?

of your dressing table, what would we find?

Rene McLean must be entertaining. What would you do to make your husband laugh?

Black.

local comedian?

My favourite local comedian is, without question, Trevor Noah.

Q If you were served

what would you do with it?

snails as a starter, how would you react?

I’d look at it…

I’d eat them!

A pair of glasses, my medication, two or three books, Vaseline for my lips and all the remote controls.

Q If I asked your daughters

what your most used saying is, what would they say?

“When push comes to shove” or “bottom line”. I still do not know whether the former is even English. It just makes the point!

Q What is the naughtiest thing

you got up to as a child growing up in Kimberley?

Painting parts of my father’s (freshly painted!) garage with a colour that, when it dried, was a different colour. My sisters and I found the paint and brushes waiting for us to use them. I’ll spare you details of the consequences…

Q What was the most fun thing you did when you travelled as the CEO of South African Tourism to Jamaica?

We went into the water with dolphins. I was scared as hell but was not going to be the party-pooper. I really enjoyed the music though. Jamaica was a private trip with my sister and daughters. Thandiwe January-McLean t: +27 (0)12 460 4127 c: +27 (0)71 879 9982 f: +27 (0)12 460 4127 e: thandiwe.j@mweb.co.za

SOUTH AFRICAN PROPERTY REVIEW

About the Valuator Group January-McLean is the Chairperson of the Valuator Group, which offers specialist asset valuations for both market and insurance purposes covering the full spectrum on the property side, plant and machinery, fine arts and antiques and most other assets (including business valuations).

2016

UPCOMING

EVENTS

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

August Region

Date

Event

11 and 12 August

Negotiation Skills Masterclass Programme (NSMP)

Mpumalanga

17 and 18 August

Negotiation Skills Masterclass Programme (NSMP)

Port Elizabeth

18 August

PE Networking Event

Gauteng

22 to 24 August

Property Financial Programme (PFP) Intermediate, University of Johannesburg

Gauteng

26 August

Introduction to Brokering Seminar (Day 1)

Gauteng

31 August

Research Breakfast: Latest Office Property Trends

Mpumalanga

TBC

Mpumalanga Cocktail Dinner

Architects

Developers

R REGISTE

SAPO

P A PRO

ERTY

2014 - 201

Date

The Western Cape, 7705 t: +27 (0)21 448 2666 f: +27 (0)21 448 2667

Roof Terrace Suite, 8 Arnold Road, Rosebank, t: +27 (0) 11 788 8095 2132 F: +27 (0) 11 788 8097

Event

Mpumalanga

15 September Mpumalanga Breakfast Seminar

KwaZulu-Natal

15 September Introduction to Brokering

Gauteng

27 to 30 September

Essential Commercial Property Programme (ECPP), Wits University

KwaZulu-Natal

27 to 30 September

Essential Commercial Property Programme

Gauteng

TBC

Power Hour Breakfast

Gauteng

TBC

Gauteng Networking Event

Date

DESIGN

PARTNER

S ARCHITE

CTURE &

and administr ators

CO-ARC INTERNA TIONAL ARCHITE

ARC ARCHITE CTURAL CONSULT PRETORI A ANTS

P.O.Box 13399, Gauteng, 0028 Hatfield, t: +27 (0)12 362 7350 f: +27 (0)12 362 7349

o. z a

Abland

2 22

Property

STUDIO 3

SAPOA Proper t y Register 2014 - 2015 2014-2015

Section

1.indd

2:31 PM

DBM 3 JHB

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

DBM ARCHITE

CTS

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

P.O.Box 15721, SIXTY (PTY) LTD The Western Vlaeberg, Cape, t: +27 (0)214626 8018 630 f: +27 (0)21 462 6634

2 2014/10/10 11:00 AM

2015/01/13

P.O.Box 9650, Bloemfont The Free State, ein, t: +27 (0)51 9300 430 8714 f: +27 (0)51 448 5384

BILD ARCHITE

SAPOA Proper ty

2014 - 2015 40 2014/10/09

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Property

2014-2015

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KZN Breakfast Seminar

October Region

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ARCHI-M

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P.O.Box 52685, CTS Saxonwold Gauteng, , P.O.Box 52604, INC 2132 Saxonwold t: +27 (0)11 Gauteng, , 326 5000 2132 f: +27 (0)11 t: +27 (0)11 326 5002 447 1344 f: +27 (0)11 447 1343 BENTEL ASSOCIA TES INTERNA P.O.Box 87619, TIONAL CONSULT THREE ARCHITE Gauteng, 2041 Houghton, P.O.Box 71671, CTS t: +27 (0)11 Eastern Cape, Central, Port Elizabeth, 884 7111 f: +27 (0)11 t: +27 (0)41 6006 884 7110 585 0086 f: +27 (0)86 513 2278 P.O.Box 95664, CTS (PTY) LTD CSAR 3 ACTIVATE Gauteng, 0145 Waterkloof, Pretoria, P.O.Box 52673, ARCHITECTURE P.O. Box 321, t: +27 (0)12 Gauteng, 2132 Saxonwold, Rosebank, (PTY) LTD Saxonwold 346 1295 Gauteng, , f: +27 (0)12 t: +27 (0)11 2132 346 1249 880 2466 t: +27 (0)11 f: +27 (0)11 788 8095 447 3441 f: +27 (0)11 BLACKSH 788 8097 EEP DESIGN 223 Tribella, DAKOTA 166 DESIGN (PTY) ADENDORFF Gauteng, 2192 Rivonia Road, Morningsid P.O.Box 1356, LTD Rivonia, e, INTERIORS ARCHITECTS & t: +27 (0)87 Gauteng, 700 8291 2128 P.O.Box 40301, CC f: +27 (0)86 t: +27 (0)11 225 6665 803 0000 Eastern Cape, Walmer, Port Elizabeth, f: +27 (0)11 6065 803 0000 t: +27 (0)41 BNM 3 BHISHO 581 4765 f: +27 (0)86 P.O.Box 5, Bhisho, DAVID CRAIG 618 2183 ARCHITECTS Eastern Cape, P.O.Box 153, CC Louis AMA 3 (PTY) t: +27 (0)40 5605 Louis Trichardt, Trichardt, Makhado, 635 1951 P.O.Box 1299, LTD f: +27 (0)40 Limpopo, 920 635 1961 Gauteng, 2052 Gallo Manor, t: +27 (0)15 516 2460 t: +27 (0)11 f: +27 (0)86 807 7505 524 3827 f: +27 (0)11 807 7509

Directors: Edward Brooks: Michael Magner:edward@activate.co.z a michael@a Reon van ctivate.co.z der Wiel: a reon@activ ate.co.za

KwaZulu-Natal

ARCHITE

RATED P.O.Box 11288, Gauteng, 1457 Randhart, t: +27 (0)11 907 2015 f: +27 (0)11 907 2020

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Introduction to Brokering Seminar (Day 2)

BOUDRY

CTS & ASSOCIA P.O.Box 51838, TES The Western Waterfront, Cape, 8002 t: +27 (0) 21 448 3955 f: +27 (0)21 448 5910 CHAMELEON

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P.O.Box Cape CTS CC Town, The Western Cape, 7915 t: +27 (0)21 448 6615 f: +27 (0)21 448 6621

2013 - 2014

6 September

2014/08/01

AA PAPAGEO RGIOU ARCHITE ASSOC INCORPO CT &

ARCHITECTURAL DESIGN ASSOCIA (GROUP) (PTY) TES

LTD P.O.Box 87076, Gauteng, 2041 Houghton, t: +27 (0)11 880 0600 f: +27 (0)11 880 0603 AUCOR PROPER TY

P.O.Box 157, X1 Gauteng,21 Postnet Suite, Melrose 46 Arch, t: +27 (0)11 033 6600 f: +27 (0)11 033 6600

P.O.Box 4063, Tygervalley CTS The Western , Cape, 7536 t: +27 (0)21 949 2530 f: +27 (0)21 945 4183 BALSHAW & P.O.Box 12932, FOGARTI ARCHITE CHRIS OWTRAM Eastern Cape, Centrahil, Port Elizabeth, CTS CC P.O.Box ARCHITECTURE 1926, Pinegowrie 6006 t: +27 (0)41 Gauteng, , 373 4340 2123 f: +27 (0)41 t: +27 (0)11 373 4324 022 6260 f: +27 (0)86 2:14:36 PM 648 8262 BATLEY

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Property Register 2014-2015 Section 2.indd 22

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ARG DESIGN

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off the wall

Broadcasting an iconic image China Central Television (CCTV) goes for an eye-catching, off-the-wall design rather than competing with China’s skyscrapers. A new icon is formed – not in a predictable soaring tower but in a three-dimensional experience of geometric and social continuity. The virtual assumes a physical identity and occupies a place and location, for itself, the public, the city and, in a feedback loop, the virtual realm By Phil Ruimte

hina Central Television Headquarters has become an icon of Beijing’s CBD. Instead of competing in a futile race for height, the project proposed an iconographic constellation of two high-rise structures that actively engage the space of the city: CCTV and TVCC. CCTV combines administration and offices, news and broadcasting, programme production and services, and the entire process of TV-making into a single loop of interconnected activities. The headquarters was completed in May 2012 and won the 2013 Best Tall Building Worldwide from the Council on Tall Buildings and Urban Habitat. Its main building is not a traditional tower but a loop of six horizontal and vertical sections covering 473 000m² of floor space, creating an irregular grid on the building’s façade with an open centre. The construction of the building is considered to be a structural challenge, especially because it is in a seismic zone. Architect Rem Koolhaas has said the building “could never have been conceived by the Chinese and could never have been built by Europeans. It is a hybrid by definition”. Because of its radical shape, it’s said that a taxi driver first came up with its nickname, roughly translated from Chinese as “big boxer shorts”. Locals often refer to it as “big pants”.

Making the impossible possible

The building’s purpose

According to Arup, the company that engineered the project, the gravity-defying structure of the building has redefined the traditional form of skyscrapers. It posed unparalleled structural challenges for Arup’s design engineers, especially when it came to linking the two leaning towers. With expansion and contraction of the structure caused by Beijing’s extreme hot and cold weather, it was of paramount importance that the new headquarters’ design and engineering should take into consideration the way the building would behave before it was linked together. Arup specified that the joining of the towers had to be done very early in the morning, when both towers would be at a uniform temperature before the sun started to rise and with movements caused by the environment at a minimum. Prior to the joining of the towers, Arup specified five days of monitoring global and relative movements so correct dimensions of the linking elements could be predicted. Final adjustments were made to the length of the linking elements before installation, as it was vital that the towers were fixed together within a few minutes. The final join was done at 8am on a cold winter’s day, when the steel was at its most uniform temperature.

The consolidation of all TV production into a single building allows the 10 000 staff to be aware of the nature of their work and of coworkers, creating a chain of interdependence that promotes solidarity rather than isolation. The building itself contributes to the coherence of the organisation. Two towers rise from a common production platform that is partially underground – one dedicated to broadcasting, and the other to services, research and education – and join at the top to create a cantilevered connection for management and the public. While CCTV is a secured building for staff and technology, a dedicated path circulating through it provides a public “loop” that allows visitors to learn and witness the process of TVmaking while offering spectacular views across multiple façades towards the CBD, Beijing and the Forbidden City. With its vast and diverse network of broadcasting and production zones pulsating on a 24-hour news cycle, an internal circulation infrastructure that resembles a subway system (with express and local stops), and interlinked brain centres, nervous system and a labyrinth of staff facilities, the building will behave like a living, breathing organism – the production of the virtual inhabiting the physical. Architects Rem Koolhaas and Ole Scheeren © OMA Design architect OMA, Beijing/Rotterdam Executive architects and engineers East China Architecture & Design Institute, Shanghai Structure Arup, London/Hong Kong/Beijing Status Competition 2002 (1st prize); completion 2012

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GREEN STARS FOR AFRICA

BROUGHT TO YOU BY WSP | PARSONS BRINCKERHOFF

With over 136 Green Stars achieved on more than 30 projects in Africa, WSP | Parsons Brinckerhoff are Africaâ&#x20AC;&#x2122;s leaders in green building and sustainability consulting. We are a founding member of the Green Building Council of South Africa, and have been part of driving the establishment of Green Building Councils in Namibia and Rwanda. Our people are passionate about green building design, helping our clients choose environmentally friendly solutions for their building projects. We strive to change the way the world is constructed, ensuring a sustainable future for our continent.

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Learn more about this and other projects on www.wsp-pb.co.za

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Specialised Knowledge and Expertise 3

1 Medical facility for 200 Rivonia Road in Morningside, Johannesburg. Architects: Geyser Hahn Architects. 2 The Union office development for Eris Properties in Accra, Ghana. Architects: Boogertman + Partners. 3 & 4 Head office for Business Connexion for BCX HQ Offices Co-ownership JV in Centurion, Pretoria. Architects: Stauch Vorster International. QS services in JV.

Whilst timeously and adequately providing traditional quantity surveying services DelQS identified and developed certain services vital to the bottom line of investors • Elemental construction cost estimating • Financial viability analysis (in-house developed program : precise and logical in presentation) • Building contract expertise • Final settlement with contractors • Cost control and reporting (in-house developed program: proactive and audit trail) • Africa projects (expertise and track record) • Specialised developments (retail, hospitality, healthcare, student housing, etc)

QUANTITY SURVEYING

Nico Roos

Liza Botha

Wilco Lourens

Gerhard de Leeuw Akopo Africa

Corné de Leeuw

Christine Larson

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DISPUTE RESOLUTION

PROPERTY VALUATION