South African Property Review Dec/Jan 2018

South African Property Review

PROPERTY SOUTH AFRICAN

December 2017/January 2018

REVIEW

PROPERTY REVIEW - LogoTreatment.pdf

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2016/08/25

11:31 AM

Commercial, property, brokering and auctioneering

PRESIDENT’S ROUNDUP Value to members

GOING, GOING, GONE Auctions online

H2O

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WANT TO BE A BROKER? Education, knowledge and experience matter

December 2017/January 2018

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SOUTH AFRICAN PROPERTY REVIEW

contents

December 2017/January 2018

PROPERTY SOUTH AFRICAN

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

December 2017/January 2018

REVIEW

PROPERTY REVIEW - LogoTreatment.pdf

1

2016/08/25

11:31 AM

PRESIDENT’S ROUNDUP

Commercial, property, brokering and auctioneering

Value to members

GOING, GOING, GONE

ON THE COVER As we count down to the end of the year, Property Review takes a retrospective look at the last 12 months. To all our members and supportive advertisers, we wish you a happy festive season and a prosperous 2018.

Auctions online

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Day 0 approaches

WANT TO BE A BROKER? Education, knowledge and experience matter

December 2017/January 2018

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20 22 26 31 34 36 40 46 49 58 60

From the CEO From the Editor’s desk SAPOA President’s message SAPOA: keeping relevant to the commercial property industry Education Training future industry leaders Legal Constitutional Court rulings that are changing the common law Planning & development Industry participation in the review of the Buffalo City Metropolitan Municipality’s Integrated Development Planning process 2017-2018 2017 roundup 2017: the year that was Water update H20: South Africa’s most precious resource Developers New Sibaya Coastal Precinct Conservation Trust to protect and enhance natural assets Business CSI Rabie CSI helps create a beacon of hope Auctioneers A hotline to success: High Street Auctions Funding Progress for black property entrepreneurs Residential property investment overview South Africa’s residential property market holding up well Brokerage Brokering property: where knowledge and education count Social New SAPOA members Off the wall Shipping out to the desert FOR EDITORIAL ENQUIRIES, email mark@mpdps.com Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 Editor in Chief Neil Gopal Editorial Adviser Jane Padayachee Managing Editor Mark Pettipher Copy Editor Ania Rokita Public Relations Officer Maud Nale Production Manager Dalene van Niekerk Designer Eugene Jonck Sales Nkepile Setshedi: sales@sapoa.org.za Finance Susan du Toit Contributors Fezile Africa, Professor Samuel Azasu, Gaye de Villiers, Louise Hunt, Marguerite Lithgow, Denna McKnight, Mumtaz Moola, Maud Nale, Anne Schauffer, Beth Stols Photography Mark Pettipher

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.

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

e: philip@rsalitho.co.za

from the CEO

Looking forward to another fruitful year Dear friends and colleagues, As we approach the end of 2017, we can look back and reflect with a sense of satisfaction on a year that has, in many respects, been challenging but positive. Members continue to support and frequently express confidence in the work that we do. As a member-driven organisation, we do not take this confidence for granted. We are motivated and inspired by the opportunities you provide us with to help us succeed as an industry body. Delivering results that exceed your expectations is our top priority. As much of our work this year has shown, we work best when we work together.

The year has been turbulent in terms of our country’s economic and political climate, but the commercial property sector has remained resilient. We all acknowledge that we had our share of challenges; however, we have managed to collectively surmount our problems and move onto greater heights.

Looking ahead, it is a great pleasure and an honour to extend a warm invitation to the 2018 Annual Convention & Property

Exhibition, which will be held from 19 to 21 June at the Durban International Convention Centre. The theme, “The future we create‌ Imagine the possibilitiesâ€?, will challenge delegates to think futuristically, allowing them to explore the possibility of multiple futures and new technologies within an innovative and diversified real estate environment.

We hope you will join us for a symphony of outstanding real estate discussions.

The festive season lies ahead. Many of you will take to the roads on route to holiday destinations to enjoy well-deserved rest. May you have a safe and pleasant journey. To all those who will be working during this time, work well – and thank you.

On behalf of SAPOA, I wish you and your families a joyous, peaceful and relaxed festive season. May the new year bring prosperity, good health, happiness and success.

Season’s Greetings!

Best regards, Neil Gopal, CEO

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from the Editor’s desk

A year of “wait and see” As we edge ever closer to the traditional festive break, I find myself reflecting on the past year with hope and a positive outlook, and the belief that 2018 will bring us all better fortune

L

ooking back on my first interview of 2017, with our Development Committee Chairman Warwick Lord, I remember it being filled with a positive outlook. It led us to believe that investor sentiment had changed, and that some of the purse strings were being loosened a bit. The South African economy was becoming a little more stable, and there was light on the horizon.

Then, just as South Africa was feeling more positive, came the axing of Pravin Gordhan in March. The rand tumbled, we were given a downgrade in the first week of April by Standard & Poor’s as well as Fitch Ratings, and our economy hit subinvestment grade or “junk status” as it’s often referred to.

We’ve watched the price of fuel increase from R13,09 for 93 ULP and R13,33 for 95 ULP in January to R13,78 for 93 ULP and R14,05 for 95 ULP in November – and we’re set for a further price hike in December.

We’ve also seen an increase of 47,7c per litre of paraffin.

Looking at the rand, in January we had to find R13,62 to buy US$1 – and, at the local currency’s lowest point in October, R14,02.

So now we wait and see: are we headed for another downgrade?

This year, a number of big corporates have consolidated their office requirements, which seems to be a continuing trend. Sasol moved into its new offices in Sandton, and Sandton’s skyline is continuing to change with the building of Discovery’s new headquarters.

Old Mutual Emerging Markets will be moving its Johannesburg head office from its existing property, Mutual Square on Grayston Drive, to a planned new building in the heart of Sandton as well. Pricewaterhouse Coopers will be moving into a new 26-storey headquarters in the Waterfall development. We’re also seeing a massive push to make Fourways Mall the second-largest mall in the country, and the largest in Gauteng.

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In the Western Cape, the biggest development to get under way was the Richmond Park Development, on 84 hectares of land near Milnerton. It is envisaged as a landmark business park and mixed-use precinct consisting of retail, light industrial, commercial and warehousing property. In September, the regional Table Bay Mall opened its doors in Sunningdale.

Over in KwaZulu-Natal, Tongaat Hulett continues to be the leading developer in the region with Cornubia and the Sibaya Precinct firmly taking shape, as well as Cato Ridge. And in the Eastern Cape, Port Elizabeth and East London’s industrial zones are still attracting foreign investment, and development within these zones continues to grow.

Corné de Leeuw, Managing Director of DelQS, mentioned recently that from a quantity surveying and development perspective there is a definite slowing down of new projects, and those that are on the “drawing board” are either being put on hold or awaiting the outcome of the ANC elective conference in December.

A conversation with SAPOA President and Managing Director of Old Mutual

Properties Peter Levett reveals a slow-down in retail spend – and with more shopping centres coming on stream, the spread of tenants is being diluted. There appears to be no real growth in the job market either.

In the office-stock arena, larger corporates are consolidating their needs, and leaving previously occupied offices vacant. In addition, the cost of finance has increased, which will have an adverse effect on new developments.

On the residential property front, semigration is still the buzzword. Gauteng and the Western Cape are experiencing the most movement, with Cape Town still leading the way. Dr Andrew Golding gives us an overview of the residential property sector in this issue.

After our presentation to the Board, South African Property Review will now become an online-only publication – and as the editor, I’m really excited about it. It means that we’ll be able to include interactivity in our offering, already present in our November edition and in some of our articles in this issue.

South African Property Review now has its own landing page, www.southafricanpropertyreview. co.za, from where you’ll be able to click through to current as well as previous editions. You’ll also be able to download a PDF version should you wish to keep a copy of the magazine – and you’ll still be able to get the content on Issuu.com.

As this is the last issue of Property Review for the year, I’d like to take this opportunity to thank all our advertisers for their support, as well as the various agencies and corporate bodies, marketing personnel and freelance writers for sending us releases. Please keep them coming – we’ll be publishing them on our home page weekly.

Finally, on behalf of the publishing team, I wish you all a safe and happy festive break.

I look forward to seeing what 2018 will bring.

Mark Pettipher, Managing Editor

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SAPOA President’s message

SAPOA: keeping relevant to the commercial property industry i months into his presidency, eter evett talks to roperty eview about his time in office Advocacy and education still take pride of place in the association’s arsenal of support services

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SAPOA President Peter Levett

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ollowing on from our “Meet the President” article in September, Peter Levett, the Managing Director at Old Mutual Property and SAPOA President says that the past six months with SAPOA have been inspirational and enjoyable. “I’ve enjoyed being more closely involved with how SAPOA interacts with the diverse and fascinating industry in which we are all involved,” he says. “We can make a difference to people in the industry.

“SAPOA is a member-driven organisation, and it is important for us to remember that as we continue to ensure that we are providing value-adding services to our members. Advocacy and education, two of our important pillars, certainly are examples of where the industry can leverage off SAPOA, which can act across the membership base much more effectively that each member can on their own. SAPOA needs to ensure that it delivers a level of excellence in these elements.

I really believe that the organisation’s Board, management and staff are striving towards this end.

“SAPOA’s mission is to be active within the commercial property space and to responsibly represent our members, no matter their size.

The organisation recognises the importance of the strength of our partnerships and continues to strengthen relationships with the public sector.

“Given the economic climate we are all facing, SAPOA needs to make sure that it is offering an effective service too. Over the past 10 years, membership fees have increased by only 4,3% per year – well below inflation.

SAPOA is also mindful of managing its organisational costs effectively; in this regard, we have maintained our personnel level at 24, compared to 23 five years ago. The management team, led by Neil Gopal, is a strong and experienced one, with eight of the members being with SAPOA for more than five years. We thank them for the impact they make to the industry every year.

“Having travelled to the various regions, I have seen first-hand SAPOA’s organisational

SAPOA President’s message

Peter Levett’s first trip as SAPOA President was to attend the BOMA International Conference and Expo in Nashville, Tennessee, USA FROM LEFT Henry Chamberlain, Lisa Chamberlain, SAPOA CEO Neil Gopal, Hannelie van der Merwe, Lisa Prats and SAPOA President Peter Levett

effectiveness, and I must pay tribute to the regional chairpersons and their secretariats for the sterling efforts they put in daily.

I recently visited the Mpumalanga region, and I could see personally how the local council had impacted the property activities in the region.

“SAPOA organises more than 70 events each year, whether these be local council meetings looking after the local industry, industryspecific meetings or general networking sessions. I must also use this opportunity to thank the members of the industry that give of their time to be involved in SAPOA – we have about 200 people from the commercial property industry involved at either Board and Committee level or as regional and local representatives.”

Levett then reported back on legal issues and town planning as well as education and marketing as areas where he sees SAPOA delivering significant benefits to members.

Advocacy and legal support “The year 2017 has been both eventful and insightful, given the evolving nature of the property market and the legislation that regulates it,” he says. “There continues to be a focus from government on various areas that have been prioritised, and where the government has begun or completed making policies available and its imperatives known.

At the forefront of the agenda, various pieces of legislation have been published that pertain to land reform, transformation, the

environment, tax and foreign investments.

“To further strengthen the SAPOA team, an additional five planning consultants have been appointed during 2017 for the cities of Jo’burg, East London, eThekwini, Polokwane and Port Elizabeth to protect the industry’s concerns around the Integrated Development Plans being adopted by the local authorities.

“The Legal Department continues to ensure that the legal risks prevalent in the commercial property industry are mitigated for the protection of the mutual interests of SAPOA members.

“The strategic goals identified enable SAPOA’s Legal Department to ensure that open dialogue takes place between the organisation and the various government departments, and that SAPOA’s inputs are recognised.”

The goals of the Legal Department “These include: ● The drafting of clauses for legislation published for public comment as a strategy to assist government in implementing the suggested comments with greater ease; ● The fostering of good relations with the government departments publishing the pertinent bills that affect members, with the aim being to be able to have sight of and comment on the legislation with the relevant department prior to it being published for public comment; ● The increasing of sectorial knowledge by drafting more agreements and manuals that will benefit the industry.

“These goals allow the Legal Department to hone in on critical aspects of impacting legislation, and cement critical discussions while establishing relationships.

“SAPOA has focused on a combination of 50 draft policies, Bills and regulations for the past reporting financial year. While some were published in previous financial years, there was a responsibility to monitor the ultimate adoption and culmination of such policies and Bills into Acts of Parliament.

“This enables SAPOA to determine the changes that are eventually adopted as applicable laws. The monitoring of current Bills or policies does not exclude the other current and applicable property-related laws (between 40 and 50 in number).

“SAPOA has made an effort to raise its effectiveness in respect of legal advocacy by ensuring that relevant information and material is made available to our members.

“The following legal documents were formulated, reviewed and standardised for use for free by SAPOA members. They are also available against payment for non-members.

Requests for these documents have been received from members of the public. (The documents are currently accessible on the SAPOA website at Sapoa.org.za).”

Standardised legal documents ● POPIA manual ● FICA manual ● Lease agreements ● Practice notes for lease agreements SOUTH AFRICAN PROPERTY REVIEW

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SAPOA President’s message

SAPOA President Peter Levett was on hand to award prizes at the Journalism Awards for Excellence 2017 at the SAPOA Annual Convention and Property Exhibition Gala Dinner. Seen here with Alistair Anderson from Business Day and Nomzamo Radebe, CEO of JHI Group (a division of Cushman & Wakefield Excellerate)

● The establishment of utility recovery guidelines (ongoing) SAPOA continues to monitor and report back on Bills and Acts, including: ● Business Rescue ● The Property Practitioners Bill ● Expropriation Bill ● Promotion and Protection of Investment Bill ● Draft Policy and Bill on the Preservation and Development of Agricultural Land Framework “Furthermore, there are legal documents that we have begun working on to assist members in furthering their interests,” says Levett.

Stakeholder engagements “SAPOA has identified that forming strong partnerships with other groups and organisations is essential to a successful advocacy strategy,” says Levett. “Much of SAPOA’s reliance in this respect has been on its internal governance structures – such as its Committees, on which representatives of its members serve on a voluntary basis.

“The Legal, Brokers, Sustainability, Property Developers, Property Facilities Management, Education, Research and the PDP Committee (as well as all the Regional Councils) have been fundamental in highlighting the practical challenges that SAPOA’s member organisations face as a result of property-related laws and the administrative implementation thereof by relevant authorities.

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“It is also worth mentioning some of the successful breakthroughs and ongoing initiatives that have been achieved during 2017.

“These include: ● Self-determined municipal valuations ● National Regulator for Compulsory Specifications ● Competition Commission: Exclusivity clauses (Market inquiry into the grocery retail sector) ● City of Tshwane resellers tariff ● Rates policies.

“SAPOA has also been successful in negotiating with the Estate Agency Affairs Board (EAAB) for non-executive director exemptions. This in effect means that non-executives do not have to sit for EAAB exams, and are exempted from writing the exams. Non-executives who apply for exemption and who are not registered have to send a letter applying for the exemption to the EAAB with all their supporting documentation showing proof of experience.

This is an anomaly and cannot be done online.”

Litigation “Litigation management is a practice that SAPOA has put in place as a last resort to protect the rights of its members. It is part of a comprehensive risk-management strategy that SAPOA takes actively, on behalf of its members and the property industry.”

SAPOA’s tightly run organisation “The Regional Councils and Committees of SAPOA play a crucial role in ensuring that good corporate governance is implemented

with the support of the meeting coordinator of SAPOA and the SAPOA management team.

The meeting coordinator is responsible for the liaison function between the following 15 SAPOA Committees and six Regional Councils: a. Awards b. Brokers c. Education, Training & Development d. Government Liaison e. Legal f. National Developers Forum g. Office Vacancy Survey h. Method of Measuring Floor Areas i. PDP j. Property Managers k. Property Owners l. Research m. SAPOA Convention n. Sustainability o. SAPOA REIT p. KwaZulu-Natal Regional Council q. Western Cape Regional Council r. Nelspruit Regional Council s. Port Elizabeth Regional Council t. Limpopo Regional Council u. East London Council”

Legal advisory services “SAPOA provides legal advisory services to its internal departments, regional offices and members of SAPOA on matters that affect the commercial property sector.

“Formal and comprehensive legal advice has been provided to SAPOA members in respect of the following: a. Business rescue provisions b. FICA requirements c. Commission disputes d. Compliance certificates and occupational certificates e. Improper conduct of estate agents f. Resellers tariffs g. Fixed-term agreements in terms of the Consumer Protection Act of 2008 h. Rates policies i. Impact of the Promotion and Protection of Investment Bill j. Water use licences.”

Town planning matters 1 The Draft Polokwane Local Municipality Land Use Management By-Law of 2015 “The Polokwane Municipality is currently assessing the comments received by SAPOA on the draft Polokwane Land Use Management By-Law, and intends to circulate the revised draft (Draft 5) before the end of the year.”

SAPOA President’s message

2 The Draft KwaZulu-Natal Spatial Planning and Land Use Management Bill of 2016 “The KZN Department of Cooperative Governance and Traditional Affairs (COGTA) circulated its draft KZN Spatial Planning and Land Use Management Bill to SAPOA prior to it being published for public comment. SAPOA’s comments have been taken into consideration. KZN COGTA confirmed that once the document has been published for public comment, it would include SAPOA as one of its targeted stakeholder groups, and will propose that SAPOA engages with the private property sector in a separate public participation forum.

The Bill was published for comment in March, and a consultant town planner has been appointed to assist with drafting the comments.�

3 The Draft Ekurhuleni Spatial Planning and Land Use Management Bill of 2015 “The Ekurhuleni Municipality published its Draft Bill for comment in March, and a consultant town planner has been appointed to assist with drafting the comments.�

4 The partnership between the National Treasury and SAPOA “The National Treasury and SAPOA signed a Memorandum of Understanding in 2015. As part of the agreement, a collaborative research project dealing with urban management legislation was embarked upon. The aim of the project is to investigate legislation used by municipalities to manage their urban areas, and to determine whether there is potential for the development of a national legislation in this regard.

A report was compiled on the research findings, and a national workshop was held on 22 August, where role-players in the private and public sector were able to share their experiences and challenges regarding urban management. The next step in the process is to establish a National Urban Management Initiative that will dedicate capacity to a steering committee to advance the concerns raised (via the report and the workshop) and identify resolutions. The department will continue to keep members updated on developments in this regard.�

5 Land Claim Enquiry: Department of Rural Development & Land Reform “SAPOA has been engaging with the Land Claims Commission to establish the latest developments with regards to the Lekhuleni Land Claim. This process was initiated by correspondence to the office of the Land Claims Commissioner in October 2015. A final judgment has been taken with regards to the claim to date, and the Planning & Development Department follows up with the Land Claims department regularly.� “The Regional Land Claims Commissioner has notified SAPOA that it intends withdrawing the gazette notices dated 12 December 2014 and 6 February 2015, and has notified the claimants accordingly. They were also invited to submit written representations on why the gazette notices should not be withdrawn.�

Education, the SAPOA Bursary Fund and the SSETA bursary scheme “Education is a critical initiative to drive skills development and transformation in the industry.

A total of 65 students are currently managed through the two bursary schemes; of these, 27 are supported through the SAPOA Bursary Fund and 38 through the Services SETA bursary scheme. Included in the total are two students funded through the Siyakha 1 Education Trust contribution, which will be annual until 2020.

Reports have been sent to all sponsoring companies, including SSETA. SAPOA continues its drive to source further funding to recruit and sponsor more students.�

SAPOA Bursary Fund “The 2017 mid-term results have shown a pass rate of 85%, compared to 79% of the previous year – a relatively good performance, with some students being

given additional attention to ensure their pass mark improves. “Administratively, the Trust has had a successful year and will continue to seek ways of being efficient and effective.�

Services SETA bursary scheme “The mid-term pass rate for students supported through the mentorship programme was 88%, compared to the 65% of students who are not mentored. SSETA has approved the recruitment of more students in line with the original proposal to sponsor 100 students. SAPOA has further applied for additional funding through the 2018 Discretionary Grants window that SSETA opened to its member companies. Further to a meeting held between SAPOA and SSETA in late July, certain issues were resolved – going forward, students will also be given meal allowances.�

Educational programmes “SAPOA has officially partnered with the University of the Witwatersrand (Wits). This partnership offers new SAPOA/Wits real estate courses to the property industry. “The main purpose of partnering with Wits is to ensure that SAPOA members are able to benefit from structured career path opportunities, supported by an accredited institution that designs courses to support the real

estate industry.

“The partnership

with Wits allows a smooth execution of the process while maintaining high standards of quality assurance, and integration of education and workplace application.

Number of SSETA students per institution in 2017 University

Number of students

University of the Witwatersrand (Wits)

6

Cape Peninsula University of Technology (CPUT)

13

University of KwaZulu-Natal (UKZN)

15

University of Cape Town (UCT)

4

Number of SAPOA students per institution in 2017 University

Number of students

University of the Witwatersrand (Wits)

14

University of Pretoria (UP)

4

Cape Peninsula University of Technology (CPUT)

3

University of Johannesburg (UJ)

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SAPOA President’s message

Networking and relationship building is an essential element of SAPOA’s added value to it’s members. At a recent meet the Mayor Networking evening in KZN, SAPOA met with the Honourable Executive Mayor of eThekwini Municipality. FROM LEFT SAPOA President Peter Levett, Executive Chairman of GladAfrica Group Noel Mashaba, the Honourable Executive Mayor of eThekwini Councillor Zandile Gumede and SAPOA CEO Neil Gopal

“SAPOA’s educational efforts are aimed at: ● Increasing knowledge and skills of the property industry among employees within the industry; ● Ensuring the content of programmes/ workshops and other educational interventions is aligned to industry needs; and

● Raising the employability and/or competence of the practitioners and professionals in the industry.

“The partnership with Wits seeks to deliver new educational programmes that are all accredited through the Higher Education Quality Committee of the Council for Higher Education, recognised by the South African

Education courses offered by SAPOA in partnership with Wits Course name

Duration

1

Introduction to Real Estate (IRE)

5 days

2

Real Estate Market Analysis (REMA)

5 days

3

Real Estate Investment Analysis (REIA)

5 days

4

Commercial Real Estate Valuation (CREV)

5 days

5

Property Management (PM)

1 year part-time (once a week)

6

Real Estate Corporate Finance (RECF)

10 days over 3 months

7

Real Estate Finance (REF)

5 days

8

Strategic Corporate Real Estate Management (SCREM)

5 days

9

Management and Leadership in the Built Environment (MBLE)

6 months (2 days per week)

10

Facilities Management (FM)

5 days

11

Building Services (BS)

5 days

12

Occupational Health and Safety in Facilities Management (OHSFM)

5 days

13

Project Management for Property Developers (PMPD)

5 days

14

Law of Property Development and Management (LPDMP)

5 days

15

Advanced Facilities Management (AFM)

5 days

16

Management Development in Commercial Property (MDCP)

6 months (2 days per month)

17

Senior Managers Development on Commercial Property (SMDCP

12 weeks (2 days per month)

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Qualifications Authority as the education and training quality assurance body.”

E-learning “The e-learning programme is set to be replaced by the Introduction to Real Estate course offered by Wits.”

Communication and marketing to members “There has been a move to digital-based communication platforms, with Facebook, Twitter and LinkedIn experiencing more than 100% growth over the past 10 months.”

South African Property Review magazine going digital “Following the digital trend, it was decided to present South African Property Review to the Board in November, with the plan that the December/January edition would be the first live digital edition.

“Statistics have shown that there has been an upward and steady read rate on the digital magazine on Issuu.com. The new online version, which will be housed on its own web server at Southafricanpropertyreview.co.za, will bring with it the potential for even greater interactive activity, such as embedded video, and the ability to carry full digital call-toaction advertising campaigns and other reactive announcements.

“Going into 2018, I look forward to continuing to serve our industry, being able to network with our members and developing lasting relationships with all spheres of government.

“I wish you a great festive season and a prosperous 2018.”

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education

Training future industry leaders Employees of the Department of Public Works have been training on SAPOA courses at Wits University, the University of Pretoria and the University of Cape Town’s Graduate School of Business Words by Professor Samuel Azasu, Wits University and Mafonti Morobi, SAPOA

A

Facilities Management (FM)

PM 2 week block session 16 Oct -20 Oct & 31 Oct- 03 November

SCREAM 14-18 August 2017

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select number of employees across different functional areas and at different levels of the Property Management Trading Entity have been attending executive courses at the University of the Witwatersrand. This is the latest chapter in the partnership between SAPOA and Wits that began in 2016.

Attendees ranged from administrative staff to senior managers. The training series started on 10 July with a course in Real Estate Market Analysis, followed by a course in Facilities Management between 24 and 28 July 2017. The latter course was facilitated by Professor Brian Atkin, a Director of the Facilities Society of the UK and the coauthor of Total Facilities Management, a bestselling textbook on facilities management. During the same week, there was a course in Real Estate Investment Analysis taught by Dr Kola Akinsomi of Wits University.

Between 10 and 14 August 2017, Professor Karen Gibler – who recently retired from Georgia State University in the US – facilitated the course in Strategic Corporate Real Estate Management. This is only the second time this course has been held in South Africa. The last course in property management took place from mid- to late October 2017 at Wits Club on the west campus of Wits University.

According to Professor Sam Azasu, who coordinates executive education in real estate, the courses serve two purposes: closing critical gaps in participants’ knowledge to enable them to function more effectively in their current roles, and as a bridge to further studies. “We sought to give participants a taste of cutting-edge knowledge to empower them in what they do by facilitating interesting classroom encounters with some of the best academics from Wits and beyond,” he says.

“Our goal is to bring some of the best minds to people’s doorstep in Johannesburg.”

The courses typically involve a mix of lectures, mini-projects and carefully constructed assignments, assessed at levels comparable to degree programmes. Even though they are stand-alone executive courses, they have already proven effective as a bridge for DPW employees with a national diploma to access postgraduate studies.

education The goal for 2018 is to redesign some of the existing courses and expand the portfolio of courses offered to meet the needs of different segments of industry. “We see an opportunity in providing world-class education to those who cannot take degree courses,” says Azasu. “In a sense, that is also consistent with the goal of transforming the industry through skills development.” The students interviewed were pleased with the quality of training and enthusiastic about putting new ideas into practice, in addition to joining parttime postgraduate studies in 2018.

Mafonti Morobi, the Education Officer at SAPOA responsible for the smooth running and facilitation of education, training courses and workshops that SAPOA offers, says five delegates at senior management level also attended and completed the Property Development Programme. This course, offered in conjunction with the University of Cape Town’s Graduate School of Business (GSB), is presented jointly with SAPOA. The intensive two-week course is South Africa’s premier course in management, property law, negotiation, investment, development, and marketing. Skills and knowledge are sharpened not only by the practical instruction and case studies, but also by the exchange of ideas with course colleagues, resulting in an extended basic knowledge of the principles and practices of property investment, development, marketing and management. An experienced GSB faculty – supplemented by national and international instructors – provides a strong base in strategic thinking, negotiation, economics and presentation skills.

The balance of the programme takes the form of a series of projects, which will be undertaken on a competitive team basis. One long-term objective of the course is to promote the sponsorship of companies through highlevel management development. In addition, delegates build long-lasting business and personal relationships with their course colleagues. Participants are drawn from the many disciplines of the commercial property industry, including the legal, architectural, engineering, quantity surveying, building

planning and brokering sectors. The calibre of participants is traditionally very high, and the standard of instruction is therefore pitched at senior and potentially senior management.

Fifty delegates also attended and completed the Certificate for Commercial Property Practitioner Programme in 2017.

In total, SAPOA and the various universities have trained 114 DPW staff in 2017, and would like to thank the Department of Public Works for choosing SAPOA as an education partner of future industry leaders in the commercial property sector.

REIA 24-28 July

REMA 10-14 July 2017

Feedback on the Western Cape NSMP

S

APOA Western Cape held the Negotiation Skills Masterclass Programme on 15 and 16 November 2017 at the J & J Conferences in Rondebosch. Course facilitator Candis Cheyne pushed the delegates far beyond their comfort zone, teaching them valuable lessons and techniques on how to achieve the desired outcomes during negotiations.

For more information about SAPOA training courses and workshops, please contact: Mafonti Morobi SAPOA Education Officer e: eduofficer@sapoa.org.za f: +27 (0)11 883 0684 w: www.sapoa.org.za SOUTH AFRICAN PROPERTY REVIEW

15

legal opinion

Constitutional Court rulings that are changing the common law Words by Mumtaz Moola

1 New homeowners not liable for historical debt, ConCourt rules The Constitutional Court ruled on 29 August 2017 that new homeowners are not liable for historical debt taken over from previous owners.

The case that created the trend of municipalities claiming rates and taxes from owners who were not the owners of the property when the liability for rates and taxes was incurred is City of Tshwane Metropolitan Municipality v Thomas Mathabathe.

Municipalities such as Tshwane, eThekwini and Ekurhuleni – as well as the Cooperative Governance Minister – argued against a landmark High Court judgment in 2016, which made a similar ruling. The High Court application saw property owners take on Tshwane and Ekurhuleni for cutting municipal services to new homeowners who had inherited historical debt. “The applicants complained that they faced darkness, having no electricity, and many other inhumane conditions because they bought property whose previous owners had failed to meet their obligations to the municipality,” the court explained in a media briefing.

The municipalities had argued that it was lawful for them to attach and sell a newly purchased property to extract money for debt owed to them. In a unanimous judgment, the court ruled that the provision in Section 118(3) of the Local Government: Municipal Systems Act of 2000 is well capable of being interpreted so that the charge does not survive transfer. This section provides that an amount due for municipal services rendered on any property is a charge upon that property, and enjoys preference over any mortgage bond registered against the property.

Tshwane, Ekurhuleni and eThekwini municipality contended that a proper construction of Section 118(3) was that the charge survives transfer. They argued that for municipalities to properly fulfil

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SOUTH AFRICAN PROPERTY REVIEW

their constitutional duties of service delivery, they needed extraordinary debt-collecting measures. This meant burdening new owners with the responsibility for historical debt. This contention they followed through both in the High Court and the Constitutional Court. They, however, conceded that nothing prevented them from enforcing their claims for historical debt on the previous owners. The municipalities conceded further that their powers included interdicting any impending transfer to a new owner by obtaining an interdict against the old, indebted owner, until the debts were paid.

“The court held that a mere statutory provision … that a claim for a specified debt is a ‘charge’ upon immovable property does not make that charge

The court held that a mere statutory provision … that a claim for a specified debt is a ‘charge’ upon immovable property does not make that charge transmissible to successors in title of property. Public formalisation of the charge is required to give notice of its creation to the world transmissible to successors in title of property. Public formalisation of the charge is required to give notice of its creation to the world.”

The court ruled that, to avoid unjustified arbitrariness in violation of Section 25(1) of the Bill of Rights, Section 118 (3) must be interpreted so that the charge it imposes does not survive transfer to the new owner.

The Constitutional Court weighed the

historical, linguistic and common law factors bearing on how the provision should be understood, plus the need to interpret it compatibly with the Bill of Rights.

The court held that a mere statutory provision, without more, that a claim for a specified debt is a “charge” upon immovable property does not make that charge transmissible to successors in title of the property. Public formalisation of the charge is required (e.g. registration in the Deeds Registry) to give notice of its creation to the world.

Section 118 does not require this public formalisation process.

In any event, the Bill of Rights prohibits arbitrary deprivation of property, which would happen if debt without historical limit were imposed on a new owner of municipal property.

In the result, the court held that, because Section 118(3) can properly and reasonably be interpreted without constitutional objection, it is not necessary to confirm the High Court’s declaration of invalidity. For clarity, the court granted the applicants a declaration that the charge does not survive transfer.

The ruling of the Constitutional Court to the effect that new owners cannot be held liable for the historical debt of a previous owner is a victory for property owners and financial institutions alike.

The municipalities and the minister were ordered to pay costs.

2 Constitutional Court changes the interpretative analysis In the matter between Ntswaki Joyce Mokone and Tassos Properties on 24 July 2017, the Constitutional Court stated that, according to Section 173 of the Constitution, “the Constitutional Court, the Supreme Court of Appeal and the High Court of South Africa each has the inherent power to protect and regulate their own process, and to develop the common law, taking into account the interests of justice.”

legal opinion For the period 1 March 2005 to 3 May 2006, Mokone and Tassos concluded an oral agreement on the same terms and conditions as the written lease. On 3 May 2006, they agreed to an extension of the lease until 31 May 2014. This they did by means of a manuscript endorsement on the face of the first page of the original written lease signed by only a representative of Tassos.

The endorsement reads: “Extend till 31/5/2014, monthly rent R5 500” Put simply, this means the courts may regulate their own process, taking into account the interests of justice. What justice requires will depend on the circumstances of each case.

The facts of the case, briefly, are as follows. On 1 March 2004, Mokone (the applicant), entered into a written lease agreement with Tassos Properties CC (Tassos). In terms of the agreement, Tassos leased premises to Mokone at 119 Commissioner Street, Boksburg (leased premises) at a monthly rental of R4 500.

The lease was for an initial period of one year, ending on 28 February 2005, and renewable for a further period of a year at a rental to be agreed upon.

For the period 1 March 2005 to 3 May 2006, Mokone and Tassos concluded an oral agreement on the same terms and conditions as the written lease.

On 3 May 2006, they agreed to an extension of the lease until 31 May 2014.

This they did by means of a manuscript endorsement on the face of the first page of the original written lease signed by only a representative of Tassos. The endorsement reads: “Extend till 31/5/ 2014, monthly rent R5 500.”

On 15 July 2009, Tassos entered into a deed of sale with Blue Canyon Properties 125 CC (Blue Canyon) in terms of which it sold the leased premises to Blue Canyon.

Blue Canyon is the second respondent

in the first application and the only respondent in the second application.

Transfer to Blue Canyon took place on 1 March 2010.

In 2010, after becoming aware of the sale, Mokone brought an application in the High Court seeking a declaration that Tassos was in breach of the right of pre-emption; cancellation of the sale and reversal of transfer of the leased premises; and an order compelling Tassos to comply with Clause 6 of the written lease (the clause containing the right of pre-emption). She later withdrew this application.

On 27 January 2012, Mokone notified Tassos in writing that she was exercising her right of pre-emption. She tendered payment of R55 886,60. Tassos rebuffed Mokone, arguing that the right of preemption was no longer part of the lease.

On 3 April 2012, Mokone initiated action against Tassos and Blue Canyon in the High Court to set aside the sale and transfer of the leased premises and compel a sale of the property to her. In the alternative, she asked for damages.

Her contention was that the manuscript endorsement that extended the lease to 31 May 2014 had also extended Clause 6 containing the right of pre-emption.

She sought to upset the transfer to Blue Canyon on the basis that Blue Canyon was aware of her right of pre-emption before it took transfer.

While the action was pending before the High Court, the latest period of the lease came to an end. Despite this, Mokone continued to occupy the leased premises. Blue Canyon, which had stepped into the shoes of Tassos as lessor after it

While the action was pending before the High Court, the latest period of the lease came to an end. Despite this, Mokone continued to occupy the leased premises.

Blue Canyon, which had stepped into the shoes of Tassos as lessor after it had taken transfer, continued to accept rent

had taken transfer, continued to accept rent. There was thus a tacit month-tomonth lease between Mokone and Blue Canyon from 1 June 2014. On 10 December 2014, Blue Canyon gave Mokone written notice to vacate the leased premises by 31 January 2015.

She refused to vacate. On 17 February 2015, Blue Canyon sought her eviction from the Boksburg Magistrate’s Court on the basis that it was the owner of the leased premises; the lease had come to an end through passage of time; and Mokone had been given due notice to vacate the premises.

Judge Mandla of the constitutional court who was presiding over the matter stated that our courts have proceeded from an assumption that English law on this subject forms the basis of our common law. English law tells us that a term that is collateral, and not an incident, to the relation of lessor and tenant, continues during the period of extension of a lease only if it is clear that this is what the parties to the lease intended. He stated that the Supreme Court of Appeal and the High Court have “always had an inherent jurisdiction to develop the common law to meet the needs of a changing society”.

If Section 39(2) were to be read to have removed the power of courts to develop the common law where its shortcomings do not implicate the Constitution, it would be a retrograde step and absurd. That would mean, even if it were clamant that the common law be developed on a non-constitutional basis, courts would not be able to do anything, despite the fact that for centuries – in the era before the advent of our constitutional democracy – courts have always been able to develop the common law. In fact, Section 173 of the Constitution stipulates that the Constitutional Court, the Supreme Court of Appeal and the High Court have the inherent power to develop the common law, taking into account the interests of justice. This language is wide enough to admit the development of common law outside the ambit of Section 39(2). Thus the answer to the question of whether it is open at all to the court to develop the common law in the circumstances at issue here is yes.

The Court declared that the extension of the lease between Mokone and Tassos on 3 May 2006 resulted in the extension of the right of pre-emption in favour of Mokone.

SOUTH AFRICAN PROPERTY REVIEW

17

planning & development

Industry participation in the review of the Buffalo City Metropolitan Municipality’s Integrated Development Planning process 2017-2018 he uffalo City etropolitan unicipality s is a five year plan that aims to develop the metro as a well governed, connected, green and innovative city

T

he Buffalo City Metropolitan Municipality’s (BCMM) five-year Integrated Development Plan (IDP) has been developed for the period of 2016-2021. As stipulated in the Municipal Systems Act No. 32 of 2000, it is a requirement that municipalities review the plan every year in order to keep up to date with the naturally changing circumstances of the city. The review process includes public participation, and SAPOA was closely involved in the industry participation part of the IDP. One of SAPOA’s key concerns with regards to city processes is that it would like to have a closer relationship with the BCMM and engage better with the city, to ensure SAPOA’s plans for the metro are in line with the BCMM, and that the city considers SAPOA’s needs. The consultative process of the review included attending IDP forum sessions, during which stakeholders were able to voice opinions relating to specific needs and considerations in the IDP. This process allowed SAPOA to be directly involved in the development of the IDP, and to ensure that its concerns were voiced and its relationship with the BCMM was realised.

The long-term vision of the metro, as stated in the IDP, is to be a city that is “well-governed, connected, green and innovative”. Derived from this vision are the following five strategic outcomes, which are directly related to the Metropolitan Growth and Development Strategy.

Strategic Objective 1: An innovative and productive city This objective includes that the metro has rapid and inclusive economic growth, which focuses on competitiveness of various industries and increases export potential and falling unemployment by promoting entrepreneurship.

Strategic Objective 2: A green city It means ensuring the city is environmentally sustainable with optimal benefits from its natural assets – a clean and healthy city of subtropical gardens. It includes the proper management of open spaces to avoid illegal dumping and encourage recreational activities, as well as minimising the impact of air pollution.

Strategic Objective 3: A connected city A high-quality (and competitively priced) city that has connections to ICT, electricity and transport networks (inside the city and to the

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SOUTH AFRICAN PROPERTY REVIEW

outside world) is at the forefront of this objective. By 2030, the BCMM must be a full logistics hub. This objective also addresses investment in the metro in line with the infrastructure developments.

Strategic Objective 4: A spatially integrated city This objective aims to ensure that the spatial divisions and fragmentation of apartheid are progressively overcome, and that township economies become more productive. The focus here is also on addressing energy backlogs and ensuring that all households have access to basic water, and includes the development of infrastructure.

Strategic Objective 5: A well-governed city A smart and responsive municipality (working with other levels of government) that plans efficiently and delivers high-quality services and cost-effective infrastructure without administration and political disruptions is key towards this objective. This sector includes the fact that the city is sustainable and meets its financial obligations.

The Spatial Development Framework (SDF) is a key component of the IDP. The BCMM SDF outlines certain priority areas for the municipality, including the following:

1 Central Urban Core (East London-Mdantsane) This area is regarded as the heart of the city-in-a-region. This is the result of the large number of people residing here, and is subject to critical infrastructure/service backlogs. The urban area has the potential to accommodate between 40 000 and 50 000 households at increased densities in the future. This is a key priority area for SAPOA as this is where the majority of industry-related activities occur.

2 West Bank Since the 1980s, the West Bank area has been seen as having the best potential for large-scale urbanisation in the greater East London area. Investment in the East London Industrial Development Zone is constrained from being fully realised by the lack of key infrastructure in wastewater treatment on the West Bank.

3 King Williams Town/ Bhisho and Quenera This area is located outside of the city – but it can open doors for investment and growth in the metro. King Williams Town/Bhisho as an extended rural service centre is an important segment of the BCMM, and continued support is required. Provincial government is leading initiatives to consolidate Bhisho as an administrative capital of the Eastern Cape, and the BCMM needs to support the initiatives by ensuring there is sufficient bulk infrastructure. The Mzamomhle and Nompumelelo settlements require upgrading.

The IDP also outlines the local government’s key performance areas, which are depicted as follows: ● Municipal transformation and organisational development ● Municipal basic service delivery and infrastructure development ● Local economic development ● Municipal financial viability and management ● Good governance and public participation A key concern for SAPOA is that more commitment needs to be given to the implementation of projects identified in the IDP. The feeling is that projects do not attract the necessary priority and related budget/s, and are rolled over to the next year but never actually get implemented.

In relation to the above – and to track the progress of the implementation of the IDP – a performance management system needs to be developed to measure the implementation of the IDP and to continuously monitor the performance of the municipalities when it comes to fulfilling their mandates. The performance management system aims to facilitate increased accountability of the communities, the municipal council and the municipal departmental heads, as well as facilitate learning and improvement to the municipality to provide the necessary tools to monitor the implementation of the IDP. The plan provides early warning signals when projects are in jeopardy of not being in line with the time frames stipulated in the IDP, and aids in decision-making at various levels.

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SOUTH AFRICAN PROPERTY REVIEW

2017 roundup

2017: the year that was It’s been an environmentally epic year, with catastrophic climate variations and widespread devastation experienced both globally and locally Words by Beth Stols

N

atural disasters are a constant reminder that Mother Nature is fundamentally unpredictable and sends us potent reminders of our finite existence.

On the local front, the Knysna fires in June were one of the most destructive in recent history. More than 20 suburbs were ravaged; the fires spread for more than 100km, destroying more than 600 homes – and in excess of 10 000 people had to be evacuated. Initial estimates of the damages totalled more than R1-billion.

The flash floods in Durban in October proved to be a provincial disaster both economically and socially, with many businesses and infrastructures (including

20

schools, hospitals and informal settlements) suffering great damage, leaving many people displaced and homeless.

The looming water crisis in the Western Cape is predicted to be the worst in more than a century. With the recent water restrictions experienced in Gauteng, climatic intellectuals claim it will take South Africa at least three years to dig itself out of this devastation.

It’s been much the same pattern on the global front. The UN Weather and Climate World Meteorological Organisation has declared that 2017 is set to become the hottest year on record (aside from the years impacted by El Niño), and that the key indicators of climate change – rising carbondioxide concentration in our

SOUTH AFRICAN PROPERTY REVIEW

atmosphere, rising sea levels, and the acidification of oceans – continue unabated this year.

It’s a no-brainer that natural disasters seem to be on an uptick. Hurricane season

in the US this year has been exceptional, with a recordbreaking sequence of events.

In the first nine months of 2017, the US had 15 disasters, each costing more than US$1-billion dollars. They collectively claimed more than 320 lives. There have been a documented 1 400 tornados. And then there’s the devastation of Hurricane Harvey and Hurricane Irma, which pummelled the Caribbean islands and wreaked havoc along the Florida peninsula and the Texas coastline. Harvey is the most powerful hurricane to hit the US in 50 years.

Added to this list are Hurricane Maria in Puerto Rico, the wildfires in California, the monsoon floods in south Asia (with more than 600 deaths), and Sierra Leone’s mudslides and flooding directly affecting and displacing more than 6 000 people. This left in its wake the added threat of outbreaks of malaria and cholera.

2017 roundup Neither Ireland nor the UK escaped unscathed, with Hurricane Ophelia making landfall there. The earthquake in Mexico that peaked at a magnitude of 8.2 was followed by a more direct hit of 7.1 on Mexico City, which has also been documented as one of the worst in recent history.

In September 2017, UN Secretary General António Guterres summed up the catastrophes so far. The US, China and India have had the most natural disasters since 1995, and the number of people directly affected by sudden-onset disasters is three times as high as those affected by conflict and violence for the same period.

These are depressing facts – and they are the mind-bending realities of natural disasters, which hold no prisoners and leave their mark on people, animals and property. But the common thread running through these calamities is our coming together during a crisis.

The links between natural devastation and the socioeconomic changes afterwards are interesting.

Humane stories are always borne out of disasters, and perhaps this is the connection that fundamentally bonds us. When the Knysna fires devastated the community,

major relief operations began immediately, with communities as far afield as Durban and Gauteng rallying, collecting perishables, clothing, blankets, and delivering these essential items to the affected areas.

National banks and businesses came on board and donated much-needed funds to assist the devastated communities.

There were stories of acts of bravery during the Durban floods, where individuals risked their lives to save others.

Then there’s the story of the Mpumalanga farmer who rallied his fellow farmers and orchestrated a massive 31-truck convoy containing 1 500 donated feed bales to be transported to Beaufort West to assist the drought-stricken farmers there.

Similarly, when billions of small plastic pellets called “nurdles” washed up on Durban’s shoreline in October after a container fell overboard during violent KZN storms and created a potential health and marine hazard, volunteers gave of their time to scour the shores and embark on a massive cleaningup operation. Such is the spirit of ubuntu in South Africa.

Natural disasters can cripple a country socially and economically, and history has shown that these occurrences often lead to political unrest, civil war and human migration.

On the flipside, they can also lead to periods of restructuring, regrowth and great entrepreneurial innovation.

International trends are working towards structuring effective and comprehensive frameworks for recovery processes. There needs to be a directive in place before a disaster occurs, so that when it occurs – and after we’ve responded and saved all we can – we know what plans to put in place to start the rebuilding process.

Being cognisant of these variables will hopefully help to ensure a more resilient future for all.

HEALTH & SAFETY CONSULTANTS

Cairnmead Industrial Consultants provide Clients with a unique Consulting Service within the Occupational Health and Safety discipline. We take pride in implementing the understanding required in the industry, as well

Christof Lourens Managing Director

as the theoretical knowledge involved. We assist our Clients with the relevant hands on application of the Occupational Health and Safety Act, Regulations and associated Southern African National Standards in their business. Our Consultants are fully equipped with a mobile office enabling them to compile and issue reports on site.

We strive to protect our Clients by ensuring that documentation and physical audits are done on all Contractors appointed on a Project. We further ensure that the Tenants and their Contractors act to their Legal responsibilities.

tel: 012 346 5752 | fax: 086 685 1118 | email: christof@cairnmead.co.za 78 Kalkoen St, Monument Park, Pretoria, 0181 | website: www.cairnmead.com

SOUTH AFRICAN PROPERTY REVIEW

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water update

H20: South Africa’s most precious resource he Western Cape news is filled with the fast approaching ay and the coined phrase the new normal ut what is being done about ensuring that all citi ens have water Words by Mark Pettipher

2 LITRES

3 FLUSHES 27 LITRES 7 LITRES

For more information go to: www.capetown.gov.za/thinkwater

I

n a recent address to CEOs in Cape Town, Western Cape Premier Helen Zille and Cape Town’s Executive Mayor Patricia de Lille both reiterated that it is the central government’s Department of Water and Sanitation’s responsibility to ensure that all South Africans have enough water. However, they also said, “We are where we are, and this is no time for the blame game.”

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With Day 0 approaching, the Western Cape leadership has appealed to everyone to pull together in this time of crisis and jointly ensure that we avoid Day 0 in a way that will not set a precedent of future unsustainability, and will not have unintended negative consequences.

Taking the looming crisis to business, Zille outlined that the private sector must help the

country build a water economy in a way similar to the growing green energy economy, which was sparked by the energy crisis 10 years ago. The government’s major role is to create conditions conducive to making water economy happen. In the interim, we can all save water at home and in our places of business. As responsible employers, we should be encouraging our staff and customers to develop a culture of “resource” preservation.

However, Zille was clear that in order for us to build our future, the private sector should not take over the role of government, and must take steps to ensure that processes are in place to keep the relevant authorities accountable and capable of acting as a crisis comes about.

Drilling down into what action is being taken, it is clear there is a high degree of unpredictability about the future. We cannot simply “grind it out”. The only real certainty is that the drought is not temporary in nature: we know the 2017 winter rainfall in the Western Cape was substantially lower than that of previous years, and the drought is the worst recorded in 100 years. It is clear we can no longer rely on past climate models – the whole world is experiencing the harsh impact of climate change, and our reliance on surface water is at risk.

In the short term, the Western Cape government is to bring online up to 500million litres of non-surface water (as outlined in the table opposite). Two projects have already been augmented – Oranjezicht spring brings in about two-million litres, while the Atlantis Aquifer has been increased to deliver a further five-million.

Seven new projects have funding and are confirmed to begin. These are: ● Strandfontein temporary desalination (seven-million litres) ● Monwabisi temporary desalination (seven-million litres) ● V&A Waterfront desalination (two-million litres) ● Cape Town Harbour land-based desalination (120-million litres) ● Atlantis Aquifer (25-million litres) ● Cape Flats Aquifer (25-million litres) ● Zandvliet Water Re-Use (10-million litres).

water update The city’s role in awareness and conservation

Emergency programme: technical project list

Educating the public plays a major role, and there are a number of posters and campaigns that have been put in place, including those available on the City of Cape Town website (Cct.gov.za/0byva). It is also imperative that maintenance and management of the current infrastructure are prioritised. Some pointers for conservation and management include: ● Education and awareness ● Pipe replacement ● Pressure management ● Active leakage control (leak detection) ● District metering (and zoning) ● Leak response time and repair quality ● Leak repair (indigent households) ● Water management devices (11 000 installed in the past two months) ● Treated effluent re-use ● Water-meter management ● Water restrictions (currently Level 5).

Original emergency programme Desalination Volume (Ml)

Level 5 water restrictions were implemented in September in the Western Cape. They are in place until further notice, and are applicable to everyone.

Zandvliet WWTW

10

Cape Flats WWTW

10

Macassar WWTW

30

What Level 5 restrictions mean The following are the most pertinent points of Level 5 water restrictions, and are applicable to all individual users: ● All water users are required to use no more than 87 litres of municipal drinking water per person per day in total, irrespective of whether they are at home, at work or elsewhere. ● No watering/irrigation with municipal drinking water is allowed. This includes watering/irrigation of flower beds, lawns, vegetables, agricultural crops, other plants, sports fields, golf courses, schools, educational facilities, nurseries, parks and other open spaces, customers involved in agricultural activities, etc. Nurseries and customers involved in agricultural activities or with historical gardens may apply for exemption. ● City departments may only water/ irrigate sports fields, parks, etc using non-drinking water, and upon agreement of days and times with the Department of Water and Sanitation. ● Facilities/customers making use of borehole water, treated effluent water, spring water or well points are encouraged not to water/irrigate within seven days after rainfall that provided adequate saturation.

Containerised land-based Hout Bay

4

Granger Bay

8

Red Hill/Dido Valley

2

Strandfontein

7

Monwabisi

7

Harmony Park

8

Cape Town Harbour

50

Universal Sites x 3

52

V&A Waterfront

2

Ships and barges Cape Town Harbour (barge)

50

Gordons Bay ship/barge

120

Cape Town Harbour (ship)

50

Water reclamation

Groundwater abstraction Atlantis & Silverstroom Aquifers

25

Cape Flats Aquifer

25

Cape Peninsula Aquifer

20

Hottentots-Holland Aquifer

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TOTAL 500 ● All boreholes and well points must be registered with the city and must display the official City of Cape Town signage clearly visible from a public thoroughfare. Visit Capetown.gov.za/ thinkwater for registration details. ● Borehole/well-point water must be used efficiently to avoid wastage and evaporation. Borehole/well-point water users are strongly encouraged to water/ irrigate only on Tuesdays and Saturdays before 9am or after 6pm for a maximum of one hour. ● All properties where alternative, non-drinking water resources are used (including rainwater harvesting, greywater, treated effluent water and spring water) must display signage to this effect clearly visible from a public thoroughfare. ● No washing or hosing down of hardsurfaced or paved areas with municipal drinking water is allowed. Users such as abattoirs, food processing industries,

care facilities, animal shelters and other industries or facilities with special needs (health/safety-related only) must apply for exemption. ● The use of municipal drinking water for ornamental water fountains or water features is prohibited. ● No topping up (manual/automatic) of swimming pools with municipal drinking water is allowed, even if fitted with a pool cover. This includes the filling of new pools or the refilling of an existing pool after a repair.

This applies to all pools, including public pools and pools at clubs, businesses and institutions.

The following restrictions are applicable to residential customers: ● Single residential properties (domestic full tariff category) consuming more than 20 000 litres per month will be fined. ● Cluster developments (e.g. flats and housing complexes) consuming more SOUTH AFRICAN PROPERTY REVIEW

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water update

TOP WAYS TO SAVE WATER INDOORS Cape Town has water restrictions in place.

Keep saving by taking these key indoor actions.

1 55

Only flush when necessary.

Don’t use it as a dustbin.

‘If it’s yellow let it mellow.

If it’s brown, flush it down.’

Take a short 2-minute shower.

A standard (non–water-saving) showerhead can use as much as 16 litres per minute.

Collect your shower, bath and basin water and re-use it to flush your toilet, and for the garden and car cleaning. *

Wait for a full load before running washing machines and dishwashers.

The rinse water from some washing machines can be re-used for the next wash cycle.

Use a cup instead of running taps in the bathroom or kitchen for brushing teeth, shaving, drinking etc.

Defrost foods in the fridge or naturally rather than placing it under running water.

Switch to an efficient showerhead which uses no more than 10 litres per minute, as per the City’s By-law.

Upgrade to a multi-flush toilet and/or put a water displacement item in the cistern which can halve your water use per flush.

Fit taps with aerators or restrictors to reduce flow to no more than 6 litres per minute, as per the City’s By-law.

Report pipe bursts by SMS 31373 (max 160 characters) and water wastage to: water@capetown.gov.za or call 0860 103 089. (Standard SMS and 0860 call rates apply) For more on water saving, restrictions and safe use of greywater go to: www.capetown.gov.za/thinkwater * Greywater use has some health and hygiene risks to be avoided. Keep hands and surface areas sanitised/disinfected.

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water update Restrictions and drought-related measures Level

Date

Restriction

Target

Level 1

2005

● ● ● ●

Level 2

1 Jan 2016

● Irrigation for 1 hour on Tue, Wed, Thur ● No irrigation 9am to 4pm

20% savings

Level 3

1 Nov 2016

● Buckets only ● Pool covers

30% savings

No irrigation 10am to 4pm Spray nozzles for hosepipes No hosing down hard surfaces No dampening of building sand

10% savings

Level 3B

1 Feb 2017

● No private car washing

30% savings

Level 4

1 June 2017

● No irrigation ● No topping up of private pools

100 litres/ person/day

Level 4B

1 July 2017

● No topping up of public pools

87 litres/person/day

Level 5

3 Sep 2017

Fines:

87 litres/person/day

● Residential > 20kl/month ● Commercial: 20% less than same month previous year than an average of 20 000 litres per residential unit per month will be fined. ● No washing of vehicles, trailers, caravans or boats with municipal drinking water is allowed. These must be washed with non-drinking water, or cleaned with waterless products or dry-steam cleaning processes. ● Customers are strongly encouraged to install water-efficient parts, fittings and technologies to minimise water use at all taps, showerheads and other plumbing components.

● Customers are encouraged to flush toilets (manually, using a bucket) with greywater, rainwater or other non-drinking water. ● The use of portable or any temporary play pools is prohibited. ● No increase of the indigent water allocation over and above the free 350 litres a day will be granted, unless through prior application and permission for specific events such as burial ceremonies.

The following restrictions are applicable to non-residential customers:

Limpopo Gauteng

85.3% / 80.1%

North West

73.1% / 58.9%

66.3% / 47.3%

Mpumalanga

66.6% / 50.0%

Free State

69.9% / 52.9%

KwaZulu-Natal

46.2% / 41.9%

Northern Cape

76.3% / 58.5%

Eastern Cape

61.5% / 64.2%

Western Cape

34.8% / 62.3%

Provincial water levels Current % / Last Years %

● All commercial properties must ensure that their monthly consumption of municipal drinking water is reduced by 20% compared to consumption for the previous year. ● All agricultural users must ensure that their monthly consumption of municipal drinking water is reduced by 30% compared to consumption for the previous year. ● No washing of vehicles (including taxis), trailers, caravans and boats with municipal drinking water is allowed. These must be washed with non-drinking water or cleaned with waterless products or drysteam cleaning processes. This applies to both formal and informal car washes. ● The operation of spray parks is prohibited. ● Customers must install water-efficient parts, fittings and technologies to minimise water use at all taps, showerheads and other plumbing components in public places, and must adhere to the Water By-law requirements. ● No new landscaping or sports fields may be established, except if irrigated only with non-drinking water. ● For users supplied with water in terms of special contracts (notarial deeds, water service intermediaries or water service providers), the contract conditions shall apply.

Failure to comply with these restrictions will constitute an offence in terms of the City of Cape Town’s Water By-law of 2010 (or as amended). The accused will be liable to an admission of guilt, fines and/or, in accordance with section 36(4), an installation of a water-management device(s) at premises where the noncompliance occurs. The cost thereof will be billed to the relevant account holder.

This provision has been effective from 1 October 2017. Customers with good reason for higher consumption need to provide the city with adequate motivation to justify their higher consumption.

Other restrictive measures that have not been detailed above, as stipulated in Schedule 1 of the Water By-law of 2010 (or as amended), still apply. Exemptions issued under Level 4B restrictions still apply, subject to review with the possibility of being revoked. Water pressure may be reduced to limit water leaks and such may cause intermittent water supply. For further information visit Capetown.gov.za/thinkwater or email water@capetown.gov.za.

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New Sibaya Coastal Precinct Conservation Trust to protect and enhance natural assets While development of the much-anticipated Sibaya Coastal Precinct steams ahead, Tongaat Hulett has put plans in place to ensure the area’s intrinsic natural heritage is protected and preserved Words by Louise Hunt

FROM LEFT Representatives of the Sibaya Coastal Precinct Conservation Trust Nonhlanhla Khoza, Dr Richard Kinvig and Dayalan Chetty

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tretching from the natural boundaries of the Ohlanga and Umdloti river estuaries, and situated between the N2 highway and the Indian Ocean, Sibaya Coastal Precinct incorporates seven nodes in total and spans more than 1 000 hectares of prime beach, forest, river and hilltop landscape. Up to 60% of this expansive development consists of protected coastal dune forest, with open spaces being rehabilitated into richly endowed environmental assets. Within these natural surroundings, a host of flora, birdlife and animal species have existed for hundreds of years. Together with the forest, wetlands and beaches, the entire natural footprint represents a rich ecology that will not only be conserved, maintained and protected, but activated for public access too.

On completion, the Sibaya Coastal Precinct will give rise to homes, schools and tertiary institutions, retirement developments, corporate,

retail and hospitality offerings and more, to serve the local community. What makes this space exceptional is the 308 hectares of protected dune forest that falls under the custodianship of the newly formed Sibaya Coastal Precinct Conservation Trust.

Much of the pristine Hawaan Forest and a series of other smaller forests fall within the precinct’s borders. “This forms the only significant remaining coastal dune forest outside of the iSimangaliso Wetland Park,” says Tongaat Hulett Developments Executive Dayalan Chetty. “It is a vital regional asset, and will be maintained, protected and preserved along with the pristine beaches, wetlands and other rehabilitated open spaces by the Trust, which is currently being registered.”

Under the expert penmanship of Dr Richard Kinvig, a conservation management plan has been compiled and will be implemented in line with the development’s

Three-hundred-and-eight hectares of coastal dune forest will be preserved, protected and rehabilitated at the Sibaya Coastal Precinct

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activities. Kinvig is a respected ecologist who specialises in botany, ecology, environmental science, zoology and entomology. Having been involved in more than 200 projects in the environmental field, Kinvig offers expert insight and considerable experience in terms of environmental management, and is an important and valued member of the Board of Trustees.

The Trust will be a self-sustaining entity funded by existing and new investors or developers within the Sibaya Coastal Precinct.

A levy has been implemented as well as a stabilisation fund to ensure the Conservation Trust’s longevity and sustainability in fulfilling its mandate of rehabilitating, protecting, maintaining and preserving the development’s natural assets in an ecologically sustainable manner. It will also be critical to ensure the Trust’s objectives remain in line with the terms of the conservation management plan, so it fulfils all obligations imposed upon it in the environmental authorisation.

“The Trust will also be critically important to ensuring that commercial activity on the site takes place in an environmentally sensitive, responsible and sustainable manner,” Chetty says.

In addition to offering an unprecedented and inclusive urban space to live, work and play, Sibaya Coastal Precinct will essentially unlock access to this coastal paradise on KwaZulu-Natal’s North Coast. A staggering 75 kilometres of hiking, running and cycling trails and a variety of outdoor pastimes to enjoy in an area which has until now been For the very first time, Sibaya Coastal Precinct’s natural assets will be unlocked for residents and visitors to explore

developers largely inaccessible, is being made available.

Opportunities also exist to connect Umdloti to Umhlanga via a series of boardwalks and trails. These green corridors will also afford beach access to more than kilometres of untouched coastline.

“The outdoor experience will be underpinned by compact urban centres and hilltop settlements balanced with an openspace lattice that will enhance sustainability by reducing the development’s spatial footprint and reinforcing the natural topography.

Ultimately the buildings will be embedded in the landscape and not in conflict with it,” says Chetty. “What is most exciting is that the open spaces will be accessible to both residents and visitors. This falls in line with our vision to create a space where people can ‘reconnect and rediscover’.”

Sibaya Coastal Precinct’s significant environmental importance will be balanced by its vast socioeconomic impact. Central to Tongaat Hulett’s entrenched philosophy of value creation for all stakeholders through the full development value chain and life cycle, and its Socio-Economic Sustainability and Innovation Programme, an all-inclusive approach will be taken to ensure that meaningful jobs are created through this process to benefit local communities. This will ensure the broader Durban community – and particularly the neighbouring Umdloti, Waterloo and Blackburn communities – is significantly and positively impacted.

“The Sibaya Coastal Precinct Conservation Trust will ensure that there are no compromises on our promise to provide a unique mixed-use development that transcends the trend of unsustainable urban sprawl,” says Chetty. “The precinct will be a beacon for urban and environmental integration that encourages mutual respect so that the different elements can exist in harmony with one another.”

For more information on Sibaya Coastal Precinct and to enquire about investment opportunities, visit Discoversibaya.co.za.

The Mother City’s newest skyscraper Abland, together with JV partner The Ellerine Brothers, announced the development of Cape own s newest office tower ower ong, situated on ower ong treet in the City owl his star green building is set to transform a site previously known as the Ernst oung offices into a storey office building Words by Fezile Africa

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onstruction has already commenced, with completion set for the first quarter of 2020. The building area will consist of 13 446m² premium-grade office space, along with 323m² of retail space on the ground floor, nine above-ground parking levels and a penthouse on the top floor. Priority has been given to activating the entire street edges of Lower Long and Jetty Street with multiple entry points and a prominent double-volume entrance space. The sculpted form of the building mass and the defragmentation and articulation of the corners will provide dynamic views of the building across the city, both from street level and from nearby buildings.

“We believe the location is perfect,” says James Cresswell, Cape Regional Director at Abland. “Not only is the property next to the MyCiti bus station, it is in close proximity to the main train station, making it easily accessible to individuals commuting via public transport.

Motorists also have easy access to the N1, N2 and the western seaboard.

In addition, the building is located in the popular Foreshore precinct close to the Cape Town International Convention Centre. Amenities such as hotels, restaurants and bars surround the building, making it a prime location.”

The office building is being developed with the occupants’ needs in mind. Flexibility in a work environment has become critical to tenants who require worker-friendly office space and high-speed IT connectivity.

The building will have a modern look characterised by beautifully designed glazed façades that extend seamlessly over both the office and parking levels, with generous floor-to-ceiling heights. Abland has created light, airy, usable space on each floor. A critical factor for the building is to limit heat build-up on the glass panels to ensure a comfortable working environment for all tenants. This will be achieved by using double glazing, and angling the building away from the harsh northern summer sun.

“We’re very excited about this project – it has been received with enthusiasm by the City of Cape Town and Capetonians in general,” says Cresswell. “The city’s stamp of approval and support has made this journey very encouraging for us. Our objective is to develop an iconic building that both Abland and Capetonians can be proud of. We look forward to welcoming our future tenants, and we’re confident that they will really enjoy this space.”

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developers

Property development on the rise As new business nodes spring up around the country, there is a demand for homes as well that cannot be ignored in the commercial property environment

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Words by Gaye de Villiers

Gauteng This province remains the centre of business and commerce for southern Africa. It therefore continues to act as a magnet for people from around the country, the African continent and the world seeking economic opportunity in the highly competitive Gauteng region, which accounts for almost a quarter of South Africa’s population and generates 35% of the nation’s national economic output.

The MEC for the Gauteng Department of Infrastructure Jacob Mamabolo has noted that infrastructure investment in Gauteng has been prioritised, and translated into an average annual growth rate in infrastructure spend of 20,7% between 2013 and 2016, which he says was the fastest growth rate for any province in the country.

There has again been rapid growth across a number of centres in the province this year, and considerable investments are being made by the private sector in numerous retail, commercial and residential initiatives, with local government supporting these developments with infrastructure projects.

New businesses and office headquarters are constantly springing up along the N1 freeway between Johannesburg and Pretoria. This is part of a process that’s seeing Johannesburg and Pretoria merging into one vast mega-city, the so-called “Jo-Toria”, with a population of more that 10-million projected by 2030.

These trends demonstrate the high degree of confidence that investors have in this region, which includes Sandton, Morningside, Rosebank, Fourways, Midrand, Pretoria East and a number of others. The growth of these centres has generally had positive implications for the residential property markets in the region.

Gauteng’s residential areas represent a broad region with a total population currently exceeding 13-million and highly complex local property market dynamics. In general, the residential property market in Gauteng is showing a fair degree of resilience, despite tough national economic conditions.

While the property markets have tapered off in certain areas, other suburbs remain very active. These include Sandton, Rosebank,

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Hyde Park, Sandhurst, the “Parks”, Houghton, Northcliff, Randburg, Bryanston, Fourways, Midrand and Soweto.

off a relatively low base compared with the other major metros, so there are many options in various suburbs

Port Elizabeth

Western Cape

In Port Elizabeth, the traditional suburbs of Mill Park, Walmer and Summerstrand continue to see good activity. In all three suburbs, homes under R3-million seem to be moving quite well, although this is a price trend evident across the city. Summerstrand remains an attractive area for student accommodation, with most investors looking in the price range from R2-million to R2,5million. An average home in Walmer and Mill Park will offer a decent position, four bedrooms, two to three bathrooms and a double garage. Many Walmer homes offer flatlets as well, which are popular for cohabiting or Airbnb.

Developments continue to thrive, and at any given time there are in excess of 20 to 30 developments targeting mainly the subR1-million price range. Popular areas are Salisbury Park, Fairview and Parsons Vlei, which offer good returns for developers. Of interest is that developers in these areas are sectionalising plots, allowing them to build two units on an erf – for example, two dwellings of approximately R130m2 on a 600m2 plot.

The need for student accommodation has also seen the development of a couple of five- to six-storey blocks catering exclusively for students at Nelson Mandela University.

Some developers have also seen a gap in the market for smaller, more affordable retirement accommodation, around the R500 000 to R600 000 price range.

Estate (or townhouse) living – both sectional title and freehold – remains popular, with the benefit of lock-up-and-go living, and little or no maintenance costs. “Townhouse” living achieves good prices and in many cases outperforms traditional freehold homes.

Coega continues to grow, creating jobs for the local population. Within the previously mentioned developments there is ample stock in the R700 000 to R1-million price bracket (less so in the sub-R700 000 price band), but there are still opportunities for first-time buyers. Port Elizabeth is still coming

Taking a closer look at the Western Cape, it’s easy to understand why Cape Town is such a popular choice with investors and buyers, as well as corporates. While other regions have seen a levelling off in houseprice growth, the niche market of the naturally space-constrained Atlantic Seaboard continues to yield considerably higher property prices, recording the strongest house-price growth in the second quarter of the year at 29,9%, followed closely by the City Bowl with 21,1%.

The development boom continues in the city centre, and the Central City Improvement District puts the property valuation, once the

developers current projects under way are completed in 2018, at R30-billion.

An example of the way urban planning has evolved is the Waterfront Marina Estate, which is within walking distance to the V&A Waterfront and the city centre. This marina, with state-of-the-art security and access control, is a residential estate in one of the most desired locations in Cape Town. The offering in this part of the city centre is constantly improving with the construction and near-completion of two new districts – the Silo and Roggebaai – both bringing a number of new five-star hotels, head offices of major corporates and top-end motor dealerships. Waterway House, near the one entrance to the village, provides accommodation to employees of top-end South African companies, with a coffee shop and sports-car dealership inside the building.

The continent’s large biggest contemporary art museum – the Zeitz Museum of Contemporary Art Africa – is situated in the Silo area. Also nearby is the newly built Netcare Christiaan Barnard Memorial Hospital, which offers excellent medical facilities.

The Waterfront development was a precursor for other contemporary mixed-use developments such as the Harbour Arch

development, which will be Cape Town’s first and largest mixed-use development in the CBD. The 5,8-hectare development will have 200 000m2 of usable space and will include seven individual tower blocks. The precinct, developed by the Amdec Group using the same principles that were applied at Melrose Arch in Gauteng, will consist of open landscaped spaces, restaurants, cocktail bars, hotels, gyms, office space and a selection of residential apartments. Key features of homes in this development include modern styling and excellent spatial design, 24/7 access control, fibre-to-the-home, water-saving devices and rainwater harvesting options, and low-energy LED lighting.

The Southern Suburbs show significant growth, with one of the top sales being a Rondebosch home for R15,5-million. The South Peninsula has also shown significant house-price escalation, particularly in suburbs such as Kalk Bay, St James and Noordhoek.

Three properties on Boyes Drive and other prime areas were on the market for between R11,5-million and R12,5-million.

Property prices in St James and Kalk Bay have increased, with entry-level apartments selling for upwards of R3-million. Homes with stunning views fetch premium prices,

and two were sold along Boyes Drive for R10,5-million and R11,37-million respectively.

Fish Hoek is proving popular with younger buyers wanting to benefit from the schools in the area, and the traditional retiree market.

The Milnerton-Blouberg-Melkbosstrand area along the Western Seaboard was among the top-five performing regions in the Cape, with a house-price inflation rate of 14% for the second quarter, marginally ahead of the City of Cape Town’s 13,8%. It should be noted that this comes off a lower base point than the other regions, but bodes well for this property market in one of the city’s fastest-growing residential areas.

Mitchell’s Plain and Eastern Suburbs While there have been fewer unit sales in this region, higher values are being achieved, with a 12% house-price growth in all areas. Many of the buyers are first-time home-owners, as well as those looking to downscale. A new record price was set for a residential property in Grassy Park, at R1,9-million. Sectional title units are also selling well, as the age profile of buyers here becomes younger. A unit in the Olive Grove complex sold for R750 000.

Boland and the Overberg It has been a bumper year for the Boland and the Overberg, with 20% of properties in this region selling within a month of being on the market. The region has continued to exceed its budget with solid sales across the board.

The strongest activity has been in the R1million to R3-million price range.

Semigration remains a significant driver of the property market in this region, with Gauteng and other buyers looking to either relocate to the Cape or wanting to secure coastal properties with a view to retirement.

With stock in high demand in Boland and the Overberg, we are also seeing a significant increase in vacant land sales.

Younger buyers are looking to areas such as Hermanus because of accelerated economic activity. The construction of the new Whale Coast Mall will generate hundreds of jobs, and Hermanus and the surrounding areas already offer excellent school opportunities. With more people being able to work from home, towns such as Hermanus (once considered holiday destinations) are seeing an influx of permanent residents.

Prices along the Whale Coast, which includes Somerset West, Strand and Gordon’s Bay, have risen by 12,8%. Lightstone data indicates that coastal property markets – defined as homes within 500 metres of the coastline – SOUTH AFRICAN PROPERTY REVIEW

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developers are outperforming their inland counterparts.

Coastal property prices have risen by an average 6,3%, while non-coastal property prices have shown a 3,9% increase. There’s also been significant investor interest in upmarket estates in the area. Pam Golding Properties has the exclusive mandate for the Benguela Cove Lagoon Wine Estate, where homes are listed for up to R17-million. Pam Golding Properties has sold more than R30million worth of property at Benguela Cove Lagoon Wine Estate over the past 18 months.

A home at the Arabella Country Estate recently sold for R8,2-million – one of the highest sales there in the past five years.

Country towns such as Riebeek Kasteel and Stanford perform well as buyers are attracted to the quaint country lifestyle.

Paarl, Franschhoek and Stellenbosch are the fastest-growing areas for high-net-worth individuals, according to publication New World Wealth, with numbers rising by 48% during the review period (2006 to 2016).

Lifestyle estates such as Val de Vie, Pearl Valley and Boschenmeer close to Paarl are highly sought-after, with local buyers and buyers from other provinces wanting a secure lifestyle in the Winelands. Val de Vie has been named by New World Wealth as the top residential estate in the country for the third consecutive year.

The agricultural property market cannot be overlooked – it has been recorded that three commercial wine farms were sold for more than R100-million each. One of the farms, at 223 hectares, is among the largest in the Stellenbosch region.

Buyers from Cape Town, other South African provinces, as well as Zimbabwe, the US and Germany are actively looking at agricultural properties and lifestyle farms.

We are seeing commercial farmers expand and diversify their portfolios by buying in areas where there are sufficient water rights. Lifestyle farms are particularly popular with high-net-worth investors.

The demand for property in the Northern Suburbs has been high, and secure estate living remains popular in suburbs such as Durbanville, Paarl and Stellenbosch. Two properties sold in the security estates of Welgedacht for R9-million. A record price of R8-million was achieved for a property in the Durbanville suburb of Durbell. There’s an emerging super-luxury property market in Plattekloof, where a home was listed for R21,5-million. The Northern Suburbs offer value for money, with close proximity to Cape Town and access to excellent schools, medical facilities and an array of outdoor activities.

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With the Tygervalley Waterfront becoming an established economic hub, an investment in properties in the surrounding area offers a sound return.

New developments Cape Town’s multibillion-rand property market is showing no signs of slowing, and there has been more than R16-billion worth of investments in 63 developments in the area since 2012. The completion of projects currently under way or in the planning phase in 2018 will push property valuations in the city to over R30-billion, according to the Central City Improvement District. This development boom has bolstered property prices, which in the CBD have increased by 15% a year. The rise in mixed-use developments will go a long way towards ensuring a 24/7 central city. With limited land availability, increasing congestion and rising home-ownership costs, there is growing demand for sectional title properties as people are willing to sacrifice space for a more convenient location. Mixed-use developments that facilitate a lock-up-andgo lifestyle are also growing in popularity – for professionals who travel frequently, for retirees who travel overseas to visit family and because of the security provided by such developments.

This year has seen the marketing of several new developments, including 117 on Strand and 16 on Bree in the CBD, as well as The Glengariff and 21 on Battery in Sea Point.

There was unprecedented enthusiasm for apartments in 16 on Bree, which when completed in early 2020 will be Cape Town’s

tallest residential building. This is partly because of the development’s enviable location on Bree Street, with its array of eateries and nightspots.

With the completion of the Zeitz Museum of Contemporary Art Africa, the Waterfront’s Silo District has become Cape Town’s newest creative hub and one of the city’s most sought-after addresses. Pam Golding Properties recently sold a luxury apartment in No 3 Silo that was listed for R8,49-million. These luxury apartments enjoy exceptional security, access to communal entertainment areas, and the convenience of being part of the V&A Waterfront and within walking distance of the city centre. Two apartments in the same development sold recently for R12million each. The Silo district includes the Silo Hotel, corporate offices, a Virgin Active Classic Health Club, the new-concept Radisson Red Hotel, and a variety of residential, retail and commercial offerings.

In the Southern Suburbs, there’s been considerable interest in the trendy Obscourt residential development. The first phase, which is nearing completion, is selling rapidly, and occupation is scheduled for early 2018. Conveniently located one block below Observatory’s Main Road, the stylish apartments are particularly suitable for young professionals, academics working or studying at the many tertiary institutions in Cape Town, medical personnel, as well as students who commute to Groote Schuur, Mowbray Maternity and Red Cross Hospitals, as well as Vincent Pallotti and the UCT Medical School.

business CSI

Rabie CSI helps create a beacon of hope Property Review spoke to Maggie Rowley, Marketing and Communications Manager at Rabie, about Sinenjongo High School, and how Rabie’s sustainable investment in the school has turned around the attitude of teachers, parents, learners and the residents of Joe Slovo Park, and inspired the community Interview by Mark Pettipher

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aggie Rowley, the Marketing and Communications Manager for Rabie at Century City in Cape Town, joined the company in 2004. She describes how the Sinenjongo High School CSI project began.

“In 2007, our committee, which assesses projects in respect of where to apportion funds, reviewed what we were doing in terms of CSI,” she says. “It amounted to bits and pieces here and there, with nothing truly sustainable that we could be thoroughly engaged in. We were giving money away without staying with a project to see how it developed, so we decided we needed to find one major corporate investment project in which we could make a sustainable difference.

While we would continue supporting smaller charities and NGOs that needed our help, it was decided to direct the bulk of our funds to one project.

“At that time, we were approached by the Milnerton Rotary Club, who told us of a local school in nearby Joe Slovo Park township, housed in containers and in desperate need of assistance. They had no sports field, no school hall, no staff room; the teachers sat in their cars to prepare lessons. Existing facilities

were very rudimentary: the containers were icy-cold in winter and stiflingly hot in summer; the principal had an office about the size of my desk (as did her secretary), with no room for the photocopy machine; the ablution facility consisted of four toilets shared by 700 students and teachers. The school was

surrounded by shacks, which reached right up to the school fence. It was very difficult for everyone. Some classes, such as Grade 8, had as many as 50 to 60 children, yet the school was retaining on average only about 30 learners as matriculants. The rest fell out, and the matric pass rate was an abysmally low 27%.

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business CSI

“The school told us that a science laboratory was at the top of their wish list, because up until then the learners had been taught science from the textbook only, without facilities for experiments or any other practical science activities. Thus, in a joint venture with Old Mutual, the first thing we provided was a science laboratory.

“At the end of the first year, we visited the school to do an audit for the science lab with the intention to renew anything in need of replacement (such as equipment and chemicals), and we were horrified to find everything still in its original bubble wrapping.

The microscopes were unused; the slides still unwrapped. It came to light that the science teacher didn’t know how to use the equipment.

“At this point we realised the level of some of the teaching at the school was alarming; as an underlying problem, it needed to be addressed. The educators had themselves been educated in township schools by teachers who, in many instances, had been underqualified, and many had no experience of what was required to create a centre of excellence. We concluded that capex alone would not make

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a sustainable difference. What was required was a multipronged approach – starting with improving the standard of teaching.

“After an intense search, we found a brilliant science and maths teacher, Pam Robertson. With multiple degrees in maths and science under her belt, all from reputable universities, she has only ever wanted to teach at underprivileged schools. When we found her, she was travelling from school to school in KwaZulu-Natal, upskilling maths and science teachers. She has since proved to be dedicated to the learners and to the school – a completely committed teacher. We initially appointed her to teach Grades 11 and 12, but despite a sterling effort it was too little, too late. Grade 11 and 12 learners had huge gaps in their knowledge, and did not understand basic fraction rules, let alone getting to grips with algebra and trigonometry.

“We realised it would be wise to start intervening from Grade 8. The Grade 9 numeracy and literacy tests had an extremely low pass rate of seven percent. Something is amiss in the primary-school system because all children entering Sinenjongo High School

from primary school were weak academically.

We now employ five extra-maths and science teachers, and a part-time life-sciences teacher.

With 50 to 60 children per class in some cases, and all in need of extra attention, it was impossible for one teacher to cope. Our extra teachers were carefully selected for their topquality teaching and commitment. They have proved incredibly hard-working, always doing extramural things with the learners, such as teaching them chess, walking them up Table Mountain, providing additional tutoring, etc.

They are the ones providing an all-round education, and their passion is awesome.

“For many years, we also employed the services of St Mary’s Interactive Learning Education (SMILE), which significantly helped improve the standard of English among both educators and learners. Until then, many of the teachers were not conversant enough in English to have the confidence to teach at least part of the lesson in English, placing matriculants in a position of double jeopardy.

“In the project’s second year, we partnered with Chevron in a joint venture to fully equip a computer laboratory for the learners, put to good use when we introduced the CAMI programme. CAMI bridges the gap in teaching maths and science, and learners can use it with software in the computer lab, at their own pace. We were splitting the classes in half so one of our excellent teachers could take 25 students into the classroom and give the lesson, while another teacher would take the other 25 to the computer lab to upskill using CAMI. “The school has gone from strength to strength, and over the years the pass rate has improved phenomenally. Since our fourth year, we have consistently had a pass rate of more than 85% (one year as high as 97%) – but for the school and for us, the cherry on top has been the huge decrease in the dropout rate.

This year we are proud to say we have 150 matriculants. It is our single most important achievement – because without a matric they are lost, and simply don’t stand a chance of breaking out of the cycle of poverty.

“A large percentage of our matriculants go on to tertiary education, including universities, and this number increases every year. This year we have a really strong group, and we hope for a pass rate of more than 90%. There are five very bright, hard-working students in this group from whom we are expecting “A” aggregates, which will be a fantastic achievement. Among the undergraduates, several study engineering, one is in medical school, one is doing a bioscience honours degree at UCT, and another has done actuarial science. Some are sponsored in a personal capacity; others get university

business CSI bursaries. These statistics are exciting – the project is making a sustainable difference.

“When we first got involved, the community didn’t seem to care. The truancy rate was very high, and some of the teachers didn’t come to school regularly – and when they did, they were not always dressed appropriately and took no pride in the school. There were no sports facilities for the community, and the parents did not seem interested or involved. Over the past 10 years this has changed radically: the school has become a beacon of hope in an otherwise derelict landscape. The changes for the better are the result of a huge team effort from the principal, the school governing body, the teachers and the learners. The school is extremely fortunate to have an exceptionally committed principal, Khuleswa Nopote, who has very strong leadership skills.

“We are a sponsor and a partner to the school. As such, we are often their first port of call when they have a problem, and we help where we can to sort out anything and everything – from visas for some teachers, to boreholes and internet connectivity. It is not just about giving money; it is also about giving time, energy, skills and commitment.

“We didn’t build the school ourselves, but for many years we put a great deal of pressure on the Department of Education – we met with them several times, informed them of our activities, reminded them continually that the container school was bursting at the seams, and generally badgered them for proper facilities.

During that time, we negotiated with Old Mutual to sell a site they had in Marconi Beam industrial park just down the road from the container school to the Department of Education, who finally built a beautiful school.

This year we sat at the maiden valedictory of the new school, and it was an emotional affair.

The matriculants were there, as were their

parents, uncles and aunts, grandparents and siblings. Every time a learner is called out to receive a prize, the whole family goes up with the learner – they all have their photographs taken, with everyone present joining in the celebration, ululating and dancing.

“Prior to the ceremony, the matriculants, led by a marching band, snaked from the school through the township wearing their badges of honour – academic gowns and mortar boards. Members of the community cheered them on – it was a major community celebration. The matric dance is also a community celebration, when a red carpet is rolled out and, again, the whole community comes to watch and admire the outfits. Some even sit on the roofs of the houses to catch a glimpse. Their pride in the school is wonderful, and this is reflected in the school results.

“The facilities for all sorts of creative activities are now in place: the sound system in the hall, the stage, the up-and-running

chess club, the school choir, the dance troupe.

It’s worth noting that the more successful the school becomes, the more the teachers buy into the hard-work ethic, and the more their commitment grows. Many former learners who didn’t have the bricks-and-mortar school are still proud of it; they return during school holidays to give mentoring and tutoring to the younger learners, and ‘pay back’ for the benefits they remember.

“Education is the key to breaking the cycle of poverty. Without it, you have little or no chance. But the negative legacy of apartheid education is huge, and the government alone can’t break this. Business needs to get involved with underprivileged schools if there is going to be a really sustainable difference.

“In terms of financial value, the cost to Rabie and associates is about R2-million a year – but in the grander scheme of things, that is a drop in the ocean for large corporates.

Being a part of the turnaround at Sinenjongo High School is definitely the most rewarding thing I have ever done. There’s nothing quite like feeling that you have helped to make a difference in so many lives.”

As the school’s requirements are bigger than Rabie alone can finance, an independent trust has been created.

The Marconi Beam Schools Trust has PBO status and is able to issue Section 18A certificates. Anyone wishing to make a contribution to the trust can do so at: The Marconi Beam Schools Trust Absa Bank Account number 40-7597-2591 Branch code 632005 PBO No 930033635 SOUTH AFRICAN PROPERTY REVIEW

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auctioneers

A hotline to success: High Street Auctions

Property Review visited High Street Auctions to speak to Director, founding partner and Lead Auctioneer Joff van eenen and Joint anaging irector and founding partner James all about their high profile success in virtual, multi-property auctions – and how, as industry leaders, they reach out to buyers and sellers around the world Interview by Mark Pettipher Written by Marguerite Lithgow

Joff van Reenen, Director, founding partner and Lead Auctioneer

“W

e are the country’s first digital auction company, and 99% of what we do is online in terms of marketing and advertising – although that one percent that we do live on the auction floor is also incredibly important. We hold live, virtual auctions,” explains Joff van Reenen, Director and Lead Auctioneer at High Street Auctions (HSA). “Technology allows us to work from a central point in Johannesburg and sell a Cape Town property to a buyer in New York. All our auctions are streamed in real time on High Street TV, so we don’t have to be on site to sell real estate – and nor do our buyers.”

Recent record-breakers The proof is in the pudding: HSA currently holds the records for the highest auction prices ever achieved on both commercial and residential properties in South Africa – and both properties were bought via telephonic bids on the day.

“The two South African records are the Kyalami Grand Prix race track, which sold for R205-million in less than 120 seconds; and more recently a villa at the top of Clifton in Cape Town, which was knocked down for R96million. I had not previously met the bidders at any stage. Technically, as far as we as the auctioneers are concerned, they were online.

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“It’s a matter of reputation, solid management experience and good governance. When our customers are comfortable and trust us enough to transact remotely, you can imagine how this increases our scope. Instead of just the city or the country, we now have people all over the world considering whether they should buy property in South Africa via a live auction.

Two or three months ago, somebody in New York bid for a property in Germiston, which he then bought. What, you might think, does somebody in New York know about a property in Germiston? Apparently quite a lot – and certainly enough to make a sound investment.”

Much of that is down to HSA’s thorough pre-auction “homework”, explains Joint Managing Director James Dall. “Bidders have a thorough understanding of the lots for sale because we do extensive due diligence and prepare investor packs that are available at Highstreetauctions.com for download. Due diligence is a two-way street, and bidders should always do their own investigation of a property before an auction – but we prepare an extensive amount of information and do everything humanly possible to ensure its veracity.

Investor packs include information such as erf numbers, numerous photographs, current zoning and particulars of rezoning that might be pertinent, a description of the area in which the property is located, and – where applicable – details such as projected annual income and tenant leases.”

Dall says South Africa in its entirety is currently a buyer’s market, but the auction industry is to some extent immune to general market fluctuations because property funds and corporates (which make up the bulk of HSA’s client base) are continuously adjusting their asset portfolios. “We are still getting a very good response, and I think it is like that with any big, well-branded, credible corporate,” he says. “If you have a good

reputation and a good following, you’ll get the stock regardless of the economic climate.

This month alone, in the space of 23 days, we are doing nearly a hundred properties, which we anticipate will come to just over a billion rand. This is almost unheard of – and it is good stock. We have found that where you get good stock, you get good buyers.”

“I think it is relative,” Van Reenen adds.

“When times are tough, people sell; when times are good, people buy. From our perspective, it’s a win-win situation. If you have a good record and you’re trusted in the marketplace, you’re more likely to achieve the prices for your seller.

“Real estate auctions are certainly not the easiest way to sell property. On the contrary: they are extremely difficult! You must have an exceptionally professional team backing you and a good brain for what you are doing to make it happen, which is why reputation and track record are so important to attract the right stock and the right bidders.

“The properties we sell are in South Africa, with occasional exceptions in countries such as Botswana, and we get a lot of international enquiries for them. For example, most of the enquiries for the Clifton residence came from outside our borders – although in the end a local person bought it.”

The real strength of an auction Van Reenen says the real strength of an auction is that it establishes the true market value of a property. In a specific market such as Cape Town, where residences are hard to come by, an auction is a particularly apt way to sell a property – which is a prime reason why auctions in specific markets are becoming more acceptable.

“As we say to our clients, ‘How do you sell a Picasso painting? You don’t. You auction it.’ There is no way you could ever ascertain the value of that painting unless you put it on an open, transparent, free and fair, willing-

auctioneers buyer-willing-seller, public-market platform.

When we have competitive bidding in a roomful of people, they will determine the market value of the assets.

“I would go as far as to say that auctioneers not only create the market, but also maintain it. Who would have known that somebody would pay R205-million for a race track? Noone had any idea. A pragmatic answer might base the valuation on the square metres, the hectares and the zoning, and work out the bulk, the coverage and the height, maybe even considering the option of ripping up the track. Such calculations could not account for the unknown buying power that the auction revealed. The meaningful questions of the day were, ‘What would happen if a petrolhead were to buy it? If he bids on it purely for racing purposes, is it worth more?’ We discovered that it was worth more because he was bidding with a far bigger plan: to bring the Grand Prix back, which I believe he is now a step closer to doing.”

Van Reenen says auctioneers make the market because they are a true reflection of it. “If someone is prepared to pay R10 for something, and no-one else will, then it is worth R10. You might prefer to sell it on Gumtree and wait a month and take 200 phone calls, but we will sell it for you with lightning speed and get the same result.”

“Nowadays, if you can’t do something online or with an app, no-one does it, and the Americans are probably leading the way with eBay,” adds Dall. “Incredibly, they have about 25-million to 30-million online auctions a day.

But there will always be a place for an expert, professional, licensed auctioneer – he is the one who, on that day, with his entire team behind him, holds it all together. Without the auctioneer’s team behind him, the auction will not work. You can compare it to the relationship between a conductor and the orchestra: without the orchestra, the conductor cannot produce a tune; likewise, the orchestra without the conductor will not play the tune!

“Our team has between 50 and 60 members, and we are purely performancebased. Each team member counts. It’s true in our world that if you fail to plan, you plan to fail. A huge amount of the groundwork is a combination of back-end processing and admin: the planning and processing of properties, mountains of paperwork, marketing. We place tremendous emphasis on pre-auction marketing. We must be proactive, we must find the buyers and sell the properties to them. It’s not just about placing an ad and waiting for the phone to ring. The most important part

James Dall, Joint Managing Director and founding partner

Dall says South Africa in its entirety is currently a buyer’s market, but the auction industry is to some extent immune to general market fluctuations because property funds and corporates (which make up the bulk of HSA’s client base) are continuously adjusting their asset portfolios.

“We are still getting a very good response, and I think it is like that with any big, well-branded, credible corporate” of the process is the marketing, and the interaction with the buyers beforehand.

That said, if you don’t get the admin and the paperwork right, you can forget the auction – and forget the quality of your property asset, because it won’t sell. We work through a very fast cycle of four to six weeks; then, every month, we push the reset button and do it all again. We deal with an intense, accelerated process, and it’s vital to get all the little pieces right. As they say, ‘The devil is in the detail’.

“What an agent does in six months, we will do in 60 seconds – with many more buyers.

Everything, including due diligence, is predone and pre-approved – and there is no finance involved. It’s cash.”

According to Van Reenen, this explains why HSA does so much business with corporates and funds such as REITs. “We know, and they know, that we can turn a core non-performing asset into cash very, very quickly. There is nothing wrong with the traditional way of approaching a broker who negotiates. It has always been done that way, and many transactions will continue like that. What brokers can sell is not necessarily auction stock. For instance, find me a broker who could have sold the race track. It’s incredibly difficult – it’s the really unique properties that stand out and are different. From shopping malls to Clifton houses that have been on the market for two years, it is a very different method of selling real estate – and it works if it is done by a professional.

“High Street started seven years ago, literally over a cup of coffee. Between the five founding partners, we brought our own accumulated personal experience, acquired the hard way. As James says, ‘Being the best doesn’t come easy – you have to have stood the test of time.’ We probably have more than a hundred years of auction IP at High Street, which you simply cannot buy because it’s experience.

“We’ve also changed with the changing times. Ten years ago, 20% of our response came from online; today, it’s 100%. Our ad in Property Review is a unique exception – it’s a brand advertisement. Auction responses all come from our website, the Property24 and Private Property websites, and from our mailers. We send out emails to a massive database every Thursday morning, then watch for the responses – there is always a big spike the following day.

“According to Clem Sunter, ‘You must have the mind of a fox. You just have to keep sniffing it out.’ Five years ago, everyone thought it impossible to auction a property worth more than R100-million … but we got in a property worth more than R100million – a shopping mall. So we sat down, we figured out how to do it, and we did it.

We thought it probably wouldn’t be possible to do more than R130-million after that – and then we got Kyalami. Again, we figured out how we were going to do it, and it worked.

We did the same again last December in the Clifton residential market; now we know that anything can be achieved.

“There are no real problems, there are just challenges – and every challenge has a solution. We are always inclined to agree with Gary Player, who maintains that the harder you work the luckier you get!”

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funding

Progress for black property entrepreneurs Property Review follows up with Nigel Adriaanse, CEO of Enterprise Development Property Fund, who reveals some of the drive, foresight and determined planning necessary in the behind-the-scenes preparation for his integrated three-year training initiative launching in January 2018

“T

he pain that’s being experienced at present will soon give way to the enormous pleasure of seeing entrepreneurs being developed in a new epoch in South African property – and I expect the pain will be worth it.” These jocular words are spoken in earnest by Nigel Adriaanse, Chief Executive Officer of the Enterprise Development Property Fund (EDPF), in reference to a demanding nine months of gritty groundwork as he approaches the debut deadline of his intense three-year training initiative, packaged to empower an inaugural group of 45 black entrepreneurs. Hand-picked for their innate entrepreneurial talent and sense of initiative, they will receive training and

Nigel Adriaanse, CEO of Enterprise Development Property Fund

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The trainee entrepreneurs will spend their first 12 months in a learnership programme at a wellrespected property management company, where they will receive essential hands-on training.

The first year will concentrate on a skillsdevelopment learnership: the learners will enter the company like workers in an apprenticeship, receiving formal training in doing the actual work of property and facilities management

coaching designed to fast-forward them into a successful, self-fulfilling career of their choice in the property industry.

“The idea behind supporting these entrepreneurs is to get them from the point where they know little, if anything, about property ownership, to the point at which they have a property of their own, and are managing, running and tenanting it as an actual operational business,” he says. The packed three-year programme will ensure the entrepreneurs receive all the formal and hands-on training they need.

The trainee entrepreneurs will spend their first 12 months in a learnership programme at a well-respected property management company, where they will receive essential hands-on training. The first year will concentrate on a skillsdevelopment learnership: the learners will enter the company like workers in an apprenticeship, receiving formal training in doing the actual work of property and facilities management. Their starter orientation will include a week of training on, for example, an issue within facilities management, followed by a few weeks of practical experience to understand what the theory means and how it works, then a return to another week of training. This introduction is followed by the formal training programme.

The first year will teach them theoretical and practical aspects of property management, including how to handle a lease and negotiate it, the legal aspects to look out for within that lease, and how to engage with tenants once they have signed the lease. Other issues that will be

funding addressed will include dealing with tenants with respect to invoicing, dealing with rental and municipal charges, and collecting payment from tenants.

Trainees start their business when they move into the second year of training.

Depending on what suits their individual needs, they will go either to a Black Umbrellas incubator or to a Transnet Enterprise Development hub (if they don’t need the incubation side). Once placed, they will receive the support they need from EDPF in the form of a place from which to work, internet access, telephone facilities and so on – similar to a shared office space.

EDPF has access to eight Black Umbrellas incubators around the country, and Black Umbrellas has agreed to give EDPF five seats per site. There are no seats available in the Transnet Enterprise Development hubs, but the entrepreneurs can go there for advice, guidance, mentorship and support with regard to CIPC, SARS, etc. In Johannesburg, there are several bodies of support, such as the Gauteng Enterprise Propeller and the Small Enterprise Development Agency.

From the end of 2017, EDPF will have a base within the Transnet Enterprise Development hubs, where the staff on duty will be trained to provide support to the trainees. Two mentors will be allocated, one each to cover financial services and property management, to guide trainees through the process of getting their business registered, and to provide them with training and mentorship for all SARS issues in relation to VAT, personal tax, company tax, and how to monitor and engage with the taxman.

In their second year, trainees will have opportunities for property ownership. As an example, the Minister of Public Works recently announced that, through the Property Incubator Programme (PIP), he wants to set aside 25% of the current spend on rentals towards small black entrepreneurs. That constitutes a billion rand a year in rentals that national government alone will spend on small black entrepreneurs who come into the PIP. EDPF will leverage off the PIP in terms of opportunities.

Additionally, Transnet, as one of the biggest land and property owners in the country, could offer enormous opportunities to do some deals through PPPs – or property could potentially just be bought from Transnet or other

parastatals on tender, to enable the trainees to develop it. There are also many private acquisition opportunities with big corporates with whom EDPF could structure deals, such as those corporates wanting to get rid of a particular property because it no longer suits their portfolio, preferring to go into retail, or wanting to get rid of residential or commercial property or even a piece of land they own that is no longer wanted. This gives the trainee entrepreneurs an opportunity to engage with corporates.

Our presentations brought in about 150 applicants countrywide, and by midDecember we will have chosen 45 finalists,” says Adriaanse. “Our goal is to pinpoint applicants with an entrepreneurial spirit, and our assessment method consists of three stages.

The preliminary stage is the basic application form completed by all applicants, and sums up what they hope to do, where they come from, any history they have as an entrepreneur, and whether they have any entrepreneurial skill whatsoever Much has taken place recently in the world of vendor financing with big corporates, such as the example in which a big company offloaded its shares to a Black Woman Fund, which they vendor-financed.

EDPF will leverage on this type of deal to ensure its entrepreneurs get funding. It is helpful that some of the banks have come forward, saying they can put up 70% of the funding required, while a couple of private equity houses have said they will come up with the remaining 30%. This scenario is similar to the TUHF model, except EDPF will not be lending the money. TUHF is the financier, whereas in the immediate term EDPF will only provide a capitalsupport function. Creating its own fund is a future aim of EDPF – it hopes on the one

hand to be in a position to support black entrepreneurs at a hugely reduced interest rate, and on the other that, by taking a small stake, it can eventually become selfsustainable.

Over a 10-year period, EDPF aims to create 1 200 operational property businesses, with a fund of about R100billion supporting those entrepreneurs.

With the property sector value being more than R5,8-trillion, R100-billion is just a drop in the ocean – but it is a start.

Furthermore, EDPF does not wish to be the only organisation doing this, which is why it will partner with TUHF and others for support. The initial engagement has been handled by UCT, where Professor François Viruly’s programme is run jointly with TUHF. All the organisations aim to support one another’s entrepreneurs through their different programmes, having already begun to engage and collaborate towards this goal and work supportively with one another on behalf of black entrepreneurs rather than being in competition.

“Our presentations brought in about 150 applicants countrywide, and by midDecember we will have chosen 45 finalists,” says Adriaanse. “Our goal is to pinpoint applicants with an entrepreneurial spirit, and our assessment method consists of three stages. The preliminary stage is the basic application form completed by all applicants, and sums up what they hope to do, where they come from, any history they have as an entrepreneur, and whether they have any entrepreneurial skill whatsoever. At this first phase, all sorts of people from all walks of life are applying, so we are identifying who in that pool of applicants actually has an innate entrepreneurial skill, and the ability to benefit from our teaching. The applicant at this point has not necessarily identified property, but could be someone interested in becoming a property entrepreneur.

“Thanks to our partnership with LEAPco, the second phase takes place online using LEAPco’s biometric identity scan software programme. This entrepreneurship scan gives a 360-degree view of the applicant that sums up who the entrepreneur is, what the entrepreneur’s skills consist of, and whether the applicant actually has what it takes to become a property entrepreneur. This second, very intense phase generates a report that provides greater detail about the entrepreneur, where he or she comes from, his or her strengths and weaknesses, whether he or SOUTH AFRICAN PROPERTY REVIEW

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For the applicant, the second step is about going online and finding out how to participate in the scan.

This responsibility is regarded as part of the test.

If an applicant manages this, we know he or she is resourceful and determined – and to have got this far, he or she must have some electronic and research skills.

Thus the procedure itself helps to sift through the applicants. Just over 100 have already made it through to this point, and onto the third and final stage, which consists of an intensive interview process she is a leader, and whether he or she is entrepreneurial by nature. I believe an entrepreneur is born with the inclination, or has grown up in an entrepreneurial environment at home. I don’t believe you can teach someone to become an entrepreneur. It is certainly possible to teach business skills to someone with an entrepreneurial spirit, and to build on their entrepreneurial quality. Basically, we teach such a person business strategy, marketing strategy and the business management skills needed to run a business, and develop an entrepreneurial person into one being capable of successfully running a business.

“For the applicant, the second step is about going online and finding out how to participate in the scan. This responsibility is regarded as part of the test. If an applicant manages this, we know he or she is resourceful and determined – and to have got this far, he or she must have some electronic and research skills. Thus the procedure itself helps to sift through the applicants. Just over 100 have already made it through to this point, and onto the third and final stage, which consists of an intensive interview process. This interview

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will identify whether an applicant is suitable to be included in our threeyear programme. Those who pass are duly notified.

“As the programme progresses, we will increase the number of participants in line with our own increased resources. In the programme’s first year of operation, the intake is a maximum of 45; in its second year, we hope to take in 50 or 60 new first-years. In this way, the programme will grow until we have learners in all three years concurrently, with limit of 1 200 over 10 years.

“During the eventful first year, we identify the direction which each participant wishes to pursue in the property industry. We don’t dictate the direction, and we don’t intend to dictate that anyone must own property or specialise in residential property. It is already established that these learners are keen to be in the property industry, and have an eye and passion for property.

“After spending the first year in the learnership, they will be in a better position to choose a direction that naturally interests them, whether that’s residential, commercial, retail or industrial. With the experience and knowledge gained, some might have a change of heart and, having at the outset expressed a great interest in owning a property, might discover a much greater pull towards facilities management or property management. The mentorship in the first year will include guidance about such choices, and the natural inclination of an individual will influence how we steer their education to their own advantage through the second and third year.

“The programme moves next onto building their business of choice, providing assistance with developing and creating their business, registering with CIPC, getting SARS issues sorted out, B-BBEE certification, etc. If it is property they want to own, we identify opportunities (government, parastatal or private; residential, commercial, industrial or retail), and each business will be set up for its particular purpose. In all the opportunities we can offer, properties will be identified and matched to each entrepreneur’s specific business requirements.

“Our underpinning policy of empowering new entrepreneurs coming into the property sector means that many excellent and life-changing opportunities will be open to them, but will be offered with an emphasis on practical experience

and learning to be capable of doing everything for themselves. This is in line with how we view the implementation side of the PIP. We provide the opportunities, then show them how to raise the money required for the opportunity to be effective by instructing how to do the feasibility studies, how to assess and choose the right property, work out the aims, do the technical reports, etc. If it is an existing building, we instruct the entrepreneurs to do the due diligence, and check whether the leases are legitimate and whether they can actually extend those leases. Only once the project is ready and bankable will it be taken to our benefactors – then we can say, ‘Equity partners, here is the deal. Banks, here is the deal. What can you do for us?’

“All this takes place in an environment in which the entrepreneurs do everything.

There is no room for spoon-feeding – but there is room for learning by exploration and experience, including some failures, as part of the essential learning curve.”

This level of commitment to each individual is the reason behind EDPF’s relatively low intake of only 45 entrepreneurs. “We want to take our time and give each entrepreneur as much attention as they need to make their business successful, and to ensure it does not fail,” says Adriaanse. “It would be self-

This level of commitment to each individual is the reason behind EDPF’s relatively low intake of only 45 entrepreneurs. “We want to take our time and give each entrepreneur as much attention as they need to make their business successful, and to ensure it does not fail,” says Adriaanse.

“It would be self-defeating to be frantically overcommitted and unable to add value to each learner

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defeating to be frantically over-committed and unable to add value to each learner.”

While running their business in the second and third year, the entrepreneurs will concurrently attend a suite of UCT courses related to entrepreneurship. The first half of the year concentrates on a number of key functional business areas, and includes courses such as Entrepreneurial Strategies, Introduction to Corporate Finance, Business in Context, Marketing, and Business Computing. In the second half of the year the attention falls on additional areas related to enterprise management, which include Management Theory in Practice, the Politics of Enterprise, Effective People Practices & E-marketing, and Business Communication. In addition, the entrepreneurs will attend Viruly’s course in Property Investment, which is being tweaked for this purpose so it can be built into this environment.

“Because we have so many sites and training facilities spread across the country, we plan to, in conjunction with our partners Forj and VR Events, bring all the lectures in those two courses into full 360 virtual reality (VR),” says Adriaanse. “An entrepreneur will be able to put on the VR kit, plug it into the computer or a phone, and be transported into the lecture room at UCT, watch the lecture, and see all the students around him/her. As it is prerecorded, the VR user will not be able to engage directly, but will be able to hear and watch the lecturer and the students, follow the questions and answers, and stop and replay as the need arises. The lectures will be presented as Volume 1, Volume 2, etc, and must be watched in the right order to experience the full package.

“It is still a new technology, and very exciting because it’s going to open up new opportunities in the property sector, making it the kind of new technology to which we must expose our entrepreneurs. Our three-year programme is not restricted only to teaching new dogs old tricks – it is also very much about giving new dogs innovative tools so they can take the property sector into a new era. It’s about doing new things in new ways, and looking at property differently. Ten years down the line, hopefully we will have developed 1 200 entrepreneurs who will successfully be running their businesses, with about R100-billion worth of assets for which we raised funding.”

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residential property investment overview

South Africa’s residential property market holding up well At a recent media event, Dr Andrew Golding, CEO of Pam Golding Properties, talked about the residential property market, as well as the effects that new developments, city nodes and lifestyle trends are having on home-buyers

E

ven in the current economic environment, people need somewhere to live, so to a large degree it’s a case of “business as usual” – as long as there is a realistic sense of the fact that at the right price and in the right location there is huge pent-up demand. Underpinning the ongoing sustainability of the housing market is an ever-increasing demand for housing that spans all sectors and price bands, further fuelled by an emerging middle class that’s becoming increasingly prosperous across a broader base.

In order to unpack the current status of the residential property market and opportunities presented, it’s essential to understand its various nuances, and that there are many different segments within the market, geographically as well as according to price band and product type.

Perhaps most notably, a young generation of aspirant home-buyers and renters, semigrants and people relocating as normal life stages and events drive activity are all ensuring continued demand in the housing market. With building activity not yet fully recovered to pre-recession levels, this means that in many key hubs and prime locations, predominantly in the major metros, demand appears to be outstripping supply – particularly in the case of sectional title properties, which are more affordable to purchase, less expensive to maintain and better-suited to current lifestyles, offering security and lockup-and-go convenience.

In the property market, the age-old expression “knowledge is power” could not be more apt: it empowers both sellers and buyers to make sound, informed decisions.

Knowledge is key to making good property choices and investments, particularly in the current uncertain market.

Although the housing market has been slowing for several years as it faces economic headwinds of subdued growth and rising inflation and interest rates, the regional housing markets have shown extremely divergent performances in recent years, which highlights the need to research before

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Dr Andrew Golding, CEO of Pam Golding Properties

deciding which segment of the housing market to invest in.

Reviewing the latest Pam Golding Residential Property Index, there are some interesting trends evident in the marketplace.

For example, activity in the price band below R1-million remains very high. While national house price inflation has averaged at 4,25% during the year to date, it lost momentum in recent months, recording an increase of just 3,9% in Q3. In contrast, Cape house price inflation continues to gather momentum and outperform – even as the other major regions show slowing growth in house prices. In addition, the rebound in the Eastern Cape in late 2016 and early 2017 now appears to be losing momentum.

In the luxury market, we’ve seen a marked increase in the number of super-luxury properties (R10-million to R50-million) being sold over the past five years. In terms of luxury properties, generally regarded as those selling for R3-million upwards, sales remain steady.

Notably, Pam Golding Properties (PGP) set a new record price for Bedfordview in Johannesburg East, with a house sale of R30-million. In Port Elizabeth, PGP’s recent sale of a luxury 750m2 home for R16-million set a new record in the city’s residential property market.

Continued demand for residential property at the top end of the market is attributed to a number of trends, including a migration of high-net-worth buyers from north of the country to coastal areas, the investment market also investing in these areas, and a small increase in foreign buyers from Africa and other continents.

Looking at the major metropolitan areas, while house-price growth in Cape Town appears to be moderating, the strength the Western Cape PGP Index shows could be partly attributable to a reflection of strong growth in prices outside Cape Town. In Johannesburg, prices appear to be stabilising while Pretoria seems to be gaining momentum.

Even though the Durban metro is slowing sharply, it is important to note this does not reflect activity on the North Coast – a not-tobe-underestimated, strategic growth node.

PGP House Price Inflation (Jan-Sep 2017) average

<R1m

R1m - R2m

>R2m

South Africa*

4.25

6.31

2.92

0.66

Gauteng

2.88

4.64

1.65

-0.51

Western Cape

9.81

13.73

10.14

4.99

KwaZulu-Natal

4.41

7.51

2.77

1.60

*SA top price-band average of R2-3m and >R3m

residential property investment overview

New urbanism: growing role of cities and lifestyle trends A number of other factors appears to be contributing to the performance of city housing markets. Increasingly, growth is being driven by cities rather than countries.

A couple of major nodes are the engines of growth and are, to a large extent, in the hands of local authorities and private investors.

In Gauteng, areas such as Sandton, Rosebank and eastern Pretoria are also experiencing significant private investment in mixed-use developments and public infrastructure expenditure, as are various growth nodes on the KwaZulu-Natal North Coast.

Cape Town’s growing international profile suggests that the fortunes of the local economy and housing market may be driven more and more by global factors rather than purely local. According to the 2017 global Alpha Cities Index, which ranks cities on lifestyle appeal for global high-net-worth individuals, Cape Town was rated 37th and Johannesburg 46th.

Another factor that may determine which metro housing markets are set to outperform the national average (and even other metro markets) is indicated by recent research by global property giant and Pam Golding Properties’ strategic partner, Savills. This suggests that major global demographic and technological changes are creating the conditions for the emergence of the “Fifth Age of Cities”.

According to Savills, the evolution of cities appears to have turned full circle. Global cities appear to be entering an age where the purpose of a successful city is to attract people, not traffic; to facilitate the flow of ideas, not just money; and to nurture human capital, and not just financial capital. As an example, this may help explain why housing markets in areas in and around the Cape Town CBD continue to flourish.

In the tech industry, human interaction, chance collaborations and the free exchange of ideas all add significant value. As a consequence, skilled young professionals are moving away from the single-use environment

According to Savills, the evolution of cities appears to have turned full circle. Global cities appear to be entering an age where the purpose of a successful city is to attract people, not traffic; to facilitate the flow of ideas, not just money; and to nurture human capital, and not just financial capital. As an example, this may help explain why housing markets in areas in and around the Cape Town CBD continue to flourish of purpose-built, out-of-town business parks and towards high-quality urban environments.

Ultimately, the city itself becomes the source of attraction for skilled workers, rather than the corporate entity. This is especially true in the self-employed world of small start-ups and scale-ups, which form an important component of the tech industry.

Semigration According to the Pam Golding Properties Residential Review, there has been a notable rise in semigration from July 2011 to date, which continues to increase. As of January 2016, the Western Cape was the destination of choice for 33% of people moving, and

agents have reported substantial interest from Gauteng buyers. FNB Estate Agent Surveys show that for the two summer quarters of 2016/2017, the City of Cape Town had the lowest percentage of people selling in order to relocate to other parts of the country.

While it is unclear precisely what is driving the coastal outperformance, it could be attributable at least in part to the semigration trend. Semigration remains a key catalyst in house-price inflation in the Western Cape, and we continue to see people opting to move to Cape Town or estates around the country before considering other alternatives.

Many Gauteng buyers are drawn especially to the Overberg and Boland areas, looking for a country lifestyle that is still relatively close to Cape Town. Many of the Gauteng sales are to buyers wanting a second residence with the intention to settle here in the long term.

Furthermore, the rural towns in the vast Karoo, which spans several regions, continue to hold appeal for their country lifestyle and community engagement, and as an affordable option for retirees.

As Cape Town’s property prices soar, potential home-buyers have turned their attention to more affordable options along the entire Cape coastline, including the Garden Route and KwaZulu-Natal. Positively, we have also seen a sharp rise in vacant plot sales in many coastal towns, which may indicate that people want to secure a foothold in coastal markets for when they are ready to downsize or retire. A large proportion of these plots is in estates. More than ever, the critical assessment is around position.

Sea-facing homes or apartments may come at a price but usually retain their value.

PGP Index: regional house price inflation (yy%) 12 Western Cape

10 8

KwaZulu-Natal

6 South Africa 4

Gauteng

2 0

SOURCE: PGP Index

Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17

For some time, the coastal metros of Durban, Port Elizabeth (Nelson Mandela Bay) and Cape Town outperformed the interior metros by a considerable margin (according to data from residential property research company Lightstone). However, this appears to be over, with both Durban and Nelson Mandela Bay losing momentum. Soon it will only be Cape Town that’s outperforming relative to the national average.

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residential property investment overview In estates, the lifestyle proposition is important, as well as levies and access to amenities such as healthcare and airports. KwaZulu-Natal has the advantage of having less congestion, with several growth nodes in Umhlanga, Ballito and Sibaya. In addition, Durban is gaining momentum, with the Point area being a secure lifestyle precinct currently under development.

Semigration to the Garden Route is a result of good property offerings in price, together with lifestyle living. This has accelerated interest in the region from Knysna and Plettenberg Bay to George and Mossel Bay. The market has remained stable in the Eastern Cape, particularly in the hubs of industry in East London and Port Elizabeth. The latter especially has been developing as a metro of choice under its current management, and with Coega gaining traction.

A closer look at the Gauteng property market, however, reveals a much more nuanced picture of the national residential property market, including semigration. The province remains the centre of business and commerce for southern Africa, attracting people from around the country, Africa and the world, seeking economic opportunity.

Gauteng accounts for about a quarter of South Africa’s population and generates 35% of the nation’s national economic output.

The Royal Institution of Chartered Surveyors’ Africa Summit held in Sandton earlier this year discussed the urbanisation of African cities, particularly those of Gauteng, noting that the centres in the region continue to attract more than 300 000 people annually.

From this we can see that the picture of migrations within the country is a great deal more complex than just one of semigration to the Cape. A massive migration to Gauteng is also ongoing.

Sectional title vs freehold Given that only 12% of South Africa’s current housing stock of 6,45-million housing units is sectional title and yet demand for sectional title properties is growing rapidly, apartment prices are holding up well relative to freehold property prices.

We are seeing that house-price inflation in the sectional title housing segment is still outperforming full title, with the gap between the two widening. According to the Pam Golding Properties Index, the sectional title house price index rose by 5,27% year on year in the third quarter of 2017, while the full title house price index showed a slower 2,95% year-on-year growth rate in Q3. It is no surprise that the less-than-two-bedroom (i.e. smaller) segment of the sectional title market showed the strongest price inflation of 9,3% in the same period, exceeding the growth in prices of two- and three-bedroom units.

Nationally, price growth of small sectional title units (two bedrooms and smaller) is increasing faster than that of free-standing homes, with an inflation of just over 10% this year.

Developers are responding to the everincreasing demand for sectional title properties, with an increasing portion of all building plans passed being for apartments.

According to a recent FNB report, this appears to be a longer-term trend, which may see this sector ultimately become the larger of the two residential market segments in the coming years.

Sectional title properties under the transfer duty threshold of R900 000 are extremely popular because of the acquisition costs being more palatable to investors.

Alternatively, off-plan development purchases

Sectional Title % total building plans passed

70 60 50

In Cape Town, with limited land availability, increasing congestion and rising homeownership costs, there is growing demand for sectional title properties as people are willing to sacrifice space in return for a more convenient location and less of a commute to work.

According to Lightstone, sectional title accounts for 14,8% of the total value (R5trillion) of South Africa’s residential housing market. Freehold properties comprise 69,7% and estates 15,5% of the total value.

Estate living

40 30 20 10 0 Western Cape

KwaZulu-Natal

Gauteng 2000

42

through a reputable developer where transfer duty is not applicable are also quite popular with investors.

Sectional title developments close to Gautrain nodes are proving particularly popular, and many developments are now offering guaranteed rentals in order to attract investors. For example, One97 in Hyde Park, a small up-market development, offers a guaranteed rental return on some apartments.

In Park Central in Rosebank you can pay your deposit in instalments.

SOUTH AFRICAN PROPERTY REVIEW

2010

2017

South Africa

Lightstone has shown that, on average, estate properties are more valuable than non-estate properties – and while they tend to track the performance of the luxury market, the prices of homes on estates tend to be less volatile, and hence a better investment option during challenging times. While secure estates with golf courses remain popular, there is a shift towards estates offering additional amenities and facilities such as cycling and jogging tracks, play areas, equestrian facilities, outdoor

residential property investment overview gymnasiums and even crèches and schools, which makes them more inclusive of the entire family’s needs.

At least one in 10 South Africans chooses a gated community when making a residential property purchase, according to Lightstone.

There are currently nearly 7 000 estates with 355 000 active residential properties valued at R800-billion in South Africa. The Fourways region – the so-called “New North” – has for long been a popular choice among foreign buyers who show a strong preference for

This is becoming evident across regions and in various sectors of the market.

Economic pressures are seeing adult children moving back home as singles or young married couples, and occupying a cottage or a second dwelling on the parents’ property.

Rising costs and a shortage of affordable retirement accommodation, together with a concern for the care of ageing parents, is contributing to this trend. As a result, some households accommodate up to three family generations.

Mixed-use developments and new residential developments

homes in up-market golf and security estates such as Dainfern, Fourways Gardens and Steyn City. These offer convenience, a strong sense of community and a secure lifestyle.

Downscaling Following on from the above, the demand for well-located sectional title apartments with low maintenance and running costs is not limited to first-time buyers but also has high appeal for those downscaling because of changing lifestyle requirements. Faced with rising costs of rates and utilities as well as security concerns and the appeal of a lock-upand-go lifestyle, there is a growing trend towards downscaling to smaller (but not necessarily less-expensive) properties.

Multi-generational living Apart from downsizing or downscaling, multi-generational living or extended family living, with the associated benefits of pooled resources and cost efficiencies, is making increasing economic sense in today’s world, including South Africa.

There is a rise in mixed-use developments and the emergence of mixed-use suburbs. Mixeduse developments such as Melrose Arch in Johannesburg feature mainly in key urban growth nodes in metropolitan areas where you can live, work and play. Another example is Steyn City Lifestyle Resort in Gauteng.

They are growing in popularity for professionals who travel frequently and retirees who travel overseas to visit family, and because of the security provided by such developments. While mixed-use developments have historically attracted singles and couples who work in and around the area, this is slowly changing as families with children and/ or pets are seeking low maintenance, security and convenience, and as a result of the demand for larger three-bedroom apartments slowly rising.

Cape Town’s central city and City Bowl have been transformed over the last decade, with residential developments going up next to prime office space. The need for a livework-play lifestyle has grown in part because of the city’s increased traffic congestion. As the Central City Improvement District notes in its “Cape Town Central City Report 2016”, densification is becoming evident, giving rise to a vertical city on a commercial and residential front.

The sell-out success of the Yacht Club development near the city’s financial hub, V&A Waterfront and Foreshore, for example, underlines the growing demand for urban living options in the city centre and nearby precincts.

In Cape Town, Century City is one of the more established mixed-use precincts, where property values have doubled in the past five years. These mixed-use precincts have also led to an evolution of the concept of “estate living” such as Harbour Arch on Cape Town’s Foreshore. This massive new development will see about 2 000 residential units selling at an average price of R55 000/m2, which,

when viewed against prices of more than R500 000/m2 in New York, R440 000/m2 in London and R224 000/m2 in Sydney, still represents value for money.

According to New World Wealth, for a 200m2 to 400m2 apartment in a prime part of the city or town, regarding the average price in US$ per square metre in leading global cities, Monaco tops the list at US$48 000, followed by New York at US$37 000, London at US$35 000, St Tropez at US$33 000, St Jean Cap Ferrat at US$32 000 and Hong Kong at US$28 000. By comparison, in Africa, Clifton and Bantry Bay on Cape Town’s Atlantic Seaboard top the list at US$5 800, followed

by Grand Baie and Port Louis in Mauritius at US$5 000, Sandton in Johannesburg at US$2 800 and Umhlanga in KZN at US$2 200.

First-time buyers: healthier lending climate With about 60% of South African citizens under the age of 35 and many not yet homeowners, first-time buyers remain an important source of housing demand. Lightstone estimates that more than 90 000 new homeowners enter the housing market each year.

As young people flock to the major urban areas, metros are becoming both larger and younger.

With about 60% of South African citizens under the age of 35 and many not yet home-owners, first-time buyers remain an important source of housing demand. Lightstone estimates more than 90 000 new home-owners enter the housing market each year. As young people flock to the major urban areas, metros are becoming both larger and younger Given limited land availability in these areas and the issue of affordability, sectional title properties are popular among first-time buyers. Based on the FNB Estate Agent Survey, the less-than-two-bedroom sub-segment of the sectional title market is believed to be a key target for first-time buyers, and apart from low first-time buyer levels in Cape Town SOUTH AFRICAN PROPERTY REVIEW

43

residential property investment overview market for this because the year-round good weather is ideal. The Garden Route and the Cape’s sought-after Atlantic Seaboard are also popular.

There is a notable shortage of retirement accommodation catering for the older generation as well as those seeking such accommodation for their ageing parents, or those planning ahead by investing in their own retirement accommodation with a view to future retirement. According to our PGP Research Department, demand for the new style of retirement living is growing, with the percentage of South Africans over the age of 60 set to double to 15,4% of the total population by 2050. However, the market has not yet provided sufficient housing stock to meet these needs. There is also evidence that many people opt to retire in coastal areas – markets that are already experiencing increased demand from South Africans of all ages who are semigrating there from the inland provinces.

Rise of investment buyers – a result of a lack of affordability – the major regions of South Africa still enjoy reasonably strong first-time buyer levels. First-time buyers in the younger generation are most likely to rent property initially, and will seek

Major investment in the Cape Town CBD and Johannesburg’s New North is a serious commitment, which suggests massive confidence in the future of these areas. The Western Seaboard has been one of the fastest-growing areas in Cape Town for the past 15 to 20 years, with the emergence of suburbs such as Century City, Parklands and Sunningdale. The Century City, Royal Ascot and Big Bay developments are in secure environments and are about 80% developed 44

SOUTH AFRICAN PROPERTY REVIEW

to reduce municipal costs for services such as electricity and water as much as possible, so their tendency will be towards green, energy-saving homes.

There does not seem to have been any major deterioration in access to finance, with the effective approval rating drifting higher (albeit not back at pre-recession levels). The size of the average deposit drifted higher between late 2014 and late 2016 but has since stabilised at about 17,5%.

Gauteng is also where the most firsttime buyers purchase property. According to Lightstone, half of young buyers over the past 12 years have purchased residential property in Gauteng. Young people are attracted to the region by the economic opportunity it offers and the generally better salaries than elsewhere in South Africa. It should be noted that properties in Gauteng are more realistically priced, thereby making homes more accessible.

Retirement This is a growing market because people no longer wish to move into an “old-age home”: they would rather more into a retirement estate, possibly within a larger estate, where they can enjoy all the usual amenities as well as medical care. People are living considerably longer, so this is a new market – and this age category is also leading a far more active life, resulting in the change in demand for a type of lifestyle. KwaZulu-Natal is a prime

South Africans, including first-time buyers, are increasingly reflecting a growing desire to own their own homes, and to invest in property not only for a sound mediumto-long-term capital investment, but also to secure a steady rental income stream.

Residential property is being highlighted as an asset class worth considering in order to diversify and balance an investment portfolio, as well as having the potential to provide for an additional income stream with the underlying key benefit of providing for appreciation in property value. It is also favoured during times of economic and political uncertainty because it is a real, tangible asset, with the income stream potential particularly welcome.

Hot spots National hot spots for investor buyers include the Atlantic Seaboard in the Western Cape, which probably tops the list, having generated significant capital growth and rental income growth over the last few years and even recently set a new benchmark price of R200 000/m2; Umhlanga in KwaZulu-Natal as well as the secure estates along the North Coast; Fourways, which is currently enjoying major investment in infrastructure, and retail, commercial and residential development; and Rosebank, Sandton and surrounds, as well as the Midrand area, where a number of investors are enjoying rental returns that cover their monthly costs. There are exceptions, however, and in most cases the investor will need to

residential property investment overview cover a small shortfall for the initial period of the investment.

Key growth nodes include areas such as Century City (Northern Suburbs) and Claremont (Southern Suburbs) in Cape Town; Rosebank and Sandton Gate (green precinct) in Johannesburg; and Pretoria/ Menlyn Maine (New North) in Gauteng.

There is also growth in areas that are welllocated (along the new MyCiti bus routes or Gautrain routes), and that have a strong mixed-use focus or are self-sufficient in the green sense, thereby reducing their reliance on utilities (which are becoming more expensive).

Major investment in the Cape Town CBD and Johannesburg’s New North (Fourways) is a serious commitment, which suggests massive confidence in the future of these areas. The Western Seaboard has been one of the fastest-growing areas in Cape Town for the past 15 to 20 years, with the emergence of suburbs such as Century City, Parklands and Sunningdale. The Century City, Royal Ascot and Big Bay developments are in secure environments and are about 80% developed.

Distance between Johannesburg and Pretoria continues to shrink The cities of Johannesburg and Pretoria have developed outwards at a rapid pace, with many experts suggesting they will form a single “mega-city” with a population exceeding 10-million by 2030. In addition, centres such as Sandton, Rosebank, Fourways, Midrand, Pretoria East and a number of others are continuing to develop strongly,

demonstrating a high degree of confidence from investors.

Positively, 19 new Gautrain stations are planned, which will include Lanseria Airport, Cradle of Humankind and Soweto.

A Gautrain station is also on the cards for Fourways, which – based on the experience of Sandton and Rosebank – is likely to further stimulate the area.

With more than half a million students in southern Africa expected to need accommodation during their studies in the next five years, according to JLL, an investment management company specialising in real estate, properties near university towns such as Stellenbosch will continue to yield considerable investment opportunities.

There were close to 31 000 applications for Stellenbosch University last year, and only about 6 500 spaces in the university’s official residences The evolution of the Fourways area over the past decade has been nothing short of staggering and, given the plans that property development giants such as the Accelerate Property Fund have for the region, there is

now little doubt that we are seeing it evolve into a mini-city in the mould of the Sandton city centre.

Student accommodation Student accommodation in close proximity to universities and tertiary institutions is proving increasingly popular, including conversion of houses that are then let out per room, giving investors significantly greater returns compared to a single lease over the property.

There is a severe shortage of student housing in South Africa, a trend that is evident in many metros in prime global cities. In mid-2016 there was an estimated 216 000-bed shortage at our universities.

With more than half a million students in southern Africa expected to need accommodation during their studies in the next five years, according to JLL, an investment management company specialising in real estate, properties near university towns such as Stellenbosch will continue to yield considerable investment opportunities.

There were close to 31 000 applications for Stellenbosch University last year, and only about 6 500 spaces in the university’s official residences. A large portion of the remaining 25 000 students therefore had to find their own accommodation close to campus.

Activity in the sectional title market in Stellenbosch Central remains brisk. Premium properties include those located on the designated “Green Route”, which is patrolled by campus security for added peace of mind.

Flats in central blocks with excellent security, good-quality finishes and a mix of tenants – not only students – are highly sought-after.

Pam Golding Properties recently sold a 77m2 apartment in Andringa Walk for R4,4-million, or R57 000/m2.

Outlook for 2018 Three key trends that we believe will gather momentum next year are: ● Growing demand for sectional title properties for both lifestyle and economic reasons within the major growth nodes. ● Estate living, reflecting the realisation that it is easier to share facilities without the upkeep. As many estates go off-grid, they become more appealing, and many estates are including more sectional title properties to meet the demand of those no longer wanting freehold homes. ● Steady transition to more energyand water-efficient homes as South Africa retains its global lead in sustainable building practices.

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brokerage

Brokering property:

where knowledge and education count As a launching point, A A s ffice acancy eport shows as at that the national office vacancy rate as recorded by A A was , down bps on the uarter before and the asking rental growth has slowed, which is indicative of the current low growth environment and e cess supply in the market Compiled by Mark Pettipher

I

’m often asked what the differences are between a real estate agent, a broker and a realtor, so I turned to the SAPOA Committee to get the answer.

A real estate agent is a professional who has passed the required real estate classes and licensing exams. This is the starting point for most real estate professionals, and the agent title is the most encompassing.

A realtor is a real estate agent who is a member of a national association of realtors.

Realtors must abide by the association’s standards and code of ethics.

A real estate broker has continued their education and obtained a broker’s licence.

Brokers can work independently or employ other agents.

A broker can work on his own, must be registered with the Estate Agency Affairs Board (EAAB) and have valid fidelity fund certificates in order to sell property and earn commission.

An agent, if not registered as a principal, has to work under a registered broker. A real estate associate broker is an agent who works on a broker’s license. An associate broker works under a licensed broker and can share in profits beyond the usual agent commission.

According to the Draft Property Practitioners Bill as published in March 2017 in the Government Gazette, all agents, brokers, managing agents, etc are collectively referred to as property practitioners.

How do you become a real estate agent?

As prescribed by the EAAB, the ongoing professionalisation of the estate agency sector, which commenced on 15 July 2008, is aimed at setting the standard of training, prescribing

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mandatory internship and educational requirements for all estate agents already practising in the property industry, and to those wishing to join and practise as estate agents for the first time.

Education requirements for new intern estate agents/newcomers Regulation 2 of the Education Regulations that came into effect on 15 July 2008 states that a person who, as from the effective date, intends to become an estate agent: ● Must serve as an intern estate agent under the supervision of a principal estate agent or of a full-status estate agent who has continuously held a valid (compulsory) fidelity fund certificate issued by the EAAB for a period of not less than three years. A mentor-protégé relationship will, thus, be created. ● Must complete the prescribed compulsory internship period – a continuous period of 12 months from the date of the first issue to that person of an intern estate fidelity fund certificate by the EAAB. The compulsory internship is aimed at equipping the intern estate agent with relevant workplace learning required to operate successfully in the industry.

brokerage ● Must also keep a logbook (also referred to as a “portfolio of evidence”) reflecting the various estate agency functions and activities that have been undertaken and performed by the intern during the course of the internship period. ● Has to, within the 12-month internship period, complete the Further Education and Training Certificate (FETC): Real Estate (NQF 4), a qualification that’s intended to enhance the provision of entry-level service within the property and real estate professions and to provide the broad

The intern estate agents who have completed other recognised qualifications – including the old EAAB examination as stipulated on the EAAB’s approved equivalency matrix for FETC: Real Estate (NQF 4) – may, in the 12-month internship period, also approach the EAAB to request an exemption from completing the full qualification and complete an exemption process against the EAAB’s approved equivalency matrix for FETC: Real Estate (NQF 4) knowledge, skills and values needed in the property and real estate environment.

The intern estate agent may be certificated against the qualification after undergoing training through an accredited education provider approved by the EAAB. The intern estate agents who have completed other recognised qualifications – including the old EAAB examination as stipulated on the EAAB’s approved equivalency matrix for FETC: Real Estate (NQF 4) – may, in the 12-month internship period, also approach the EAAB to request an exemption from completing the full qualification and complete an exemption process against the EAAB’s approved equivalency matrix for FETC: Real Estate (NQF 4). They may be assisted in this process by an accredited education provider. Where the intern’s qualification does not fully meet the equivalency exemption process requirements, the intern may complete the qualification by way of Recognition of Prior Learning route, which will allow the interns who are bringing into the industry any relevant previous experience and learning an opportunity to be granted credits against the qualification and thus allowing them an opportunity to complete training on only those unit standards that were identified for gap training.

Intern estate agents are required to display their intern status on all marketing material and communications, including business cards, brochures and email signatures.

It is expected that, having served as an intern estate agent for a continuous period

of 12 months, the newcomer will attain a solid base of knowledge, skills and practical ability to be able to compete with estate agents who have already been active in the profession for some time. This new educational dispensation is carefully designed to ensure the theoretical knowledge acquired in the classroom and the practical experience gained in the workplace complement each other to provide a head start to success by introducing newcomers to the exciting new career that awaits them.

Registration and upgrading of intern estate agents to full-status estate agents Regulation 3 of the Education Regulations stipulates that a person who, as from the effective date of the Education Regulations (15 July 2008), intends to register as an estate agent with the EAAB must comply with the internship requirements referred to in Regulation 2 and explained in the last section.

The regulation relating to education requirements further stipulates that no person may be registered with the EAAB as a fullstatus estate agent unless that person has also successfully completed the Professional Designation Examination (PDE) for nonprincipal estate agents (commonly known as PDE 4), conducted by the EAAB. The prerequisite for admission to the PDE is the successful completion of the said qualification, or proof of being successfully granted exemption against the equivalency matrix.

Therefore, no person may, as from the effective date of the regulation, be issued with a full-status fidelity fund certificate unless such a person has fully complied with the educational requirements referred to above. Furthermore, all persons practising as estate agents or property brokers must be in possession of a valid fidelity fund certificate, issued by the EAAB, especially if they want to be able to claim commission.

The current office property scene The quarter ending September 2017 has seen vacancy rates improve across all office grades, with the biggest change in C-grade offices (a quarter-on-quarter improvement of 120bps), followed by Prime and B-grade offices, which both declined by 90bps quarter-on-quarter.

The national A-grade office vacancy rate went down by 10bps during the quarter.

According to the SAPOA Office Vacancy Report, 91% of current office development is taking place in 10 nodes, with Gauteng office nodes dominating the scene. Of these, Sandton continues to account for the bulk of development activity – which also accounts for 45% of national office development.

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brokerage As many of the countryâ&#x20AC;&#x2122;s large-scale projects are slated for completion in the next 12 to 18 months, national office developments are likely to gradually trend downwards, with overall office development slowing down. Given that the gross fixed capital formation by the business and financial services sector â&#x20AC;&#x201C; a key leading indicator for office occupancy â&#x20AC;&#x201C; remains negative at -1,9% year-on-year, there is a probability that the office vacancy rate could deteriorate further.

If business confidence remains negative, it stands to reason that industry decision-makers will maintain a selective approach to capital allocation, especially when it comes to expansion. A sustained improvement in the office vacancy rate relies on a strengthening macroeconomic environment, and this sector still faces a range of headwinds, including economic growth and job creation.

The asking rental growth has slowed further in the past year â&#x20AC;&#x201C; indicative of the current low-growth environment and an excess of supply in the market. Cape Town seems to be the exception to this trend.

Any future improvement to the vacancy rate and asking rental growth depends on the strengthening of underlying demand drivers, specifically financial and business services, employment growth and capital investment Regional office vacancy overview Q3 2017 â&#x2014;? â&#x2014;? â&#x2014;? â&#x2014;? â&#x2014;?

Nelson Mandela Bay: 6,5% City of Cape Town: 6,8% City of Johannesburg: 12,6% eThekwini Municipality: 11,7% City of Tshwane: 10,6%

Where are we in the office property cycle?

SAPOAâ&#x20AC;&#x2122;s Office Vacancy Report states that the aggregate vacancy rate has moved broadly sideways between 2011 and 2017, while the level of development activity has been trending steadily lower since reaching a peak in the fourth quarter of 2015. This places the current quarter roughly midway relative to its longterm history in terms of total vacancy rate and development as a percentage of existing stock.

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The asking rental growth has meanwhile slowed further in the past year â&#x20AC;&#x201C; indicative of the low-growth environment and an excess of supply in the market. Cape Town seems to be the exception to this trend. Any future improvement to the vacancy rate and asking rental growth depends on the strengthening of underlying demand drivers, specifically financial and business services, employment growth and capital investment.

Given the current trend of economic growth and structural growth constraints, it is becoming increasingly difficult to see the national office rate returning to mid-single digits within the next three years.

Is the economy affecting the brokerage market? â&#x20AC;&#x153;The economy is affecting us all,â&#x20AC;? says Marita Meyer, Principal Broker at Niche Properties. â&#x20AC;&#x153;But it depends on how you respond. If the economy is slow, you get more enquiries for smaller, more affordable spaces. Our bigger tenants, who are comfortable with their own profile and who can afford to go to A-grade and Premium-grade buildings, have planned ahead of time to do so. As a broker, you need to be on the ground and you need to be prepared to respond accordingly. Knowledge is crucial â&#x20AC;&#x201C; so if you have a good knowledge of the industry, you will not be affected too much.â&#x20AC;?

Who do you work with? â&#x20AC;&#x153;Most retail centres prefer not to use brokers, but landlords of offices and industrial premises do,â&#x20AC;? says Meyer. â&#x20AC;&#x153;In Pretoria, there is a large number of private landlords who have smaller portfolios or a couple of buildings; but Joâ&#x20AC;&#x2122;burg is home mostly to property fund owners such as Redefine, Growthpoint, Emira, Delta, Fortress and PIC, who control the commercial property market. As brokers, we need to keep a balance between working with the property funds and the private landlords to be able to offer a full spectrum of available space to prospective tenants. Most company head offices in South Africa are either in Cape Town or in Joâ&#x20AC;&#x2122;burg.

Pretoria may have subsidiary offices as well as government and diplomatic clients. We have to know the market and the landlords, and be in communication with the decision-makers. â&#x20AC;&#x153;When it comes to new developments, there are few vacancies. Developers/landlords are marketing aggressively ahead of completion of a project, which results in the securing of anchor tenants and leaves the remaining pockets of office space to be filled on completion. You may find that a tenant will move to a new building from an older building owned by the same landlord, in the same portfolio.

â&#x20AC;&#x153;As brokers, we all work on commission, so we need to have a comprehensive knowledge of the market.

We have to be tech-savvy, and we have to respond to clients promptly and professionally, using all the tools available to communicate to be able to keep closing deals.

A new person coming into the business needs to go through the necessary training channels, get qualified and become EAAB-certifiedâ&#x20AC;? â&#x20AC;&#x153;We have found that there are many C-grade inner-city buildings becoming vacant.

This is mostly due to accessibility and parking constraints â&#x20AC;&#x201C; we are being asked for premises that are close to transport nodes, highways or business centres, all of which are serviced by available public transport. â&#x20AC;&#x153;As brokers, we all work on commission, so we need to have a comprehensive knowledge of the market. We have to be tech-savvy, and we have to respond to clients promptly and professionally, using all the tools available to communicate to be able to keep closing deals in a changing economic landscape. A new person coming into the business needs to go through the necessary training channels, get qualified and become EAAB certified, and join the recognised respected associations â&#x20AC;&#x201C; such as SAPOA, which also offers relevant training and refresher courses for brokers.â&#x20AC;?

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Western Cape Breakfast Session SAPOA Western Cape Regional Council hosted a breakfast with a focus on “Respecting heritage while encouraging development”

FROM LEFT Noko Sekgobela from Growthpoint, Stephen Townsend from UCT, Andre van Graan from CPUT, SAPOA Western Cape Committee member Rob Kane, Casey Augoustidess from Melck Warehouse, and SAPOA Western Cape Regional Chairman Marlon Parring

Peter Golding

FROM LEFT Paula van Melsen, Christelle Wait and Astrid Gilwald

FROM LEFT Henri de Wet, Elbè Cooper and Brina Snyders

FROM LEFT Lauren Smith, Emma Cornelius and Angelique van Wyk

FROM LEFT Nikhail Munsamy, with Refqah and Imraan Ho-Yee

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he panel of experts included Steve Townsend of the University of Cape Town, Andre van Graan of the Cape Peninsula University of Technology, and Casey Augoustides of Melck Warehouse.

SAPOA Western Cape Committee Member Rob Kane served as the panel facilitator.

The breakfast session was sponsored

by Growthpoint Properties.

The breakfast was sponsored by

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East London Networking Evening SAPOA East London held a very successful networking event, hosted and sponsored

by Kempston Home Loans and Rodel Bridging Finance

FROM LEFT Wesley Norris, Scott Tarr, Bead Sparg, Mike Francis and Brett Bursey

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APOA East London Vice Chairman Grant Wheatley presented the welcome address, in which he thanked the sponsors for their valuable contribution to making the networking evening the largest ever hosted by the region. He also updated the guests about SAPOA and its activities, and made special mention of the fact that he as well as Chairman Johan Burger had finally been able to meet with the Executive Mayor of Buffalo City for the first time, after trying to set up this meeting for seven years. East London now awaits a date from the Executive Mayor’s office for a potential “Meet the Mayor” dinner early next year.

Guest speaker Andrew Church of Rodel Bridging Finance delivered an informative presentation about his company and its offerings. This was followed by a presentation by Alec Booth of Kempston Home Loans, who briefed guests on the group’s various initiatives.

Kempston Home Loans thanked SAPOA for the opportunity of hosting the event, which gave the company an excellent platform to network with SAPOA members and all the guests present.

Craig Tappan with Burger van Dyk

Michelle Rosenthal with Lisa Schewitz

Penny Lindstrom with Allan Moyce

Grant Wheatley with Alec Booth

The networking evening was sponsored by

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Port Elizabeth Breakfast Session SAPOA Port Elizabeth Regional Council hosted a breakfast session entitled â&#x20AC;&#x153;The gymnastics of residential developmentâ&#x20AC;?

FROM LEFT Gordon Barnard, Mark Bakker, Ilse Danev, Debbie Wintermeyer, Bruce Wilson and Clayton Johnson

Speaker Bruce Wilson (SVA International)

Johan Jansen van Rensburg

Rob Edelson

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Mark Bakker

Jacques Wessels

he guest speaker at the breakfast was Bruce Wilson, an associate and architect at SVA International. With extensive experience and knowledge of the economic and development case for private sector involvement in housing and human settlements, he discussed with the delegates the various residential development opportunities available within the current metro. These opportunities include social housing, community housing, student accommodation, sustainable settlements, integrated settlements and inner-city housing.

The breakfast was sponsored by

FROM LEFT Nic Kruger, Mike Palframan, Diane Jolly and Belynda Venter

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KwaZulu-Natal Networking Breakfast A solid downpour wasn’t going to prevent the KZN SAPOA members from converging on Mount Edgecombe Country Club to listen to well-known South African FNB economist John Loos’s property predictions for 2018 Words by Anne Schauffer

FROM LEFT SAPOA KZN Regional Chairman Edwin van Niekerk, Ian Wyles, Rainer Stenzhorn and Sam Daykin

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sumptuous breakfast preceded the slightly less digestible topic of “What to expect in the property sector in 2018”, sponsored by Rodel Bridging Finance. Networking is always the order of the KZN breakfasts, and judging by the solid buzz emanating from all, it was business as usual in the packed room. KZN SAPOA Chairman Edwin van Niekerk opened the event and welcomed all warmly, albeit cautiously, referring to Rodel’s complimentary pack of tissues at each place setting: “Will we be needing them during John’s talk?”

Sam Daykin of Rodel introduced the Rodel team, brand and a lively curveball: an auction.

A large framed photographic collage of South African sporting heroes was put up by Rodel, and auctioned by long-time professional auctioneer Ian Wyles. The funds raised were to go to a charitable wildlife sanctuary. The bidders were as entertaining as the auctioneer, and Wyles dropped the hammer on top bidder – and fellow auctioneer – Rainer Stenzhorn of In2Assets Property Specialists.

“We’re in the ‘super-cycle’ stagnation phase of the property cycle,” is how Loos described our current situation. Contrary to expectations, his predictions for 2018 were premised less on

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the permeating political noise, and more on history repeating itself – economic cycles, the considerable correction needed in all sectors of the property market, and the sectors of the market which shouldn’t be hardest hit, but he feels will be. Like retail: “What’s keeping me awake at night? Retail. We currently have a worried consumer, but not a weak consumer.

It’s always been retail best, office worst. But is it?

That’s historical, but is it true today?” In Loos’s opinion, retail has been buoyed by excessive spending at the expense of no saving, with retirees being a good example. “When the going gets tough, the tough go shopping,” he said.

“Our generation likes to spend.”But, he cautioned, a worried consumer starts to save. He didn’t lay his prediction totally at the consumers’ door, but touched on retail being expensive, and on online shopping. He felt smaller retail might hold up better than regionals.

He also spoke about stimuli for the economy: “When bond rates go down, we get relief, not stimulation. What we have in our favour at the moment is a very slow-moving Reserve Bank – it goes a long way to smoothing the cycles.”

Loos didn’t ignore politics, but he did caution South Africans. “There’s a lot of naivety in South

Africa about politics,” he said. “If X wins, or Y wins, this or that will happen. It’s not that simple.

Whoever wins, there are massive fights to be fought.” Clearly, they’re fought particularly well by the exceptionally strong: Margaret Thatcher’s name cropped up. Loos also discussed how a weaker economy makes people angry: “One follows the other. We can see and feel the anger. Political change follows a weak economy.”

Loos began and ended with the disclaimer that nobody is in a good position to know what’s on the cards for 2018. “In turbulent times, we have to be adaptable, apply our minds, and expect the unexpected.” In short, no matter what happens in the months ahead, “We still have to go through the rough patch.”

There wasn’t a SAPOA member who was seen using the tissues supplied – but everybody pocketed them for possible use at a later date…

Networking Breakfast sponsored by:

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FROM LEFT Sifiso Msomi, Mohsin Shaik, Greg Veerasamy and Fiona Hodge

John Loos, economist at FNB

FROM LEFT Dave Ramsay, Nonhlanhla Koza, Xoli Shabalala and Andile Mnguni

Rohan Daniel

FROM LEFT Rob Knowles, Jared Stander, Ntathu Buthelezi and Bheki Shongwe

Sikhulile Nhassengo

FROM LEFT Hassen Paruk, Yvonne Dass, Tania Desmarais and Miles Terblanche

Zwakele Mbambo

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Port Elizabeth Breakfast Seminar Port Elizabeth Regional Council hosted a breakfast seminar at the PE St George’s Club

FROM LEFT Hubert Sieg, Mark Rist, Andries Strauss, PE Regional Chair Mark Bakker, Werner Benade, Paul Mason and, Gareth Fletcher

Gaye Le Roux with Katharina Crafford

Wade Golightly

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The presentation was enjoyed by all who attended

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he seminar, entitled “How we achieved a 6-Star Green-rated building”, was a presentation by Imbono FJA Architects, who was also the sponsor for the morning.

Imbono FJA Architects, based in Newton Park in Port Elizabeth, was recently awarded a 6-star Design Rating by the Green Building Council of South Africa for the Product Testing Institute located at the Coega IDZ. Guest speaker Hubert Sieg, Managing Member and architect at Imbono FJA Architects, presented an overview of the project, outlining some of the key aspects addressed by the design team to deliver a sustainably appropriate project.

The presentation was enjoyed by all delegates and guests in attendance.

social

Grant Longworth with Bridgette Thiersen

Nolubabalo Madalane

Ivo Huisman with Errol Ritson

Oluseyi Adebowale with Kabir Ibrahim

Mark Watson with Erik Nieuwoudt

Sharon Dent with Councillor Annette Lovemore

The breakfast was sponsored by

FROM LEFT Shaun Fogarty, Nic Kruger and Jacques Wessels

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SAPOA new SAPOA new members SAPOA welcomed the following new member companies, who joined during 2017.

We are excited to have you as part of our membership. Membership is a lifelong journey, and we look forward to a mutually beneямБcial relationship.

MPUMALANGA

KWAZULU-NATAL

EAGLE CREEK INVESTMENTS 138 (PTY) LTD +27 (0)72 563 9202

DURBAN COASTAL INVEST (PTY) LTD T/A PAM GOLDING PROPERTIES +27 (0)31 573 6000 www.pamgolding.co.za

LIMPOPO LUTAVULA (PTY) LTD +27 (0)83 403 8432 NDIDALI QUANTITY SURVEYORS +27 (0)15 297 0103 www.ndidaliqs.co.za

EASTERN CAPE GRINDSTONE PROPERTY MANAGEMENT & DEVELOPMENT +27 (0)41 581 5851 IMVELO QUANTITY SURVEYORS +27 (0)43 748 5209 PLM QUANTITY SURVEYORS AND VALUERS CC +27 (0)43 748 2710 www.plmqs.co.za SMALE & PARTNERS INC +27 (0)43 726 9327 www.smale.co.za SONGO DESIGN LAB & PROJECT MANAGERS +27 (0)43 748 1800 TRUE GROUP COMMERCIAL PROPERTIES (PTY) LTD +27 (0)43 700 0000 www.trueprop.co.za

EXCELLERATE SERVICES (PTY) LTD +27 (0)31 573 7684 www.enforce.co.za GAVIN R BROWN & ASSOCIATES +27 (0)31 202 5703 www.gavbrown.co.za GORASI (PTY) LTD T/A SIRAGO REAL ESTATE +27 (0)31 030 0999 www.siragorealestate.com INNATE INVESTMENT SOLUTIONS +27 (0)31 830 5291 www.innatesolutions.co.za KAYONGA PROPERTY VALUERS +27 (0)31 201 1546 RODEL FINANCIAL SERVICES +27 (0)31 303 7722 www.rodel.co.za SAKHISIZWE ARCHITECTS CC +27 (0)31 563 3424 www.sakhisizwearchitects.co.za

SIGNAL HILL PROPERTIES (PTY) LTD +27 (0)31 572 6283 SMALL RIVER INVESTMENTS CC +27 (0)83 383 4097

TRIPLO 4 SUSTAINABLE SOLUTIONS (PTY) LTD +27 (0)31 563 4422 +27 (0)32 946 3213 www.triplo4.com

SOPA PROPERTIES (PTY) LTD +27 (0)21 374 1114 www.sopatrading.co.za

WESTERN CAPE

3CUBE PROPERTY SOLUTIONS (PTY) LTD +27 (0)10 286 0777 www.3cubeproperty.co.za

AMITY VALUERS (PTY) LTD +27 (0)21 713 0380 www.amityvaluers.co.za ARP ARCHITECTS +27 (0)21 423 5884

ADAMS & ADAMS +27 (0)12 432 6125 www.adamsadams.com

BIFF LEWIS GEOMATICS +27 (0)21 442 3480 www.blgeomatics.co.za

AEVITAS GROUP (PTY) LTD +27 (0)82 496 6983 www.aevitasgroup.co.za

DAKU GROUP OF COMPANIES +27 (0)21 418 0573 www.dakugroup.co.za

ANCHOR SECURITIES STOCKBROKERS (PTY) LTD 011 591 0592 www.anchorsecurities.co.za

DIAMOND COMMERCIAL MANAGEMENT (PTY) LTD +27 (0)21 434 0001

ARCHITECTURE FOR A CHANGE +27 (0)11 477 8738 www.a4ac.co.za

DIMENSION DATA +27 (0)21 486 5624 www.dimensiondata.com INGOZI MANAGEMENT +27 (0)21 946 3368 www.ingozi.biz JACK FROST T/A FROST INTERNATIONAL +27 (0)21 709 0401 www.frostint.com PROTURNKEY (PTY) LTD +27 (0)21 422 2940 www.proturnkey.co.za QO.LAB +27 (0)21 671 0771 www.qolab.co.za SAPROPERTY.COM +27 (0)21 427 1600 www.saproperty.com

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GAUTENG

BLACK PEARL PROJECTS (PTY) LTD +27 (0)83 414 5682 BOSCH PROJECTS (PTY) LTD +27 (0)11 706 4558 www.boschprojects.co.za COALVEST PROPERTIES (PTY) LTD +27 (0)12 482 6606 www.coalvest.co.za CONSOLIDATED POWER PROJECTS ENERGY SOLUTIONS +27 (0)11 729 1481 www.concogrp.com ELITE FACILITIES GROUP (PTY) LTD +27 (0)11 039 6659 www.elitefacilities.co.za

SAPOA new SAPOA new members ENIGMA GROUP +27 (0)11 367 1940 www.enigma-group.co.za EZYPROP (PTY) LTD +27 (0)61 434 6388 www.ezyprop.com FORTEM CONSULTING ENGINEERS (PTY) LTD +27 (0)10 591 2250 www.fortem.co.za FUEL PROPERTY FUND MANAGERS (PTY) LTD +27 (0)82 576 7700 www.fuelproperty.co.za GRANDLOCATIONS +27 (0)82 365 1627 GOLDBROZ INVESTMENTS (PTY) LTD +27 (0)11 783 9966 GRO2 CONSULTING (PTY) LTD +27 (0)12 667 0200 www.gro2.co.za

LIBERTY TWO DEGREES C/O STANLIB REIT FUND MANAGERS (PTY) LTD +27 (0)11 448 6808 www.liberty2degrees.co.za LYNX REAL ESTATE +27 (0)79 882 3159 www.lynx-re.co.za MAINE CONSULTING +27 (0)11 465 0096 www.maine.co.za MATSOGOPALA PROPERTY +27 (0)82 329 7760 MENLYN MAINE INVESTMENT HOLDINGS (PTY) LTD +27 (0)12 361 7758 www.menlynmaine.co.za MONTBRUN INVESTMENTS (PTY) LTD +27 (0)43 740 1088 MOWANA PROPERTIES +27 (0)11 073 6800 www.mowanaproperties.co.za

HM PROPERTY DEVELOPMENT +27 (0)82 378 9573 INZALO EQUITY INVESTMENTS & PROPERTIES +27 (0)83 624 0777 JOHANNESBURG HOUSING COMPANY NPC (JHC) +27 (0)10 593 0200 www.jhc.co.za KINGSWAY CIVIL (PTY) LTD +27 (0)11 496 1754 LEEANKA INFRASTRUCTURE CONSULTANTS +27 (0)11 442 1100 www.leeanka.co.za LEMON PEBBLE ARCHITECTS +27 (0)11 492 0413 www.lemonpebble.co.za

MURRAY & DICKSON CONSTRUCTION +27 (0)11 463 1222 www.mdconstruction.co.za NESA INVESTMENT HOLDINGS +27 (0)11 326 3903 www.nesaih.co.za NGOVU WANAWAKE (PTY) LTD +27 (0)11 664 6437 www.ngovu.co.za PLATOSPEC (PTY) LTD +27 (0)12 668 1179 www.platospec.co.za

PROSITE PLAN AFRICA +27 (0)11 803 8161 www.prositeplan.com PROTON PROPERTY HOLDINGS +27 (0)11 791 7862 www.protonproperties.co.za REALGROWTH DEVELOPMENT +27 (0)12 347 5326 www.realgrowth.co.za RETAIL AFRICA (JOHANNESBURG) (PTY) LTD +27 (0)10 020 1810 www.retailafrica.co.za SHANDU ATTORNEYS INCORPORATED +27 (0)10 035 2142 www.shanduattorneys.co.za SHARON KNIGHT +27 (0)11 234 1191 www.sharonknightproperties.co.za

SHINY ROCK GROUP T/A SHINY ROCK PROPERTIES +27 (0)83 447 6316 www.shinyrock.co.za

UKHUNI BUSINESS FURNITURE +27 (0)11 887 9243 www.ukhuni.co.za URBAN NETWORK ASSET MANAGEMENT (PTY) LTD +27 (0)11 787 8777 www.urbannetwork.co.za VBS MUTUAL BANK +27 (0)11 037 5400 www.vbsmbank.co.za VERDO INVESTMENTS (PTY) LTD +27 (0)10 590 8086 W&M HOFFMAN PROPERTIES (PTY) LTD +27 (0)12 803 6661 YUM RESTAURANTS INTERNATIONAL +27 (0)11 790 9044 ZYLEC INVESTMENTS (PTY) LTD +27 (0)11 234 1104

AFRICA

SPURGEON PROPERTY CC +27 (0)11 881 5681/2 www.spurgeonproperty.com TENANT CO-ORDINATION SERVICES (PTY) LTD +27 (0)11 233 6895 www.tenantcoord.co.za

NAFPROP (PTY) LTD +27 267 7663 9972 www.newafricanproperties.co.bw

INTERNATIONAL RENDEAVOUR +44 207 400 6900 www.rendeavour.com

TURTLE COVE CC T/A NEXZIGN +27 (0)11 883 1389 www.nexcorp.co.za

PROPERTIQ +27 (0)10 020 4872 www.propertiq.co.za PROPERTUITY MANAGEMENT +27 (0)861 333 444 www.propertuity.co.za

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off the wall

Shipping out to the desert An office consisting of a cluster of angled shipping containers, proposed for a site in Germany

by James Whitaker but never realised, is now being built as a home in the California desert Words by Jenna McKnight, Dezeen.com

W

ork is scheduled to begin next year on the Joshua Tree Residence, which was designed for a film producer and his wife who live in Los Angeles. Photo-realistic renderings of the proposed home by the London-based designer James Whitaker show a cluster of white cargo containers emerging like a starburst from a rocky site.

The commission came about after the client and his friends took a trip earlier this year to Joshua Tree National Park in southern California. The client owns a 36-hectare property near the wilderness preserve, which is about a three-hour drive from LA. “While there, in the middle of this rocky desert, one of the friends said, ‘You know what would look great here?’ before opening her laptop to show everyone a picture she’d seen on the internet,” says Whitaker, who leads a studio in London. “The picture was of an office that I’d designed years ago but which had never been built – Hechingen Studio. The next time the client was in London, we met up.”

The film producer ended up hiring Whitaker to create a holiday home for his remote property dotted with orange-hued boulders and scraggly plants. The home will be situated on a sloped site, in a gully formed over the years by stormwater.

Whitaker has envisioned an “exoskeleton” made of shipping containers painted a bright

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white. The containers appear like a starburst, with cuboid forms pushing out in every direction. The home will be lifted off the ground by concrete columns. “Each container is orientated to maximise views across the landscape or to use the topography to provide privacy, depending on their individual use,” says Whitaker.

Encompassing 200m2, the dwelling will contain a living room, kitchen, dining area and three bedrooms. Renderings show a stark interior with concrete flooring, white walls and minimal decor, including furniture made of plywood and Misfits seating by Ron Arad.

(Whitaker formerly worked in Arad’s studio in London.)

The home is intended to offer a connection to the sun-baked landscape, while concurrently providing a sense of protection and privacy.

Square windows frame views of the blue sky and rugged terrain. In some areas, faceted ceilings give the effect of being inside a crystalline form.

Just off the home is a carport with a canopy of solar panels, which will generate electricity for the dwelling. The scheme also includes a large wooden deck that merges with the rocky hillside. “The client was keen for a hot tub to be included, so we configured the outdoor space to have a degree of privacy and be sheltered from the desert winds,” the designer says.

According to Whitaker, his client’s career in film-making has made him open to visionary ideas. “He has a background in nurturing creative projects to fruition, so he is, in many ways, the dream client!” he says.

Albert Taylor, who is the co-founder of the London engineering firm AKT II, helped to provide structural input during the development of the concept.

Whitaker’s initial design for Hechingen Studio, an office building he conceived for an advertising agency in Germany in 2015, will be exhibited at the National Maritime Museum of Australia.

Innovative Solutions for an

iconic landmark

Our experts are passionate about innovation, providing our clients with best-in-class solutions for any engineering design project.

We demonstrated this passion when we took on the restoration of the iconic Kyalami Race Track in Midrand. Using state-of-the-art 3D visualisation and cutting edge engineering solutions, WSP redesigned the track to meet FIA standards.

Our approach not only enhances driver experience, but improves track safety and spectator experience making for a friendlier, more exciting track-day.

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30471 - DelQS SAPOA A4 Ad.indd 1

2017/05/12 11:09:17 AM