South African Property Review September 2014 by SAPOA

South African Property Review

PROPERTY SOUTH AFRICAN

September 2014

REVIEW

AFRICA FOCUS Nigeria leading the African economic ﬁeld

dhk GOING GREEN Portside

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Green property

SUSTAINABILITY How does your garden grow?

THE GREEN REVOLUTION Commercial property greening pioneers set the sustainability tone

by-country focu try-

September 2014

INDIA It’s all the RAJ

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Here’s to hospitality that caters to the world. FNB is proud to be the bank of choice behind Africa’s greenest hotel.

MetropolitanRepublic/15202/E

FNB has always been a proud supporter of innovative firsts. That’s why in 2013, when Hotel Verde approached us to help them build a 100% carbon neutral hotel near Cape Town International Airport, FNB Commercial Property Finance grabbed at the opportunity to help. One year and one state-of-the-art eco hotel later, Hotel Verde was voted the greenest hotel on the continent. It is one of only five in the world awarded with platinum accreditation from the Leadership in Energy and Environmental Design. A prestigious first for South Africa, leaving all other hotels, dare we say, green with envy. Just goes to show if your business is going far, we can help you get there.

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If your hospitality business is going far, we can help you get there. Email tourism@fnb.co.za or fnbcpf@fnb.co.za for more information. First National Bank – a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

2014/08/20 9:20 AM

from the CEO

ue to the scarcity of water resources in South Africa, which are increasingly under pressure, the need arises for water resources to be utilised efficiently and wisely in order to ensure a sustainable future not only for the property industry but for the entire country and world. In light of this as well as of the National Water Act (No 36 of 1998), the Department of Water Affairs (DWA) issues and handles Water Use Licences (WULAs) in order to monitor the usage of water resources. SAPOA is pointing to a growing risk to land development: the complex issuing of WULAs and river reserve determinations. Since the majority of new land development proposals in South Africa require crossing of water courses, WULAs have become a key criterion in new land and property projects. The primary concern is that the process to issue WULAs is highly cumbersome, lengthy and unclear. SAPOA notes that even where planning approval has been granted, and an environmental impact assessment has been approved, construction activity cannot commence without a WULA. Furthermore, all WULA applications appear to now be handled through the national DWA, with no delegation to the regional offices. The result is that the timing of approval is uncertain, although certainly very long,

which is a significant cost and challenge for our property developer and property owner members. An allied concern deals with the question of river reserve determinations. In eThekwini, municipal officials have advised SAPOA members that the municipality is unable to obtain approval for any wastewater treatment works – or for any expansion of existing works – while Water Affairs conducts river reserve determinations for all rivers between the Mvoti and the Umkomaas. While SAPOA acknowledges thorough planning on the part of Water Affairs, we are concerned at the length of time this task will take – and what the impact will be on several large new land developments located in the municipal area. We are as yet not clear on what the process is, whether it has started or what the time frame will be. Although the process of river reserve determination is intended to be based on environmental, social and economic incomes, SAPOA is concerned that a fair and equitable process be implemented to engage all stakeholders. One very real example of the impact is that a potential special economic zone being discussed close to King Shaka International Airport in Durban would not be viable until the question of waste water is resolved. SAPOA points to the fact that the issuing of WULAs poses a real risk to development activity, and thus negatively impacts both the construction and property development sectors of the economy. SAPOA is taking the proactive step of contacting the DWA to raise our concerns and ensure that the impact of these decisions is fully considered. We trust we will be able to find a constructive way to work together to find a solution. Neil Gopal, CEO

Seven years of property greening With September being our green edition, sustainability in the property industry is under the spotlight in this issue. Seven years ago SAPOA, with the assistance of greening pioneer Bruce Kerswill, established with approval from the SAPOA Board of Directors, the Green Building Council of South Africa (GBCSA) – the country’s first Green Building Council. The sole purpose of its establishment was to align South Africa’s commercial and industrial property industry with global environmental best practice. Modelled on some of the world’s greatest Green Building Councils, the GBCSA is an independent, non-profit company formed in 2007 to lead the greening of South Africa’s built environment. It provides the tools, training, knowledge, connections and networks to promote green building practices across the country and build a national movement that will change the way the world is built.The Council’s mission is to promote, encourage, and facilitate green building in the South African property and construction industry through marketbased solutions, focusing on advocacy and promotion, rating tools, education and training, as well as resources. The GBCSA is one of 92 members of the World Green Building Council, alongside the Councils of Australia, the US and the UK. The GBCSA has developed the Green Star SA rating system, which is the official certification body for Green Star SA projects. As the Founding Partner, SAPOA will continue to support the now wellestablished GBCSA in its greening efforts.

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from the Editor’s desk

Reduce, reuse, recycle, rethink Do you have a bad case of green fatigue? Perhaps the best cure is to rethink sustainability

irst it was AIDS fatigue; now green fatigue is setting in across the globe. In recent years, the term green fatigue has been widely used to describe a phenomenon wherein individuals have become desensitised, less interested or, more negatively, annoyed with the constant influx of sustainabilityrelated messages. Apart from the continuous eco-messages that are now more profound than ever in society, the onset of green fatigue is said to most likely be attributed to the cost of money, time and effort – which many people don’t have due to a busy lifestyle, rising living costs and rapidly changing trends. Green fatigue is said to be the cause of declining recycling rates as well as the loss of interest in climate change. The growth of the recycling rate in the UK has significantly slowed over the past few years. According to the latest figures from the UK Department of Environment, Food and Rural Affairs (DEFRA), local authorities in England recycled or composted 47.1% waste collected in the second quarter of 2013, down from the 47.6% achieved in Q2 2012. The overall annual rate remained at 43.9%. A recent article published by The Telegraph in the UK states that the combination of green fatigue caused by councils imposing numerous confusing bins on households as well as declining paper and glass usage, and local authority budget cuts, have contributed towards the fall, which is increasing the risk of the UK having to pay millions of pounds in fines as well as almost certainly resulting in missing the EU targets of recycling half of all household waste by 2020. During 2000-2001, households significantly increased the amount of rubbish they recycled to 11%. This figure increased to 43% in 2011-2012. However, the rate of increase slowed dramatically in 2012-2013, rising by just 0,2%. Recycling and resource management company SITA UK, which is employed by local councils to collect kerbside waste, believes that in the year 2013-2014 recycling rates will have fallen by at least two percent.

On the topic of climate change, a global survey study by GlobeScan Radar has revealed that public concern about environmental issues (including climate change) has slumped to a 20-year low since the financial crisis in 2008/2009. According to the poll of 22 812 people in 22 countries, including the UK and the US, fewer people now consider issues such as CO2 emissions, air and water pollution, animal-species loss, and water shortages to be “very serious” than at any time in the last two decades – only 49% of people now consider climate change to be a very serious matter. “Of course people’s concerns about climate change changed in 2009 when economic pressures were rising,” David Nussbaum, Head of WWF UK, told The Independent. “[But] the problems haven’t gone away… There are longer-term concerns that may not seem imminent that are extremely serious. A skilled political leader has to grapple with how to act and respond to the immediate pressure people feel while helping [to take] account of the wider concerns and interests.” “Evidence of environmental damage is stronger than ever, but our data shows

that economic crisis and a lack of political leadership mean the public are starting to tune out,” says GlobeScan Chairman Doug Miller. Perhaps a possible solution is to add “rethink” to the green slogan of “reduce, reuse, recycle”. Sustaining sustainability can be achieved via other key channels – one possible avenue is job creation. Back home, South Africa faces alarmingly high rates of uneducated, unskilled and unemployed citizens – 29,8% of South Africans of employable age are currently unemployed (Census 2011) and just under 60% of the unemployed have less than a Grade 12 qualification (StatsSA 2012). In light of this, there is opportunity to create jobs in recycling – increasing recycling activities can create informal, direct, indirect and induced jobs, as well as downstream jobs in the manufacturing sector. As at 2009, South Africa’s governmental Department of Environmental Affairs estimates that the total waste sector (formal and informal) constitutes 113 505 employed people. However, there have been no comprehensive studies undertaken to quantify the direct, indirect and induced jobs created by a recycling economy in South Africa. The recycling sector can be transformed into a key industry of the South African economy. The eThekwini municipality, for example, currently landfills in the region 6 000 tons of waste per day. Diverting 70% of this can create at least 20 000 jobs, and save the city and ratepayers more than R300million per year. South Africa landfills 24-million tons of municipal solid waste per annum, of which 16,6-million tons are easily recyclable. This amount could create 215 500 direct jobs, 258 600 indirect jobs and 280 150 induced jobs – 754 250 jobs in total. Although this is just one example, the opportunities are there to transform green fatigue into green vigour. Now that’s a term we need to hear more of. Candace King, Editor

SOUTH AFRICAN PROPERTY REVIEW

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from the editor’s desk

Reduce, reuse, recycle, rethink Do you have a bad case of green fatigue? Perhaps the best cure is to rethink sustainability

irst it was AIDS fatigue; now green fatigue that economic crisis and a lack of political is setting in across the globe. In recent leadership mean the public are starting years, the term green fatigue has been widely to tune out,” says GlobeScan Chairman used to describe a phenomenon wherein Doug Miller. individuals have become desensitised, less Perhaps a possible solution is to add interested or, more negatively, annoyed “rethink” to the green slogan of “reduce, with the constant influx of sustainabilityreuse,&recycle”. Sustaining sustainability can BUSINESS, RETAIL HOSPITALITY DEVELOPMENT related messages. achieved other key channels – one 03 MINS FROM be KING SHAKA via INTERNATIONAL AIRPORT Apart from the continuous eco-messages possible avenue is job creation. that are now more profound than ever in Back home, South Africa faces alarmingly society, the onset of green fatigue is said high rates of uneducated, unskilled and to most likely be attributed to the cost of unemployed citizens – 29,8% of South money, time and effort – which many people Africans of employable age are currently don’t have due to a busy lifestyle, rising living unemployed (Census 2011) and just under costs and rapidly changing trends. 60% of the unemployed have less than a Green fatigue is said to be the cause of Grade 12 qualification (StatsSA 2012). declining recycling rates as well as the loss In light of this, there is opportunity to of interest in climate change. The growth of create jobs in recycling – increasing recycling the recycling rate in the UK has significantly activities can create informal, direct, indirect slowed over the past few years. and induced jobs, as well as downstream jobs According to the latest figures from the UK in the manufacturing sector. On the topic of climate change, a global Department of Environment, Food and Rural As at 2009, South Africa’s governmental survey study by GlobeScan Radar has Affairs (DEFRA), local authorities in England Department of Environmental Affairs revealed that public concern about recycled or composted 47.1% waste collected estimates that the total waste sector (formal environmental issues (including climate in the second quarter of 2013, down from the and informal) constitutes 113 505 employed change) has slumped to a 20-year low since 47.6% achieved in Q2 2012. The overall annual people. However, there have been no the financial crisis in 2008/2009. rate remained at 43.9%. comprehensive studies undertaken to According to the poll of 22 812 people A recent article published by The Telegraph quantify the direct, indirect and induced in 22 countries, including the UK and the in the UK states that the combination of jobs created by a recycling economy in green fatigue caused by councils imposing US, fewer people now consider issues such South Africa. as CO2 emissions, air and water pollution, numerous confusing bins on households The recycling sector can be transformed as well as declining paper and glass usage, animal-species loss, and water shortages into a key industry of the South African and local authority budget cuts, have to be “very serious” than at any time in economy. The eThekwini municipality, for contributed towards the fall, which is the last two decades – only 49% of people example, currently landfills in the region now consider climate change to be a very increasing the risk of the UK having to 6 000 tons of waste per day. Diverting 70% serious matter. pay millions of pounds in fines as well as of this can create at least 20 000 jobs, and “Of course people’s concerns about almost certainly resulting in missing the EU save the city and ratepayers more than R300climate change changed in 2009 when targets of recycling half of all household million per year. economic pressures were rising,” David waste by 2020. South Africa landfills 24-million tons of Nussbaum, Head of WWF UK, told The During 2000-2001, households significantly municipal solid waste per annum, of which Independent. “[But] the problems haven’t increased the amount of rubbish they 16,6-million tons are easily recyclable. This gone away… There are longer-term concerns recycled to 11%. This figure increased to 43% amount could create 215 500 direct jobs, that may not seem imminent that are in 2011-2012. However, the rate of increase 258 600 indirect jobs and 280 150 induced extremely serious. A skilled political leader slowed dramatically in 2012-2013, rising by jobs – 754 250 jobs in total. has to grapple with how to act and respond just 0,2%. Although this is just one example, the to the immediate pressure people feel while Recycling and resource management opportunities are there to transform green helping [to take] account of the wider company SITA UK, which is employed by local fatigue into green vigour. Now that’s a term concerns and interests.” councils to collect kerbside waste, believes we need to hear more of. Contact Tim on: +27 32 814 0000, Email: property@dubetradeport.co.za or visit: city.dubetradeport.co.za “Evidence of environmental damage is that in the year 2013-2014 recycling rates will stronger than ever, but our data shows have fallen by at least two percent. Candace King, Editor

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SOUTH AFRICAN PROPERTY REVIEW

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contents

September 2014

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

September 2014

REVIEW

AFRICA FOCUS Nigeria leading the African economic ﬁeld

Green property

series

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The WOR

dhk GOING GREEN Portside THE GREEN REVOLUTION Commercial property greening pioneers set the sustainability tone

by-country focu try-

September 2014

INDIA It’s all the RAJ

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monthly cou n Our

Abreal

SUSTAINABILITY How does your garden grow?

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ON THE COVER The Mother City’s latest iconic skyline feature, the Portside building, was designed by Dhk Architects and Louis Karol Architects, and project-managed by SIP Project Managers, Absolute Project Managers and Metrum Project Managers. This prestigious office building has been awarded one of the country’s first GBCSA 5-Star Green Star SA ratings

2014/08/13 11:07 AM

From the CEO From the Editor’s desk News Education, training and development Legal update SAPOA municipal rates Councillors in conversation Interview Berkeley bids farewell Tackling property rates Theme leader Justiﬁably green Africa uncovered Nigeria Eye on the world India IPD Conference Invested in property Development Africa’s next top marvel Interview The green Italian job Feature Sustaining Africa and beyond Feature Building on the green mind-set On show Portside: tall, green, and handsome Proﬁles Statistics PDP and WC Property Development Workshop WC Career Day and Lease Agreement Workshop GT Golf Day KZN Breakfast What’s on SAPOA upcoming national events 2014 Off the wall Like energy off a duck’s back FOR EDITORIAL ENQUIRIES email editorial@sapoa.org.za or managingeditor@sapoa.org.za. Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 e: sales@sapoa.org.za Editor in chief Neil Gopal Editorial Advisor Jane Padayachee Managing Editor Mark Pettipher Editor Candace King Copy Editor Ania Rokita Production Editor Dalene van Niekerk Designer Dirk Knoesen Sales Riëtte Stevens Finance Susan du Toit Contributors Martin Ferguson, Eugenia Makgabo, David A Steynberg, Glenn Bentley, Anne Schauffer Photographers Michael Glenister, Mark Pettipher, Dave Hann, Val Adamson

P R O P E R T Y

F U N D

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

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

e: david@rsalitho.co.za

2014/08/13 11:07 AM

from the CEO

SAPOA spotlights water risks to land development As water resources become increasingly scarce and the issuing of Water Use Licences becomes more imperative yet cumbersome, SAPOA CEO Neil Gopal points to how these issues are impacting land development which is a significant cost and challenge Seven years of property greening for our property developer and property With September being our green edition, owner members. sustainability in the property industry is An allied concern deals with the question of river reserve determinations. under the spotlight in this issue. Seven years In eThekwini, municipal officials have ago SAPOA, with the assistance of Bruce advised SAPOA members that the municipality Kerswill, established with approval from the is unable to obtain approval for any wasteSAPOA Board of Directors’, the Green water treatment works – or for any expansion Building Council of South Africa (GBCSA) – of existing works – while Water Affairs the country’s first Green Building Council. conducts river reserve determinations for all The sole purpose of its establishment rivers between the Mvoti and the Umkomaas. was to align South Africa’s commercial and While SAPOA acknowledges thorough planning on the part of Water Affairs, we industrial property industry with global are concerned at the length of time this environmental best practice. Modelled task will take – and what the impact will on some of the world’s greatest Green be on several large new land developments Building Councils, the GBCSA is an located in the municipal area. independent, non-profit company formed ue to the scarcity of water resources in We are as yet not clear on what the process in 2007 to lead the greening of South South Africa, which are increasingly is, whether it has started or what the time Africa’s built environment. It provides the under pressure, the need arises for water frame will be. tools, training, knowledge, connections resources to be utilised efficiently and wisely Although the process of river reserve in order to ensure a sustainable future not determination is intended to be based on and networks to promote green building only for the property industry but for the environmental, social and economic practices across the country and build a entire country and world. incomes, SAPOA is concerned that a fair national movement that will change the In light of this as well as of the National and equitable process be implemented to the world is built. More than 25 years of providing planning advice to theway Property Water Act (No 36 of 1998), the Department of engage all stakeholders. The mission is to promote, Development Industry: Proud contributors to the successes Council’s of Water Affairs (DWA) issues and handles Water One very real example of the impact is encourage, Bedford Square, Kolonnade Centre, Lanseria Airport,and facilitate green building Use Licences (WULAs) in order to monitor the Irene that aMall, potential special economic zone being Lynnwood Bridge, Mall of the North, Matlosana Mall, Menlyn in the South African property and usage of water resources. discussed close to King Shaka International Centre, Menlyn Maine, The Innovation Hub, Woodlands construction industry through marketSAPOA is pointing to a growing risk to land Airport in Durban would not be viable until development: the complex issuing of and WULAs the question Boulevard many more. of waste water is resolved. based solutions, focusing on advocacy and and river reserve determinations. SAPOA points to the fact that the issuing promotion, rating tools, education and Since the majority of new land assistance of WULAs poses real your risk toland development For professional witha all zoning challenges, training, as well as resources. development proposals in South Africa activity, andatthus negatively contact The Practice Group 012 362 1741impacts or both The GBCSA is one of 92 members require crossing of water courses, WULAs the construction and property development info@practicegroup.co.za of the World Green Building Council, have become a key criterion in new land sectors of the economy. alongside the councils of Australia, the and property projects. SAPOA is taking the proactive step of US and the UK. The GBCSA has developed The primary concern is that the process to contacting the DWA to raise our concerns the Green Star SA rating system, which is the issue WULAs is highly cumbersome, lengthy and ensure that the impact of these decisions and unclear. SAPOA notes that even where is fully considered. We trust we will be able official certification body for Green Star SA planning approval has been granted, and to find a constructive way to work together to projects. As the founding partner, SAPOA an environmental impact assessment has find a solution. will continue to support the now wellbeen approved, construction activity cannot established GBCSA in its greening efforts. commence without a WULA. Neil Gopal, CEO proficient consultancy for peace of mind Furthermore, all WULA applications appear to now be handled through the national DWA, with no delegation to the regional offices. The result is that the timing of approval is uncertain, although certainly very long,

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SOUTH AFRICAN PROPERTY REVIEW

2014/08/12 9:31 AM

news Shopping centre landlords ask Competition Commission to address exclusivity clauses in retail leases

he SA REIT Association has raised concerns on behalf of its members about the exclusivity clauses in leases. The association is of the opinion that grocery retailers are using these clauses in their fight to restrict each other in market share. Shopping centre owners are caught between their contractual obligations with their supermarket tenants and providing a variety of grocery retailers to their customers – to the detriment of South Africa’s consumers. SA REIT Association considers exclusivity clauses undesirable and is looking to the Competition Commission to intervene. Exclusivity clauses in a lease agreement are driven by retailers to prevent similar competing businesses from being able to trade at the same shopping centre. In most instances, the property owners were not the original party to the lease agreement where the exclusivity clause was negotiated with the retailer. Today’s consumers, however, prefer multiple grocery retailers at centres for greater variety and choice. The SA REIT Association confirms its members’ side with consumers on this issue and supports upholding free market principles. The Competition Commission considered the undesirability of the practice some years ago. While not ruling whether it considered the behaviour uncompetitive, in each retail acquisition or merger transaction brought to the Commission since 2009, it has noted that it’s the new landlord’s or acquiring party’s responsibility to use its best endeavour to negotiate with their supermarket tenants the removal of exclusivity clauses from their leases. However, in all these cases property owners have been unable to get the retailers to remove these clauses from the lease agreements.

Retailers are unwilling to surrender this hold over their competition and are now taking aggressive advantage of exclusivity clauses, leaving landlords caught between a rock and a hard place. SA REIT Association is concerned that this push by retailers is driving restrictive business practice and believes it has the responsibility to raise its apprehension over this undesirable situation, and will be asking the Competition Commission to turn its attention to exclusivity clauses again. The association is aware of various properties across South Africa where some of the food retailers have threatened legal action, claiming landlords are in breach of existing lease agreements and insisting landlords enforce exclusivity clauses against certain national retailers. They are also pushing through their cases with urgency, even in instances where this national retailer has already been open and trading for quite some time at a shopping centre. Landlords have become the ham in the sandwich. The landlord is left in the objectionable position of either having to prevent the opening or trade of that national retailer, or facing claims for damages for breach of contract due to the exclusivity clauses. SA REIT Association members have indicated they are against these clauses and they are not driving this exclusivity. The consumer should have the ultimate choice. A free market is fundamental to this country and SA REIT Association members would like to see that principle perpetuated. +27 (0)11 783 2201, Sareit.com

Tyrone Govender, Chief Executive Officer of Freedom Property Fund

Freedom Property Fund announces BEE share participation scheme

reedom Property Fund recently advised the market it would go ahead with the assessment and adoption of a share participation scheme, which will boost the ownership of its shares by previously disadvantaged individuals through a BEE structure. “Our investment model thrives on empowering stakeholders in a meaningful way and is strongly influenced by BEE,” says Tyrone Govender, Chief Executive Officer of Freedom Property Fund. “It’s a commercial imperative for Freedom.” He explains that the BEE share participation scheme will be based on best-practice models with excellent partners, and will be for the long term. “As a company that operates in South Africa, we believe transformation is essential

for sustainability,” he says. “We are not doing this because it is required of us; we are doing it because we believe it is good business. Freedom plans to outperform when it comes to BEE in terms of the property sector charter.” Freedom Property Fund listed on the JSE Main Board on 12 June 2014, introducing a unique property capital growth opportunity for investors, coming from the fund’s diverse and growing portfolio, which includes residential, commercial and industrial property assets of R1,56-billion. Its assets comprise income-yielding properties and developments, complemented by a secured pipeline of around R3-billion of commercial property developments and R7-billion residential rental and sale

Coega investor construction booming in IDZ

he Coega Development Corporation is seeing a construction ascend with seven companies busy with construction well under way within the Coega Development Corporation’s (CDC) industrial development zone (IDZ). Construction taking place at the IDZ provides job opportunities for residents living in the Nelson Mandela Bay metropole. About 1 800 people are benefiting from the construction-related jobs. “Construction expansion of existing businesses is sign of current investors’ business growth and an improving economic climate,” said CDC Head of Marketing and Communication Dr Ayanda Vilakazi.

Companies currently under construction include leading gas suppliers Air Products (R300-million investment) and Afrox (R300-million); electricity generator Dedisa Peaking Power Plant (R2,2-billion); while cold chain logistics facilitators Vector Logistics’ investment is valued at (R140-million); Digistics expansion (R30-million); ID Logistics (R30-million) and UTi Distribution (R30-million). Afrox completed piling, casting of slabs for cold box and molecular sieve, while work at the tank farm, machine house and compressor foundations is currently in progress. The slab for the office building is presently being casted, and Afrox aims to have the construction completed during the fourth quarter of 2014.

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news developments, as well as a longterm development pipeline in decentralised areas throughout South Africa. Heightened BEE credentials will support Freedom Property Fund’s business strategies and ensure its competitiveness in both the residential and commercial property space. In the residential rental market, the fund’s developments will be better poised to attract mines as tenants for worker accommodation. In the commercial property market, Freedom Property Fund will increase its standing as a landlord of choice for the transformation benefits it offers its tenants. “We believe enhanced BEE credentials are relevant for our business,” says Govender. “It supports Freedom strategies to deliver sustainable value and growth prospects for all our shareholders. This transaction will assist Freedom to attract capital at competitive rates. It will also elevate Freedom’s reputation as an employer and help us attract good people.” +27 (0)10 003 8451, Freedompropertyfund.com

Twelve people will be employed in various jobs once operational, and 42 jobs would have been created during the construction phase. More than a third of the work is completed on Dedisa Peaking Power Plant. On completion, the plant will consist of two open-cycle

Green initiatives gain momentum in South Africa

reen building in Johannesburg has received a boost with the Johannesburg Stock Exchange’s (JSE) listing of its first green bond. The Green Building Council of South Africa (GBCSA) has welcomed the R1,46-billion bond issued by the city of Johannesburg, which will be used to fund green initiatives. “This is great news,” says Brian Wilkinson, Chief Executive Officer of the GBCSA. “It is exciting to see the city of Johannesburg and the JSE applying leading strategy and innovation to ensure the city’s sustainability and its increased energyefficient operation through green projects.” Of the C40 Cities Climate Leadership Group, Johannesburg is the first to issue a green bond. Wilkinson praised the recent announcement that funding from this green bond would be used for low-carbon infrastructure, minimal resource reliance and increased natural resources, in line with the city’s climate change mitigation strategy. He notes it is one of many signs that green initiatives are clearly gaining momentum in South Africa. Johannesburg’s green bond, referred to as COJGO1, will be used to fund climate change mitigation strategies, especially those that include greater use of gas and natural energy. One of the city council’s green programmes includes the installation of 43 000 solar water

gas turbines able to produce 335MW of electricity, which is roughly half of Nelson Mandela Bay’s power requirement. The establishment of the plant will provide value-added assistance to a number of growing industries established in the IDZ, estimated to be

heaters by City Power that will collectively save the equivalent of 22,5GW-hours of electricity a year – enough to run a small town. “The green leadership that this bond represents is commendable,” says Wilkinson. “We encourage cities and towns throughout South Africa to consider green solutions, which will allow them to benefit from greater environment sustainability.” +27 (0)86 104 2272, Gbcsa.org.za

Brian Wilkinson, Chief Executive Officer of the GBCSA

in excess of 1 000 permanent employment opportunities to be created as a result of the supply of electricity to those industries. Air Products is firmly on schedule to commission the plant and have gas flowing to customers in the final quarter of 2014. Nine operational jobs and 42 construction jobs are being created. Vector Logistics started construction in May this year, and has created 120 construction jobs, with 90 people employed once operational. Digistics Digital Logistics has outgrown its current 2 285m² facility in Zone 1 of the Coega IDZ – a space it has occupied for six years – in favour of a larger 4 510m² facility. Construction of the new Digistics warehouse facility started at the end of May this year. There are 120 construction workers benefiting from the

project and, once completed, 30 people will benefit from permanent jobs. ID Logistic will create work for 50 people once operational; during the construction phase 200 people would have benefited from jobs created. UTi Distribution currently operates from a 2 700m² building but will be moving to a 2 800m² building (currently under construction), thus increasing its capacity by 100m². The new site is expected to be completed close to the end of this year. Dr Vilakazi added that contributing to the CDC’s success as a “leading catalyst for socioeconomic growth”, the CDC not only provides a competitive investment location for investors but this is supported by valueadded business services.” +27 (0)41 403 0464, Coega.co.za

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2014/08/12 9:35 AM

news

GBCSA and IPD collaborate to launch South Africa Sustainability Index

Enterprising landlords raise quality of office space

s commercial property owners continue to compete for office tenants in a constricted market, which has to a large degree favoured the latter, who are able to shop around for the best deal, landlords with foresight have raised the standard and quality of their offerings. So says Jonathan Klimek, Leasing, Sales and Investment Consultant at JHI Properties in Gauteng, noting that enterprising property owners are capitalising on the demand for appealing, value-for-money office accommodation in convenient locales. Capital Property Fund has recently completed the revamp and refurbishing of the entire Fourways Office Park along with the buildings they own within Fourways Golf Park, modernising and improving each to A-grade quality while still offering highly competitive rentals of R105/m² versus about R140/m² for comparable space in other developments. A rapidly growing commercial, residential and retail node, Fourways is easily accessible via the N1 off-ramp along William Nicol Drive, from Witkoppen Road, or via the R511, while the increasingly popular Lanseria Airport is only about a 15-minute drive away. The fact that Fourways has been included for the site of a proposed new Gautrain Station is further acknowledgement of the relevance and strategic location of the area. “Over the years, this node has experienced massive growth and is today a thriving community well served by good infrastructure and multiple service and recreational facilities, including the highest standard of shopping, schools, medical, fitness and health centres, sports activities, restaurants and other entertainment,” says Klimek. In line with this, the residential component of Fourways has increased dramatically, underpinned by well-maintained, attractive neighbourhoods with an emphasis on security, and further boosted by an excellent resale reputation. “With proximity to the workplace a key imperative in today’s world of e-tolls, rising traffic congestion and numerous other demands on our time, the advantages of being able to live within minutes of office developments such as Fourways Office Park and Fourways Golf Park are apparent.” As a result of the revamps and improved offering, JHI Properties has halved vacant space in Fourways Office Park from 8 000m² to less than 4 000m² over the past eight to 12 months. The remaining available space comprises pockets of office accommodation in three buildings, ranging from 221m² to 436m², and with the flexible option to consolidate premises to 645m² or combine ground- and first-floor space to a total of 850m². Tenants who have already taken up space in this office park include Blue Horizon Licensing and Exposure Marketing who relocated from North Riding, near the Dome. “With convenient transport access, both office parks provide office space to suit a variety of businesses, from corporate head offices to business schools,” says Klimek. “The expansive gardens in each afford a very pleasing work environment with tranquil views and the opportunity to walk, even jog, around the grounds, while there is good security and ample parking. Both parks offer tenant installations and beneficial occupation periods.” +27 (0)11 911 8000, Jhi.co.za

new collaboration between the Green Building Council of South Africa (GBCSA) and Investment Property Databank (IPD) will analyse the fundamental investment benefits of efficiently managed buildings. The launch of the South Africa Sustainability Index was announced at the 12th annual IPD South Africa Property Investment Conference in Sandton. This GBCSA and IPD collaboration will examine the relationship between property investment and a building’s environmental performance by measuring existing properties in South Africa in terms of their sustainability. A small pilot study undertaken by the team has already shown efficient commercial buildings provide higher returns to their owners. It also revealed that these higher returns are driven by lower discount rates, or lower risk, potentially due to better fundamentals in efficient properties, such as vacancies and rental growth driving net income growth. The findings of this pilot study are also confirmed by similar research in other countries, such as Australia. Taking their research to the next level, GBCSA and IPD have confirmed they will now grow their research sample to better provide the case for green building and efficient building management as an enhancer of returns. The research will start with average use trends by different types of commercial properties. As the research sample grows, it will also compare usage trends over time. The research will be based on environmental resource usage data submitted

by local property companies. The performance of efficient buildings will be measured against IPD data, which represents a large portion of the local commercial property sector. The IPD South African Sustainability Index in conjunction with the GBCSA will be released annually and include in-depth analysis. “Green leadership is having a huge impact on commercial property in South Africa,” says Brian Wilkinson, Chief Executive Officer of the GBCSA. “Besides the proven benefits for users of green buildings, we wanted to show the impact of green building and efficient building management on the financial performance of a building to further support the case for green innovation in the South African property sector. We believe this new index will achieve this and become an important tool to drive even more sustainable and efficient buildings in the country.” “This index is set to become a valuable source of information for capital owners to assess the environmental sustainability of property investments,” comments Stan Garrun, Executive Director and Head of IPD South Africa. “IPD will assist in developing sustainability indicators and trends, while enabling the ongoing analysis of the relationship between investment and environmental performance.” A more detailed analysis of the pilot study findings will be made available at the 7th Annual GBCSA Convention, which takes place from 10 to 12 September at the Cape Town International Convention Centre. +27 (0)86 104 2272, Gbcsa.org.za

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from the CEO

the

South

African

property

construction industry through marketbased solutions, focusing on advocacy and promotion, rating tools, education and training, as well as resources. The GBCSA is one of 92 members of the World Green Building Council, alongside the councils of Australia, the US and the UK. The GBCSA has developed the Green Star SA rating system, which is the official certification body for Green Star SA projects. As the founding partner, SAPOA will continue to support the now wellestablished GBCSA in its greening efforts.

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and

2014/08/12 9:39 AM

education, training and development

Safety first Martin Ferguson, SAPOA’s HR, Education, Training and Development Manager, collaborates with thought leaders in South Africa’s property sector

The appointment of a competent construction health and safety agent by the client could buffer the client against both civil and criminal liability. This appointment will become obligatory in certain circumstances from August 2015

In light of new construction regulations, former Occupational Safety Court Prosecutor, Founder of Klass Looch Associates and Director of ComPrac Holdings (Pty) Ltd, Advocate Raynard Looch, provides legal comment on the liability implications emanating from contraventions of construction regulations for clients, client developers and owners of structures

ll construction works in which physical construction began after 7 February 2014 must comply with Construction Regulations 2003, and such construction works are exempted from complying with Construction Regulations 2014 until 7 August 2014, six months after the commencement of these Regulations. Thereafter Construction Regulations 2014 shall apply, with the exception of Regulation 3 and 5(7)(b), which will come into effect on 7 August 2015, 18 months after the commencement of these Regulations. In terms of Construction Regulation 11 of the Occupational Health and Safety Act, owners of structures have a fixed legal duty of maintaining the structure to ensure it is and remains safe for continued use. This infers that an owner must put measures in place to discharge this duty. Statutory criminal liability emanates from failing to discharge a fixed statutory legal duty. The opposite of a duty is a right. If owners of structures have a duty to ensure a structure is safe, the occupants of the structure have a right to a safe structure. Civil liability emanates from the infringement of a right, and if this right is infringed, a civil suit for damages may be instituted against the owner.

If tenants and other third parties suffer injury or death as a result of the owner’s failure to ensure the structure is (and remains) safe for occupancy, a criminal prosecution will be instituted against the owner in terms of the Occupational Health and Safety Act No 85 of 1993, or the common law (culpable homicide) in the event of fatalities. A criminal conviction is not a prerequisite for a successful civil suit but will greatly assist. An owner’s failure to conduct periodic inspections and keep records of the inspection as required by the construction regulations is in itself a criminal offence – even in cases where there is no threat to health and safety of persons. If, however, this omission can be linked to an incident such as a collapse of the structure, resulting in injury and death, a criminal conviction is virtually guaranteed and a plaintiff in a civil matter for damages will have a solid case. A criminal prosecution can be brought against juristic persons as well as natural persons and, if the latter are directors of companies, they may be removed from the board of directors upon conviction in terms of the Companies Act. Where an owner of a structure engages a contractor to perform construction work,

the owner becomes the client, with comprehensive duties as listed in Construction Regulation 5 (barring the exemptions regarding the permit to perform construction work and a South African Council for Project and Construction Management Professions accredited agent). Similarly, where the registered owner of land intends to develop the property on which a structure or structures are to be erected, irrespective as to whom the eventual owner may be, such owner will be regarded as the client and will be required to fully comply with the statutory requirements of the Occupational Health and Safety Act. If a client fails in their statutory duties as contained in Construction Regulation 5, and a link can be established between the clients’ omission and a result (injury or death), a prosecution against the client would in all likelihood be instituted as well as opening the way for a civil suit for damages against the client. For example, an owner of a sewerage works engages a contractor to perform construction work at the works. The owner now becomes the client as defined in the construction regulations. The client fails to inform the contractor in the Health and Safety Specifications/

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education, training and development Baseline Risk Assessment of the potential risk of hepatitis B – which immunisation could “have prevented – and a worker contracts hepatitis B and dies. There would a prima facie case of various contraventions of the construction regulations, the Occupational Health and Safety Act in general, and the common law (culpable homicide). The worker’s dependants could potentially sue the client for damages. The appointment of a competent construction health and safety agent by the client could, however, buffer the client against both civil and criminal liability. This appointment will become obligatory in certain circumstances from August 2015. Owners of structures routinely employ a facility managing entity or an individual to discharge, inter alia, their construction regulations duties. These entities or individuals are regarded as either employees or mandatories of the owner. Their acts or omissions can result in criminal liability being imputed onto the owner in terms of Section 37 of the Occupational Health and Safety Act. A civil suit is also possible against an owner for their unlawful

MOCCA - Grain Silo

Advocate Raynard Looch, former Occupational Safety Court Prosecutor, is the Founder of Klass Looch Associates and Director of ComPrac Holdings (Pty) Ltd

conduct, which causes harm or damage to third parties. An owner may be a juristic or natural person, and the same principles apply. SAPOA has recently engaged with the ComPrac Group to prepare and present a series of workshops that address this important and sensitive matter. These workshops will be rolled out nationally to assist SAPOA members on a broad base, from client developers to facility managers and other professional groups.

About the ComPrac Group

ounded in 1994, the ComPrac Group provides health and compliance safety solutions for large industries. The group boasts a presence countrywide, with headquarters in Gauteng, office facilities in the Western Cape and KwaZuluNatal, and satellite offices across South Africa. With a focus on the mining, construction, manufacturing, agriculture and marine sectors, the ComPrac Group enjoys a close association with the legal fraternity and other industry sectors that are committed to global best practice in health and safety management. The group has been delivering legal compliance health and safety risk management services to the South African market for more than a decade. Effectively improving efficiency, managing risk and adding real value are the three prevalent cornerstone philosophies in the ComPrac Group of companies. SOUTH AFRICAN PROPERTY REVIEW

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legal update

SAPOA municipal rates: public participation sentiments echoed Eugenia Makgabo, Admitted Attorney of the High Court and Legal Officer at SAPOA

SAPOA will continue to advocate for sustainable rates. We intend to continue engaging with the government with regards to this issue in an effort to find amicable solutions while ensuring that commercial ratepayers’ interests and overall contributions are taken into consideration when municipal budgets are drafted – and fundamentally that the process of public participation is exercised appropriately by municipalities in accordance with statutory obligations

Paul Anthony Kalil and others versus Mangaung Metropolitan Municipality and others (210/2014) [2014] ZASCA 90 (4 June 2014)

he appeal before the Supreme Court of Appeal was based on a judgment by the Free State High Court pertaining to the adoption of the Municipal Rates Budget 2013/2014 by the Mangaung Metropolitan Municipality (hereinafter referred to as “the Municipality”), which included the increased rate to be applied on commercial properties. The Municipality has put in place that the ratio of residential to commercial properties for the purposes of rates would be 1:3,8. The appellants raised three pertinent concerns before the court: First, that the levying of property rates was an integral part of the budget process in terms of various legislation, such as the Municipal Property Rates Act 2004 (Act No 6 of 2004, hereinafter referred to as “the Rates Act”) and the Municipal Systems Act 200 (Act No 32 of 2000). In light of the abovementioned fact, the decision to increase rates on business properties required community participation, which had in this instance not occurred. Second, that the ratio between the proposed rate for commercial properties and that on residential properties exceeded the permissible ratio prescribed under section 19(1)(b) of the Rates Act, as well as the accompanying regulations. Third, that the implementation of the proposed rates would materially and unreasonably prejudice national economic policies, economic activities across municipal boundaries, or the national mobility of good, services, capital and labour, which is contrary to Section 229 of the Constitution. Section 229 states that a municipality has the power to levy a rate on property in its area.

Judgment The judge held that Section 17(3) of the Municipal Finance Management Act 2003 (Act No 56 of 2003) details numerous documents that are to accompany an annual budget when it is tabled, including draft resolutions, approving the budget, imposing any municipal tax, and a projection of cash flow by revenue source. Further, under Section 22 of the Municipal Finance Management Act it states that, after the annual budget is tabled in a municipal council, the accounting officer must make public the documents referred to in section 17(3). The judge thus held that the proposed budget and related documents envisaged by section 17(3) of the Municipal Finance Management Act were not published for comment by way of these notices, and the requirements in that regard were thus not met. This essentially means that the Municipality failed to adhere to the required public participation process. The judge, however, differed with the viewpoints of Judge Southwood, which were reflected in the South African Property Owners Association v Johannesburg Metropolitan Municipality, and which relate to the effect of section 19(1)(b) of the Rates Act, where he stated that section19(1)(b) uses the word “ratio”, which ordinarily indicates a relationship between two similar magnitudes in respect of quantity, determined by the number of times one contains the other. In section 19(1)(b), the magnitudes are the amounts in the rand determined by the Council. He further stated that, although inelegantly worded, section 19(1)(b) indicates that the ratio of the rate on non-residential properties – which includes business, commercial and

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legal update industrial properties – to the rate on residential properties may not exceed a prescribed ratio. The object of the section is clearly not to limit the rates on either non-residential or residential properties per se. It is to prohibit the relationship between the two rates from exceeding the prescribed relationship. His view is that the problem that arises from the wording of the relevant part of section 19(1)(b) is resolved if it is interpreted to read, “A rate on a category of non-residential properties so that the prescribed ratio to the rate on residential properties determined in terms of section 11(1) is exceeded.” The judge in the appeal court held that there is nothing in the Rates Act or its related legislation that indicates that the maximum permitted rate on property would be that imposed in respect of residential properties. Further to that, section 8(1) of the Rates Act provides that a municipality may, in terms of the criteria contained in its Rates Policy, levy different rates for different categories of property. Fundamentally it was stated that Judge Southwood’s interpretation formed no part of the ratio decidendi as his views were not endorsed by the majority of the judges.

The interpretation of section 19(1)(b) in the appeal court is that a municipality may not levy a rate on non-residential properties that exceeds a prescribed ratio to the rate on residential properties, but not that a rate levied on non-residential properties may not exceed that imposed on residential properties The appeal was dismissed with no order as to costs. SAPOA will continue to advocate for sustainable rates. We intend to continue engaging with the government with regards to this issue in an effort to find amicable solutions while ensuring that commercial ratepayers’ interests and overall contributions are taken into consideration when municipal budgets are drafted – and fundamentally that the process of public participation is exercised appropriately by municipalities in accordance with statutory obligations.

Further to that, section 8(1) of the Rates Act provides that a municipality may, in terms of the criteria contained in its Rates Policy, levy different rates for different categories of property

Considerations l “Rate” means a tax on property which is imposed by the Municipality, as envisaged in Section 229(1)(a) of the Constitution l According to Chapter 4 of the Municipal Systems Act, a process of community participation or public participation must take place before the Municipality adopts its rates policy. l Section 21(A)(1) of the Municipal Systems Act further provides that all documents that must be made public by a municipality are to be conveyed to the local community by way of the following methods: (a) By displaying the documents at the Municipality’s head and satellite offices and libraries; (b) By displaying the documents on the Municipality’s official website, if the Municipality has a website; and (c) By notifying the local community of the place, including the website address, where detailed particulars concerning the documents obtained. l Section 152(1)(b) of the Constitution obliges municipalities to provide services to their communities in a sustainable manner.

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SAPOA National Councillors

Councillors

in conversation

SAPOA’s Councillors share their views on the current themes and latest trends in the property industry By Candace King

ith sustainability under the spotlight this month, we speak to Heidi Hertz, Head of Strategic Operations at City Property Administration, SAPOA National Councillor and Chair of the Sustainability Committee, about the role of greening in the property industry, sustainability trends, and the movement’s future in the sector.

How has sustainability fared in the property industry over the past few years?

Heidi Hertz, Head of Strategic Operations at City Property Administration, SAPOA National Councillor and Chair of the Sustainability Committee

Using benchmarking tools (such as those available from the GBCSA) can greatly assist property owners in ranking their buildings – and in addressing those buildings that have very low green ratings

Greening and sustainability have had a slow start but will continue to gain traction. There is enormous pressure on the property industry to focus on these issues, not only through the various regulations that have been (and continue to be) introduced, but also via the tenants who buckle under the increased operating costs. To remain competitive, property owners must address the cost burden on tenants to ensure sustainable rental growth. The commercial property sector consumes 10% to 15% of Eskom’s energy output, so initiatives by our industry to reduce our electricity consumption have a real impact.

What is the general consensus in the industry about sustainability? The general consensus is that these issues have great relevance for the industry as a whole, not just because of environmentalimpact concerns but because of the rands and cents of it.

Property owners made good use of the Eskom Standard Product Funding Programme, with more than 5 000 projects registered for the replacing of ageing, inefficient lighting with energy-efficient lighting. City Property, as an example, has replaced more than 21 000 inefficient lamps in the last year. The return on investment on other technologies, such as solar PV, can make it difficult to justify the expenditure.

What are the latest trends in this regard? With most property owners having dealt with the lowhanging fruit of lighting retrofits, focus has shifted to solar, heat pumps, grey-water harvesting, efficient HVAC, and so on. The cost of all these technologies will continue to reduce. SANS 204 and 10400-XA, which deal with energy usage in all new developments or additions to existing buildings, were introduced in November 2011 and prescribe the minimum requirements for water heating, insulation and glazing, requiring the architect to satisfy certain conditions. Heat pumps are rapidly becoming commonplace. Property owners continue to explore what is available locally and abroad, but need to look beyond electricity consumption to include other aspects of environmental sustainability in the mix. Finding reliable technologies from trusted companies with local support remains a challenge.

What are your thoughts on the use of alternative energy? Alternative energy remains unaffordable and inaccessible compared to coal-based energy. Cabinet approved private-sector participation in electricity production in 2003, but more needs to be done to promote alternative energy. Being able to sell back into the grid would make it easier to justify the expenditure. Government policies to make all of this happen exist – but implementation has been slow.

Where do you see sustainability in the next few years? I don’t think it’s a question of whether it will expand; it must. Reaching the energy-efficiency targets set by the government is a strategic imperative for the country and for the businesses that hope to operate sustainably going forward. Using benchmarking tools (such as those available from the GBCSA) can greatly assist property owners in ranking their buildings and in addressing those buildings that have very low green ratings. In his presentation at this year’s SAPOA Convention, Kees Hage of PWC Luxembourg stated that, by 2020, it is likely that all buildings in advanced economies will need to have a sustainable rating. Buildings that do not keep up with the changing needs may face a “brown discount”. Property owners need to ensure they have energy managers and engineers in place in their organisations to systematically address the shift that is taking place.

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SAPOA national councillors

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interview

Berkeley bids farewell By Candace King

wenty years working as a key figure in a paramount company is a long time and a great achievement. This is the sterling feat of industry veteran Frank Berkeley, Managing Executive of Nedbank Corporate Property Finance, who has retired from his Nedbank role effective end August 2014. In between his busy schedule, we got the chance to speak to this industry icon about his time with Nedbank as well as his tireless contribution towards the property sector. Having joined the Nedbank Group in August 1994 – the year of South African democracy’s birth – Berkeley has been at the helm of Nedbank Corporate Property Finance Division’s exceptional performance since taking the reins in 2004. In the same vein that our democracy made great changes to our nation, Berkeley brought a specific spark to the group, successfully positioning Nedbank as the leading bank in commercial property finance, with a market share well ahead of its competitors. His involvement in Nedbank also forms a crucial part of the banking group’s transitive history, which harks back to the 1800s. Prior to joining the Nedbank Group, Berkeley held the position of Chief Executive Officer of Group Five Residential Division, encompassing Group Five Homes, Goldstein Homes and Gough Cooper Homes. In 1994, Berkeley joined Syfrets as Regional General Manager for the Property Finance Division. In 1997, Syfrets merged with UAL Merchant Bank and Nedbank Investment Bank Division to form the listed Nedcor Investment Bank Limited (NIB), where he held the position of Divisional Director of the Property Division. With the merger of Nedbank, NIB, Cape of Good Hope Bank and BoE in 2003 to form the new Nedcor Group, he became the Divisional Director of Nedbank’s Corporate Property Finance Division. Thereafter, he was appointed as Managing Executive of Nedbank Corporate Property Finance in 2004. “My 20 years with Nedbank were well spent”, says Berkeley. “There were tough times over the 20 years, with the first 10 being the most challenging. The last five years have been the best. During this period we learnt a lot and dealt with many great clients. All in all, it was educational and very rewarding.”

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interview After 20 fruitful years with Nedbank, Managing Executive of Nedbank Corporate Property Finance, Frank Berkeley, has decided to take early retirement from the leading green bank

Berkeley notes that Nedbank’s Property “Helping people to grow has been Finance business landscape is in the best enormously satisfying – helping people to shape it’s ever been. During 2014, it should achieve their potential and their goals within reach the financial targets projected to be the bank has been the most enduring thing,” achieved in 2016. “Property Finance reached says Berkeley. With greening taking a foothold R100-billion in book size at the end of June in the property industry, he notes that 2014 – a milestone that we can attribute Nedbank’s stance on sustainability is a key to the entire staff of Nedbank Corporate attribute. “Apart from its green branding, Property Finance,” says Berkeley. While many Nedbank boasts a green ethos that it’s very banks pulled out of property finance during proud of,” he says. “Having established the the economic downturn period around 2008, Green Trust in association with the World according to Berkeley the Corporate Property Wide Fund for Nature in 1990, Nedbank has Finance Division remained in the game and long been a green bank. It’s part of our culture. continued to perform, growing its market Green building started off as a ‘nice to have’, share. Over the past 20 years, he believes but with rising energy costs, it has become a the landscape has become more competitive. ‘have to do’. For example, water was virtually “There are more players in the market and free 20 years ago but has now become costly. people now appreciate property more,” he The payback period of green building is says. “Currently, it’s tougher for the banks worthwhile and makes financial sense. but easier for clients. Almost every The knowledge base new building has “Helping people to grow has has definitely grown a green element. been an important factor – helping The challenge and strengthened.” On the greatest now is to green people to achieve their potential achievements and existing buildings.” and their goals within the bank hardest challenges, When asked has been the most enduring thing” where he’d wish Berkeley says that the biggest highlights to see Nedbank in include Nedbank Property Finance’s the next 20 years, Berkeley says that the bank incremental growth over the past 20 years is currently in a very good space and will only as well as its ability to maintain its best staff grow from here. “I foresee Nedbank changing amid tough economic times. “With a 40% with the times and adapting as one of the market share, Nedbank has contributed largest financial institutions. As a last message tremendously towards the growing property of encouragement to Nedbank, treasure the finance industry,” he says. “Ten years ago, its culture and look after the people.” book size stood at R24-billion. This figure has Life after Nedbank, Berkeley says, will be grown to R100-billion – this is a remarkable hard-working and focused on the property achievement. The property industry has industry. “Retiring from Nedbank does not certainly had its share of challenges and mean that I won’t be working any more,” he opportunities. Our message has consistently says. “Personally I don’t ever want to retire, been that, even in tough economic times, but would like to continue in business as we have remained open for business and long as my health permits. I think that if partnered with our clients to provide finance you reach 80 years of age, that is a good where opportunities are realised. Challenges time to think about cutting down to a fourhave included rising interest rates as well as day week! helping clients survive during tough times. “I want to pursue other avenues and Remaining a market leader and growing certainly will still be involved in property. our book size have also been challenging.” I’m hooked on this industry. I have ideas Berkeley says one of his most noteworthy I want to do for myself, and certain business highlights is Nedbank’s dedication towards ventures and people I want to get involved its hard-working staff. Nedbank has succeeded with. One of my goals is to create structures in retaining its best people, and during times and investment opportunities for South of poaching, the institution has managed to Africans who would like to invest in property keep its top staff. abroad – in particular in Europe.”

When asked where he’d wish to see Nedbank in the next 20 years, Berkeley said that the bank is currently in a very good space and will only grow from here.“I foresee Nedbank changing with the times and adapting as one of the largest financial institutions. As a last message of encouragement to Nedbank, treasure the culture and look after the people”

On behalf of SAPOA and its members, we thank Frank Berkeley for his contribution towards the property industry and wish him all the best in his future endeavours. SOUTH AFRICAN PROPERTY REVIEW

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meeting

Tackling property rates By Candace King Photographs by Michael Glenister

n 4 August, SAPOA hosted a meeting at the Hyatt Hotel in Rosebank to discuss the ongoing issue of property rates and its impact on property owners. As an outcome of a paper delivered at the 46th Annual SAPOA International Convention and Property Exhibition and the points raised during the property rates panel discussion, it became apparent that the only way to correct the current imbalance in the rating system is for the industry as a whole to take control of the process. “We are all aware of the issues currently facing municipalities throughout the country and the devastating effect that incorrect municipal valuations are having on the rates payable by both landlords and tenants,” said SAPOA Neil Gopal. “There is no doubt that if we succeed in correcting the municipal values, rates and taxes will be stabilised.”

SAPOA is proposing the concept of selfdetermined municipal valuations (SDMV), which will offer members the opportunity to do away with the tedious tasks of lodging objections, appeals and even High Court applications. SAPOA believes that negotiating municipal valuations before (rather than after) they are compiled will put an end to the situation the industry is currently in. SDMV will also normalise the rates account payable to the municipality. This will allow for better cashflow management and tenant relationships, and reduce tenant vacancies. The meeting provided a more in-depth look at the rating and valuation issues currently facing property owners throughout the country, and laid out how the concept of SDMV would be applied. “We need to establish whether this is a concept that will

be supported by our members,” said Gopal. “If, in principle, the concept of SDMV is agreed upon at this meeting, the next phase will be for SAPOA to obtain a mandate to further investigate and implement the principles of SDMV with the Department of Corporate Governance and Traditional Affairs, under whose jurisdiction the Municipal Property Rates Act vests.”

ATE TY R

ER PROP

SD FOR ASE C E TH SUE AND XT IS E NE H T IN E ON

MOR

FROM LEFT Abakon Property Valuations (Pty) Ltd Managing Director Werner Sarvari; SAPOA President and Chief Investment Ofﬁcer: STANLIB Direct Property Investments Amelia Beattie; SAPOA CEO Neil Gopal; Rates Watch (Pty) Ltd Director of Valuations Ben Espach; and Rates Watch (Pty) Ltd Director of Rates Kokkie Herman

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meeting

TOP ROW, FROM LEFT SAPOA CEO Neil Gopal; Storage RSA Marketing and Development Manager Izeldi Loots with SAPOA President and Chief Investment Officer: STANLIB Direct Property Investments Amelia Beattie; Rates Watch (Pty) Ltd Director of Valuations Ben Espach; Rates Watch (Pty) Ltd Director of Rates Kokkie Herman BOTTOM ROW, FROM LEFT Abakon Property Valuations (Pty) Ltd Managing Director Werner Sarvari; Growthpoint Properties Limited Executive Director and SAPOA Immediate Past President Estienne de Klerk; STANLIB Direct Property Investments Liberty Property Portfolio Fund Manager Alex Phakathi

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theme leader

Justiﬁably green

Sustainability in South Africa is now a solid, rapidlydeveloping movement, with the property industry leading the green revolution By Candace King Photographs by Michael Glenister

t’s official: the greening and sustainability movement in the property industry is no pipe dream or wishful thinking. Although South Africa is relatively new on the green building scene, the country is making rapid progress. In the last few years, the movement has gained immense traction, with greening practices now firmly on the agenda of any boardroom discussion that involves real estate. Spearheading the movement is the Green Building Council of South Africa (GBCSA), which currently leads the transformation of

the South African property industry to ensure that buildings are designed, built and operated in an environmentally sustainable way via its several rating tools. Having been around for seven years, the GBCSA has, to date, certified more than 60 Green Star SA-rated projects – a major milestone for the industry and proof that the green building movement is firmly established in the commercial property sector. “We have a further 150 or so projects in the Green Star SA registration pipeline, which shows the interest of property professionals in our country,” explains GBCSA Chief Executive Officer Brian Wilkinson. “Stemming from these projects, the positive green building impact is set to increase significantly. In total, this is more than two-million square metres that are either already certified as green buildings or have registered their intent to apply for certification.” Over the past few years, the industry has proved the business case for green building, developed new products and processes, and built capacity and knowledge. The clear progress that the South African green property market has seen will continue as an ongoing trend as market demand grows and financial rewards become evident. Increasing government regulations and shareholder pressure have also provided multiple incentives to own and occupy highperformance green buildings. Wilkinson says that, as with any macrolevel change, the general consensus about greening in the property industry is divided between those pioneering change (the early adopters) and those who “wait and see”.

Brian Wilkinson, Green Building Council of South Africa Chief Executive Ofﬁcer

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“As the early adopters of green building started demonstrating that green building was not only the right thing to do but also that it could be done at little or even no extra cost, so others started joining the trend,” he says. “In fact, I’d be happy to say that we’re out of the early stage and that green building has basically become mainstream. The growth in certifications, member numbers and course delegates is all proof.” While it has become mainstream, there is still the belief that greening is a hyped fallacy that’s, plainly put, far too expensive. It really is quite simple, says Wilkinson: any form of property investment is, by definition, a longterm play. “The question is, are you going to knowingly allow your stock to become tertiary and expose yourself to high operating costs, lower rentals, higher vacancies and ultimately lower valuations?” Another point raised is that, in light of South Africa’s major problems, including inequality, poverty, disease and unemployment, shouldn’t those challenges be addressed first before greening? “We absolutely have other issues in South Africa that can’t be ignored,” says Wilkinson. “But in the property sector, this is something we simply have to do. It’s not about choosing one or the other; it’s about leaders positioning their companies to do as much as possible in addressing all the issues. Unfortunately we’ve hurt our planet far too much, and with the growth in population and the impact of the pace of urbanisation, climate change is no longer a myth, but a very real factor.”

The case for green building The built environment is a huge player in the damage we do to our planet – a third of CO2 emissions are from our sector, and we are responsible for 40% end-use energy consumption, 40% solid-waste generation, and 12% fresh-water consumption. But the good news is that we can do something about this relatively quickly and with a great business case. Take the No. 1 Silo building at Cape Town’s V&A Waterfront, for example – it uses 70% less electricity than a standard office building. Apart from the minimisation, or even removal of, harmful effects on the environment, green building boasts a host of economic and company benefits, including higher valuations, higher rentals, lower operating costs, increased tenant satisfaction, lower risks, improvements to employee

productivity and, ultimately, better investment returns – and more. “People who believe that it’s too costly and unviable have not done their homework – they don’t see the true value in green building,” says Jarrod Lewin, GBCSA’s Business Development Manager. “Green buildings can be expensive; however, this depends entirely on how you build them. The stats and figures prove that green building is now the norm and not a nicety. In the next five to seven years, we estimate to hit 5 000 certified Green Star SA buildings.” “The benefits are very much on energy and water improvement,” notes Justin Bowen, Development Manager at Emira Property Fund. “Green buildings perform 50% better than a SANS-compliant building in terms of energy. People think that a green building costs 17% more than a standard building, but this isn’t the case.”

Jarrod Lewin, Green Building Council of South Africa Business Development Manager

All aboard the green train From the industry’s property owner and developer company heavyweights, to the major banks and key corporate tenants, all stakeholders are joining and engaging in the greening movement. “The GBCSA could not have achieved the success we have without the support from, and partnership with, major industry players who have pioneered the way to a better place for people and the planet,” says Wilkinson. While the green-building initiative in South Africa is largely driven by the corporate sector, more recently the public sector is also paying more attention to the issue. To date, several national government-owned buildings in South Africa have received a Green Star certification.

Justin Bowen, Development Manager at Emira Property Fund BELOW No 1 Silo at the V&A Waterfront was awarded the country’s first-ever 6-Star Green Star SA As Built rating by the GBCSA

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Werner van Antwerpen, Sustainable Development Manager at Growthpoint Properties Limited

“We’ve seen the advances made by government bodies and big businesses ranging from banks to property developers who have taken up our Green Star SA rating opportunities to demonstrate commitment in their own spaces,” says Wilkinson. One of the country’s biggest green movement players is Growthpoint Properties Limited, which owns the largest number of Green Star SA-rated buildings in South Africa. “The primary reason for rapid growth in the green property industry over the last few years is directly related to the business case that green is becoming a business opportunity in an increasingly competitive global marketplace,” explains Werner van Antwerpen, Sustainable Development Manager at Growthpoint Properties Limited.

stock; an increase in green leasing agreements on both new and existing buildings; as well as a move towards renewable energy sources. As lead financier of green buildings in the country, as well as the biggest occupier of green buildings, Nedbank is proud of its Green Star Rated buildings accredited by the GBCSA, which include Sandton Phase II in Johannesburg; Ridgeside in Durban; Menlyn Maine in Pretoria; and Lakeview in Roodepoort. Under construction is Nedbank’s fifth and sixth green building in Newtown, which will open for business at the end of 2014. “Our more than 20 years of involvement in sustainability and addressing issues of climate change have evolved us as a business – and as a good corporate citizen – into an operation that entrenches a culture of sustainability in everything we do,” says Charl de Kock, Head of Group Property Services at Nedbank. “At Nedbank, we are committed to achieving carbon neutrality, and our energy-efficiency targets form an integral part of our business strategy and ongoing performance evaluation.”

An evolving movement

Growthpoint Properties Limited’s Mayfair on the Lake is the first tenanted office building in KwaZulu-Natal to achieve a Green Building Council of South Africa 4-Star Green Star rating

Rudolf Pienaar, Office Division Director at Growthpoint Properties Limited

“For property owners, it has become acutely evident that green has become a business imperative. The green property industry has also seen a movement whereby tenants are increasingly demanding green buildings.” “Globally, property owners and developers face the challenge of future-proofing their buildings,” says Growthpoint Properties Limited’s Office Division Director, Rudolf Pienaar. “Going green is now generally viewed as the smart choice, and it encompasses imperatives such as sustainability, responsible investment requirements, aesthetics and profitability.” Van Antwerpen and Pienaar both point out that various trends are shaping the green movement in South Africa. These include a shifting focus from new building design and construction to greening existing building

The GBCSA is constantly looking at how the market is evolving, and adopting new ways of supporting this evolution to ensure that it is a green one. Last year, the organisation released two new tools that see building owners and tenants being able to seek a Green Building Certification for the performance of their existing buildings, and tenants being able to seek certification for their interiors. Furthermore, the GBCSA has partnered with IPD to develop and track a sustainability index. The IPD Sustainability Index in Australia is well established, and it’s great that we’ll soon be able to publish our own, according to Wilkinson. The IPD Australia Sustainability Index has shown that buildings with Green Building features and initiatives can outperform the main index! The City of Johannesburg has become the first municipality to list a Green Bond on the JSE. The R1,46-billion bond COJGO1 was priced at 185 basis points (1,85%) above the R2023 Government Bond and will mature in 2024. The money raised through the bond will be used to finance green initiatives. Commenting on the Carbon Tax Policy, Wilkinson says, “We would have preferred to have seen revenues from any carbon tax ring fenced to support climate change

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Charl De Kock, Head of Group Property Services at Nedbank

adaptation. The tax will ultimately have the effect of adding another layer of cost to poorly performing buildings, and is yet another reason why property owners, property managers and property developers need to take a longer-term view to make sure that their portfolios minimise carbondioxide emissions.” With its plethora of greening initiatives, the GBCSA will be seeking to leverage its existing tools and services further in the near future and to offer viable, easy solutions for property professionals to access in order

to abate climate change through built environment change. “The green property market will continue to transform, as we have reached a point where financial benefits encompass improved financial performance and increased capital value,” says Van Antwerpen. “With the number of certified Green Star rated buildings on the increase and with new GBCSA Green Star tools being launched, the green property market will undoubtedly continue to transform in a significant way,” says Pienaar.

FROM TOP 45th SAPOA Convention Innovative Xcellence Overall Green Award winner Lakeside Office Park, Centurion; 4-Star Green Star SA Office v1 Design rated Tshedimosetso House, Pretoria; the first-ever 6-Star Green Star SA Office v1 Design rated building in South Africa – Vodafone Site Solution Innovation Centre, Midrand

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es: i r e eyerion a s Africa c hly ntry t f n e A o ou Th our m by-c try focus n cou

Africa uncovered Nigeria

While it’s currently Africa’s greatest success story, Nigeria – like many of its continent’s counterparts – is plagued by problems. Yet this country of duality is poised for exceptional growth By Candace King

Nigeria at a glance ▼ Population 170,1-million (2013) ▼ Major cities Lagos (8-million), Port Harcourt (1,4 million), Abuja (0,8-million) ▼ Currency Naira (NGN) ▼ Total area 923 768km² ▼ GDP growth 6,2% (Q1 2014) ▼ Key industries crude oil, coal, tin, columbite, rubber products, wood, textiles, chemicals

igeria’s current landscape can be likened to Charles Dickens’ classic A Tale Of Two Cities – a country with immense juxtaposition, a divided nation that is Africa’s biggest economy but also one of the continent’s most povertystricken and unequal. For Africa’s opportunist star, it’s both the best and the worst of times. Amid all the emerging economies of the world, the African region is the next foreign direct investment frontier, with global investors and business leaders paying close attention to the continent, and particularly to Nigeria. As Africa’s top GDP-performing country and its leading oil producer, Nigeria is the most populous country on the continent, with about 170-million people calling it home. Moreover, Nigeria boasts a young and rapidly growing population and a rising

middle class that has a taste for technology and consumerism: by 2012, 33% of Nigerians were online (ITU). Nigeria is also strategically located in West Africa, which allows for conducive trade within the continent, and with Europe and North and South America. In April 2014, the Nigerian government began to release “rebased” data that highlighted a GDP of US$510-billion in 2013, compared with US$354-billion for South Africa. The rebased data also revealed an economy that was far more diverse than previously understood. While oil and gas remain significant resources of economic importance, Nigeria is moving away from being solely a petro-economy and exploring other sectors, including agriculture and trade, which are bigger and faster-growing. Today, the country’s entire resource sector only accounts for 14% of GDP, while productivity has contributed 55% of total growth since 2010. Another sector to watch in Nigeria is its film industry – Nollywood – which is the second-largest employer after agriculture. The sector produces US$200- to US$300million in revenue per year, and is the secondlargest film industry in the world. With its current positive performance and promising growth, Nigeria has come from

a very tumultuous past, with the ills of its history still haunting the country today. After a century and a half of colonial rule, Nigeria gained independence from the UK in 1960; seven years later, the country fell into a civil war. The political ruling landscape since independence alternated between military and democratic regimes, with several military coups having occurred through the years, until democratic elections in 1999 and 2003 brought in a new era of relative stability and strong economic growth. The country was simultaneously plagued by deep-seated religious and ethnic divisions – a Christian south, a Muslim north, and three major ethnic groups: the Hausa-Fulani, the Igbo and the Yoruba – which still exist today. After several attempts at stabilising democratic rule since its independence, the Fourth Republic was established in 1999 and proved to be more successful than its predecessors. In May 2010, Goodluck Jonathan became President and went on to win the elections in April 2011. However, the internal troubles were not over. Violence ensued in the north, further aggravating the geographical religious divide. Formed in 2002, the dreaded northern-based radical militant Islamist group Boko Harām has wreaked havoc

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eye on Africa Population by millions

1,4- -3.5 3,5 1.4

- 3.5

3,5- -5.5 5,5 3.5

- 5.5

- 7.5

5,5- -7.5 7,5 5.5

- 9.4

7,5- -9.4 9,4 7.5

in Nigeria over the past few years with ongoing attacks, assassinations, kidnappings and bombings. One of the other major problems facing the country is poverty. More than half of Nigeria’s population lives in poverty – and more than 40% of all Nigerians live below the official poverty line. While agriculture plays a key role, the sector is heavily hampered as a result of several factors, including post-harvest losses, an inefficient market system and the fact that Nigerian farmers have very limited access to productivityimproving inputs. While Nigeria boasts a budding oil industry, the sector is dogged by oil spills, corruption, mismanagement and violence.

Despite this, the environment for growth in Nigeria has improved since the early 2000s as a result of the implementation of various reforms, which have led to greater macroeconomic stability. With the correct reforms and investments in place, Nigeria could become one of the world’s leading economies by 2030. According to a new report from the McKinsey Global Institute, “Nigeria’s Renewal: Delivering Inclusive Growth In Africa’s Largest Economy”, it’s believed that Nigeria can build on the momentum of the past decade and, if all goes well, achieve 7,1% annual GDP growth through 2030, raising GDP to more than US$1,6-trillion in 2030. This could potentially move Nigeria from being the 26th-largest economy today to a top-20 economy by 2030 – and most likely make it bigger than the Netherlands, Thailand and Malaysia. The report analyses how the country can live up to its economic potential while making growth more inclusive, thus alleviating more Nigerians out of poverty. The report states that the country is well positioned to benefit from trends such as a rising demand from emerging economies, growing global demand for resources and the spread of the digital economy. The report identifies five major potential sectors that will drive Nigeria’s economy into the future. These include agriculture, trade,

First Africa property fund eyes Nigeria Black-owned property loan stock company Delta Property Fund Limited successfully listed Delta International Property Holdings (“Delta International”), the JSE’s first panAfrican income property fund (JSE short code: DLI), which offers property investors direct access to immediate high-growth opportunities on the African continent. Unsurprisingly, the fund has set its sights on Nigeria as a key investment market on the African continent. Apart from Nigeria, Delta International’s first phase of geographic expansion targets are Ghana, Morocco and Mozambique, with the second medium- to long-term expansion phase including Angola, Gabon, Tanzania, Tunisia, Zambia and Zimbabwe. Delta Property Fund Limited listed a total of 43 918 556 new shares on the JSE AltX on 23 July 2014 at an issue price of US$2 per share, raising US$87-million by way of private placement. Furthermore, Delta International offers an attractive US-Dollar-

based forward yield of 7,8% and approximately 70% free-float, which should support the stock’s liquidity. “Our geographic spread will be across north and sub-Saharan Africa, excluding South Africa,” said Sandile Nomvete, Chairman of Delta International and Chief Executive Officer of Delta Property Fund Limited. “We have identified an acquisition pipeline of up to US$250-million. Core to the portfolio will be office and dominant retail assets – but we will also consider strategically placed hotels, distribution centres and some residential acquisitions, provided that these are located in rapidly urbanising areas and are underpinned by a sovereign lease. “Before entering a country, we always carefully analyse political and economic stability and expected GDP growth as well as the ease of doing business – especially the applicable tax regime and repatriation of dividends.”

oil and gas, manufacturing and infrastructure – the latter likely to be crucial in catering for Nigeria’s increasing growth.

The Nigerian property industry Nigeria’s property sector is experiencing tremendous development and is on the cusp of incremental game-changing growth. One major downside of the industry is straining infrastructure. Nigeria is keen to attract foreign investment but is hampered in this regard by security concerns and by a shaky infrastructure that’s troubled by power cuts. While, on average, the value of a country’s core infrastructure (including roads, railways, ports, airports and the electrical system) represents about 68% of GDP, Nigeria’s is only about 39%. In the country, trade and infrastructure represent the majority of the growth potential, likely contributing about a third of GDP expansion through 2030. Between core infrastructure and real estate, total infrastructure investments in Nigeria could reach US$1,5-trillion from 2014 to 2030, making building infrastructure not only a major contributor to GDP but also an enabler of growth across the economy.

Retail market With the increasingly rapid construction and uptake of western-style retail and leisure malls, the retail sector in Nigeria is flourishing. Over the past few years, shopping malls have mushroomed across the country and more are being added to the retail list each year, with the likes of The Palms Mall and Ikeja City Mall in Lagos, Grand Towers Abuja Mall, Ado Bayero Mall in Kano, and Delta City Mall in Warri.

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eye on Africa Exhibit E1 “Rebasing” confirms that Nigeria theNigeria largest economy in Africain Africa “Rebasing” confirmsisthat is the largest economy African countries

Nominal GDP, 2013 1 2013 $ billion

Real growth 2010 –13 1 % 510

Nigeria (rebased) 2 354

South Africa

4.9

105

Morocco

With regards to Nigeria’s industrial market, a number of multinational companies (such as Procter & Gamble, GSK, Nestlé, Diageo and SABMiller) are showing increasing interest in investing in Nigeria. These companies are injecting massive investment in new production facilities supplying the Nigerian market. Companies are establishing secondary manufacturing hubs on the outskirts of Lagos state, especially in southeast Nigeria. Problems in the sector include the country’s chronically poor power supply, which has led to a number of companies departing from the country. The office sector is showing signs of improvement. The availability of goodquality space is gradually improving, with several A-grade projects having come to the market, and several more still under construction. One gigantic development that’s set to change the market – and the property industry as a whole – is Eko Atlantic, an impressive new city urban development in Lagos. The project website states that Eko Atlantic will be a new home to 250 000 people – and

3.0

124

Angola

Industrial and office market

1.9

216

Algeria

This spike in retail development is boosted by Nigeria’s large developing consumer class. By 2030, about 160-million Nigerians (out of a projected population of 273-million) could live in households with sufficient income for discretionary spending. This equates to more Nigerian consumers than the current population of France and Germany combined.

2.7

262

Egypt

Sudan

Tunisia

Ethiopia

Ghana

Kenya

6.4

4.3 -0.4 1.5 9.0 10.2

Cameroon

Côte d’Ivoire

Uganda

Zambia

4.9 4.4 4.1 4.9 6.7

1 Economic data for some countries in 2013 estimated by the International Monetary Fund (IMF). 2 Data for Nigeria rebased GDP are based on basic prices, the headline figure used by the National Bureau of Statistics. SOURCE: IMF; National Bureau of Statistics; McKinsey Global Institute analysis

Source: IMF; National Bureau of Statistics; McKinsey Global Institute analysis

the workplace of a further 150 000. The 10km² development will include waterfront areas, tree-lined streets, an efficient transport system and mixed-use plots that combine residential areas with leisure facilities, offices and shops. Lagos and Eko Atlantic are expected to become the new financial epicentre of West Africa by 2020. In terms of rental figures, rents in Lagos remain among the highest in the world, with achievable rents at more than US$1 000/m² per annum for smaller spaces. Office rents in Abuja are a little below Lagos levels. The office sector will be greatly stimulated by the World Trade Center Abuja project which is set to revolutionise the city. The masterplanned eight-tower complex development

will feature AAA office towers, luxury residences and up-scale shopping.

Residential market In light of Nigeria’s growing population and rising middle class, the residential market is poised for growth. However, the sector is plagued by a lack of home loans, high interest rates and high prices – Lagos is the continent’s second-most expensive real estate market. There’s also a great national housing shortage, which the World Bank estimates at 17-million. Meanwhile, Lagos’ luxury residential sector continues to suffer from an oversupply of high-end properties that were built in the years prior to the global financial crisis. However, rents and sales prices for high-end apartments remain high.

Lagos prime rents and yields Prime rents

Prime yields

Offices

US$85/m2 per month

10%

Retail

US$65/m² per month

11%

Industrial

US$12/m² per month

13%

Residential

US$10 000 per month*

Abuja prime rents and yields Prime rents

Prime yields

Offices

US$65/m per month

10%

Retail

US$65/m² per month

11%

Industrial

US$9.50/m² per month

13%

Residential

US$10 000 per month*

11%

* Four-bedroom executive house – prime location SOUTH AFRICAN PROPERTY REVIEW

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Th e WOR

series D L

by-country focu try-

As the world’s secondlargest developing economy, India is on the rise, with the greatest potential to be a key global leader By Candace King

Key facts ▼ Population 1,27-billion (2014 est.) ▼ Major cities Mumbai, New Delhi, Bangalore, Chennai, Kolkata ▼ Currency Indian Rupee (INR) ▼ Total area 3 287 263km² ▼ GDP growth (2013 to 2014) 4,7% ▼ Key industries Agricultural products, textile goods, gems and jewellery, software services and technology, engineering goods, chemicals, leather products

India rising I

n a world dominated by developing countries that are driving global growth and redefining foreign investment decisions, India is regarded as the most notable and poised emerging market to watch. According to International Monetary Fund estimates, emerging economies are expected to grow two to three times faster than developed nations, with India right in front as Asia’s next biggest performer. As the world’s largest democracy and second-most populous country after China, India is ripe with opportunity, with an economy that’s fast-growing and powerful. Not only is India rich in cultural and religious diversity, it also boasts a plethora of natural assets including coal (fourth-largest reserves in the world), iron ore, manganese, natural gas, diamonds, petroleum and limestone, as well as arable land. With an economy that combines traditional and modern industry, India is home to the world’s largest and most successful film industry. Bollywood is responsible for the production of more than 1 100 movies every year – just ahead of Nigeria’s Nollywood, and twice as many as the US’s Hollywood. Prior to its emergence as a major world power in the 1990s, India’s history has been quite tumultuous at times. India’s existence can be traced back to the ancient Indus Valley civilisation, one of the world’s oldest

civilisations, which flourished during the 3000 and 2000 BC. After years of empire and dynastic rule, European explorers began establishing footholds in India during the 16th century; by the 19th century, Great Britain had become the dominant political power on the subcontinent. Non-violent resistance to British rule, led by Mohandas Gandhi and Jawaharlal Nehru, resulted in Indian independence in 1947. The peaceful transition was coupled with widespread communal violence that took place before and after the subcontinent partition into two separate states – India and Pakistan. Since independence, rival neighbours fought three wars, with the final clash occurring in 1971 and resulting in east Pakistan becoming the separate nation of Bangladesh. Apart from the ongoing feud between the two states that has involved terrorism over the years, India has had to deal with many pressing problems: significant overpopulation, extensive poverty, environmental degradation, socio-political clashes, violence, rape, abuse of women and girls, and widespread corruption are a mere sample of India’s host of issues. Other internal problems include an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural

Figure 1: Composition of GDP and labour force

Composition of GDP

Composition of labor force

17%

20% 31% Industry Agriculture

17%

Services 66% 49% Source: CIA, JLL

Source: CIA, JLL

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employment opportunities, high spending and poorly targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-tourban migration. Despite this, India has worked hard towards turning the country around economically, and a number of demographic trends are adding to its success. After the launch of economic reforms in 1991, economic growth followed. India’s swelling youthful population is driving the country’s emergence as a regional and global power.

India’s economic lotus of progress Despite India’s high inflation, slowing GDP growth, trade deficit, external debt and depreciating currency, Jones Lang LaSalle believes that the second-largest developing economy in the world is on the trajectory of becoming the world’s third-largest economy by 2020. From the late 1980s, India began to open up to the outside world, encouraging economic reform and foreign investment. Developing into an open-market economy, India has introduced economic liberalisation measures, including industrial deregulation, privatisation of state-owned enterprises, and reduced controls on foreign investment. Having begun in the early 1990s, economic

reforms have served to accelerate India’s growth, which averaged under seven percent per year from 1997 to 2011. The country boasts a diverse economy that consists of traditional and modern agriculture, handicrafts, a wide range of modern industries, and a variety of services that serve as a major source of economic growth. Services account for nearly two-thirds of India’s output, with less than one-third of its labour force. With the second-biggest population in the world (of which 65% is income-earning), India is home to a growing urban middle class, which has stimulated various service sectors, especially information technology. Its large, skilled workforce makes it a popular choice for international companies seeking to outsource work. The country has capitalised extensively on its massive educated Englishspeaking population, which serves as a major importer of information technologies, business outsourcing services and software workers. After slowing economic growth in 2011 because of a decline in investment caused by high interest rates, rising inflation and investor pessimism, the Indian government announced additional reforms and deficit reduction measures in late 2012, including allowing higher levels of foreign participation in direct investment in the economy.

As the world’s largest democracy and secondmost populous country after China, India is ripe with opportunity, with an economy that’s fast-growing and powerful. Not only is India rich in cultural and religious diversity, it also boasts a plethora of natural assets, including coal (fourthlargest reserves in the world), iron ore, manganese, natural gas, diamonds, petroleum and limestone, as well as arable land

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eye on the world While growth fell to a decade-low in 2013 as a result of wide fiscal and current account deficits, investor interest and perception improved in early 2014 thanks to a reduction of the current account deficit and expectations of post-election economic reform. A surge of inbound capital flows ensued, as did a stabilisation of the Rupee. Based on its budding population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy, India’s long-term growth appears positive and is expected to outperform long-time rival China. According to a report by Japanese brokerage firm Nomura, India’s economy will begin to outpace China from 2016. Nomura expects India’s real GDP growth to rise from an average of 4,7% in 2013 and 2014 to 6,3% in 2015, 7,1% in 2016 and 7,7% in 2017. India has addressed its poverty issues by halving its official poverty rate, from 45% of

the population in 1994 to 22% in 2012. Raising its population out of poverty together with the rise of the middle class, has caused India’s real estate sector to blossom, with policies and trends that are altering the market.

Poised property India’s real estate is a continuous key component in the success of its growing economy. According to a recent study by Cians Analytics on the returns from various asset classes in the country between 1991 and 2013, the real estate and equity market have produced the highest returns to investors. The real estate sector is experiencing a transitional period in its development. Once disorganised and predominantly run by family-owned businesses, the real estate market is slowly moving towards a more structured corporate approach. Because of rapid urbanisation, increasing levels of income and the opening up of the

Investment in real estate by 2015 Investment excluding EWS housing (US$ billion)

Investment including EWS housing (US$ billion)

Residential

244

Retail

4,8

Office

Total

257

Asset

Source: EY estimates

sector to foreign direct investment, the real estate sector has grown tremendously over the past decade. With the entry of international real estate players, foreign investors and Indian corporate houses into the real estate sector, the value and development of property has grown. According to EY, the contribution of the real estate sector to India’s GDP has been estimated at 6,3% in 2013 and is expected to create more than 17-million employment opportunities across the country by 2025. While housing contributes approximately five to six percent of the country’s GDP, the retail, hospitality and commercial subsectors have also grown simultaneously, meeting the increasing infrastructural needs. In the past three years, over US$1,14-billion has been invested in commercial office space by core investors. The sector is currently being altered and shaped by regulations, including the possible introduction of a REITs system, the Company’s Bill, FDI, the Real Estate Regulation Bill and the new trends in realty development. An interest has been shown by the Indian government in the establishment of REITs in the country. The Securities Exchange Board of India has released draft guidelines for the proposed REIT structure. REITs will assist in funding options for developers and will provide an exit option for investors, resulting in a reduction in cap rates and an improvement in valuations.

Figure 2: Annual GDP growth rate in the last decade 20

Growth Rate (in %)

(5)

(10) 2000

2001

2002

2003 US

2004 UK

2005 Japan

2006

2007 Brazil

2008 Russia

2009

2010 China

2011 India

2012

2013*

2014*

World

Source: International Monetary Fund Statistics Report – Data and Statistics, 2012; * GDP data projection for the year 2013 and 2014

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eye on the world Figure 3: Number of companies listed on the BSE * Gradual growth in listed companies – result of shift from disorganised to organised

Source: Bombay Stock Exchange

Because of rapid urbanisation, increasing levels of income and the opening up of the sector to foreign direct investment, the real estate sector has grown tremendously over the past decade

Figure 4: Growing urbanisation

Source: McKinsey India Awakening Report

India’s property industry faces a number of challenges, which include getting caught in red tape, confusing land laws, uncertainty of raw material supply, labour issues, and concerns over law enforcement and property rights. The new Land Acquisition Act may affect real estate prices, causing project delays and increase project costs. The property hot spots in India – Delhi, Mumbai and Bangalore – have been the most attractive destinations, accounting for more than 60% share of occupier activity across all industries over the past year. Looking at the specific sectors, there is an oversupply in the commercial segment, and tenants who are dictating rentals are adopting a cautious approach. Absorption has remained low since corporate has halted in its expansion plans. The national capital region, Mumbai and Bengaluru continue to be the leading cities, accounting for more than 75%

of the entire space getting absorbed in the country over the past three years. Retail is doing quite well, remaining stable and receiving increasing enquiries from retailers. The major cities continue to witness steady expansion by international apparel and food and beverage retailers. The supply of organised A-grade malls in the leading cities is approximately 5,1-million square metres. Apart from the investmentgrade malls, these major cities have also witnessed development of 1,8- to 2,3-million square metres of hypermarket spaces. Considering the stable leasing activity and slowdown in completion of malls, the vacancy levels in malls have also declined. There’s great opportunity in the residential segment, with the sector expected to experience an increase in demand and price growth this year. Contributing 80% to the real estate sector, residential is expected to grow

significantly over the next few decades. It is estimated that Indian cities need to develop at least two-million houses annually for the growing population. The Indian government is taking measures to promote growth in the manufacturing sector, which will stimulate the industrial sector. In the industrial space, warehousing is becoming more organised, with rentals considerably cheaper across the top seven cities in the country. In the office sector, there has been a major move towards lowercost offices, which has placed pressure on office rentals. Going forward, the challenge for India’s real estate and infrastructure is how it intends to deal with meeting the rising demand for world-class infrastructure in its cities, the supply of housing across different income levels, and the creation of sustainable cities for future generations. SOUTH AFRICAN PROPERTY REVIEW

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IPD Conference

Invested in property

With real estate taking its rightful place as an attractive asset class, the 12th Annual IPD SA Property Investment Conference shed light on the opportunities in the sector, further cementing property’s investable intrigue By Candace King Photographs by Dave Hann

mid global economic uncertainty, political unrest, changing demographics, and rising influential trends, including sustainability, making the right investment decision is a daunting task in a rapidly evolving world. Added to this is the selection of the right asset or asset class to invest in. Thus the question lingers on the lips of investors: where to from here? This increasingly voiced query was addressed at the 12th Annual IPD SA Property Investment Conference, which took place at the Sandton Convention Centre in Johannesburg. Sponsored by property manager powerhouse STANLIB, the IPD Conference featured a top-notch programme, spearheaded by thought leaders and real estate experts. Twenty-five speakers shared their knowledge and insight into property as a real and riveting asset class. Over the course of two days, the Conference delved into all the current themes and topics that are impacting the property industry; provided a platform to discuss and challenge ideas; and offered a great intimate opportunity for delegates and industry players to network. Carefully examining the distinctions between “asset class” and “asset” in order to emphasise property’s fortunate tangible and advantage-rich nature, the Conference took a look at the role of real estate in multi-asset portfolios and investment strategies, its defensiveness and diversification value, and its global characteristics and elasticity in being able to reinvent itself through alternative property solutions. “Property as an asset class now holds a rightful place in asset allocation decisions,” said Amelia Beattie, SAPOA President and Chief Investment Officer: STANLIB Direct Property Investments. “Property behaves in a certain way, providing more predictability than some other assets. STANLIB is passionate about investment, and property as an asset class is key in our offering to the market. I remain deeply passionate about property on the continent, here and in the rest of Africa – not only for the love of bricks and mortar creations and the opportunity to create long-

Amelia Beattie, SAPOA President and Chief Investment Officer: STANLIB Direct Property Investments

term investment returns, but mostly for the real difference it makes to the people and the communities it serves.” “South African real estate – both listed and unlisted – has done very well, but we are a relatively small market and risk-adverse investors have largely bypassed us,” said Stan Garrun, Executive Director and Head of IPD South Africa. “So we have gone offshore, we have broadened our horizons to the rest of Africa, and we are opening doors on new investment options and markets on our doorstep.” While South African investment real estate remains in a recovery mode and vacancies continue to be sticky across all sectors, signs of improvement are beginning to appear, with outstanding returns recorded in various pockets. “One thing is certain – the real estate markets in South Africa have been able to buck the trend before, and opportunities continuously beckon,” said Garrun.

The winning assets South Africa’s sterling property funds were recognised for top performance in their underlying un-geared property portfolios at the Annual IPD Direct Property Investment Awards during a three-course dinner affair on day one. The influential IPD Direct Property Investment Awards recognise

consistent top performance of the listed and unlisted property funds per sector in the IPD database. This year’s awards are entirely based on annualised results for the three years ending December 2013. Growthpoint Properties Limited took top honours with the overall IPD Direct Property Investment Award 2014 as well as the award for retail portfolio performance. Growthpoint Properties Limited achieved a 16,6% total return across its entire property portfolio, compared with an IPD overall benchmark return of 13,9%. In terms of retail performance, Growthpoint Properties Limited’s portfolio delivered an 18,9% total return, outperforming the IPD retail benchmark of 14,5%. Attacq Limited won the award for the top performance in the office sector. It notched up the highest returns for office property at a 16% total return, which was well above the IPD benchmark of 12,2%. Metropolitan Life Properties won the award for best industrial property portfolio performance. It achieved top returns in this sector with a 21,3% total return, substantially outperforming the IPD benchmark return of 15,4%. Vukile Property Fund Limited was recognised with the IPD’s Data Quality Award for meeting IPD’s data provision criteria of accuracy, completeness, timing and detail. “The IPD Direct Property Investment Awards are aimed at showcasing superior performance and illustrating the fundamental value of investing in commercial property,” said Garrun. “We believe that fact – and quality data – underlies transparency, good systems and governance. It supports informed investment decisions based on reliable facts and confidence in the sector.” Despite investors looking elsewhere for opportune markets (offshore and in Africa), the local listed property sector remains attractive. This was reinforced by the bid undertaken by the delegates on day two. As part of an asset-allocation game, delegates voted for local listed property as the most attractive asset type or market.

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IPD Conference

FROM LEFT IPD Awards Winners Dean Steinberg (Junior Investment Analyst at Vukile Property Fund Limited); Natasha O’Reilly (Fund Manager at Eris Property Group for Metropolitan Life Properties); Morné Wilken (Chief Executive Officer at Attacq Limited); Stan Garrun (Executive Director and Head of IPD South Africa); Stephan le Roux (Divisional Director: Retail Portfolio at Growthpoint Properties Limited); and Eileen Andrew (Client Manager at IPD South Africa)

Stan Garrun, Executive Director and Head of IPD South Africa

Taking steps for sustainability One of the key topics at this year’s IPD Conference was greening and sustainability in the property industry. Sustainability is a globally escalating issue that will inevitably have a profound effect on real estate in the future. By 2030, global energy demand is set to be 35% higher than the current demand. Furthermore, Africa is very vulnerable to

Brian Wilkinson, Chief Executive Officer of the Green Building Council of South Africa

climate change, which needs to be taken into account given the fact that the continent is an investment hot spot. In an effort of enriching sustainability in South Africa, the Green Building Council of South Africa (GBCSA) and IPD are currently working on the impending IPD Sustainable Property Index, which was soft-launched at the Conference.

“Sustainable building is a no-brainer. Sustainability in the industry is indeed gaining momentum,” said Garrun. A total of two-million square metres of green building is currently in existence in South Africa, debunking the myth that shrouds this movement. “In order to address climate change, we have to address the existing building infrastructure,” said the GBCSA’s Chief Executive Officer Brian Wilkinson. “I am absolutely convinced that this index will become significant. Watch this space.” The real challenge in unlocking all the opportunity chests is for the real estate to tackle sustainability. “I recently attended the BOMA Convention in the US with SAPOA CEO Neil Gopal,” said Beattie. “It was an enriching experience to compare perspectives with many industry leaders from all over the world – but the conversation topic of ‘Our Duty to Remove Barriers to Sustainability’ is one that stuck with me and made me think deeply about our actions in everyday investment considerations. “What are we doing, as the investment community in property, to remove barriers to sustainable investment practices? Are we placing enough focus on balancing shortterm objectives with the long-term nature of what true sustainability requires?” Beattie believes that, for us to continue to grow as an industry, we will need to apply our mind carefully to what these barriers are and how we will on our own – and jointly – remove these barriers to enable sustainability in our investments and investment decision-making, not only making our buildings green but sustainable in the wider sense of true responsible investments. In closing, Garrun noted that while there are challenges crowding the market, particular segments and opportunities are becoming very real. These include the revival of the residential sector, greening and sustainability of property, and environmental, social and corporate governance factors, as well as alternative markets such as student accommodation and storage facilities. “These topics will be the food for thought at next year’s Conference,” said Garrun. SOUTH AFRICAN PROPERTY REVIEW

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2014/08/13 9:03 AM

development

Africa’s next top marvel After months of speculation, details on the sought-after Discovery building in Sandton are out. They paint a picture of a highly efﬁcient building that’s set to be the biggest – and one of the greenest – single commercial ofﬁce developments in Africa By Candace King

or some time, the South African Property Review eagerly sniffed around to uncover information on the mega Discovery building development. Now, after months of tightlipped secrecy in the property industry, the details of the project have finally been revealed – and it’s quite big deal. The new concrete kid on the Sandton block is set to alter the skyline of Africa’s richest square mile as well as sustainably revolutionise the business node with its impressive energy-efficient footprint and environmentally innovative specs. Developed in a joint venture by two of the country’s property giants – Growthpoint Properties Limited and Zenprop Property Holdings – Discovery Limited will boast a resourceefficient, cost-effective and environmentally sustainable global head office in Sandton. Trumping large landmark developments such as the 70 000m² Standard Bank building in Rosebank, the colossal 87 000m² HQ will be the biggest single commercial office development in Africa, as well as one of the most innovative on the continent.

Positioned at the heart of the gateway to Sandton Central, on the prime corner of Rivonia Road and Katherine Street, the Discovery building will be excellently situated diagonally opposite Sandton City and a short block’s walk away from the Sandton Gautrain station. The building will comprise two wings with eight floors of offices, plus a ground floor and a feature roof level. It will also offer nine basements with more than 5 100 parking bays. “The Discovery building is one of the most exciting property developments not only in South Africa but also on the African continent in terms of size, technology and green features,” says Norbert Sasse, Chief Executive Officer of Growthpoint Properties Limited. “This serves as a great opportunity for Growthpoint to make a statement.” He adds that this project has been in the making for at least five years, noting that the vision of redeveloping the corner has been a long-standing one. Owned by Growthpoint Properties Limited (55%) and Zenprop Property Holdings (45%), the tailor-designed, ground-breaking and highly efficient green building will accommodate Discovery Limited’s future growth and ensure the most resourceful use of space, time and money.

Registered with the Green Building Council of South Africa (GBCSA), the building has been designed to incorporate a 5-Star Green Star SA Office v1 Design rating. Furthermore, this building will be one of the first in South Africa to achieve a GBCSA Socio-Economic rating – a new rating tool that launched at the end of 2013. The PILOT Socioeconomic Category (SEC) for Green Star SA rating tools is a world first, with the GBCSA taking the lead to develop this first set of socioeconomic criteria for

Lean, mean and green Sustainable development is priority and a core concern three stakeholders involved seriously green milestone

a key for the in this project.

Discover the facts ●

86 993m² – the largest single commercial office development in Africa.

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Eight floors of offices

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Ground-floor reception level

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Roof level

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Nine basement levels with 5 100 parking bays

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Storage of 3 111m²

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1 000m² data centre with the capacity to double in size in future

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Site size of 307 206m²

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About 596 000m³ of soil and rock will be removed from the site during bulk earthworks – the equivalent of 238 Olympic pools

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Reinforced concrete of 125 000m³ will be used in the building’s concrete structure, equal to 50 Olympic pools

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13 760 tons of steel reinforcement bars will be used in the concrete structure – the same as 36 Boeing 747s at maximum take-off weight

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The building’s glass façades will span 26 000m² – the same size as 100 tennis courts

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The tiles used in the building will cover 46 000m² – the size of five rugby fields

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development building rating tools focused on a developing country context, as well as an international framework for adaptation in other developing countries, in association with the World Green Building Council. Registered green buildings are invited to test the SEC in the PILOT phase, which will last until December 2014. Projects that achieve a rating for the PILOT SEC will get additional recognition for this, alongside their Green Star SA rating. “The new Discovery head office will be one of the most environmentally sustainable and efficient buildings in Sandton,” says Growthpoint Properties Limited Office Division Director Rudolf Pienaar. “It is also set to become a landmark on the Sandton skyline. Green building plays a key role in providing spaces in which businesses can thrive. For Discovery, it will create a stimulating working environment and reduce building utility costs with sustainable alternatives. “Offices should integrate flawlessly into our clients’ business and provide people with a positive, healthy, energising environment. This means creating user-friendly offices and solutions through innovation and creative design that keep pushing the boundaries.

Working with Discovery has laid the foundation for an operationally efficient, sustainable building that promotes increased staff retention and productivity, improved asset performance, reduced operational costs and much more.” The old Sandton Garden Court Hotel buildings and other buildings that previously stood on the site were demolished in the most sustainable manner possible, says Bob van Bebber, Director at Boogertman + Partners Architects, the firm responsible for the design of the building. Apart from its location close to several modes of public transport, Van Bebber says the building will feature significant green features, including a double-glazed façade for thermal heat control, natural lighting and lighting control systems, rainwater harvesting, and recycling.

“This is not efficient,” he says. The new Discovery building will bring all of Discovery Limited’s Sandton-based employees under one roof in the bustling node. “This iconic building will be the largest single-office development to take place in Africa,” says Zenprop Property Holdings Chief Executive Officer James Tannenberger. “Accordingly, we have assembled a highly skilled project team in order to meet the inherent demands of a complex and multifaceted delivery process, while integrating Discovery’s specific requirements into the broader planning and design processes. This will ensure that this prestigious development meets the unique business needs of Discovery, now and into the future.”

Delivering for Discovery

“The goal for Discovery is to be the best insurance organisation in the world by 2018, as well as a powerful source for social good,” says Robertson. “We wanted a building that aligns with Discovery’s values. We wanted to create a space that’s highly efficient and that brings everyone together, and to have a building that resonates with Discovery’s business prudence. We are very excited about this project.” If the Discovery Group’s growth continues to soar, a second phase of the development has been included in the negotiations. This would provide another 15 000m² of space. While further secrecy shrouds the total cost of the development, an estimated figure of more than R2,5-billion has been reported online. With earthworks having commenced in March 2014, it’s full steam ahead, with the construction of basement levels set to commence in October 2014 and the development of the office levels to start in January 2016. Discovery occupation is scheduled for 1 January 2018.

The new headquarters will serve as the company’s hub for the growing international business that now has operations in South Africa, the US, the UK, Australia and AsiaPacific. The new office will offer a working environment that provides optimal space for creativity, connection and growth, in an inspired setting that also fosters innovation. With its greater efficiency, it will also provide Discovery with a rental and maintenance cost saving over the initial 15-year lease period. John Robertson, Chief Information Officer at the Discovery Limited group, notes that the group currently occupies about 67 000m² in Sandton, spread across four buildings. By the end of the year, the company will require a fifth building to accommodate its 5 000 (and counting) employees.

All systems go

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interview

The green Italian job We speak to green Architect Enrico Daffonchio about his eco-conscious firm, the green movement and sustainable design trends that are reshaping the current – and future – built environment By Candace King

Italian Architect and Founder of Daffonchio and Associates Architects Enrico Daffonchio designed the Cradle restaurant at the Cradle of Humankind as well as Arts on Main in the Maboneng Precinct

talian-born Johannesburg-based Architect and Founder of Daffonchio and Associates Architects Enrico Daffonchio has, architecturally speaking, green fingers. Qualified in Italy and registered with the Italian and South African councils for the architectural profession, Daffonchio has been behind a number of significant sustainable developments. Established in 1996, Daffonchio and Associates Architects specialises in architecture, property development, appraisal and feasibility, concept proposals and presentations, as well as project management from rezoning to construction. Active in the commercial, residential and urban sectors, and involved in private and public projects, the company has been involved in several collaborations and joint ventures with other firms, artists and specialists from various disciplines. Daffonchio and Associates Architects’ design ethos is angled around energy efficiency and awareness of the broader effects that buildings have on the environment. According to its website, “the [firm’s] design work focuses on energy efficiency and the awareness of the broader effects that building has on the environment, as well as the way in which proportion, light and colour affect peoples’ mood. Building materials and structural elements are meant to be shown with integrity as graphic and sculptural patterns.”

The firm incorporates a variety of green features within its design, including photovoltaic electricity, solar under-floor heating, rain-water harvesting, solar geysers and embodied energy. The firm has received several awards, including the Wallpaper Best Lodge Award 2003 for The Outpost, South African Institute of Architects Award of Merit 2010 for The Energy Works, South African Institute of Architects Award of Excellence 2010 for Untamed, and World Architecture Forum Finalist 2011 for the Maboneng Precinct.

The green Architect Passionate about green architecture and sustainable design, Daffonchio says that the current role of greening and sustainability in the built environment is to reduce consumption, slow the depletion of natural resources, and create a better and healthier living environment. When asked about the influence of sustainability on his way of thinking, Daffonchio explains that during his time at university in Italy, he attended lectures by one of the pioneering green architects in Europe, which played a significant role in his career. “Thereafter, when I started my practice, sustainable design was a requirement,” he says. “Since then I have integrated it into every project to the extent possible. Recently, it has become part of the SANS requirements, so it’s imperative for architects to practise sustainably. Personally, I think that it’s just logical for sustainable thinking to complement all design parameters.” With the unstoppable rise of technology that’s altering the way in which buildings are designed and developed, and the way in which they operate, Daffonchio notes that technology is not alone in its takeover of the world. “Green design develops hand in hand with the development of the relative technologies,” he says. While naysayers and anti-tree huggers firmly stand by their thinking that green building is not beneficial and too expensive, Daffonchio says that the key to developing green buildings lies within its design, which

needs to be executed properly in order to achieve the optimal benefits (such as lower operational costs). “Sustainable design is about the intelligent use of resources, whether people believe in global warming or not,” he says. “It is a logical and economical approach to making it work.” Daffonchio believes that greening and sustainability can indeed help solve some of the built environment’s problems, including energy crises, resource shortages, food scarcity, and more. “Obviously, yes. It is not really an opinion – if you consume less, you are left with more,” he says, adding that alternative energy sources such as solar power and wind turbines will become an integral part of the built environment and have, in fact, already done so in recent times. On the near future, Daffonchio says that things will change, and that the green movement will progress and make its mark. “I see a progressive selection of the best technologies and a reduction in their implementation costs to the point that they will completely replace the old ways – as it has always happened in history,” he says. Situated in Parkwood, Johannesburg, The Energy Works is a 600m² green office building that runs on renewable energy, harvests rain water, makes use of natural lighting as far as possible and uses a number of ecofriendly materials (Photograph © Tristan Mclaren)

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interview

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feature

Sustaining Africa and beyond While the agriculture, ﬁsheries and forestry sectors of Africa are deemed the revolutions of growth and prosperity, greening and sustainability have become important on the continent in order to preserve key resources of economic promise By Candace King

n January 2014, Senegal President Macky Sall said that “Africa is a land of opportunity. Business opportunities are there, growth is there and the population is there.” This statement can be backed up by the figures and statistics that depict Africa’s incremental growth over the past decade. Across the continent, GDPs are growing, exports are booming, foreign investment is increasing and dependence on aid is reducing. With the introduction of democracy, political landscapes are stabilising, and corruption is declining thanks to government transparency and accountability.

But most of the continent’s people, especially those who live in rural areas and informal settlements, have yet to experience this growth and prosperity. Poverty is Africa’s number-one ailment and the improvement of people’s lives remains relatively low. Plans for more inclusive and sustainable growth are very minimal. Governments need to ensure that all of the continent’s people benefit from the African success story. This can be achieved by strengthening the focus on Africa’s greatest and most productive assets: the region’s farms and fisheries. According to the Africa Progress Panel’s (APP) Africa Progress Report 2014, entitled “Grain, Fish, Money: Financing Africa’s Green and Blue Revolutions”, Africa’s leaders have an unprecedented opportunity to convert the continent’s great wealth into permanent improvement in Africans’ lives. Agriculture and fisheries lie at the heart of this new dawn. Consisting of 10 distinguished individuals, including Graça Machel and Bob Geldof, and chaired by former Secretary-General of the United Nations and Nobel laureate Kofi Annan, the APP advocates for equitable and sustainable development for Africa. In the report’s foreword, Annan states that “the world’s population needs to be fed and Africa, our continent, is well positioned to do so. We have enough resources to feed not just ourselves but other regions too. We must seize this opportunity now.” While Africa’s farmers have an unrivalled capacity for resilience and innovation, they are not sustainable and are plagued by a lack of resources and support, low levels of productivity, bad management, badly misplaced development strategies, and climate change. Fisheries and logging are troubled by high levels of illegal and unregulated activity. In each case, resources that should be used for investment in Africa are being plundered through the activities of local elites and foreign investors. “African countries must manage their resources effectively with foreign investor policies in place to safeguard against exploitation,” says Rowland Gurnell, Chief Operating Officer of Broll’s Facilities Management Division. “As an example, where new mines open, proper sustainability plans must be in place to avoid water and air contamination issues from old mines, a problem that South Africa battles with.

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feature

Natural energy sources such as the sun and wind can be put to better use and contribute to longer term sustainability initiatives.” “Africa is rich in natural resources – and we need to protect them, use them wisely and make sure that future developments are energy-efficient, resource-efficient and environmentally responsible,” says Green Building Council of South Africa’s (GBCSA) Programme Manager Jo Anderson. “This will significantly reduce or eliminate the negative impact of development on the environment and occupants.”

Giving sustainability the green light in Africa In light of protecting Africa’s assets and ensuring its longevity, greening and sustainability have picked up on the continent, with South Africa heading the rally. Gurnell says the rest of the continent is moving towards greening and sustainability. “The continent is ready, some countries more than others,” he says. “While the continent has its challenges, many countries are working towards alleviation of these, and educating people about sustainability issues. From our experience with clients within the commercial, industrial and retail property sectors, we believe that Kenya, Rwanda, Ghana and Nigeria are heading in the right direction.” Anderson notes that the GBCSA is seeing some positive changes in the green building space in Africa. Globally, as of early 2011, there were just over 80 Green Building Councils at various stages of their development; now there are 200 entities registered with the WorldGBC, says Anderson. “Having started as the first GBC on the African continent, the GBCSA is proud to say that the movement has expanded to include GBCs in Nigeria, Zimbabwe, Benin, Botswana, Ghana, Kenya, Mauritius, Namibia and Tanzania,” she says. “The GBCSA is tasked with the support and development of green building councils throughout Africa, and we have certainly seen positive growth in this area.” Green building offers a distinct opportunity to mobilise and educate communities around sustainable building practices. Green building design ranges from low-tech (simple but clever) to hi-tech (smart and sophisticated) design – and Africa needs to find an appropriate methodology, suitable to the local climate and community.

“The approach to green building in African cities may need to take broader aspects into consideration that can really build resilience and sustainability among urban dwellers,” says Anderson. Similarly, green, sustainable practices provide a unique opportunity to mobilise and change – and to reap the rewards of that change. Locally, the GBCSA has long advocated building high-performance buildings as a necessity in African cities, where power shortages and infrastructure breaks threaten to destabilise areas – and, by the same token, addressing Africa’s infantile structure while considering the continent’s growing needs. “African cities have survived for generations without consistent power supply, with broken fresh water supply, and so on,” says Anderson. “The inherent need to ‘make another plan’ has driven our people to be continually innovative.

Rowland Gurnell, Chief Operating Ofﬁcer at Broll’s Facilities Management Division

Figure 1: Crop Yields in Africa

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feature

“African cities have survived for generations without consistent power supply, with broken fresh-water supply, and so on. The inherent need to “make another plan” has driven our people to be continually innovative”

Why, in a city challenged by power blackouts, would you design an energy-hungry building? It’s just common sense that buildings should be energy-efficient, water-resourceful and capable of effectual management and operations in such cities. The simple avocation of green buildings supporting alternative transport as these cities become overrun with cars seems to be a no-brainer.”

Sustaining the future

Green Building Council of South Africa Programme Manager Jo Anderson

“Africa has the opportunity to leapfrog – to learn from the lessons of the developed world, while avoiding the mistakes that have been made previously,” says Anderson. There is also a need to focus on African knowledge

and grow existing sustainable systems. She says it’s important that innovations respect and have insight into local socioeconomic structures and traditional ways. “It’s true that Africa faces many challenges and has needs associated with very dire circumstances – but this is our chosen challenge, and you need to start somewhere,” says Anderson. “Development is going to happen – let’s make sure it’s done in the most sustainable manner.” If the predicted numbers become a reality – with the mass urbanisation predicted towards African cities – it’s a necessity for green buildings to become the standard. And it’s not the only thing that needs to be done!

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feature

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feature

Building on the green mind-set Green building technologies go further than just the bricks, mortar and glass on a building – they also include sustainable thinking and company culture By David A Steynberg

Francis Porter, Sustainability Consultant (Principal Associate) at Green by Design, the sustainability section of the building division at WSP Group

Activity-based working sees ofﬁce spaces being used to meet and collaborate, not just to sit at desks to do work

he Industrial Revolution is a distant memory in today’s resource-constrained environment. Copious consumption of naturally occurring minerals to generate electricity (and the blind overuse thereof ) does not form part of the public discourse today and probably never will again. The new era of environmental, social and commercial sustainability seems to have touched just about every corner of the planet. South Africa (and Africa, in general) is no exception. Partly borne out of necessity, with energy provision continually under strain and costs rising year-on-year, and out of a moral responsibility, the way in which we do business has changed. The property industry has played a significant role locally, with the formation of organisations such as the Green Building Council of South Africa (GBCSA) and its Green Star Rating tool, to regulations such as SANS 1400, which try to force better and more sustainable building design and construction. “Regulation acts as the stick and Green Star certification is the carrot – they both work for the same goal and all the work we do from the certification side is best practice.

Between the two we’re moving in the right direction,” says Francis Porter, Sustainability Consultant (Principal Associate) at Green by Design, the sustainability section of the building division at WSP Group. His colleague, Alison Groves, Sustainability Consultant (Principal Associate), adds that more and more owners and future tenants are demanding green technologies in their portfolios. “It not only offers the best in terms of available technologies today but also because sustainability in building practices is increasingly demanded by international portfolios,” she says. “If you want to get listed in the UK or the US, for example, you will definitely have to demonstrate this.” Whether it’s about the rands and cents or because it’s the right thing to do, the green building movement has grown tremendously in South Africa in the past few years. According to Jarrod Lewin, Business Development Manager at GBCSA, “The green building movement is about seven years old. We started out with one to four buildings, and have grown exponentially year-on-year to about 60 this year.” “The developers of the 60 certified projects that received Green Star Rating certifications have revealed that their buildings will result in the combined annual savings of 76-million kWh, which is the amount of electricity needed by 5 300 households for a year, and/ or 115-million kilograms less of carbon emissions every year,” Arthur Chien, Vice President of Talesun Energy, was quoted as saying. “This is equivalent to taking 28 000 cars off the road and saving 124-million litres of water per annum, which is sufficient to keep 34 000 households going for a year.” The subject of sustainable property development is constantly evolving. New technologies, building techniques and thought patterns are driving the agenda. Much of the new stock of office property has undergone a change in design as much as it has a transformation in terms of space planning.

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feature “Trend-wise, we’re seeing displacement ventilation coming in, which is more energyefficient,” says Groves. “Electrical reticulation is also more popular and desks are being pulled back from the façade – you no longer own your window. This gives the façade more communal ownership.” Office layout itself has become increasingly important in reining in costs as much as it has in creating healthier and happier spaces for employees. Peter Townshend, Managing Director of Know More, a division of workspace specialists Giant Leap, highlights a new trend that originated in Europe and that is spreading across South Africa: activity-based working (ABW). The concept sees workers in an activity-based office not owning a desk, nor any space for that matter. They choose what type of work space to work at on a daily (or even hourly) basis. It is an ownerless environment that allows staff to come and go as they wish and to work wherever they want. “By adopting ABW we are reducing office sizes by up to 45%,” he says. “Although we have been programmed to believe we need a single space that we can call our own, where we do all our work, the reality is that this is hugely inefficient – not just on the building side, but also when it comes to productivity. “Research shows that desks are occupied only about 52% of the time, and a single desk can cost a company around R150 000 a year to run. Bearing this in mind and considering the links between mobility and productivity (productivity generally increases with mobility), it makes sense to allow staff to be more flexible and to work from anywhere

and at any time. Work follows us wherever we are and offices today need to be designed to reflect this.” From a purely operational cost perspective, businesses today are increasingly studying trigeneration technologies, according to Groves. “Businesses want to have the ability to generate their own power,” she says, adding that Johannesburg has gas infrastructure and reserves it could use to generate lowcarbon electricity. The “tri” in trigeneration refers to three simultaneous outputs from the gas-fired engines: low-carbon electricity, hot water to heat buildings, and chilled water to cool buildings. A trigeneration engine runs on natural or renewable gases producing lowcarbon electricity, and the engine generates heat that is captured to make hot water. Hot water can be converted to chilled water for air conditioning by a secondary piece of equipment called an absorption chiller. Hot water or chilled water, called thermal energy, can be distributed to nearby buildings through a network of underground pipes. “You use electricity, power and heat to make the building work,” she says. “There is less strain on the grid and it makes you more independent as a business. A Green Star rating should be the cherry on top. It should be the foundation of every new build. In a resourceconstrained world we cannot afford to build the obsolescence we have in the past. We have to realise that capital cost is not the be-all and end-all, and operational cost and emissions are what live with us going forward.”

Alison Groves, Sustainability Consultant (Principal Associate) at Green by Design, the sustainability section of the building division at WSP Group

The trigeneration plant at Standard Bank’s Rosebank ofﬁces provides three simultaneous outputs from the gas-ﬁred engines: lowcarbon electricity, hot water to heat the building, and chilled water to cool the building

Activity-based working is like “hot desking” on steroids, providing employees with a range of spaces in which to do their work

Break-away rooms are on the increase in many newly built ofﬁce buildings, providing spaces for relaxation, board meetings or places to celebrate without disturbing those who man phones or require quiet to do their job SOUTH AFRICAN PROPERTY REVIEW

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on show

MAIN PICTURE FNB’s lobby area gives a taste of the open spaces to come INSET, FROM LEFT Old Mutual’s ground-floor lobby entrance; FNB’s ground-floor reception; FNB’s 8th floor reception

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Tall, green and handsome The Portside building in Cape Town has caused a stir in the city. Towering above all at 139m high, and with superior green building principles seen as a benchmark of environmental sustainability, it is raising the bar in green design. Its handsome steel-and-glass appearance and progressive architectural design is inspiring, complementing the beauty of the Mother City By Glenn Bentley Photographs by Mark Pettipher

he development is strategically situated within the emerging financial district in the north-west section of the central business district (CBD). Comprising a full city block of 6 500m² and bordered by Buitengracht Street, Hans Strydom Avenue, Bree and Mechau Streets, the site is located on a key intersection that had already been approved for a tall building. The development embodies the energy of a rapidly evolving world-class city and capitalises on the panoramic views of Table Mountain and the Atlantic Ocean. As a joint initiative between Old Mutual and FirstRand Bank, this R1,6-billion project represents a substantial investment into the Western Cape, and has already become a landmark in Cape Town’s CBD. Portside is Cape Town’s first new skyscraper since 1993. The building stands at 139m tall, with a gross construction area of 114 547m² over 32 floors. It offers more than 57 000m² of rentable area, including an easily accessible 1 430m² of retail on the ground level as well as 1 382 parking bays. Portside houses the provincial headquarters for the four contiguities of FirstRand: First National Bank, Rand Merchant Bank, Wesbank and Ashburton Investments.

The remaining AAA-grade office space is available for leasing via Old Mutual Property. In addition to the vibrant cafés and restaurants at ground level, the building also houses a state-of-the-art First National Bank branch.

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onShared showvision. One goal.

on show LEFT FirstRand’s entrance on Buitengracht Street BELOW Old Mutual’s entrance on Bree Street

With 35 years of experience and a portfolio of high-profile projects, SIP has become highly sought-after as a result of consistently delivering highquality projects on time.

The genesis

SIP Project Managers (Pty) Ltd Reg no: 1984/006110/07 Johannesburg 10 Woodmead Estate 1 Woodmead Drive, Ext 28 Woodmead t: +27 (0)11 233 6800 sipjhb@sippm.co.za Durban 1 Rydall Vale Crescent Douglass Saunders Drive La Lucia Ridge t: +27 (0)31 583 4260 sipdbn@sippm.co.za Cape Town Parklane 3rd Floor, Block B Corner Park & Alexandra Roads Pinelands t: +27 (0)21 511 3040 sipcpt@sippm.co.za

John Lee of Walkers Inc has been involved with Old Mutual Property for many years. He explained how initially the development was planned by Old Mutual as an investment development, with FirstRand Bank coming to the party because of the enormity of the project and the opportunity to consolidate their workforce under one roof. It was jointly decided to open a sectional title register in the deeds office, to enable both parties to have their own sections. The development was thus structured to cater for the separate sectional title owners – Old Mutual, which owns the lower half; and FirstRand, which owns the top half. The ownership agreement was therefore financially structured to cater for separate sectional title owners, with a vision underpinned by a firm commitment to sustainable and responsible development.

Green architecture

Dhk Architects was appointed as the lead architect firm for this landmark development, in association with Louis Karol Architects. One of the key requirements was for two clear addresses for the respective corporate owners, which was achieved through the creation of two separate entrances on opposite sides of the building, each with its own plaza. Old Mutual’s entrance is on Bree Street and FirstRand’s is on Buitengracht Street.

Portside was designed as a benchmark of integrated sustainability, to raise standards of design and indoor environmental quality, and to set benchmarks for the reduction of energy, potable water consumption, stormwater run-off, waste production and negative emissions for tall buildings. It is the first commercial building in South Africa to be entirely lit by LED lighting. Electric carcharging points are provided and the cycle provision includes cycle-racks, showers and change rooms. The façade has been designed for total disassembly for later reuse or recycling, also understood to be a first for a tall building in South Africa. The building achieved 5-Star Green Star SA Office Design rating, and is the first tall building in South Africa to attain this ranking.

Project management Old Mutual and FirstRand Bank appointed a project management team, comprising SIP Project Managers, Absolute Project Managers and Metrum Project Management, in late 2010. The project managers embarked on developing a project initiation programme and an indicative construction programme, which were used as the baseline planning and programming tools for the project. The programmes were presented to the joint owners as well as to the consultants to obtain

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FNB has capitalised on the spectacular views of the Mother City, with meeting and break-out areas taking full advantage of the airiness of the architectureâ&#x20AC;&#x2122;s panoramas

Synergy

iqela software solutions

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on show their buy-in and commitment to the plan from inception through to completion. The owners’ decision to proceed with the Design and As-built Green Star applications to the Green Building Council of South Africa required the various consultants to address their designs in ways that informed the tender documentation at an early stage. According to SIP Project Managers, a further benefit of early tendering and appointment resulted in the preparation of shop drawings and equipment submissions taking place earlier, thus negating the “just in time” tendency that often occurs on projects. Regular weekly and monthly meetings allowed the project to be managed with a “detailed hands-on approach”, whereby potential problems were identified as early as possible and dealt with immediately to avoid potential negative impacts later on in the lifespan of the project. This proactive approach resulted in a minimum of contractual claims being tabled and a highly workman-like and professional approach being taken by the contractors’ representatives and the project management team, including the consultants and the clients, leading to a successful conclusion.

Team efforts

FNB’s working environment encourages movement and out-ofthe-box thinking, with work spaces ranging from formal to relaxed, trendy modernism and the expected ambience of sheer luxury

The synergy between Portside and the surrounding medium-high-rise developments in the emerging precinct has sparked and created a critical mass of activities intended to revitalise this part of the city. The location is part of the Central City Urban Conservation Area, also a crucial design consideration. Intended as an urban marker, the building needed to respond to its context in the greater CBD as much as in the local precinct and its immediate surroundings. The visual impact of the building was carefully considered at the scale of distant, middle and immediate perspectives. Aiming to create benefits that go beyond the site, the new Portside tower will not only be a key addition to the emerging financial precinct, but is also intended to generate economic stimulus and provide a significant, sustainable and attractive addition to Cape Town’s dramatic skyline from an urban, architectural and visual point of view. The multidisciplinary professional team that came together included an amazing conglomerate of very talented people, who gave birth to this wonderful building. Representative teams from FirstRand and Old Mutual worked closely with the professional team throughout the entire

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Ca p e Town 9 S o m e r se t R o a d De Wa t e r ka n t Ce n t re 6 t h f lo o r 8001 T +27 (0)21 421 6803

Jo h a n n e s bu rg 1 8 M e lro se B o u le va rd M e lro se A rc h 3 rd f lo o r 2196 T +27 (0)11 684 1234

P o r t E l i za b e t h 2 1 Do n kin S t re e t Do n kin S q u a re 6001 T +27 (0)74 069 6696

architecture urban design interior design www. d h k . c o . za

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Delivering innovative property solutions to our clients since 1828 15th Floor, Plein Park, Plein Street Cape Town, South Africa PO Box 254, Cape Town 8001 t: +27 (0)21 464 1400 f: +27 (0)21 462 2256

www.walkers.co.za The design and fit-out of interiors were carried

WORKING TOGETHER TO GREEN BUILDINGS tSustainability strategy workshops tGreen Star SA submissions t Computer simulation modelling for both Green Star SA and SANS 10400 XA rational design

out by First National Bank’s internal team project to ensure that both their principal aspirations and functional requirements were met. Dazzling in design, the reflective glass exterior basks in a shimmering shape-shifting dance against the sky. Here’s to the tall, green and handsome Portside!

AGAMA is a proud member of the Portside project team that achieved a 5 Star Green Star SA Office Design rating, including full Innovation credits

t: +27 (0)21 701 3364 w: www.agama.co.za 50

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on show Meet the team Joint owners FirstRand Bank and Old Mutual Developer Eris Property Group and Old Mutual Property Architects Dhk Architects and Louis Karol Architects Project managers SIP Project Managers and Absolute Project Managers; Metrum Project Managers (FNB portion) Structural engineers WSP and Nadeson Mechanical engineers Spoormakers & Partners Electrical engineers BFBA/Ifindo Consulting and Claassen Auret International Faรงade engineers WSP Environmental Sillito Environmental Consulting Quantity surveyor De Leeuw Group, AECOM Main contractor Murray & Roberts Western Cape Sustainability consultant Agama Energy Attorneys Walkers Inc Synergy website Iqela Software Solutions cc

Lift services Benatar Consulting Lifts Proji-tech and WAC Projects Rational fire design Solution Station Heritage specialist Ashley Lillie Archaeologist Tim Hart (UCT) Traffic consultant HHO Africa Urban planning Bluegreen Planning and Design Town planner Tommy Borumer Landscape architect Claire Burgess CSIR built environment acoustics consultant MacKenzie Hoy Consulting Acoustic Engineers Land surveyor David Hellig Abrahamsen Geo-technical and civil engineering consultant Clive Newsone Independent commissioning agent AURECON Consulting Engineers FNB interior Greg Temlett, Luisa Freitas and Wayne Belman

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profiles

High Performance Architecture Edward Brooks, BArch (Wits) PrArch Edward Brooks matriculated from St John’s College in Johannesburg in 1988 and studied architecture at Wits, graduating in 1997 with a distinction in design. To wind down, he enjoys a game of golf or squash, reading and family time.

Reon van der Wiel, BArch (Wits) PrArch Reon van der Wiel matriculated from Potchefstroom Boys High School in 1994. He also studied architecture at Wits, graduating in 2002. He worked for Activate Architecture as a student, and joined the firm in 2002 as a qualified architect, becoming a partner in 2006. Outside of the office, he can be found building his new green home and spending time with his family.

Michael Magner, BArch (Wits) PrArch Michael Magner matriculated from Pretoria Technical High School in 1990. He studied architecture at Wits, graduating in 1997 with a distinction in design. When he isn’t in the office, he’s spending time with his family, mountain biking, playing golf or sailing. The firm was started in 1997 by Brooks and Magner, and has grown steadily over the past 16 years. With three directors/ shareholders and four associates, and a staff compliment of 10 people the firm offers its services to institutional and commercial clients with a focus on high-performance green architecture. Green building design has taken hold in South Africa. While there is still a long way to go to make the sort of impact on the environment that climate change experts are saying is needed, there is a positive shift in

Schalk de Beer FROM LEFT Edward Brooks, Director; Reon de Wiel, Director; and Michael Magner, Director

FSA Commercial Manager

the built environment stakeholders, who provide opportunity to design and build better buildings. The GBCSA has been instrumental in generating the momentum. One of the challenges is that there are projects and clients who are interested in green design, but when the GBCSA verification tool(s) do not suit the building programme, it’s very difficult to keep the client interested in pushing the green design beyond some of the very basic interventions.

Schalk de Beer studied BCom Marketing at the University of Pretoria part-time while working with Barloworld, graduating in 1984. He then joined Marley Chemicals in 1984 as Product Manager for Waterproofing Systems. In 1985, he was appointed as Marketing Manager with City Metal Products (Pty) Ltd. In 2007, he was contracted to Franke in India as a consultant, and joined Franke in 2008 as Commercial Manager for its range of commercial and residential products. “Being a green company, we try to reduce air and water pollution in the industrial sector and provide a healthier environment for all,” he says. “Through recycling of materials, we aim to reduce waste land areas. The challenges are providing people with healthy sanitation and educating them on waste reduction.” For Franke, thinking and acting in a sustainable way is a must. Ecological, economical and social aspects are considered in all the firm does, from office to production floor. As a company, Franke works towards continuous improvement with a common goal to improve quality and reduce waste and costs. This is achieved through several ongoing projects at the factory: Water recycling: a filtration system was installed to harvest water from a spring in the corner of the site. This removes the need for municipal water supply. Energy-saving project: the press shop, warehouses and manufacturing area replaced the 400W mercury vapour lamps with highoutput T5 fluorescent lights on time and proximity switches. This has resulted in an 80% saving in power consumption.

l Activate® focuses on each client’s specific needs; the physical and financial context; using the latest Building Information Modelling Software to design evidence-based, up-to-date and appropriate highperformance architecture. l Activate® has developed as one of the forerunners in green building design in South Africa. The Lebone II College project (25 000m²) won the SAIAAfrisam 4 Sustainable Architecture Award in 2012, and the new SANRAL head office (8 500m²) attained a 4Star design rating from the GBCSA. l Activate® provides director-level project leadership from inception to built reality. Our formula has resulted in 12 prestigious industry awards in the last five years, including three SAPOA Excellence in Property Awards, a CSSA Fulton Award, a SAIA merit award and, most recently, a winning entry in the new Sol Plaatje University in Kimberley.

t: +27 (0)11 788 8095 brooks@activate.co.za reon@activate.co.za michael@activate.co.za www.activate.co.za 52

Franke Kitchens Systems (PTY) LTD

t: +27 (0)31 450 6000 schalk.debeer@franke.com www.franke.co.za

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profiles

Adrian Maserow Director AMA Architects

AMA Architects is a leading architectural firm in South Africa, dedicated to sustainability of the built environment and the community that it exists in. The contemporary design firm values creative innovation and critical thinking in pursuit of cutting-edge architectural design solutions. These ideals are the company’s source of competitiveness in a fast-moving global built-environment world. Its capacity for diverse project types and processes all feed into a body of distinct developments. Last year, AMA Architects won the overall SAPOA Award for Sustainability for the Lakeside Office building. Some of its proud current projects include the Green Star 4-Star iconic Atholl Towers Sandton office building and the residential urban resort Sandton SKYE, of which tower one of three is complete and phase two is due to start shortly.

The 4-Star Green Star rated Atholl Towers Sandton office building

Kaya FM head office on Jan Smuts Avenue in Johannesburg

Completed projects With the Kaya FM head office on Jan Smuts Avenue in Johannesburg, AMA Architects explored the materiality of light steel frame building, clad in high-density polystyrene panels in a refined compositional façade. The 25 000m² Cosmo Shopping Mall has recently been handed over and is providing an exciting shopping experience for the residents of Cosmo City. The prominent heavy engineering industrial factory and warehouse for TSR was recently completed, and AMA Architects has been privileged to be a part of this striking industrial development. Architectural design will excel through proven liveability concerns of mixed-use precincts that the firm has promoted, such as WAM Sandton. “We subscribe to forward-thinking developments that promote mixed-use projects and skills in commercial, retail, industrial and residential design,” says Maserow. “These types of projects are developed towards our competitive advantage in a demanding marketplace.”

WAM Apartments, Sandton

Lakeside office building

Cosmo Shopping Mall

TSR interior

t: +27 (0)11 807 7505 / f: +27 (0)11 807 7509 adrian@amagroup.co.za www.amagroup.co.za SOUTH AFRICAN PROPERTY REVIEW

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profiles

Old Mutual Property Faieda Jacobs Regional Manager (Coastal) Old Mutual Property

Faieda Jacobs was born in Cape Town, graduating with a law degree from UCT. Following graduation she joined Old Mutual, drafting pension fund rules and regulations, before an opportunity arose to join Old Mutual Property in 1984, the start of a very fulfilling career. Her journey in the property industry has spanned all facets of the business, from valuations to property management, facilities management and asset management. Jacobs, who serves on the board of the Green Building Council of South Africa (GBCSA), is increasingly excited about the path Old Mutual Property is on to become a green building initiatives market leader. “At Old Mutual Property, we believe in doing good while doing good work. This includes limiting the negative impact our business has on the environment and capitalising on the positive effect transformation brings to our industry,” she explains. “By becoming a forerunner in the implementation of green initiatives, we can realise the benefits of our energy-efficiency and sustainability efforts much sooner than our competitors. This is not only through cost saving, but also through meeting the demands of a business market that is becoming more focused on acquiring or operating from green premises.” However, there are several challenges in this environment. “Justifying the additional costs associated with the implementation of green building initiatives is not always easy, and remaining competitive is hard in an industry where many role-players have not yet embraced the green building concept, and therefore offer cheaper – albeit less sustainable – premises,” she says. Nonetheless, Jacobs and her team are proud of their notable achievements, such as the Old Mutual Property Platinum sponsorship of the GBCSA, as well as its sponsorship of the GBCSA’s Socioeconomic Category Tool, helping to ensure properties

of the highest standard are developed in line with a commitment to a “greener” property industry. “The development of Portside, South Africa’s first 5-Star Green Star-rated highrise building, as well as the Energy Efficiency Award 2013 for Cavendish Square from the City of Cape Town, are also accolades for our business,” she says.

Old Mutual Property continues to deliver reduced operating expenses through the intelligent use of air-conditioning controls, high-efficiency chillers, optimising thermal transfer off-coil, common area lighting retrofits utilising LEDs and control devices, recycling plants installed at all properties where possible, and a focus on the efficient use of water resources.

t: +27 (0)21 530 4500 fjacobs@oldmutualproperty.com www.oldmutualproperty.com

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statistics

Climate change: fact or fiction? Source: Turn Down the Heat – Climate Extremes, Regional Impacts and the Case for Resilience Report (The World Bank)

limate change may be to some one of the greatest fallacies of the 21st century, but current research and statistics prove otherwise. According to the World Bank’s “Turn Down the Heat: Climate Extremes, Regional Impacts and the Case for Resilience Report”, extreme poverty can be curbed by 2030 only if climate change is tackled. As part two in a series, the report follows “Turn Down the Heat: Why a 4°C Warmer World Must be Avoided”, which concluded that the world would warm up by 4°C by the end of this century if no action is taken now, resulting in increasing extreme heat waves, sea-level rise, and more severe storms, droughts and floods, which would hit the poorest and most vulnerable the hardest. Scientists analyse the likely impact on three key yet vulnerable regions – subSaharan Africa, South Asia and South East Asia. If the world continues on its current path, it will warm by 2°C over pre-industrial times by mid-century and continue on to become 4°C warmer by 2100. The report highlights that the temperature increase will negatively impact agricultural production, water resources, and coastal ecosystems and cities, resulting in major risks to agriculture and livelihood in sub-Saharan Africa, the rise in sea-level, the devastation of coastal areas in South East Asia, and water extremes facing South Asia.

According to the World Bank’s “Turn Down the Heat: Climate Extremes, Regional Impacts and the Case for Resilience Report”, extreme poverty can be curbed by 2030 only if climate change is tackled SOUTH AFRICAN PROPERTY REVIEW

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PDP and Property Development workshop

Property Development Programme T

he Property Development Programme (PDP) for 2014 ran from 20 July until 1 August. As was the case in previous years, the course was jointly presented by the Graduate School of Business of the University of Cape Town and SAPOA, and proved to be another huge success. Proudly sponsored by Standard Bank, the programmeâ&#x20AC;&#x2122;s first week of intensive lectures focused on the full property development cycle. The culmination of the course was the application of the principles presented

in the first week to a theoretical property development project in or around Cape Town. The 2014 PDP project required delegates to consider a potential development at Ratanga Junction Island, located at Century City in Cape Town. In undertaking the project, delegates were requested to consider that they were preparing a development proposal to the Rabie Property Group. The winning teams were determined by a panel of judges â&#x20AC;&#x201C; industry experts who assessed and scored the teams against the

same criteria. The overall winning team was Group 2, called Feroa Developments Lifestyle East & West. The second-placed team was Group 7, Bridgeway Islands Development. The third-placed team was Group 3, known as Island Junction. A certification dinner was held at the Clock Tower Building at the V&A Waterfront at the end of the pogramme. SAPOA would like to thank everybody for their support and sterling efforts to make the PDP a success year after year.

Overall winning team (from left): Tony Gebhardt, Hamlyn Gebhardt Quantity Surveyors; Mokgwetsi Phala, Arc Architectural Consultants Pretoria; Luther Mkhize, Focus Project Management; Peter Christelis, Christelis Group (Pty) Ltd; Bongani Mahlangu, Focus Project Management; William Wallace, Amdec; Ndileka Ntikinca, Transnet; Mike Palframan, Nedbank Corporate; Eben Petersen, FNB Commercial Property Finance; Jeanette Seabe, Eskom; Krishnen Naidoo, Capital Property Fund; Kumeshnee West, UCT

Second-placed team (from left): Adriaan Mentz, Stauch Vorster Architects; Colin Young, Nine Cubed Group; Malcolm Mbata, Growthpoint Management Services; Craig Wittstock, Stratford Property Ventures; Chris Teague, Flanagan & Gerard; Khanyisile Nene, ACSA; Ingrid Cronje, Nedbank; Hope Segone, Old Mutual Investment Group; Marc Levi, Tarloy Properties; Adrian Read, Growthpoint Properties Limited; Kumeshnee West, University of Cape Town

Third-placed team (from left): Kumeshnee West, University of Cape Town; Tony Gebhardt, Hamlyn Gebhardt Quantity Surveyors; Daleen Botha, Stor-Age Self Storage; Linda Moodley, Standard Bank; Osezua Abhulimen, Realbanc Limited; Gilbert Sunglee, Currimjee Property Management & Development; Darroll McKeown, AECOM South Africa (Pty) Ltd; Hermanus Johannes Grobler, Standard Bank Namibia; Stanton Alberts, Nedbank; Nicholas Ramsay, Hodari Properties; Luambo Nicholas Nyambeni, Palconi Projects (Pty) Ltd

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PDP and Property Development workshop

Kumeshnee West, Acting Director for Executive Education at the Graduate School of Business, University of Cape Town

Tony Gebhardt, Hamlyn Gebhardt Quantity Surveyors

Martin Ferguson, HR, Education, Training and Development Manager at SAPOA

Marvin Nair, Standard Bank

Professor Francois Viruly, University of Cape Town, Built Environment Faculty

Western Cape Property Development Workshop

APOA Western Cape is hosting a series of half-day workshops focused on property development. The first workshop took place on 25 July at the DoubleTree by Hilton Hotels Upper Eastside. The workshop dealt with the fundamentals of property development, aiming to give the delegates a much clearer understanding of ways to identify development opportunities, the objectives of property development, the steps involved in the investment process, the development constraints, and understanding the different types of property development. We had 24 delegates booked for the first workshop; numbers are sure to increase going forward. The workshop facilitator, Professor Francois Viruly, is a well-known figure in the field. He is currently based at the University of Cape Town in the Built Environment Faculty and has served on the SAPOA Education Committee. He is very knowledgeable on the subject matter and is an engaging speaker.

Professor Francois Viruly is a knowledgeable, engaging speaker SOUTH AFRICAN PROPERTY REVIEW

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career day and workshop

SAPOA attends Career Day and hosts Lease Agreement Workshop

he Association of Built Environment Students’ (ABES) first-ever Connect Career Day and Conference in the Western Cape gave students an opportunity to connect with companies in the property industry and learn more about vacation work, internships, graduate placement programmes and bursaries offered by some companies, as well as the career paths available. Based at the University of Cape Town, ABES is a studentrun body that provides built-environment students with an opportunity to connect with industry professionals. This was a great opportunity for SAPOA to promote careers in the property industry – we will definitely be back next year.

LEFT SAPOA Western Cape Region Secretariat Melissa Mohamed at the ABES Connect Career Day

ack by popular demand as a result of interest from members who had missed the first workshop, SAPOA Western Cape hosted a second Lease Agreement Workshop, featuring Property Lawyer Johann Marnitz as facilitator, on 4 August. The Lease Agreement Workshop is an intense one-day workshop that looks into the rights and obligations of the parties to a lease, new legislation and case law affecting lease agreements. The workshop – which covers essentials for a lease agreement – is aimed at professionals who have to implement lease agreements and/or are responsible for negotiating, renewing, drafting and managing leases and lease agreements.

Lease Agreement Workshop, 4 August 2014

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from the editorâ&#x20AC;&#x2122;s desk

Protronic-S AQUA130 Hands Free Hot and Cold Metering Tap Protronic-S mains-independent, opto-electronicallycontrolled washbasin mixer DN15 with theft-proof aerator with integrated flow rate regulator. Wash basin mixer with battery operation. Self-closing single mixer

Aquamix-C AQUA202 Self-Closing Hot and Cold Pillar Metering Tap For wash systems, as a basin mixer with aerator with integrated flow controller. For connecting to the hot and cold water supply. Self-closing mixing cartridge, piston-free design, with automatic and backlash-free closure. Adjustable flow duration. With finely adjustable and twist-proof temperature stop. Full metal construction, polished chromium-plated brass. Optionally with connecting hoses or connecting pipes, connecting pieces with integrated non-return valves and dirt strainers. Self-closing single mixer

Aquamix-S AQUA200 Self-Closing Hot and Cold Mixer For wash systems, as a basin mixer with aerator with integrated flow controller. For connecting to the hot and cold water supply. Self-closing mixing cartridge, piston-free design, with automatic and backlash-free closure. Adjustable flow duration. With finely adjustable and twist-proof temperature stop. Full metal construction, polished chromium-plated brass. Optionally with connecting hoses or connecting pipes, connecting pieces with integrated non-return valves and dirt strainers.

Aqualine-C AQUA203 Self-Closing Pillar Tap Noise group I, for wash systems, with aerator and integrated flow controller. Optionally for connecting to cold water or premixed warm water. Self-closing functional cartridge, piston-free design, with automatic and backlash-free closure. Adjustable flow duration. Full metal construction, with twistproof operating element, polished chromium-plated brass. Self-closing pillar tap

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Aqualine-S AQUA201 Self-Closing Pillar Tap

Aqualine-S AQUA205 Self-Closing Bib Tap

Noise group I, for wash systems, with aerator and flow straightener. Optionally for connecting to cold water or premixed warm water. Self-closing functional cartridge, pistonfree design, with automatic and backlash-free closure. Adjustable flow duration. Full metal construction, polished chromium-plated brass.

Noise group I, for wash systems, with angled outlet and aerator with flow straightener. Optionally for connecting to cold water or pre-mixed warm water. Self-closing functional cartridge, piston-free design, with automatic and backlash-free closure. Adjustable flow duration. Full metal construction, polished chromium-plated brass.

Self-closing pillar tap

Self-closing bib tap

SOUTH AFRICAN PROPERTY REVIEW

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2014/08/12 2:12 PM

Gauteng golf day

GT golf day

FROM LEFT SAPOA CEO Neil Gopal, City of Johannesburg Honourable Mayor Parks Tau and Managing Director of Group 5 Housing Frank Enslin

SAPOA Gauteng Provincial Council Chair Gareth Shepperson (left) with West Course Longest Drive winner

East Course Second Place team with SAPOA Gauteng Provincial Council Chair Gareth Shepperson

SAPOA Gauteng Provincial Council Chair Gareth Shepperson with East Course Longest Drive and Closest to the Pin winner

West Course First Place team with SAPOA Gauteng Provincial Council Chair Gareth Shepperson

SOUTH AFRICAN PROPERTY REVIEW

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2014/08/12 4:58 PM

Gauteng golf day

Sponsorâ&#x20AC;&#x2122;s Triviron Project Management (Pty) Ltd Managing Director Phenyo Mogoletsi Mathopa, luckydraw winner Laetitia Steinberg and SAPOA Gauteng Provincial Council Chair Gareth Shepperson

East Course Third Place team

SAPOA Gauteng Provincial Council Chair Gareth Shepperson with West Course Closest to the Pin winner

East Course First Place team with SAPOA Gauteng Provincial Council Chair Gareth Shepperson

Triviron Project Management (Pty) Ltd Managing Director Phenyo Mogoletsi Mathopa

West Course Third Place team

West Course Second Place team SOUTH AFRICAN PROPERTY REVIEW

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2014/08/12 2:23 PM

KZN breakfast

Trust Seminar Breakfast By Anne Schauffer Photographs by Val Adamson

APOA members arrived in great numbers to enjoy a breakfast spread sponsored by Grindrod Bank at the Coastlands Hotel in Umhlanga Rocks – the prelude to a lively presentation on the complexities of trusts by acclaimed Author and Co-author of more than 14 books, Consultant and Lecturer on trusts, Professor Walter Geach. Trusts and tax matters are not just a topic of interest for the highly entertaining Geach, but a passion, says SAPOA KwaZulu-Natal Regional Chair Edwin van Niekerk. And clearly they are, as he proceeded to challenge the audience. “Are trusts still relevant? Do they have a future? Yes, they are more relevant than ever before. We need to use them intelligently.

Other than tax planning, there are many reasons to have a trust or trusts, not least of them asset protection.” He stressed the very real complexities of trusts, and how printing one out as though one size fitted all – with a few tweaks here and there – is unwise. Contrary to common thinking, trusts are highly regulated, he said, and not to be entered into lightly, carelessly or with motives other than those for which trusts are intended. “What is your intention when you form a trust? Don’t manipulate it,” he said.“A partnership is not a trust. A trust without beneficiaries is not a trust – it’s a partnership. Don’t hide behind a trust – a court will see right through a sham,

and ignore it. Don’t handle a trust as though it’s your alter ego – it’s not, and it’s wrong.” Geach presented the topic with great humour and enthusiasm: “I’m not here to depress anybody,” he said. “I get very excited when it comes to tax.” He offered recent and legendary legal case histories as clear examples of the various issues associated with trusts, which made his presentation as accessible as it was lively. Van Niekerk spoke on behalf of all present when he thanked Grindrod Bank for its sponsorship of the event, and Geach for providing succinct insight into the complexities of trusts: “Everybody would have been happy to listen to the topic for considerably longer.”

TOP ROW, FROM LEFT SAPOA KwaZulu-Natal Regional Chair Edwin van Niekerk, Professor Walter Geach and Derek Kemp; Bev Nelson, Linley Smith, Sbu Mankwali and Zakeira Mahomed; David Gorven, Zithobile Jij and Justin Gillmer MIDDLE ROW, FROM LEFT Simon Wear, Verna Benchimol, George Charalambus and Howard Ainsworth; Mike Graham, Peter Sparks, Louis Savrimuthu and Martin North; Aletta de Lange, Michael Wildner, Carryn Scott and Graeme Palmer BOTTOM ROW, FROM LEFT SAPOA KwaZulu-Natal Regional Chair Edwin van Niekerk; Professor Walter Geach

SOUTH AFRICAN PROPERTY REVIEW

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2014/08/13 9:38 AM

what’s on

SAPOA upcoming national events 2014 September Region

Date

Event

Gauteng

1 to 5 September 2014

BCTP & FMP Training Courses

KwaZulu-Natal

3 to 4 September 2014

Negotiation Skills Masterclass Programme (NSMP)

Port Elizabeth

9 September 2014

Port Elizabeth Golf Day

Polokwane

10 September 2014

SANS 10400 Workshop

Gauteng

12 September 2014

Research Breakfast: Retail Trends Report

Gauteng

15 to 19 September 2014

IPMP Training Course

Polokwane

16 September 2014

Council Meeting Lowveld

Gauteng

18 September 2014

National Council Meeting

KwaZulu-Natal

18 September 2014

Brokers’ Cocktail Networking Event

Western Cape

26 September 2014

The Development Feasibility Study Workshop

KwaZulu-Natal

29 September 2014

SANS 10400 Workshop

October Region

Date

Event

Gauteng

2 October 2014

Legal Power Hour

Western Cape

10 October 2014

Raising Finance for Developments Workshop

Gauteng

14 to 15 October 2014

NSMP Training Course

Gauteng

17 October 2014

Breakfast: Industrial Vacancy Report

KwaZulu-Natal

20 October 2014

Tongaat Hulett-sponsored Breakfast

Gauteng

24 October 2014

Brokers’ Seminar Day 1

Gauteng

27 to 29 October 2014

ICPP Training Course

Polokwane

28 October 2014

Lowveld Golf Day

November Region

Date

Event

Gauteng

4 to 7 November 2014

ICPP Training Course

Gauteng

6 November 2014

Legal Power Hour

KwaZulu-Natal

11 November 2014

Gala Dinner

Gauteng

12 to 13 November 2014

NSMP Training Course

Gauteng

13 November 2014

Networking Evening

Gauteng

14 November 2014

Brokers’ Seminar Day 2

Gauteng

17 to 21 November 2014

FMP & IAMP Training Courses

Polokwane

20 November 2014

Council Meeting Lowveld

Gauteng

20 November 2014

Brokers and Legal Update

Western Cape

21 November 2014

Delivering the Property Development Workshop

Polokwane

25 November 2014

Gala Dinner SOUTH AFRICAN PROPERTY REVIEW

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2014/08/13 9:41 AM

off the wall

Like energy off a duck’s back Cute, supersized and energy-efﬁcient – meet Energy Duck By Candace King

hile squeaky yellow rubber ducks bring bath-time joy, another kind of floating duck could provide renewable energy to an eco-conscious European city and save an avian species under threat from climate change. A team of four UK designers and artists have come up with Energy Duck – an artistically iconic and entertaining, floating, duck-shaped renewable-energy generator sculpture that’s habitable for tourists and pays homage to the city of Copenhagen’s sea-faring Common Eider duck that lives in large numbers in the city and whose breeding habitat is at risk from the effects of climate change. As a project submitted to the 2014 Land Art Generator Initiative (LAGI) Copenhagen Design Competition, Energy Duck has been designed in the image of the Eider species, and acts as a solar collector and a buoyant energy storage device. LAGI’s focal goal is to design and construct public art installations with the added benefit of utility-scale clean energy generation. The designed sculptures will continuously distribute clean energy into the electrical grid, each with the potential to provide power to thousands of homes. LAGI’s objective is to advance the successful implementation of sustainable

design solutions by integrating art and interdisciplinary creative processes into renewable energy infrastructure. Fulfilling the requirements of LAGI, the 12-storey-high Energy Duck has the power to provide Copenhagen with solar energy and hydro-power in Copenhagen Harbour – where Energy Duck will reside – which will assist the Danish capital in its efforts to become the world’s first carbon-neutral city by 2025. Developed by artists and designers Hareth Pochee, Adam Khan, Louis Leger and Patrick Fryer, Energy Duck is made of lightweight steel and covered in low-cost, off-the-shelf PV solar panels that will absorb the sun’s rays during the day and convert the energy into electricity. To tourists’ delight, the low-power LED lamps on the duck’s exterior will turn the harbour into a colourful LED light display at night. The LEDs will change colour in rhythm with the movement of Energy Duck’s internal hydro turbines – a mechanism that visitors will be able to see as they board the avian vessel and admire its insides. According to digital architecture and design magazine Designboom, Energy Duck “has been conceived to be completely scalable, depending on the situation: a 40mhigh duck serves a town; a 20m-high duck serves a village, and a 4m-high duck serves an individual house.” As described in technical detail on LAGI’s website, “some of the solar electricity is stored by virtue of the difference in water levels inside and outside the duck. When stored energy needs to be delivered, the duck is flooded through one or more hydro-turbines to generate electricity, which is transmitted to the national grid by the same route as the PV panel-generated electricity. “Solar energy is later used to pump the water back out of the duck, and buoyancy brings it to the surface. The floating height of the duck indicates the relative cost of

‘Quack’ facts Name

Energy Duck

Competition

2014 Land Art Generator Initiative Copenhagen Design Competition

Artist team

Hareth Pochee, Adam Khan, Louis Leger, Patrick Fryer

Artist location

London, the UK

Energy technologies

Photovoltaic panels (Panasonic HIT or similar), hydraulic turbines (Kaplan, Francis or similar 100kW-500kW capacity)

electricity as a function of city-wide use: as demand peaks, the duck sinks. “Visitors inside the duck will have views upwards to reveal the striking pattern of the mesh of PV panels in silhouette, backlit by daylight streaming through the air gaps. Looking downwards allows one to see the sea water rising and falling within the pressure storage tanks.” The winner of the 2014 LAGI Copenhagen Design Competition will be announced in Copenhagen in early October 2014. Let’s hope that the bobbing energy bird will get the nod.

SOUTH AFRICAN PROPERTY REVIEW

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2014/08/13 9:46 AM

PASSIONATE ABOUT

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Untitled-1 1

2014/08/20 9:22 AM

Proactive Quantity Surveying 3

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

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

QUANTITY SURVEYING

Gerhard de Leeuw

Akopo Africa

Nico Roos

Dr CornĂŠ de Leeuw

DISPUTE RESOLUTION

PROPERTY VALUATION

Untitled-3 1

2014/07/28 9:56 AM