ART www.businessmediamags.co.za 2022SEPTEMBER Steyn City, Johannesburg Driving growth within the retail market How technology is upending the sector INSIDE: BREATHING NEW LIFE INTO INDUSTRIAL AND MIXED-USE PRECINCTS
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We take a look at why South African developers are investing offshore and what their investment appetite is for opportunities in sub-Saharan markets.
Equipping the key players within the commercial property sector for the changing world of property management.
13 RETAIL Thought leadership
Diversify your investments
Amelia Beattie, CEO, Liberty Two Degrees, shares what she believes will help drive growth within the retail sector.
10 DIVERSITY
Cover Image: Steyn City, Johannesburg
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Breaking the bias
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Content Co-ordinator: Vanessa Payne
16 INDUSTRIAL MARKETS
18 RENEWABLE ENERGY
20 GOING GREEN
How commercial property owners can capitalise on renewable energy.
Thought leadership
Is going green a golden opportunity for South African SMEs? Mark Paper, chief operating officer, Business Partners International at Business Partners Ltd, unpacks the benefits and opportunities for the SME sector.
A new breed of industrial developments
Education and training
14 MIXED-USED DEVELOPMENTS
Advert Designer: Bulelwa Sotashe
EDITORIAL COMMENT
Steyn City
Contents
Protech and digital solutions
Far from the grimy, smoky districts of yore, South Africa’s modern industrial parks are multifunctional spaces where people want to work.
Contributors: Amelia Beattie, Caryn Gootkin, Gareth Griffiths, Mark Paper, Anthony Sharpe, Rodney Weidemann
ManagementMANAGEMENTAccountant: Deidre Musha
We take a look at the latest developments in this multi-use parkland development precinct. New hotel developments
16 14 13 18
ProjectSALES Manager: Merryl Klein merrylk@picasso.co.za | +27 21 469 2446
ProductionPRODUCTIONEditor: Shamiela Brenner
Copy Editor: Brenda Bryden
We profile two women taking over the reins in a traditionally male-dominated industry.
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Lifestyle precincts, hotels and apartment hotels are starting afresh post-COVID-19.
How technology is upending how we work and shop – innovation within IT is propelling efficiency by using big data and advanced analytics to cut costs and become more competitive.
HeadDESIGNof Design: Jayne Macé-Ferguson
9 PROPERTY INVESTMENT
Managing your assets Unpacking the dual aim of increasing revenue and value.
6 FINANCE
Maintenance forms an important part of property management. “We follow strategic and systematic approach to planning and maintenance of all assets within the buildings we manage, delivering the highest value level of service to the client.”
Gaby Sithole
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(previously Investec Asset Management) and Growthpoint Properties,” says Gaby Sithole, director of asset management at Lango Real Estate. “Lango means entry or gateway in Swahili, which embodies our strategy of becoming the dominant player in the African real estate market. Our current portfolio includes prime office and retail properties in Zambia, Nigeria, andSinceGhana.”itsinception, Lango has seen the potential in the real estate landscape in sub-Saharan Africa. “As an early mover with signifi cant scale, we are well positioned
windon Property manages property assets on the behalf of both investors and landlords, says Liezel Anderson, director: head of property management at Swindon Property. “We make important investment decisions to help the client’s portfolio growth and maximise their return on investments through optimising rental revenue and minimising operating expenses. Our ultimate focus is on unlocking the true potential and long-term value of our clients’ assets.”
DIVERSIFY YOUR INVESTMENTS
MANAGING YOUR ASSETS
to leverage the early stages of real estate growth in select countries with our real estate platform, which is comparable to structures found in far more developed countries,” says Sithole “We focus on a robust income stream backed by blue-chip international tenants on long-term and typically hard-currency leases.”
vacancies, decreasing operating expenses and minimising arrears,” says Anderson.
Like others entering this vast market, Lango follows a well-considered investment thesis aimed at maximising the diversification benefits from a portfolio spread across multiple jurisdictions and property sectors – retail, office and industrial properties. “We set limits on maximum country and sector exposure, a strategy that has proved itself through our reasonably consistent and robust performance during the recent pandemic stress, particularly when considering how different markets reacted differently and at different times,” says Sithole.
“We evaluate each building annually, which may see us recommending increasing the income from the building through subdivision, redevelopment or adding additional rentable income areas to enhance the income stream,” says Anderson. “Knowing what is happening in the market helps us get the best returns for our clients when renewing leases and negotiating escalation rates.”
ub-Saharan Africa’s growing consumer markets and strong projected economic growth have attracted the attention of property developers. Swindon Property’s African Cities Insights (Q2, 2021) notes that “we should see investor confidence returning to the sub-Saharan Africa region, bringing with it an increase in rental enquiries in all property sectors”.
The cornerstone of a successful investment property is tenant satisfaction and retention. “Sound tenant profiling ensures low vacancy rates,” says Anderson. “It is vital to manage the property in a way that keeps tenants happy and encourages them to remain in the building.”
SWINDON PROPERTY
“WE ARE WELL POSITIONED TO LEVERAGE THE EARLY STAGES OF REAL ESTATE GROWTH IN SELECT COUNTRIES WITH OUR REAL ESTATE PLATFORM.” – GABY SITHOLE
Lango Real Estate, one of the many South African companies taking advantage of these opportunities,developmentinvests in prime commercial real estate assets in key gateway cities and sector-specific nodes across the African continent. “Lango is the successor of a joint venture between Ninety-One
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By CARYN GOOTKIN
This demands implementing a carefully planned overall strategy for each rental property and the client’s entire real estate portfolio, which includes improving asset value by wisely reducing expenses and increasing income. “At Swindon Property, we maximise net income through increasing rental income, reducing tenant
To ensure capital growth, successful asset managers constantly assess market valuations and market-related rentals.
Property asset managers manage investment properties for their clients and are mandated to increase revenue and value. Achieving this requires solutions tailored to each property’s specific dynamic.
6 COMMERCIAL PROPERTY FINANCE SUPPLIEDIMAGES:
“We achieve this through proactive, planned property life-cycle maintenance, utility management, and world-class technology. We leverage this technology to create guidelines that allow us to anticipate trends and cater to our client’s individual needs. Whether the property is retail, commercial, industrial or a massive planned development, it helps to have systems that improve effi ciencies in every part of the process, from rent collection to fi lling vacancies and fi nancial planning.”
CARYN GOOTKIN looks at why South African developers are investing offshore and what their appetite is for investment in sub-Saharan markets
So, what’s causing this? The property landscape has become far more complex in recent years. Property professionals are navigating a new regulatory minefield while also juggling higher investor expectations. Their existing tools and processes can barely keep up with daily realities. They certainly can’t produce sophisticated, investment-level reporting.
fail to recognise the difference between being a landlord focused on the “dollars and dimes” property rentals and an investor focused on the big-picture strategy of optimal growth.
Property professionals are becoming increasingly aware of the importance of technology in empowering service delivery. By embracing modern, purpose-built tools such as WeconnectU to lighten the administrative load, property professionals are finally free to focus on delivering truly worldclass asset-management experiences. They’re shining a light on their strategic capabilities, and its paying dividends on every level.
JOHANN VAN DER MERWE , managing director, WeconnectU Intelligent Property Solutions, looks at how the management of property can impact investment performance
WeconnectU offers a truly end-to-end property managemet ecosystem that solves all the major challenges in community management, rental portfolio management, and inspections and maintenance manageable,businessesbuildingmanagementdeliveringreactivepropertyprovenWeconnectU’smanagement.solutionshaveextremelyeffectiveinhelpingprofessionalsshiftfromtoproactivemanagement,aworld-classassetexperiencewhilesustainable,modernthatarecompliant,scalableandprotable.
ADVERTORIAL WECONNECTU
SUPPLIEDIMAGES: 8 COMMERCIAL PROPERTY ➔ Scan this QR code to go directly to the Weconnectu website.
There’s also a persistent lack of awareness among property investors themselves. Many
Johann van der Merwe
The reasons are layered and complex, but can generally be distilled down to a single root cause: the investment experience for property and other asset classes differs significantly.
Now let’s look at that same investor’s experience when it comes to their property assets. The management process starts with the property manager securing a tenant. The investor then receives monthly distribution statements, requests for money for maintenance, updates on any late payments, and notification of annual rent escalation.
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roperty is one of the oldest and most successful long-term asset classes and a signifi cant source of economic growth and infl uence. So, one would assume property assets would be managed with at least as much care and skill as other asset classes. Yet, the general perception of the property manager’s role remains one of mere administration.
FINANCIAL VERSUS PROPERTY ASSET MANAGEMENT
Take your average financial asset for example. The investment experience begins with the asset manager assessing the investor’s risk profile and expected returns, then developing a customised investment strategy. The strategy is then implemented and its performance reported quarterly, alongside other relevant information such as market trends. Return on investment (ROI) and strategy are also reviewed annually, keeping the investor fully informed to make sound investment decisions.
TRANSFORMATION AND TRANSPARENCY
Together, we’re doing what it takes to close the gap between property assets and other asset classes. The property industry and the economy deserve it.
MIND THE GAP – HOW THE INVESTMENT EXPERIENCE IS SELLING PROPERTY SHORT
ABOUT WECONNECTU
Likewise, investors are becoming aware of the shortfalls in the experience they’ve been getting. They are actively seeking property professionals who go beyond the typically reactive administrative basics to optimise investment performance through proactive management. Compliance and operational value are baseline requirements – these investors are looking for next-level expertise that maximises ROI, reduces risk, guides portfolio growth, and informs investment decisions. And they expect complete transparency.
Thankfully, transformation is happening for both property professionals and property investors.
Supporting this kind of transformation is one of the biggest reasons we founded WeconnnectU. We’re passionate about property, property investors, and the professionals who unite the two.
We have over 1 300 clients already leveraging our purpose-built software ecosystem to transform their property management services into true asset management experiences. That includes flawless compliance, seamless financials, consistent communication, and detailed reporting on everything from yield to capital growth and more.
For more information: 086 999 james@weconnectu.co.za0756www.weconnectu.co.za
It all seems remarkably mundane and administrative and not terribly helpful from an asset performance perspective. Yet, property professionals such as rental and community portfolio managers are often the single greatest influence on the success of their investors’ assets.
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“WITH THE DEVELOPMENT OF TECHNOLOGY SUCH AS ROBOTIC PROCESS AUTOMATION, MANY PROPERTY MANAGEMENT PROCESSES CAN BE AUTOMATED, MAKING IT THAT MUCH EASIER TO MANAGE A LARGER NUMBER OF PROPERTIES.” – ROSS FITZCHARLES
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“It is important to understand that technology skills are not the only ones needed. As technology is adopted more deeply and enables estate agents to provide better information, the educational focus switches to soft skills. In property management, these can be leveraged to help build long-lasting relationships with clients and deliver exceptional service.
Property management professionals must educate themselves in certain key subjects if they hope to succeed in an evolving world, writes RODNEY WEIDEMANN
Ross Fitzcharles
“From integrated digital solutions that monitor areas such as lifts to technology measuring footfall flow within a building, technology insights can be used to inform managers on how to improve their customers’ experiences and adjust tenant product mix and offerings. Lastly, smart metering systems play a critical role in the drive towards net zero.”
tenant mix while providing deeper insights and improving efficiencies,” he says.
PROPERTY MANAGEMENT COMMERCIAL PROPERTY 9 SUPPLIEDIMAGES:
DEEPER INSIGHTS THROUGH TECHNOLOGY
KEY AREAS IMPROVED THROUGH USE OF TECHNOLOGY • Bank integration • Tenant application • Lease renewal • Compliance • Communication • Reporting. Source: WeConnectU
“With the development of technology such as robotic process automation, many property management processes can be automated, making it that much easier to manage a larger number of properties. Plenty of technology platforms focusing on these solutions and services for landlords are popping up, so education and training on such technologies is now imperative,” he says.Fitzcharles adds that training and understanding are also key for understanding collaboration technology and how to use social media to build a brand. Previously,
would be like trying to build a single puzzle with pieces from several different boxes. Property management requires massive administration efforts and technology is important for eliminating manual, paper-based operations.
“TECHNOLOGY INSIGHTS CAN BE USED TO INFORM MANAGERS ON HOW TO IMPROVE THEIR CUSTOMERS’ EXPERIENCES AND ADJUST TENANT PRODUCT MIX AND OFFERINGS.” – JONATHAN SINDEN
anaging a property portfolio can be a complex and time-consuming matter, which is why technology is increasingly being leveraged to make the process more efficient and simpler.
Johann van der Merwe, MD at WeConnectU, notes that technology alone doesn’t always create efficiency. If one uses different accounting, maintenance and management solutions, for example, these technologies must communicate with one another. “Without effective integration, using multiple solutions
“As we look to the future and which areas of this market are booming, another area where commercial property managers should seek to improve their education and skills is the ‘green’ space. Clearly understanding the impact of going green –and the benefits of things such as adopting renewables, reusing water, and aggressive recycling – is going to be critical very soon,” he concludes.
Property managers need to leverage technology to reduce complexity, increase efficiencies and drive deeper tenant insights, writes RODNEY WEIDEMANN
“Within this context, real estate has become increasingly consumer-focused, with technology playing a more significant role in improving tenant, customer, and human experiences. Data collection and analysis are at the heart of this process. Data can demonstrate how space is used, helping managers refine offerings and their
“If a property manager is not leveraging technology to its fullest extent to make processes more efficient and communicate better value to clients, they will not be around for long. However, such players must choose a solution that offers an end-to-end ecosystem to fully address the core pillars of property management. A single solution with multiple modules will work more efficiently than five separate systems,” he concludes.
Jonathan Sinden, COO at Liberty Two Degrees, notes that the pandemic accelerated the pace of technological change in the property arena, driven by trends such as online shopping and remote working.
Knowledge is the key
he says, the focus was on billboards and having the right connections, but today it is about perception.
he property management market has changed significantly in the past decade. Digital technologies have had an impact, along with changing practices and growing environmental concerns, leaving education and training struggling at times to keep up. Nonetheless, property management has been made easier, thanks to the latest digitalRosstechnologies.Fitzcharles,founder and CEO of Preferental, a digital platform that assists SA Property Network members, among others, with managing their properties, notes that today, landlords have more access to tools and information to make informed and insightful decisions.
“WE HAVE TO CREATE AN ENVIRONMENT WHERE PEOPLE FEEL COMFORTABLE JOINING THE COMPANY. WE MUST ALSO BE INTENTIONAL IN MAKING APPOINTMENTS TO IMPROVE DIVERSITY.” – LAILA RAZACK
In the two and a half years she has been with the company, Pfaff-Karg seems to be doing extremely well in her role. However, she admits that being a woman in the industry can be challenging and constantly being in a boardroom full of men can be intimidating.
In South Africa’s property sector, women have historically occupied roles in residential sales and marketing, rarely moving into leadership positions. Important strides have been made to reverse this in the past 5 to 10 years, but more still needs to be done.
Commercial property is a traditionally male-dominated industry, but women are slowly taking up the reins. TIISETSO TLELIMA profiles some women making an impact on the sector
In the past six months, Spear purchased an industrial property, 27 Junction Road in Parow, for R65-million. The property has been leased to Pepkor for 10 years, creating considerable uplift in value.
“BEING A WOMAN IN THE INDUSTRY HAS BEEN CHALLENGING AND NEGOTIATING IN A ROOM FULL OF MEN CAN BE TRICKY AND LONELY.” – KIM PFAFF-KRAG
BREAKING THE BIAS
KIM PFAFF-KARG, CHIEF INVESTMENT OFFICER, SPEAR REIT LIMITED
LAILA RAZACK, CFO AT EQUITES
Laila Razack, a chartered accountant, joined Equites as a fi nancial manager in 2015. Within a year she was appointed head of fi nance, and at the end of 2019, when Equites’ CFO resigned, Razack assumed the position temporarily. After a rigorous recruitment process, she was offered the position permanently in May 2020. Razack was only 32 years old when she took over as CFO, but she threw herself into the job and has never looked back. “Being so young and a woman, I felt a little insecure about being able to perform the role and how I would be perceived in the market, but my approach was just to do my best,” she explains. “I continued doing what I have been doing throughout my career. It’s been a fantastic journey.”
endorsement of the ability of Spear to provide versatile solutions,” explains Pfaff-Karg.
Laila Razack
Under her leadership, Pfaff-Karg has facilitated the disposal of a number of noncore properties that has assisted in reducing Spear’s loan-to-value ratio to its target range
Equites is a logistics-focused fund that buys warehouses and distribution
Kim Pfaff-Karg
“We’re in the process of redeveloping one of our existing industrial properties for the outgoing tenant based on their expansion requirements, which is an
As a woman of colour, Razack feels strongly about representation and the need for more diversity in the property sector. Equites has tried to address the problem by ensuring that 53 per cent of its
FAST FACT
staff consists of women, and that more than 50 per cent is black. “We have to create an environment where people feel comfortable joining the company. We must also be intentional in making appointments to improve diversity – whether it’s gender or race,” she adds. Razack is also a director of the Michel Lanfranchi Foundation, which provides students with full bursaries to study property-related courses.
“Negotiating with men can easily turn into managing egos as men typically like to win whereas women tend to compromise. We don’t mind walking away feeling equal and that for me is the crux of the entire women versus men debate in property.”
Kim Pfaff-Karg took on the role of chief investment officer at Spear REIT Limited in March 2020, three weeks before the national lockdown to curb the spread of COVID-19, which negatively impacted the commercial property sector. “It was quite a daunting start, but the market has stabilised and I am really enjoying my role as I have the opportunity to leverage my property valuation and investment broking skills to ensure that we are buying and selling the correct properties at the correct prices,” says Pfaff-Karg.
centres and also develops them in-house. Razack focuses on blue-chip tenants such as Shoprite, DSV, DHL, Pick n Pay Distribution and Amazon. “Our focus is on long-dated leases and making our tenants’ lives as simple as possible,” saysEvenRazack.though she was thrown into the job at a difficult time during COVID-19, she steered the ship and made sure the company emerged from the pandemic unscathed.
10 COMMERCIAL PROPERTY DIVERSITY SUPPLIEDIMAGES:
Source: www.wpn.co.za
of between 38–43 per cent. Spear’s most recent disposal was 5 Fitzmaurice Avenue in Epping to the Rex Trueform Group for R85-million, which is currently pending transfer.
The double-level L-shaped building provides pedestrians with easy access to the lower and upper levels of the centre. Company partner Aki Savva says that the design intention was to ensure clean horizontal and vertical lines with an emphasis on the entrances. The main-street entrance welcomes pedestrians via a bold entrance portal in the shape of a giant red flag. A similar, but understated, solution was applied to the upper-level access.
Columns in the shape of stylised tree trunks with branches and shield-shaped roofs are visible at each of the Mall of Thembisa’s distinctive entrances. The largest roof covers the external food court area and main entrance to the building, while the tree-trunk columns are a prominent design element throughout the building.
Three of MDS Architecture’s recent projects are finalists in the 2022 SAPOA Awards, which recognise innovative excellence.
Three feature walls, designed and painted by local graffiti artists, create attractive and inspiring spaces, often used for selfie backdrops.
Louis Pretorius, another partner at the company, says that his favourite aspect of Mall of Thembisa is the Kasi CoLAB, a township designer’s emporium that provides local designers with a prime location from which
COMMERCIAL PROPERTY 11 ➔ Scan this QR code to go directly to the MDS Architecture website. SUPPLIEDIMAGES:
FLAGSTAFF SQUARE SETS A NEW STANDARD FOR RURAL RETAIL
Some of South Africa’s best known and most loved shopping centres have been designed by retail architecture specialists MDS Architecture For more information: 011 884 www.mdsarch.co.za7999
INTIMATE PROPORTIONS IN A GRAND SPACE AT MALL OF THEMBISA, GAUTENG
Local communities in the Eastern Cape’s OR Tambo district can enjoy convenient and stylish shopping at Flagstaff Square.
RUSTENBURG MALL – UNIQUE SENSORY EXPERIENCES AND AN URBAN ART GALLERY
The Marketplace, a flexible and multifunctional central entertainment area, incorporates kiosks and tuk-tuks, bringing together bespoke, craft-like offerings with more mainstream food offerings. Original art is displayed in galleries throughout the mall.
Inside, several pop-up roofs are a prominent architectural feature and serve to flood the interiors with natural lighting through clerestory windows. The anchor restaurant, Imbizo, is a circular, aluminium-clad, triple-volume space that takes full advantage of the magnificent views of the township beyond and forms a focal point of the building from the main road.
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Rustenburg Mall is located within one kilometre of the country’s largest public transport hub in the North West province. Each of the shopping centre’s three entrances displays tree-like canopies and large sculptural signs made up of individual 2m-high lettering structures. MDS Architecture partner Pierre Lahaye explains that the roof design is inspired by Acacia trees and their symbols as expansive shelters for get-togethers.Internally,Rustenburg Mall’s design offsets timber and crisp white features. The ceiling features custom-designed ribbon-like lighting to guide shoppers through the building as well as mobiles and abundant natural light.
Mall of
DS Architecture, established in 1954, has an extensive portfolio, but is particularly well known for its retail shopping centre designs. As Sandton City’s original architects, MDS Architecture is also responsible for the designs of Mall of Africa, Ballito Junction, Mall of the North and Boardwalk Mall, which is currently under construction in Gqeberha.
FlagstaffThembisaSquare
AWARD-WINNING RETAIL ARCHITECTURE FOR OVER 60 YEARS MDS ADVERTORIAL
Rustenburg Mall
to trade, free of charge. The open-plan space features vibrant graffiti painted by local artists.
“External and internal spaces are harmoniously linked with the use of materials and a neutral colour palette backdrop that contrasts with vibrant colours at the entrances,” he says.
There is no doubt that this is attractive to tenant businesses. The quality and diversity of tenants in malls is also beneficial to the performance of shopping centres. L2D saw
To support the property industry’s growth initiatives and its day-to-day functioning, environmental, social and governance (ESG) plays a critical role. Environmental sustainability within this framework proved its relevance at the inception of the COVID-19 pandemic – a testament to the longstanding need for the industry to focus on this element. While commitments have been made to achieving net-zero targets, far bolder commitments are required. For example, L2D has committed to achieving a net-zero 2030 target across waste, water and energy. The REIT has diverted 84 per cent of waste from landfill (35 per cent in 2021) and has reduced its reliance on the power grid through solar energy, seeing a reduction of 3.6 per cent across the portfolio.
In the first half of the year, Sandton City hosted the Kamers Market on its rooftop, attracting over 7 500 visitors, Eastgate Shopping Centre introduced late-evening trade and a range of digital-based interactions with customers to create an enhanced shopping experience, while Midlands Mall in Pietermaritzburg hosted the inaugural 2022 PMB Gin Festival, which saw a total reach of 1.64 million visitors across social and digital platforms.
PRUDENT FINANCIAL MANAGEMENT
THOUGHT LEADERSHIP: RETAIL COMMERCIAL PROPERTY 13 SUPPLIEDIMAGES:
In its latest mid-year results to 30 June 2022, L2D saw continued positive momentum in the recovery of its property portfolio. The REIT saw
better occupancy rates and good leasing activity in the first half of 2022, indicating the strong demand for retail space in the portfolio where 179 leases, including renewals and new deals, were concluded. This equates to 46 992m2 and has translated into an increase in L2D’s retail occupancy, up 97.2 per cent in the first half of the year.
THE NEED TO DRIVE PRIORITIES REMAINS
• prime location;
Sandton City Kamers Market
• advanced safety initiatives;
• prudent financial management; and
Amelia Beattie
• the strong demand for quality retail space by tenants;
AMELIA BEATTIE , CEO of Liberty Two Degrees, shares what she believes will help drive growth within the retail sector
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With customer experiences playing a key role in drawing feet to shopping malls, some of South Africa’s most iconic assets can bear witness to this.
TO SUPPORT THE PROPERTY INDUSTRY’S GROWTH INITIATIVES AND ITS DAY-TO-DAY FUNCTIONING, ENVIRONMENTAL, SOCIAL AND GOVERNANCE PLAYS A CRITICAL ROLE.
he inflationary burden on households due to rising interest rates, the sharp increase in fuel prices, escalated load shedding, double-digit increases in municipal and utility costs, and a surge in food prices remains a catalyst for downward pressure on economic growth post the pandemic
Eastgate Shopping Centre
This may have boded well for the retail sector, but the biggest drivers to outperformance in this space by retail-focused REIT Liberty Two Degrees (L2D) are:
Uncertainties still prevail in the industry, and it is imperative to remain realistic about these. Driving priorities remains the real task, ensuring that the gains made translate into improved growth opportunities and, ultimately, value for all stakeholders.
• a need for captivating and in-person customer experiences;
ENVIRONMENTAL SUSTAINABILITY A KEY FOCUS AREA
GEARED FOR GROWTH
• a key consideration for ESG factors.
Considering the current challenging economic backdrop, it is evident that prudent financial management is key to enabling future growth. L2D has proved that its conservative balance sheet has served as a critical strength within the uncertain context, enabling the REIT to maintain a healthy loan-to-value of 24.6 per cent as at 30 June 2022, and sufficient liquidity to meet its porfolios’ operational needs.
double-digit growth in portfolio foot count – up 10.2 per cent on 2019 – and reported turnover growth for its retail portfolio, up 16.1 per cent on 2019 and 25.1 per cent up on 2021. The turnover for the first three months of 2022 is higher than the corresponding months over the past three years. This recovery also translates into annual trading density growth of 5.5 per cent compared to March 2019, indicating an improvement in retail sales per trading square metre.
However,lockdown.thelifting of the National State of Disaster and the removal of the remaining COVID-19 regulations have countered the effects of the current economic environment, contributing to a return in retail and consumer confidence.
Constructed on an undeveloped site, previously serving as a parking lot, in Benmore, the building complex was developed by property development and management company Anaprop, which is owned by Acsion Ltd.
ierre Lahaye, partner at MDS Architecture, says that they are increasingly witnessing an evolution to mixed-use alternatives. “In our experience at MDS Architecture, a retail node often becomes the catalyst for further development and this, in turn, results in more functional areas.
“Mixed-use developments are popular worldwide because they represent the way people want to live – close to amenities and the places they visit every day. The idea of mixed-use spaces is quite well developed on the African continent, so it is encouraging to see the development of South African iterations, resulting in improvements for residents,” Lahaye explains.
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A multi-use PRECINCT
“It boasts six basements of parking under the twenty developed floors within the main building. A full green area envelope has been developed to meet the main requirement of providing affordable, secure accommodation in the heart of Sandton,” says Nicoloudakis.
Astrino Nicoloudakis
NEW DEVELOPMENTS
While the existing property was a rebrand and the original focus was on increasing services and training staff to a new level, Campbell says that the group is now beginning with “serious renovations”.
The Clubhouse overlooks the pooldeck on the second floor.
“One of the reasons we were interested in the Parktonian is because it has many rooms, which can be set up as suites, semi self-catering, or full self-catering rooms. We also have the potential to convert more of these rooms into apartment-style, as we foresee growth in this market,” he says.
“July 2022 was a record month for us –the best ever in our history! This won’t be the last record we set. We expect to break historical revenue targets in the future. We are very upbeat and confident and have seen massive growth in the domestic leisure market,” he concludes.
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“The overarching concept is ‘live, work, play’ all at one address. The multi-use lifestyle precinct includes a 561-room luxury hotel, 480 upmarket leased apartments, and conferencing and event facilities, including an 80-seater auditorium. We offer a co-working space with hot desks, office space and boardrooms, an NCF-curriculum nursery school, doctors’ rooms, a gym, clubhouse, deli, restaurants, a spa and retail outlets,” Nicoloudakis explains.
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he Acsiopolis building is a multi-use lifestyle precinct on one hectare of land in the heart of Sandton. Its offerings include substantial luxury hotel rooms, apartments and multiple other facilities designed to draw investors and residents from all stages of life. The apartments are available for lease, not outright purchase.
The property itself is substantial. Astrino Nicoloudakis, CIO of Acsion, mentions a gross building area of 147 000m2 for the whole site and a gross leasable area of 67 000m2 for the main building.
he privately-owned ANEW Hotels & Resorts Group recently announced the opening of two new properties in Gauteng – the ANEW Hotel Parktonian in Braamfontein and the ANEW Hotel Roodepoort.
The Parktonian (formerly a Protea Hotel by Marriott) is one of the largest in the group’s portfolio, boasting 300 rooms with extensive conferencing facilities within Braamfontein’s central node. It has incredible potential for combining business and leisure, says Alan Campbell, ANEW Hotels & Resorts’ sales and marketing director.
The Roodepoort hotel (formerly also a Protea Hotel), a much newer facility, is located close to all the business hubs in Johannesburg. Campbell says: “This has been a phenomenal addition for the group. It doesn’t offer apartments in the traditional sense of the word, the style being more like hotel rooms, but they are great rooms with spacious balconies looking out onto a green office oasis in the middle of Roodepoort,” he explains.
GARETH GRIFFITHS uncovers the latest happenings in lifestyle precincts, hotels and apartment hotels
Alan Campbell
The hotel’s skydeck, which has been closed for full renovations, will reopen in September 2022, followed by upgrades to the rooms.
“Our vision for the building is unique, encompassing all the uses and services required for people at all stages of life. You can move in as a single person and still be living here as a retiree because there are studio apartments, three-bedroom apartments and penthouses.
“Even in less urban settings, a retail component develops into villages complete with squares, village greens and a high street component. As an added bonus – especially in more rural settings – mixed-use developments usually involve varying degrees of infrastructure upgrades. Our shopping centres are drawing people in and increasingly serving as gathering places and opportunities for communities to interact while offering much broader retail and entertainment options.
urbanReshapingspaces
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“OUR VISION FOR THE BUILDING IS UNIQUE, ENCOMPASSING ALL THE USES AND SERVICES REQUIRED FOR PEOPLE AT ALL STAGES OF LIFE.” – ASTRINO NICOLOUDAKIS
BUSINESS AND LEISURE
• maintenance;
rank lifestyle estates. Those that make it onto the list are stringently assessed in terms of:
“THIS PRESTIGIOUS DEVELOPMENT IS RELENTLESS IN ITS QUEST TO FULFIL ITS UNDENIABLY OVERARCHING AMBITIOUS OBJECTIVE: TO BE RECOGNISED AS THE VERY BEST LIFESTYLE ESTATE IN THE WORLD.” – ZOE VAN ONSELEN
tretching across 2 000 acres of lush and verdant parkland near Fourways and Lanseria in Gauteng Province, Steyn City’s aim to be the best is an ongoing process of improvement.
“This prestigious development is relentless in its quest to fulfil its undeniably overarching ambitious objective: to be recognised as the very best lifestyle estate in the world,” says Zoe van Onselen, head of marketing at Steyn City.
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• location, views and scenery;
THE GREAT OUTDOOR ENVIRONMENT
Steyn City’s array of facilities is well known. Freshwater, outdoor swimming is available in the crystal clear waters of the development’s 300m lagoon, which also offers a beach-style kiosk, advises van Oselen. There’s a wide choice of other sporting amenities such as floodlit tennis courts, outdoor workout stations, a fully equipped gym, an indoor aquatic centre and an equestrian centre with clubhouse. Plus, there are play nodes to keep children entertained and a choice of eateries.
“All services are located within our super-basement, which can accommodate 2 000 cars. This facility is worth mentioning because it is very different to what people might expect from a basement: far from being dark and cramped, we’ve implemented design detail that makes it easy to navigate, while architectural cutouts make it light and airy.”
• communal gardens and parks;
“This has been recognised as a key development, as it gives people who are eager to try out the Steyn City lifestyle, but aren’t quite sure that apartment living is for them, the opportunity to trial these magnificent luxury residences. The offering also is certain to appeal to a market that has been hard hit by the recent hike in interest rates,” van Onselen says.
“For residents needing educational facilities, Steyn City School offers a modern campus, which accommodates children from early learning to matric. The school was accredited as a Microsoft Showcase School less than one year after opening its doors,” adds van Onselen.
• safety;
A new feature of Steyn City is reported to be its City Centre, which opened for homeowner arrivals in August. And from September, its first tenants may occupy a selection of luxury residences custom-developed for long-term rentals.
“If its performance is anything to go by, Steyn City is well on the way to attaining that goal: In New World Wealth’s recently released ranking of the top 10 lifestyle estates in South Africa, Steyn City received a glowing endorsement. The report described Steyn City as ‘probably the best-designed lifestyle estate in South Africa’. The wealth intelligence firm went on to give plaudits to the development’s signature indigenous planted parkland, as well as the mix of accommodation and facilities, which it called world-class,” she enthuses. The complex was also on the list as the top residential estate in Gauteng in 2019.
Steyn City Properties CEO Giuseppe Plumari is justifiably excited by this mega project: “The City Centre development has redefined the way we look at urban living, quite simply because it is different. We’ve done away with many of the structures considered part of apartment living, for example, you won’t find any walk-ups here.
If any prestigious multi-use development has caught the eye of the public in recent years, it is Steyn City. GARETH GRIFFITHS reports on this exciting parkland development’s latest news
LIVE, WORK, PLAY...
The extensive parkland means that every resident has access to one of the largest back gardens in South Africa. Residents can enjoy the outdoors in many different ways, including running the 45km floodlit promenade, or part of it, cycling the 50km MTB track or golfing on the Nicklaus design championship golf course.
• design and space;
• birdlife and nature; and
Zoe van
NEW OFFERINGS
STEYN CITY
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• activities and facilities;
• environmental awareness.
The security offered by Steyn City is also a major attraction: the entire complex is biometric-access protected. There are round-the-clock foot patrols and a 24-hour security nerve centre.
Making the list is no small achievement, given the strict criteria New World Wealth uses to
DAKOTA PRECINCT EKURHULENI
“THE WAREHOUSES
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Dakota Precint in Ekurhuleni
He adds that the park is being built in accordance with health and safety requirements from international insurance companies. “It also helps companies that want to attract better staff members and actually hold on to them.”
Far from the grimy, smoky districts of yore, South Africa’s modern industrial parks are multifunctional spaces where people want to work. By ANTHONY SHARPE
The project has been delayed somewhat through council approvals, but the first 7 600m2 will be finished in the first quarter of 2023. “We’re ready to start building for larger users right now,” adds Truscott. WILL BE VERY TALL, WHICH MAKES OPERATING THEM CHEAPER BECAUSE TENANTS METRE, NOT CUBIC METRE.” – MARK TRUSCOTT
arehousing and logistics property specialist Improvon is developing the Dakota Precinct on 250 000m 2 of prime, easily accessible land (130 000m 2 of it under roof) near Rand Airport in Ekurhuleni. The R1.3-billion development aims to capitalise on growth in the logistics sector while easing the flow of goods from the Port of Durban into Gauteng, says Mark Truscott, Improvon’s head of leasing and freightedfrominAfrica’s“Mostmarketing.ofSouthfreightcomesthroughDurban,whereitisroadtoGauteng,
PAY PER SQUARE
and this is the perfect entry point into the province,” says Truscott. “It makes sense for the large third-party logistics providers to have large warehouses where they can break the bulk cargo from large container trucks, segregate the products and distribute them aroundImprovon’sJohannesburg.”strategyis to develop logistics nodes in areas with strong road links, targeting users operating in old warehouses with outdated technology and facilities. “We run the body corporate to ensure the roads don’t decay, the streetlights work and the gardens are nice. We put an incredible amount of money into landscaping, in fact. Each warehouse or mini-precinct within the site is fenced and has security. It all creates a much safer and more pleasant working environment.”
Although the buildings do not have solar panels installed, given the varying power requirements of different customers Truscott says they are solar-ready, with reinforced roofs where panels can be installed at short notice. Rainwater is harvested from the large warehouse roofs, and all air conditioners are energyFeaturesefficient.such as this help reduce running costs, but efficiencies are also increased on an operational level, says Truscott. “We’re building large yards and fitting roller shutter doors so they can handle more trucks dispatching and receiving simultaneously. The warehouses will be very tall, which makes operating them cheaper because tenants pay per square metre, not cubic metre.”
A NEW BREED OF INDUSTRIAL DEVELOPMENTS
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Mark Truscott
Developer Abland and partners have completed 60 000m2 of under-roof space (with the same still under construction) of the new S&J Industrial Estate on 160 hectares of rehabilitated mining land next to the N3 and M2 in Ekurhuleni. The estate will incorporate light manufacturing, logistics and distribution, and warehousing facilities.
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The last point is important because Cargo Compass is relocating much of its
operation to the park. Knoesen says Equites is seeing many companies consolidating various aspects of their business into one building, which has to be operationally efficient and aesthetically pleasing. “We’re looking at things such as pause areas, open-plan offices, canteens, restaurants and so on. You can’t just look at the building in isolation; you must consider the park environment too. We’ve introduced facilities such as showers, bicycle parking and a 5km running track as these are some of our blue-chip tenants’ requirements.”
S&J INDUSTRIAL ESTATE
Development started last year and finished in August, with Cargo Compass commencing trading at the beginning of September.
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Jaun Knoesen
Cargo Compass’s new head office, warehouse and distribution facilities in development phase.
A client such as Cargo Compass requires logistics specifications at the forefront of what’s happening in the sector, adds Knoesen. “We’ve got premium dock levellers, massive 50-metre yards and 15.5-metre clear eaves with ample racking space. The building is acid compliant too. It’s not an industrial building in the historic sense; it’s a logistics building.”
packed with technology, including photovoltaics supplying renewable energy, with Edge certification underwritten by the Green Building Council of South Africa. The building will have 30 per cent less water and energy consumption, and carbon emissions, compared to standard buildings.”
nternational freight forwarder Cargo Compass has entrusted the development of its new 29 188m 2 warehouse and distribution facility to specialist industrial logistics REIT Equites. The development, which incorporates Cargo Compass’s head office, is on 48 751m 2 of land in Equites Jet Park, near the R21Onehighway.ofEquites’ main goals in the Jet Park area is to bring it up to the same quality level as other large logistics nodes, says Jaun Knoesen, executive head of property development at Equites. “We see this as a node that will ultimately reinvest into the park and then grow through these sorts of specKnoesendevelopments.”saysthefacility is a newer style of development for the area. “It’s
CARGO COMPASS EQUITES JET PARK
CAPITALISING ON THE RENEWABLE ENERGY TREND
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Explaining how commercial property owners should go about paying for such solutions, Martin Meyer, head of power and infrastructure finance at Investec Bank, says various options are“Shouldavailable.the property owner decide to proceed with a rooftop solution, it can be
“Doing this offers a twofold benefit: it reduces the organisation’s power constraints and adds value to the “Remember,property.however, that solar panels alone don’t necessarily solve all the owner’s power challenges – batteries and generators are still required for true power security. Developing a power system that brings all these components together can add significantly to the overall costs.”
• What are your current power needs? Remember that the difference between drawing 1MW and 10MW is huge.
• What percentage of power does your business want to convert to renewable energy?
has its own significant power requirements, but also to potentially provide power to clients. Such an approach might even enable us to sign the sort of power purchase agreement that will provide them with green power without the need to source funding,” says Webb.
Meyer says that with installations using a power purchase agreement or lease-to-own agreement, the finance comes embedded in the respective tariff or lease costs, so there is no direct financing required for the customer. If the company chooses to do its own installation, the financier will typically look to the company’s balance sheet to support the required funding.
“Property owners undertaking the latter need to assess what it will cost the company to operate and maintain the system in addition to the installation cost.
“As an organisation, even we have considered setting up our own IPP. Not only because RMB
he impact of the recent stage 4 load shedding on businesses has been significant, and the need to remain operational during working hours has led to many commercial property owners considering implementing renewable energy projects.
“If your power requirements are moving in the latter direction, it is not a bad idea to consider setting up a plant of this scale and selling green power to the tenants, ideally at a cheaper rate than Eskom. Excess energy can then always be sold back to the grid.
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• Do you understand the load profile properly? This is vital – if your business draws the most power early morning, for example, you will not get the peak benefit of solar.
• What sort of agreement suits you best – a rent-to-own installation or a power purchase agreement?
“They must also ensure that they are comfortable with the warranties given by the installers, only use Tier One equipment in their installations, and, most importantly, give proper consideration to effective storage systems to ensure a level of supply security during both peak loads and periods where there is less sun,” says Meyer.
“A lease-to-own agreement will also have no capital outlay, but there will be a monthly fixed cost for the system, whether or not the system produces power. Doing it yourself, of course, requires the full capital outlay and the ongoing operations and maintenance costs.”
• Do you have the required rooftop or land availability for the required solar implementation?
With load shedding once again impacting businesses, an increasing number of operations are looking at the best ways to leverage solar power, writes RODNEY WEIDEMANN
• What is your chief renewable energy driver – cost, green power, or supply certainty?
KEY QUESTIONS PROPERTY OWNERS SHOULD ANSWER BEFORE GOING SOLAR
IRRESPECTIVE OF SCALE, THE IDEA OF PLACING SOLAR PANELS ONTO A ROOF OR AN UNUSED PARCEL OF LAND IS GAINING TRACTION.
Keith Webb, a member of Rand Merchant Bank’s (RMB) Infrastructure Sector Solutions team, points out that irrespective of scale, the idea of placing solar panels onto a roof or an unused parcel of land is gaining traction.
FINDING FUNDING
Rand Merchant Bank has developed a list of questions to help customers decide which solar route they should follow:
Webb indicates that paying for a solar rooftop project is usually through on-balance sheet funding. Larger projects that fall within the Independent Power Producers (IPP) ambit – those over 10MW, generally – tend to be implemented via off-balance sheet financing.
through a power purchase agreement, a lease-to-own agreement, or doing the installation themselves. The power purchase arrangement requires no capital outlay for the offtaker, who will only pay for the power produced by the system. Maintenance costs and the like will be borne by the seller,” explains Meyer.
Is going green a golden opportunity for South African SMEs? MARK PAPER , chief operating officer, Business Partners International at Business Partners Ltd, unpacks the benefits and opportunities for the sector
SMES HAVE THE UNIQUE OPPORTUNITY TO BECOME PIONEERS AND INCREASE PROFITABILITY BY SHIFTING TO GREEN BUILDING PRACTICES.
GREEN BUILDINGS AND SMEs
A VIABLE OPTION
PwC reports that, in 2021, South Africa experienced 1 136 hours of load shedding, costing the country’s economy up to 400 000 potential jobs and a 2.7 per cent loss in real gross domestic product (GDP) growth. A large proportion of this loss was absorbed by SMEs that do not usually have the resources to invest in alternative sources of electricity supply. Green buildings offer a solution that can assist the country with reaching its sustainability objectives while helping small businesses mitigate the impact of load shedding.
Quantifying the benefits of green building, the International Trade Administration suggests that recently certified green developments are expected to save developers and occupants 76 million kilowatt hours – the amount of electricity used by 5 300 households in a year. Furthermore, these developments are estimated to save 12 million litres of water annually –enough to sustain 34 000 households for a year. These estimations not only represent a sizeable reduction in the sector’s carbon footprint, but also equate to substantial savings for businesses.
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In addition to providing property finance of between 100 and 120 per cent for green buildings, the cost of green certification is
This has played an instrumental role in the launch of a R720-million green buildings financing programme for small and medium-sized enterprises (SMEs). The programme, launched in early 2022, will provide funding for SMEs to either purchase, build or retrofit buildings to make them green.
THE BENEFITS
The Business Partners Ltd green building financing programme addresses this need. Our collaboration with the International Finance Corporation (IFC) to fund green buildings means we are offering one of the best products in the market. With our green buildings financing programme, some of the elements of greening properties come at no cost to the business owner.
The MSCI South African Green Annual Property Index reports that green-certified buildings attract and retain tenants more effectively than their conventional counterparts. In an environment where the country’s commercial property sector has experienced shrinkage due to remote working, green buildings provide a unique value proposition due to better tenant retention and lower operating costs.
covered by a nonrefundable R150 000 grant. Business Partners Ltd also offers SMEs a rebate of up to 40 per cent of the capital expenditure needed to green their buildings and achieve green buildings certified status.
SMEs have the unique opportunity to become pioneers and increase profitability by shifting to green building practices. There is also significant potential for job creation among these SMEs and the chance to positively impact the country’s GDP.
There has never been a better time for small businesses to take their place as instrumental drivers of the green economy. There is every indication that investing in green construction will reap positive returns in the mid- to long-term.TheGreen Building Council of South Africa emphasises that green-certified offices present a 31 per cent higher capital value than conventional buildings. Furthermore, these green buildings contributed to a lower decline in net operating income and lower vacancies throughout the study. Green offices also produced returns 170 basis points higher than their noncertified counterparts – presenting a strong business case for more sustainable building practices.
he demand for “green” or environmentally sound buildings has been driven strongly by the global shift towards sustainable development and various push-and-pull factors. Unstable power supply and the opportunity to save on utilities are just two reasons businesses are planning to go green. However, the core issue of a high-cost outlay on these ventures remains.
The appetite for green buildings as business properties and an investment for SMEs continues to be hampered mainly by the capital outlay required to achieve green building status.
Green buildings, although still expensive to build, are a viable option, thanks to the rebates offered through our green buildings financing programme. SMEs can reduce the payback period on the investment for greening their buildings by up to three years.
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