10 minute read
PROPERTY MANAGEMENT
A 360-camera used to capture explorable footage for a virtual tour of a property.
Riaan Huysamen (far left) from SkyPixels preparing to record footage with a drone.
Virtual Reality
Virtual tours, in our new normal, are fast becoming commonplace to sell property. By JAMES FRANCIS
We’re taking a stroll through a house. The estate agent points out various features, gesturing and moving about. But we’re not at the property, and the agent’s presentation is not specifically for us. Instead, we’re watching a tour on YouTube, moving our phone to look around an impressive 360-degree scene.
“In the international market, people are quite accustomed to virtual tours,” says Brendan Louw, CEO of Forj, a producer of virtual photo and video tours. “And three years ago, we started seeing this trickle into South Africa. There’s definitely momentum in the property market and we’ve even seen a higher increase since the pandemic.”
At its most basic, you can imagine a virtual tour being similar to Google Street View: static photos stitched together so you can explore a 3D space using your mouse or fingers. The next stage is a virtual video tour, using 360-degree footage edited into an interactive video. At the top of the heap, become more intense since the COVID-19 pandemic, prompting managers to be more formally qualified, says Samuel Azasu, associate professor (Real Estate) at Wits Enterprise.
“The current pandemic has already complicated the demands for the job. at least in terms of expense and complexity, are rendered tours: 3D rendered examples of properties or interior designs - popular among architects and those pre-selling properties. But regardless of the method, the result is the same: the ability to scrutinise a property without physically being there.
Drones are also a modern way to capture property on video. According to Riaan Huysamen, an aerial photographer and drone pilot at SkyPixels, drones are great for location shots and bird’s-eye views of property layouts. Small drones can record interiors, so a video can swoop elegantly inside and outside of a property. Drones are used to capture 360-degree footage or photos, in ways other techniques cannot.
“The drone is always going to give
Education and training
As the need increases for property managers to be upskilled, JAMES FRANCIS looks at the ways they can do so
The role of a property manager has
you a view that no camera can, unless The pandemic has, in many cases, amplified the impact of a lack of formal training as people are forced to respond to situations they have not been trained for.
Being able to understand the drivers of the economic outcomes for the property you manage and the changing you had a very expensive camera on a long stick. You can take those kinds of shots that you would battle to do if you just had a normal camera,” says Huysamen.
Uptake of these technologies has jumped, particularly among younger estate agents. Costs are also coming down - a standard virtual tour can cost less than R3 000 and these are very popular for sole mandates and private sellers - not least because they are secured from snooping visitors.
But there is also an influx of underqualified and amateur producers. Equipped with a basic 360-degree camera or unlicensed drone, these individuals frequently flaunt laws and produce poor quality content, undermining the rest of the industry. If you want a virtual tour of a property, consult the professionals. Cutting corners only leads to lacklustre results and legal complications.
needs of your tenants does not come naturally. Even if on-the-job learning is possible, formal training accelerates this learning and contextualises experience people already have,” says Azasu.
There are numerous channels through which to train as a property manager. The University of the Witwatersrand’s Wits Enterprise is one of several local universities that offer a formal qualification. Others include the ›
Universities of Pretoria and Cape Town, We partner with companies within all supported by professional bodies such the property sector who are looking as the South African Institute of to support students and we provide Black Property Practitioners additional support to students (SAIBPP), the Institute of throughout their educational Real Estate Management journey via the student and (IREM) and the South African Property Owners FAST FACT youth chapters.” A property manager Association (SAPOA). To date, the SAIBPP can oversee numerous
Tertiary institutions Bursary Programme small properties or one such as the Career Excel has disbursed over large property. They Academy and City Varsity R3-million of funding might delegate different also offer accredited to students in need. tasks to a team. It’s a qualifications, as do some Source: SAIBPP multifaceted role that property management incorporates people skills, firms like Broll. Additionally, administration, strategy, bursaries are available for and the finer points of running students, says Vuyiswa Mutshekwane, a business. Property management SAIBPP’s CEO. “The SAIBPP Bursary remains in high demand - more so in Programme is targeted towards students tough times when landlords need their with financial needs studying property and properties run efficiently while retaining property-related studies. good tenants.
“The demand for certified professionals cuts across the public and the private sector,” says Azasu. “Government needs are especially acute. My advice is to always take a formal career test or spend a day or two shadowing a property manager. It is a job that involves a lot of variety requiring technical knowledge, business savvy and a love for solving problems for people.”
Indeed, the demands of the job may well push unqualified managers out of the picture. But learning institutions are accommodating for this: “For those who have already found their way into these roles without formal training, a full-time degree program might not be a feasible proposition. In that case, I would recommend the Postgraduate Diploma in Property Development and Management which runs as night classes for two years at Wits if you already have a Bachelor’s degree.”
Tenant screening, applications, and leasing
In difficult economic times, how does one go about screening prospective tenants to prevent problems later on?
“A t their peak, 83.11 per cent of commercial tenants were in good standing in quarter four 2016. During lockdown, commercial tenants in good standing deteriorated to 50.36 per cent - only one in two tenants were paid up,” says Michelle Dickens, MD of TPN Credit Bureau. “Retail tenants faired worst, bottoming out at 40 per cent in good standing in April and ‘recovering’ to 45 per cent in July. Industrial tenants bottomed out in May at 53 per cent and improved marginally to 58 per cent in July.
The least affected sector, being office tenants, dropped to 59 per cent in May with the fastest recovery to 67 per cent in July.”
These rough conditions, coupled with the onerous processes of evicting tenants, demand that sufficient tenant screening be done to avoid any legal or financial issues later on. So just how does one go about this?
“Landlords and property managers tend to lead the selection process, and credit scores are the most common way to verify the reliability of a future tenant.” –Michelle Dickens, MD, TPN CREDIT BUREAU FAST FACT According to Michelle Dickens, MD of TPN Credit Bureau, prior to lockdown, in quarter one of 2020, 77.85 per cent of commercial tenants were in good standing.
Dickens explains that the leading indicator of a good tenant is their past behaviour. Credit agencies typically gather and rate such information - rating commercial tenants by their rental payment behaviour, the maturity of their business and combination of directors, as well as judgments and defaults listed on the business and each principal.Landlords and property managers tend to lead the selection process, and credit scores are the most common way to verify the reliability of a future tenant. Performing a credit check requires the prospective tenant’s permission, so it’s a good indicator if they are willing to be transparent.
It’s important to note, though, that a good credit score doesn’t always lead to a good tenant. It’s also a good idea to scrutinise their bank statements to identify regular payments, look for warning signs that they regularly apply for credit to mitigate poor cash flow, and ask for references from previous landlords. Michelle
Dickens
BUCKING TRENDS IN A WEAK ECONOMY
Innovation is key to reinventing growth in the logistics real estate sector post-COVID-19
COVID-19 has confi rmed global trends in South Africa, highlighting – and rapidly accelerating – the growth potential of the country’s logistics real estate sector. The shift to ecommerce driven by South Africa’s national lockdown has allowed both existing retailers and smaller ecommerce players to gear up the scale of operations.
The result is that Fortress REIT’s relentless focus on building high-quality logistics real estate assets continues. “We keep building our signature state-of-the-art logistics boxes at the same cost as four or fi ve years ago, providing tenants the same rentals that we were offering then,” says Steven Brown, CEO of Fortress. With ecommerce bucking the trend in a lacklustre economy, Brown believes that the logistics property sector not only presents investors a lifeline in an otherwise challenged market, but also “points to the growth opportunities inherent in meeting change with innovation.”
THE MALL IS HERE TO STAY
The rapid coming of age of ecommerce in South Africa has increased focus on supply chain while “COVID-19 has highlighted the importance of warehousing and the strategic imperative of carrying more stock,” says Brown. Even after lockdown, trade wars and other mounting global tensions are likely to sustain demand for storage and supply infrastructure.
Steven Brown
Brown says that while omnichannel will diversify shopping and purchasing options, South Africa is not going to see the death of retail malls. “If lockdown has taught anything it is that people need places to see other people. After lockdown, social engagement is likely to become even more important,” predicts Brown. “Even in an age of ecommerce, brands still need to engage with the consumer and that’s best achieved in high-quality retail real estate assets. Malls are here to stay, although retail is likely to become more concentrated into the last mile of big, dense, urban nodes.”
“I’m impressed at the speed with which the country’s retailers have taken their ecommerce operations to scale and the innovation that this has driven,” says Brown.“Our tenants are very innovative.”
Standing with tenants as they navigate today’s ‘new strange’ Fortress has gained insights into what tenants need right now as well as how these needs might evolve in future.
Innovating with our Tenants
By focusing on the real estate fundamentals of location around big urban nodes with transport infrastructure and access to highways or ports, “we’ve been encouraged to build more speculative boxes based on what tenants want. We’ve also very quickly let every one of the speculative boxes that we’ve developed,” says Brown.
Client-driven innovations include everything from 15-metre eaves enabling more storage per square metre and laser-levelled fl oors allowing maximum forklift extension to utilise the additional height. Independently pressured water supply and up-to-date fi re suppression systems are also in demand. All roofi ng, today, is built to accommodate solar panels for independent electricity supply. “When legislation permits, in addition to meeting their own power needs, we will be able to sell to the grid,” says Brown. “Innovation and change are informed and guided by client need.”
Shared lease-ownership arrangements have, for example, proved extremely resilient from an affordability and retention perspective among tenants with incomes disrupted by the lockdown. Fortress has not lost a single shared ownership tenant since lockdown started. “Tenants are also prepared to pay more for quality developments that don’t require much maintenance and include good security on fl exible terms that can be adapted to support their business,” explains Brown.
Fortress has also found tenants quite happy to pay a premium for leases including maintenance, insurance, pressured water supply and other onsite services and utilities, “freeing them to concentrate on their core business activities.” Fortress is seeing “the kind of innovative growth in response to disruption that is likely to continue after lockdown as industries adapt to the broad range of opportunities that this new world reality presents,” concludes Brown.
For more information:
Johannesburg: +27 (0) 11 282 2800 Cape Town: +27 (0) 21 945 2960 Durban: +27 (0) 83 626 7161 info@fortressfund.co.za www.fortressfund.co.za
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