Business Day Home Front 09 September 2016

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FRIDAY, SEPTEMBER 9 2016

HOMEFRONT PAGE 2

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JOBURG ART EXPANDS ITS PALETTE

WHO IS THE TYPICAL HOME BUYER?

UPGRADES TO FOCUS ON FOR A SALE

GROWTHPOINT CEO ON MOVE INTO AFRICA

The case for foreign tenants Rental properties are a growth market for the many foreigners targeting SA for work opportunities. While it is legal to rent to a foreign national, it requires a careful vetting process, a thorough credit check and, often, big deposits WORDS: NICOLA JENVEY :: PHOTO: ISTOCK

CONTINUED ON PAGE 8

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ART

Friday September 9 2016

THE COMMANDER, 2016, BY CHEMU NG’OK (SMAC GALLERY)

Accessible art at the fair Local and African art is the focus of the annual FNB JoburgArtFair, and this year East Africa is the highlight. It coincides with inspiring developments on Rosebank’s new art mile NOLAN OSWALD DENNIS

WORDS: MELVYN MINNAAR :: PHOTOS: SUPPLIED

T

ODL, 2016, BY ASHA ZERO (SMAC GALLERY)

he FNB JoburgArtFair has again invaded the Sandton Convention Centre, opening today and running until September 11. It is a gentle invitation to those with a yen for contemporary art to what is an important and colourful event.

Behind its casual title lies a culture shift. Some decades ago the solemnity of art — as seen in museums and admired from a distance — would not have been associated with a fair, which conjures up a more informal and personalised association.

But these days art is out of — what some perceive as — the stuffy classical closet.

Those in the money game too have discovered its trade value. Hence another big city and another art fair. And of course, a bank as sponsor.

INTERNATIONAL TREND The Johannesburg version is well established, having been founded by production company Artlogic in 2008 as an annual event, following a growing international trend.

A strong focus is on local and African art, and this year work and artists from East Africa take the spotlight.

Punters are in for a treat of artful extravagance.

All of the country’s top art galleries, as well as a few smart overseas dealers,

“Artists from that region are already world-famous, but some are coming to the fore now” Lucy MacGarry, curator, FNB JoburgArtFair

ART

Friday September 9 2016

THE ART PROPERTY SYNDROME Ever since the new age of super art museums developed into tourism meccas two decades ago, such as the Guggenheim in Bilbao and the Tate Modern in London, adjacent properties have felt the lift.

Of course, industries related to art are the number one tenant pool.

Now, coinciding with the FNB JoburgArtFair, Rosebank’s new TRUMPET is clinching the title as the first building by developer Tomorrow Co in the Keyes Art Mile precinct.

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SMALL SHADOW I, 2016, BY PETER EASTMAN (SMAC GALLERY) Martin (Lizamore & Associates), Grace Cross (SMITH) and Ruann Coleman (SMAC Gallery).

And of course, the winner of this year’s FNB Art Prize, Johannesburg-based Nolan Oswald Dennis. Art fair talks and discussions fill up the adjacent Nelson Mandela Theatre on Nelson Mandela Square.

PALMYRA I BY WILLIAM KENTRIDGE (GOODMAN GALLERY) converge to flash their wares. There is no doubt of art’s leisurely attraction: at least 80 exhibitions by galleries from 17 countries are exhibiting. They are categorised as contemporary and modern art, special projects, gallery solo projects, limited editions and art platforms.

Be on the lookout for special focus on the bright talent of artists such as Clive van den Berg (Goodman Gallery), Mandy Coppes-

PERFORMANCE ART Art these days is not limited to what hangs on walls; it embraces every media and medium, including audiencechallenging performance, which means that visitors to the FNB JoburgArtFair are offered plenty of cultural diversion for their money.

The spaces at the art fair are plotted for visitors to mingle and mix — to break, as it were, the customary barriers of high and low, easy and difficult of traditional art. The physicality promotes

“It stimulates interest in art off the street, as it were, at a time when young artists are especially creative and inventive” Baylon Sandri, director, SMAC Gallery

a revelry in which it can all be a playground, or theatre.

Site-specific installations, such as the space-invading constructions by celebrated Burundian artist Serge Alain Nitegeka and Sanaa Gateja from Uganda, vitalise the public experience.

Lucy MacGarry, a curator of the fair, is particularly excited by the focus on East African art. “Artists from that region are already world-famous, but some are coming to the fore now.

We’re talking art from Kampala, Addis Ababa, Bujumbura, Nairobi, Dar es Salaam.”

If the African focus is indeed a trendy art adventure for visitors this year, it is often the wellestablished dealers and galleries that turn out the eye-catching stuff to attract newbie art lovers. After all, this is their business and this is a fair.

Two trend-setting Cape Town art galleries, SMAC and Whatiftheworld, together with Southern Guild, are housed in the just-opened, sculptural TRUMPET building. Their opening exhibitions are designed for a high-impact debut.

Other well-known, established Joburg galleries are thriving in the space.

The beautiful Circa building is opposite the renowned Everard Read Gallery — catch the new exhibition by Lyndi Sales — anchoring what is now established as a come-to-art destination.

The TRUMPET shares the same eye-catching design imprint from Circa’s architects, StudioMAS. The TRUMPET’S mixedused design has a focus on activities that would also interest people coming to see art; the street-level tenant mix of shops and spaces along the art mile buys into the high-street good feeling of seeing, stopping and shopping.

Baylon Sandri, director of SMAC Gallery in Stellenbosch, Cape Town and now TRUMPET, applauds the concept behind this new environment. “It stimulates interest in art off the street, as it were, at a time when young artists are especially creative and inventive.”

Among the tenants are Anatomy Design, Missibaba, Kartell, Moroso, Cassina, Flos Lighting and Shelflife.

The street front has a Milk Bar and BGR, while acclaimed chef David Higgs sits atop the impressive building in Marble Restaurant. It is indeed a creative destination.

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DESIGN

Sound the alarm Technology is taking a central — although unobtrusive — role in furnishings. The Plug and Dream is an inviting case in point WORDS: CHRIS REID :: PHOTOS: PLUG AND DREAM

W

hen people first started bringing electronics into their homes, they took the form of enormous statement pieces. From imposing radiograms and TVs built into cupboards, the technology was part of the furniture.

From there the trend was to make technology increasingly discreet (and discrete). What we’re seeing now, however, is the reintegration of technology with furniture, albeit more as an added benefit and less as a way to showcase the devices themselves.

Friday September 9 2016

A great example of this trend is the Plug and Dream headboard. Designed by Loève Saint-Ourens (pictured), the piece takes the form of a modular system that includes a video projector, an audio deck, an aromatherapy diffuser, lighting and a Qleek station, linking to the owner’s Spotify account for streaming music.

Plug and Dream lets you preprogramme a morning ritual so that you can be slowly woken up by your chosen smells, sounds and lighting. The idea is to create something more personal and enjoyable, rather than the rude awakening an alarm on the bedside table offers the rest of us.

This new breed of techenhanced furniture is still in its relative infancy, and there are always issues of compatibility and longevity (something the Plug and Dream sidesteps with its modular design). As technology becomes an everpresent part of the rest of our lives, it makes sense that it gets combined with furnishings too.

And with internet-connected TVs and fridges already in our homes, the wireless couch and headboard are soon to follow. pluganddream.com

“As technology becomes an everpresent part of the rest of our lives, it makes sense that it gets combined with furnishings too”

Expansive Hermanus home with Walker Bay views

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It has a 27-hole golf course, tennis, bowls, squash and paragliding, as well as wine tours in the beautiful Hemel and Aarde valley and further afield. There is also shark cage-diving, whale watching, walks in the Fernkloof Nature Reserve and contour paths, as well as the meandering cliff path from Blue Flag Grotto Beach to the New Harbour and more.

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We are privileged to offer this prestigious property situated on a corner stand of 1,400m² on Millionaire’s Row comprising: • Lounge-bar area on both levels with outstanding views. Five spacious, sumptuous en suite bedrooms also with expansive sea views.

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• Views of both Walker Bay in front and the Klein River mountain range behind.

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COVER

Friday September 9 2016

CONTINUED FROM PAGE 1

The case for foreign tenants WORDS: NICOLA JENVEY :: PHOTOS: ISTOCK

GUIDELINES FOR RENTING TO FOREIGNERS Consider applicants who are presentable and can converse to some degree in a language common to both parties as communication is critical in rentals.

If the foreigner is gainfully employed in SA, a confirmation of that employment should provide peace of mind, while a salary slip and/or bank statements can verify their affordability.

While it is difficult to screen someone’s credit history if they have not obtained any credit or accounts in the country, screening is possible using a passport number.

Contact the references provided and ask specific questions regarding the prospective tenant’s conduct in a previous property, even if it is abroad.

Aim detailed questions at the previous agent or landlord about payment regularity, conduct and outgoing procedures.

If you have any doubt in the process, either turn down the tenant’s application or request a higher rental deposit (two to three months) to minimise your risk.

Source: RE/MAX Living rental specialist Grant Rea

T

he global migration of labour means there are millions of people living in countries not of their birth as multinational corporations transfer employees on secondments, youngsters explore different cultures before settling down, or the opportunity for better earning potential draws job seekers to new horizons.

Statistics SA data following the 2011 census reflected that there were 2.19-million people living in SA born outside the country. This meant that at the time, foreign

nationals made up 4.2% of the population and within their ranks, 71% came from another African country.

The increase in foreign nationals living in SA has also paved the way for renting opportunities, either to individuals who have emigrated for better job prospects, or corporate rentals when employees have one- or two-year contracts.

LEGALLY BINDING Smith Tabata Buchanan Boyes partner Stavros Anthias says: “There are no hindrances to renting property to

foreign nationals. It is a legally binding agreement between a landlord and a tenant governed by South African law regardless of the tenant’s nationality.”

Phatshoane Henney Attorneys director Libo van Aswegen says a landlord or tenant can legitimately lease or sell immovable property to anyone recognised as a legal foreigner under the Immigration Act 2003.

That means they possess a valid temporary or permanent residence permit approved by the Department of Home Affairs.

However, RE/MAX

“There are no hindrances to renting property to foreign nationals” Stavros Anthias, partner, Smith Tabata Buchanan Boyes

COVER

Friday September 9 2016

“Many foreign tenants are more diligent than South Africans regarding prompt rental payments” Grant Rea, rental specialist, RE/MAX Living Living rental specialist Grant Rea says on face value there appears to be an aversion to renting property to foreigners, and it is mainly driven by screening issues. Crucial in screening tenants are affordability, identification verification, employment, creditworthiness and references. Rea says: “Many foreign tenants are more diligent than South Africans regarding prompt rental payments.”

STATS SA 2011 CENSUS 2.19-million — residents born outside SA 4.2 — % of foreigners among South African residents 71 — % of foreigners from other African countries

CREDIT HISTORY Tyson Properties regional director Gauteng Jonathan Davies says the company rents only to foreign nationals who can prove some level of South African credit history, otherwise they are required to pay the full year’s rental upfront. Despite the seemingly harsh terms, he believes there are now three times as many foreign nationals renting property in Gauteng compared with three years ago, suggesting “a dramatic increase”.

His words are echoed

by Renprop MD Chris Renecle, who says that in

Johannesburg’s northern suburbs the company has had three times more foreign nationals applying to rent than was the case two years ago — and they are seeking upmarket accommodation with rentals ranging between R6,000 and R10,000.

Renecle says this surge has complicated credit checks and tenant suitability, adding

that landlords who do not vet their tenants against stringent guidelines are risking their investments.

It is one reason prompting landlords to employ rental management companies for this process.

“However, once suitable tenants are in the property, landlords must never accept their rental payments in cash

as the authorities can deem it money laundering,” he says.

LARGE DEPOSITS Anthias believes landlords are justified in securing two to three months’ rental as a deposit from foreign nationals. Key to his argument is that, should the tenant breach the contract and abscond outside SA, any local default judgment will not affect their creditworthiness.

While he recognises that this deposit amount is substantial, international experience reflects similar approaches — foreigners renting in Dubai pay the full year’s rental upfront, for instance.

Echoing Anthias’s comments, Rent Protect managing member Stefan du Plessis says the key principle when renting to foreign nationals is tracing people and having the ability to seek legal recourse should that become necessary.

“That means before entering into a rental agreement, landlords must question — how can I get rid of a nonpaying tenant; who are the next of kin should a problem occur; does the person have local or international banking details and does the foreign national have a worker’s permit — and ensure the contracts are in place to mitigate risk.”

He says another trick to minimising risk to the landlord involves ensuring that the contract gives South African court jurisdiction and thus binds the foreign national to local laws.

In conclusion, Van Aswegen says the law criminalises letting or selling properties to illegal foreigners by making the transaction equivalent to aiding and abetting that person. Consequently, landlords renting to foreign nationals must secure the necessary proof that they are legally present in SA.

2 016

BUYER PROFILES

Friday September 9 2016

Painting a picture Who is the average South African property buyer? Whether you are an investor or property developer, local residential buyer patterns offer clues as to what is selling and the capacity for purpose-built property offerings

D

espite the size of SA’s real estate sector, which generates about R236bn worth of property transfers a year, there is no definitive set of regularly updated statistics that help developers understand who is investing in their properties.

This makes it tricky to work out who is buying what sort of real estate in various parts of the country, what they are paying and how much they are borrowing

WORDS: MEG WILSON PHOTOS: ISTOCK

from banks to do so.

However, the kind of buyer profiling undertaken by the National Association of Realtors (NAR) in the US has proved to be a good tool for various stakeholders in the property sector, such as developers, building contractors and banks.

It is with this in mind that a picture is starting to form of investment in SA’s top three property sales regions (see the accompanying tables).

“Single men and women (never married, separated, divorced or widowed) are increasingly buying on their own”

TABLE 1: PERCENTAGE OF HOME LOAN APPROVALS PER PRICE BRACKET (JUNE 2015 TO MAY 2016) Purchase price R0-250k

Gauteng

KwaZulu-Natal Western Cape

National

5

1.4

1.6

4.6

R250k-500k

19.6

19.2

16.1

23.1

TABLE 2: BUYER AND PRICE BREAKDOWN BY REGION (JUNE 2015 TO MAY 2016) Regional % of total home loan approvals

% of home loans approved in region

Average property purchase price in rand

Absa small, medium and large homes in rand

Average % deposit paid

Average gross monthly income in rand

Buyer age 18-35

54%

856,765

(S) 851,931

10.5

32,482

R500k-750k

23.8

25.2

19.9

22.9

R750k-1m

16.9

18

16.2

16.4

R1m-1.25m

8.4

8.6

9

8.1

R1.25m-1.5m

7.7

8.7

9.3

7.4

Buyer age 36-55

43%

1,159,596

(M) 1,224,174 18.6

55,169

Buyer age 56+

3%

1,431,599

(L) 2,007,120

33.8

63,632

Buyer age 18-35

45%

877,005

(S) 702,577

14.4

33,206

Buyer age 36-55

49%

1,152,348

(M) 1,218,240 21.7

47,787

Buyer age 56+

6%

1,291,650

(L) 1,925,363 31.7

56,930

Buyer age 18-35

47%

1,165,514

(S) 1,174,277

27.2

33,271

Buyer age 36-55

46%

1,600,573

(M) 1,568,317 36.2

54,795

Buyer age 56+

7%

1,538,527

(L) 2,327,522

64,515

R1.5m-1.75m

5.8

6

8.1

5.5

R1.75m-2m

3.8

3.5

5.2

3.4

R2m-2.25m

2.2

2.5

3.4

2.1

R2.25m-2.5m

1.7

1.6

2.7

1.6

>R2.5m

5

5.3

8.3

4.8

Source: BetterLife Home Loans (totals may not = 100% due to rounding)

Gauteng (40%)

KwaZulu-Natal (11%)

Western Cape (21%)

Source: BetterLife Home Loans

35.6

BUYER PROFILES

Friday September 9 2016

TABLE 3: SUPPLIED NATIONAL AVERAGES, APRIL 2016

Absa

National Average % average price deposit paid in rand 1,404,662 Not supplied

Not supplied

Not supplied

BetterLife HL

1,010,451

718,832

11.5

19

First-time Average % buyers in rand deposit paid

FNB Barometer 1,075,033

Not supplied

Not supplied

Not supplied

ooba

13

810,626

12.5

1,071,814

UPMARKET BUYERS Gauteng has a far bigger percentage of buyers (65.3% of home loan approvals) in the less than R1m price bracket compared with the Western Cape, where 53.8% of buyers fall into this category (see first table).

Looked at another way, the Western Cape has more upmarket buyers than Gauteng or KwaZulu-Natal.

There is further evidence in the second table, which shows that in the Western Cape, buyers in all three age categories are investing in higher-priced properties than their counterparts in the other two regions.

The research shows that Western Cape buyers do not necessarily earn much

more than those in the other provinces. This accords with recent research by data company Lightstone Property, which found that the monthly gross salary required by a buyer in the Western Cape is R22,600 — just R2,000 more a month than a buyer in Gauteng — on the purchase of a medianvalue property using a 20-year home loan at a 10.5% interest rate.

But in the Western Cape, they are paying much bigger deposits than those in Gauteng or KwaZulu-Natal, which suggests that most are probably repeat buyers with cash in hand from the sale of an existing property.

Gauteng has the largest percentage of buyers in the

“The research shows that Western Cape buyers do not necessarily earn much more than those in the other provinces”

18-35 age group (this usually includes the most first-time buyers) and the lowest average home purchase price in this category.

OLDER INVESTORS It is interesting to note that the averages calculated for the first two age groups in each province stack up relatively well with the most recent Absa breakdown of prices for small and medium homes. But the averages for 56-plus buyer groups are much lower than the Absa averages for large homes in all cases and regions. This tends to support increasing anecdotal evidence that a large percentage of 50-plus buyers are downsizing to reduce their expenditure

Source: BetterLife Home Loans

TABLE 4: BUYER BREAKDOWN BY GENDER AND STATUS (JUNE 2015 TO MAY 2016)

SINGLE MEN

on home maintenance and operating costs as well as home loan repayments.

The stats on the breakdown of buyers (see infographic) suggests that joint purchases by couples or friends no longer account for the majority of home sales in all regions. Single men and women (never married, separated, divorced or widowed) are increasingly buying on their own.

But, as noted in the recent FNB Property Barometer, they are waiting much longer to become homeowners. The percentage of buyers who are under 40 years old has declined to 44%, from a high of 53% shortly before the 2009 market crash.

SINGLE WOMEN

COUPLES/JOINT PURCHASES

Gauteng

31.7%

Gauteng

29%

Gauteng

39.3%

KwaZulu-Natal

26.7%

KwaZulu-Natal

27.4%

KwaZulu-Natal

45.9%

Western Cape

25.1%

Western Cape

21.2%

Western Cape

53.7%

National

29.8%

National

27.2%

National

43%

HOME SENSE Friday 9 September 2016

Sales appeal If you are planning to sell your home, a few tricks can make the property more saleable and may even boost the asking price. A new coat of paint and a modern, attractive bathroom are top upgrades WORDS: ANNE SCHAUFFER :: PHOTOS: ISTOCK

K

nowing what adds value to your home, and what does not, is not quite as easy as it sounds.

There is always that toss-up between leaving upgrades to the next owner — who may not like your taste — and upgrading so the home has more appeal. There is a financial balance sheet to be drawn up: outlay versus prospective income. We are not talking about a doerupper (which attracts the bargain hunter), but rather a home that is somewhat dated yet fully functional and in good condition.

Updated bathrooms and kitchens will always be immensely appealing, not only because they make your home more contemporary, but because a prospective buyer is not wrinkling his forehead thinking about the cost of doing those upgrades himself.

Bear in mind too, that you may be a creative, handson, do-it-yourself type, but most people are not, so they cannot see beyond your pale green tiled bathroom. And if they can, they are counting the cost of outsourcing everything — from the design to the doing it (and how much they need to knock off your asking price to fund it).

“There is a financial balance sheet to be drawn up: outlay versus prospective income”

5 TOP UPGRADES Bathroom Kitchen Patio Green, cost-saving elements Security

WIDE APPEAL When talking style, find that balance between contemporary and trendy.

There is a sector of the market for which screeded floors, industrial lighting and exposed brickwork have little appeal. To broaden your potential market, you need to broaden the appeal.

It all boils down to finances but ideally the rule of thumb is update circumspectly — lean towards classic-cumneutral. It is far easier for a prospective buyer to add their bold colours than it is for them to tone down your bright blue mosaics.

Do some homework on what is in and what is out.

Magazines and décor internet sites reveal all. Do not go cheap and nasty, but there is little need for Carrara marble. Look at 50 shades of grey, white and cream in contemporary textures.

BEST SOLUTIONS Think of sanding, staining or bleaching floorboards, redoing carpets, spraying cupboards, respraying sanitary ware, and paint, paint, paint. Look at the season’s most neutral palette.

People care about bathrooms, and they date quickly. It is worth spending on upgrading these.

Depending on that balance sheet, you are either looking at frameless showers, the shower head, and the bath, or for wet rooms, mosaics, mirrors — you name it.

A reputable tiler can work magic. If you are a successful bargain hunter and can DIY it, upgrades need not cost the earth.

HOME’S HEART A great kitchen is immensely appealing, not just because of open plan living and the kitchen’s visibility from the front door to the lounge, but because everybody is cooking and everybody is casual. A spacious, warm, inviting kitchen, where you can cook, friends can participate or chat, wine can flow and smells permeate the house, is favoured by most. If there are built-in appliances, a great gas stove is a winner.

For many, green elements are big plusses. It is not just about ethics, but security of electricity and water supply and, of course, the promise of low to no costs if you can go off grid. From photovoltaic solar panels to solar geysers, most South Africans today are drawn to the benefits.

The moral of the story?

Do that spreadsheet and do that homework.

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COMMERCIAL PROFILE Friday 9 September 2016

Leading the way Norbert Sasse believes that Growthpoint and its partners are creating a powerful platform for pan-African property investment WORDS: ANNE SCHAUFFER PHOTOS: SUPPLIED & ISTOCK

N

orbert Sasse, CEO of Growthpoint Properties, received the inaugural Lifetime Achievement Award from the South African Property Owners Association (Sapoa) at its convention in June.

Although honoured, he was equally taken aback: “The other contenders had a great depth of property experience — essentially, my background is financial.

I’m a chartered accountant and my passion is corporate funds, funds management and listed property.”

This background is evident in the big conversation around Growthpoint Properties — its investment in Africa. Says Sasse: “We’ve been quite cautious, perhaps even a little slow out the blocks, but we eventually formulated a strategy on how we would invest into Africa. We’ve taken the view that we’re looking at establishing what we call a fund management business, so we committed ourselves to investing. But what we needed to do then was raise third-party funds for other

investors to come with us: we’d create a prima fund for which we would ultimately be responsible and manage.”

Growthpoint entered into a joint venture with Investec Asset Management last year to create Growthpoint Investec African Properties Limited, a property investment holding company that would seek out acquisition or development opportunities in Africa.

Growthpoint invested $50m (about R725m) and, recently, the International Finance Corporation (IFC) — a member of the World Bank Group — committed $40m.

“We’re in the process of trying to raise funds from the investor market to the tune of $250m, hopefully by the end of this year,” says Sasse.

LISTING OPTIONS? “The target is $500m. If we achieve that, and investor appetite and preferment of fund is there, we could introduce some gearing, some bank debt. Ostensibly in five to seven years’ time, with $750m to $1bn of assets, we could list this

vehicle on a recognised stock exchange such as London or Johannesburg, or even one of the African exchanges.”

Sasse believes that Growthpoint, Investec and the IFC each bring unique expertise to the African table and that together, they will be creating a powerful platform for pan-African property investment.

EXCELLENCE AWARDS Receiving the Lifetime Achievement Award from the voice of commercial property in SA adds resonance to the creation of this joint venture.

The award recognises the exceptional contribution made by an individual considered to have changed the face of the local property sector. Sasse is acknowledged to be the driving force behind Growthpoint’s success and was deeply involved in the formulation of SA’s internationally recognised real estate investment trust (Reit) dispensation.

It was not the only Sapoa award for which Growthpoint took to the podium. Two further awards endorsed

NORBERT SASSE

“The other contenders had a great depth of property experience — essentially, my background is financial” Norbert Sasse, CEO, Growthpoint Properties

its objective to be leaders in sustainable, green buildings.

Growthpoint is a Platinum Founding Member of the Green Building Council of SA (GBCSA) and owns or co-owns the largest portfolio of Green Star SA certified buildings of any company in the country.

Sasse is quick to deflect any personal accolades in this regard: “The ultimate passion for green building initiatives lies within our business. As much as I believe in it personally — and it fits with our philosophy as a company — credit has to go to two key players on our team: Rudolf Pienaar and Werner van Antwerpen.”

Growthpoint received the award for Best Commercial Office Development for its Ridgeview offices in Umhlanga, KwaZuluNatal, as well as the Innovative Award for its Greenovate Awards Programme, an initiative that, in partnership with the GBCSA, is designed to incentivise built-environment students to explore ways to live more sustainably.

Priced from R2 million. No Transfer Duty.

One-on-Whiteley, the new residential phase of Melrose Arch, is the ultimate in luxury cosmopolitan living. When you invest in an apartment at One-on-Whiteley, you are investing in a secure, convenient and vibrant lifestyle.

One-on-Whiteley provides an amazing opportunity to be part of the success and attraction that this unique new urban quarter offers. By owning an apartment in One-on-Whiteley, you open the door to 21st century living.

On Show at the Pam Golding Office - No. 5 The High Street, Melrose Arch.

To be part of the ultimate in luxury cosmopolitan living, please contact: Victoria Russell 074 683 1222 • victoria.russell@pamgolding.co.za Peet Strauss 083 675 1212• pstrauss@pamgolding.co.za Tersia Taljaard 063 695 7571 • tersiat@amdec.co.za Office: 011 684 2995/6 • pamgolding.co.za/melrose-arch

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• Flexible payment plans enabling you to pay your deposit in instalments.

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ON SHOW: Weekdays 9am - 5pm. Saturday and Sunday 12pm - 5pm.

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P R O P E R T I E S

To become an investor today or add to your property portfolio, please contact: Jak Redelinghuys 082 445 2130 • jak.redelinghuys@pamgolding.co.za Theo Joannides 081 313 4907 • theo.joannides@pamgolding.co.za Victoria Russell 074 683 1222 • victoria.russell@pamgolding.co.za Office: 011 268 1637 • pamgolding.co.za/property-development

PROPERTY NEWS Friday 9 September 2016

Pam Golding lands 117 on Strand

Property sector surges in value

T

P

am Goldberg Properties has been awarded the exclusive mandate to market flats in a R600m Cape Town central city development that will include flats, retail space and A-grade offices.

Construction is scheduled to start this month for upmarket flats at the 117 on Strand development, and units should be completed in the third quarter of 2018.

A total of 117 flats will be available in the mixed use, 17-storey development

by Ingenuity Property Investments, a JSE-listed property company. There will be 42 flats in the podium section of a new building bounded by Strand, Hudson and Castle streets, while a glass tower section will house a further 75 flats.

Says Ingenuity CEO Arnold Maresky: “City rejuvenation has led to an extremely vibrant and liveable city centre and 117 on Strand will offer the best of modern living in an area that combines rich history with timeless appeal.”

Studio flats are priced from R2.255m, according to Peter Spencer of Pam Golding Properties’ City Bowl office.

A limited number of flats will have terraces.

Buyers stand to benefit from urban development zone tax incentives, a South African Revenue Service programme aimed at regenerating inner cities, enabling the first purchaser from a developer to get tax deductions.

Four three-bedroomed duplex penthouses, ranging from 169m² to 233m² and situated on the 16th and 17th floors of the tower block, will have double-volume spaces.

The mixed-use development will include five levels of basement parking and seven levels of above-ground bays, providing more than 500 parking spaces.

The building is designed to achieve a four-star Green Building rating and will incorporate energy-efficient features. The exteriors of an existing heritage building on site and also of an adjacent, smaller building, will both be restored.

he South African property sector is worth R5.8-trillion, according to results from the latest study from the Property Sector Charter Council, undertaken to determine the size of SA’s property sector.

The sector’s size is R5.3-trillion with a further R520bn land officially zoned for commercial and residential development, the study states, using figures from the 2014-15 financial year. This is an increase of nearly R1-trillion since the end of 2010, when the size of the South African property market was R4.9-trillion.

Compiled by MSCI for the council and released in July, the study supplements the council’s SA Property Sector Economic Impact Report. It estimated the sector’s contribution to gross domestic product was R191.4bn in 2012 in terms of annual income and expenditure flows generated by the sector and a R46.5bn contribution to the fiscus.

Formal residential property still accounts for nearly three-quarters of property owned in SA, and grew from an estimated R3-trillion at the end of

2010 to R3.9-trillion. For the first time, the study also considered informal residential property, although it has no value. It was quantified by the number of households provided by the Department of Human Settlements. Undeveloped urban land zoned for development remained unchanged at about R520bn (1.1% of total land in SA).

The public sector contributed R237bn, of which about R102bn is estimated to be in the hands of the Department of Public Works, R66bn held by SA’s 19 largest

state-owned enterprises, and R69bn by metros and selected local municipalities.

Says CEO of the council Portia Tau-Sekati: “For a sector this big and this important it is crucial to have a hub of knowledge that consolidates information to support a common and consistent understanding of the sector.”

Tau-Sekati explains that by regularly updating this research the council also creates a measure of the effect of property cycles on the sector’s value, which can be significant.

Property values in numbers

R1.3-trillion

Commercial property sector Property type

Owner type

Retail – R534bn

Corporate/other – R789bn

Office – R357bn

Reits – R297.7bn

Industrial – R281bn

Unlisted funds – R130.7bn

Hotel – R74bn

Life & pension funds – R48.6bn

Other – R20bn *

*

Estimate for “other” is category based

Source: Property Sector Charter Council

SA favoured for hotel investment

O

f the hotel investment markets in Africa, international real estate and investment management firm JLL favours SA, Mauritius and primary cities in East Africa, according to hotels and hospitality in sub-Saharan Africa head Xander Nijnens.

“From a sector perspective, we favour the mid-market, budget and serviced apartment segments over luxury and upper upscale.”

High currency volatility across the region has caused challenges to investors in terms of inflation, rising lending rates and uncertainty in investment underwriting, he says.

STR Global’s latest

pipeline report (May 2016) shows a 34% increase in rooms under construction in Africa at 30,737 — revealing many high growth markets.

“However, the pace of demand growth is disparate across the continent,” says Nijnens. “East Africa and SA have good demand fundamentals, while North Africa and West Africa have been impacted by instability and economic slowdown. As a result, hotel performance and investment sentiment across the continent has proved mixed thus far in 2016, with global uncertainty and oil and gas price volatility impacting regional markets,” he says. “‘Africa is not for wimps’ is a phrase well known to

Africans, particularly when foreigners suffer challenges.”

Says Tim Smith, managing partner of HVS Consulting in SA: “This phrase could equally be applied to hotel investment and development on the continent. But with higher risk comes higher reward and the change in values of some of these markets shows that those rewards can be substantial.”

He adds: “The good news is the sun continues to shine across Africa and, with improved airlift, confidence in democracy and economic growth all providing corporate and tourism demand, hotel investment in new and existing markets should be strong in the medium to long term.”

which holds 100 highyielding office, retail and industrial properties valued at R1.9bn, will be acquired

by Synergy in return for the issue of Synergy B shares to Arrowhead. This will realise Arrowhead’s strategy of placing its high-yielding properties in a separate JSE-listed subsidiary.

Arrowhead’s property portfolio will consist of large quality properties.

The transaction is expected to increase Synergy’s market capitalisation to R3.4bn, with a property portfolio valued at about R4.4bn.

The GemGrow vehicle will “re-energise and

differentiate Synergy and give it a new platform for growth with yield-enhancing acquisitions”, say the groups.

Says Vukile CEO Laurence Rapp: “With this transaction, Vukile will achieve our goal, placing more than 90% of our assets in the most defensive and preferred property sector.”

GemGrow listed property fund created

V

ukile Property Fund, Arrowhead Properties and Synergy Income Fund have concluded a landmark transaction to create a high-yield, highgrowth fund within the existing entity of Synergy, to be renamed GemGrow Properties Limited.

The implementation

date is October 1.

Synergy’s portfolio will be reconstituted with properties from Vukile and Arrowhead for its asset base. Gerald Leissner will be the CEO of GemGrow.

In the case of Vukile, a R2.45bn asset swap will result in Synergy exchanging its entire portfolio of 14 retail

shopping centres in return for 29 of Vukile’s higheryielding office, retail and industrial properties. This will transform Vukile into a specialised retail property fund with more than 90% of its portfolio comprising highquality retail assets.

In the case of Arrowhead, its subsidiary, Cumulative,

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WESTERN CAPE POSITION IS KING Proudly located in a cul-de-sac, taking advantage of it's northern views over Green Point Common, V& A Waterfront, harbour and the Ocean beyond is this 3 bedroomed, 3 bathroomed home which retains a nod to its past with wooden floors and stain glass detailing. A large elevated pool area presents the potential for further expansion providing further view real estate. SRI zoning provides protection of this properties natural assets. Staff accommodation, garaging and garden along with the amenities of Green Point Redham School and the surrounds round off this family home.

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GAUTENG BORDERING WESTCLIFF A JOHAN SLEE MASTERPIECE This exquisite home is set in a lush 1669 sqm terraced garden, this beautiful North facing home offers fine living at its best! Consisting of free flowing receptions onto garden, pergola and pool, gourmet kitchen, 3 bedrooms, 3 bathrooms (2 en suite), plus the perfect work from home/study. Staff cottage, double garaging. Features of this magnificent home include climate controlled wine cellar, surround sound system, motion sensor lighting, superb master suite with indoor/outdoor shower and Jacuzzi room, solar heated pool, stone walkways, feature waterfall, Morso fireplace, aluminium security shutters; state of the art security. You have earned the right to enjoy the best!

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