Table of Contents Why invest in burial plots?
The Fundamentals Population Growth The Burial Plot Problem Advantages of Private vs Municipal Plots South Africa
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Legacy Parks Introduction Management Team
Dear Investor, As the global economic climate continues to be fraught with insecurity and uncertainty, the search for stable assets with impressive yields is as challenging as ever. Interest rates are low, bond yields are poor and the equity markets are still characterised by volatility. In these uncertain economic times it is reassuring to purchase something tangible, and one real estate related asset that has become increasingly popular amongst market participants is burial plots. Not only do burial plots have a strong track record for providing stable returns that tend to track above inflation, but historically the price of burial space has only ever gone up. For this reason, the growth of this asset is considered to be more reliable than many other property related assets, achieving capital appreciation even during recessionary periods. The fact that burial plots have never depreciated in value is unsurprising when you consider the global trends. A rapidly expanding global population combined with a lack of investment in municipal cemeteries has resulted in a huge demand for cemetery space. Demand for space is now rising faster than supply, and this is unlikely to change as governments around the world are confronted with municipal cemeteries reaching their limited capacities. Nowhere is this problem more prevalent than in South Africa, where many municipal cemeteries are overpopulated and in a state of desperate decline. In 2012, 27 out of the 35 cemeteries in Johannesburg had almost reached full capacity, with more expected to follow in the next few years. In Durban, cemetery officials claim that the amount of land they need each year has doubled in the last ten years and some estimates suggest the last available spaces will be filled within two years. The story is similar in the Cape region. The government is faced with the problem that expanding municipal cemeteries is not only expensive, but also practically challenging as land suitable for burial sites is extremely limited. In response to this deteriorating situation, the South African burial sector has seen a surge of interest in private burial grounds. Families are looking for a safe, secure and attractive alternative to poorly maintained and overcrowded municipal cemeteries, and this demand is becoming increasingly urgent as some cemeteries bring in new regulations to prevent the pre-allocation of graves to families wishing to be buried together. Private burial grounds not only take the pressure off municipal cemeteries but can also provide an attractive and environmentally friendly alternative to traditional graveyards. It is against this backdrop that we proudly present Legacy Parks in South Africa, an ethically structured burial plot project which offers purchasers access to the fast-growing private burial ground sector. This project offers you an opportunity to purchase a fully registered burial plot outright that will be maintained by an independent trust and managed by Legacy Parks. Here are some of the project’s highlights: • • • • • • •
Real Estate related exposure to Africa’s biggest economy Direct asset ownership in a fast growing sector South Africa’s first eco-cemetery Instant burial right buy-back in place Guaranteed Minimum yields of 6% per annum Median forecasted yields of circa 19% per annum Asset purchase at 18-26% Below Market Value
This project is structured so purchasers can partake in an environmentally responsible asset that has the potential to achieve significant returns. I invite you to peruse this document and consider the positive impact this opportunity holds for your portfolio. Warm Wishes Willie Fouche Chairman & CEO
Important Parties Property Owner Sieghard Kulenkampff P.O. Box 50 Klapmuts 6570 The Management Company Legacy Parks (Pty) Ltd Farm Wiesenhof Klapmuts Road, R44 Western Cape South Africa
Receiving Agents South Africa Michael England Incorporated 223 Bree Street Cape Town Western Cape South Africa
Company Auditors Eylon Incorporated 11 Fick Street Potchefstroom 2531 South Africa
Why invest in burial plots As demand for cemetery space grows faster than supply, burial plots have become an increasingly popular land based asset. A rapidly expanding world population combined with a lack of investment in municipal cemeteries has resulted in a surge in demand for private burial plots, and investors are now realising their potential for significant and secure returns. In South Africa the shortage of burial space in municipal cemeteries has caused the price of these small plots to rocket in recent years. “Historically, the price of burial space has only ever gone up in value and has never depreciated.” In times of economic uncertainty it is reassuring to purchase something tangible, and burial plot assets have a strong track record in providing stable, inflation-beating returns. Historically, the price of burial space has only ever gone up in value and has never depreciated. For this reason, the growth of this asset is considered to be more reliable than many other property assets, growing in value even during recessionary periods.
The Fundamentals Population growth The world’s population is expanding faster than ever before, and the demand for food, fuel and living space is creating a huge strain on the world’s finite amount of land. Throughout the world, municipal cemeteries are starting to reach their capacities’ as the number of people needing burial space continues to accelerate. “The only certainty in life is death and taxes” - Benjamin Franklin The world is expected to have 2.5 billion extra people by 2050, and as the world population grows, so does the death rate. This is putting a huge strain on existing cemeteries, and the fact is that many governments worldwide are unprepared for the extra demand. Buying land is not only expensive, but land suitable for burial sites is extremely limited. The need for alternatives has never been greater as cemeteries in places such as London declare a “burial crises” and cemeteries in Durban struggle to cope with often 80-90 burials a day- ten times the demand there was ten years ago. Private burial grounds are increasingly filling this gap in the market and becoming ever more popular with families looking for a secure, safe and attractive alternative to often run-down and poorly managed municipal cemeteries.
The Burial Plot Problem South Africa’s cemeteries are currently in a state of decline. Overpopulated, poorly maintained and unsafe, they deter visitors and have left citizens in need of a suitable alternative. After years of deterioration, many of South Africa’s cemeteries lie deserted with no flowers to brighten the graves or visitors coming to pay their respects. The once pristine cemeteries of Stickland and Jamestown, both situated in scenic areas in the Western Cape, have become grossly overpopulated, with a lack of maintenance leaving them dilapidated and unsightly. Neglect and poor management has meant that many of South Africa’s cemeteries have now also become the target of thieves and vandals. The maintenance and safety of the graveyards is only one part of the problem however, with the biggest issue being the lack of space. In 2012, 27 out of the 35 cemeteries in Johannesburg had become almost full, with many more soon to follow. Durban cemetery officials say that the amount of land that they need each year has doubled in the last decade, and estimates suggest that the last available grave spaces will be filled within two years. Cities such as Durban and Cape Town are now advocating “secondary burials” where old caskets are exhumed and buried much deeper allowing new caskets to be buried above. Municipal cemeteries have even considered “reduction burials” involving the disinterment of remains after at least 30 years, and reburial in a smaller casket to create space. So far this suggestion has not proved popular. The most recent white paper regulating municipal cemeteries stipulates that burial rights will only be secured for 20 years, and this may even be reduced to 10 years in the near future in order to accommodate the growing shortage of burial space. Current regulations also specify that graves can no longer be pre-booked, meaning that those who wish to be buried alongside family or loved ones no longer have that option within the municipal system. If more people opted for cremation rather than burial it would help alleviate the problem, but in South Africa cultural beliefs mean that few people choose that option. Currently only 8% of South Africans opt for cremation, compared with a third in America, half in China, three quarters in Britain and 95% in Japan. Cremation is still considered a taboo in South Africa, partly because of beliefs about connecting with ancestors after death, and custom demands that everyone has a sacred, dedicated plot of land in a cemetery - something that the government is increasingly unable to provide.
The appeal of new space It is no wonder that there are widespread negative perceptions of cemeteries amongst the South African population. There is a growing need to provide an alternative for South Africans, and to take some of the pressure off municipal graveyards. Legacy Parks aims to fulfil these needs, providing a cemetery option that is safe, secure and well maintained with beautiful natural surroundings. Extensive market research undertaken by TNS Global – the world renowned market research firm – on behalf of Legacy Parks has highlighted the need for this type of burial option within the South African community, following a model already popular in countries such as the United Kingdom and the United States.
Advantages of private v. municipal plots Natural burial parks are becoming an increasingly popular alternative to traditional cemeteries the world over. They offer a natural, attractive and safe environment that addresses the shortcomings of municipal cemeteries. Currently there are over 260 established Natural Burial Parks in the United Kingdom, and the United States has established over 400 Natural Heritage Burial Sites in the last five years. As environmental concerns continue to grow and traditional cemeteries reach their capacity, industry experts say we can expect to see many more natural burial sites in the near future.
South Africa Steady growth, a stable political environment, well-developed infrastructure and a large domestic market have long made South Africa the most attractive place to do business in Africa. Now however, its successful economic reforms and important strategic position in the continent have made it one of the most exciting emerging market investment destinations in the world. South Africa has for a long time been considered a stand-out success in the African continent, with investors piling into the country to take advantage of its abundant natural resources, relatively large middle class and secure business environment. Known as the “gateway to Africa”, South Africa is considered to be the economic powerhouse of the continent. It has strong democratic institutions, a world-class financial and capital markets system, and an environment conducive to doing business. It is the single biggest destination for FDI in the continent, attracting 16.5% of Africa’s FDI since 2003, with one of the largest Gross Domestic Products (GDP). As a result of successful reform, South Africa is now considered to be part of the BRICS emerging market group, along with the other rapidly growing markets of Brazil, Russia, India and China. It has a GDP per head of over $11,000 at purchasing power parity, bigger than China’s or India’s and more than four times the African average. According to the World Bank’s Ease of Doing Business Index it ranks second in Africa, after Mauritius, and comes an impressive 35th in the world rankings. According to British financial paper the Economist, “for the soundness of its auditing standards and regulation of its securities exchanges [South Africa] is second to none”. This exciting business climate has not gone unnoticed and Ernst & Young expect FDI inflows into South Africa to average around $10 billion a year for the next five years, creating at least 125,000 new jobs. The government is dedicated to building upon the huge potential of the South African economy and have introduced wide-ranging legislation to promote training and rapidly improve on its range of world-class skills and competencies. Currently the country already has world class clusters in environmental technologies, ICT, transport equipment, financial services as well as various creative industries. The country’s infrastructure is by far the best in Africa, and it holds 80% of the continent’s rail network. This lead is not about to be beaten either, with the government funding 134 infrastructure projects in 2013 costing around $130 billion, and $100 billion extra allocated for the following three years. Based on these statistics it comes as no surprise that many entities around the globe are flocking to invest in South Africa. In essence, South Africa makes an obvious destination for investors looking to make a play on the emerging markets in an economically and politically low-risk environment.
Introducing Legacy Parks Legacy Parks (Pty) Ltd offers a first-to-market private natural park that will compete as a viable and comprehensive alternative to municipal cemeteries and other private burial options. It is one of the first of its kind in South Africa, and aims to become a market leader for this new type of burial option. The advantages of private natural burial sites over the municipal cemeteries are numerous:
Tranquil and beautiful environment It is becoming increasingly clear that traditional cemeteries no longer address the needs of citizens in terms of burial options and long-term memorialisation. According to research from StatsZA, the average person will visit the grave site of a family member no more than two times a year, with one of the primary reasons cited as being the â€˜cemetery environmentâ€™. Municipal cemeteries are often run down and poorly maintained, emanating a feeling of neglect and abandonment that deters visitors. In contrast, natural burial parks brim with vitality, creating an environment that truly celebrates life.
Safety and Maintenance Sadly, the lack of security and management at most municipal graveyards means they have become the target of thieves and vandals, with the result that many family members feel they are too dangerous to visit. Legacy Parks provides a secure environment for family members to visit. Furthermore an independent maintenance trust ensures that the burial park will be well looked after in perpetuity at no extra cost to the plot owner.
Conservation Natural burial parks help assist conservation by providing a space that is in harmony with local wildlife and indigenous flora and fauna. At Legacy Parksâ€™ burial park, only 10 of the available 300 hectares will be used for burials. Unlike traditional cemeteries, which have up to 80% of the space covered with graves, there is a distinct focus on conservation. The site will accommodate all manner of wildlife, including over 100 species of bird as well as zebra, oryx and springbok.
Eco-friendly In many ways traditional burials are environmentally unfriendly. As well as the resources and pollution involved in manufacturing coffins, they often introduce potentially harmful substances into the soil, such as solvents and glues and non-biodegradable elements like metal plaques. Natural burial parks aim to have as low an impact on the environment as possible, and create sites that are a natural asset. Coffins are simple and made of easily decomposable, non-toxic materials such as wicker, untreated pine, seagrass or bamboo. Furthermore, natural markers such as trees, shrubs or rocks are used instead of traditional gravestones. Some graves also allow for the planting of an indigenous tree at the burial site which serves as a living memorial instead of a cold tombstone. Ashes can also be scattered together with wildflower seeds.
Management team The entrepreneurial team and founders have extensive experience in taking large businesses through various stages of development. Willie Fouché – Chairman and CEO Willie Fouché is a successful businessman and entrepreneur with extensive experience of business development in the services and manufacturing sectors and holds a B Com and LLB degree. In his early career, Willie worked for the Kwa-Zulu Development Corporation, the Industrial Development Corporation (IDC) and Small Business Development Corporation (SBDC) where he became a champion of business incubation and initiated the Hive of Industries concept at the SBDC. In 1983, Willie started his own business in furniture manufacturing and never looked back. Over the next twenty years, he set up and developed several businesses, the last of which was in coal distribution. Willie retired to Knysna in 2004. His retirement lasted approximately 12 months before he was approached to assist with the development of the Legacy Parks Project. Willie supports family values and is passionate about helping young people develop their own businesses. His mottos are “keep it simple” and “don’t leave anything for tomorrow that can be done today.” Werner Fouché – Director of Insurance and Property Development Werner completed his BSc in Construction Management in 2005 at NMMU. He was then employed by the WBHO in Port Elizabeth for a year and worked as a site agent on various developments. His family started a property development business and then he joined them as Project Manager. Werner successfully managed the company’s developments from inception to completion and was also greatly involved in the marketing and general management of the two businesses. Werner has been involved in all aspects of the development of Legacy Parks. His main responsibilities are the rezoning, EIA applications and site development (including the management of town planners, environmental consultants and specialists, architects and landscape architects, contractors and builders). Werner also spearheads Legacy Parks’ Insurance Division, managing over 300 active sales agents and playing a pivotal role in the construction and roll out of every new project. Thanks to his leadership, Werner has managed to grow Legacy Parks Insurance Policy Division to a self-standing SPV, which has proven to be one of the most lucrative divisions of the company.
Dieter Fouché- Director of Marketing and Digital Systems Dieter has a BA degree in Media Communication and Culture, and has worked within production for some of the biggest television companies in the world. After receiving his degree, Dieter acquired a position at a Cape Town based film production house, Homebrew Films. Starting as an intern, he proved himself early on and wrote and starred in a 52-part children’s wildlife series for Kyknet, named Groentjie. Thereafter he left South Africa to pursue a position aboard the biggest cruise liner in the world, the Liberty of the Seas. After another year working with big production companies abroad, including CNN and RCTV, Dieter’s love for his country drew him back, and he worked for productions in South Africa for some of the most coveted companies in the world including; Discovery, National Geographic, Universal Pictures, 3rd Degree, DSTV (including Kyknet, Mnet, MK, MTV). A self-taught graphic designer, copywriter and web programmer, Dieter heads up all creative input for Legacy Parks. Thanks to his love of the media industry, he brings an astute knowledge of the intricate workings of media development to the Legacy Parks Team.
Published on Jan 20, 2014