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South African Property Review

PROPERTY SOUTH AFRICAN

August 2017

REVIEW

PROPERTY REVIEW - LogoTreatment.pdf

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2016/08/25

11:31 AM

Innovation, Journalism & Excellence Awards Post-Convention Report Back

SAPOA ANNUAL CONVENTION AND PROPERTY EXHIBITION ROUND-UP

FACE TO FACE

OTIS elevating Africa and taking South Africa with it

SHOWCASING INNOVATIVE EXCELLENCE Grazing southern African skylines

August 2017

MEET THE BOARD 2017/2018


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contents

August 2017

PROPERTY SOUTH AFRICAN

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

August 2017

REVIEW

PROPERTY REVIEW - LogoTreatment.pdf

1

2016/08/25

11:31 AM

Innovation, Journalism & Excellence Awards Post-Convention Report Back

ON THE COVER The SAPOA Annual Convention and Property Exhibition takes centre stage, with a disruptive theme being followed throughout the conference. Julius Malema opened the proceedings!

SAPOA ANNUAL CONVENTION AND PROPERTY EXHIBITION ROUND-UP

FACE TO FACE

OTIS elevating Africa and taking South Africa with it

SHOWCASING INNOVATIVE EXCELLENCE Grazing southern African skylines

August 2017

MEET THE BOARD 2017/2018

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From the CEO

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From the Editor’s desk

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SAPOA Board Meet your SAPOA Board

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Industry news

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Obituary Robin Vorster

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Education, training & development How to support the transformational agenda in the property sector through skills development, education and training

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Legal update Proposed amendments to the outdoor advertising by-laws of the City of Johannesburg and the City of Cape Town

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Legal update The amended B-BBEE Property Sector Code

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Legal update Paying for public infrastructure through property values

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Convention round-up SAPOA Convention 2017: the good, the bad and the disruptive

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Exhibitor stand winners

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Excellence Awards Iconic developments grace southern Africa’s skylines

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Journalism Awards Journalism Awards for Excellence 2017

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Face to face Elevating Africa and taking South Africa with it

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Office space The gig is up: say hello to your dream workplace

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Events

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What’s on Upcoming events

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Off the wall Student accommodation gets a face lift fit for the future FOR EDITORIAL ENQUIRIES, email mark@mpdps.com Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684

Editor in Chief Neil Gopal Editorial Adviser Jane Padayachee Managing Editor Mark Pettipher Copy Editor Ania Rokita Public Relations Officer Maud Nale Production Manager Dalene van Niekerk Designer Eugene Jonck Sales Robbie Pansegrauw e: rob@mpdps.com Finance Susan du Toit Contributors Adam Ismail, Anne Schauffer, James Maddock, Mumtaz Moola, Phil Ruimte, Portia Mkhabela Photography Mark Pettipher, Xavier Saer DISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding any goods or services advertised within this edition. Copyright South African Property Owners’ Association (SAPOA). All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from SAPOA. The publishers are not responsible for any unsolicited material. Printed by Designed, written and produced for SAPOA by MPDPS (PTY) Ltd e: mark@mpdps.com

e: philip@rsalitho.co.za


from the CEO

How the digital transformation is reshaping retail as we know it One of the biggest sectors of the economy today is going through massive disruption through innovation. The rise of e-commerce is impacting not only the brick-and-mortar mall anchor stores of even premier retail brands, but also the performance of the malls themselves

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t the end of June, in a move that surprised many, Washington-based e-commerce and cloud-computing company Amazon announced its intention to purchase Whole Foods Market grocery chain stores for US$13,7billion. Amazon has long been pushing to expand its online grocery business, seeing it as an emerging opportunity, and had been dabbling with traditional brick-and-mortar activities for a few years, from owning a few physical stores to running experiments such as Amazon Fresh and Amazon Go. When the news broke, critics saw it as a sign that the company had finally caved and made a large investment into physical stores in order to grow. What many didn’t see, however, is that this acquisition is actually in alignment with Amazon’s view of the world of retail. The firm’s move marked the beginning of the end of retail as we’ve known it – or perhaps the beginning of the retail industry as it should be. This will no doubt have significant impact on the traditional model of shopping centres. Historically, the industry would take a while to adopt technology and data to disrupt itself. Amazon has approached the problem of retail in a more scientific way since day one. In the Amazon world, every transaction is recorded, every buyer is known, all inventory movement is known and, perhaps most importantly, every possible next order can be suggested based on what visitors buy and browse. This playbook, based on the belief that all data must be collected, analysed and used, is very different from retail’s traditional way of thinking. However, it doesn’t change the fact that Amazon is trying hard to increase efficiency and convenience. Amazon will not be the only company to innovate in this space. If you’ve been following the latest trends, you”ll find that this acquisition is possibly only an indication of the drastic changes that will occur to impact all of us. When we closely observe the disruption happening in the retail industry, we see the personalisation of the consumer as a major force driving change. Millennials demand more

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authentic and personalised product offerings to meet their unique preferences. The power of social media, the rise of mobile use, analytics and clouds continue to drive the digitisation of life. In the FMCG world, we’re only just beginning this digital transformation – but as we look at other industries, it’s clear that digital trends accelerate quickly and as an industry we need to be prepared. According to global performance-management company Nielsen Holdings, digital will put individual consumers at the centre-stage in many retail processes. It will also encourage real-time execution, allowing a retailer to vary prices and promotions by time of day, activity in the store, promotions in neighbouring stores and external circumstances.

The future of digital retail In an age of digital transformation, the retail industry has to invest massively to meet the needs of ever more demanding, tech-savvy customers. From the growth of online retail and the rise of mobile use to the current obsession with data-driven logistics, digital disruption is forcing retailers to reshape the industry and reinvent the game. Digital will bring hyper-personalisation, where advertising, promotion, pricing and even store layouts will be customised at customer level. Consumer-level information will become the most important measure in retail, replacing the point-of-sale data that has dominated for so long. The opportunity exists in South Africa for innovative retailers to combine consumer data from various sources to predict shopping trends, design targeted customer campaigns and connect with their customers in unique ways. The reality is that the world is not likely to see the end of brick-and-mortar stores any time soon. But as consumer confidence in online purchases increases, it won’t be long before the trend becomes a strong challenge to retailers. Neil Gopal, CEO


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from the Editor’s desk

Mother City abuzz with disruption Each year, SAPOA convenes en masse. The build-up was well advertised and we were not disappointed – the Convention Committee certainly pulled a surprise out of the bag on day one

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hat can we say about the SAPOA Annual Convention & Property Exhibition 2017, which was held in Cape Town this year? Those who attended will know what I’m talking about when I say that having Julius Malema as the opening keynote speaker was a huge coup. It was certainly disruptive, and even he was surprised to have been invited to speak. I’m not going to dwell on the Convention too much, as this edition is dedicated to our Report Back. Going through the pages, you will be able to get an idea of the extent of the Convention, which started for some with a township tour of Langa, where we were given a hugely eye-opening perspective about life in a township. (Langa is the oldest township in South Africa.) We were shown that there is much to be improved upon and that while there is work afoot by the Cape Town Municipality to improve housing conditions for the 80  000 Langa residents, there is a long way to go. (I’m sure this tour was meant to be a “wake-up call”, and that Langa township is not a unique case.) Political and economic insights and overviews were the order of the day, leaving us all with much to think about, culminating in the dinner and awards evening. Loudly disruptive rock music assaulted the guests at the celebratory evening as the excitement mounted. The Journalism Awards for Excellence gave tribute to South Africa’s

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property journalists, and confirmed that the commercial property industry is a niche environment to be in. The Property Development Awards for Innovative Excellence once again demonstrated that, as South Africans, we in many cases lead the way in the built environment – locally and internationally, in the “green” space, aesthetically and functionally, as well as innovatively. Deciding how best to illustrate to our members the value of the annual Convention, I could have gone on about the figures (and sent you all to sleep). Mindful of the requirements of our sponsors and members, I decided to make a visual presentation for you. The infographic on page 44 shows that we hit a few firsts – 1  237 delegates, primetime coverage, a R10  000  000+ return on investment equivalent, and a whole day of trending on social media. Together with this edition, we present our Women in Property supplement. Thank you to the companies who took the opportunity to recognise their ladies’ contribution to the industry, and the Convention Photo Album. In the September edition I look forward to chatting face to face to some of our Developer members, and take a look at the retail built sector. I hope that you will enjoy reading this issue’s offering! Mark Pettipher, Managing Editor


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SAPOA Board

Meet your SAPOA Board Peter Levett (President) Managing Director at Old Mutual Property Levett has been a Director at Old Mutual Property since 2000, and the Managing Director since 2011. He is responsible for property investment and business strategy at Old Mutual, with property assets of about R18-billion, and participates in investment strategy as a member of the Executive Committee of the Old Mutual Investment Group. He is a qualified CA and has several degrees, including an MBA (with distinction) and a master’s degree in commerce (cum laude).

Ipeleng Mkhari (President Elect) CEO of Motseng Investment Holdings Mkhari established the first black woman-owned CCTV business, before founding Motseng Investment Holdings in 1998. She is now the company’s CEO. She has a bachelor’s degree in social science, has completed the Executive Development Programme at Wits Business School, and is an Archbishop Tutu Fellow. She is currently a nonexecutive director at KAP Industrial, Nampak, Assore and SAPOA, and a board of governors member of St John’s Diocesan School for Girls.

Neil Gopal Chief Executive Officer

Nomzamo Radebe (Immediate Past President) CEO of JHI Group Radebe is the Immediate Past President of SAPOA and a Past President of the South African Council of Shopping Centres. Her career spans more than 18 years in senior roles in property, finance and treasury management. She was awarded the “Five Star Woman” award by the Women’s Property Network, and is the Chairman and trustee of the SAPOA Bursary Trust and a nonexecutive member of the SAPOA Audit and Risk Committee. She is also a non-executive Director of Munich Reinsurance Company of Africa Limited.

Dr Sedise Moseneke Executive Director at Vukile Property Fund Limited After completing his bachelor’s degree in dental surgery in 2000, Moseneke served in the SANDF as a lieutenant in the Burundi peacekeeping mission. Today, he is the Executive Director at Vukile Property Fund Limited. He is also the interim CEO of Synergy Income Fund. He is an elected board member of Nu-Way Housing Developments and Krisp Properties, and was a previous SAPOA President (2012/2013). In addition, he is a member of the Young Presidents’ Organisation (Pretoria chapter) and serves on the WHPS Old Boys’ Committee.

Nnema Byrd Investment Principal at STANLIB Nnema Byrd joined STANLIB in 2014, and has 16 years of finance and property experience in the US and across Africa. Her experience covers private equity, transaction structuring, property valuations, acquisitions, land development, asset management and property dispositions. She is a member of the CFA Institute, the Economic Society of South Africa, and the Women’s Property Network. She has an architecture degree and an MBA from the Massachusetts Institute of Technology, and is a CFA® charter holder.

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SAPOA Board Vuyani Hako Executive Head at PIC Properties Vuyani Hako boasts 23 years of property industry experience; of those 23, he spent 12 in executive management. He’s had exposure to local authorities and the private sector. He’s worked as Managing Director at Metropolitan Property Services, Chief Executive Officer at Momentum Property Investments and Executive Director at Eris Property Group. He holds a BSc in town and regional planning from Wits and an MBA from the Stellenbosch Business School. He is a Board member of the V&A Waterfront.

David Green Director at ProAfrica Property Services (Pty) Ltd David Green is a Director at ProAfrica Property Services, which assists international corporates with all aspects of real estate in South Africa and Africa. Projects have included the largest industrial sale and leaseback disposal in sub-Saharan Africa, and the relocation of large corporate head offices in South Africa, Kenya, Ghana, Nigeria, Mauritius and Angola. Green has been a member of SAPOA since 1982 and is currently the Chairman of the SAPOA Convention Committee, a position he has held for several years.

Jeff Zidel Vice Chairman of Fortress Income Fund Jeff Zidel’s acumen as a property developer and investor has seen him involved in all aspects of the property industry for more than 40 years. The co-founder of Resilient is Vice Chairman of JSE-listed Fortress Income Fund and nonexecutive Director of New European Property Investment PLC. He was three times Past President of the Roodepoort Chamber of Commerce, and a winner of the 2010 Absa Jewish Achiever Award for Listed Companies.

Pieter Engelbrecht Head of Development at Growthpoint Properties Limited Engelbrecht is the Head of Development at Growthpoint Properties, the largest property REIT on the JSE. He began his career as a qualified quantity surveyor, and after three years of practice moved into the development field. He has more than 30 years of experience in the property industry and has been involved in mixed-use developments for various clients. He is the Chairperson of SAPOA’s Property Development Awards for Innovative Excellence Committee. James Aling Managing Director of Halls Properties James Aling is the Managing Director at Halls Properties (the property development business of the Halls Group) and the current Chairperson of the SAPOA Regional Council in Mpumalanga. He aims to get the regional council established and representative of the broader Mpumalanga region, and to see that urban management gets the necessary attention on the SAPOA agenda as a sustainable approach to developing and/or revitalising neighbourhoods and precincts in partnership with property owners and local government.

Noel Mashaba (Elected) Executive Chairman of GladAfrica Group Noel has more than 14 years’ business management, business negotiation, brand building and business development experience, all at a senior level prior to establishing GladAfrica he participated in the establishment of businesses within the petroleum industry as well as consulting firms. Constructing unique teams to manage complex projects Noel Mashaba is the founder of GladAfrica Group (Pty) Limited and executive chairman of the GladAfrica Group’s board. Zola Malinga (Elected) Co-founder and Executive Director of Jade Capital Partners Zola Malinga is the Executive Director of Jade Capital Partners, a 100% women-owned investment company that she co-founded in 2013. She is a qualified CA, and was an investment banker, a Director in Property Finance at Standard Bank, a senior manager in the BEE Finance and Investment Division at Standard Bank, and Corporate Finance Consultant at Investec Bank. She serves as a nonexecutive Director on the Boards of the Hospitality Property Fund, Grindrod Limited and Sasol Inzalo. She is also an exco member of the Property Sector Charter Council, and past Chairperson of the Gauteng chapter of the Women’s Property Network. SOUTH AFRICAN PROPERTY REVIEW

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SAPOA Regional and National Council

National Council

Regional Council

East London East London East London Regional Councillor: East London Regional Councillor: Regional Councillor: Secretariat: Secretariat: Email: Secretariat: Email:

Johan Burger Johan Burger Johan Burger Glynis Heger PROPERTY REVIEW - LogoTreatment.pdf Glynis Heger sapoa.el@sapoa.org.za Glynis Heger sapoa.el@sapoa.org.za

Email:

sapoa.el@sapoa.org.za

Regional Councillor: Secretariat: Secretariat: Email: Secretariat: Email:

Marlon Parring Marlon Parring Marlon Parring Jehan Adams Jehan Adams wc.sapoa@sapoa.org.za Jehan Adams wc.sapoa@sapoa.org.za

Email:

wc.sapoa@sapoa.org.za

Regional Councillor: Secretariat: Secretariat: Email: Secretariat: Email:

James Aling James Aling James Aling Bella Chirwa Bella Chirwa lowveld@sapoa.org.za Bella Chirwa lowveld@sapoa.org.za

Email:

lowveld@sapoa.org.za

Western Cape Western Cape WesternCouncillor: Cape Regional Western Cape Regional Councillor:

Mpumalanga Mpumalanga Regional Councillor: Mpumalanga Mpumalanga Regional Councillor:

● Property Development Awards Committee: Kwa-Zulu Natal Pieter Engelbrecht Kwa-Zulu Natal Regional Councillor: Edwin van Niekerk Kwa-Zulu Natal Growthpoint PropertiesEdwin van Niekerk Regional Councillor:

Regional Councillor: ● Brokers Committee: Secretariat: 2016/08/25 11:31 AM Rene Styber Secretariat: Email: Secretariat: Email: Rosh Pinah Properties

Edwin van Niekerk Helen Seymour Helen Seymour sapoa.kzn@sapoa.org.za Helen Seymour sapoa.kzn@sapoa.org.za

Email:

sapoa.kzn@sapoa.org.za

1

HR, Education, Training & Development Committee: Port●Elizabeth Bernadet Hartley Port Elizabeth Regional Councillor: Mark Bakker Port Elizabeth Eris Property Group (Pty) Ltd Bakker Regional Councillor: Mark

Regional Councillor: Mark Bakker ● National Developers Forum: Secretariat: Caroline Ritson Secretariat: Caroline Ritson Warwick Lord Email: sapoa.pe@sapoa.org.za Secretariat: Caroline Ritson Email: Lords Properties sapoa.pe@sapoa.org.za Email:

sapoa.pe@sapoa.org.za

● National Research Committee: Limpopo Elaine Wilson Limpopo Regional Councillor: Paul Altenroxel Limpopo Property Group Paul Altenroxel RegionalBroll Councillor:

Regional Councillor: Committee: Paul Altenroxel ● Sustainability Secretariat: Zendi Linde Josef Quraishi Secretariat: Zendi Linde Email: sapoa.limpopo@sapoa.org.za Secretariat: Zendi Linde Company Email: Amdec Property Development sapoa.limpopo@sapoa.org.za Email:● Legal Committee:

sapoa.limpopo@sapoa.org.za

Desiree Nafte

Kwa-Zulu Natal Kwa-Zulu Natal Kwa-Zulu Natal Regional Councillor: Kwa-Zulu Natal Regional Councillor:

Hyprop Investments Limited ● Convention Committee:

Regional Councillor: Secretariat: Secretariat: Email: Secretariat: Email:

Edwin van Niekerk Edwin van Niekerk Edwin van Niekerk Helen Seymour Helen Seymour sapoa.kzn@sapoa.org.za Helen Seymour sapoa.kzn@sapoa.org.za

Email:

sapoa.kzn@sapoa.org.za

Metope Investment Managers ● Government Liaison Committee:

Regional Councillor: Secretariat: Secretariat: Email: Secretariat: Email:

Mark Bakker Mark Bakker Mark Bakker Caroline Ritson Caroline Ritson sapoa.pe@sapoa.org.za Caroline Ritson sapoa.pe@sapoa.org.za

Email:

sapoa.pe@sapoa.org.za

Regional Councillor: Secretariat: Secretariat: Email: Secretariat: Email:

Paul Altenroxel Paul Altenroxel Paul Altenroxel Zendi Linde Zendi Linde sapoa.limpopo@sapoa.org.za Zendi Linde sapoa.limpopo@sapoa.org.za

Email:

sapoa.limpopo@sapoa.org.za

Port Elizabeth Port Elizabeth Port Elizabeth Regional Councillor: Port Elizabeth Regional Councillor:

Limpopo Limpopo Regional Councillor: Limpopo LimpopoCouncillor: Regional

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David Green ProAfrica Properties Services ● REIT Committee: Lilian Barnard

Dr Sedise Moseneke Vukile Property Fund ● Property and Facilities Management: Nicole Baumgarten Broll Property Group ● Method of Measuring Floor Areas (MOMFA): Sean Liebenberg Excellerate Design and Projects ● Property Charter Alignment Committee: Musa Ngcobo Thelma Ngcobo & Associates


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Creating Concrete Possibilities

2017/04/11 2:55 PM


industry news

industry news Debunking the rate-per-square-metre cost myth

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“cost per square metre� rate is a method of expressing building costs that should be used with extreme caution by clients and contractors involved in the comparison and planning process, says former President of the Association of South African Quantity Surveyors Bert van den Heever. There are design variables that can adversely influence squaremetre rates, giving a false impression of the cost of a building project. “You will not compare a Porsche to a VW on the basis of their cost per square metre, so why try to do it with buildings?� says Van den Heever. “A generic cost per square metre rate doesn’t give you the detailed information you need regarding finishes, fittings, services, site development costs, etc. Quantity surveyors usually do elemental estimates to derive the square metre cost of a

project. An elemental estimate provides build-ups for elements such as the substructure, ground floor, external façade, etc, and enables the quantity surveyor to advise the client on aspects of cost at a very early stage.â€? A square-metre rate is calculated by dividing the net cost of the building (excluding site works, cost of land, etc) by the gross square metres of the building or gross floor area (GFA). GFA can be defined as the total floor area inside the building envelope, including the external walls and excluding the roof. “As a general rule, the simpler the shape of a building, the lower the unit cost will be – but even this can be misleading,â€? says Van den Heever. “More intricate designs generally result in higher perimeter/floor area ratios, increasing excavation costs, drainage costs and a number of other constructionrelated costs significantly.â€?



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industry news

industry news

Builders expands Waterfall distribution facility

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ttacq announced an agreement with Builders to expand their distribution facility at Waterfall Distribution Campus. The Builders Distribution Centre in Gauteng services all four of the Builders store formats – Builders Warehouse, Builders Express, Builders Trade Depot and Builders Super Store. The Distribution Centre services Builders’ stores in the greater Gauteng area, as well as Mpumalanga, Limpopo, North West, Bloemfontein, Botswana, Mozambique and Zambia. “The Waterfall location was identified as the centre of gravity for this distribution area, as well as the easy access to main roads in all directions,” says Diane Hoffman, Massbuild Supply Chain Director. “Attacq is delighted to welcome the Builders expansion to Waterfall,” says Attacq Chief Executive Officer Morné Wilken. “We are pleased that Builders’ supply chain operations are already realising real business benefits from being in Waterfall’s Logistics Hub.”The existing

38 000m² facility will be expanded by 9 618m². Construction has already commenced and is expected to be completed by January 2018. The location of the Distribution Centre provides a strategic advantage in servicing the region, as it is within five kilometres of the main regional arterial access routes (the N1, M1 and N3 highways) and 32km from OR Tambo International Airport. “The business benefits of having a distribution centre situated in Waterfall Logistics Hub not only includes giving companies the ability to achieve economies of scale, but the location is also easily accessible to company staff from all areas, while the strategic positioning creates an excellent opportunity for businesses to maximise brand exposure,” explains Pete Mackenzie, Head of Development at Attacq. “It is one of South Africa’s largest mixed-use developments, which is attracting top international companies such as Builders.”

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obituary

Robin Vorster 3 August 1935 – 7 July 2017 Robin Vorster, SAPOA Past President 1988/1989, passed away in Cape Town on 7 July. Our deepest condolences go out to his family, friends and colleagues

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quantity surveyor by profession, Robin Vorster joined the prominent architect Helmut Stauch in 1958. He very quickly became a junior partner, responsible for business and organisational aspects of the practice. In 1963, he became joint senior partner, and when Stauch passed away in 1970, Vorster became the senior partner. This event placed a 35-year-old quantity surveyor at the helm of one of the most prominent architectural practices in South Africa. This was unprecedented but provided a unique recipe for success. Vorster’s leadership over the years saw Stauch Vorster Architects become a major player in the South African property development arena, with (at one point) a staff complement of 400 people of 19 different nationalities, operating out of 12 offices in South Africa. The practice also undertook projects on the African continent. The publication World Architecture placed Stauch Vorster as the largest practice on the African continent in its annual surveys of professional firms of 1999 and 2000. The property development boom that hit the South African property industry in the 1960s – which originated in large part from life insurance companies’ need to develop income-producing properties – was capitalised on through Vorster’s sound understanding of the financial aspects and his connections in the property investment arena, as well as the first-class, well-oiled designdelivery team.

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New and faster ways of building were explored; fast-track construction, with complex relationships between owner, professionals and contractors, was developed; sophisticated ways of recording design briefs and specification writing became the order of the day in the practice. Pioneering projects such as Cavendish Square in Cape Town, Greenacres in Port Elizabeth and numerous similar retail and office complexes were designed throughout South Africa by the practice in the ensuing years. The practice developed an operational manual that was later to become a manual distributed nationally by the South African Institute of Architects to its members, and assisted in the development of well-run professional firms in support of the property development industry. Vorster gave generously of his time to the organised property industry. He served as chairman and participant on various SAPOA committees continuously from 1968 (when SAPOA opened its doors to enable professional consultants to become members) to 2000. He served as SAPOA’s 13th President in 1988, and 1989 and lectured at the UCT Graduate School of Business in the Property Economics winter school. Vorster retired from professional life on 20 June 2001. His contribution to his architectural practice, the organised property industry and society as a whole over the 41 years of his career has been exceptional. Thanks to Pieter Bakker for this tribute.


industry news

Africa Property & Construction

Cost Guide 2017 is out now.

For digital or hard copies please email dikeledi.mahlangu@aecom.com. aecom.com

@aecom

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education, training & development

How to support the transformational agenda in the property sector through skills development, education and training The transformation agenda for the property sector is essential to ensure that more entrants are afforded an opportunity to participate in the property sector. Education and training still play a pivotal role in the transformational agenda of the country. According to the research conducted by the Property Charter on the challenges facing the property sector, it is reported that there is little investment in skills development and limited commitment to workplace training By Portia Mkhabela

I

n order to address this outcome, the Property Charter – through it strategic partners and supported by the Services SETA – will be hosting a skills seminar in August 2017, in lieu of developing a paper aligned to the skills development within the property sector. The seminar will address the following matters: ● How the sector can drive skills development as a sector vs individual effort; ● How we can create demand for a future pool of learners to study property construction as a career option, with the aim of having additional tertiary institutions with dedicated faculties in property and construction; ● How to ensure that relevant roleplayers engage on the future of skills development in the property sector, i.e. large and small businesses, academia in tertiary institutions, facilitators, learners, beneficiaries, government, etc; ● Curriculum incorporation of developing current and future trends; ● Development solution and intervention plans from the seminar to drive the programme. SAPOA will participate in the seminar, both as a supporting organising member and a panel member, in sharing best practice in the management of a bursary scheme that has been successful in the integration of tertiary education and the world of work transition. This also includes good governance and a well thought-out standard operating procedure to complement the mandate of the scheme.

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The seminar will focus on establishing workable solutions in partnership with universities, SETAs, the private sector and the training providers. In support of the transformational agenda, SAPOA participated in the Property Charter career exhibition event, which was hosted from 3 to 5 July 2017 at KwaShukela (SASA) Convention Centre, Mount Edgecombe, in KwaZulu-Natal.

customer satisfaction and best value. This course thus has twofold aims: to enable participants to develop an understanding of the theory, principles and practice of facilities management by showing how facilities management should be performed, and to support the core business of the client organisation, primarily building owners.

Upcoming SAPOA training programmes: KwaZulu-Natal Facilities Management Workshop

The course will primarily benefit property practitioners who do not have property degrees, past graduates of SAPOA programmes in different aspects of the real estate business, and people from different disciplinary backgrounds considering entering the profession. If you have a National Diploma and would like to enrol in our postgraduate diploma programme, we would require you to pass these short courses as a condition for acceptance.

In response to clients’ requests (and ensuring that education responds to requirements), SAPOA, in collaboration with the Real Estate faculty of Wits University will be presenting a Facilities Management Workshop in KZN for SAPOA members and non-members.

Objectives This short course has been developed to provide a higher level training for participants who have been introduced to the real estate discipline at NQF 4 and NQF 5 levels. The goal is to provide higher-level, more targeted training, focused on some of the fundamentals that enable performance in key business areas.

Course content Facilities management can be summarised as the creation and maintenance of an environment that supports an organisation’s primary operations, taking an integrated view of the services infrastructure, and using this to deliver

Who should attend?

The workshop will take place from 21 to 25 August 2017 at the Mount Edgecombe Country Club Estate in Durban. All delegates interested in attending can visit Wits-enterprise.co.za/c/facilitiesmanagement-kzn or contact Helen Seymour on sapoa.kzn@sapoa.org.za. Contact: Portia Mkhabela, Education & Training Manager at SAPOA t: +27 (0)11 883 0679 e: education.manager@sapoa.org.za


HR Advert to come

SOUTH AFRICAN PROPERTY REVIEW

17


legal update

Proposed amendments to the outdoor advertising by-laws of the City of Johannesburg and the City of Cape Town The City of Johannesburg published its outdoor advertising by-laws for comment in June, and the City of Cape published its outdoor advertising by-laws for comment in April. SAPOA believes that signage and advertising play a vital role in the property development process, and it is essential that properties obtain as much exposure as possible without detracting from the scenic cityscape that Cape Town offers. We believe that if advertising and signage are implemented in a responsible manner, it will not only be to the benefit of the property development industry but also the regional economy of which the property development industry is a fundamental part. We highlight a few pertinent issues By Mumtaz Moola

City of Johannesburg Draft Outdoor Advertising By-Laws Definitions: it is important that amendments to definitions be done in order to clarify the provision. “Advertising precinct”: Currently no indication is given as to where these designated precincts are. As no precincts have yet been designated nor have been commented upon by interested and affected parties, this can only lead – until such time as these precincts have been identified – to a highly subjective approach when it comes to the adjudication process of outdoor advertising signs. We are therefore of the opinion that this proviso in the by-laws should be omitted until such precincts have been identified and have followed a public consultative process as required. “Motorway: The definition should be extended to include means a public road or a section of a public road which has been designated as a motorway/freeway by an appropriate road traffic sign in terms of applicable legislation, and freeway shall have corresponding meanings attached thereto. “Public place”: A clear distinction has to be made in accordance with the town planning scheme between private open space and public open space. Private open space is defined as follows: “means land zoned private open space, with or without access control and which can be used as a private ground for sports, play, rest and recreation, or as an ornamental garden; pleasure ground; golf course; or for buildings reasonably required in connection with such uses.”

Chapter 2 Section 3(9): If any information requested by the city in terms of clause (q) of Schedule 1 is not provided within 60 days from the date of the first written request, or within such further period as the city may in writing permit, the application concerned shall automatically

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lapse without further notice. We recommend that this period should remain at 90 days as per the present by-laws. Comments from other parties (i.e. SANRAL or GAUTRANS) often take a considerable period of time to obtain. Section 4(1): In considering an application submitted in terms of Section 3(3), the city must, in addition to Schedule 2 or an Outdoor Signage Management Framework as approved by the city and any other relevant factor, legislation, policy, and by-laws of the city, have due regard to the following: (b) Whether the proposed advertising sign will – (ii) constitute a danger to any person or property or to motorists or pedestrians or obstruct vehicular or pedestrian traffic or constitute a traffic hazard in general The words “traffic hazard in general” are vague and non-descriptive, and should be deleted. The by-law makes adequate provision as to where signs may be positioned, levels of illumination, and that such sign will not obscure the visibility of a traffic sign. Also, Section 5(1)(b) makes provision that an approval may be withdrawn if the advertising sign concerned constitutes a danger to any person or property. This will automatically include motorists as well. Section 4(2)(a): The city may refuse any application submitted in terms of Section 3(3) or approve it, subject to any amendment or condition the city deems appropriate which may include a condition, subject to Section 14(3)(b) and if the approval is in relation to a third-party advertising sign and on private property, that an annual/monthly contribution be paid by the owner of the property as determined by the city for benefiting from the exposure a public road/street provides. The inclusion of the provision that a monthly/annual levy be paid to the city by a private property owner if a third-party advertising sign is erected on such property. Private property owners are already obliged to pay rates and taxes to the council, and the

inclusion of such provision is no more than an additional rate and tax imposed on such landlord. Commercial property owners are already burdened with a higher tariff in terms of the zoning provisions, and the imposition of a further tariff fee is tantamount to a tax rather than a tariff. In the event that the city would want to introduce such rates, there must be adherence to the Municipal Property Rates Act, namely that the local community must be consulted regarding the proposed boundaries of the area, and that an indication of how the area will be improved or upgraded by funds derived by the additional area must be given (among others). Section 4(2)(b): Any approval in terms of Subsection (a) above may be for a period as determined by the city. The costs involved in the erection of an outdoor advertising sign are substantial. This provision is also a new provision that was not contained in any previous by-laws in relation to advertising signs and is aimed at targeting private property owners with more cumbersome fiscal provisions. Owners of land in general, as per the definition of the by-laws, effectively mean private property owners. Section 4 (5): The provisions of this section determine that the owner of the property is not exempted from the duty to ensure that an advertising sign is designed, erected, completed, displayed and maintained in accordance with the provisions of these bylaws and any other applicable law. Previously this burden was only applicable to the owner of the advertising sign. The same applies to Section 6 (1). Section 4 (7): If an advertising sign approved in terms of Subsection (2)(a) above is not completely erected within six months from the date of notification of such approval or within a time specified in such approval or any further period which the city on good cause shown allows in writing, the approval


legal update shall automatically lapse, whereafter a new application must be submitted in terms of Section 3(3) above. The provision as proposed provides an arbitrary administrative discretion that can specify a time period of such short nature, it makes it impossible to comply therewith. If the provision is kept as is, this will mean the applicant will need to apply for an extension period which can be refused by council. It is therefore proposed that the words or within a time specified in such approval be deleted. Section 4(9): After the erection of an approved advertising sign, the applicant shall provide the city with a completion certificate by a registered engineer within two days of the date of such erection. This is an unrealistic time period, as such a certificate is to be issued by the registered competent person who, in most instances, if not all, is not employed full-time by the media owner or the property owner. A more realistic and fair time period should be 14 days. Section 4(10): Any application for renewal shall be submitted to the city for consideration in terms of Section 3(3) five months prior to the expiry of such an approved advertising sign. Section 4(2)(b) provides the city with the power of approving an advertising period for any time period it deems appropriate. This means it could be for less than five months, which in practice means that an applicant wanting to renew its sign approval is immediately in contravention of Section 4 (10).

Chapter 3 Section 6(2) provides that any advertising sign on a public road/street or facing a public road/street must comply with the following requirements: (a) except for street light pole and on-premises advertising signs, a minimum distance of 100m must be maintained between approved advertising signs or adverts on the same side of a public road/street or on private property, provided that the city may require a minimum distance exceeding 100m if it considers it necessary in the interest of road safety. Section 6(3) provides that any advertising sign on a public road/street or facing a public road/street controlled by road traffic signs or signals must in addition to any other requirement in terms of this by-law or any other applicable law, comply with the following requirements:

(a) No advertising sign may obscure or interfere with any road traffic sign or create a traffic hazard; (b) Any advertising sign must be clear of any road traffic signs concerned and must be positioned in compliance with the following: (i) no free-standing on-premises advertising sign greater than 8m² in extent shall be allowed within 100m of the nearest road traffic sign or signal at an intersection; (ii) no street furniture used for advertising or a sign containing the name of a suburb and an advertisement at an intersection may be within 5m of any road traffic sign; (iii) except for temporary construction site advertising signs and street furniture advertising signs, targeting the same critical traffic direction, no other freestanding third-party advertising sign may be positioned within 100m of the nearest road traffic sign or signal at an intersection where the speed limit on such road does not exceed 60km/h. On roads where the speed limit exceeds 60km/h, the distance referred to herein shall increase to 100m. We are of the opinion that the restriction referred to in Section 6(3)(iii) should: (i) Be limited to free-standing third-party signs only and; (ii) A distinction needs to be made regarding the distance requirement in relation to the speed limit applicable to such road. (iii) The distances referred to shall only apply to those signs facing the same traffic direction as the road traffic sign.

Power cables and conduits to signs Section 7(2): No advertising sign may be connected to any electricity supply without the prior written permission of the electricity supply authority concerned. Such permission must, on request by an authorised official, be presented to him or her by the owner of the advertising sign concerned. It is unclear why this is a pre-requisite, especially for signs located on private property where such electrical installation is done by a duly registered electrician.

Prohibited signs Section 9(u): In the middle or on the median island of a motorway marked as such, whether provincial, national or local and it includes street-pole advertising signs but excludes gantry signs on motorways vesting in councillor gantry signs approved by provincial roads or along national roads.

Chapter 4 Provisions relating to specific advertising signs Other temporary advertising signs; Section 23(2) provides that the city may approve temporary advertising on property owned by, vested in or controlled by it of any approved size for a period not exceeding 120 days. This section is currently unclear and could lead to misinterpretation. It is suggested that the time period be extended to make it possible to erect a temporary sign for a period not longer than six months. Section 28(1)(a): The owner of the property and the owner of the advertising sign are responsible for maintaining an advertising sign and the surrounding area so it does not become unsightly or deteriorate to such a degree that it is in conflict with any provision of this by-law. The practical implementation of this provision is questioned. For example, is the council (as property owner) on whose property various signs are erected accepting responsibility for sign maintenance along with the sign owner? This imposes a similar burden regarding the maintenance of the advertising sign and the consequences of the lack of maintenance which inter alia will include an additional cost burden for the property owner. Section 28(2): If, in the opinion of an authorised official, any advertising sign has been allowed to fall into disrepair or is in conflict with any provision of this By-law, such authorised official shall serve a notice on the owner of such sign and the owner of the property requiring him or her, at his or her own cost, to remove the advertising sign or take other steps relating to the maintenance specified in the notice, within a period so specified, failing which, such authorised official may take such steps necessary to remove such advertising sign, which shall include the removal of such sign without a court order if the sign has been erected on city-owned property, on property that vests in the city in terms of any applicable legislation or on any public place. The powers afforded to council in italics above pertain to the legal principle of “selfhelp” which is prohibited by law. Section (4): Notwithstanding the powers vested in Subsection (2) above and after failure by the owners to comply with the notice envisaged in Subsection (2) above, if an advertising sign is in contravention of any provision of this bylaw, the sign will be deemed illegal, and an authorised official may mark the advertising sign as illegal by pasting the words “illegal sign” over the entire advertisement, rendering the advertisement null and void. SOUTH AFRICAN PROPERTY REVIEW

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legal update Section (5)(a): If at any time, no advertisement is displayed on an advertising hoarding, the city may serve a written notice on the owner of that hoarding requiring him or her at his or her own cost, to display an advertisement on that hoarding within a period so specified or to display a community message specified by the City, until that owner displays an advertisement on the hoarding concerned. (b) The approval for an advertising hoarding in terms of this by-law lapses if the owner on whom a notice has been served in terms of Paragraph (a) fails to comply with the requirements of the notice within the period specified therein. We believe such discretionary power to be contrary to the provisions in the Promotion of Administrative Justice Act, and therefore illegal. The right to be heard and the right to make representation is now well established in law. Also, no time periods to respond to notices issued to an owner are stipulated. Time periods are usually stipulated either in an Act itself or by way of the regulations issued in terms of the Act. We therefore suggest that time periods be stipulated and that such time periods be: i Fair and reasonable to comply with; ii Provide the owner of such sign an opportunity to make representations to council as to why the notice issued should not be enforced.

Termination of approvals granted under previous by-laws or other applicable legislation Section 33: If an approval for an advertising sign was granted in terms of the by-law repealed by Section 39 or in terms of any previous by-laws or other legislation that might have been applicable to outdoor advertising without specifying a period for the duration of that approval, the city may determine a date on which such approval will lapse. (1) Subject to compliance with the Promotion of Administrative Justice Act No. 3 of 2000, the city may determine a date contemplated in Subsection (1) and notify the owner of the advertising sign concerned of its decision, and that he or she may apply for the approval of such sign in terms of Section 3(3) of this by-law. (2) If the owner of an advertising sign fails to submit an application in terms of Section 3(3) of this by-law within 60 days of the date of being notified of the date as determined under Subsection (1), the advertising sign concerned shall be considered to be erected and/or displayed without any approval and

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shall be deemed illegal and contrary to the provisions of this by-law. The provision contained in Section 33 does not allow the owner to first engage council prior to council wanting to invoke the provisions contained in this section.

Appeals Section 36(1): Any interested party whose rights are affected by a decision by an authorised official in terms of or for the purposes of this by-law, may appeal against that decision to the city Manager or his nominee(s), by lodging a written notice of appeal, specifying the grounds of the appeal, within 21 days of the date on which he or she was notified of that decision as per Section 4(3) above. The City Council in terms of the current regulatory system is already conflicted in that it is player and referee in the outdoor advertising sign industry – an intolerable situation we object to. The city is the owner of vast tracts of road reserve which are ideal for the display of advertisements. In this regard, the city council is a direct competitor with private property owners on that same road. In terms of the current regulatory system, the city council is the decision-maker on the approval of such advertising signs. The introduction of this draft by-law is the ideal opportunity to consider that the city must divest itself of one of the two regulatory functions.

Offences and penalties Section 37(1) and (2): shall be guilty of an offence and – (i) upon conviction, be liable to a fine or imprisonment not exceeding 20 years, or to both a fine and such imprisonment, and the fine shall be calculated according to the ratio determined for such imprisonment in terms of the Adjustment of Fines Act; and (ii) a person convicted of an offence under this by-law who, after conviction, continues with the action in respect of which he or she was so convicted, is guilty of a continuing offence and liable to a fine or, upon conviction, to imprisonment for a period not exceeding three months, or to both such fine and imprisonment, in respect of each day on which he or she so continues or has continued with that act or omission. (2) Nothing in Subsection (1) above shall be construed to prevent the city from imposing, in addition to the civil and criminal options available, a rates penalty as per the city’s approved

Rates Policy against an owner of a property who is in contravention of any provision of this by-law. The new penalty and contravention provisions as per the draft by-law are severe, and existing sign owners can immediately find themselves criminally liable. It is therefore suggested that council gives consideration to the insertion of a sunset clause in the by-law, which will provide existing sign owners with adequate opportunity to comply with the by-laws.

City of Cape Town draft outdoor advertising by-laws Development boards require proof of site/ building plan approval: This is often not possible, as the developer may require “buy in” at a launch process in order to ensure the development proceeds, and this will need to be done prior to building approvals being achieved.

Chapter 4 Deemed approval Residential development boards can only be 3m2 in total size: This is impractical for large-scale land developments where the average passing traffic speed is 120km/h and the distance allowed from the road is 18m. We propose a maximum size of 6m2 for new land developments. Property marketing signs are limited to 0,3m2 in total and must be erected flush against a wall or fence: This size is clearly not achievable for commercial/industrial properties where the exposure needs to reach vehicular traffic, and is often positioned above street/height level. Temporary Locality – Board Property Marketing Signs may not be larger than 0,3m2: Proposed change to 3m2 as per above, as the size requires exposure on commercial and industrial property that needs to reach vehicular traffic, and is often positioned above street/height level.

Chapter 2 Objects and application of the by-law Application of the by-law and conflict of laws The city may, from time to time, issue guidelines to aid in the application and interpretation of this by-law or any aspect thereof. This provision allows the city to exercise a discretionary power to issue additional guidelines without a public participation process, which could be to the detriment of an applicant. This is


legal update notwithstanding the fact that the applicant could have complied with the by-law provisions pertaining to that class of sign. It is proposed this clause be deleted as the by-laws read along with the policy should form the basis as to how the by-law should be interpreted and applied.

Chapter 3 Application for approval 4(2)(e): If signs are not visible from a public place, including signs displayed inside an enclosed stadium or shopping centre. We don’t believe it is the intention of the lawmaker that signs inside an airport, train or bus station need to be applied for. This should have the same exemption as signs inside a shopping centre, although it could be regarded as being a “public place”. Application for approval (vi) provides that if the applicant is not the registered owner of the property or properties on which the sign will be erected, power of attorney from such owner or owners must be obtained. (ix) In the case of signs by or on behalf of non-profit bodies, documentary proof from the host non-profit body of the nature and extent of the benefit to be received from the erection and display of the sign. It is unclear as to why this information is required by council. The relationship between the applicant and the specific non-profit body can be of a contractual nature. Is council thus going to be an adjudicator to determine whether the nature and extent of the benefit is appropriate or not? We are of the opinion that the purpose of the by-law is to determine whether an advertising sign is appropriate to be erected and displayed on a specific site or not. The purpose of the by-law can hardly be seen to interfere in the contractual relationship that may be in existence between parties The provisions contained in 5(1) and (c) are mandatory, and require a considerable amount of money to comply with. We are of the opinion that, in some instances, council can be lenient in requesting what information is required.

7 Application registration (6) Acceptance of an application as complete does not oblige the city to approve it.

11 Processing and consideration of applications, decision and conditions in case of approval (6) The city may, at any time, after notice to the owner or original applicant (or holder of

an approval), withdraw an approval granted in terms of this by-law or its predecessor, amend any condition or impose a further condition in respect of such approval, where a sign or signage structure – (c) no longer complies with any provision of this by-law (including as a result of infrastructure changes made by the city). Furthermore, the inclusion of the wording “infrastructure changes made by the city” is undefined and unclear, and provides the city (in effect) with any reason to withdraw an approval. A considerable capital expenditure is involved in the erection of a sign, and the provisions of this clause stand to impose considerable financial harm on a sign owner. In effect, the provision of this clause implies that even if an applicant is granted a five-year approval in terms of the new proposed by-law, such approval can be withdrawn at any stage. This clearly questions the relevancy of granting a five-year approval, as the holder of a five-year approval has, in effect, no five-year right, because it can be withdrawn or amended at any time. 11(d) Where any sign becomes torn or damaged or otherwise falls into a state of disrepair, the owner of the sign structure, the media owner, the applicant to whom the approval was granted and the owner of the fixture or property on which or to which a sign is attached, must within seven working days of a notice to do so, repair it. Extension of the aforesaid period can be granted by council on good cause shown, and such request has been submitted to council in writing within the stated seven-day period. 11(h) Where a proposed sign is larger than 54m², the city may impose a condition restricting the number of bits in the advertisement graphic, in which case such sign content must remain fixed for the period of display of such sign. Any proposed changes to its content or graphics must be submitted for approval as a new application in terms of Section 4 of this by-law not later than 14 days prior to the proposed display of the new graphics. Graphics may not be altered without attainment of the city’s approval. Any intended changes to the graphics must be submitted for approval as a new application in terms of Section 4 of this by-law.

be delegated to the official(s) who refused the application. Furthermore, the appellant should have the right to be present at such hearing to make further representations if necessary. Further, a time frame for the conclusion of all appeals must be given in order for there to be certainty and accountability.

Chapter 3 General requirements 6. Designated areas The city may from time to time determine designated areas within which variances from the provisions of this by-law will be allowed as specified by the city. It is important that the city provides a list of designated areas

Schedule 3 Provisions relating to specific sign types 2 Billboards (2) If the erf where the billboard is to erected borders on a designated public road and: (a) if the buildings on that erf are more than 50m from the road reserve boundary, the billboard may not be placed less than 50m from the road reserve boundary, which distance is to be calculated at 90° to the nearest point of the road reserve; (b) if the buildings on the erf or on adjacent erven are less than 50m from the road reserve, the billboard may be placed at a distance no less than the alignment of the street-facing public façades of those buildings on the erf or adjacent erven, provided that [the provisions contained in (2)(a) and (2(b) above can be waived upon] an assessment of the environmental and traffic impact conducted by an appropriately qualified independent practitioner to the city’s satisfaction indicates no detrimental impact. The above provisions are highly restrictive, and will limit third-party advertising opportunities to such an extent that very few billboards can be erected. We are therefore of the opinion that the words indicated in brackets above should be inserted. (4) Billboards must:

14 Appeal

(d) have a minimum letter or number height of 285mm.

(2) The appeal authority for the purposes of any appeal in terms of this by-law is the City Manager, who may delegate the responsibility to any official. This implies that the appeal can

(5) The total bits in a proposed advertisement, calculated in accordance with the table set out in Schedule 2 hereto, may not exceed 15. SOUTH AFRICAN PROPERTY REVIEW

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legal update

The ownership element “aims to address the low levels of black ownership” in the sector, and has set a black ownership target of at least 27% to be achieved for each propertyowning company

The amended B-BBEE Property Sector Code Entities of a certain size are considered to be exempted microenterprises and thus deemed to be B-BBEE compliant as a Level 4 contributor (100%). These are entities or persons with an annual turnover of less than R10-million (if services-based), or with a net asset value of less than R80-million (if asset-based), or estate agencies, brokers or valuators with an annual turnover of less than R2,5-million

By Adam Ismail, a partner at Webber Wentzel

T

A measured entity must achieve a minimum of 40% in all three priority elements, namely net value on the ownership scorecard, skills development, and enterprise and supplier development. This was not a requirement of the 2012 Property Sector Code 22

SOUTH AFRICAN PROPERTY REVIEW

he 2017 Property Sector Code replaces the B-BBEE Property Sector Code, which was published by the DTI on 1 June 2012 (2012 Property Sector Code). The following are some key observations in relation to the 2017 Property Sector Code: ● The ownership element “aims to address the low levels of black ownership” in the sector, and has set a black ownership target of at least 27% to be achieved for each property-owning company. It also includes specific targets for ownership by black women, broad-based groups and black new entrants in order to score the maximum points possible for ownership. ● The 2017 Property Sector Code has created a “normalisation formula” to address the dilution of B-BBEE shareholders in property listed companies because of frequent capital raisings that the industry sees. There is a formula that counteracts this dilution in order to ensure that there is no material prejudice to property companies in the listed environment due to the dilution of its black shareholding over time.

● The generic scorecard in the 2017 Property Sector Code differs in relation to the allocation of points on the scorecard from the 2012 Property Sector Code. A measured entity must achieve a minimum of 40% in all three priority elements, namely net value on the ownership scorecard, skills development, and enterprise and supplier development. This was not a requirement of the 2012 Property Sector Code. Noncompliance with any one of these priority thresholds will result in the measured entity’s B-BBEE status level being discounted by one level down. With regards to non-compliance, measured entities must obtain at least 40 points under the 2017 Property Sector Code in order to be B-BBEE compliant, as opposed to the minimum of 30 points in terms of the 2012 Property Sector Code. The 2017 Property Sector Code has been updated in a manner consistent with the principles in the Amended Generic B-BBEE Codes, which came into effect on 1 May 2015.

2017 Property Sector Code

2012 Property Sector Code

Ownership

Code 100

30 points

Code 100

20 points

Management control

Code 200A

9 points

Code 200

10 points

Employment equity

Code 200B

13 points

Code 300

15 points

Skills development

Code 300

19 points

Code 400

15 points

Preferential procurement

-

-

Code 500

20 points

Enterprise supplier development

Code 400

39 points

Code 600

10 points

Socioeconomic development

Code 500

2 points

Code 700

15 points

Economic development

Code 600

5 points

-

15 points


legal update

Paying for public infrastructure through property values By Sean Dayton and Ntokozo Majola, Associates at Bowman Gilfillan

With the South African economy slowing in recent years, National Treasury is increasingly requiring municipalities to take greater responsibility for capital raising. While theoretically local government could increase its revenues by raising the property tax rate, with the South African public feeling more and more stretched, this is treacherous terrain for political leaders. Moreover, as far as financing specific infrastructure projects is concerned, the “user pays” principle demands a closer link between expenditure and revenue, in that only those residents who actually benefit from a particular public investment should be the ones paying for it

S

outh African cities are not unique in dealing with the increasing need for self-reliance – cities around the world have been experimenting with innovative financing models to fund public infrastructure expenditure. At the heart of many of these models is the basic premise that investment in public infrastructure is, more often than not, able to dramatically increase market value of properties in the immediate vicinity of the investment – and if government is to invest in an area, it is only fair that it should be able to mobilise, for the benefit of the community at large, at least a portion of the unearned increase in value enjoyed by property owners in the area as a result of that investment. This is the fundamental proposition for “land value capture” (LVC) techniques in general. One LVC technique gaining attention in South Africa is tax increment financing (TIF), a funding model whereby a municipality or municipal agency borrows by using, as collateral, the future incremental property tax revenue generated through increased property values within a specific geographical area. The incremental revenue (“tax increment”) is that portion of the property tax generated from a property that’s directly attributed to the increase in property value caused by the investment in infrastructure in the precinct. Institutions such as the UCT Nedbank Urban Real Estate Research Unit are carrying out research into implementing TIF in South Africa. Some South African municipalities, which are having increasing difficulty borrowing as a result of already-high levels of debt relative to earnings, have shown an interest in TIF financing because of its perceived ability to take debt “off-balance-sheet” by making use of a special purpose vehicle (SPV) to raise the capital needed for a particular infrastructure

project. The SPV would issue bonds, or borrow directly from financial institutions, and repay the debt using the incremental property taxes attributed to properties in a designated TIF district. In this way, any liabilities would be considered liabilities on the SPV’s balance sheet, rather than on that of the municipality, with limited or no recourse by creditors back to the municipality.

One LVC technique gaining attention in South Africa is tax increment financing (TIF), a funding model whereby a municipality or municipal agency borrows by using, as collateral, the future incremental property tax revenue generated through increased property values within a specific geographical area The City of Johannesburg, with assistance from National Treasury, has recently identified a project in Dunkeld for possible TIF financing. The project involves the much-needed upgrading of electricity infrastructure in the area in order to unlock capacity for further development in the precinct, which, experts say, will enable greater densities and increase property values in the area significantly.

By exploring tax increment financing, the City of Johannesburg wants to troubleshoot a financing tool that could go a long way in helping our cities achieve their infrastructure goals while also benefiting land owners through increased property values. Not only can the model be used to fund anything from bulk infrastructure to public transport, beautification projects and nonmotorised transit (NMT) lanes but, if modified slightly, large property owners such as Tongaat Hulett in KwaZulu-Natal could also conceivably use the technique to raise upfront capital needed to develop large greenfield sites. Implementing TIF is, however, not without its difficulties, and significant legal challenges exist that make implementing it difficult in a South African context. Our regulatory framework does not neatly provide for the transfer of property tax revenues “off-balancesheet” to an SPV, and our common law makes it difficult for a municipality to transfer its rights to the tax increment only (while retaining “base” revenues), as this would constitute a splitting of claims requiring consent of the landowner. Additionally, there are questions as to how to transfer “rights” that have not yet come into being (especially in the context of successive owners-in-title). Yet despite these challenges, TIF and land value capture techniques in general offer a massive opportunity for local government in South Africa to finance infrastructure through property values. One need only look at the enormous increases in property values around Gautrain stations to realise the significant potential for South African cities to sustainably fund their infrastructure spend in future through capturing (at least some of ) that value. SOUTH AFRICAN PROPERTY REVIEW

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Convention round-up

SAPOA Convention 2017:

the good, the bad and the disruptive The drum roll as the 2017 SAPOA Convention got under way was undoubtedly louder than in previous years – and at times it wasn’t clear whether it signalled a red-carpet appearance or a war of words. With layer upon layer of political and economic confusion blurring the South African landscape, no surprise that drums were beaten long, loud and well into the Cape Town night, as the property sector wrestled with itself and others Written by Anne Schauffer

T

he 2017 SAPOA Convention teed off on 15 April and, as always, was an electric balancing act between networking and interaction with other SAPOA members, and a raft of absorbing, eloquent, often hard-hitting speakers on a range of tough and telling topics. Property is always about people, and in South Africa right now, personalities and politics loomed large on the agenda because it’s the current nature of our beast.

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At times, the Convention threw up many more questions than answers, and no matter what else was liked, loathed or learnt during the week, very few delegates could have left Cape Town without a healthy dose of self- or sector examination. Master of Ceremonies Eusebius McKaiser was, as always, enjoyably articulate, confrontational, irreverent, and supremely accomplished at prodding and probing

whenever necessary. A political analyst, broadcaster, lecturer and author, McKaiser steered the Convention through some provocative and disruptive speakers, controversial panel discussions and fastidious housekeeping rituals. A Convention of this magnitude will always be dependent on the generosity of sponsors. This year, a massive thanks went out to the GladAfrica Group as the principal sponsor,


Convention round-up

with the City of Cape Town as a supporting sponsor, Tongaat Hulett for the convention dinner, and Cushman & Wakefield Excellerate for the SAPOA Journalism Awards. In addition, thanks go to Nedbank CIB for the Delegate Booklet and mobile app, Remote Metering Solutions for the Wi-Fi, PEC Utility Management for the Master of Ceremonies, Standard Bank as a supporting sponsor, AECOM for the golf halfway house, The Creative Axis as a supporting sponsor, Akweni for the bottled water and vida e caffe' for the coffee stations.

Disruption That was the theme of the SAPOA Convention, and although the predictability of the theme elicited much dry and wry commentary, by the close of the conference, “disruption” couldn’t have been more appropriate. It evolved into a hard-hitting, often uncomfortable concept for many of those assembled, in ways few imagined it would or could.

Relishing the theme was Executive Chairman of GladAfrica Group, Noel Mashaba, who took to the microphone to confirm the Group’s three-year sponsorship. “As a black wholly owned South African-bred company with keen interest in transformation, growth and development, GladAfrica is best placed to contribute to change within the broader property market,” he said. “I believe everybody seated here has already seen disruption in the property market. Disruption usually breaks open an industry and exposes opportunities for new, smaller players to compete effectively against larger, more established rivals. Given its size and importance, disruption in the property sector could be a good thing when it comes to the challenges the South African economy is facing today. I am a firm believer that transformation will be realised when Africans have developed ideas that the market now depends on. I am not a believer that any company that comes from the US or Europe will resolve South African problems. African problems require African solutions.”

Deputy Mayor of the City of Cape Town, Alderman Ian Nielson, welcomed delegates to the city. Nielson shared the challenges that Cape Town faces, in particular the crucial water shortage, and examined how the city was reactive to the crises. McKaiser introduced then outgoing president, Nomzamo Radebe, CEO of JHI Group. One day, we will truly be liberated when we don’t have to reference her as such – but it is a milestone, an important one, and her journey has been amazing.” Radebe summed up the volume of work achieved by SAPOA during the year; it was no small load. In addition, she noted that the survey conducted with members to determine how SAPOA is perceived in the marketplace received a high response rate – confirmation that SAPOA is still regarded by its members as the official voice of the property industry. Radebe focused on SAPOA’s strong education drive over the past 12 months, and the list of achievements is long and growing. “SAPOA has continued SOUTH AFRICAN PROPERTY REVIEW

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Convention round-up with its Bursary Fund, and continued to strengthen our relationships with the Services SETA, who sponsored R40-million, and also with the Estate Agents Board,” she said. “Further to this, we have been appointed by the Department of Public Works to train 400 staff from the department. Central revenue for this two-year appointment is R17,5-million, probably the largest deal SAPOA has done to date.”

The morning of Day 1 Delegates who’d settled comfortably into their upholstered seats for the morning were destined to be shifting, squirming and laughing uproariously (or nervously) in the space of a few hours. And it wasn’t only accomplished, politically incorrect comedian, Nik Rabinowitz, who disrupted the postbreakfast bonhomie with his wonderfully dark, entirely irreverent humour – but he, together with the keynote speaker, focused on one of the elephants in the room: the biggest land mammal. Disruption was guaranteed as the distinctive red beret of the first keynote speaker was flagged in the auditorium – commander-in-chief of the Economic Nik Rabinowitz, comedian

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Freedom Fighters, Julius Malema. McKaiser introduced the commander by saying, “The theme of this conference is Disruption, as you know, which may not be the most original theme – but disruption needs to be done in a world that is deeply unjust. It can’t be business as usual, both in politics and in the economy. And this speaker is certainly someone who, I think we would all agree, whatever you make of his politics and the content of his views, represents disruption, which goes to the heart of what the SAPOA Convention of the next two days is about.” As expected, Malema pulled no punches as he addressed ‘captains of the industry. “We were shocked to receive an invite from you because we thought we would be the last people you would want to hear from. Because when you invite us, you must be sure you are not sensitive to the truth, because we confront the truth, raw as it is. We are here today because this Convention is held under the theme of disruption, leadership in the industry rewriting the rules and reinventing the game. We know you’re looking for working solutions, because we are the only party that speaks truth to power, which has presented working solutions to the crisis of poverty, under-

industrialisation, unemployment and inequality. We represent the property-less people of South Africa, the majority of the people who under the racist apartheid regime were not allowed to own property and still are propertyless, even under democratic dispensation.” He was relentless, as was expected. “This country was founded on a disruption, a crime against humanity, which property owners sitting in this Convention were the beneficiaries of. Colonialism and apartheid were a disruption of the property relations of the native population in favour of a racist, anti-black, colonial property owner. And that is still a reality of the African black majority today. “I tell you unequivocally, if there is a disruption that we need today, it’s one of your new liberal, short-sighted, profit-and-greeddriven attitude. We have said to you, let us share the land. There is no ignoring the landlessness of black people, as you have all done since 1994. A peaceful, legally controlled transfer of land is possible to respond to the looming collapse of the country. Our fellow patriotic white people must stop being overly sensitive and let us all unleash the only disruption that matters – or face the total collapse.” McKaiser opened the floor to questions, but not before commenting drily, “I think a lot of them like your place in our democracy because you keep the ANC and Number One in check, but they are secretly scared of what would happen if you were in charge. So I want you to speak to them very plainly: if EFF won 50% plus one vote, and you don’t want to have to go into a coalition in 2019, what would be the implications for their property rights?” Malema replied, “The state must be the custodian of the land. Why? Because you are refusing to release it. Black people will never own the land – they don’t have money, they will never have the money, because ownership of the land is what results in you having the money. So the struggle has always been about property ownership. “We need the state to say, all this land belongs to the state, and then it shall be allocated back to the same person. If it’s residential, it’s residential under so and so. If it’s an office park, it’s office park under so and so. As the state, we lease it back to you, as long as a purpose is clearly defined on what that piece of land is used for. Once we have done that, we must see how many pieces of land remain, because there is too much land out there. Then that which remains gets allocated to those who have been looking for land but cannot afford to buy it.”


Convention round-up

Julius Malema, commander-in-chief of the EFF

Estienne de Klerk, CEO of Growthpoint, was first up: “I am South African. I have been here for many generations, so we are in this boat together. We have to collectively work out what is going to work. If you want to be an agent of success of the country, then there are certain things you are going to have to educate yourself on. And I would like to know what you are going to do about that, because some of the policies that you are proposing will not lead to the success of this country. “The kind of capital we need as a country, Mr Malema, to be able to develop this country, to create the jobs, is going to have to come from not only local investors, because we don’t have the money. It’s going to take international capital. The only way we can do that is to make our country effective, efficient and competitive, and to provide returns that are attractive to those investors to invest, otherwise we are not going to create the jobs, unfortunately, Mr Malema, and the ownership structures will never change.” It was day two, and disruption was under way.

“The first is the rise of Africa – the dramatic improvement in the economic security and health of sub-Saharan Africa over the last 15 years, and the improvements in governance and political competition. This represents a massive trading and investment opportunity. The second trend relates to the effects of Brexit on sub-Saharan Africa, and what the investment, trade and investment landscape may look like in the region once Britain departs the European Union.” Jennings pointed out that although the common perception is that Africa is the “hopeless continent, for the last 15 years, Africa has been one of the fastest-growing regions globally, with the world’s most rapidly improving health statistics, governance improvement and conflict reduction.” So what are these trends, and what’s driving them? Economic growth in Africa has averaged almost six percent over the past 15 years, the highest since independence. Six of the 10 fastest-growing economies in the world in the last decade have been African, with the same being projected for the coming decade. The United Nations estimates that, between 1989 and 2003, the number of democracies in Africa increased from three to 23, and the World Bank’s latest Ease of Doing Business Survey indicates that Africa is the fastest-reforming region in the world, with five of the 10 fastest reformers globally being African. And Brexit? Jennings believes it provides a significant opportunity for Africa and the UK. “Brexit is to the advantage of both the country

and the continent,” he says. “A panel of experts convened by MPs and peers in the UK concluded that the UK should take advantage of Brexit for a pro-development trade policy with Africa, bringing exciting opportunities in trade and investment between the UK and both South Africa and sub-Saharan Africa.” Given the implications of Brexit, the discussion kicked off with Mark Stevens. “It’s a question of cycles and, clearly, the news out of the UK currently isn’t good – but it’s a very big economy with a wonderful infrastructure. The people are hard-working – and, as always, the cycle will turn.” Phil Barttram, Executive Director of MSCI, commented on eastern Europe, and how it potentially has more affinity with us as emerging-market players. “There seems to be a sense that South Africans who go there understand the story. Take Poland: they see this hard-working group of people, an emerging market with an emerging-market type of mind-set. Some of the western Europeans get uncomfortable when they go to Poland; we’re quite comfortable with that disruptive, awkward space, having come from Africa. “It doesn’t come down to whether those are good investments based on the country and the fundamentals; it’s based on whether those who are doing the deals are doing the right deals – buying properties at the right price, foreseeing the right growth, being able to add value to the assets they are purchasing. Stevens added, “At the end of the day, this is about growth – and those markets are showing growth.”

And after tea… Stephen Jennings, the founder and CEO of Rendeavour, took to discuss the topic: Offshore vs Local Investments: Considering Brexit, what are the pros and cons - were to from here?. Gugulethu Cele, senior anchor at CNBC Africa, facilitated the panel discussion, which, in addition to Jennings, featured Zola Malinga, the founder and Executive Director of Jade Capital Partners (Pty) Ltd, and Mark Stevens, CEO of Fortress Income Fund. Jennings highlighted two trends he believes are critically important to South Africa and sub-Saharan Africa in the coming decades:

Stephen Jennings, founder and CEO of Rendeavour

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Convention round-up without the transformation objectives will be very limited, and probably reinforce the inequalities inherited from the past.” Risk. Always the word that needs analysis in this space, and in the South African context, it’s up against a slew of views on tough social ills and issues.

SAPOA Journalism Awards for Excellence

Gugulethu Cele, senior anchor CNBC Africa

Jennings’s response to Cele’s questions around sub-Saharan Africa’s successes, given that three of biggest economies are in a technical recession, focused on business models. “Sub-Saharan Africa – Nigeria – is where Russia was 25 years ago. When I went to Russia, the economy was the same size as Texas or Netherlands. It grew into a US$1,7trillion economy. But you couldn’t take the business model from London – you had to adapt it, you had to tailor it. This is for South African investors who want very high longterm returns but have the ability to tailor their model, be more patient and work through the challenges of sub-Saharan Africa. Is it easy to work there? It’s not; you have to tailor your business model to reach saturation.” Cele feels strongly that “One of the key elements is that your entrepreneurs and small business owners are going to be the disruptors, the productive drivers for that inclusive economic growth. Growth in any economy, and especially the South African context,

Sponsored by Cushman & Wakefield, this is an important, much-celebrated aspect of the annual SAPOA Convention, as journalists are recognised for their work in the property sphere. Acknowledged as a vital cog in the broader property wheel, discussion and debate around property is vital, and without quality journalists examining and exposing the issues, dissemination of information would be thin and poor. The nominees had been announced, and all winners would be revealed at the gala dinner on the Thursday evening.

Disruption – digital and technological Cele facilitated the discussion Digital Disruption & Disruptive Technology: Catching the Wave. The premise was that digital transformation reshapes every aspect of a business, and that during recent years, there have been shifts in how traditional leadership roles operate, as silos break down and the scopes of various roles widen and change. “Digital transformation has morphed from a trend to a central component of modern business strategy.” Cele challenged the panel, “Has technology and associated trends leading to change in corporate real estate disrupted the market? What is the impact on both the investor and occupiers?” The panel included Toby Shapshak, Editor in Chief of Stuff Magazine; Dave Duarte, speaker on future and global trends; Craig Hean, Managing Director of JLL South Africa and sub-Saharan Africa; and Stafford Masie,

FROM LEFT Gugulethu Cele, Toby Shapshak, Craig Hean, Dave Duarte and Stafford Masie

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leading global IT trend tracker and thought leader, and former General Manager of Google South Africa. Technology, smarter buildings and smarter workplaces begin from simple, tangible concepts and moves into the psychology of people and movements. For Hean, “It’s about utilising sensor technology. For example, if over a period of time the data tells us that at three o’clock in the afternoon the workforce migrates to a coffee area, the building learns that it can shut down the lighting systems, or make certain lifts unavailable and start saving electricity and water consumption. The building starts to make decisions on its own.” “Usage patterns,” summed up Shapshak. “We hear a lot about what used to be called teleworking; it’s now known as co-working spaces or working from home. You don’t need to have parking or desks for every single person in the organisation.” Importantly, he added, “Don’t underestimate the power of fibre. Fibre will be a major shift in property, whether it’s commercial or residential – it allows us to participate in this internet economy in an even better way.” Cele pointed out a recent Economist cover coining the phrase “data is the new oil”. Shapshak believes privacy will be a big concern: “I think data is the new oil – but privacy is going to be the next big oil.” Masie takes digital transformation even further. “People have the capability now to extend, augment, make… And they want to do that. It’s not about you delivering innovation – it’s about you delivering an architecture for participation for further innovation to occur.” And Shapshak gives the final word to Steve Jobs: “‘If you don’t cannibalise yourself, someone else will.’ And perhaps the smartest thing I ever read about the new economy was a line in The Economist, about 20 years ago, and it said, ‘The biggest thing about the new economy is that it’s just


Convention round-up

FROM LEFT Eusebius McKaiser, Nicola Weimar, Judge Dennis M Davis, Thabi Leoka, Isaiah Mhlanga and Dawie Roodt

going to make the old economy more efficient.’ Use the technology that enhances your business. Don’t try to own the business – rather hire it and use it, but just understand that if you don’t shift, somebody else will steal your thunder.”

Session 2 on Day 2 It was a challenging morning, with an overload of valuable information, and a heap of concepts to be untangled and unbundled during a great lunch. Lunchtime was also a good opportunity to visit and interact with the various exhibitors at the exhibition area. After lunch, Pieter Engelbrecht, Chairperson of the SAPOA Property Development Awards for Excellence, as he introduced the impressive nominees for the awards in the numerous categories. Once again, the winners would only be revealed at the gala dinner the following evening. Session 2 began with the much-anticipated economic presentation and panel discussion. Up bounced a dynamic Nicola Weimar, Senior Economist at Nedbank, who faced up to “South Africa continues to face significant challenges in 2017. While the real economy shows signs of turning the corner, politics are taking centre stage.” McKaiser facilitated the discussion, with panellists Thabi Leoka, an economist and economic strategist at Argon Asset Management; economic analyst Dawie Roodt; Honourable Justice Dennis M Davis of the High Court of South Africa (Western Cape Division); and Isaiah Mhlanga of Rand Merchant Bank. McKaiser shot from the hip: “There’s a lot of uncertainty in the country, questions around political risk, important questions to be asked about the economy… What are the prospects of getting it out of its rut? This country is not going to deal with unemployment and inequality if it grows at less than one percent, as is currently the case.”

Weimar flicked through some telling slides and graphs, and went straight for South Africa’s jugular. “Looking at South Africa’s quarterly GDP growth rate since 1993, it’s fair to say the past three years have been a particularly tough spell. We have watched our growth rate literally slow down to a crawl – we went from just over three percent in 2011 to a measly 0,3% in 2016, then we watched it disappear into thin air. We’re now in what the

Nicola Weimar, Senior Economist at Nedbank

markets call a technical recession, and it gets a little bit worse the more you delve into the details. This weakness is always widespread. How on earth did we get here? If we are brutally honest, it was not just the drought or the global commodity price slump that got us to this very uncomfortable place. It was also a series of political mistakes and missteps, and the seemingly endless flow of revelations in the news of widespread, deeply entrenched corruption in the broader public sector that appears to be centred around the highest office in the land. In our view, it is politics and

corruption that was South Africa’s undoing.” And there we had it. Ironically, most panellists felt Weimar’s GDP forecast was actually too optimistic. Davis was scathing. “You predict in 2020 a 2,3% growth. That’s pathetic. You talk about ‘coming out of the recession’, and what we are talking about in three years’ time is 2,3% – that is deeply disturbing. Everything is blowing internationally in our favour, and the best we can think of is 2,3% ‘if we do not make any more mistakes’? It just shows you the extent of where the risks lie.” Roodt believes there are three things to be done: establish a world-class skills-development system; remove all obstacles in the way of job creation (“Please do not create jobs but remove obstacles!”); and fire all civil servants and reappoint them only on merit. “Please, no more policies – and no more five-year plans.” Mhlanga felt strongly that “inclusive growth and an inclusive society are the business case for the country. If you are only accountable to investors and don’t care about what happens within society, you have an unstable society. But if there is no agreement or a common objective because of an unshared history, then we don’t speak together. The fastestgrowing emerging economies have in common a very strong leadership, and clear, transparent and predictable policies – a common objective or agenda in terms of what the country is about.” McKaiser put this to David: “Is it useful to think about the roles of financial institutions, banks and the Reserve Bank in particular, in terms of whether we can get more out of them by way of redistributive policies or not?” “Yes,” was the response. “The financial services sector has to start to think how it becomes more inclusive and how it promotes economic development for 55-million people. Black entrepreneurs, small and medium, can’t get access to capital. There is a serious debate SOUTH AFRICAN PROPERTY REVIEW

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Convention round-up

Phil Barttram, Executive Director of MSCI

we have to have without undermining the integrity of the financial services.” From finance, the Convention moved on to how to generate it with “Diversification – emerging property sectors”, and a key address by Phil Barttram, Executive Director of MSCI. The challenge to the panellists? “As investors and property funds look for growth and diversify their risk-return, they are faced with the inevitable question of whether to invest locally or move offshore. For those allocating capital within South Africa, there is a variety of specialist property sectors attracting the eye of institutional money flows. These include hospitals, storage and residential.” The discussion revolved around what attracts investors to these emerging property sectors, and the challenges managers face in extracting investment returns from these sectors. Barttram facilitated the discussion, with fellow panellists including Estienne de Klerk, MD of Growthpoint; Carel de Wit, CEO of Indluplace Properties; Bram Goossens, Financial Director of Equites Property Fund; Manda Nkuhlu, Group Executive Director of Cagro M3; Anton de Goede, Fund Manager at Coronation Property Equity Fund; and Gavin Lucas, CEO of Stor-Age Property REIT Ltd.

Barttram ran through his view in a nutshell of the here and now. Currently, he said, “South Africans are starting to lose confidence in the prospect of economic growth. Internationally, what we consider to be emerging sectors here, are established and recognised for their role in providing diversified returns. The different types of property you can buy in the US sub-sectors include the traditionals – but also the likes of storage, hotels, suburban offices, warehouses and medical offices. “There is capital looking for real estate returns, big international money. While the traditional sectors may be seeing limited growth, we have an opportunity to provide a home for that capital in globally recognised sectors such as healthcare, storage, residential and specialist industrial.” Barttram invited the panellists to explore some of the thinking behind the investment in and ownership of these assets, what makes them tick and what, if anything, is holding us back from unlocking their true potential. Addressing De Goede, Barttram said, “You are currently allocating money and buying either the stocks or talking to investors about where to place their money. What is it that makes you decide between buying a residential REIT or allocating money into a residential REIT, versus allocating money into a large diversified portfolio of property?” De Goede feels that “It’s not the actual asset class that drives the investment decision, but rather the potential return you can expect out of that investment that’s driving it. And when you look at the listed space, it’s the initial yield that you can buy the stock at, versus the growth you are expecting out of that stock. Of course, nowadays, you can generate similar returns out of specialisation that you can out of broader diversified funds – an environment where the skills sets are very focused in terms of the value creation out of that asset class.”

FROM LEFT Phil Barttram, Anton de Goede, Bram Goossens, Gavin Lucas, Estienne de Klerk, Carel de Wit and Manda Nkuhlu

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De Klerk explained Growthpoint’s current focus: “Hopefully by year-end, our healthcare fund and Africa Fund will be available to investors. With Growthpoint’s involvement, certainly on the healthcare side, we can impute REIT status, so it will be an unlisted REIT where there is a requirement among pension funds specifically to circle back to physical property on the balance sheet, if you would like, where they don’t have the volatility of the public market.” It was a robust discussion, with multiple insights into local versus offshore, and specialist and emerging sectors. And that was a wrap for day two, an intense day of unpacking and unpicking the South African property landscape and all that affects it. Little doubt delegates would be heading for the exhibition hall where all manner of icecold beverages awaited them, as first the AGM then the cocktail party got underway. Everybody felt, quite rightly, that they’d earned some fortified refreshments – and judging from the increasing volume of opinions resounding through the space, drinks went down exceedingly well. Tomorrow was another day, and although politics had been a thread that ran through the entire property conversation on day two, it was also on the agenda for day three, populated by a range of the country’s most agile political minds.

Ladies' Breakfast on Day 3 A highlight of the conference is always the SAPOA Ladies’ Breakfast – and this year, mentalist and illusionist Gilan Gork played with the minds of the women present. He was introduced by outgoing President of SAPOA Nomzamo Radebe, a champion of women, one who constantly talks up the confidence, power and value that women add to the workplace. She shared a quote by Marian Williamson, opening with, “Our deepest fear is not that we are inadequate; our deepest fear is that we are


Convention round-up

Nomzamo Radebe, outgoing President of SAPOA

powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be?” The 2017 SAPOA Ladies’ Breakfast was a wonderful mix of laughter and learning – and a little anxiety. It was a highly interactive session, where Gork demonstrated – with delegates plucked randomly from their croissants and cappuccinos – how magic has nothing to do with what he does, but being observant and sensitive to body language, tonal changes and a host of other almost invisible signals does. Gork shared the intricate tools of his trade, and held everybody in the palm of his hand. He ended the session with a nerve-wracking demonstration that definitely came with a “do not try this at home” label. The session was as much fun as it was intense. That, together with a sumptuous breakfast organised by the SAPOA marketing team, headed up by Marketing Manger, Jane Padayachee and assisted by PRO, Maud Nale, made for a superb start to what was destined to be an explosive day. Politics at 9am

Powerful panel discussion to kick off Day 3 Entitled “Join in the Conversation”, the topic was, “South Africa’s political establishment begins to crack – where to from here?” Key speakers were Daniel Silke, a political analyst and futurist; and Karema Brown, seasoned journalist, Editor and Chief Content Officer at Independent Media, and Host of Talk@9 on Talk Radio 702. Iman Rappetti, award-winning journalist and radio personality, was the panel facilitator, which consisted of Pierre de Vos, South African constitutional law scholar; Aubrey Matshiqui, Research Fellow at the Helen Suzman Foundation; and Ebrahim Fakir, Director of Programmes for ASRI.

Silke put South Africa in perspective: “It’s not just in South Africa where there are issues surrounding leadership, ethics in leadership, and the involvement of superpowers in governance. It is in other parts of the world as well.” He touched on the increasing similarities between many societies worldwide where electorates have chosen particular types of leaders to represent them. “Clearly, in the United States there are pressing issues, and those who are doing global risk analysis now regard the Trump presidency as one of the core risks to the world in the future.” Silke talked about our economic malaise. “Although we shouldn’t set everything by GDP, our GDP growth rate is a broad indicator of the inability of our policy framework to address core issues in South Africa. “South Africans haven’t been getting richer – and, as a nation, we should have been. We are on a decline and have been for the past two years. So you wonder why some of your shopping malls are starting to show strain at the edges. It’s not just the 8,9-million South Africans that are out of work, but also salaried South Africans who are now feeling worse off, combined with those who feel as though ‘there just ain’t no job out there for us to get’.”

is in the kind of state it’s in; and it is why we have the kinds of leaders we do in places such as the US and Europe, where a lot of far-right organisations are beginning to rise. And it also accounts, I think, for some of the cracks we are beginning to see on the continent. “But if we are here in this room thinking that if Jacob Zuma is removed tomorrow the things that ail the South African political system, or in fact our body politic, will be addressed, then we are all sadly mistaken. “There are fundamental things wrong with our society that have very little to do with Jacob Zuma’s leadership or presidency. I think Malema’s presence here and what the EFF stands for is a recognition by SAPOA that South Africa remains a very unequal society, that the negotiation and breakthroughs in 1994 went so far but were, in large measure, an accommodation of existing privilege. Unless you deal with what privilege means, and your own complicity in your privilege, thinking that removing Jacob Zuma is going to solve the problems of South Africa is very short-sighted. And as people involved in managing assets, particularly property, I think you are interested in a much more long-term view of how stable the political situation is in South Africa.

Illusionist Gilan Gork played with the minds of those present at the Ladies’ Breakfast

“Perhaps UCT’s Unilever Institute of Strategic Marketing puts it best: “South Africans are experiencing a crisis of aspiration. The country’s socio-political climate has been a melting pot for frustration as hopes and dreams are not met or delayed significantly, or remain tantalisingly out of reach. Make no mistake: it’s a fasten-your-seat-belt moment for South Africa.” And that’s just what the delegates did, as Brown took to the stage. “Inequality and economic exclusion are the biggest drivers of political risk, globally and in South Africa. It is at the root of a globe at war with itself; it accounts for a lot of why Europe

“It’s also going to be difficult to build social solidarity, which is what you require in a place such as South Africa, where people literally live in the same geographic space but in different worlds. Those are the things that SAPOA and business organisations need to begin to deal with, and you have to go beyond putting black people on your boards. If your business practices are not going to change, if your understanding of value and of what it means to create a sustainable business is not going to change, it’s going to be very difficult to put sustainable issues on the table that other social forces and your compatriots in the social contact will be able to understand. SOUTH AFRICAN PROPERTY REVIEW

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Convention round-up

FROM LEFT Ebrahim Fakir, Karema Brown, Daniel Silke, Pierre de Vos, Aubrey Matshiqui and Iman Rappetti

“Part of the reason we have such a fraught labour regime in South Africa is because of the absolute lack of trust between people who sit around a table to negotiate. We need to understand that leadership begins with us. “If you want to be in South Africa, put down roots in your business and grow your assets in South Africa, you need to roll up your sleeves and acknowledge that inasmuch as you need to come up with solutions, you have to acknowledge you are in fact part of the problem – part of the inequality matrix that remains intact and in place in South Africa.” Rappetti touched on the role of the courts: “We are leaving a lot of our political debates or disputes to be resolved in the arena which, as former Deputy Chief Justice Dikgang Moseneke was saying, should really be the preserve of making sure that ordinary people’s struggles are represented.” De Vos agreed. “Some of it is inevitable. When you have a constitutional democracy where political parties play an overbearing role, those checks and balances between the legislature and the executive are not as efficient as they should be because there are party loyalties.” Matshiqui feels we’re very good at attaching labels – state capture, populism, and so on. Alternate facts. “Actually, they tell us very little about our complex political, social and economic phenomena. We use these labels in a meaningless way with the aim to distort to the advantage or disadvantage of particular interests, whether they are political or economic. Your understanding of what populism might be depends on which side of the political spectrum you come from. “The crisis we have in the world is the crisis of Western thought. And what you see with Brexit and the election of Trump is a situation where they are the symptoms, not the crisis. It’s the crisis of liberal democracy.”

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SOUTH AFRICAN PROPERTY REVIEW

Fakir believes the first thing to do is to admit we sometimes don’t actually know what’s going on. Be honest: “There is a real desire in South Africa for a simple, honest, sincere politics without the kind of trappings of fancy buzz words.” Matshiqui said, “We tend to think that values are the glue that binds democracy together. The glue, actually – or another glue – is economic growth. Where there is economic growth, I find it easy to agree about the rules that govern the political game, but when one group is dominant, is controlling or is looting the fruits of economic growth, or when there is no fruit at all, then the rules are abandoned – and what we have is a political jungle.” Rappetti asked De Vos his thoughts on how well the Constitution can withstand the necessary challenges emerging in society. De Vos deals with students every day: “They say the Constitution is not actually doing what it’s supposed to do, that it serves the interest of those with money and power. The checks and balances don’t work – it hides what’s happening in politics and makes respectable what shouldn’t be.

“People don’t understand that something like a Constitution is just a piece of paper that must be interpreted. What I am optimistic about is the way in which the Constitutional Court has been interpreting the Constitution. The Court has become far more aware of what’s going on in society, and has been interpreting the Constitution in ways that try to respond to the actual societal reality. And that makes the Constitution a living document.”

Welcome to the new SAPOA President Peter Levett, Managing Director of Old Mutual Property and the new SAPOA President, addressed the delegates, and shared the numerous successes and challenges enjoyed and faced by SAPOA. He thanked Nomzamo Radebe for her hard work, dedication and strong leadership through SAPOA’s 50th year. “More than 50 years ago, SAPOA was started through a collaborative effort between Old Mutual and Sanlam. I feel we have come full circle.” He also thanked Neil Gopal for his many years of dedicated service to SAPOA, and for his leadership. “At the CEO dinner on Tuesday

Peter Levett, MD of Old Mutual Property and the new SAPOA President, thanked Nomzamo Radebe for her hard work, dedication and strong leadership through SAPOA’s 50th year


Convention round-up

listed that are purely South African. They are all overseas in some form or another. “Follow the money. Look at where the growth has been. One of the reasons why there’s been so much investment outside of South Africa is because it’s been cheaper, and the guys have played the yield game. Then add on to that political risk, which essentially comes down to confidence.” Viruly concluded the discussion by reiterating: “What will that obsolescence be? What sectors are going to be the winners? To argue that the property market as it stands today will always be the way it is, is something we need to question.”

night, it was wonderful to hear the great compliments from the Honourable Mayor, Patricia de Lille, about the extent to which Neil protects the members’ interests in Cape Town – and I know he does that elsewhere in the country.” He also introduced the SAPOA management team: “The first thing you may notice is that the senior management team, other than Neil, of course, consists only of women. It’s very important to know the senior management team is diversified. Of the team of 16, 14 are from employment equity groups – because transformation is an important element for SAPOA, and transformation is a very important element for the industry.”

Disruption of the SA Property Market McKaiser introduced François Viruly, Associate Professor at the University of Cape Town, who invited his panel to examine “Disruption of the SA Property Market” and to take a glimpse into the future. His questions revolved around the impact of disruptive forces on property cycles as well as the investment decisions that we make. His panel consisted of Professor Mathew Lester, a lecturer at Rhodes University; Len van Niekerk, Senior Property Analyst: Global Markets at Nedbank; Herman Pienaar, Director: City Transformation and Spatial Planning at the City of Johannesburg; and Dorah Modise, CEO of the Green Building Council of South Africa. “The second biggest issue after location, location, location is timing – knowing where you are on the property cycle,” said Viruly. “We need to understand both the issues that drive short-term cycles and the parameters that affect the trends, including technology, transformation, demographics… We need to listen to what critical trends the property booms of the 1960s, 1980s and 2000s were influenced by, and what the future holds. “What came out is that each of these cycles has a very specific story around social, technological and political issues. And every time we have one of these peaks, some obsolescence happens – some part of the property market starts losing out.” Viruly examined each boom, and its fall-out. “In the 1980s, what drove it was the car; what we sacrificed were the CBDs. There will be another one of these peaks – each one higher than the last. What will this next one look like?” Pienaar suggested taking a step back: “The big question for cities and urban areas is how we deal with urbanisation, and how we structure future cities and develop them in a way that can deal with urbanisation dynamics.

François Viruly, Associate Professor at the University of Cape Town

“Some of the major issues that came to the fore during this conference revolved around inclusivity – how one starts to focus cities around the needs of people and around the new technology that’s there, but making sure it’s urban areas for all and that all advantages can be accessed by all people. “The general consensus is that cities are still movement economies, that how one moves around in the city and the efficiency of the transportation system are key, as is how development responds around that backbone. In South Africa we have a lot of ground still to cover – most world cities have more than 50% of people within one kilometre of their transit system. In South Africa, Jo’burg in particular, we are at 11% – way behind.” Viruly says, “A group of techies said to me, the one sector we have not hit yet is the real estate sector. The future of the broker is as the travel agent was 10 years ago.” In the UK and the US, large property firms are buying out small advanced tech firms. So the new battleground in real estate is going to be technology, technology, technology – or data, data, data.” Viruly did want to talk to those on his panel in finance – those who analyse property. Van Niekerk still thinks the economy matters: “We can talk about tech, the latest app, all of those things, but it comes down to where the money is, where it’s going to, and why. If we look at the South African property market over the past few years, at the JSElisted companies, in terms of the property sector, if you ignore market cap size and debt, more than 60% of that pool of assets you have access to are not South African. There’s a handful of South African companies

“At his best, man is the noblest of all animals; separated from law and justice, he is the worst’ – Aristotle McKaiser introduced the final speaker of the Convention: “I think he is one of the country’s finest legal minds, deeply committed to justice and to this democracy of ours – Gerrie Nel.” A household name for so many reasons in South Africa, Nel – head of Afriforum and a former South African state prosecutor – was given the last word at SAPOA. His stated topic, “Integrity, law and the role of civic society”, essentially distilled corruption down to a front-of-mind concept for most South Africans. “I have been a prosecutor for 36 years, and I studied law because I hate unfairness and I hate bullies.” He elaborated: “Anybody who walks into a house armed, pushes you around and steals your property – that’s a bully. Somebody who commits corruption, steals state money – that’s an untouchable bully. Businesspeople who fix prices and collude are a gang of bullies.” Collusion? “When a public servant is corrupt, we say he’s corrupt – but when businesspeople get together and fix prices, we say that’s collusion. It’s soft; it’s not important. I discovered that collusion around the building of the World Cup stadiums added R14-billion to the price paid by the local authorities. Think what we could have done with R14-billion.” Nel focused on corruption, demystifying its definition. He quoted Minister Jeff Radebe during the launch of the Anti-Corruption Discussion Document Strategy: “Corruption is an epidemic that obstructs government’s efforts to render adequate services to citizens. The minister reminded us that for every corrupt official there must be a corrupt businessman. Why would two clerks in a government department corrupt each other? SOUTH AFRICAN PROPERTY REVIEW

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Convention round-up

Advocate Gerrie Nel, a private prosecutor and head of Afriforum

It doesn’t make sense. So there must be a corrupt businessman who would corrupt an official. Who’s the real bully? Is it the official sitting there and dealing with tenders – or the man willing to pay a year’s salary in advance to get a tender? The speakers – the minister, the deputy minister, directors-general – said that without model leadership we can do whatever we want to … we will never stop corruption. “Marcus Aurelius said, ‘Waste no more time arguing what a good man should be, be one.’” Corruption takes many different shapes and forms. Nel talked about grooming and how it’s associated more with sexual offences: “But you also get grooming in corruption. How? I am a businessman and we are friends; he works for the government, and I have lots of money. His car needs tyres, I buy them for him. He needs his car serviced, I pay for that. His child is elected to represent South Africa at the Olympic Games, I pay for him and his family to go. Ten years later he is head of the procurement section and I want a tender, can he say no? He can’t.” Nel urged delegates to listen, “To succeed in the fight against corruption we need four things: strong political will, an efficient and corruption-free judiciary; a free press; and an independent and active civil society. We have three. We have an active civil society, free press and a respected judiciary. I think those three can really make a difference, and I quote Albert Einstein: “The world will not be destroyed by those who do evil, but by those who watched them without doing anything.”

offered up by the brains trust who work in, around and behind the country’s commercial and industrial property, economic and political space, and beyond. “There’s one word people are using that I think sums up the gees of so many conversations here: inclusivity. We need inclusivity in how we design and redesign our cities, and when it comes to the shares and the spoils of the economy. And our futures are all implicated, regardless of where we fit into society and whether we are part of business, labour, civil society or a political analyst. Our fate is tied together in how we are going to problem-solve it. “If you put a gun to my head and said, you can only problem-solve one of the different ills that you have, I would say it’s inequality. Inequality correlates more reliably statistically with gratuitous violent crime than even poverty does. “If there’s one word I want you to lose sleep over, it is inclusivity. How do we make our society more inclusive? How do we make the stakeholders who are on the table more inclusive? How do we make our panels more inclusive? Who is in the boardroom – how do we make the boardroom more inclusive? “The commitment, at least at a rhetorical level, towards inclusivity that I have heard in so many panels is something that really, really warms my heart.”

“We Will Rock You” was the theme of the evening, and everybody was encouraged to play their part, slip into their leathers, and rock the night away. There were many wonderfully sleek, slinky and sexy costumes and outfits, and SAPOA members threw themselves into the musical mood. The ball room was a-glitter, the speakers belted out songs to which everybody knew the words. The event was a fitting conclusion to a momentous Convention, and the announcement of the award winners. The final drum roll was for the winners of the SAPOA Journalism Awards for Excellence, sponsored by Cushman & Wakefield Excellerate; and the winners of the SAPOA Property Development Awards for Excellence. Although… We’re sure everybody will agree that all those present at the 2017 SAPOA Convention were winners. Whether you sleep on it or lose sleep over it, it created enormous food for thought.

Black leather, rock ’n’ roll … and awards The Convention’s gala dinner and awards evening are always memorable – and every year the bar is raised. This year was no different. The gala dinner was sponsored by Tongaat Hulett Developments, whose MD Mike Deighton joined David Green, Chairperson of SAPOA’s Convention Committee, on the stage to welcome guests.

David Green, Chairperson of SAPOA’s Convention Committee

The wrap-up of SAPOA Convention 2017 McKaiser had the not insubstantial task of distilling what was a massive conference with vastly divergent ideas, disruptive thoughts, and a depth and volume of information

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SOUTH AFRICAN PROPERTY REVIEW

“We Will Rock You” was the theme of the evening, and everybody was encouraged to play their part


exhibitor stand winners

Winning exhibitor stands Green stand Large stand Small stand Innovation stand

The Creative Axis Architects Dube TradePort Tsebo GladAfrica SOUTH AFRICAN PROPERTY REVIEW

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excellence awards

Winner: Office Developments – Corporate, and Overall Winner Sasol Place

Sasol Place is the new global head office for the multinational petro-chemical company, with a total GLA of 67 000m2. The complex,

L WINNER OVERAL

detailed fit-out within a unique, iconic building

DE ICE OFF

VELOPMENTS CORP ORA TE

required in-depth research of global best practice; and regular engagement with Sasol stakeholders ensured a considered, efficient workplace, offering a “palette of places” to residents and guests. Working closely with Paragon Architects, Paragon Interface has achieved a timeless, elegant design with seamless transitions between base-build and fit-out – a world-class, high-performance workplace that echoes the “One Sasol” culture. Paragon Interface worked with Paragon Architects to extrapolate the concepts of the base-build into the interior architecture and space planning of the interiors. Working closely with the client – and exploiting contemporary materials, building processes and software – they achieved a built result that reflects the culture of the client, and creates a stimulating work environment.

Developer Alchemy Properties, Sasol Pension Fund Architects Paragon Interface Architects Project managers Capex Projects Quantity surveyors RLB, Pentad, BWR Structural engineers Sotiralis Consulting Mechanical engineers Adaptive Resource Engineers Other consultants Linspace Acoustic Engineers Principal contractors Aveng Grinaker LTA Electrical engineers Quad Consulting Fire consultants TWCE Fire Services Green consultants PJC

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SOUTH AFRICAN PROPERTY REVIEW

Iconic developments grace southern Africa’s skylines Fifty-three entries made it into this year’s offering – all innovative solutions reflecting how companies are adapting to stay ahead in the competitive commercial built environment

T

he 2017 Property Development Awards for Innovative Excellence did not disappoint. The quality of the developed buildings is world-class and truly iconic, each with a focus on functionality and integration into our urban fabric. The submissions strived to fulfil an optimum balance between aesthetic design, operational efficiency and cost effectiveness, with many of them implementing green principles and wellness standards to all aspects of the buildings. In addition to the usual categories – Corporate Office, Commercial Office, Retail, Residential, Refurbishments, Mixed-use, Other (including hotels and leisure), Industrial, Innovative Property Developments, and International – the SAPOA Innovative Excellence Awards Committee included Interiors in this year’s mix. SAPOA CEO Neil Gopal said in his introduction to the coffee-

table book that “The quality of entries received this year once again highlights the fact that, despite the country’s economic challenges, the South African property development industry is meeting the demands of global standards. The gratification of the awards is that they encourage all investors, designers and managers to strive continuously to meet and exceed the world’s leading property developments through peer engagement and consistent participation in global industry conversations.” Next year there will be an additional category to look forward to – that of Rural Development – throwing down the gauntlet and once again challenging the property industry to be cognisant of the need for inclusionary development and further reform in the South African built environment.


Judging Panel

Winner: Office Developments - Commercial and Overall Green Award No 5 Silo

No 5 Silo evolved from the overall Silo District masterplan. It is the third building in the precinct to be completed.

Pieter Engelbrecht Growthpoint Properties (Pty) Ltd

It provides office space for the V&A Waterfront, but also extends the sustainable and public nature of the precinct. It is pedestrianpermeable, with a six-storey high public Street and Arcade providing access through the building from all sides, and is further supported by retail and public facilities at ground level. The Street is not only an “urban� idea, but also part of the sustainability agenda of the building. It is naturally ventilated with high-level fans maintaining the movement of air. This becomes a new type of atrium, unconditioned and accessible to the public. Its roof is saw-toothed, bringing southern light into the building, maximising the amount of natural light and aligning the solar panels above. Design themes suit the

Andries Schoeman Delta Property Fund (Pty) Ltd

location of the precinct as part of a working harbour, fit-forpurpose, workmanlike, dockside warehouse. Developer V&A Waterfront Holdings (Pty) Ltd Architects VDMMA, Jacobs Parker Project managers MACE Quantity surveyors MLC Civil engineers Arup (Pty) Ltd, Sutherland Engineers Structural engineers Arup (Pty) Ltd, Sutherland Engineers Mechanical engineers Worley Parsons Other consultants Ecosafety, GIBB, Matrix, Solution for Elevating, SRL Principal contractors WBHO Electrical engineers GIBB Fire consultants Sutherland Engineers Green consultants Arup (Pty) Ltd Anthony Orelowitz The Paragon Group LOPMENTS COMM DEVE ERC ICE IAL OFF

OVERALL GREEN

Beata Kaleta DSA Architects

Christian Roberg Abland

SOUTH AFRICAN AF PROPERTY REVIEW

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excellence awards

IAL DEVELOPME USTR NTS IND

block. At the corner of the offices, a doubleglazed

glass

façade,

dressed

with

sun

louvres, encapsulates the three-storey-high lobby spaces. The roofing structure over the large warehouse has a raised, angled centre section with smoke vents, which aid with improved circulation and allow natural sunlight to filter into the warehouse. Partially made up of polycarbonate, the space is filled with defused natural light – and thanks to the operations, which run 24 hours a day, the lights can be seen streaming through the polycarbonate once the sun has set.

Winner: Industrial Developments New Head Office for Amrod

into three departments – picking, storage and production. The total ground-floor area of

South Africa’s office and warehouse design

the warehouse is 22 500m² – but because of

for Amrod is in Attacq’s Waterfall commercial

the great height of the structure, the large

district, LP22. Running along the M1 and N3

warehouse space is made up of multiple floors.

Developer Attacq Architects Empowered Spaces Architects Project managers Empowered Spaces Architects Quantity surveyors RLB Pentad Civil engineers DG Consulting Engineers Structural engineers DG Consulting Engineers Mechanical engineers Adaptive Resources Principal contractors Abbeydale Building & Civil Electrical engineers RWP Fire consultants Specialised Fire Technology (Pty) Ltd

highways at the Buccleuch Interchange, the

Approaching from the western edge of

building is ideally positioned and has an

the property and winding down the entrance

invaluable road frontage. The development

road, one enters via the parking area and

comprises 30 400m² of warehouse space split

is met by an impressively large office

Winner: Innovative Developments

the various facets of GE’s activities across Africa.

on the western side. It overlooks a magnificent

The 2 454m² GLA building, located on Glenhove

golf course to the south.

GE Africa Innovation Centre

The GE Africa Innovation Centre is located in

Road in Rosebank, is close to major road arterials,

The goal was to create a mixed-use, flexible,

Johannesburg. From the outset, the project was

public transport, and to community, religious

functional, robust and sustainable environment

committed to innovation, collaboration and

and health centres.

highlighting the key principles of GE, industrial

strategic dialogues with key stakeholders across

The building is an east-facing, three-storey,

innovation and African collaboration. As such,

sub-Saharan Africa. Considering the wide scope

glazed structure that takes advantage of the

the fit-out through the use of the customer

of the design, innovation was critical in presenting

generally mild climate, with access and parking

experience centre, the healthcare experience, and the training and development centre teach users about, and showcase, GE’s technology, which is moving towards localised African sustainability in the industries of energy, aviation, healthcare, oil and gas, and transportation. This ethos is drawn in through the use of local materials and products, and facilitated through contemporary and innovative African industrial design in the team.

IVE DEVELOPME OVAT NTS INN

Developer GE Africa Architects Paragon Architects South Africa Project managers Aecom Quantity surveyors Aecom Structural engineers Kantey and Templar Mechanical engineers Aecom Other consultants Lemon Principal contractors TSK Bartlett Electrical engineers Aecom Fire consultants Aecom Green consultants Aecom

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SOUTH AFRICAN PROPERTY REVIEW


Judging Panel

Winner: Interiors Sasol Place Interiors

considered and efficient workplace that offers a “palette of places” to residents and guests.

Sasol Place is the new global head office for petro-

Working closely with Paragon Architects, Paragon

chemical company Sasol, with a total GLA of 67 000m2.

Interface has achieved a timeless, elegant design

It is an extremely complex and detailed fit-out situated

aesthetic with seamless transitions between base-build

in a unique and iconic building. The process required

and fit-out. This resulted in the achievement of a world-

in-depth research of global best practice – and regular

class, high-performance workplace that echoes the

engagement with Sasol stakeholders ensured a well-

“One Sasol” culture. Corné de Leeuw DelQS Quantity Surveyors and Property Valuers

INTERIORS

Developer Alchemy Properties, Sasol Pension Fund Architects Paragon Interface Architects Project managers Capex Projects Quantity surveyors RLB, Pentad, BWR Structural engineers Sotiralis Consulting Mechanical engineers Adaptive Resource Engineers Other consultants Linspace Acoustic Engineers Principal contractors Aveng Grinaker LTA Electrical engineers Quad Consulting Fire consultants TWCE Fire Services Green consultants PJC

Winner: International Developments Torres Rani Commercial & Residential Towers

The brief from Rani Investments, was “to create an iconic

with a mix of one-, two- and three-bedroom units. The top two floors have five duplex penthouse units. The office tower has a total of 23 604m² of A-grade office space.

building that will enrich Maputo’s skyline, while satisfying the critical shortage of A-grade residential and office accommodation”. The sinuous shapes of the building were inspired by the rolling hills and undulating coastline of Mozambique. The development shares a site with the existing Radisson Blu Hotel, and consists of two tower blocks on a common four-storey podium that incorporates parking, service areas and a small retail mall component, with restaurants, conference facilities and breakaway rooms. The apartment tower has 156 serviced apartments

Craig Sutherland Sutherland Multidisciplinary Engineers

SE DEVELOPME Dean Narainsamy ED-U NTS MIX Aecom

Developer Rani Investments Architects DSA Architects International, Mesch Architects Project managers Metrum Project Managers Quantity surveyors RLB, Pentad Quantity Surveyors Civil engineers DG Consulting Engineers Structural engineers DG Consulting Engineers Mechanical engineers Acend Engineers Principal contractors Stefanutti Stocks, SS Construcones Mocambique Electrical engineers CKR Consulting Fire engineers CKR Consulting Landscape consultant Landmark Studios

L DEVELOP ATIONA MEN ERN TS INT

Hashim Bham BTKM Quantity Surveyors

Itumeleng Mothibeli Vukile Property Fund

SOUTH AFRICAN AF PROPERTY REVIEW

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excellence awards Winner: Mixed-use Developments

SE ED-U MIX

Century City Square Century

City

Square,

DEVELOPM ENT S

the

new commercial and hospitality hub of Century City, is a pretty unique mixeduse development. It consists of a 1 900-seat conference

centre,

a

125-room

hotel,

51 apartments, and 15 000m2 of offices, showrooms and restaurants in a total of six different buildings, all set around a bustling public square and positioned over convenient basement parking. The apartments and some of the offices were sold on a sectional title basis, while the remainder of the offices, as well as the showrooms and restaurants, were retained by the developer as corporate letting

stock.

Sales

stood

at

100%

at

completion, and were 98% let within six months. As part of an all-green precinct, it has been awarded a 4-Star Green Star Custom Mixed Use Design rating, the first in the Western Cape to achieve this. The R1-billion mixed-use project with its conference centre, hotel, offices, restaurants, showrooms, apartments and a public square has created a vibrant new hospitality and commercial hub in the Western Cape.

Winner: Other Developments

Developer Rabie Property Group Architects Vivid Architects Project managers Rabie Property Group Quantity surveyors BTKM Quantity Surveyors, B&L Civil engineers HHO Structural engineers Aurecon S&T Mechanical engineers Spoormaker & Partners, BVI,

WSP Consulting Other consultants Origin Interiors Source, DHALE, Descom, Binnington, Copeland, AssMtshali-Moss Principal contractors Murray & Roberts Electrical engineers JD Reitz, RWP, QDP Fire consultants Aurecon Green consultants PJ Carew

emblem of the city’s transformation into an

communities through skills transfer and training.

economic hub. With its prime position at the

The architecture seeks to celebrate African

The City of Johannesburg’s new state-of-the-art

top of Rissik Street, the new Chamber will

principles of place-making while incorporating

Council Chamber has recently received a 5-Star

symbolise the city’s transformation in line with

smart technologies and green building systems.

Green Star SA design certification in the category

the core values of transparency, accountability

As a transparent “lekgotla”, the Chamber will

for Public and Education Buildings (PEB), the first

and accessibility.

hopefully be a hub that nurtures and enhances

City of Johannesburg – Council Chamber

municipal building in South Africa to be rated

The conceptual design was inspired by the

under the PEB tool. It also achieved a Green Star

Tswana word lekgotla, meaning “a place where

The Chamber is located within 10-minute

SA Socio-Economic Category (SEC) rating. The new

meetings are held”. A key intention of the project

walking distance of the Gautrain Park Station,

Chamber forms the nucleus of Johannesburg’s

was to include local content in the design, and

two Rea Vaya bus stations, Metro bus stations

new Metro Centre in Braamfontein, and is an

to promote economic opportunities for local

and taxi service stops. The project created

positive dialogue, and instils a sense of leadership.

significant involvement enterprise R DEVELOPMENT S OTHE

opportunities through

for

skills

development,

in

community transfer

and

keeping

with

national government’s Batho Pele (“people first”) principles. Developer Joburg Property Company (JPC) Architects StudioMAS Architecture and Urban Design Project managers Bayete Capital Quantity surveyors Koor Dindar Mothei (Gauteng) Civil engineers PURE Consulting Engineers Structural engineers PURE Consulting Engineers Mechanical engineers RPP, WSP Consulting Engineers Other consultants Linspace Acoustic Engineers Principal contractors Grinaker Aveng LTA, Enza Construction Electrical engineers Aftek Consulting Engineers Fire consultants Highcrest Engineering Green consultants WSP Group Africa

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SOUTH AFRICAN PROPERTY REVIEW


Judging Panel

John Truter WSP Group Africa Structures

T DEVELO PME ISHMEN URB NTS REF

Winner: Refurbishment Developments

The stylish new apartment blocks were developed

Stonehill Place

in response to the overwhelming demand from South

The visage of Cape Town’s lower CBD is set for a change

Africa’s growing upper-middle class for luxury living

with a first-of-its-kind development – a five-star hotel and

close to the city and ocean. Over two years, through

apartment block housed in one of the city’s architectural

the Signatura label, Rabie’s Midas touch has seen the

masterpieces. Construction and remodelling of the

rejuvenation of 19 buildings throughout the city and

former Safmarine building is now completed; it has been

Atlantic Seaboard, providing sought-after apartments

transformed into the luxurious Radisson Blu Hotel and

and boosting property values in their respective

Residence apartments, which has been developed in

areas.

partnership with Shaun Rai of Stonehill Property Fund.

apartments represent the pinnacle for Signatura,

The lower half of the building will become one of Swedish

which was established in 2011 as a private-label

hotel group Rezidor’s flagship city developments.

development company.

Architects Bernicchi Architects Project managers Mark Saacks, Bradley Parker, David Cohen Quantity surveyor Lishya Kirpal of De Leeuw Group Structural engineer Christiaan de Villiers of De Villiers Consulting

Winner: Residential Developments Sol Plaatje University

The

Radisson

Blu

Hotel

and

Residence

John Williamson MDS Architecture

Mechanical engineer Colin Pryce of C I Pryce (Pty) Ltd Principal contractor Juan Hugo of Juan Hugo Construction Electrical engineer Dimitri Lourandos of Solution Station Fire consultant Dimitri Lourandos of Solution Station

located between apartments, as are informal gathering spaces, creating opportunities for social interaction.

The Moroka student residence was designed and built

The building optimises passive thermal comfort

for the Sol Plaatje University in Kimberley in the Northern

through optimal orientation of the rooms, augmented by

Cape. The ground floor houses communal and public

a highly efficient TABs system. The aesthetics and materiality

facilities, with four floors of apartment-style student

of the building make use of honest and robust material

residence above it. The residence is an integral part of

to achieve a stylish, low-maintenance building.

Ken Reynolds Nedbank (Pty) Ltd

the learning environment, and is located within the central campus precinct, adjacent to key lecture facilities. Creating an environment in which learning extends beyond the confines of the lecture venue and onto the walkways and lounges, this extension is intended to provide a secure and comfortable living environment that fosters a sense of belonging among students. The apartment model is central to this social structure. Each apartment consists of six to eight rooms with a shared ablution, kitchenette and living space per apartment.

Architects Activate Architecture Project managers Aecom Quantity surveyors Limco QS Civil engineers Aurecon Structural engineers Element Consulting Mechanical engineers Royal Haskoning DHV Other consultants Ludwig Hansen, Insite, Aurecon Principal contractors Qualicon Construction Electrical engineers Civil Sense Fire consultants Aurecon Green consultants Paul Carew Consulting, General Images

Nonku Ntshona Nonku Ntshona & Associates Quantity Surveyors

Seminar rooms for group work and club gatherings are

TIAL DEVELOPME IDEN NTS RES

Queen Mjwara Eris Property Group

SOUTH AFRICAN AF PROPERTY REVIEW

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excellence awards Winner: Overall Transformation

As an industrial area, Lords View is fully built

wetland and green belt, attracting a variety

Lords View Industrial Park (The Green Industrial Park)

to be fit-for-purpose, with widened road infrastructure, turning circles designed to

Enviroserv will be converting methane

Introducing green sustainability and beauty to

accommodate super-links that provide quick

into energy and will build a waste-to-energy

the industrial space, inside and outside the office,

vehicle flow through the development, a

(WTE) plant on three hectares in Lords View.

Lords View – built adjacent to a municipal landfill

central location to major business nodes, quick

This will eventually produce up to 27MVA of

site – opens the door to green energy production

multiple-option access to major roads, land

renewable energy. WTE plants are the only

and heat generation through bio gas and

acquisition, pre-zoning and timing benefits,

technology that will reduce dependency on

waste-to-energy means. Dams are sustainably

and planning for growth and connectivity of

land filling by reducing waste mass by up to

designed, and built to function as a wetland

the area to surrounding areas. Central and

95%; i.e. only three percent to seven percent

that promotes multiple species of fauna and

close to major and small airports, Lords View

will be waste. Lords View also incorporates

flora through the sustainable incorporation of

is fully serviced with electricity (up to 40MVA),

sustainable urban drainage systems.

legislation, principles of sustainability, and

water, storm water, sewer, fibre, and an on-site

Lords View Industrial Park is a park in an

aesthetic appeal.

cellphone tower to improve reception. It is

almost literal sense of the word – a park where

of flora and fauna.

Greening and landscaping are visible upon

registered as a catalytic project with EMM, thus

productive industry takes place. Lords View

entering at the main entrance from Allandale

client applications are facilitated with resourceful

has beautiful green landscapes, which give

Road, all the way along the private open spaces.

assistance – and it has the blue-chip companies

it a sense of place. By combining the concept

These have been made into attractive common

as tenants to show for it.

of “green” with aesthetics, the developers

areas that show an endless welcome to both

Lords View is an end product of the

have softened the boundaries between work

employees and employers, all the way to their

rehabilitation of an old quarry into a world-

spaces, introducing to the market an incredibly

work-conducive environment with its exercise-

class green, large-scale logistics and industrial

attractive product and an environment that’s

promoting areas.

park that cover 1,3-million square metres.

conducive to work.

Landscaping is planned to be in unison with

The old borrow pits have been utilised as storm-

Lords View sources permanent services

the outdoor furnishing to accentuate the natural

water

water

locally, and has a long-term focus on up-

concept of the park, and promote association

will be used to irrigate the common areas

skilling and advancing local security and

with sustainability.

and the green belt; they also create a new

landscaping expertise.

Developer Lord Trust Developers (Pty) Ltd Architects The Creative Axis Architects Project managers Lord Trust Developers (Pty) Ltd Civil engineers Knight Piésold Other

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SOUTH AFRICAN PROPERTY REVIEW

attenuation

ponds,

and

consultants GIBB Electrical engineers Topack Consulting Green consultants Eco Assessment Landscape architects Uys & White Landscape contractor Green Acres

RANSFORMA TION RALL T OVE


Judging Panel

IL RETA

Architects MDS Architecture Project managers GHC Africa Project Managers Quantity surveyors NWS Quantity Surveyors Civil engineers Aurecon Structural engineers Aurecon Mechanical engineers Graeme Page

Winner: Retail Developments

Mall of Africa – A new benchmark in retail design

DEVELOPMENT S

Consulting Engineers Principal contractors MOA JV, Group 5, WBHO Electrical engineers Rawlins Wales and Partners Fire consultants Specialised Fire Technology

glazed roof lights makes for a uniquely pleasing experience inside the shopping centre, while at the

The Mall of Africa on the Waterfall Estate near Midrand has

same time allowing shoppers to feel connected to

set a new benchmark in retail design, putting South Africa

exterior conditions.

(and Africa) on the map in terms of retail development.

Many cutting-edge digital trends have been

The mall is the largest single-phase shopping

incorporated into the design. In terms of tenant mix, the

centre in southern Africa, consisting of 132 994m2

design criteria have demanded flagship designs from

GLA, more than 6 500 parking bays, and an expansive

national and major tenants, and the integration of new

truck tunnel delivery zone. The mall’s expert retail

brands and stand-alone brands.

planning and tate-of-the-art designer architecture, all

Lying at the heart of Waterfall City, the Mall of Africa

placed within a new urban framework, have supplied

forms the key development within this urban framework.

the catalyst for a new CBD.

It is the hub around which the other mixed-use

The design inspiration for Mall of Africa and its courts was drawn from the geological beauty of the African

residential areas) are clustered. The Mall of Africa has been designed and developed

makes fantastic use of glass, with high shop-fronts

by Africans, but it can stand proudly in global alignment

and key structural glazed elements. The abundance of

with the most outstanding international retail centres.

Winner: Overall Heritage

irrespective of rank or race – representing South Africans

Sandi Mbutuma Azzaro Quantity Surveyors

in a unified way, without segregation. The Creative Axis Architects was appointed to the

In 2016, as the centenary of the Battle of Delville Wood

transformation of the Delville Wood memorial project

approached, the memorial was added to and given a

in November 2015, and the brief was to upgrade the

more appropriately inclusive character. The upgrade was

memorial site in France. A significant part of the brief

designed to reflect the true South Africa, and the concept

here was to put right the fact that the full story about

did not refer to rank or race. The design resulted in a gentle

the sacrifice made by South African soldiers in World

but emotionally significant adjustment to the landscape.

War I had not been told.

On entering the site, one can still see the original

The South African Native Labour Corps was originally

Herbert Baker memorial, with little idea that there’s

formed as a result of the British request for labourers

anything beyond it. On proceeding through the arch of

to alleviate a labour shortage at the French ports on

the memorial, the new layout starts to emerge. The design

the western front. Four to five thousand black South

incorporates a large earth berm, bisected by a deep

Africans were in active service as soldiers at the Battle of

cut into the earth on the axial pathway between the

Delville Wood in France.

memorial and the museum. The cut in the landscape is

In both the 1920s memorial and 1980s museum,

symbolic of a scar – the wound to South Africa that the

no representation was made of the non-white soldiers

massive losses at the battle represented. On either side,

who served and died at the battle. In 2016, the

within the “scar”, concrete walls lined with limestone bear

memorial was upgraded, with the upgrade designed

the names of fallen soldiers in alphabetical order,

to reflect the true South Africa.

Developer South African Heritage Resources Agency (SAHRA) Architects The Creative Axis Architects Project managers Anix Consulting Quantity surveyors Talani Quantity Surveyors Civil engineers Nako Iliso Structural engineers Nako Iliso Mechanical engineers Nako Iliso Electrical engineers Nako Iliso Heritage consultants Mayat Hart Other consultants French Plans (France) Principal contractors STAG (France) Fire consultants Nako Iliso Green consultants French Plans (France)

Sam Silwamba Old Mutual South Africa

components (retail, offices, conference, recreational and

continent, into a loop mall, double-level centre that

The Transformation of the Delville Wood War Memorial and Museum

Rudolf Nieman Sterikleen

T DEVELO PME ISHMEN URB NTS REF

Stuart Gibbs Zenprop Property Holdings

Wessel van Dyk Nsika Architecture and Design

LL HERITAGE OVERA

Zinon Marinakos DSA Architects International

SOUTH AFRICAN AF PROPERTY REVIEW

43


the SAPOA Annual Convention & Property Exhibition figures

1 237 Attended – 2017 CT

at the welcoming cocktail party

150

attended

Convention dinner and awards

978

THE SAPOA A N N U A L CONVENTION & PROPERTY EXHIBITION

67 companies exhibited 1 136

50

delegates on township tour

players at Golf Day

SAPOA partnered with CNBC for branded crossings

7interviews with speakers Advertising (rand) value equivalent (AVE)

1

premier broadcast rebroadcast on-screen bug

Clip count

Social

80 161

Social

816

Print

3 419 323

Print

91

Broadcast

2 935 776

Broadcast

52

Online

4 475 223

Online

127

A combined total of R10 910 484 Note: highest in the history of our conferences

A combined total of 1 087

Hashtag #SAPOA17 was the number-one trending topic on 21 June 2017. 44

SOUTH AFRICAN PROPERTY REVIEW


the SAPOA Annual Convention & Property Exhibition figures face to face

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2016

elite law firm

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REGISTER

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South African Property Owners Association - Property Register

EACH YEAR WE ACCEPT a large number of listings and advertisements from SAPOA professionals and service providers across the entire spectrum of property activities. Don’t miss out on this well-used, popular industry resource. SAPOA aims to provide added value by offering the basic listings free of charge to all members. In this respect, we hope that we are assisting you in your marketing endeavours to some extent. We thank you for your support in previous years. In an effort to improve the look and ease of usage, we have redesigned the directory layout to a four-column grid and have made available certain entries that will stand out from the norm.

2015/12/01 11:25 AM

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Journalism Awards for Excellence

Journalism Awards for Excellence 2017 Dedicated and professional members of the media who excelled in reporting on the property industry were honoured at the Journalism Awards for Excellence 2017. A total of 31 entries were received this year

T

● ● ● ●

he SAPOA Journalism Awards for Excellence 2017 were awarded in four categories: Property News Journalist of the Year Property Feature Journalist of the Year Property News Website of the Year Property Publication of the Year

There was a strict list of criteria for each category that needed to be met when deciding the ultimate winners. Members of the judging panel were chosen on the basis of their ability to provide a fresh perspective and insight, and featured a number of highly respected professionals across a range of disciplines: 1. Brian Azizollahoff – Managing Director of Propertiq 2. Nomzamo Radebe – CEO of JHI Group, a division of Cushman & Wakefield Excellerate 3. Izak Petersen – CEO of Dipula Income Fund 4. Chele Moyo – Vice President: Commercial Property Finance at Barclays Africa Group CIB 5. Hilary Joffe – Editor-at-Large of Business Day 6. Rob Rose – Editor of Financial Mail 7. Ron Dervy – Editor of Business Times 8. Ryk van Niekerk – Editor of Moneyweb

Judging panel for the 2017 SAPOA Journalism Awards for Excellence

Brian Azizollahoff, Propertiq

46

Property News Journalist of the Year was awarded to Alistair Anderson from Business Day

Ray Mahlaka of Moneyweb is the Property Feature Journalist of the Year 2017

Nomzamo Radebe, CEO of JHI Group (a division of Cushman & Wakefield Excellerate)

SOUTH AFRICAN PROPERTY REVIEW

Izak Petersen, Dipula Income Fund

Chele Moyo, Barclays Africa CIB


Journalism Awards for Excellence

SA Property Insider (represented by Thabang Mokopanele) is the Property News Website of the Year

Louise Fenner-Solomon and the team at Architect & Builder were awarded Property Publication of the Year

SAPOA 2017 Journalism Awards for Excellence were sponsored by

Hilary Joffe, Business Day

Rob Rose, Financial Mail

Ron Derby, Business Times

Ryk van Niekerk, Moneyweb

SOUTH AFRICAN PROPERTY REVIEW

47


face to face

Elevating Africa and taking South Africa with it South African Property Review speaks to Bora Gulan, President of Otis North and Central Europe, Africa, and Daniel Daphne, Managing Director of Otis Africa, about Otis’s immediate and long-term investment plans to develop its new South African incubation hub, the African Academy, into a “future centre of excellence” for Africa, and a gateway to the African continent Interview by Mark Pettipher

Bora Gulan, President of Otis North and Central Europe, Africa

T

he tallest elevator ever installed by Otis is in the Burj Khalifa in Dubai, still the tallest building in the world. Also the fastest elevator in the world, it serves 160 storeys. In the last 100 years, 10 buildings have claimed to be the tallest in the world, among these the Empire State Building, CS Towers (Willis Towers), Petronas Twin Towers, and Melon Tower in Malaysia. Some held their record for as little as eight months; the Empire State maintained its rating for more than 30 years. The most impressive statistic to emerge from all this is that nine of the 10 installations were Otis’s. “Innovation is not new for us”, explains Bora Gulan, a key executive in the global elevator industry and President of Otis North and Central Europe, Africa, “It is our legacy, handed down by our founder Elisha Graves Otis, who started the Otis elevator journey with his invention of the first safe elevator in 1853. Since then we’ve introduced many innovations: the first escalator, the first electrical escalator, the first automatic doors in an elevator, the first micro suppressors to control the computer-controlled elevators, and so on. It all began with us, and we successfully maintain our legacy on the global platform.

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SOUTH AFRICAN PROPERTY REVIEW

“It’s a great challenge when an architect designs a building that’s 1,2km high, and we have no elevator solution to fit the system. We work with the architect, developer and engineering team to develop something. The phenomenon in Formula One racing seems likewise a trend for us. An extraordinary need is the catalyst for innovative technology: just as the first ABS braking system was invented for Formula One racing, soon everyone was using the invention in everyday life. “Today we have several legacies to perpetuate. After 164 years, Otis remains the undisputed industry leader, which we don’t ever take for granted. We work continually to transform our business, and the industry we created. We continually break ground with our more challenging projects, and have no real competitors. We compete against ourselves. “Otis’s main innovative hub is in Gien, France where we invest a great deal into developing new technologies. We continually generate new global and regional product releases. We invest in service transformation, producing digital tools, mobile tools and so on to make the service of our business, our elevators and our customers more seamless. We invest continually in improving our operational excellence, our manufacturing output and our quality. At our incubator hub at Gien, disconnected from the world, we can very quickly test our new marketing themes and any fresh ideas coming in from customers. We invite customers in to test the ideas with them before we finally deploy them. “Our key goal to grow with the transformation happening in Africa calls for many in industry with people skills – hence our plan to develop our people locally. In July, we launched our new African Academy in Johannesburg to provide training in every aspect of human resources, to the whole of Africa. The Academy is designed to offer a comprehensive range of skills training

programmes such as technical, sales, managerial, and more. Our subcontractors will be trained and accredited in our important new installation techniques for safety. Safety is our number-one priority. Customers will also be welcomed to find out what’s new in the industry, and what to look for when buying and using an elevator. Although not linked or accredited through any particular university, we approached several Wits professors, experts in their subjects, to assist with building our courses. We know it is not the name but the course convener’s level of expertise that really counts.”

Daniel Daphne, Managing Director of Otis Africa

Moving our Africa headquarters into Africa speaks volumes about how serious Otis is about commitment to its business in Africa, says Daniel Daphne, Managing Director of Otis Africa. Our tenure in Africa is not shortterm; we are here for the long haul. It is a bold move for us, but the opportunistic approach in Africa is over. Our aim in every country in which we operate is to be a local company with multinational experience. It gives us the opportunity to work with the local communities. Our training will educate the local people, giving them fantastic opportunities. We will be local and global.


face to face “In Europe we train our mechanics constantly, and we’ll have people coming from Africa for training here. It’s time for this organisation to be mature and independent in respect of expertise, and achieve this by focusing on its trainees. Many customers remind us of a time when Otis was the university of the trade. We shall recapture this here in Johannesburg.” “Sixty-eight youngsters start our scholarship programme on the day we open, and another 40 start in August,” says Gulan. “Our intensive selection brings in young trainees from various neighbourhoods, such as Alexandra. Trainees will effectively work and study in our Johannesburg incubation hub. We believe they will transform our company. Our commitment is to make significant changes for the good in their lives, and quickly. For some, the first paycheque at the end of the first month could equal the whole family’s income, making a big difference to their life. As a youth sponsorship programme, it is a win-win situation. We will produce great employees, and we are a loyal employer.” Otis, with its parent company United Technologies, has run many global programmes like the employee scholarship programme. It has spent well over a billion US dollars sponsoring university and higher education for employees. The company enforces no restrictions. Employees are permitted to study anything from nuclear engineering to business and art. Otis believes that well-educated employees are more useful to the company. In terms of company policy, there is no repayment and no service obligation in lieu of repayment. According to Gulan, “Localisation is the cornerstone of our Africa strategy. South Africa is the Group’s new gateway on the continent. Our elevators are installed in housing, business centres, malls, metros and airports. A recent example in Africa is the Algiers airport, completed last year, and one of the biggest in Africa. The Otis flagship, with our 450 employees and new executive headquarters in Johannesburg, will deliver growing development support to most African markets, including the municipal sector. ‘Possibles’ in the pipeline for us are the new Discovery Insurance building, and a 1,2km installation that we hope to hear about. We are fighting for both! “We are constantly adding more features to the technology to revolutionise the industry, Soon, you will summon the lift with your phone, without pressing a button. The elevator will sense your arrival via your phone or security batch card and greet you by name; if you work

on the 10th floor, it will direct you to ‘elevator B’. You will not touch anything. Elevators will have more sensors, and we will remotely detect and predict more upcoming failures, diagnosing and fixing a problem before it becomes a problem. We will be able to sense the usage patterns of the users, and adjust the elevator according to those patterns. The machine control room will be on the ground floor, not the top. Elevator systems will be more intelligent, more connected to the other systems in the building, and more secure because of new scanning devices such as bomb detection – a serious issue today.” “A quite recent, exciting innovation from Otis is ‘the switch’, a new device destined to be extremely useful for Africa,” says Daphne. “First, its consumption is ridiculously low – no more than the average hairdryer. It works in mono phase, and is simply plugged in. Second, if accidentally unplugged, it runs for another hundred hours. This has huge implications for maintaining security during load shedding – elevators will continue to operate safely for two more days. Homeowners with private lifts can still go out.

Otis South Africa launches training academy Interview by Maud Nale

G

lobal manufacturer of elevators and escalators, Otis South Africa, launched its training academy in June 2017. This is in line with its skills development programme, designed to create technical and functional expertise in African markets. According to Segren Reddy, General Manager for Otis South Africa, building skills and expertise through the Otis Training Academy is a key element in positioning South Africa as a hub for Otis products on the African continent. “The skills shortage in the technical field has Otis struggling to find qualified mechanics who can service and maintain our equipment while meeting its stringent safety standards,” he says. “With the recent statistics released on the unemployment rate in South Africa, Otis acknowledges that it can contribute to the reduction in unemployment by doubling the intake of learners into the learnership/ apprenticeship programme.” Otis, in partnership with merSETA, has been able to run a very robust learnership/ apprenticeship programme. It currently hosts 68 learners and graduates and, on average, sees 15 mechanics qualify each year. Last year, 21 learners qualified, all of whom were subsequently employed by Otis.

In terms of load shedding, all our elevator systems are also regenerative, without exception. They generate electricity going up (using a dynamo) and going down (provided they are full). The electricity is stored in batteries, and the elevator switches seamlessly to the batteries during a power failure. Unlike using a generator, you do not hear or feel a thing.”

Segren Reddy, General Manager for Otis South Africa

Apart from graduating learners with an NQF Level 4 Mechanic qualification, the training academy will offer programmes ranging from service and maintenance, installations and quality to environment, health and safety, sales, field engineering and operations, supervision, project management, general management and leadership, as well as a module on doing business in Africa. The training framework will ensure development of clear career paths, allowing employees to progress through the organisation, bringing about talent development and far greater employee retention. In addition, the training academy will provide training to subcontractors and black entrepreneurs participating in the Otis B-BBEE programme. The vision for the academy, according to Reddy, is in line with the company’s vision to remain committed to and delivering on its promise of uncompromising quality and safety. “For Otis, it is imperative that it has strong leadership, and a highly skilled, customer-centric and competent workforce to ensure it retains its global leadership position,” he says. “We hope that the Otis Training Academy will become a larger training space for partners and distributors across Africa.” SOUTH AFRICAN PROPERTY REVIEW

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The gig is up:

say hello to your dream workplace Ever dream of having the flexibility to work wherever you want? Working less, but getting paid more? Setting your own hours? Ultimately being your own boss? Who doesn’t like the sound of that? By James Maddock, Head of Global Occupier Services at EMEA

T

hanks to free communication channels and globalised networks, this dream has become an achievable reality for the fastgrowing ‘“gig economy”, which is comprised of 20 to 30% of the working population – or 162-million people worldwide. These “gig” workers – often referred to as consultants, contractors, freelancers or temp workers – are ultimately changing the corporate landscape and how we work. Now, companies can much more easily hire nonpermanent employees on an as-needed basis, while gig workers are enjoying the freedom, flexibility and work-life balance they crave. Everyone wins. Well … perhaps not everyone. Gig workers do lack healthcare benefits and job security, and a small percentage would prefer a traditional job but haven’t found the right role. However, even with these drawbacks, 40% of the workforce will be freelancers, independent contractors and “solopreneurs” by 2020. This statistic alone speaks volumes about the impact the gig economy is sure to have on the workplace of the future.

The gig economy is here to stay Globalisation of work, global trade, and technology shifts such as the rise of smartphones, are huge contributors to the gig economy – and these trends aren’t going away any time soon. In fact, by 2020, 80% of the world’s population will own a smartphone, according to The Economist. And with more data being created in the past three years than in the entire previous history of the human race, it’s pretty clear the gig economy is here to stay.

Saying goodbye to the traditional workplace The gig is up. Since we are working differently now, corporate workplaces must be prepared to support these changes.

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SOUTH AFRICAN PROPERTY REVIEW

Firms are increasingly redesigning their offices to provide fewer private offices and cubicles, and more open and collaborative space, to address the fact that 30 to 50% of their workforce are not actual employees. The goals are twofold: first, to provide workplaces that facilitate discussion and collaboration; second, to decrease the firm’s overall rent bill by providing less physical space per worker. Contracting and collaborative workplaces are key factors in why office vacancies remain elevated even with our economy at full employment, and why so little new office

More and more gig workers are utilising coworking or collaborative spaces such as Regus, the industry leader in shared work space, which has 3 000 locations in 900 cities across the globe, or WeWork space is being built. Continued economic and job growth won’t change that. We just don’t need as much office space. More and more gig workers are utilising co-working or collaborative spaces such as Regus, the industry leader in shared work space, which has 3 000 locations in 900 cities across the globe, or WeWork, which claims 50 000 members who work in its spaces. Together, they and other providers of coworking space have leased several million square metres of space in the past few years, and that trend is sure to continue with the growth of this economy.

The gig economy also has an impact on traditional corporate culture and employee engagement. With so many contractors in the mix, it’s more important than ever to demonstrate a commitment to all workers – whether full-time or temporary. When all workers are engaged, they are more likely to be committed to company goals. Plus, you never know where a contractor may end up. They could return as a full-time employee or even work for one of your clients one day.

How CRE executives can plan for the future Now more than ever, CRE needs to secure a seat at the table with other businessunit leaders when discussing the company’s strategy and forward-looking plans. There needs to be a good understanding of not only who will be using the space, but how and when they will be using it. Different groups should be considered and consulted with when planning. For instance, according to Deloitte, 70% of millennials might reject traditional employment/ business and choose to work independently in the future. Given this reality, this group’s work styles should definitely be addressed. In addition, artificial intelligence and robotics will be more prevalent in the near future and their presence should be factored into the planning as well. Armed with this type of information, companies can design and continually redesign a workplace that works for their organisation going forward. At the end of the day, businesses that will be successful in the future will be those that break down the barriers between people, workplaces and technologies, and empower their employees to be productive and creative no matter where they are. w: james.maddock@cushwake.com


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office space

IT’S NO SURPRISE THIS ECONOMY IS GROWING SO QUICKLY. BELOW ARE JUST A FEW OF THE REASONS WORKERS ARE CHOOSING TO WORK INDEPENDENTLY AND COMPANIES ARE CHOOSING TO HIRE MORE OF THEM.

LIVING THE

Ability to WORK LESS and EARN MORE, depending on the field

DREAM FREEDOM

to choose type of work

VERSATILITY

Working simultaneously for different clients on different projects

FLEXIBILITY

to work when and where you want

Ability to

TURN DOWN

projects when not interested

Lower

SPACE COSTS

SCALABILITY

Can expand workforce in periods of peak demand

EXPANSION

when company is in growth mode

BENEFITS FOR COMPANIES

Ability to bring in certain expertise on an as NEEDED BASIS Reduced cost of

HEALTHCARE and other benefits

6

The Occupier Edge

SOUTH AFRICAN PROPERTY REVIEW

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events

BOMA International Conference & Expo

FROM LEFT Henry Chamberlain, Lisa Chamberlain, SAPOA CEO Neil Gopal, Hannelie van der Merwe, Lisa Prats and SAPOA President Peter Levett

Monday general session with Henry Chamberlain

Monday general session panel

T

his year’s Building Owners & Managers Association (BOMA) International Conference & Expo, which took place from 24 to 27 June 2017, was one for the record books. Property professionals from around the globe, including newly elected SAPOA President Peter Levett and SAPOA CEO Neil Gopal, gathered in Nashville, Tennessee, for best-in-class education, unmatched networking opportunities, and solutions to meet every operational challenge and enhance asset performance.

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Newly elected SAPOA President, Peter Levett with Mark and Scott Kelly


events

Winner of Historical Building TOBY Award (The Wrigley Building)

Virtual reality goggles at the expo

Allied Universal security robot at the expo

International Workshop Group, with Neil Gopal as Chair

International workshop

SOUTH AFRICAN PROPERTY REVIEW

53


events

Port Elizabeth networking evening SAPOA PE Regional Council hosted a networking event, sponsored by Investec

FROM LEFT Gianluca Acquisto, Rob Edelson, James Parker and Jacques Wessels

T

he guest speaker for the evening was Councillor John Best, MMC for Safety & Security at Nelson Mandela Bay Municipality. He presented the topic for the evening, “Creating a safer city with specific interventions to achieve this goal�. Investec also sponsored the luckyprize draw. The evening was thoroughly enjoyed by all 40 delegates who attended.

FROM LEFT Jannie Wagenaar, Gordon Barnard and Chris Evans

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SOUTH AFRICAN PROPERTY REVIEW


events

FROM LEFT Mathew Gibbs, Gareth Scheepers, Mark Abrey and Prince Gqomfa

PE Regional Chair Mark Bakker and Councillor John Best

PE Regional Secretariat Caroline Ritson and Andy Vogel

Billy Schepers with Chris Evans

SOUTH AFRICAN PROPERTY REVIEW

55


events

KwaZulu-Natal breakfast seminar SAPOA KZN Regional Council hosted a breakfast seminar, sponsored by Dube TradePort

FROM LEFT Trevor Richardson, Gerald Franken, Andile Mnguni and Frank Reardon

Akhil Ganesh with Avisti Rabynath

FROM LEFT Nina Saunders, Julia Randles and Douglas Tatham

Karen Browne with Anton van Weers

T

he welcome address was given by Regional Chair Edwin van Niekerk, who then handed over to Dube TradePort Chief Executive Officer Hamish Erskine. Erskine delivered a presentation on the topic, “The developers’ guide to Dube TradePort Special Economic Zone and the Durban Aerotropolis”. The presentation was much appreciated by all 73 delegates in attendance.

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SOUTH AFRICAN PROPERTY REVIEW

FROM LEFT Paul van Heerden, Deon Govender, Nomvula Mdluli and Warren Fielding


events

FROM LEFT Keith Wilson, Ben Funlake, Kaya Ngqaka and Rob Knowles

FROM LEFT Fundi Dlamini, Eric Phala and Pumla Mlondo

Martin North

FROM LEFT Corne van Rooyen, Raymond Roos and Taryn Muller

Thandekile Sibiya with Garry Hamilton

FROM LEFT Fiona Hodge, David Warmback and David Jollands

Ted Fountain with Michelle Benn

SOUTH AFRICAN PROPERTY REVIEW

57


events

Mpumalanga breakfast session SAPOA Mpumalanga Regional Council hosted a breakfast session in Nelspruit last month about “The Role and Impact of the Commercial Property Sector: Mpumalanga and the City of Mbombela”

F ROM LEFT Regional Chair James Aling, Deputy Chair Derek Todd, Ernest Jele, Pierre van Jaarsveld and Luan Cilliers (Urban-Econ)

Jackie van Tonder

Theuns Schoombee

Lizl Pretorius (Chas Everitt) with Joe Izeboud (HL Hall & Sons Properties)

T

he speaker on the morning was Pierre van Jaarsveld, Senior Development Economist at Urban-Econ. The company was also the event’s main sponsor. SAPOA partnered with the Mbombela Local Municipality to conduct a GDP research project, with Urban-Econ as the designated town planners. Van Jaarsveld presented the findings of the project, and highlighted the importance of collective effort between the private and public sector in maximising economic growth in the province. The delegates found the presented research extremely useful, using the networking opportunity to ask questions and make comments about it to SAPOA Regional Chairman James Aling and Mbombela local municipality representative Ernest Jele, as well as Urban-Econ. The breakfast session was held in partnership with Urban-Econ, with financial contribution from Du Toit-Smuts and Mathews Phosa Attorneys.

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Sakkie and Amanda De Lange

FROM LEFT Estelle van der Walt, Owen Wiggins, Gugu Mkhatshwa and Sabine Walker


UPCOMING EVENTS & TRAINING PROGRAMMES AUGUST TRAINING PROGRAMMES Gauteng

Occupational Health and PROPERTY REVIEW - LogoTreatment.pdf Safety (OHS) Workshop

15

KwaZulu-Natal

Method for Measuring Floor Areas in Buildings (MOMFA)

18

Gauteng

Sectional Title Workshop

04

AUGUST EVENTS 1

21-23 Gauteng

Property Financial Programme (PFP) Intermediate

21-25 Gauteng

Real Estate Investment Analysis (REIA)

21-25 KwaZulu-Natal

Facilities Management (FM)

31

Conveyancing for NonConveyancers Workshop

Gauteng

SEPTEMBER TRAINING PROGRAMMES 01

Gauteng

Method for Measuring Floor Areas in Buildings (MOMFA)

15

Gauteng

SANS 10 400

19-20 Gauteng

Negotiation Skills Masterclass Programme (NSMP)

22

Gauteng

Introduction to Brokering Seminar (Day 1)

29

Gauteng

Conveyancing for NonConveyancers Workshop

OCTOBER TRAINING PROGRAMMES 02-06

KZN Gauteng

Introduction to Real Estate (IRE)

05

Gauteng

Introduction to Brokering Seminar (Day 2)

12-13 KwaZulu-Natal

Negotiation Skills Masterclass Programme (NSMP)

20

Property Finance Workshop

Gauteng

2017

Dates are subject to change. Please see Sapoa.org.za for regular updates.

2016/08/25

08

Gauteng

Women’s Day Breakfast

17

Western Cape

SAPOA & WPN Women’s Day Breakfast

18

KwaZulu-Natal

Breakfast Seminar

18

Port Elizabeth

Breakfast Seminar

29

East London

Networking Evening

11:31 AM

SEPTEMBER EVENTS 07

KwaZulu-Natal

Broker Networking Cocktails

28

Limpopo

Networking Evening

28

Western Cape

Golf Day

TBC

Port Elizabeth

Networking Evening

TBC

Gauteng

Broker Networking Event

OCTOBER EVENTS 20

KwaZulu-Natal

Breakfast Seminar

TBC

Port Elizabeth

Breakfast Seminar


off the wall

Student accommodation gets a face lift fit for the future Gone are the days when student digs were back-to-basics bedsits designed to cater for lifestyle over studies. Today’s students have a different set of priorities… Complied by Phil Ruimte

G

reat Wi-Fi and plenty of power sockets now top students’ most-wanted lists when it comes to accommodation, according to JLL experts. “Student ‘digs’ are fast becoming more like hi-tech offices or a modern boutique hotel,” says Tim Harris, director and project manager at JLL’s UK Project and Development Services team. “In fact, students’ demand for Wi-Fi goes way beyond anything you’d get in an office, and the bandwidth is often better than an employer’s hard-wired services.”

Co-studying Comparisons between university life and the working world don’t end there. “Just as workers like to work outside the office as well as in it, students like to study outside the library as well as in it,” says Harris. “So we’re seeing communal spaces, which in the old days would have had TVs and table-football machines, being turned into work rooms not unlike co-working spaces. It’s what students want from their accommodation.” There are even suggestions that student accommodation should go one step further and provide start-up space for recent graduates. “There are many young people with cool ideas who need somewhere to develop their business – a sort of enclosed incubation hub,”

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SOUTH AFRICAN PROPERTY REVIEW

says Harris. “Student accommodation would really suit them because they can’t afford to rent an office on the open market yet. Meanwhile, they’re still young; they want to be looked after and continue enjoying the university experience. It could be a ‘soft release’ to the outside world. I think this may be where developers of student accommodation go next.”

Diverse demands Beyond connectivity and co-working, students’ accommodation wishes are influenced by their culture, their individual attitudes to study, their wealth and their age. This means there are no set rules. Some wouldn’t enjoy the solitude of a new-build serviced apartment far from campus, and would prefer traditional-style student accommodation near lectures. But with a growing number of Asian students studying outside of their home countries, universities must think specifically about this demographic’s needs. “For instance, did you know that rice cookers can use up more power than fridges, and that each Asian student will probably have one and switch it on every day at about the same time? Universities have to understand all their customers and provide for them,” says

Spacebox has been installed at several universities and institutes of learning to provide flexible, low-cost housing for students, key workers and young professionals. The University of Utrecht (pictured below) has installed more than 300 units within the campus grounds. Car parking is provided, and there is extensive bicycle storage to encourage the use of car-free transport. Each Spacebox has its own kitchen, toilet and shower room. There is a communal laundry. Other design options include communal café/sports/leisure rooms. Tenants report a high level of satisfaction with the facilities over several years of use. Harris. “This may mean retrofitting – or it may mean a new build.” And there is plenty of opportunity for both, with much of the UK’s student housing stock lagging behind the times and in need of modernisation.

Competing with the hospitality sector A fresh look is now key when it comes to monetising student digs all year round, with non-student income as important as the students’. If university accommodation resembles hotel rooms or serviced apartments, it will appeal to some students – but it will also compete with the hospitality sector for guests outside of term time. “UK universities are now in such competition for customers – both students and otherwise – that some are even installing IPTV in bedrooms so that during term-time students can see re-runs of lectures, while summer ‘hotel’ guests can get commercial content,” explains Harris. “It could be that many universities end up following the US model of providing easily rentable boutique space – because at the end of the day, universities want a rental income over a long period of time, especially if they are repaying the developer or funder who refurbished their buildings.”


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2017/05/12 11:09:17 AM

Property Review August 2017  
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