South African Property Review July 2016

South African Property Review

PROPERTY SOUTH AFRICAN

July 2016

REVIEW

50th Annual SAPOA International Convention and Property Exhibition

The SAPOA 50th Anniversary Convention & Property Exhibition

Broll Platinum Sponsor

Getting to know

Knight Frank South Africa July 2016

SVA International Partners in the industry’s progress

A passion for people and property

SAPOA events

13,500 PEOPLE

21,250 TENANTS

2,300 BUILDINGS

R150 b illion

IN ASSETS

1 1 million

SQUARE METRES OF LETTABLE AREA

345

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LEADING THE WAY Driven by excellence and forward thinking, we’re distinguished by our proud track record as Africa’s leading trusted provider of a wide range of integrated property solutions and services.

With our growing African footprint, we are setting the pace for property service excellence in Africa.

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CONTACT US Head office (Johannesburg): +27 (0) 11 911 8000 INFO@EPSGROUP.CO.ZA

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T H E F U T UR E OF P R OP ERT Y T HINKING EXCELLERATE FACILITY MANAGEMENT . EXCELLERATE BRAND MANAGEMENT . EXCELLERATE UTILITIES MANAGEMENT .

JHI . JHI RETAIL . JHI ADVISORY . JHI CRES . JHI STRUCTURES . ENFORCE . INTERPARK . SPARK . STERIKLEEN . ERADICO .

50K A T ASOUTH N G A . AFRICAN C H A T T E LPROPERTY S . F R E S HREVIEW . FIRST TECHNICAL . PROFICA

contents

July 2016

PROPERTY SOUTH AFRICAN

Abland

REVIEW

South African Property Review

PROPERTY SOUTH AFRICAN

July 2016

REVIEW

50th Annual SAPOA International Convention and Property Exhibition

The SAPOA 50th Anniversary Convention & Property Exhibition

Broll A passion for people and property

Platinum Sponsor

ON THE COVER Celebrating 50 years of excellent service to the Commercial Property Industry.

SAPOA’s 50th Anniversary Convention and Property Exhibition.

Farewell to incumbent President Mike Deighton and welcome, President elect, Nomzamo Radebe.

Getting to know

Knight Frank South Africa

Abreal

July 2016

SVA International Partners in the industry’s progress

2 4 8 18

From the CEO From the Editor’s desk Industry news President’s farewell Mike Deighton reflects on a year in the SAPOA Presidency 30 Platinum sponsor Introducing the Joburg Property Company 32 Education, training and development Feedback on the 2016 SAPOA Bursary Fund 34 Planning and development Taking the National Development Plan forward 36 Legal update Competition Commission’s enquiry into exclusivity clauses in long-term lease agreements 38 Celebrating 50 years of industrial excellence An institution is born 46 Eye on the world America 56 Profiles 99 Regional news 102 Events 110 What’s on upcoming events 112 Off the wall Thinking out of the box?

Oilgro

FOR EDITORIAL ENQUIRIES, email editor@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 Production Manager Dalene van Niekerk Designers Wade Hunkin, Eugene Jonck Sales Robbie Pansegrauw e: rob@mpdps.com; Riëtte Stevens e: sales@sapoa.org.za Finance Susan du Toit Contributors Anne Schauffer, Dr Modjadji Malahlela, Maud Nale, Mumtaz Moola Photographers Dryden-Schofield, Jabu Nkosi 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: llewellyn@rsalitho.co.za

P R O P E R T Y

F U N D

from the CEO

Here’s to 50 years of SAPOA 1966 to beyond!

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n 1966, individuals of concerned property developers and owners led by Andries van Riet joined forces to ensure their rights – and the rights of all in the industry –were taken into consideration by the South African government and the private sector. SAPOA was born; 50 years later it remains a South African institution.

The SAPOA family is a unique, memberdriven organisation that represents, protects and advances commercial and industrial property interests, in terms of ownership, management and development. As a member organisation, the voices of members are the most authentic in terms of uncovering the past, understanding the present and envisaging the future.

Where the industry had been fractured and individuals self-serving, it is now characterised by cohesion with a pooling of resources and knowledge, and defined by set standards and development practices. Where the industry had been led by individual voices, it is now characterised by one voice, representing and protecting the interests of all.

Fifty years on, SAPOA is considered an institution in the South African property industry. Regarded as an influential voice, it is able to bring the concerns and opinions

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of the property industry to government and other important stakeholders, both locally and internationally. It is easy to forget that more than 50 years ago SAPOA was merely an idea, a tiny seed that had yet to find purchase in the minds of even the most likely stakeholders.

In 2016, South Africa faces some significant social, political and economic challenges.

SAPOA realised the importance of ensuring its voice (and the voice of those it represents) is heard by government, in order to be certain that decisions made will be beneficial for all concerned.

By working together, the opportunity to make long-lasting decisions that will have a positive impact in years to come is where success lies, for both the property industry and for the country.

SAPOA, as a South African institution, is recognised both locally and internationally as a force to be reckoned with. We have established and maintained a healthy relationship with government on all levels, ensuring that robust dialogue takes place, in particular about issues facing the property industry. Government recognises that SAPOA members play a key role in determining the economic direction of the country, and SAPOA has a key role in ensuring that before legislation is set in stone, the voices of the property industry – and their concerns – are heard and taken into consideration.

Internationally, SAPOA has developed strategic relationships and partnerships, both formal and informal, with a number of organisations and agencies.

SAPOA considers itself to be a family, encouraging networking between members and industry leaders to ensure growth and vitality within the industry. Knowledge sharing at such a high level has contributed significantly to SAPOA being recognised as the official voice of the commercial property industry in South Africa. Contacts are made, mentorship relationships are formed, and a strong sense of family is created.

That SAPOA has not only existed but played a vital and ongoing role in the South African property industry for 50 years is testament to its governance structures.

Strong leadership has ensured that SAPOA remains on track and focused on the interests of all members, rather than a select few.

Additionally, SAPOA constantly re-evaluates its position to remain relevant to the issues of the day.

Over the past 50 years, SAPOA has worked (and continues to work) tirelessly to create a lasting legacy that will impact not only current members but members to come, and the property industry as a whole. SAPOA has striven to be relevant, transformative and empowering of others through its many endeavours to change the face and nature of the property industry in South Africa.

As we set our sights on the next 50 years, SAPOA will need to be flexible and adaptable, remain member-driven, continue to evolve and work from its strong foundation. In 50 years’ time, perhaps technology will have a bigger impact on SAPOA, and we’ll have to be adjustable to changes as they take place.

To the past and current presidents of SAPOA and former CEO Brian Kirchmann, who have contributed towards this legacy, I thank you for your hard work and dedication in bringing SAPOA to where it is today.

To you, our members: SAPOA starts with you. Without you, it would not have been possible to come this far. One of the reasons we have had such longevity is because of your support and loyalty. SAPOA is owned by you. It exists because of you, and I have no doubt that if we continue to remain relevant and on top of major issues, we will remain relevant for the next 50 years and beyond. Warmest thanks and deep appreciation for all your contributions, efforts and dedication in making SAPOA the success story that it is today.

Here’s to 50 more!

Neil Gopal, CEO

SAPOA events

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from the Editor’s desk

All that glitters must be gold Some say that 50 is the new 40 – so SAPOA’s life is just beginning

W LEADERS IN ECONOMIC & REAL ESTATE MARKET INSIGHT INCORPORATING

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HEAD OFFICE (Gauteng) Tel +27 12 460 7009 Fax +27 12 346 5883 Cell +27 82 898 8667 hein@demacon.co.za www.demacon.co.za Gauteng | Western Cape |Free State North West | Vaal Triangle

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hat more can be said about SAPOA’s 50 year journey of excellence, of being the voice of South Africa’s commercial property industry, and of its total devotion to advocacy in the property arena? Neil Gopal’s CEO message pretty much covers it. If there is any doubt in your mind, take a look at SAPOA’s history on page 38, where we look at some of the institution’s firsts and pay homage to the people who have given up their time to build the lasting legacy that is the South African Property Owners Association.

Our members are certainly pleased with SAPOA’s progress – and judging from the plethora of profiles we have in this, our Convention issue, there are many companies proudly associating themselves with an occasion as auspicious as our 50th anniversary celebrations. We thank them for their support.

Looking at the Convention that many of you are about to experience, we first must give thanks to the sponsors – our Platinum sponsor Joburg Property Company and our Gold sponsor Glad Africa Holdings (Pty) Ltd, and all of our silver sponsors, including Tongaat Hulett, RMS Remote Metering Systems, Fortress Income Fund Limited and Nedbank.

We also thank our corporate sponsors, Schindler for the notebooks and pens, JHI for the Journalism Awards, Growthpoint Properties for the Golf Halfway House, AECOM for the Mini Programme and Bidvest Services for the Internet café, as well as all the supporting sponsors, including Standard Bank, Vukile Property Fund and PWC. Without your generous support, the property industry would not be able to celebrate this landmark event.

Wednesday 22 June is certainly going to be entertaining. The convention will open to dignitaries and delegates alike, and SAPOA will be launching its new look – a corporate identity that will take the institution through its next 50 years. Then at the end of it all, you will be enthralled with a black-tie gala dinner, where the annual awards will be handed out and celebrated – an evening not to be missed.

At the same time, we bid farewell to Mike Deighton, our incumbent President and the

SOUTH AFRICAN PROPERTY REVIEW

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Chief Executive Officer of Tongaat Hulett, who has tirelessly carried the SAPOA flame with him wherever he has gone, both at home and abroad. We welcome President Elect Nomzamo Radebe, Chief Executive Officer of JHI, to the podium – she will carry with her the distinction of SAPOA’s first black female president.

Mike’s overview on page 18 takes us through SAPOA’s 2015 to 2016 achievements.

Also in this issue, our Eye on the World series looks at the USA – a fitting topic as Neil will be representing South Africa’s property industry at the Building Owners and Managers Association International Convention and Expo (BOMA) on 25 June in Washington DC. We wish him a safe journey.

There are many unsung heroes at SAPOA, and while we hurry to give thanks to our sponsors for making the Convention possible, we must also thank Jane Padayachee and her team for organising the event, as well as for the many other events that SAPOA puts on during the year. SAPOA has a small team of people, and the organisation would not run as smoothly as it does without everybody pulling together and the internal cooperation of the accounts, legal, planning and HR departments. On behalf of Neil and the Board, thank you for your dedication to getting a job well done.

Looking ahead to our August issue, we are excited to be focusing on Women’s Month with our Women in Property feature, a tribute to – and recognition of – the role women play in the growth of the industry.

We will also be reporting back on the Convention and introducing you to our new board members. If you were unable to attend this year, we will give you the opportunity to see who has won those sought-after awards mentioned earlier, as well as see the outcome of the 2016 SAPOA Innovative Excellence in Property Development Awards.

All that is left for me to say is, we hope that you will enjoy the Convention and this edition of the South African Property Review.

Until next time.

Mark Pettipher, Managing Editor

SAPOA events

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AKWENI LOOKS BACK AT ITS 10-YEAR JOURNEY WITH HUMILITY AND PRIDE

What does Akweni have lined-up for the next 10 years?

“We want our reach in Africa to grow, hence our strong and driven focus in this region. We are also strengthening our five business units to become more profitable, sustainable and replicable in Africa and beyond.”

2026, are you ready?

The year 2006 was a year of many firsts. It was in this year that Apple iTunes sold its one billionth song. It was also the year that Twitter launched and Facebook opened for public use. This was the year that the West African black rhino was declared extinct. For Anthony Afordofe, 2006 was a year of new beginnings and the birth of Akweni Construction and Project Management, a professional construction and project management company.

reckoned with in the industry, under the adept leadership of Anthony.

Like most young people, selecting a career was not clear cut for Anthony.

He had to choose among three very different career paths and with a little nudge from his father, he decided to study architecture, graduating with a BTech degree. This was the foundation of what would later become Akweni.

Today, a decade on, Anthony and his team look back at the 10-year journey with humility and pride as they celebrate the company’s successes. “At the age of 11, I told my parents I would one day own a business enterprise that would grow to serve people and their needs, I wrote this thought on a piece of paper and the dream became a reality that is still on its journey,” says Anthony, whose desire has always been to make a meaningful contribution Now occupying significant office space in Killarney Mall Office Towers and and difference in society. a second office in Anthony’s native Ghana, Akweni has become a force to be Today, in 2016, 10 years later, we look back at the incredible story of how Akweni moved from a small corner office to having an impressive project pipeline portfolio in excess of two billion in both Southern and West Africa with a view to expanding to additional territories on the continent.

Addition of study to residence, (JHB)

2006

SABC Offices, (Nelspruit)

2007 House Foli, (JHB) House Koranteng (JHB)

2008

E’Mhluzi Mall, (Middleburg)

2009

Sinica Warehouse, (Benoni)

2010

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Fezile Dabi Stadium, (Parys)

AKWENI AKWENICONSTRUCTION CONSTRUCTIONAND ANDPROJECT PROJECT

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En route to realising this dream, Anthony worked for Boogertman Krige Architects, ACSA and Abland. It is at ACSA & Abland that Anthony grasped all aspects of the private property development and program management business, having been entrusted with projects from inception to completion.

He spent intense years there, working 15-hour days on various commercial developments in Gauteng. By the end of 2006, Akweni Construction and Project Management had been registered and Anthony was ready to take on the market. It was a huge leap in an industry dominated by well-established entities but that only served as a push factor to boldly step into the market.

Anthony and his team look back at their first project with pride, as it is a testimony to a decade of hard work, learnings, successes and partnerships. It is a journey that started with being entrusted with an R18, 000 project to managing portfolios worth billions of Rands.

The growth of the portfolio was accompanied by positive adjustments to the company. Akweni’s human capital has grown in quality and quantity and consequently the company’s processes have been audited and certified to an ISO 9001:2008 standard as of 2015.

Further, the company’s client base has grown, both in the private and public sector. Moreover, the business has successfully established five distinct business units, “As a black-owned company, we wanted to take some of the namely: project management, construction, property existing and new market share and prove that we can also development, logistics and facilities management. participate within our industry, achieve One of the company’s main My vision was to provide a service excellence, grow our feats is the continued growth revenue, people, service into other regions of Africa, within our industry that bridges the offering, processes and specifically Ghana as well as technology that would drive diversifying into technology gap between technical and social our mandate to deliver through Kweni IT, which offers aspects of doing business. exceptional services to software testing and quality our market. assurance services.

My vision was to provide a service within our industry that “In achieving all this, we appreciate the partnerships that have sustained us for the past decade. This company would bridges the gap between technical and social aspects of not be where it is today without the dedication of the Akweni doing business. staff.

I can proudly say that in the 10 years that we have been in the industry, we have indeed achieved this vision and even “As a leader, I believe the law of attraction, ‘you attract what you think of’. If you want to master something, surround surpassed it,” says Anthony. yourself with people who are already doing it successfully, The passion to merge business and social aspects is the because successful people are proactive not reactive. As we very basis of Akweni Cares, an initiative developed to celebrate this milestone, we say here is to the next 10 years plough back and empower the communities Akweni works and beyond,” says Anthony. in. “We dedicate our time and resources to these initiatives because we understand that business is just not In Akweni’s 10 years of existence, the business has been about profits but uplifting communities, for it is these same successfully involved in diverse projects. The timeline below provides a few highlights of its decade long journey: communities that have made us reach this far.”

The man behind the Akweni success story, Anthony, is a versatile character, fascinated by both the technical side of architecture as well as its business side. Probed on what his favourite part of his job is, he says: “Selling! I enjoy the psychology of marketing and advertising and backing it up with technical ability to deliver quality services to our clients, with the view of creating repeat business and referrals.”

FreeFree State State Legislature Legislature Building Building

2012

2026, are you ready?

University of Johannesburg Multiple projects

JHB Development Agency COMDEV Phase 1 Inner City Commuter Links (Library, Museum and Art Upgrade Pahse 2 Gallery)

1111

What does Akweni have lined-up for the next 10 years?

“We want our reach in Africa to grow, hence our strong and driven focus in this region. We are also strengthening our five business units to become more profitable, sustainable and replicable in Africa and beyond.”

Mountain View Clinic

JHB Property Company Various projetcs

2013 South Gate Mall Extension (Game, Jet, HiFi Corporation, Builder’s Express,

FNB Ghana, (Accra)

South West Gauteng College Phase 1

JHB Property Company - Various Projects

FNB South Africa (JHB)

2014

2015

Shead’s Meat Market

ABSA, (JHB)

Slowvovile Clinic

FNB Ghana, (Accra)

MANAGEMENT MANAGEMENT10 10- -YEAR YEARPROJECT PROJECTHIGHLIGHTS HIGHLIGHTS

Volvo (Cape Town)

JHB Property Company Various Projects

JHB Development Agency - Various Projects

2016

industry news

Gold rush for Aurum development in Bantry Bay

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everal milestones have been passed in the transformation of The Ambassador Hotel in Bantry Bay, Cape Town into one of the most luxurious and sophisticated residential developments yet to be seen in Africa.

The City of Cape Town approved plans in April for the landmark property to be developed into eight presidential residences, each occupying its own floor with private lift access. The building currently housing the hotel’s executive suites (on the mountain side of Victoria Road) will also evolve into 15 luxurious apartments, capped by a showstopping four-bedroom 530m² penthouse.

The development will be known as Aurum, symbolising gold and radiant light. It is being undertaken by global property investment company Da’Realty, part of the 107-year-old family-owned Darvesh organisation.

Ahsan Hassan Darvesh, President of the global conglomerate, bought the hotel after a lengthy stay, during which he realised the potential of the spectacular cliff-face site with the Atlantic Ocean undulating below and Lion’s Head gazing down upon it.

Pam Golding Properties has been awarded an exclusive agency sales mandate, complementing a successful pre-launch announcement and marketing by Da’Realty.

Sales of 60% of the development are already secured.

“Aurum will redefine the concept of limited-edition living in South Africa,” said Basil Moraitis, Atlantic Seaboard area manager for Pam Golding Properties. “Its timeless style and incomparable quality will put it on a par with the very best in New York, Dubai and London.”

Da’Realty Chief Operating Officer Lily Eskandari, an interior architect currently based in Cape Town to oversee the development, said a survey of the building was undertaken this month in May with construction scheduled to start in June.

Occupation is set for September next year.

Orders have been placed with some of the most exclusive international manufacturers to ensure that Aurum is in an uncompromising class of its own: Armani Dada-designed kitchens, dressing room fixtures and fittings by Molteni & Co, Gessi sanitaryware, sound and visual systems

by Bang & Olufsen, and designer appliances

by Gaggenau.

The group has already built wellestablished relationships with more than 100

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famous luxury brands, such as Dior, Chanel and Dolce & Gabbana. These links are based on high-end turnkey projects undertaken by the group’s subsidiary, Elegant. It designs, manufactures and installs shop fittings for such brands around the world through its provision of creative, high-quality glass and furniture-fitting solutions for design and architectural industries.

This expertise will be utilised in the Aurum, creating features such as a cascading waterfall on the street-facing façade of each of the two buildings, linking them architecturally and hinting at the luxury within.

The reception areas will be adorned with fine glass and crystal chandeliers. Other features will include a luxurious spa, a restaurant, 24-hour valet and concierge services, and beautifully landscaped grounds around a feature pool.

Da’Realty has appointed Fabian Architects, engineering and construction group Murray & Roberts, and luxury home development company Metle to implement its ambition to maximise the potential of this exclusive address, under well-established Da’Realty brand guidelines.

“Our vision is to combine opulence and nature to culminate in lifestyle artistry,” said Darvesh. ”Only a true work of art could pay homage to this incredible setting. Aurum will redefine the concept of limited-edition living in South Africa.”

He added that high-net-worth investors seek environments that offer rare levels of scenic beauty, as well as exceptional

opportunities for leisure and pleasure. They also want easy access to art, culture, sport and fine dining.

“Da’Realty is focused on finding locations that exude these innate investment qualities, and in taking luxury development to a new level, promising not only luxurious living but also high returns.”

Darvesh said Aurum would be followed by a development in Clifton, with a goal of one niche boutique project annually in South Africa.

“Aurum is a location- and brand-conscious buy,” said Moraitis. “This is a trophy prospectus that we are offering to our international database, through our network in Africa and the Indian Ocean islands, and with our partner Savills.”

Sea-facing presidential apartments range in size from 270m² to 600m², with prices from R110 000/m² to R140 000/m².

On the mountain side of Victoria Road, the luxury residential units start at 140m², increasing in size to 550m². Each floor houses a maximum of three units.

Prices start from R95 000/m² and go up to R120 000/m².

Plentiful parking is available on one level of the presidential development and two levels of the mountainside development, with an additional 10 visitor parking bays.

The secluded location lays claim to almost 300 wind-free days a year. Clifton’s worldfamous beaches are only a few minutes’ stroll away, and there is easy access to top restaurants, the V&A Waterfront and the city’s financial centre.

Limited-edition living is up for grabs at the Aurum in Bantry Bay, Cape Town

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industry news

industry news Building trade with KwaZulu-Natal’s aerotropolis

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eveloping Africa’s first purpose-built aerotropolis, with Dube TradePort at its nucleus and home to King Shaka International Airport, is significantly impacting on north coast property patterns as ease of access prompts investors to acquire second homes in the region.

Dube TradePort Corporation’s acting CEO Hamish Erskine says new flights originating to and from Durban formed part of the larger implementation of KwaZulu-Natal’s economic and tourism development plans. These include stimulating local manufacturing, warehousing and logistics as new facilities are established at Dube TradePort, and the Tongaat Hulett Developments at Cornubia and RiverHorse Valley.

There was also an increase in property buyers from Gauteng and abroad, particularly given the rand’s value against international currencies. Tongaat Hulett Developments Director Rory Wilkinson says one example of the impact boosted economic development on the north coast has had on the property market was the sell-out of the Sibaya-based Ocean Dunes within a relatively short period.

“All these factors count towards adding value and increasing the demand for property on the north coast,” Wilkinson says.

The comments come as King Shaka International Airport experienced a watershed year in 2015 that witnessed Durban’s network boosted by four new airlines – Qatar Airways, Turkish Airlines, Ethiopian Airlines and Proflight Zambia – in addition to the daily Emirates flights and regional services to Harare, Maputo and Mauritius. Into that success, Economic Development, Tourism and Environmental Affairs MEC Michael Mabuyakhulu announced that a feasibility study for a rapid rail system connecting King Shaka International Airport with Durban, Pietermaritzburg and Richards Bay would be completed before the end of the year.

According to Stats SA, total international arrivals have risen 60% and foreign passenger arrivals to 22% since King Shaka opened in 2010 because of direct international flights. January 2016 saw a record in international arrivals with 15 895 passengers, an 85% hike from 2010.

“The international passenger market in the province registered a 20% growth year-onyear, indicating there is still a large untapped and growing market,” Mabuyakhulu says.

Erskine says international flights open and enhance global and regional trade links by moving passengers and cargo. Mid- to longhaul flights can haul between 10 and 30 tons of cargo as aircraft on these routes are widebodied. It is this global connectivity that will drive the aerotropolis and the associated economic growth, says Erskine.

In the past year, international cargo volumes from Dube Cargo Terminal rose by 12% to 8 000 tons, while the facility handled 6 400 tons of domestic cargo. Erskine says the organisation has concentrated efforts on driving cargo volumes by developing key infrastructure, including the state-of-the-art Dube Cargo Terminal.

In line with new airline route development, Dube TradePort, the KwaZulu-Natal government, Tourism KwaZulu-Natal, Trade and Investment KwaZulu-Natal, eThekwini Municipality, Airports Company South Africa and National Department of Transport have established a Routes Development Committee to implement programmes geared towards attracting new direct international flights. Focus also includes developing the Dube TradeZone, designated a special economic zone, as a specialist freight-orientated export environment and multi-modal logistics platform.

“Dube TradePort takes advantage of its prime location as the only facility in Africa combining an international airport, dedicated cargo terminal, warehousing, offices, retail, hotels and agriculture,” Erskine says.

Wilkinson says the increased economic activity from King Shaka International Airport and Dube TradePort speak to the appreciating value of the surrounding property and the investment potential. Prime residential, commercial and industrial land on the north coast is critical to boosting economic growth and development in the region as the airport and Dube TradePort anchored trade opportunities.

Aerial photograph of King Shaka International Airport and Dube TradePort (Photograph © Dube TradePort)

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industry news

industry news

Cornubia Interchange to create significant benefits for businesses

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he much-anticipated Cornubia link bridge and interchange scheduled for completion in the first quarter of 2017 will provide Cornubia based businesses multiple and unencumbered access to main arterial routes and a dedicated link into the heart of Umhlanga New Town Centre.

The roadway will be the second access route linking Cornubia to the N2. The link bridge and interchange form part of an extension to the Umhlanga Ridge Boulevard crossing over the N2 freeway adjacent to the flagship Porsche dealership.

This link will be part of the new Go!Durban Integrated Rapid Public Transport Network, a priority transport project that combines existing and new rail systems with Bus Rapid Transit systems, and road, pedestrian and bicycle facilities.

“The multimillion-rand link bridge will ensure that Cornubia is the best connected and accessible A-grade industrial estate in KZN, adding value to Redefine Properties’ newly completed uShukela Industrial Park,” says Dan Gardener of FWJK Quantity Surveyors. uShukela is a 27 660²m greenfield industrial development featuring 16 mid-size units ideal for light manufacturing, warehousing, logistics and similar applications.

Furthermore, the new N2 highway interchange will provide free-flow accessibility to the greater Cornubia precinct and uShukela Industrial Park,

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firmly positioning it as an ideal location for businesses looking for a strategically located industrial hub. uShukela Industrial Park is approximately 30 minutes from the port and the Durban CBD. Businesses commuting between Durban industry and Richards Bay can now reduce travel times when despatching from Cornubia.

Close proximity to the King Shaka International Airport, Umhlanga and Gateway shopping centres and Mount Edgecombe, should see uShukela emerge as a versatile multi-industrial facility. “uShukela, is welllocated for businesses to leverage its proximity to the port, CBD and retail centres,” says Johann Nell, National Asset Manager: Industrial, at Redefine Properties. “The benefit of efficient connectivity to central and northern nodes establishes our park as a key industrial facility, suitable to warehousing for smaller importers and technologyfocused industries. The design-led facility offers ambient lighting through translucent sheet inserts, LED lighting throughout and sectionalised industrial doors, delivering a greener environment to the local industry.”

The region is a future platform for oil, gas and renewable energy industries for local and export production.

With both Richards Bay and the Dube TradePort already established as industrial development zones (IDZ), the entire province is poised for explosive growth.

The DTI has earmarked Dube TradePort, along with the Tshiame IDZ in Harrismith, as the first to be transformed into special economic zones as soon as the regulatory framework has been established. This is expected to bring further attractive differentiated incentives for doing business in KZN. uShukela is taking shape on a highly visible site facing onto one of the main boulevards. Entry is from a controlled side road with a wide turning circle to allow even the largest vehicles to enter and leave with ease.

“We are seeing an increasing interest in the park on the back of its positive attributes as well as those to the area, and we are finalising tenancies for Block A at the moment,” says Nell. “As part of our Cornubia pipeline, we are able to entertain bespoke developments of up to 25 000m² for qualifying clients.”

Warehousing at uShukela industrial development

industry news Fields of Expertise (Full Scope of Professional Consulting Services) New Developments & Existing Installations:

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Traffic studies Concept and design proposals Specification & design detail Tender & adjudication Installation / cost control and verification Hand-over & close-out Project management Site Monitoring & Supervision Base-line specifications Green Buildings Facilitation (Lifts & Escalators)

Existing Installations:

Cape Town (Head Office)

Safety and OHS Act compliance audits Quality of maintenance and safety audits Risk & hazard assessment Due-Diligence inspection and reports Drafting of maintenance agreements Maintenance management Specialist technical & commercial support Energy efficiency tests & certification Qualified technical statements based on the ADIASYSTEM®

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www.tuv-sud.co.za

BUILDING for good New Water Reservoir Will Save Millions Basil Read, in collaboration with GIBB Engineering and Architecture and the Government, has built an innovative water supply and distribution system that now services its Savanna City development. The aim of the new system is to limit water losses by 10%, which equates to an approximate saving of R11 million per annum.

The centrepiece of this ground-breaking initiative is a new, purpose-built R37.3 million reservoir that holds 10 million litres of water. Constructed using ‘self-healing’ concrete that automatically expands to fill in any cracks that may develop. This new water supply has a distribution system which is divided into manageable zones incorporating a series of pressure reducing valves, which make leak detection and repairs much more efficient. The material used for the pipes was also carefully chosen for its strength and durability.

All in all, the new Savanna City reservoir is an outstanding example of Basil Read’s commitment to the sustainable use of our precious natural resources. By combining local insight with the best international technology available, Savanna City is leading the way in creating innovative urban planning solutions for the future.

Visit our website www.savannacity.co.za for more information.

Solid ground for starting your future and building it for good

TEL: 010 010 5316 www.savannacity.co.za

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industry news

Walking the path to smart growth and sustainable design for communities, one step at a time

International guest speaker Jeff Speck

“C

limate change isn’t just a disaster; it is also our best chance to demand and build a better world.” This quote from Naomi Klein, activist and author of The New York Times bestseller The Shock Doctrine: The Rise Of Disaster Capitalism, has inspired the theme for this year’s Green

Building Council of South Africa (GBCSA) convention, to be held in Johannesburg this July.

Inspiring professionals in the built environment to “Build a better world NOW”, the convention aims to stimulate awareness, ambition and action to design, build and operate better buildings – and to make this change swiftly.

Jeff Speck, one of an exciting line-up of internationally recognised sustainability leaders headlining the conference, presents a compelling case for radical design shifts so that cities, their citizens and their natural environments can thrive.

Speck believes it is time for our cities to take a step in a different direction.

An urban designer and author who advocates internationally for smart growth and sustainable

design, Speck is the former director of design at the US National Endowment for the Arts. As the overseer of the Mayor’s Institute on City Design, he has helped many US mayors overcome pressing city planning challenges. And as creator of the Governors’ Institute on Community Design, he has guided state governors in their fight against suburban sprawl.

Speaking on TEDCity2.0 from New York on the walkable city, Speck asks how we solve the problem of suburban sprawl and shows how we can free ourselves from dependence on the car, which he calls “a gas-belching, time-wasting, life-threatening prosthetic device”, by making our cities more walkable and more pleasant for more people: a measure termed “walkability”.

Speck cites three key benefits of walkability: economic, health and environmental: ●● He says the best economic strategy a city can have is no longer the old method of attracting corporations or creating industry clusters, but rather becoming a place where people want to be. This is especially true for Millennials who, Speck reports, will decide where they want to live, move there, and only then look for employment. ●● “Study after study ties where you live to your health,” says Speck. When it comes to the benefits of a walkable city, he notes obesity is directly connected to environmentallinked inactivity, higher level of exhaust pollution from cars is linked to illnesses such as asthma, and there are a higher number of road deaths in cities that are designed around cars rather than pedestrians. ●● When it comes to the environmental benefits of walkability, the new standards of measuring and mapping

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carbon emissions – per household rather than per square kilometre – have totally changed the way US environmentalists think about cities. While cities may be the highest generators of carbon emissions per square kilometre, each household in a city emits much less than those in the suburbs. Households on the urban edges generated the highest carbon emissions of all. Speck adds the denser the city, such as Manhattan in New York, the better they perform.

“We can do better. We want to do better. We want to be green,” said Speck, adding that “all the green technology innovations together contribute a fraction of what we contribute by living in a walkable neighbourhood a few blocks from a train station in the heart of a city.”

His assertion that we have to change our cities and our lifestyles to be more sustainable rings true with Klein’s statement: “If we’re going to change everything, it’s going to take everyone.”

The ideal opportunity to join the movement for greater sustainability is offered by the ninth Green Building Convention, on from 26 to 28 July 2016 at Sandton Convention Centre. The influential assembly plays a key role in shaping and developing South Africa’s green building agenda and is the highlight on the country’s sustainable development calendar.

“Climate scientists are unanimous in their findings: this is the decade to take action to prevent catastrophic global warming,” says Brian Wilkinson, CEO of GBCSA. “Now is the time for bold, focused leadership. Now is the time for collaborative action that benefits both humans and the living planet that sustains us. Now is the time to unite with one common purpose – to build a better world now.”

industry news

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industry news

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industry news

industry news

A short reprieve for consumers: good news for homeowners and buyers R

eserve Bank Governor Lesetja Kganyago recently announced that the Monetary Policy Committee had decided to leave interest rates unchanged for now, following the news that the consumer inflation rate had slowed for a second consecutive month in April to 6,2%.

This means the repo rate – which is the rate at which the Reserve Bank lends to commercial banks – will remain at seven percent for at least another two months, and that the prime rate and variable home loan rate will remain at 10,5%.

“At the moment, the concern weighing most heavily on South Africans is our low economic growth rate,” says Shaun Rademeyer, Chief Executive Officer of BetterLife Home Loans, South Africa’s biggest mortgage originator.

“This is projected to reach less than one percent this year and will be a major factor in the decisions that ratings agencies make about the country’s investment status.

“What these agencies want to see is that South Africa can deliver on its plans to increase growth and boost employment, as outlined by Finance Minister Pravin Gordhan in his budget speech in February and ongoing presentations to international investors. A rate increase at this time would have made it extremely difficult to do this – while not necessarily having any major limiting effect on inflation.

“What’s more, the latest unemployment figures from Stats SA clearly illustrate the danger of putting inflation targeting ahead of economic growth.”

In any case, he says, this decision is good news for homeowners and buyers.

“It means that the monthly repayment on a home loan of R800 000 obtained at an interest rate of 10,5% will remain at just under R8 000 – and that will give existing homeowners some comfort.

It also means that there will be no increase for now in car instalments, credit- and store-card repayments or any other debt commitments, which will give prospective buyers a little more time to qualify for a home loan at their current income levels.”

Nevertheless, he notes, as the banks are already following very strict creditgranting criteria, prospective buyers should apply for loans through a reputable mortgage originator such as BetterLife Home Loans, which is prepared to motivate and caretake individual applications, and can advise them as to the most suitable home loan option for their individual financial circumstances.

“The advantage in following this course is evident from the fact that we are currently able to obtain approval for 75% of the home-loan applications we submit, as opposed to a success rate of less than 40% in the open market,” he says.

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President’s farewell

Mike Deighton reflects on a year in the SAPOA Presidency Mike Deighton, SAPOA’s 2015-2016 President, looks at SAPOA’s achievements during his tenure and its 50th year of service to South Africa’s commercial property industry

M

ike Deighton, elected as SAPOA’s President at SAPOA’s Convention in Durban last year, said, “First, I’d like to thank our CEO Neil Gopal and his team of dedicated staff for the tireless efforts and support that they have shown me this past year.

“The Board and I could not have functioned as well as we have done, had we not had the support of the industry as well,” he added, qualifying his opinion that the industry really is about its people, and the difference cooperation makes in smoothing the way forward when wading through new legislation and municipal policy changes.

In his acceptance of becoming SAPOA’s President, Deighton had reiterated that SAPOA would continue to strive for excellence in the commercial property industry through education, through cooperation and through research.

“By forming strong partnerships with other groups and organisations, we continue to realise that such collaboration and cooperation is essential to successful advocacy,” he said.

Fostering and enabling the legal environment Given the evolving nature of the property market and the plethora of legislation that regulates it, the past year has been both eventful and insightful.

There continues to be a focus from the government on various areas that it has

About Mike Deighton In 1984, Deighton qualified with a BSc in civil engineering and subsequently studied for a BCom (Hons).

He started his professional career with the Durban Municipality.

In 1995, Deighton moved into property development, joining Gough Cooper Homes, which later became Group Five Properties. He was involved with Group Five Properties until 1999.

In 2000, he joined Tongaat Hulett Developments as Development Manager, and in 2005 he was promoted to Director: Commercial and Industrial Developments.

In March 2008, he was appointed Managing Director at Tongaat Hulett.

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President’s farewell prioritised and simultaneously begun or has completed by way of making policies available as well as its imperatives known.

At the forefront of the agenda, various pieces of legislation have been published in the last 12 months that pertain to land reform, transformation, the environment, tax and foreign investments.

The Legal Department continues to ensure that legal risks prevalent in the commercial property industry are mitigated for the protection of the mutual interests of SAPOA members.

At the end of 2014, the Legal Department set out its strategic goals for 2015. They included: ●● The drafting of clauses for legislation published for public comment as a strategy to assist Government in implementing the suggested comments with greater ease. ●● The fostering of good relations with the government departments that are publishing the pertinent bills that affect members. The ultimate aim is to be able to see and comment on legislation with the relevant department prior to it being published for public comment. ●● The increasing of sectoral knowledge by drafting more agreements and manuals, which will be of benefit to the industry.

These goals allowed the Legal Department to hone in on critical aspects of impacting legislation and cement critical discussions while establishing relationships.

Pertinent Bills and Acts Some of the pertinent Bills and Acts that have been closely monitored are discussed below.

Business Rescue In March 2015, SAPOA was invited to present its submissions regarding business rescue before the Specialist Committee appointed to investigate the business rescue provisions of the Companies Act, No. 71 of 2008 (Act).

One of SAPOA’s main arguments at the committee was that a tenant’s rental, from the time that the tenant goes into business rescue until the time that the business rescue process comes to an end, is post-commencement finance and accordingly, SAPOA requested the Specialist Committee to amend the Act to specifically provide for this.

Although the Committee was sympathetic towards SAPOA, it indicated that government was reluctant to change the Act and would prefer our courts to interpret the business rescue provisions in the Act and to create a body of precedent regarding those provisions.

The Specialist Committee acknowledged that property owners are placed in a difficult

SAPOA AT A GLANCE Revenue for the 2015 year was R35,2-million, down by 3,15% compared to 2014, while retained earnings increased by 0,01% to R12,9-million.

Over the last few years, SAPOA has contributed the following for the benefit of the industry: ●● R2-million towards the Property Charter; ●● R600 000 towards the establishment of the Green Building Council of South Africa; ●● R255 000 towards the Business Against Crime initiative; ●● R1,7-million towards the SAPOA Bursary Fund; ●● R1-million towards the industry Advocacy Fund; ●● R6,2-million since 2010 has been spent with regards to advocacy SAPOA has yet again received an unqualified audit from PwC, with a remarkable achievement of no audit suggestions. The auditors confirmed they indeed applied their mind strongly in this regard. position when a tenant is placed under business rescue but it was most reluctant to amend the Act to state that rental from the time that the tenant is placed under business rescue must be regarded as post-commencement finance.

Property Practitioners Bill The Property Practitioners Bill (“Practitioners Bill”) was withdrawn by the Minister of Human Settlements. SAPOA has in the past been in discussions with the EAAB regarding this Bill to ensure that SAPOA members’ interests are protected. SAPOA has drafted and sent a submission to the EAAB in response to the draft Bill.

Expropriation Bill This Bill seeks to replace the Expropriation Act, No. 63 of 1975.

The new Bill displays a fundamental departure from the expropriation model of the Expropriation Act. The Expropriation Bill was approved by Cabinet on 11 September 2014.

SAPOA has been engaging with government through Business Unity South Africa and have made comments regarding the Bill at the National Economic Development and Labour Council forum. We have further advised Government about our concerns, which include expropriation in certain instances being a disincentive for business as owners are not likely to invest in their properties without the certainty of security of tenure, the concerning issue of food security and the disincentive for foreigners to invest in the country.

Self-determined Municipal valuations Members brought to our attention that there are grave concerns regarding inconsistent and inaccurate valuations.

The implementation of the Municipal Property Rates Act has become problematic, resulting in general and supplementary valuation rolls that are not accurate, consistent, efficient or uniform as intended by the Act. This has a direct negative impact on property rates and it further impacts on landlord and tenant relationships as assessment rates are one of the top expenses on the landlord’s list of operating expenses.

A solution to this issue is the formation of a Valuers Office. Professional and registered valuers will work closely with the private sector in order to get the correct valuations for property owners. An accurate valuation roll can then be sent to the relevant municipality. This would be a key tool to fair rating.

SAPOA has opened a dialogue with the City of Johannesburg, who have shown an interest in the running of a pilot programme in order to begin to unlock the numerous benefits of this concept.

National Regulator for Compulsory Specifications There was concern among members regarding compliance with the National Building and Standards Act, No. 103 of 1977.

Of particular concern was the fact that due to unforeseen circumstances, there are instances where members are no longer in possession of occupancy certificates.

A meeting was held with the National Regulator for Compulsory Specifications and a possible solution was discussed.

This involved sending a letter to Minister Rob Davies advising him of SAPOA’s stance regarding the need to uphold legislation at all SOUTH AFRICAN PROPERTY REVIEW

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President’s farewell times and the current challenges it is faced with regarding the penalties in place for noncompliance with the Act.

Request for Proposal tool kit or guidelines to ensure fair tender processes

FROM LEFT David Green, Neil Gopal, Amelia Beattie, Mike Deighton and Estienne de Klerk

FROM LEFT Eusebius McKaiser, Neil Gopal, Tessa Deighton and Mike Deighton

FROM LEFT SAPOA President Mike Deighton, CEO Neil Gopal and BOMA International Chair and Chief Elected Officer Kent Gibson

SAPOA is compiling a Request for Proposal (RFP) industry tool kit to improve the RFP or tender process for developments. Currently, no guideline exists for submitting tenders with an RFP process.

The purpose of the guidelines is to ensure principles of fairness for everyone – both the business embarking on the process and those providing submissions. An industry guideline on the RFP process will encourage advisers to manage their clients’ process more suitably, create more certainty and ensure transparency and efficiency.

Conferences , government and municipal engagement During 2015 and 2016, we attended a number of conferences and events, such as BOMA International and the inaugural Small Towns Conference hosted by the South Africa Local Government Association (SALGA) in October.

A direct result of this relationship has facilitated that SALGA will be hosting a workshop at the SAPOA 2016 Convention entitled “Small Towns, New Future”.

By attending the Gauteng Spatial Development Framework Review and Gauteng City Regional Spatial Planning Summit hosted by the Gauteng Premier’s

What is the International Council of BOMA International?

The International Council consists of the real estate associations from around the world that have affiliated with BOMA International. ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●

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Asociación de Propietarios de Inmuebles Associação Brasileira das Empresas do Mercado Imobiliário BOMA Canada BOMA China BOMA Indonesia BOMA Japan BOMA Korea BOMA Mexico BOMA Philippines British Council for Offices Finnish Association of Building Owners and Construction Clients Greek Green Building Council Philippines Association of Building Administrators Property Council of Australia Property Council of New Zealand Russian Guild of Property Managers and Developers South African Property Owners Association

SOUTH AFRICAN PROPERTY REVIEW

BOMA’s mission: To advance global cooperation within the world community of commercial real estate by creating a more informed marketplace. Goal: To provide opportunities for highlevel networking to exchange information, best practices, research, standards, education and training and public policy strategies, and to facilitate business opportunities among members.

exhibit booths, special VIP programming, property tours and networking events exclusive to International Council members.

Main interests: ● Emerging trends in commercial property ● Reliable information on doing business in other countries ● Investment opportunities in emerging markets ● Strategic asset management issues to drive high-performance buildings ● Improving investment returns and shareholder value

How does BOMA operate?

Once an association affiliates with BOMA International, it is automatically a member of the International Council.

The Council meets annually at BOMA’s June conference.

Council programming includes a VIP reception and dinner, the International Council Workshop, a private building tour and VIP seating at the Outstanding Building of the Year reception and banquet.

High-level networking and information sharing are among the benefits enjoyed through participation in the International Council programming.

The International Council members are also interested in participating in study tours and affiliate-hosted conferences as well as other industry conferences. BOMA’s annual June conference features world-renowned keynote speakers, education sessions,

What does it cost for a commercial real estate association to affiliate with BOMA and join the International Council?

There is no annual fee for affiliation. All of BOMA International’s affiliates are members of the International Council.

President’s farewell

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President’s farewell “Neil Gopal is the current chairman of the international affiliates body, and in his capacity as SAPOA CEO, speaks on behalf of all 17 of those affiliated at their council AGM. I would just say, on a personal level, it really speaks volumes of the role of SAPOA. I have no doubt that within the US, the recognition and high regard that Neil, and by implication SAPOA (and by further extrapolation the South Africa industry), is held by the players in the US industry, is quite phenomenal.” office, which was highly informative, we were able to take away many ideas that will prove useful to our members.

The Urban Investment Partnership Conference hosted by the National Department of Treasury gave us insight into funding and government cooperation.

Continuing our dialogue with local municipalities, we have had (through our regional offices) constant engagement with local municipalities such as the Mpumalanga region on how to assist the Mbombela Municipality with regards to processing SPLUMA applications.

SAPOA also facilitated an engagement between the Mbombela Municipality and the City of Cape Town.

In the Port Elizabeth Region we had talks with the Nelson Mandela Bay Metropolitan municipality about illegal dumping and the reduced water pressure in Deal Party. We partnered with the Polokwane Municipality to highlight the municipal procedures on addressing illegal land use through publishing articles in the local newspapers.

Both the KwaZulu-Natal and Cape Town regional offices collaborated with their municipalities on urban management and property development issues, while our East London and Gauteng teams engaged with

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BCA President Zukiswa Ntlangula with SAPOA Chief Executive Officer Neil Gopal and SAPOA President Mike Deighton

Memoranda of Understanding signed by SAPOA in 2015-2016 Association

National, provincial or local

1 South African Cities Network (SACN)

National

2 South African Council for Planners (SACPLAN)

National

3 The Black Conveyancers Association (BCA)

National

4 Green Building Council of South Africa (GBCSA)

National

5 Johannesburg Property Owners and Managers Association (JPOMA)

Local

6 Royal Institute of Chartered Surveyors (RICS)

International

7. Kruger Lowveld Chamber Of Business And Tourism (KLCBT)

Provincial

8 South African Planning Institute (SAPI)

National

9 The South African Photovoltaic Industry Association (SAPVIA)

National

10 National Treasury

National

The following MoUs are in the process of being finalised: 10.1 Department of Co-operative Governance and Traditional Affairs (COGTA) 10.2 Ombudsman City of Johannesburg 10.3 City Improvement District

STANDING SAPOA President Elect Nomzamo Radebe and SAPOA Chief Executive Officer Neil Gopal SEATED National Treasury Deputy Director-General of Intergovernmental Relations Malijeng Theresa Ngqaleni and outgoing SAPOA President Mike Deighton

President’s farewell

+27 (11) 217 7700 www.zenprop.co.za SOUTH AFRICAN PROPERTY REVIEW

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President’s farewell Cities Network (SACN) on transport-orientated development that’s being conducted through an appointed consultant, Metroplan.

As in previous years, we appointed Urban Econ to conduct research on the role and impact of the commercial property sector in Gauteng.

(You’ll find the report in your Convention goodie bag.) We thank the Gauteng Premier’s office and the City of Johannesburg for their funding contribution to this research.

SAPOA and education

SAPOA’s Eryk Wood, Development Bank of Southern Africa’s Sinazo Sibisi and outgoing SAPOA President Mike Deighton

Our distinctive organisational structure maintains and encourages its members’ control and participation.

Through an elected National Council, which includes provincial representatives in KwaZulu-Natal, Mpumalanga, Limpopo, the Western Cape, Port Elizabeth, Buffalo City and Gauteng, members are able to determine the policy and direction to be implemented by the secretariat in all nine provinces across South Africa. their respective municipalities on their draft land use management by-laws.

When the review of the City of Johannesburg’s Spatial Development Framework and Integrated Development Plan came up in January, SAPOA engaged with its local members and put forward constructive suggestions and contributions.

SAPOA also involved itself with the Polokwane Urban Renewal Strategy and Central Business District (CBD) Development Plan.

In a similar way we were pleased to have worked with the Department of National Treasury to draft a policy framework for municipal development charges.

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Planning and approvals continue to be hugely important. Since the Spatial Planning and Land Use Management Act (SPLUMA) came into effect in July 2015, we have had continued engagement on SPLUMA between various stakeholders and the Department of Rural Development and Land Reform.

This year is on record as having the harshest drought for many years, with this in mind we have worked with the Department of Water and Sanitation to put measures in place towards greater water conservation.

Research plays a vital role in making informed decisions, especially in drafting policies and aiding insight towards future development.

With this in mind, we undertook collaborative research between SAPOA and the South African SAPOA DPS S.A PROP AD (420X297).pdf

1

2/26/15

10:11 AM

SAPOA commissions a number of industry-specific reports and surveys, including Office Vacancy, Industrial Vacancy, and Capitalisation and Discount surveys, along with the Retail Trends, Operating Costs, and the Rates & Taxes reports.

As SAPOA has committed itself to furthering property education and development through facilitating access to courses given by SAPOA and collaboration with various institutes and Universities, it was decided that a review of its educational offerings should be conducted.

This took place in October last year.

The aim of the desktop review was to complete an audit of the documentation as well as the processes used by the department.

SAPOA’s ultimate aims are to: ●● Increase the knowledge and skills of the property industry among employees within the industry; ●● Ensure that the content of programmes/ workshops and other educational interventions are aligned to industry needs; and ●● Raise employability and/or competence of the practitioners and professionals in the industry.

The desktop review assessed various documents, including: ●● SAPOA’s strategies affecting education ●● SAPOA website pages ●● Policies and procedures ●● Standards ●● Course material – workshops and programmes ●● Brochures ●● MoUs, agreements and SLAs ●● Feedback forms from delegates ●● CVs of lecturers and facilitators The review raised the following questions: ●● Is SAPOA interested in the professional development of individuals in the industry? ●● If yes, then is SAPOA a professional body? ●● Should SAPOA seek to be recognised by the South African Qualifications Authority (SAQA) as a professional body? ●● Should SAPOA develop and award professional designations? ●● Should SAPOA offer Continuing Professional Development (CPD)?

President’s farewell

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President’s farewell At a time when South Africa needs a strong and principled leadership, SAPOA’s role in encouraging governance through cooperation is even more crucial. Networking events such as our “Meet the Mayor” evenings help smooth the way to building a lasting cohesion in the ever-changing commercial real estate landscape.

FROM LEFT SAPOA Chief Executive Officer Neil Gopal, Executive Mayor of the City of Cape Town Patricia de Lille and outgoing SAPOA President Mike Deighton

Given that SAPOA does not seem to have policies in place that govern the relationships with higher-education institutes or the professional development of individuals, it can be assumed that these standards are not registered on the National Qualifications Network nor written in any way.

Summary of observations ●● Educational Strategy: The audit revealed the lack of coherence and strategic alignment between these diverse activities. ●● Operational focus of SAPOA Education: Reflecting on these activities it is clear that most of the work done by SAPOA Education is operational. Agreements indicate that the focus on activities remains that of administrating programmes and issuing certificates.

FROM LEFT SAPOA President Elect Nomzamo Radebe, SAPOA Chief Executive Officer Neil Gopal, Executive Mayor of the City of Johannesburg Parks Tau, City of Johannesburg City Manager Trevor Fowler and outgoing SAPOA President Mike Deighton

FROM LEFT City Manager of the City of Tshwane Jason Ngobeni, SAPOA Chief Executive Officer Neil Gopal, MMC for Economic Development & Planning Councillor Subesh Pillay, outgoing SAPOA President Mike Deighton, and MMC for Housing and Human Settlements Councillor Joshua Ngonyama

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SOUTH AFRICAN PROPERTY REVIEW

Audit • Tax • Advisory

President’s farewell

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President’s farewell Going forward into next year I entrust the helm to President Elect Nomzamo Radebe, who I am certain will bring a unique style and vision to SAPOA, and who will continue the good works that have been handed to each of us by our former Presidents.

Good Luck Nomzamo, and Godspeed.

Although this is necessary, the audit has revealed that SAPOA has not focused on the following types of activities: ● Setting and monitoring of standards related to awarding, revoking and maintaining professional designations; ● Setting of standards related to monitoring and quality assurance of programmes and workshops (although the administration is part of SAPOA’s responsibilities in the contracts); and ● Approval of workshops for continuing CPD. Role of SAPOA Possibly the greatest risk identified during the audit (and various discussions with the SAPOA executive) is the continuing role of SAPOA in delivery of education in the industry.

SAPOA is a well-respected organisation that has industry support. However, SAPOA’s

involvement remains dependent on the historical relationship the organisation has had with the institutions and the critical role it plays in recommending a learning pathway to its constituency.

To conclude education development… ● The audit of SAPOA Education was initiated because of concerns that the operational focus of activities within this department was detracting from the value SAPOA can add to the professionalisation of commercial property industry in South Africa. ● Recommendations made in this report point to a change of focus in education, from administrating educational offerings to setting the strategy for education, training and development of practitioners and professionals in the industry.

Together with its member partners, our association manages the SAPOA Bursary Fund, which is accessible to students who are pursuing full-time studies at South African universities.

The fund continues to be a game-changer in the education and development of future property leaders.

Twenty-seven students currently benefit from the bursaries for the 2016 academic year. Nineteen of the students are sponsored by Abland, and two are sponsored

by Hyprop. The remaining six are 2015 students who are receiving continued funding directly from SAPOA. 28

● Emphasis was placed on the standardisation of processes and the simplification of relationships with fewer institutions at a more strategic level. ● Most importantly, the report emphasises the importance of SAPOA gaining statutory recognition as a professional body to ensure its role as a professionalisation agent in the industry is cemented into the growth of the commercial property industry in South Africa. ● The audit revealed that a result of the role SAPOA has historically played in delivering education to the industry, the focus of activities managed by education was administrative and operational. ● The recommendation is that SAPOA should focus its efforts on developing career pathways for individuals. These career pathways will then culminate in the awarding of industry-approved certifications or professional designations. ● SAPOA’s role then changes from being part of the operational resource servicing education in the industry to a critical driver of the delivery of competent practitioners and professionals in the industry. In other words, the focus moves to professionalisation of the commercial property industry in South Africa.

The way forward ● SAPOA should gain recognition as a professional body with SAQA. ● SAPOA should register professional designations through SAQA. ● SAPOA should develop and manage the awarding of professional designations to the industry. ● SAPOA needs to establish CPD programmes and career paths for practitioners and professionals in the commercial property industry.

This focuses SAPOA’s activities as a professional body on the professionalisation of our industry.

It’s important to note that SAPOA is involved in other educational activities, including: ● Bursary Fund ● Career Days: property careers promoted in Gauteng, Mpumalanga and KZN ● Student Forum: re-established in 2015 ● Graduate listing programme: platform supporting the employment of students and access to graduate and internship programmes offered by SAPOA members ● Student on-boarding programme: to introduce final-year students to the industry ● Strategic partnerships are also being nurtured with the Estate Agents Affairs Board (EAAB) and the Skills Education Training Authority.

SOUTH AFRICAN PROPERTY REVIEW

SAPO

President’s farewell

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SOUTH AFRICAN PROPERTY REVIEW

SAPOA ADVERT.indd 2

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2016/05/27 12:51:13 PM

About the Joburg Property Company

About the Joburg Property Company

Introduction Introduction The Property Joburg Property (JPC) prides itselftheinonly being themandated only entity mandated manage the diverse The Joburg CompanyCompany (JPC) prides itself in being entity to manage thetodiverse property property portfolio of approximately 30 700 properties valued at a historical value of R8.7 billion on of portfolio of approximately 30 700 properties valued at a historical value of R8.7 billion on behalf of the City behalf of the City of Johannesburg.

Johannesburg.

The portfolio is diverse with various asset classes which are managed with the intention to achieve the strategic The portfolio is diverse with various asset classes which are managed with the intention to achieve the strategic objectives of maximising both economic, social, transformative and financial returns for the City of Johannesburg. objectives of maximising both economic, social, transformative and financial returns for the City of Johannesburg.

JPC prides itself on leveraging the property to ensure investment attraction and retention on council property, JPC prides itself on leveraging the property to ensure investment attraction and retention on council property, SMME and entrepreneurial development, job creation, economic transformation and poverty alleviation.

SMME and entrepreneurial development, job creation, economic transformation and poverty alleviation.

Our mandate includes: Our mandate includes:

AssetAsset Management Management

Property Management Property Management

Prope

• Asset Register - 30 700 • Asset Register - 30parcels 700 parcels • Land• Strategy Land Strategy

Property Management has been Property Management has been reconfigured into the reconfigured intofollowing the following categories: categories:

• Property Research • Property Research

• Blue•Chip Blue Accounts Chip Accounts

• Asset Management Plans Plans • Asset Management

The P includ R4 bil develo over t

• Mixed-use Accounts • Mixed-use Accounts

• Property Asset Asset Management • Property Management

• Socio Economic Accounts • Socio Economic Accounts • Developmental Accounts • Developmental Accounts • Land• Acquisiton Land Acquisiton

JPC’s and m progr to mix Corrid

• Municipal Accounts • Municipal Accounts

The JPC positioned itself toitself being lead agovernment-owned entity in setting standards and employing ThehasJPC has positioned to abeing lead government-owned entity in setting standards and employing upcoming trends trends on the on direction which must taken manage land soland thatso economic, commercial and social upcoming the direction whichbe must be to taken to manage that economic, commercial and social returnsreturns are achieved – this is– athis balance which does exist the private sector. sector. are achieved is a balance whichnot does notinexist in the private JPC aims be atoleader in terms understanding and managing the property portfolio in the context of all the JPCtoaims be a leader in of terms of understanding and managing the property portfolio in the context of all the marketmarket dynamics whilst at the same the property within within a complex legislative environment. dynamics whilst at thetime samemanaging time managing the property a complex legislative environment.

As a state entity that operates between these two paradigms and holds privilege of managing a diverse As aowned state owned entity that operates between these two paradigms andthe holds the privilege of managing a diverse and unique portfolio, JPC is aware the “ins and outs” wellas aswell the balance which must embraced to be ato be a and unique portfolio, JPC is of aware of the “ins and as outs” as the balance whichbe must be embraced front-runner in this environment. front-runner in this environment.

“We therefore do believe that wethat are we bestare placed and best positioned to share and public “We therefore do believe best placed and best positioned towith shareboth withprivate both private and sector, public sector, the triumphs, encounters and theand future managing state-owned property” says Helen CEO ofCEO JPC.of JPC. the triumphs, encounters the of future of managing state-owned property” says Botes, Helen Botes, “We pride on beingon thought andleaders implementers in leading the transformation agenda “Weourselves pride ourselves beingleaders thought and implementers in economic leading the economic transformation and in agenda leading debates land reform, and state-owned landand ownership and management and and and in on leading debatestransformation on land reform, transformation state-owned land ownership therefore would welcome as a first step to a great partnership” adds Botes. management” addssuggestions Botes.

JPC is embarking on a progressive consultative land strategy programme which will be will a detailed comprehensive JPC is embarking on a progressive consultative land strategy programme which be a detailed comprehensive analysisanalysis of every possible piece of land owned by the COJ, land neighbouring that of the municipality and land of every possible piece of land owned by the COJ, land neighbouring that of the municipality and land along the corridors and within development nodes. nodes.

The land is a forward lookinglooking strategy and willand direct along the corridors and within development Thestrategy land strategy is a forward strategy will direct the Citythe of City Johannesburg as to when, how and under to release, dispose, acquireacquire land and bank of Johannesburg as to when, how and what underconditions what conditions to release, dispose, land and bank land. JPC will be embarking on an in-depth consultative programme with not just government departments but but land. JPC will be embarking on an in-depth consultative programme with not just government departments within within the private sector as well.as well. the private sector

www.jhbproperty.co.za www.jhbproperty.co.za

“W th A de th re W of sin

Exe

erty y of

egic urg. erty,

ying cial

the

erse be a

tor,

nda and

sive and rect ank but

Property Development Property Development

Facilities Management Facilities Management

The Property Development portfolio The Property Development portfolio includes developments of over includes developments of over R4 billion and more than R8 billion R4 billion and more than R8 billion of of developments have been facilitated developments have been facilitated overpast thefive pastyears. five years. over the

This includes the management of This includes the management of taxi ranks, informal trading facilities, taxi ranks, informal trading facilities, public conveniences and the public conveniences and the refurbishment and maintenance refurbishment and maintenance of all of all council facilities. council facilities.

JPC’s approach the redevelopment JPC’s approach to thetoredevelopment and management of office is and management of office spacespace is progressive and transformative leading progressive and transformative leading to mixed-use developments to mixed-use developments alongalong the the Corridors of Freedom.

Corridors of Freedom.

JPC has adopted a dynamic JPC has adopted a dynamic and and transformative approach to Facilities transformative approach to Facilities Management to aclass world class Management leadingleading to a world Optimisation programme OfficeOffice Space Space Optimisation programme at approximately R22 billion. valuedvalued at approximately R12 billion.

“We creating inviting accessible space “We areare creating an an inviting andand accessible space be ideal an ideal advertisement world-class thatthat willwill be an advertisement for for thethe world-class African emerged since transition African citycity thatthat hashas emerged since thethe transition to to democracy.

It will create more synergies among democracy.

It will alsoalso create more synergies among City’s departments municipal entities thethe City’s departments andand municipal entities andand reduce of doing business with Johannesburg. reduce thethe costcost of doing business with Johannesburg. creating a true ‘City Hall’ where citizens WeWe areare creating a true ‘City Hall’ where thethe citizens of the have access to one-stop services of the citycity willwill have access to one-stop services in ain a single, vibrant space.” single, vibrant space.”

Executive Mayor, Councillor Tau (Loop, Executive Mayor, Councillor MphoMpho Parks Parks Tau (Loop, 2015)2015)

education, training and development

Feedback on the

2016 SAPOA Bursary Fund The SAPOA Bursary Fund is a tool that SAPOA implements to attract motivated youth to join the commercial property sector and increase the skills pool

By Maud Nale Photograph by Jabu Nkosi

T

here’s a need for suitably qualified students to join the property industry, and we are confident that we will find the best and most deserving candidates. This is in line with SAPOA’s vision and commitment to actively and responsibly represent, promote and protect the interests of our members’ commercial activities within the property industry, and further extends to educating the future generations of South Africa, which would result in benefits such as empowerment, education and training.

In an effort to promote transformation, redress the past, promote the property sector to youth and address the current and future skills shortage, SAPOA focused intensely on its Bursary Fund by providing deserving university students with study bursaries. Together with its member partners, SAPOA manages the Bursary Fund and seeks to award them to only the most promising and deserving candidates.

The Bursary Fund, which is accessible to students who are pursuing full-time studies at South African universities, continues to be a game-changer in the education and development of future property leaders.

The qualifications that the Bursary Fund recognises include: ●● BSc Urban and Regional Planning ●● BSc Property Studies ●● BSc Construction Studies ●● BSc Quantity Surveying ●● BSc Town and Regional Planning ●● BSc Real Estate ●● BSc Property Management

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SOUTH AFRICAN PROPERTY REVIEW

●● BCom Finance (with Property Valuation and management as a major) ●● BCom Property Valuation and Management The SAPOA Bursary Fund currently sponsors 27 students for the 2016 academic year.

Students had the opportunity of meeting the Bursary Fund trustees as well as a representative from Abland, one of the principal sponsors. The meet-and-greet session was held at the SAPOA head office in May. Nineteen of the Bursary Fund students are sponsored by Abland. Six of the 2015 students have received continued funding, and two are sponsored by Hyprop.

The trustees for the SAPOA Bursary Fund include: ●● Nomzamo Radebe, Chief Executive Officer of JHI Properties ●● Neil Gopal, Chief Executive Officer of SAPOA ●● Meshack Phiri, Portfolio Manager at Pareto ●● Nomvula Pooe, Learning & Development Manager at Growthpoint Properties ●● Amelia Beattie, Head of Direct Property Investments at Stanlib With the property industry experiencing steady growth over the past few years, there exists an ever-present need for competent, skilled workers within the industry. We thank all our member companies for their continuous support in promoting the property sector as an industry of choice.

education, training and development Students funded by SAPOA Student

Qualification

Year of study

University

Lehlohonolo Mosotho

B Town & Regional Planning

4th Year

UP

Boikano Joy Rakgoale

BCom Accounting

3rd Year

UJ

Olebogeng Moagi

BCom Finance

3rd Year, 1 module

UJ

Nosizwe Kubheka

B Town & Regional Planning

2nd Year

UP

Abdullah Sidat

BSc Hons Quantity Surveying

1st Year

Wits

Andile Chabani

BSc Hons Construction Management

1st Year

Wits

Qualification

Year of study

University

BSc Property Studies

4th Year

Wits

BSc Hons Urban & Regional Planning

1st Year

Wits

Qualification

Year of study

University

B Town & Regional Planning

4th Year

UP

BSc Property Studies

4th Year

Wits

BSc Construction Studies

3rd Year

Wits

Nhlakanipho Mhlongo

ND Real Estate

3rd Year

CPUT

Nhlanhla Chawane

BCom Finance

3rd Year

UJ

Atina Mdluli

BSc Construction Studies

3rd Year

Wits

Khethiwa Mukwevho

BSc Construction Studies

3rd Year

Wits

Thetlwane Choenyana

BSc Construction Studies

3rd Year

Wits

ND Real Estate

2nd Year

CPUT

Students funded by Hyprop Student Thalitha Ramusi Edwin Ndlovu

the SAPOA Bursary Fund, visit Sapoa.org.za.

Students sponsored by Abland Student Chulumanco Giyose Mteto Tukwayo Mpho Ramokgopa

Lunga Mhlongo Menzi Gumede

Contact:

ND Real Estate

2nd Year

CPUT

Immaculate Meje

BSc Property Studies

2nd Year

Wits

Luyolo Shabalala

BSc Property Studies

2nd Year

Wits

Ntombifuthi Mthabela

BSc Property Studies

2nd Year

Wits

Orifha Masevhe

BSc Property Studies

2nd Year

Wits

Portia Monaheng

BSc Property Studies

2nd Year

Wits

Seipati Mahobja

BSc Property Studies

2nd Year

Wits

Wandile Seakamela

For more information on

BSc Property Studies

2nd Year

Wits

Luscha Motsane

BSc Hons Quantity Surveying

1st Year

Wits

Thobeka Mabaso

BSc Hons Construction Management

1st Year

Wits

Fiona Kahn Education Manger t: +27 (0)11 883 0679 f: +27 (0)86 458 6955 e: edmanager@sapoa.org.za

In addition to this, Abland has committed R1-milliom to the SAPOA Bursary Fund for 2016.

The SAPOA Bursary Fund students of 2016 with the trustees and Abland representative Brad Bentz

SOUTH AFRICAN PROPERTY REVIEW

33

planning and development

Taking the National Development Plan forward:

Cabinet approves the integrated urban development framework and the 2016-2019 implementation plan This article was submitted by Dr Modjadji Malahlela from the Department of Co-operative Governance and Traditional Affairs

W

hen the 2011 census results were released, indicating that 63% of the South African population reside in urban areas, it was a stark reminder that South Africa is a predominantly urban country.

The United Nations estimates that this figure will increase to 70% by 2030, and to 80% by 2050. This means that by 2050, eight out of every 10 persons will be residing in urban spaces.

This phenomenon is not unique to South Africa. The world’s urban population is also increasing drastically. The global urban population has increased from 30% in 1950 to 54% in 2014. This figure is expected to increase to 66% by 2050.

It is estimated that of the global growth, 90% will be in Asia and Africa. The 21st century is, for this reason, known as the “urban century”.

The growth of the urban population poses both opportunities and challenges.

Urbanisation generates significant opportunities for economic growth and, if properly planned and managed, contributes to poverty reduction through creating jobs and enhancing livelihood strategies for the poor. This relationship is, however, not automatic because it is not a causality.

Poorly planned and managed urbanisation results in overcrowding, congestion, poor quality of life, environmental degradation, crime and grime, and many other problems.

These challenges manifest themselves at a city level.

Most of our cities and towns are experiencing the downside of urbanisation.

This is because South African cities and towns are shaped by the apartheid legacy that was anchored on deep class and racebased segregation. The apartheid system confined the majority of population away from economic opportunities, in spatially dispersed and disconnected locations with

34

SOUTH AFRICAN PROPERTY REVIEW

poor services. This, coupled with a townplanning regime of separate land-uses (as opposed to mixed land uses) has resulted in long and costly commuting distances, making our cities very inefficient and expensive when it comes to providing and maintaining services. Poor investment in public transport has also increased reliance on private vehicle usage, resulting not only in congestion but also high carbon emissions.

The priority is to correct the fragmented spatial form, and to make cities and towns more liveable, safe, productive and inclusive for all. The National Development Plan (NDP) makes proposals on the trajectory to be followed. The NDP asserts that “by 2030, South Africa should observe meaningful and measurable progress in reviving rural areas and in creating more functionally integrated, balanced and vibrant urban settlements”.

In response to the NDP, the Department of Cooperative Governance, working with

various national departments and partners such as the South African Local Government Association, South African Cities Network and the Deutsche Zusammenarbeit, developed the Integrated Urban Development Framework (IUDF). The IUDF builds on various chapters of the NDP and extends Chapter 8, “Transforming human settlements and the national space economy” and its vision for urban South Africa. It also responds to the post-2015 sustainable development goals (SDGs), in particular to Goal 11: making cities and human settlements inclusive, safe, resilient and sustainable.

The IUDF marks a New Deal for South African cities and towns. It sets a policy framework to guide the development of inclusive, resilient and liveable urban settlements, while addressing the unique conditions and challenges facing South Africa’s cities and towns. This New Deal is about maximising the potential of urban areas by integrating and aligning investments in a way that improves the fragmented spatial form. It is about retro-fitting the existing city footprint to produce compact, coordinated and connected cities, using transit-oriented development and other urban planning strategies to yield desirable social, economic and environmental outcomes, as envisioned in the NDP. The objective is to steer urban growth towards a sustainable growth model of compact, connected and coordinated cities and towns that are functionally integrated, balanced and vibrant – creating settlements where people can live, work, shop and play, and where business can invest, employ and prosper. Importantly, this vision for South Africa’s urban areas recognises that the country has different types of cities and towns, each with different roles and requirements. As such, the vision has to be interpreted and pursued in differentiated and locally relevant ways.

planning and development

To achieve this transformative vision, the IUDF identifies four strategic goals: spatial integration, inclusion and access, inclusive economic growth and good urban governance. The objective is to forge new spatial forms and to ensure that people have access to social and economic services, opportunities and choices; and to harness urban dynamism for inclusive, sustainable economic growth and development. This will require an enhanced capacity of the state and its citizens to work together to achieve spatial and social integration.

These strategic goals inform the priority objectives of the nine policy levers, which are premised on the understanding that (1) integrated urban planning forms the basis

Redressing the current urban inefficiencies and achieving integrated urban development will require a systematic and collaborative approach among government spheres and nongovernment partners for achieving integrated urban development, which follows a specific sequence of urban policy actions: (2) integrated transport that informs (3) targeted investments into integrated human settlements, underpinned by (4) integrated infrastructure network systems and (5) efficient land governance, which all together can trigger (6) economic diversification and inclusion, and (7) empowered communities. All of the above will demand effective (8) governance and (9) financial reform to enable and sustain these policy actions. The levers thus seek to address in combination the structural drivers that maintain the status quo. In addition, strengthening the rural-urban linkages, ensuring safer urban spaces and urban resilience are three cross-cutting IUDF priorities to be included in the conceptualisation and implementation of the IUDF policy levers.

Attaining this would require dealing with several issues, such as: ● Improved collaboration and alignment of plans, budgets, implementation and monitoring;

● Strengthening partnership between government and the private sector to ensure alignment of private developments and local plans; ● Balancing brownfield and greenfield development in order to create more compact and connected development; ● Ensuring availability and access to strategically located land to ensure that new housing developments are in close proximity to transport, job opportunities and social facilities; and ● Using various planning instruments, infrastructure and other available levers to strengthen linkages between urban and rural areas.

Redressing the current urban inefficiencies and achieving integrated urban development will require a systematic and collaborative approach among government spheres and non-government partners. It is therefore important that all stakeholders, both within and outside of government, embrace the principles of the IUDF. The IUDF principles and priorities should inform and guide development plans and policies, strategic infrastructure investments, regulatory and fiscal instruments, spatial targeting, as well as sector policy documents and related legislated framework.

This is critical because the choices made today about managing urban growth will lock in social, economic and climate benefits – or costs – for decades to come. Policy choices and investments can lead either to sprawling, car-dependent cities or to more compact, public transport-oriented urban development.

These choices will have implications for the economic and social performance of cities, and for their carbon emissions. Furthermore, the path dependencies created by the urban form persist for centuries and therefore, if managed well, the potential benefits of this urban growth are substantial.

While the approval of the IUDF by Cabinet is a key milestone on the path to achieving integrated urban development, its success lies in collaboration and strong leadership at all levels of government and a shared objective, as opposed to sectoral interests and goals. This requires a different discipline and collaborative paradigm among different stakeholders, and coordinated investment in people and places.

Government must lead, but cannot do it on its own. Semi- and non-governmental stakeholders must also participate, support and take co-responsibility for solutions.

legal update

Competition Commission’s enquiry into exclusivity clauses in long-term lease agreements

By Mumtaz Moola

On behalf of its members, SAPOA lodged a complaint with the Competition Commission and requested the Commission to investigate exclusivity clauses, and to give a definitive ruling regarding the anticompetitive nature of exclusivity clauses in leases once and for all This legal opinion is only a guide and should not be copied with the expectation that it will serve each party’s individual circumstances.

Most of these recommendations have not been tested in our courts. SAPOA cannot guarantee any success in any court if any of these recommendations are put to use.

36

T

he Competition Commission panel appointed to conduct a year-long market inquiry into the grocery retail sector is set to ruffle feathers as it tackles the contentious issue of exclusivity clauses in lease agreements.

This is the first market inquiry into the multibillion-rand grocery sector, although there have already been a number of investigations.

On behalf of its members, SAPOA lodged a complaint with the Competition Commission and requested the Commission to investigate exclusivity clauses, and to give a definitive ruling regarding the anti-competitive nature of exclusivity clauses in leases once and for all. The recommendation from SAPOA is that the Commission must proceed with a market inquiry as this is the most suitable approach for SAPOA and its members. Pending such an inquiry, SAPOA has requested that the Commission suspend the complaint.

In May 2015, SAPOA received a letter from the Commission confirming its decision to conduct a market inquiry into the grocery retail sector.

The issue of exclusivity clauses is one fraught with difficulty. The Competition Act safeguards against restrictive horizontal practices, restrictive vertical practices and abuse of a dominant position. A restrictive horizontal practice is one where competitors co-operate rather than compete, with the result that a number of firms act in unison. Abuse of dominance occurs where one firm is so

SOUTH AFRICAN PROPERTY REVIEW

dominant that it gains an anti-competitive advantage over its competitors, customers and suppliers, and a restrictive vertical practice is one where a relationship exists between different levels in the supply chain that has the effect of preventing or lessening competition in the market.

Exclusive agreements could be classified under the restrictive vertical practice agreements.

The Competition Commission’s position on exclusivity agreements has been made clear in many cases. It is generally opposed to exclusivity clauses.

In the Sycom case in respect of Somerset Mall, the Commission found an exclusivity clause in the lease agreement between the landlord and one of the anchor tenants, Pick n Pay Stores Limited (“Pick n Pay”).

This exclusivity clause has the potential effect of preventing small businesses from accessing Somerset Mall, such as grocery stores and bakeries of a certain size, cafés and delicatessens that sell fresh fish or meat; butcheries other than halaal butcheries; and smaller freshproduce businesses.

To date, the Competition Commission has investigated and referred a number of property transactions to the Tribunal in which it identified a public interest concern relating to the existence of exclusivity clauses in various lease agreements concluded between landlords and their anchor tenants.

The Commission in those matters recommended that the mergers should be approved by the Tribunal subject to conditions to address the effect of the proposed transaction on the ability of small businesses to become successful.

Essentially, exclusivity clauses may be allowed if they do not give rise to anti-competitive behaviour. The Competition Commission advises all people who have concerns regarding agreements to send an email to them in order for them to draft a legal opinion regarding whether that particular agreement could be problematic. This would serve as a protective measure for the parties concerned.

Note that not all cases are the same and the Tribunal will have to investigate all cases in detail in order to determine whether there is anti-competitive behaviour. The motive must be quite clear with regards to these agreements – if the motive is to prejudice the power of another, then this would pose a huge problem and result in anticompetitive behaviour.

The Commission published draft Terms of Reference for the market inquiry in the Government Gazette on 12 June 2015, and called for public comment on the draft.

SAPOA submitted that the anticipated scope of the inquiry stipulated in the draft was very broad and may therefore lead to a shallow inquiry on a great number of aspects of the market.

It was therefore recommended that the inquiry be divided into two distinct phases and that the

legal update

Commission set reasonable timeframes within which the inquiry should be conducted and concluded.

The Competition Commission then released Terms of Reference that are the Final Terms of Reference for the Grocery Retail Sector Market Inquiry.

Retailers and other players involved in the grocery retail supply chain should be prepared to engage in a lengthy and detailed process.

The Competition Commission has in the past not been able to sufficiently prove that retailers contravened the Act. In January 2011, the Competition Commission concluded part of its investigation against four major supermarkets. During the investigation the Commission identified several competition concerns, which included exclusive lease agreements, information exchange, category management and possible abuse of buyer power.

The outcome of the investigation revealed there was insufficient evidence to indicate contraventions pertaining to abuse of buyer power, category management and information exchange.

The Commission did have concerns regarding the long-term exclusive leases, and its analysis to date indicates that these may amount to contravention of the Competition Act, particularly where supermarkets have market power.

The Commission found that exclusive lease agreements are of concern and could result in anti-competitive effects in circumstances where the supermarket chains have market power within the relevant local markets.

Supermarket chains and property developers enter into and enforce long-term exclusive leases through so-called “anchor

legal update

tenancy”. Typically, these leases are for a minimum period of 10 years with the renewal options of up to 40 years. In addition, competing firms are excluded from particular shopping centres by “Use and Exclusiveness” clauses in lease agreements.

Specialist stores such as liquor stores, fruit-and-vegetable stores and full-line grocery stores are often excluded in shopping malls where any one of the main supermarket chains is the anchor tenant.

If there are, in fact, anticompetitive features uncovered during the course of the grocery retail market inquiry, and these are appropriately addressed in the commission’s findings, consumers are likely to reap the benefits.

Massmart has encountered a number of hurdles in introducing its Cambridge stores because of long-term lease contracts.

Massmart has said it would stress the matter to the panel, which will receive submissions from interested parties in July and August. Massmart said the covenants between “entrenched national grocery retailers and their landlords” were “intuitively anti-competitive”.

Pick n Pay said its focus was on serving customers “in a competitive and dynamic market”.

The panel has a particular interest in the effect of national chains on small and independent retailers in township, peri-urban, and rural areas.

Panel chairman Halton Cheadle said it was not the intention of the panel to find wrongdoing for the commission to investigate, but rather to see what recommendations could be made concerning policy and regulation.

The inquiry officially began on 27 November 2015, and the Competition Commission aims to conclude the inquiry by 29 May 2017.

SOUTH AFRICAN PROPERTY REVIEW

37

celebrating 50 years of industrial excellence

An institution is born South African Property Review takes a look at the germination of a thought that gave birth to an idea which now epitomises the power of an association that has been representing the interests of the South African property industry for more than a half a century Compiled by Mark Pettipher

A

fter the end of World War II and into the 1950s, South Africa experienced a fundamental increase in demand for housing, business premises and land development.

City centres and business districts needed planning, and the government of the day had legislation that was ambiguous and confusing.

At that time there was no-one to lobby the government and protect the interests of commercial property owners and developers, and no single unifying voice.

In the late 1950s, key individuals – representing larger property investors in South Africa – came together to discuss how such an organisation might be formed. The objective was to explore intentional action through an association of interested investors and developers in the private sector.

To determine their interest, Pepler Scholtz, then Assistant Manager of Sanlam, initiated contact with key stake-holders in government and property institutions as well as with professionals in the property industry.

However, like many visionaries, Scholtz’s dream was perhaps ahead of its time. It would take another six or so years before the seed, planted in the soil of the South African property industry, would come to fruition.

SAPOA is formed The year 1963 saw Sanlam Investment Manager Andries van Riet, while travelling between Belville and Cape Town, discuss with Assistant General Manager Dawid Malan whether or not it was time to form a unified body to represent the interests of property owners and developers in a meaningful way.

Over the next few years, Van Riet, with Sanlam’s support, took up the challenge and researched similar overseas organisations, in particular in the US and the UK. Because Van Riet wanted the organisation to represent everyone, he travelled to both countries and visited specific institutions to gather vital information and knowledge that would later lay SAPOA’s foundations.

A memorandum and proposal were drawn up. Armed with both, Andries started a personal campaign to win over large corporations and institutions that had sizeable property interests.

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SOUTH AFRICAN PROPERTY REVIEW

Andries van Riet

“One cannot speak about SAPOA without acknowledging the role that Andries van Riet played, as a visionary behind the organisation.”

Banus van der Walt (President 1999-2000)

He made appointments with 35. The response was overwhelming and he garnered support from notable firms such as Old Mutual, Southern Life, United Building Society, Standard Bank, Saambou, Trust Bank and Woolworths among others. They were all eager to join forces with him.

SAPOA today It’s hard to imagine that a little over 50 years ago SAPOA was just a kernel of an idea, a seed that was yet to be planted. Today it has grown into an institution to be reckoned with.

It has become recognised both locally and internationally as an institution that carries the voice of commercial property owners and developers to not only the governments of the day, but further afield to countries such as the US, the UK, New Zealand and Australia.

This international recognition is important to South Africa because it provides muchvalued insight as to how the property industry is growing worldwide.

Core to SAPOA’s DNA is the continued development of healthy and relevant relationships with government bodies on all levels. Added to this, education plays a dominant role; this includes the running of its own courses, such as the PDP, which SAPOA developed in 1969 in collaboration with the University of Pretoria.

More recently, SAPOA joined forces with the University of the Witwatersrand (Wits) as a strategic partner in an effort to provide the industry with a one-stop-shop service for all real estate courses.

Keeping things relevant, Amelia Beattie, SAPOA’s 2014-2015 President says, “The four pillars that we have established over the years – relationships, driving legislation and regulations, leadership, and opportunities – are what you gain from being involved with the organisation.”

“The only reason that we have such longevity over our 50-year history is because of the support of our membership,” says SAPOA Chief Executive Officer Neil Gopal.

In 1966, the South African Property Owners Association was born. Its first board members were (from left) J A Sinclair, A J Van Riet (Chairman), J E Triegaart, I Solomon, J L Nel and G L van Zyl

15717

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SOUTH AFRICAN PROPERTY REVIEW

39

celebrating 50 years of industrial excellence

Papi Mphahlele, first black president

Lynette Finlay, first female president

Nomzamo Radebe, first black female president

“SAPOA is owned by its members and it exists because of its members. I have no doubt that if we remain relevant and continue to keep on top of the major issues, we will go from strength to strength for the next 50 years.”

not only engages in robust governmental and industrial dialogue, it also brings together the industry’s thought leaders.

Paramount to aiding the next 50 years’ growth is the importance of sharing knowledge and skills. “I got to know the leaders in the industry on a personal level,” Robin Vorster, President 1988-1999, said in a recent interview. “The more you get to know them, the more you respect their skills, their intelligence – and maybe they respect yours.

In that way, you build up a business and relationships that carry you along the way.”

Mphahlele’s relationship with SAPOA began with his membership in 1996; two years later he became more involved and joined the Education Committee, planning the Property Development Programme and other courses.

After serving for two years on the committee he was elected into the council and finally became President in 2002.

“Things were interesting at the time of my presidency because there was a lot happening,” he says. “Until then, you could say it was an elite kind of organisation; there was this element of post-1994 that one could look at and say, ‘Hey, this organisation seems like it’s not sensitive to the winds that are blowing.’ By the time I became president, we were looking at the situation and saying, ‘We don’t see any progress within SAPOA’.

“Then there was the election and I was on the council and became President; the first black president.

“There is a lot that came with that year.

That year became very important to the whole industry because we declared it the year of transformation.”

Looking to recognise women in the property industry, SAPOA’s first female president Lynette Finlay took on the 20042005 reins. During her tenure, the Property Charter was initiated, and an alliance was developed with universities, resulting in SAPOA’s educational programmes being linked to universities and the formalisation of a property degree. In order to define the educational requirements of the property industry, Finlay she was instrumental in establishing SETA as a regulatory body.

“Being the first female President was truly an honour,” she says, commenting on her presidency. “During my year, there were difficult changes that were implemented.

I believe we achieved them because of the SAPOA team and my interaction with our members.

Who are SAPOA’s members As a member-driven organisation, SAPOA is open to any individual or company that has an interest in property.

In fact, SAPOA members control 90% of South Africa’s private sector commercial land and building stock, and manage the majority of property funds listed on the Johannesburg Stock Exchange.

Each member is a leading player and decision-maker in the commercial property arena. These members, who include company chairs, chief executive officers and managing directors, often control massive companies and their associated budgets.

Some of the brightest, most talented people in the property sector occupy senior roles in SAPOA member organisations.

By joining, SAPOA members have access to 14 committees: ●● Awards ●● Brokers ●● Convention ●● Education, Training and Development ●● Government Liaison ●● Legal ●● Methods of Measuring Floor Areas ●● National Developers Forum ●● Office Vacancy Survey ●● Property and Facilities Management ●● Property Development Programme ●● REITs ●● Research ●● Sustainability

SAPOA’s networking opportunities As is evident from this year’s 50th Anniversary Convention and Property Exhibition, SAPOA

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SAPOA’s achievements, firsts and milestones Moving rapidly to 2002 and in line with SAPOA’s adoption of integrating reform into the property industry, Papi Mphahlele became SAPOA’s first black president, serving the year 2002 to 2003.

Estienne de Klerk, President 2013-2014

“I think SAPOA is an amazing organisation, and I certainly got as much as I gave in terms of my experiences and the relationships I built with the people I met”

celebrating 50 years of industrial excellence

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celebrating 50 years of industrial excellence Milestones at a glance ●● ●● ●● ●● ●● ●● ●● ●● ●●

1967: Representation on the Building Research Advisory Committee (BRAC) 1969: Education – launch of the Property Development Programme 1975: Representative on the Building and Construction Industry Advisory Council 1976: Achievement of amendments to the Rent Control Act 1994: Inclusion of the Property Clause into the South African Constitution 2004: Property Charter becomes the framework for transformation in the property industry 2009: SAPOA Bursary Fund is established 2016: Active participation in the formulation of the Expropriation Act 2016: Signing of MoU with National Treasury

“Although being the first female president was symbolic at the time and clearly a milestone for women in the industry, SAPOA is a member-driven organisation – and there are very few women in the industry in top positions, and only a few participated in SAPOA’s committees. This is very much unlike today, when women are recognised for the role they play and hold down some of the top positions in the industry. Women presidents such as Marna van der Walt, Amelia Beattie and President Elect Nomzamo Radebe all run extremely successful businesses.”

Another first for SAPOA is the appointment of its first black female president. President Elect Nomzamo Radebe takes on the mantle of the upcoming 2016-2017 incumbency.

Radebe, currently the CEO of JHI, joined SAPOA 10 years ago. She was the Chairman of the Bursary Fund and became active in

council and leadership matters five years ago. As the first black first female president, she continues SAPOA’s active pursuit of transformation in the property industry.

“It’s a wonderful recognition, that in my lifetime I am able to achieve being the first black female president,” she says of her upcoming role. “But I know that it’s not purely because of my wisdom – it’s also the result of the support and the wisdom that I have drawn from other people that have come before me.

“I am proud of it. I am excited but also nervous – nervous because I probably think there would be large expectations that I am going to just ‘wow’ this world and make SAPOA different!

“But you can’t do that, because SAPOA and what it represents out in the world has been built over time. “There are people who have worked hard for it to get there.

So although one may emphasise or make the organisation focused on certain elements and make sure those elements are tangible during their tenure, it’s only a year – and you can’t turn a bus around for it to point in a different direction just because you are there, unless it is warranted.

Just in case, I really think SAPOA is on the right track and it’s a matter of how one helps steer the ship.”

Organisations created by SAPOA Amelia Beattie, President 2014-2015

“This is an amazing industry with amazing people.

We need to really celebrate the 50 years that have gone past, and we need to remain mindful of our duty to serve this industry. We need to take as our chief duty passing on what we have received to so many that will come after us.”

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Two of South Africa’s most influential organisations to come out of the SAPOA stable are the South African Council of Shopping Centres (SACSC) and the Green Building Council of South Africa (GBCSA).

The SACSC offers its members a single platform for the entire industry. Like SAPOA, it is a member-based organisation that sets standards, promotes ethical and professional behaviour within the industry and provides information and education alongside a variety of communication opportunities.

Addressing the very topical subject of greening procedure, the GBCSA is working to transform the South African property

industry into one that takes these issues seriously. The council looks at ways to address the contributions buildings make to climate change, and aims to be instrumental in setting standards that produce healthier and more productive environments for people and their respective communities.

Leaving a legacy Over the past 50 years, SAPOA has built a legacy that will live on long after this year’s Convention. It is a legacy of providing

Mike Deighton, President 2015-2016

“It’s been an absolute privilege to play a role and to assist this organisation over this past year, alongside the executives, players in council, the Board and many others. It certainly has been a privilege to have been associated with the organisation in such a fundamental way.” opportunities for members to grow, of building future leaders, and of fighting for advocacy. Through these strengths, SAPOA’s legacy is safe in the organisation’s stability and continuity.

SAPOA prides itself on being the “voice of commercial property” but it is more than that: It is a catalyst for change, an institution to be reckoned with, and one that deals with and aids the design and implementation of policy that affects all of its members.

“SAPOA’s legacy has been incremental,” says Warren Schultze, President 2009-2010.

“It has grown into a very strong body, it’s financially independent, it’s a body recognised by industry players and a body recognised by government and municipalities, and it is a strong role-player in forming policy, helping shape legislation, and mediating between industry and public bodies. And it’s vastly stronger than it’s ever been before.”

SOUTH AFRICAN PROPERTY REVIEW

43

Provides strategic advice relating to activities of capital investment, portfolio planning, disposal of assets and identification of possible scenarios for the positioning of the portfolio.

These opportunities enable the City to achieve their land transformation goals.

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SOUTH AFRICAN PROPERTY REVIEW

Obtaining and maintaining value from the property portfolio by effectively administering and leasing, acquiring and selling and lastly ensuring maintenance of the property.

The portfolio comprises commercial, social, residential, industrial and municipal property.

PROPERTY DEVELOPMENT

PROPERTY MANAGEMENT

PROPERTY ASSET MANAGEMENT

SAPOA events

Actively engages with the property development value chain.

This function involves conceptualising, designing and implementing developments on CoJ land.

s ty

n

Corporate building management and maintenance of public facilities.

The OSO Programme is set to create a launch pad to elevate service delivery, raise living standards and quality of life.

OUTDOOR ADVERTISING

FACILITIES MANAGEMENT

SAPOA events

A wide range of advertising mediums that reach consumers out of home.

Monitoring of structures on council land.

www.jhbproperty.co.za SOUTH AFRICAN PROPERTY REVIEW

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erie

s●

monthly cou n Our

Th e WOR

eye onLD thes worlds ●

Born in the USA, the home of the greenback The land of the free is the world’s third-largest country – and purportedly the world’s largest economy

by-country focu try-

Compiled by Mark Pettipher

T

he US is a country of 50 states covering a vast swathe of North America, with Alaska in the extreme northwest and Hawaii extending the nation’s presence into the Pacific Ocean.

Major cities include New York, a global finance and culture centre, and Washington DC, the capital, both on the Atlantic Coast; Los Angeles, famed for film-making, on the Pacific coast; and the midwestern metropolis of Chicago.

Economy The flag consists of 13 alternating red and white stripes that represent the 13 original colonies, and 50 white stars on a blue field, with each star representing a state. The colours on the flag have the following meanings: red is for valour and bravery, white is for purity and innocence, and blue stands for vigilance, perseverance and justice.

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SOUTH AFRICAN PROPERTY REVIEW

The United States is the world’s largest producer of oil and natural gas. It is the world’s largest national economy in nominal terms and second-largest according to purchasing power parity (PPP), representing 22% of nominal global GDP, estimated to be US$17,91-trillion as of Q2 2015 and 17% of gross world product.

It has the world’s ninth-highest per capita GDP (nominal) and tenth-highest per capita GDP (PPP) as of 2013. It’s a mixed economy

that has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment. In studies such as the Ease of Doing Business Index and the Global Competitiveness Report, the US is one of the world’s top-performing economies. It is also one of the largest trading nations as well as the world’s second-largest manufacturer, representing a fifth of the global manufacturing output.

Its seven largest trading partners are Canada, China, Mexico, Japan, Germany, South Korea and the UK. The US has abundant natural resources, a well-developed infrastructure and high productivity. Americans have the highest average household and employee income among Organisation for Economic Co-operation and Development (OECD) nations, and in 2010 had the fourth-highest median household income, down from second-highest in 2007.

eye on the world

It’s been the world’s largest national economy (not including colonial empires) since at least the 1890s.

The US not only has the largest internal market for goods, it also dominates the trade in services. US total trade amounted to US$4,93trillion in 2012. Of the world’s 500 largest companies, 128 are headquartered in the US. The US has one of the world’s largest and most influential financial markets. Foreign investments made in the country total almost US$2,4-trillion, while US investments in foreign countries total more than US$3,3-trillion.

The economy of the US leads in international ranking on venture capital and global research and development funding.

Consumer spending comprised 71% of the US economy in 2013. The United States has the largest consumer market in the world, with a household consumption expenditure five times larger than Japan’s.

The labour market has attracted immigrants from all over the world with a net migration rate ranked among the world’s highest.

Population Based on the latest United Nations estimates, the current population stands at 323 879 839 (May 2016), which amounts to 4,38% of the total world population, ranking the US number three in the list of countries by population, with a population density of about 35 per square kilometre. More than 80% of the population is urban (268 012 791 people in 2016).

Education The US spends significantly more on education than other OECD countries. In 2010, it spent about 39% more per full-time student for elementary and secondary education than the average for other countries in OECD,

A full moon rises through the haze over the Capitol in Washington DC, with the Lincoln Memorial and Washington Monument aligned (Photograph © Dreamstime.com)

SOUTH AFRICAN PROPERTY REVIEW

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eye on the world Key facts ▼ Capital Washington DC ▼ Independence Day 4 July 1776 ▼ Motto In God We Trust ▼ National bird The bald eagle ▼ National flower Rose ▼ National anthem The Star-Spangled Banner ▼ Area (50 states and District of Columbia only) 9 631 418km² ▼ Largest state Alaska ▼ Smallest state Rhode Island ▼ Largest cities New York, Los Angeles,

according to date from the National Center for Education Statistics.

The US federal government contributes almost 10% to the national education budget but education is primarily the responsibility of state and local government.

Education in the United States follows a pattern similar to that in many other countries’ systems. Early childhood education is followed by primary school, middle school, secondary

Chicago, Houston, Philadelphia, San Diego, Detroit, Dallas, Phoenix, San Antonio ▼ Border countries and oceans Canada, Mexico, Atlantic Ocean, Gulf of Mexico, Pacific Ocean ▼ Population 323 879 839 ▼ Languages English 82,1%, Spanish 10,7%, other Indo-European 3,8%, Asian and Pacific Islands 2,7%, other 0,7% ▼ Religions Protestant 52%, Roman Catholic 24%, Mormon 2%, Jewish 1%, Muslim 1%, other 10%, none 10%

school, and then post-secondary (tertiary) education.

Post-secondary education includes non-degree programmes that lead to certificates and diplomas, as well as six degree levels: associate, bachelor, first professional, master, advanced intermediate, and research doctorate.

The US system does not offer a second doctorate (or higher doctorate), but it does offer post-doctorate research programmes.

Key trends to watch in 2016

Tourism Outlook

1 2 3 4 5

At 143,8-million, employment is at its highest level ever recorded, and sustained job growth over the past several years has consistently driven occupancy growth that’s expected to continue into 2017.

Though more employees may be heading into the office, the US development pipeline of 9,16-million square metres remains below the previous two peaks in 2000 and 2008, at 12,9-million and 10-million square metres respectively. Most markets will be well-positioned from a supply perspective once leasing momentum begins to slow in 2017 and 2018.

Leasing activity remains dominated by both technology and financialservices companies, which have been driving growth in markets across the country – but volume in the first quarter came in at its lowest level (4,6-million square metres) since the recession as concerns over the economy’s stability grew. With fears of a recession now diminished, leasing activity should begin to increase over the course of the year.

Despite lower leasing volume, low vacancies and limited new deliveries kept the overall leasing environment highly competitive in the country’s most in-demand markets. Rental rates increased at the highest rate thus far in the cycle, with a 3,2% increase. In secondary and tertiary markets where development is limited or nonexistent and demand stable, rents will continue to post above-average increases..

Strengthening fundamentals in secondary markets, together with a decline in investment opportunities and high barriers to entry in primary markets, have resulted in an increased focus on secondary markets with high occupancy growth. But signs of softening in selected secondary markets may keep investors focused only on the highest-performing one.

Source: JLL United States Office Outlook, Q1 2016

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Adult and continuing education, plus special education, cut across all educational levels.

Each state determines the number of years of compulsory education: in most states, education is compulsory from the age of five or six to 16, but in some states teens have to stay on in school until the age of 18. Formal schooling lasts 12 years, until about the age of 18.

All children in the United States have access to free public schools. Private schools (religious and non-sectarian) are available but students must pay tuition to attend them.

Every state has great control over what is taught in its schools and over the requirements that a student must meet; every state is also responsible for the funding of schooling.

Therefore, there is huge variation between schools regarding courses, subjects and other activities – it always depends on where the school is located. Still, there are some common points, such as the division of the education system into three levels: elementary/primary education, secondary education, and post-secondary/higher education (college or university).

The remainder of 2016 will be largely landlordfavourable as expansionary leases begin to take occupancy across the US, but conditions will begin to shift in 2017 as markets work to absorb the more than 7,43-milliom square metres of new supply that will deliver over the next two years.

Additionally, as markets move nearer to their inflection points in terms of rental rates and market growth, 2017 will start to see some cooling as markets stabilise – especially in primary markets that performed well earlier in the expansion.

The travel and tourism industry in the United States generated nearly US$1,5-trillion in economic output in 2013. This activity supported 7,8-million US jobs, and accounted for more than nine percent of all US exports.

One out of every 18 Americans is employed, either directly or indirectly, in a travel- or tourism-related industry. In 2014, US travel and tourism output represented 2,6% of GDP. While the majority of the activity in the industry is domestic, expenditure by international visitors in the United States generated a record-breaking US$220,6-billion in sales and a US$74-billion trade surplus in 2014. According to the US Department of Commerce projections, international travel to the United States should grow by 4,3% annually through to 2020.

The US leads the world in international travel and tourism exports, and travel and tourism are the top services export, accounting for 31% of all US services exports in 2014.

Commercial real estate In a recent Wall Street Journal article, journalist Peter Grant reported on a plunge in commercial property sales in February.

Sales of US commercial real estate plummeted in February, sending the clearest signal yet that a six-year bull market might be coming to an end.

eye on the world US$25,1-billion worth of office buildings, stores, apartment complexes and other commercial property changed hands in February, compared to US$47,3-billion in the same month in the previous year, according to deal tracker Real Capital Analytics Inc. In January, sales were US$46,2-billion.

Prices that had been on a steady upwards march since 2009, are beginning to plateau, and have started falling in certain sectors and geographies, according to analysts and market participants. An index of hotel values compiled by real-estate tracker Green Street Advisors, for example, was 10% lower in February than it was a year earlier, due in part to reduced business and international travel.

Overall, commercial-property values are levelling off. Green Street’s broad valuation index in February was 8,7% higher from one year earlier but in the previous year the index rose 11%.

The question is whether February was a temporary blip or the beginning of a more lasting pullback. The Green Street index, which tracks higher-quality property owned by realestate investment trusts, is 24% above its 2007 peak and 102% higher than the trough of 2009.

Rents, occupancies and other fundamental factors are improving for most property types, analysts say. It has been pointed out that new supply growth has been limited.

The market has slowed primarily because of forces at work in the global capital markets rather than problems stemming from real estate itself. These forces, which also caused global stock markets to plummet in the first two months of this year, have made debt –

US leasing trends by industry Hi-tech Healthcare/Life sciences Business services Financial services Creative industrial Legal Government Insurance Energy 5% 10% 15% 20% 0% Note: Includes the 25 largest transactions by square metres in each quarter for the 54 markets tracked by CBRE Research Q1 2016

2015

2014

2013

Source: CBRE Research, Q1 2016

the lifeblood of real estate – more expensive and more difficult to obtain.

The most dramatic sign has been the sharp decline in bonds backed by commercial mortgages. In 2015, about US$100-billion of commercial mortgage-backed securities were issued. This year, experts believe volume will fall to between US$60-billion and US$75-billion.

Banks and insurance companies are filling part of the void. They can charge more and be more selective, making loans primarily backed by trophy and fully leased buildings in strong

markets. Borrowers in the riskiest deals, such as land purchases and new construction, are having a more difficult time finding financing.

The US real-estate debt markets began to tighten at the end of last year as concerns grew about interest rates rising, and new regulations on lenders (enacted in response to the world financial downturn) began to take effect.

Central banks eased up on their tightening of interest rates, but the US real-estate debt market remained choppy at the beginning of the year as global stock and corporate-bond

Most active foreign investors

Canada

China

Germany

Qatar

Norway

Canada

Germany

South Korea

South Korea

Canada

Germany

Singapore

Hong Kong

All others

China

United Kingdom

Source: JLL Research (Assets larger than 4 650m²)

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49

eye on the world markets convulsed amid signs that the Chinese economy was weakening. As yields of junk bonds soared, real estate became a less attractive investment. At the same time, the spreads between real-estate borrowing rates and treasury bonds widened greatly.

Today loans that would have been made with interest rates in the 4,5% to five percent range are being made above five percent, market participants say. Borrowers who would have lent up to 75% of a property’s value have reduced their so-called loan-to-value ratios to between 65% and 70%.

Those changes mean that many realestate investments that would have made sense before no longer do. Higher rates and tougher standards also make it more difficult for prices to continue rising.

Market participants point out that some conditions have improved slightly since the beginning of the year. For example, the stocks of US real-estate investment trusts have rallied along with the broader market.

February saw the shares of REITs that specialise in shopping malls trading at a 21,4% discount to the value of the property owned by those REITs, according to Green Street. That discount had declined to 19,1% as of 15 March. For office property REITs, the discount declined to 21,4% from 24,5% during the same time frame. By contrast, in March 2014, when the bull market in commercial property was still raging, malls were trading at only a 0,3% discount to asset value while office REITs traded at a 1,29% discount.

Some buyers are looking at the market’s softening this year as a buying opportunity.

According to Colliers, the office market outlook is promising and looks at what can be expected for 2016.

As we look ahead to 2016, the positive momentum of 2015 is expected to carry forward, and the US office market will continue its growth. ●● The US economy looks to continue its moderate growth, notwithstanding the recent turbulence in the financial markets and slowdown in global economic growth. ●● Occupancy and asking rents will continue to grow, particularly in major markets (except Houston), though at a more moderate pace than the record growth of the past year in the tightest markets. ●● While several markets have surpassed their prior peaks in asking rent and dipped below their prior trough in vacancy rates, there is still room for continued gains on both fronts.

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●● Based on our future growth analysis, the markets poised for strong growth in 2016 and beyond are topped by Orlando, Phoenix, Portland, Raleigh-Durham, Charlotte and Dallas/Fort Worth, Austin, Atlanta and Tampa. These markets are driven by robust activity in tech firm satellite offices, strong growth in professional services and an influx of corporate relocations to take advantage of more business-friendly environments. ●● Technology firms will continue their growth as their appetite for space shows few signs of slowing, notwithstanding isolated examples of modest subleasing

activity by some struggling tech firms such as Twitter. Whether snapping up new construction in their core markets or expanding satellite offices in other markets, this sector should be a major driver for years to come. ●● Gateway markets will continue to be the preferred destination for investors, though secondary markets poised for large growth are drawing increased interest. The US will remain the safe haven of choice for foreign investment as uncertainty remains across Europe and Asia. The Federal Reserve will continue to closely

Commercial real estate overview 2016

US capital market

US office market

●● Direct investment in US commercial real estate reached US$111-billion in Q1 2016, down 19,8% year-on-year. Individual asset sales – the best benchmark for investment momentum – experienced a more moderate decline of 10,9%. ●● Cross-border investment subsided in Q1 2016 to US$10,2-billion. Limited entity-level, portfolio and large asset acquisitions partly explain the decline from last year’s volume, in Q1 2015, of US$27-billion in cross-border investment.

Canada remains the lead capital source, followed by China, Qatar and Germany. ●● Pricing data continue to reflect mostly stable cap rates. ●● The NCREIF Property Index for institutional real estate registered a total annual return of 11,8%. The level is favourable, but lower than 2015’s 13,3% return. ●● Lending momentum subsided in Q1 2016 based on both CBRE Research’s Lender Momentum Index and a similar index produced by the Mortgage Bankers Association. ●● CMBS issuance for Q1 2016 declined 29,6% year-on-year. However, agency mortgage lending rose 47,5%, due in part to the high level of production carried over from 2015. ●● In Q1 2016, commercial mortgage delinquency rates were practically nonexistent for the GSEs and life companies, declined for banks, and held steady for CMBS. They are likely to edge higher in 2016 for the latter.

All references to deal volume cited in this report are based on Real Capital Analytics transactional database.

●● Office-using employment increased by 119 800 jobs in Q1 – above the quarterly average since office-using employment growth resumed after the recession. The financial-activities component has seen weaker growth in the past two quarters, while the office-using services component grew at a healthy clip in Q1 2016. ●● Year-on-year, net absorption slowed slightly to 7,34-million square metres from the Q1 2015 total of 7,61-million.

The west and south recorded the highest absorption totals in Q1 2016, led by Dallas/Fort Worth and Phoenix, each with more than 1,1-million square metres. ●● The vacancy rate went unchanged in Q1 2016, holding at 13,2%; the downtown rate increased by 10 basis points (bps) to 10,4% and the suburban rate was flat at 14,7%. More than 80% of the markets tracked by CBRE Research registered year-on-year vacancy rate declines. ●● Construction completions slowed to 836 000m² in Q1 2016 but outpaced net absorption for only the second time since Q3 2010. The top 10 markets by square meterage under construction accounted for nearly 70% of the total pipeline across the markets tracked by CBRE Research. ●● Annual growth in gross asking rentals accelerated to six percent in Q1 2016, the fastest pace since Q2 2008. The tighter downtown market continued to lead, with year-on-year rent growth approaching nine percent. ●● CBRE Research’s Q1 2016 underwriting survey of prime office building acquisitions reflects sustained confidence but less-aggressive underwriting.

Source: CBRE

eye on the world monitor economic headwinds and take a measured pace on future rate hikes, which will have little to no impact on investors. ●● While our outlook for 2016 remains positive on balance, downside economic risks and headwinds are rising. Although tech growth is expected to remain robust overall, recent declines in the valuations of certain tech firms and the recent decreases in venture capital could be harbingers of a greater shakeout. Markets that are heavily driven by finance also face greater risks, as many year-end earnings calls alluded to further cost-cutting.

Rent growth assumptions dropped slightly in Q1 2016, and unlevered target internal rate of returns rose modestly to an average of seven percent for CBD acquisitions and 7,8% for suburban. ●● At US$31-billion, Q1 2016 office investment remained high, though it fell short of the 2015 level by 14,8%.

US industrial and logistics market ●● With year-on-year demand growth of 21%, Q1 2016 was one of the strongest opening quarters of the past 15 years. Net absorption marked a 24th consecutive quarter of positive net absorption, eclipsing the longest such streak in more than 20 years. ●● The development market responded to rising rents and extremely limited supply, particularly in the Class A segment. The first quarter saw 3.71million square metres completed, with an additional 16,3-million square metres under construction. Speculative development has become prevalent and represents the majority of new development in most core markets. ●● In Q1 2016, tight supply pushed rents up in many core markets, with growth of 1,7% for the quarter and six percent year-on-year. An additional 4,1% increase is forecast for 2016, which would mark a fifth consecutive year of rent growth. ●● The pace of US industrial acquisitions moderated in Q1 2016 to US$13-billion.

For purchases of individual assets – the best benchmark for investment momentum – acquisitions slipped 6,9% year-on-year. Individual asset purchases represented the majority of transactions in Q1, in contrast to 2015.

Top 10 metros 5-year GMP growth forcast (2015-2020)

5-year EMP growth forcast (2015-2020)

US as a % of inventory

Dallas, Texas

16,3%

13,2%

3%

Atlanta, Georgia

20,6%

11,5%

0,8%

Houston, Texas

15,2%

11,1%

3,5%

Seattle, Washington

14%

8,8%

5,2%

Boston, Massachusetts

15,5%

6,3%

2,6%

San Francisco, California

8%

7,8%

5,4%

Washington DC

14,4%

6,5%

1,7%

Los Angeles, California

12,7%

7,9%

2,1%

Chicago, Illinois

11,2%

7%

1,1%

Manhattan, New York

8,9%

5,2%

2,2%

Top 10 metros

Source: Moody's Analytics, Colliers International

Growth forecast 5-year GMP growth forecast (2015-2020)

5-year EMP growth forecast (2015-2020)

Under construction as a % of inventory

13,1%

7,6%

1,8%

Boston, Massachusetts

15,5%

6,3%

2,6%

Washington DC

14,4%

6,5%

1,7%

Northern New Jersey

13,7%

6,2%

0,2%

New Hampshire

8,4%

10,3%

0,7%

Orlando, Florida

29,6%

16,3%

0,3%

Raleigh/Durham, North Carolina

28,3%

14,5%

0,9%

Austin, Texas

21,7%

14%

0,4%

Charlotte, North Carolina

22,2%

9,6%

3,2%

Columbus, Ohio

17,7%

10,4%

2,3%

Grand Rapids, Michigan

14,3%

9,7%

2,4%

Denver, Colorado

15,9%

9,5%

1,9%

Indianapolis, Indiana

18,1%

9,2%

0,4%

Phoenix, Arizona

22,1%

15,2%

2%

Portland, Oregon

32,7%

10,5%

2,3%

Boise, Idaho

24,5%

9,2%

2%

Stockton, California

19,1%

10,1%

3,7%

Region US

Northeast

South

Midwest

West

Source: Moody's Analytics, Colliers International

SOUTH AFRICAN PROPERTY REVIEW

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people in profile

A passion for people and property South African Property Review gets the opportunity to meet up with Malcolm Horne, Group CEO of Broll Property Group

By Mark Pettipher

S

traight-talking private family man Malcolm Horne meets me at the entrance to his office and we get right into the conversation.

“It’s been a rewarding year so far, and it’s not slowing down,” he says. “Business-wise, we’re seeing tremendous growth, unlike anything we’ve seen in the past three years.

“The main reason for this growth is our specialisation and diversification strategy.

In the past, you’d set up either as a property management business or operate a specialist niche business offering boutique services to certain clients. “We made the decision to become a fully fledged one-stop-shop professional-property-services business, catering to both investor and occupier needs alike.

“It was good foresight to do this as we have seen an incremental growth in our business as a result. Broll’s many specialised service offerings cater to the needs of the market and proactively deliver solutions in times of constant change effectively and quickly to the various needs of our many stakeholders and clients. As a result, we are seeing growth throughout Africa – although it certainly hasn’t always been like this.”

Growth and Africa expansion

Malcolm Horne, Group CEO of Broll Property Group

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SOUTH AFRICAN PROPERTY REVIEW

“If you ignore Africa, you do so at your peril – Africa occupies long-term value.

The African property sector is in its infancy stages and, as with anything, hard work, investing, believing in the future and patience are necessary to reap longterm rewards,” says Horne.

It certainly isn’t easy to do business in Africa. You need to be well informed and prepared for the opportunities and potential risks each country poses, and partner with companies on the ground who understand the local market opportunities and customs – and who know what they are doing.

“Gone are the days of developing a piece of land and expecting it to work. The depth of research available to us has become much more sophisticated.”

With available information for investors out there, the development of commercial property is a lot more scientific, and so the companies with presence on the ground have a distinct advantage to advise occupiers and investors.

Broll has 17 offices outside South Africa and 25% of its staff is situated in Africa.

people in profile “South Africa is still our core business and market because of the sheer size of the market, and I anticipate it will continue to be so into the future,” says Horne.

The backbone of Broll’s business consists of three elements: property management and leasing (approximately 25%), facilities management (30%) and occupier services (about 35%), but the additional valuation, research and advisory work are just as important to the business.

Broll’s growth in Africa will come over time. The reality is that Africa (including South Africa) is where the future lies.

“It has taken us 12 years to get to the point we are at right now,” says Horne. “Our African service lines are still in their early stages of development but I am extremely proud of the Broll businesses that we operate across the continent and the many skilled property professionals in these businesses.”

Africa is difficult for investors and occupiers to understand. Many markets are currently facing economic headwinds, resulting in more investors relying on professional-propertyservices companies to guide and advise them in their decision-making processes.

“The professionalisation of property services as an industry in Africa has huge growth potential to those who invest time, money and resources into this sector.”

Horne is enthusiastic about Africa.

“Even though we’re supporting a lot of our new African initiatives, I’m optimistic about the future of our business in Africa,” he says. “But one needs to be patient and not be afraid to invest in infrastructure before reaping the rewards.

“A lot of our African revenue is dollardenominated; as such, we have a hedge against the slump in our rand,” he says in

Past year’s achievements ●●

●●

●●

The leasing of the Mall of Africa – probably the largest single-phase retail outlet in South Africa Being awarded the Telkom occupier contract, the biggest outsourced contract in the occupier space in the country Gaining the MTN facilities management business and the DBW prestige housing complex in Cape Town

Broll Property Group headquarters in Illovo, Johannesburg

response to a question about the weakening rand and future prospects in Africa. “If you look at Nigeria, for example, we are seeing the activation of local capital markets – the locals are investing in the market and this is an example of where we need to be able to access different sectors of the market quickly.

“We see growing concern from retailers who are feeling the brunt of high rentals because of the dollar-denominated lease agreements. Their merchandise is being sold in local currency even though they are paying a dollar-based rental. The price point of their product cannot always be adjusted to cater for drastic currency fluctuations.”

Education and skills development Horne sees a trend towards improved professionalisation of the property and facilities management sector. “You have to add real value to your clients; you can’t just go on providing the same old bland services.”

He says it’s key to develop different dynamics and dimensions to your service offerings.

These revolve around understanding the market needs and investing in the correct people and skills in order to add real value to your client base.

“It’s important to give staff the right platform and environment in which to operate. In keeping with our objective of striving for excellence in the industry, we’ve invested heavily in developing out people.”

Horne is very passionate about education and says that through the Broll Academy, the Group is in advanced discussions to create a training centre for artisans and technical skills that will add value to the facilities and property management environments. The academy’s role is to fast-track management, people skills and property knowledge.

“We will soon be launching a revised training academy because we believe that education and job creation are at the heart of providing employment opportunities.

This doesn’t only apply to South Africa but to Africa as well. Although we are seeing a large number of highly educated people

SOUTH AFRICAN PROPERTY REVIEW

57

people in profile Awards 2015

Broll SA Advisors and Consultants for Agency/Letting – 1st place in Africa, Euromoney Awards

Consultants for Research – 1st place in Africa, Euromoney Awards

Real Estate Advisors and Consultants – 1st place in Africa, Euromoney Awards Broll Ghana Advisors and Consultants for Agency/Letting – 1st place, Euromoney Awards

Advisors and Consultants for Research – 1st place, Euromoney Awards

Real Estate Advisors and Consultants – 1st place, Euromoney Awards Best Valuation Firm

Best Property Management Company Broll Nigeria Advisors and Consultants for Agency/Letting – 1st place, Euromoney Awards

Advisors and Consultants for Research – 1st place, Euromoney Awards

Real Estate Advisors and Consultants – 1st place, Euromoney Awards

2014

Broll SA PMR Golden Arrow Award – Bronze Facilities Excellence

Real Estate Advisors and Consultants –1st place in Africa, Euromoney Awards

Real Estate Advisors and Consultants – Overall 1st place in Africa, Euromoney Awards

Real Estate Agency/Letting – 1st place in Africa, Euromoney Awards

Real Estate Valuation – 1st place in Africa, Euromoney Awards

Real Estate Research Services – 1st place in Africa, Euromoney Awards Broll Namibia

PMR Golden Arrow Awards – 1st place Property Management Company

Broll Ghana

Best Valuation Firm of the Year, Ghana Property Awards Best Brokerage Firm of the Year, Ghana Property Awards Commercial Property Management Award, Ghana Property Awards Valuation Firm of the Year Brokerage Company of the Year

Broll Nigeria Real Estate Advisors and Consultants – 1st place in Africa, Euromoney Awards

Best Real Estate Support Service Company – Real Estate Unite Awards

Best Commercial Property: Ikeja City Mall – Real Estate Unite Awards

2013

Broll SA

PMR Golden Arrow Awards – Gold for Facilities Excellence

Broll Ghana

Property Management Company of the Year

2012

Broll Ghana

2011

Facilities Management Award

Broll Ghana

Facilities Management and Maintenance Award

Broll Namibia

Top Performer overall winner – 12 Seasons Awards

2010

Broll Ghana

Facilities Management and Maintenance Award

Broll Namibia

Commercial Building Management Award

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SOUTH AFRICAN PROPERTY REVIEW

in the African markets, there is still need to develop practical skills relevant to our business operations. We will outsource most of the academic teaching to institutions such as the University of Pretoria and the University of the Witwatersrand and focus on the practical applications and property understanding skills.”

Property is a people business. As such, any property professional needs to be an engaging individual with excellent communication skills and a team player, as often, these skills are fundamental to the success of an individual, in any career choice.

“We often hire the aptitude and attitude of an individual, so the different personalities are important – they need to complement our different divisions.”

A valuer has a vastly different personality and skills set to that of a retail broker, so Broll’s recruitment processes look for different personality types and embrace their strengths, finding ways to integrate the different traits into the business.

IT and business needs Technology has a firm foundation within Broll, and the Group has its own IT division that creates bespoke technology solutions for both staff and clients – like Broll-Online.

“To outsource that part of the business would take a huge shift,” says Horne. “The more we empower our staff with technology that supports the business requirements, the more efficient and skilled they become.”

He says this efficiency is a differentiator as he believes Broll’s operational performance and business environment dictate the development of its IT department and its subsequent technological developments.

“We are one of the first property companies in the industry in which both the property and facilities management systems and procedures are externally ISO-rated, which means we have a fully documented operational procedure process audited by external independent accredited parties,” he says proudly. “The ISO platform links our business IP, our methods of working, procedures, job descriptions, which all in turn talks to training needs highlight staff development areas. We invest in our people and their skills, and create an environment that will enable them to become highly skilled property professionals.”

people in profile Experience and partnerships Horne has been with Broll for 13 of its 40 years of existence. Where is it going from here? “In a property services business, you need to stand out from the crowd and find innovative ways to consistently add value,” he says. “We believe in the African story. Since we affiliated ourselves with CBRE in 2004, we have been building a property services business that can compete with the best in the world and now manage 42-million square metres of client space across all markets. We have built a business that is renowned for its professional advice and for providing credible information to investors and occupiers, thanks to our track record and service offerings.

The property industry is relatively unregulated in many markets. Broll’s aim is to develop skills that will be accredited in these markets so it can be counted and regarded among the world’s best property professions.

To do this, it has also built strong relationships with a number of local professional bodies, government and regulators; among them is the South African Property Owners Association (SAPOA). As a former Board member of SAPOA, the South African Council of Shopping Centres and the African Board of International Council of Shopping Centres, Horne says SAPOA has extreme relevance to the South African property industry and has come to the fore by lobbying government and parastatals alike.

What SAPOA does well is consolidate the voice of the legislative framework to the industry. Its members have created a leading property organisation recognised as the voice of commercial property in South Africa.

“For property investors, it is comforting to know that there is substance and financial stability as well as depth of professionalism and knowledge at SAPOA, which brings tremendous credibility to the industry both locally and abroad,” he says.

Ubuntu and the art of doing business Johannesburg-born Horne says there is nothing that beats being home in South Africa and there is always a feeling of relief when the plane touches down on African soil after his many (mostly business) trips abroad.

“Once you go abroad, you learn to realise and appreciate what we have in South Africa,” he says. “As a born optimist, I firmly believe in the future of South Africa and that we will

At head office in South Africa, the Group’s CSI project through the Broll Foundation had employees packing meals for the Stop Hunger Campaign in 2015

overcome the various challenges that we face as a country.”

He recently returned from West Africa, where Broll has been celebrating its 10th anniversary. “Ghana is an interesting place to be,” he says. “Part of the reason I went to Ghana was to attend a church service to give thanks to the community; this forms part of our greater CSI commitment.

“We need to respect the different African cultures – and we believe that it’s important to give back to the communities in which we operate.”

Broll’s CSI commitment stems from a deepseated belief that prosperous companies need to give back in a meaningful way – and this does not just mean giving money.

To this end, Broll has a CSI committee to encourage activity in the community.

The company is prepared to have the business stop for a day whenever they are putting an initiative together, be it packing food parcels or an outreach programme to help with a community school. Broll creates a competition among company personnel, further enhancing the belief that CSI is about participation. “Can we do more? Yes!” Horne answers his own question. “But it comes down to understanding what is required within a society, we try to develop that as fundamental to company culture.

“It is exciting to get the momentum of change going, with the understanding that we are not just a South African business – we are a multi-cultural African business that operates in 17 different diverse markets with different people, customs and cultures,” he says.

Once you put that into the melting pot, does the business have purpose? “We believe that we have a purpose, and once you can demonstrate this to the people that your business has a heart, then the society and environment in which we work and live will thrive,” says Horne. “If you can demonstrate a heart for the society and people you work with, you will ultimately have a heart to invest in development and skills in your company.

It does matter to us what happens to your child at home; it does affect the way that you work in the office. If your business has a heart, you will be more tolerant of your fellow colleagues and ultimately have a healthy long-term culture of performance and accountability.

“Our success boils down to the people within our organisation. It humbles me to stand back and see how our business has grown, especially over the last five years.”

It’s not always the senior people that need the acknowledgement, it’s the rest of the workforce – the unsung heroes who work long hours to mobilise the contracts and uphold the standards.

“Our strength lies in the ability of many individuals working together as a team with a common goal and purpose – I am proud of each one of them,” says Horne.

t: +27 (0)11 441 4000 info@broll.com www.broll.com SOUTH AFRICAN PROPERTY REVIEW

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company in profile “We have specific and specialised expertise in retail – shopping centres, hospitality developments – hotels, healthcare facilities and student housing, and the more usual office and

DelQS:

fifteen years of service to the property industry

residential developments” Property Review talks to Dr Corné de Leeuw and Gerhard de Leeuw, and gets a fascinating insight into a quantity surveying practice that has grown through years of hard work and dedication to adding value to the property industry

By Mark Pettipher

D

First major project: Gate of Kuwait (Architects: GLH Architects)

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SOUTH AFRICAN PROPERTY REVIEW

elQS is truly an international player – a proudly South African company, with a history of excellence, which this year celebrates 15 years of delivering quantity surveying services to the continent’s construction and property sector.

Sitting with me are Dr Corné de Leeuw and his son Gerhard. Corné has many years of service to the property industry, having founded his former company, the CP de Leeuw Group, now the De Leeuw Group, in 1958. He is also a former President of the South African Property Owners Association (SAPOA).

In 2001, Corné joined forces with his son to establish DelQS in Johannesburg and take up the challenges of the new millennium by merging experience and a long track record with youthful vigour and technological expertise.

Subsequently, in 2010, DelQS established a branch office in Pretoria with Nico Roos as the director in charge.

While timeously and adequately providing traditional quantity surveying services and utilising the best that technology can provide, DelQS identified certain services being vital to the bottom line of property developers and investors. To this end it has researched the needs of its clients and has developed expertise and systems related to the following: ●● In-house developed financial viability analysis, including detailed estimates of construction cost, acclaimed to be precise and logical in presentation ●● Extensive building contract expertise and quality contractor procurement systems ●● In-house developed cost control system that proactively tracks past and potential future construction cost decisions, and provides a precise audit trail

●● Ensuring that final settlements with contractors are based on the conditions of contract, leaving (with recommendations) any other settlement decisions to the client ●● Expertise and a track record of dealing with projects elsewhere in Africa, and beyond ●● Expertise in almost all building development categories Looking at the past 15 years, Gerhard reflects on his first major project, an iconic piece of architecture – the Gate of Kuwait, a 40-storey mixed-use office and hotel development.

For Gerhard – freshly registered as a quantity surveyor, two years after university and stepping out of his first job in property development – this was a huge learning curve. The project was one of six design proposals by various architects, which had to be financially evaluated by DelQS for the Alshaya Group of Kuwait. Of the six, one proposal by GLH Architects was taken up to construction drawings, but sadly never built.

Over the past 15 years, DelQS has garnered agreements and set up a number of nonfinancial associated offices throughout Africa – in Namibia, Ghana, Kenya, Mauritius, Namibia, Nigeria, Tanzania and Uganda. The agreements are based on the understanding that they will successfully collaborate on projects on the ground locally in those countries. DelQS has, in addition, working experience in Angola, Cameroon, Gabon, Lesotho, Mozambique, Rwanda, Senegal and Zambia.

“It is vital to our business that we have local contacts in Africa, and that we can work to the same standards and systems that we have here in South Africa,” says Corné.

company in profile 2

1

3

4

1 Head office for Ecobank in Accra, Ghana (Architects: Arc Architects) 2 The Union office development in Accra, Ghana for Eris Properties (Architects: Boogertman+Partners) 3 Menlyn Learning Hub in Pretoria for the Feenstra Group (Architects: Boogertman+Partners) 4 Head office for Business Connexion in Centurion for a consortium of investors (QS services in JV) (Architects: Stauch Vorster International)

“DelQS invariably uses local quantity surveyors to provide local knowledge at the outset and a day-to-day presence during the construction phase.”

The DelQS practice is commercially focused – 95%, with very few government appointments. As such, there is much commercial expertise in place. The De Leeuws are particularly proud of their in-house developed financial viability reporting system which, they say, attracts the attention of property developers and investors and is thus a source of new professional appointments.

“What we are very conscious of,” says Gerhard, “is that our home base is South Africa. We have been blessed with a steady flow of appointments, mainly for projects in Gauteng but also further afield in Mpumalanga, Limpopo and the Free State.

Currently under construction is a head office for Business Connexion in Centurion (QS services in JV) with architects Stauch Vorster International; a medical facility in Morningside, Johannesburg with Geyser Hahn Architects; student housing in Pretoria with architects Boogertman+Partners and the Menlyn Learning Hub, also with Boogertman+ Partners, where practical completion has just been achieved.”

“We have specific and specialised expertise in retail – shopping centres, hospitality developments – hotels, healthcare facilities and student housing, and the more usual office and residential developments,” adds Gerhard.

Turning again to work in Africa, Gerhard says, “We’ve had projects in Africa from the outset. In Calabar in Nigeria, we have a project that was at that time a US$300-million development, comprising 60 000m² of retail, SOUTH AFRICAN PROPERTY REVIEW

61

company in profile “We’ve done well out of Africa. It’s a growing continent with a projected increase in population of a billion people by 2050 – so we see a great future for us in that regard”

Directors and associates: Nico Roos, Wilco Lourens, Liza Botha, Akopo Africa, Gerhard de Leeuw, Christine Larson, Corné de Leeuw

a 300-bedroom hotel and 20 000m² of warehousing. We were also involved in the dredging of a man-made lake and the development of the road infrastructure.

GAPP Architects and Urban Designers were both the architects and the urban designers.”

“This was soon followed by a US$250million hotel and apartment development in Lagos, Nigeria, designed by GLH Architects,” says Corné.

More recently, the practice has been very active in Ghana, with shopping centres for Atterbury Properties, of which two are completed in Accra and a third under construction 300km to the north of Accra in Kumasi. WHBO has been the contractor in all cases. Other projects currently under construction include the iconic Ecobank head office building, also in Accra. The contractor on Ecobank is Energoprojects, a Siberian construction company, with South African architects Arc Architects. An office development for Eris Properties – called The Union – will also soon be under way.

“If you don’t know your way in Africa, you’ll get your fingers burnt,” says Corné. “Developers appoint us because we have the experience and the contacts in Africa.”

Both Corné and Gerhard are actively involved with the Africa Association of Quantity Surveyors – Gerhard is the Honorary Treasurer and Corné is the Chairman of the Services and Model Documentation board. They have three meetings a year, rotated in the Englishspeaking countries in Africa.

“We’ve done well out of Africa. It’s a growing continent with a projected increase in population of a billion people by 2050 – so we see a great future for us in that regard,” says Gerhard.

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Value management, also known as value engineering, is mentioned in the DelQS company profile – so I enquire about it.

“We’ve facilitated about 20 value management workshops utilising the Australian system,” says Gerhard. “We believe that we’re setting the standards, and are one of only a few practices that are in a position to provide facilitation for true value management.” Corné explains that many project managers, quantity surveyors and developers are under the impression that value management is merely getting together around a table and performing a quick cost-cutting exercise. But true value management is not a cost-cutting exercise; it is a process that includes a formal workshop with a brain-storming session lead by a facilitator, with the object being to obtain value for money.

To stabilise DelQS’s future, there are plans to expand. Having first taken the initiative to establish DelQS in Africa, a move that has proved fruitful, the opening of the Pretoria office in 2010 was part of the sustainability strategy. Now DelQS is planning to open in Cape Town and Durban – to cover different geographic regions and accommodate the fluctuation in workloads between the different city and regional markets.

As part of the expansion plans, DelQS has recently appointed an additional director and three associates from within its ranks.

The current directors and associates are Corné de Leeuw, Gerhard de Leeuw, Nico Roos, Akopo Africa, Liza Botha, Wilco Lourens and Christine Larson.

Quantity surveying practices are generally small – there are about 750 practices in South Africa, and a large number of them are either small or very small.

DelQS considers itself to be within the top 20 in terms of personnel size. In the past, QS practices were much bigger but with a large complement of clerical or non-technical support staff – nowadays with technology advancements, the support staff complement is much decreased.

DelQS utilises both in-house and purchased quantity surveying programs, the best that technology can provide. The two DelQS offices can operate as an integrated whole, working simultaneously on the same project and from remote locations. This is possible because of the networking IT systems they have. For ease of communication, DelQS has gone over to using Google Apps for Work.

In terms of BEE, DelQS is encouraged that there are many black students coming through the universities with the right kind of qualifications and skills, meaning a search for future employees will not be a problem.

DelQS is happy to embrace transformation and to bring black employees through the ranks – it’s important to DelQS that graduates have an understanding of the work process and get to know the company’s culture. The issue is retaining people – and the company encourages personnel by showing them that there is a career path for them within DelQS.

t: +27 (0)11 642 8751 / +27 (0)12 460 3304 jhb@delqs.co.za / pta@delqs.co.za www.delqs.com

SAPOA events

Sandton Place, 68 Wierda Road, Sandton, 2196 t: +27 11 779 1600 www.dsa-arch.com

Johannesburg | Dubai | Lisbon

Hospitality & Leisure | Mixed-Use Developments | Commercial | Luxury & Serviced Apartments | Urban Housing | Residential Estates | Entertainment & Casinos | Safari & Game Lodges | Refurbishments & Restoration | Retail | Industrial | Sustainability SOUTH AFRICAN PROPERTY REVIEW 101

company in profile

SVA International:

partnering the industry’s progress

SVA International is B-BBEE Level 3-rated and 51% black-owned. Quantity surveyor and property industry doyenne Nyami Mandindi chairs the Board. The company sponsors bursaries and helps to grow emerging professional skills

From local foundations to a global presence The roots of SVA International go back to 1943, when Bauhaus-trained architect Hellmut Stauch established Stauch Vorster Architects with Robin Vorster in Pretoria. Stauch was a leading practitioner in the area’s Regionalism Movement during the 1940s and 1950s, and a respected lecturer in design at the School of Architecture at the University of Pretoria.

The firm originally concentrated on domestic architecture, but larger commissions and public projects followed, influenced by Modernism and the Brazilian Movement, 8 Melville office development in Johannesburg

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SOUTH AFRICAN PROPERTY REVIEW

which saw SVA grow into a leading national practice hallmarked by cognisance of local conditions, economy of materials and efficient integration of function.

The firm gained momentum in the metropolitan centres and set up offices in Johannesburg, Cape Town, Durban and Port Elizabeth. With the democratic era, SVA pioneered working beyond South Africa.

Project experience in the past 20 years ranges from the north (Egypt, Libya, Algeria, Sudan) to the east (Ethiopia, Uganda, Kenya, Tanzania), the west (Cameroon, Nigeria, Ghana, Ivory Coast, Gambia, Senegal), Central Africa (Gabon, Congo, DRC, Angola, Zambia), as well as our neighbouring countries. The company has offices in Nigeria, Mozambique and Mauritius.

After almost 75 years and more than 1 000 projects, these points of presence throughout the continent have enabled SVA’s evolution into a leading multi-disciplinary architectural firm in Africa.

Collaborative design Now a member of the GIBB group of companies and rebranded as SVA International, the firm encourages a collaborative process among its 100-plus professional staff in the various offices. Dialogue and design excellence develop solutions that are appropriate and unique to each project requirement, including aesthetics, context, budget and timing. Key to success is developing mutually beneficial relationships with clients, consultants, contractors and end-users.

All borders are fluid – between offices, countries, sectors and disciplines. The digital era means that SVA International is at ease servicing clients based, for example, in Cape Town but building in Kinshasa. Harnessing technological advancements means the practice can assure clients of a continuity that shrinks geographical distances. SVA International responds dynamically to the changing demands of the market locally and further afield, through its geographical spread and diverse knowledge and expertise across sectors.

The practice is headed by Garth Hamilton, working in the Cape Town office. A son of a prominent architect, Hamilton says he feels privileged to lead the “venerable organisation” and draws on his early experience of working in the built environment at the time of South Africa’s liberation. “The growing pains of the new country informed my identity as a South African architect and shaped the way the practice developed, bringing a consciousness of the transitions of society and the different needs that architecture must respond to so as to meet the challenges of our nation, which was (and still is) forging a culture of humanity and diversity,” he says.

Strong relationships, multi-sector skills Paul Symondson, a director at SVA International’s Johannesburg office, sees the company’s approach as always being to nurture an understanding of the people, places, cultures and environment wherever they work. “We establish context, forming and maintaining local relationships, learning to adapt to an ever-changing social, political and commercial landscape,” he says. “We listen to and understand needs, respond to dynamic forces, and lead through knowledge and experience, building new collaborations, and creating exciting and appropriate designs and developments.

“We have established strong links with a broad spectrum of international brands and operators to add insight and value. In this way we can optimise potential for development in established and expanding markets. SVA International’s multi-sector skills are especially relevant in the design of mixed-use environments across the continent, bringing in the energy

company in profile of diverse players from across the spectrum of the development industry.”

Conrad Debaveye has long been a key player in these pioneering projects, and is widely acknowledged as a leading figure in the hotel, hospitality and mixed-use development industry across the African continent. Kevan Moses, as Managing Director of SVA from 2008 to 2015, led the highly acclaimed Long Beach and St Regis Resort projects in Mauritius, with both completed developments being rated within the Condé Nast Top 100 Resorts of the World. Tinus van der Westhuizen, Paul Symondson and Franc Brugman lead the extensive and highly experienced retail design teams.

“SVA has an edge in being able to bring together expertise in all sectors,” says Moses. “We have huge amounts of experience and long-standing relationships with fellow consultants in all disciplines, sharing intelligence in pursuing efficiency with excellence.”

Evidence of this is SVA’s long-lasting involvement with SAPOA, which it joined in 1999. Since then, the company has been involved with many of SAPOA’s platforms, and is one of the long-standing sponsors Proposal for a new apartment hotel in Senegal

of the flagship Property Development Programme (PDP). True to its multidisciplinary nature, SVA also has a long history with other industry and professional associations.

The GIBB alliance As the demands – and opportunities – presented by 21st century urbanism and its African client base grew, SVA sought a partner who shared its entrepreneurial vision. Out of this was born a formal relationship with GIBB, one of the largest black-owned multi-disciplinary engineering consulting firms, which has a far-reaching portfolio of major works and a prodigious ability to shape the built environment in Africa.

As a member of the GIBB group of companies, SVA International remains a fully independent architectural practice that now can expand its client offerings through the strategic advantages of the alliance.

At an urban level, the firm is able to present solutions that include strategic spatial plans and settlement design, master planning and precinct plans, urban design frameworks and form-based codes.

Paul Symondson, a Director at the Johannesburg office: “We have established strong relationships with international brands and operators to add insight and value, and to optimise potential for development in established and expanding markets”

Expertise spanning across project types On the architectural front, expertise spans many project typologies: mixed-use complexes, integrated waterfront developments, retail and commercial buildings, convention centres, education, health and science facilities, sport and leisure venues, and hospitality spaces.

While the practice’s specialist knowledge and support was already available from one office to another, ensuring maximum benefit to clients irrespective of project location, SVA International can offer a multi-disciplinary building solution that, in a traditional South African context, would have been provided by a number of different companies.

By retaining a combined multitude of skills in what is to all intents and purposes an in-house environment, SVA International has the ability to seamlessly and reliably deliver turnkey solutions to a variety of different clients.

Kevan Moses, Managing Director of SVA from 2008 to 2015: “SVA brings together expertise in all sectors.

We have experience and long-standing relationships with fellow consultants across the disciplines to share intelligence in pursuing efficiency with excellence”

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company in profile Putting the brief first SVA International’s success does not only stem from its architectural, urban design and project management skill sets. A large part of what the practice does differently falls under the somewhat antiquated description of client service – a service that Hamilton and his team have taken into a fully modern context.

“We’ve been interpreting client needs since 1943, and we have learnt, over the years, to listen closely before responding to briefs,” he says. “Before we even start to draft concepts, we undertake to fully understand our clients’ economic and commercial imperatives, which is vital if we are to present innovative, relevant ideas that enhance their vision.”

SVA International also undertakes to be upfront about foreseeable risks inherent in the brief. This circumvents potential setbacks down the line and keeps unnecessary costs down.

Sustainable design SVA’s design philosophy has always been about creating environmentally and socially responsive buildings. Consideration of the impact of new projects on the environment and society, together with the form, function, and architectural language of a project, are integral to the process.

With a number of accredited green building professionals on staff, buildings are conceptualised to provide efficient, comfortable surroundings, reduce energy and emissions, and prevent health risks.

A pressing social need in South Africa today is student housing, especially when combined with innovative financing systems.

SVA’s Durban office, led by Francesco Coppola, has particular experience in the field, and a variety of projects are in the pipeline.

Heritage and urban regeneration While SVA International seeks a sense of architecture and urbanism that matches the pace of socioeconomic, political and technical change, an understanding of the relevance of the local context is always paramount.

This is evident in its expertise in restoring/ renovating historic buildings, guided by strict aesthetic, structural and legal requirements.

SVA International’s Port Elizabeth office under Debbie and Bryan Wintermeyer has gained an enviable reputation in the arena of heritage impact assessments, communitybased processes and urban regeneration.

Technological edge In the early days, architectural design was done with pen and pencil on large boards.

Now drawing and design work is all logged, rendered and shared digitally, and able to accommodate variety and quick changes.

With the advent of 3D printing, online tablets and automated building construction processes, Hamilton sees the profession’s technological progression increasing in pace. “The industry has benefited from a development revolution that will become more intense,” he says. “SVA International’s differentiation is that we are surfing that wave, as opposed to standing on the shore.

I envisage digital technology as an ever more important aspect of the business.”

SVA International keeps staff up to date with structured in-house training that ensures high standards of project delivery and efficiency. Additionally, the firm operates within the parameters of a practice manual first developed in 1970 and updated annually, which prescribes technical and project management quality and procedures.

Overall, the wealth of knowledge and experience built up over the years, learned and shared with partners, has enabled SVA International to be among the most productive, commercially effective and innovative turnkey architectural practices to support the progress of the South African building and property development industry.

ABOVE St Regis hotel/leisure resort rated in Condé Nast’s Top 100 worldwide BELOW BCX Connexion head office in Centurion Garth Hamilton, Managing Director of SVA International: “We undertake to fully understand our clients’ economic and commercial imperatives, which is vital if we are to present innovative, relevant ideas that enhance their vision”

SVA International (Pty) Ltd Johannesburg: +27 (0)11 268 6090 Cape Town: +27 (0)21 421 4276 Durban: +27 (0)31 263 8200 Port Elizabeth: +27 (0)41 581 6362 info@svarchitects.com www.svarchitects.com 66

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SAPOA events

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company in profile

The future is bright for Atterbury

An aerial view of Mall of Africa

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ith the successfully completed Mall of Africa development under its belt, a brand new investor, a newly launched fund and an exciting new multibillion-rand mixed-use precinct development soon to break ground, leading South African property developer and investor Atterbury has a bright, busy and buoyant future to look forward to.

Atterbury Group recently launched Atterbury Property Fund, a new real estate growth fund that will become the investment vehicle for the existing and future Atterbury assets in South Africa, Namibia and Mauritius.

“Atterbury Property Fund will take Atterbury confidently into the future,” says Louis van der Watt, Chief Executive Officer of Atterbury Group. “We are excited to take the next step in our journey,” Right now, Atterbury is perhaps best known as the developer and co-owner of the new Mall of Africa at Waterfall, Midrand.

However, what is more, with Van der Watt at its helm, Atterbury has earned an enviable reputation for creating and growing property funds. Most recently, JSE-listed real estate capital growth fund Attacq was spun out of the Atterbury stable. Before that, it formed Attfund, which was sold to Hyprop in 2011. Atterbury Property Fund is Atterbury’s next chapter.

Atterbury Property Holdings will own 80% of the shares in Atterbury Property Fund.

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Atterbury’s employees will hold the remaining 20% stake, aligning the interests of the company with those of its staff.

Starting as a closed unlisted fund, Atterbury Property Fund will launch with assets valued at R3,1-billion. It has secured a large immediate development pipeline that includes R2-billion’s worth of top-structure developments over the next three years. All these developments, which will transfer to Atterbury Property Fund on completion, are distinguished by the quality design and function that the market has come to know and trust from Atterbury.

“The aim is to grow it towards a marketrelated liquidity event that will give the market access to participate,” says Atterbury Property Fund Chief Executive Officer Wouter de Vos. As CEO, De Vos brings more than 21 years of experience and an impressive investment acumen to the fund, including 18 years at Investec Private Bank, where he headed up the Northern Region and served on the national executive team. He specialised in private client investment banking, including structured property finance as well as growth and acquisition finance. He was also Director and co-owner of boutique investment firm Talana Capital.

It is anticipated that Atterbury Property Fund’s initial property assets will include, among others, a 10% stake in the newly opened 130 000m² Mall of Africa at Waterfall,

Midrand; 15% of the 46 200m² Bagatelle Mall of Mauritius; 25% of Namibia’s first regional mall; the 52 089m² The Grove Mall of Namibia in Windhoek; Club mixed-use office and retail precinct opposite the Pretoria Country Club; the 16 250m² Riverwalk Office Park in Pretoria which includes Deloitte’s head office; and KPMG’s 4 300m² Hillside offices in Lynnwood, Pretoria.

“Atterbury Property Fund will acquire the pipeline assets from Atterbury on favourable terms in exchange for financial assistance during the development phase,” De Vos explains. “This will result in superior financial returns for its shareholders. By consolidating Atterbury’s assets into Atterbury Property Fund, we will also benefit from more favourable funding terms and potentially access debt capital markets.”

The fund’s long-term approach will mean that shareholders won’t receive distributions for the first few years. “Atterbury Property Fund is investing for the long term,” says De Vos. “We’re focused to take advantage of property investment opportunities where we can create and add value with Atterbury’s leading-edge property development and asset management expertise. We will leverage off the existing and well-established Atterbury networks as well as proven brand.”

company in profile In addition to ventures with existing Atterbury partners, Atterbury Property Fund is eager to create new investment partnerships, including investing in JSE-listed property counters.

“We will be highly selective and target our investment into companies where we can add value through our development, dealmaking, investment and asset management abilities, and exert strategic influence at management and board level,” says De Vos. Rand Merchant Bank Holdings (RMH), which recently acquired a 25,01% stake in Atterbury Property Holdings, will become an indirect shareholder in Atterbury Property Fund, subject to approval by competition authorities.

Investment holding company RMH is expanding its current single investment in FirstRand to create a property investment business. As a first step in the strategy of establishing a diversified portfolio of scalable entrepreneur-led businesses with proven track records in managing and building out property portfolios, the group announced its intention to make a 25,01% investment in Atterbury.

Atterbury will become RMH’s key development partner in its core portfolio that will target the more traditional and larger areas of South African property (principally office, retail and industrial property). To supplement this core portfolio, the RMH property business will also include a specialist portfolio that will focus on niche areas of the property sector.

The RMH property strategy will focus on owner-managed businesses, a broader value chain in property, an unlisted portfolio, a balance between net asset value and yield, as well as a lower concentration risk, as RMH will acquire stakes across multiple strategies, sub-sectors and geographies in time.

The group will follow a phased approach to acquire its various property investments.

“Our new property investment strategy meets our stated objective of creating shareholder value and also further diversifies RMH’s earnings base as we will invest across the breadth of the property value chain,” says RMH’s Chief Executive Officer Herman Bosman.

“In line with our history and ethos, we’ll focus on entrepreneurial and owner-managed businesses. The strategy will involve investing in physical property portfolios as well as vertically integrated property companies, specifically with internal management teams that offer asset management, development management and property management skills. As a first step in the realisation of our

strategy, we have found an excellent partner in Atterbury. The company has a 22-year successful track record in entrepreneurial skills, as well as development and asset management ability. Its team is regarded as the most innovative player in the South African property market. We will work with Atterbury and other future investment partners to assist them with capital, strategic input, networking opportunities, structural longevity and any additional governance systems.”

“It was evident from the first meeting that Atterbury and RMH share a similar culture and value set,” adds Atterbury’s Chief Executive Officer Louis van der Watt.

“Atterbury, as a relatively small company, is honoured to be reckoned among the RMH stable’s other prestigious investments.

Atterbury Group recently launched Atterbury Property Fund, a new real estate growth fund that will become the investment vehicle for the existing and future Atterbury assets in South Africa, Namibia and Mauritius Having developed more than two-million square metres both inside and outside of South Africa, we are the ideal partner for RMH to capitalise on property opportunities.”

Atterbury’s recent key developments include 300 000m² of commercial, retail and industrial properties on the Waterfall land in Midrand, Gauteng. This includes Southern Africa’s largest single-phase shopping centre development to date: the R5-billion Mall of Africa is a 130 000m² super-regional mall that sets a new benchmark for shopping centres on the continent.

It also has a whole host of exciting upcoming projects, including the recently announced prime new multibillion-rand development in Pretoria.

James Ehlers, Managing Director of Atterbury Property Developments,

confirms that Atterbury’s latest venture will be a modern, mixed-use commercial development on about 85ha of prime land, at the high-profile juncture of the N1 and R21 highways. The development will be similar to the staggering Waterfall development in Midrand, albeit on a different scale. Atterbury has a unique understanding of this type of greenfields development at which it excels.

The new Pretoria mixed-use precinct will be constructed on the landmark property belonging to the Erasmus family on the last portion of the original Waterkloof farm in Pretoria. It will be developed by Atterbury in a joint venture with the Erasmus Trust, and is expected to start early next year.

The Erasmus land enjoys a prime site bordering to the N1 and R21 highways, with Solomon Mahlangu Drive at its northern border. It provides easy access to Johannesburg, Pretoria, Pretoria East and OR Tambo International Airport.

In addition, as part of the development, Atterbury is also considering investing in roads and other infrastructure to benefit the area.

Once re-zoning is confirmed, the new development will be meticulously planned to position commercial properties for peak functionality, access and visibility.

Equal attention will be given to the residential units, which Atterbury intends to undertake in partnership with a specialist residential developer.

The project will be developed over five to seven years, driven by market demand.

Already, Ehlers says, the demand is strong.

“We are talking to specific retailers who want to be part of this development and there is a huge demand for housing in the area,” says Ehlers. “We expect different facets of the project to be constructed simultaneously, which will result in a bustling construction site, similar to what you see at Waterfall right now.”

Johannesburg: +27 (0)10 596 9800 Pretoria: +27 (0)12 471 1600 Stellenbosch: +27 (0)21 808 1000 enquiry@atterbury.co.za www.atterbury.co.za SOUTH AFRICAN PROPERTY REVIEW

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SAPOA events

REFINING MIXED-USE & URBAN DESIGN

Bentel Associates International is utilising its experience in urban planning and mixed-use projects to meet the needs of the changing business environment in emerging market economies

Mixed-use development is a phrase that you might have come across recently. If not, you are sure to hear this in the future as this type of development becomes more and more prevalent in our dynamic and ever changing world.

Over the past decade mixed-use real estate has received significant attention around the world. This attention stems from a number of factors ranging from the encouragement of such development by local planning authorities to increase density to the more recent interest in creating more vibrant, walkable and connected communities. By integrating smartly designed buildings and spaces that can perform many functions, encompassing a ‘mix ’ of retail, commercial, residential, hospitality and other leisure or recreational uses, these types of developments are able to engender life back into our urban areas and cities.

“Throughout Bentel’s history, we have been involved in all types of commercialorientated projects, with retail playing a significant role. There has been a recent focus in the last decade or so on urban design and mixed-use developments, and we are currently capitalising on this market trend,” comments Tim HarlechJones, Business Development Director at BAI. It is important to differentiate from urban design or multi-use in the context of large developments – mixed-use is a single structure of different components in a vertical arrangement, whereas multi-use refers to different structures that are intrinsically linked, whether this is an urban design context or even within a planned single development. Each one has its own challenges – the challenges in the vertical context will be the structural and services arrangement, yet the challenge in an urban design context is one to link the various functions and components with respect to accessibility, visibility, walkability. In both cases design and planning plays an integral part, and space making is important to consider in treating spaces between the building fabric in a positive light.

Established in 1960, Bentel Associates International (BAI) has been involved with a number of integrated mixed-use and urban design projects in South Africa and beyond its borders. Having been a pioneer of shopping centre design in South Africa, retail design has always been a core focus of Bentel’s expertise and experience over the years. With the shift to more integrated and larger projects, the influence of urban design and mixed-use developments has become more significant in the recent years in their portfolio of experience.

In recent years, BAI has been involved with numerous mixed-use developments – examples locally include Nelson Mandela Square, completed in the 90’s and recently undergone a repositioning and refurbishment, and Bedford Square, a 50,000sqm retail, commercial and

Nelson Mandela Square

Urban Design - Mauritius

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residential project in Bedfordview. Both examples are substantial verticallystacked buildings, which include different types of activities and offerings, with integrated public hardscape spaces.

Mixed-use schemes allow for a mitigation of commercial risk for the developer, due to the different offerings, and also allows for counter-cyclical behaviour for occupants of the different components in giving more life to the development throughout the day and night. Tim goes on to say, ‘Ultimately from a development cost point-of-view, this counter-cyclical behaviour can be used to garner efficient parking ratios to a scheme, which allows for substantially reduced costs to a development and depending on location of the development, can be reduced further based on access to public transport routes.’

BAI’s urban design expertise encompasses the planning of numerous large urban and peri-urban areas for the development of a range of functions that work harmoniously together – in this case creating multi-use environments which create communities.

For example, BAI was involved in Waterfall C i t y, w h i c h i s c u r r e n t l y u n d e r development north of Johannesburg. BAI has also been associated with some of the architecture in this large growth node with the recent completion of a retail convenience centre in Waterfall Corner and an office component in the Cell C Campus.

Vegas Mixed-Use, India

SAPOA events Wessel van Dyk is the Principal Design Director at Bentel, and has been involved with a number of landmark and awardwinning projects, ranging from golf estates to marinas, large mixed-use projects to separate retail, commercial, clubhouse and residential schemes across South Africa, the Indian Ocean Islands and other countries on our continent.

Bedford Square

According to Wessel, “We're skilled at navigating the complex challenges that arise when designing mixed-use and multiuse projects, from single buildings to entire new communities. We live in a dynamic, ever-changing world. Increasingly, today’s cities need smartly designed buildings and spaces that can perform a multitude of functions.”

There are numerous large urban design and mixed-use projects that are under concept in South Africa and beyond.

However BAI are also engaged in such projects in the Middle-East and the subcontinent. One such example is the ‘Vegas’ development that is currently under construction in Dehli, India. Vegas, which consists of retail, commercial, residential and hotel components and covers a total of 205,000sqm of gross building area. This development recently won an Asia-Pacific Property Award for best mixed-use architecture, furthering the recognition of BAI’s abilities on the international stage.

Backed by an award-winning portfolio of projects spread across the world’s emerging markets, BAI has been consistently recognised on a local and also international scale for its achievements across the mixed-use genre. With a clear aspiration to become a leading urban design and architectural company in not just Africa but in all emerging markets, the company continues to prove itself and deliver landmark projects with innovation and flair.

Waterfall City - Master Plan

Cell C Head Office

Waterfall Corner

Michelangelo Towers

Johannesburg tel: +27(0)10 590-7900 email: bentel@bentel.net Mumbai tel: +91(0)22 4066-4600 email: bentelindia@bentel.in www.bentel.net architecture master planning interior store planning REVIEW graphic design SOUTHdesign AFRICAN PROPERTY 101

company in profile

Africa’s growth prospects have increased demand for real estate The firm’s Real Estate Practice comprises a dynamic team of talented, experienced real estate lawyers servicing Africa and specialising in representing the interests of banks, developers, property funds and other institutions in acquiring, developing and financing commercial, industrial and retail real estate across the continent

t: +27 (0)11 669 9468 c.schafer@bowman.co.za www.bowman.co.za 72

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Craig Schafer, Head of the Real Estate Practice at Bowman Gilfillan Africa Group

A

cross the African continent, cities are expanding rapidly.

This growth has resulted in an increased need for quality real estate of all types, including industrial, agricultural, commercial and retail properties, as well for the specialised legal advisory services essential in complex real estate transactions.

The Bowman Gilfillan Africa Group is a leading Pan-African law firm that has transformed with the changing African legal landscape into what is today one of the continent’s largest law firms. The firm has eight offices in six African countries serviced by more than 400 specialised lawyers.

The firm’s Real Estate Practice comprises a dynamic team of talented, experienced real estate lawyers servicing Africa and specialising in representing the interests of banks, developers, property funds and other institutions in acquiring, developing and financing commercial, industrial and retail real estate across the continent. The team has been recognised internationally

by Legal 500 and has previously won

the Property and Construction Team of the year at the African Legal Awards.

The Real Estate Practice is headed

by Craig Schafer in the firm’s Sandton office. He specialises in real estate finance and development. Schafer was highly recommended by Legal 500 in 2015 and 2016. The team also includes Roger Burman who has more than 35 years of experience and specialises in transferring large real estate portfolios, and Selemeng Mokose, the first black woman to be admitted as a conveyancer in South Africa with a specialisation in real estate finance.

The firm’s widely experienced Cape partners, Bob Bertrand and Paul Stelling, were recently joined by Warren Hamer and his team. They specialise in renewable energy projects and large-scale real estate development. Hamer was formerly an Assistant Registrar of Deeds in the Cape Town Deeds Registry and, with his team, adds a wealth of technical and practical experience to the practice.

The firm’s real estate offering is completed by Jeff Bookbinder, an experienced figure in Botswana, Fred Mpanga in Uganda and Alex Njage in Kenya. The latter has been instrumental in spearheading the growth of the Real Estate Practice in Kenya and features prominently in many of Kenya’s leading real estate transactions.

Many of Africa’s leading real estate role-players trust the team to manage their transactions. The team strives to create long-term partnerships with clients, providing them with costeffective, practical legal solutions of the highest international standards.

The team is mindful of the many obstacles that may delay the implementation of transactions, whether they be municipal or governmental inefficiencies or regulatory hurdles, and actively seeks to manage these issues in line with their clients’ best interests.

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Bigen Africa

completes state-of-the-art storage facility for Cipla Medpro 74

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igen Africa, a solutions-driven infrastructure development group with a firm foothold in southern Africa and a growing African footprint, has again proved itself as an innovative developer capable of delivering on infrastructure that supports the latest business vision of its diverse clients.

In the role of civil and structural engineer on Cipla Medpro’s latest development, Bigen Africa’s structures division has helped to realise this client’s ambitious objective of “placing a Cipla product within one kilometre of every South African in need of medication” through creating a state-of-the-art storage facility as the client’s main hub for all imports and distribution into southern Africa. The site is strategically close to the N7 Cape-Namibia route and the Cape Town harbour.

Constructing this central element of Cipla Medpro’s distribution strategy in Rivergate, Cape Town, was a challenge that Bigen Africa was confident in meeting based on its highly effective capability development strategy, which is strongly based on strategic partnership building. The 16 380m² storage and distribution facility, a R185-million investment, houses 22 000 pallets and will enable Cipla Medpro to improve its delivery times of a wider variety of product to its government clients. An expertly designed climate-control system ensures that stringent temperature regulations are met.

“As a solutions-focused infrastructure development group, Bigen Africa does not simply aim for an economic use of building materials, but also considers the construction sequence, buildability, programme and longterm life cycle of each project,” says Frans Maritz, Structures Principal for Bigen Africa and project leader on the project.

“One of the challenges our team faced was that the positioning of the internal columns was critical to accommodate the required racking layout. By limiting the amount of internal columns to only eight on this 32m x 38,55m grid, we were able to provide very large column-free spaces. The combination of this footprint with a stacking height of 15m resulted in a very high utilisation of internal space.”

The structure further incorporates a high-tolerance, fibre-reinforced concrete surface bed to accommodate the smooth flow of high volumes of forklift traffic; a jointless floor of 32m x 38m panels and a durable concrete frame that serves as a robust barrier against forklift movements at ground level. An automated docking system was constructed 1,4m above the external concrete loading yard to ensure efficient

company in profile

ABOVE The state-of-the-art distribution centre spans 16 380 square metres and is envisaged to see 75 000 kilograms of product being distributed per month OPPOSITE First steel for the Cipla distribution gateway was laid by mid-2015 and the project was delivered within eight months

on- and offloading at eight docking bays. An adjacent double-storey building offers 1 500m² of office space, a cafeteria, a gymnasium and other warehouse facilities.

Bigen Africa has previously applied its expertise to warehousing facilities for major brands such as Shoprite, Distell, On the Dot and the South African Postal Service, among other large, prestigious projects throughout southern Africa. The fact that the bulk of Bigen Africa’s clients award tenders to the Group repeatedly testifies to its ability to deliver on its mandate. It is this insistence on quality and innovation to meet clients’ needs and the highest standards that has resulted in the Group being honoured with multiple industry awards over the years. Just in 2015, Bigen Africa received three CESA Aon Awards for Business Excellence, Best International Project for the North-South Carrier Project in Botswana, and Best Mentoring Company.

It also received numerous PMR Bronze Arrow Awards for civil consulting engineers, structural consulting engineers, and civil and structural engineers (combined).

For the Group’s involvement in the Second Creek integrated development project in the Buffalo City Metropolitan Municipality,

the Eastern Cape, it received a Govan Mbeki Housing Award.

As a specialist provider of engineering services, management consulting and development finance, with emphasis on value-adding for clients, Bigen Africa prides itself on its “on-time, within-budget” delivery, thought-leading approach and in-depth understanding of Africa’s infrastructure development needs. With 45 years of experience, Bigen Africa is a partner of choice to African countries, and the Group has established offices in various locations on the continent, such as Ghana, Zambia, Botswana and Namibia. The Group has undertaken a multitude of projects for the private sector, parastatals and government in Angola, Nigeria, Tanzania, Uganda, Zambia, the United Kingdom and the Middle East, as well as all major centres in southern Africa.

Bigen Africa’s structures division operates from both its head office in Pretoria and its branch in Cape Town, South Africa, and has successfully delivered a host of mega-projects on the continent and internationally. The individual expertise of the department’s team members encompasses all aspects of structural engineering, including buildings and bridges.

The Group’s vision of improving quality of life of all through development of sustainable infrastructure solutions also finds expression in its creed of “doing good while doing business”, which is not only practised in terms of CSI but also prioritises socioeconomic development in communities where projects are undertaken.

This may take the form of channelling some of the employment and procurement opportunities to local communities.

“Doing good while doing business” t: +27 (0)12 842 8700 / +27 (0)21 919 6976 pretoria@bigenafrica.com / capetown@bigenafrica.com www.bigenafrica.com SOUTH AFRICAN PROPERTY REVIEW

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company in profile

Unravelling

property complexity requires keeping trusted partners close

Attie Pretorius, Chairman, National Practice Head: Real Estate, and Director at Cliffe Dekker Hofmeyr

Attie Pretorius received a Lifetime Achievement Award for Excellence in Real Estate Law at the inaugural SA Professional Services Awards in 2014. Among his many achievements, he authored the South African chapter for the International Comparative Legal Guide to Real Estate Law, 2006 and 2007 (2nd edition), published by Global Legal Group in London

t: +27 (0)11 562 1101 attie.pretorius@cdhlegal.com www.cliffedekkerhofmeyr.com 76

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By Attie Pretorius, Chairman, National Practice Head: Real Estate, and Director at Cliffe Dekker Hofmeyr

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he fact that SAPOA is celebrating its 50th anniversary this year is an important milestone for the commercial and industrial property industry.

Economic and regulatory conditions are challenging and becoming increasingly complex. It is therefore crucial that the industry continues to speak with a unified voice well into the future.

The need for closer collaboration between all role-players in this sector has become a necessity over the years as tougher economic conditions create both challenges and opportunities. It is heartening that SAPOA continues to benefit from a good relationship with industry participants and regulators, as this ensures that it can continue to be consulted on matters that are crucial to the wellbeing of the sector.

All businesses have to adapt to current challenging conditions to ensure that they face the fewest obstacles along the way. This is where sound advice and good partnerships become even more crucial. Accordingly, real estate lawyers have to be able to advise businesses with the highest possible degree of sectoral specialisation.

It is noted that the slowdown in China is having dramatic ripple effects throughout Africa, but this does not mean there are not significant avenues for expansion, and demand for property development pipelines continues at a healthy pace.

But the need to project-manage complex cross-border and multi-jurisdictional activity is on the rise, which is why businesses need to be able to work through a single point of contact with their trusted advisers.

At Cliffe Dekker Hofmeyr, we are adapting to these challenges by ensuring we continue to supply services that can match the demands of participants in the industrial and commercial property arena on a daily basis.

As a firm we are therefore entrenching our position as a known and trusted toptier South African legal adviser with strong networks across Africa, offering services to our clients that reduce their exposure when entering jurisdictions within the continent with which they are unfamiliar.

To do this, we have adopted a focused strategic approach, most notably the integration of our services and sectoral offerings, the addition of value-added services and a focus on innovation, partner collaboration and client-tailored solutions.

Our aim is to entrench a collaborative way of doing business among our lawyers through our strong network of partner firms and our clients’ businesses, both domestically and on the rest of the continent.

Importantly, we believe in partnerships, and the partnerships that we cherish and value the most are those which we have forged through time and experience with our clients, our people and our communities.

We have a proud history in South Africa that dates back to 1853, but are gearing up for renewed growth and an exciting future.

It is a pleasure to congratulate SAPOA on the inroads that it has made over the past 50 years. The future certainly shines brightly in the property sector in Africa if strong frameworks and trusted partnerships can continue to thrive.

company in profile TLG6659

cliffedekkerhofmeyr.com

FROM POWERFUL PARTNERSHIPS COME POWERFUL SOLUTIONS

REAL ESTATE

Whether you are a real estate investor, developer or corporate end-user, you will not find a partner with a greater breadth and depth of legal expertise in South Africa than Cliffe Dekker Hofmeyr. Our extensive experience, strong track record and industry insight, allows us to offer solutions, across the entire range of property law, that are both groundbreaking and practical. Working together with our clients, we always find a way.

Cliffe Dekker Hofmeyr. The real estate legal partner for your business in Africa.

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legally speaking

Property owners’ fears:

land restitution and liability for the debts of others

By Andrew Bembridge, ENSafrica

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wo issues currently at the forefront of landowners’ minds are the extension of the deadline to lodge land claims and the perception that a property owner can be held liable for the debt of previous property owners.

The extension of the cut-off date for land claims The Restitution of Land Rights Act 22 of 1994 (“the Restitution Act”) was promulgated 22 years ago. When the Restitution Act came into force, a person would be entitled to restitution if, after 19 June 1913, he or she was dispossessed of a right to land, as a result of past racially discriminatory laws or practices, and had lodged his or her claim by the end of 1998. Government has since extended the cut-off date for lodging claims to 30 June 2019, and the President has indicated that the 19 June 1913 date should also be revisited. This recent extension of the cut-off date has resulted in an 18-year gap during which no claims could be lodged.

The Restitution Act failed to specify a time period in which land claims must be finalised.

As a result, many land claims lodged prior to 1998 still have not been finalised, are under investigation or have been referred to the Land Claims Court for determination.

Two consequences have arisen from the extension to the cut-off date: ●● Settled land claims cannot necessarily be considered as settled any longer, as there is no prohibition on another claimant claiming the “settled” property; and ●● Matters that require determination by the Land Claims Court cannot be finally determined before 30 June 2019.

This is because a land claim cannot be properly determined or finalised until all of the claimants are known to the Commission on Restitution of Land Rights (“the Commission”) and/or the Land Claims Court. Accordingly, all matters for determination before the Land Claims Court and the Commission should be postponed until at least 30 June 2019.

The legislation that amended the cut-off date for claims did not provide that all claims settled before the amendment date came into force be deemed as finally settled.

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It would make sense for this to be the case so that claimants would not be entitled to claim land that had already been settled – an injustice to those with a valid claim.

If a land claim for a community is settled, either through trusts or community property associations, it is unlikely that there will be a competing claim from another community unless the geographical area was originally large enough to have accommodated two communities.

Andrew Bembridge, Director and Head of the Real Estate/Property Department at ENSafrica

Many current landowners may be under the impression that if ownership of land through title deeds may be traced back to before 1913 as not being owned by communities, there can be no land claim on those properties. However, this is clearly not the case, as proving that one was dispossessed of a right to land for the purpose of the Restitution Act does not require proof that one was dispossessed of ownership of that particular land in question. The registration of title is, to a great extent, irrelevant.

Registered title is a factor, but it does not afford unblemished primacy. Clearly, the racially discriminatory laws prohibited land ownership, meaning that many claimants could not, in law, have owned the properties. Claimants may, however, show a right to land in many other ways.

It will be interesting to see how the courts and the Commission deal with these issues. For now, property owners will remain in a state of uncertainty until 30 June 2019 has passed.

Liability for the debts of previous owners The second issue on the minds of property owners is whether they can be held liable for the municipal debt of previous owners. There has been a media frenzy surrounding this issue, which arose from the recent Supreme Court of Appeal (“SCA”) ruling City of Tshwane Municipality v Peregrine Joseph Mitchell and the interpretation of Section 118(3) of the Local Government Municipal Systems Act 32 of 2000. Section 118(3) affords the municipality a tacit charge (hypothec), i.e. preference as a creditor, and the SCA in this case held that a hypothec survives a sale in execution.

The effect of the ruling is not that an owner is strictly liable for another person’s debt, but that an owner’s property may be attached as security for another’s debt. This means that the property may be sold in execution to offset another’s debt for municipal service fees. However, the municipality would first have to obtain a judgment against the original debtor before it can exercise its rights under the hypothec against the current owner’s property. The current owner should naturally be joined to the dispute and receive notice of any attachment of the property.

This judgment is unfortunate, as it could never have been the intention of the law that a person can lose his or her property because of a prior owner’s debt. Hopefully, this matter will be resolved in the Constitutional Court – but until such time, the judgment remains.

t: +27 (0)83 259 2877 abembridge@ENSafrica.com www.ENSafrica.com

legally speaking

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company in profile

Getting to know

Knight Frank South Africa

When was Galetti Knight Frank established?

Tony Galetti: The company was established 10 years ago by my business partner Francois Staples and me as Galetti Commercial and Industrial, based in Cape Town. We experienced fantastic growth and within a few years opened offices in Johannesburg, Pretoria and Durban to provide a truly national footprint to better serve our clients’ needs.

The company is dropping “Galetti” to re-brand as Knight Frank. How did the partnership come about?

TG: About five years ago we realised the significance of being aligned with a global brand. After a two-year period spent meeting with various parties around the world, we found the best fit with Knight Frank, the global property services consultancy headquartered in London. Since partnering with Knight Frank in 2013, our relationship has strengthened and we’ve seen increasing benefits coming from the global network – so we have made the decision to re-brand to Knight Frank South Africa.

When you started the company 10 years ago, did you foresee it being where it is today?

Francois Staples: In 2006, Tony and I discussed what we wanted for the company. Our target was to be the number-one brokerage in Cape Town within five years, and number one in South Africa within 10 years. In this time, we’ve become more than just a brokerage with advisory and tenant-representative services forming a large part of our business.

In short, we had ambitious goals and are proud to say we’re comfortable with the distance we’ve travelled. We realise that just because our firm is a leader doesn’t mean we have become comfortable and complacent. Every month we see new brokerages and more competition in the marketplace, so we need to continue to look at ways to remain ahead, and to lead through innovation and hard work.

The company prides itself on its reach across Africa. How many offices do you have on the continent?

TG: That was one of the key attractions of our partnership with Knight Frank. We currently have 27 offices across Africa, of which 20 are situated outside South Africa. As Knight Frank, we have been operating in Africa for a long time and recently celebrated our Nigerian office’s 50th birthday, so we have a strong

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company in profile track record. In fact, in the last 18 months we have transacted in 52 of the 54 African countries via our regional offices and African property experts.

The company recently introduced a Global Corporate Services team.

What was the thinking behind this?

FS: Corporates spend millions on real estate annually, whether it’s on purchasing, selling, leasing or renegotiating leases with landlords, and they rely heavily on good advice and data to make decisions. This division looks to guide clients so they can make the best possible real estate decisions for their business. Our GCS team has saved our clients tens of millions of rand over its short period of operation.

We also offer technology so our clients can better house their real estate information; this empowers them to make quicker and easier decisions themselves. We have found every client to be completely unique, so we tailor a solution that suits each client’s real estate requirements precisely. It’s not a onesolution-fits-all division, so it requires real expertise. Given our vast access to data, close proximity to the market through our brokerage and our global reach through Knight Frank, we’re well positioned to give that advice.

What sets Knight Frank apart from the rest?

TG: We’ve always said our company is driven by our people; that still stands true today. We go to great lengths to ensure our teams are given the best possible training, tools and opportunities to be the best in their field.

Speaking of our exceptional people, we’re looking for experienced brokers to join our team. If you’re target-driven, work well under pressure and would like to join a leading agency, don’t hesitate to contact us. Our proprietary Cloud-based internal operating systems allow us to service our clients anywhere at any time, with the most up-to-date market information. We really believe this sets us apart.

services – so that we can consistently compete in a global top three in the various markets. I should add that we are not chasing growth merely to say we are bigger than our competitors; that’s not the goal. We are looking to grow our revenue lines and grow our ability to be more competitive locally and internationally, so we can be best in class in as many markets as possible. We also expect our cross-border and global mandated work to increase significantly

Where do you see Knight Frank in five years’ time?

TG: Our goal alongside our international partners is to continue growing our core businesses – mainly agency and consultancy

t: +27 (0)11 783 1195 / +27 (0)21 418 6308 info@rsa.knightfrank.com www.kfsa.co.za

BELOW Francois Staples OPPOSITE PAGE Tony Galetti

Technology has revolutionised the commercial real estate industry. How has your company embraced tech?

FS: We consider ourselves to be a pioneer in this field. A large part of our success has been in the building and continual improvement of our internal data-housing software. We use it to collate all information on property within the regions in which we operate, as well as house our tenants’, landlords’, buyers’ and sellers’ information. With this data we can produce high-quality brochures for clients in real time, and we can match buyers and sellers as well as tenants and landlords with ease. This system requires constant updating, so we have employed admin staff as well as full-time programmers to update and continually improve it. It truly sets us apart from our competitors. We are also constantly looking to improve our website from a usability and lead generation perspective, and to focus on publishing useful market information through Twitter, Facebook and LinkedIn. Having said all that, we realise that there will probably be disruption to the industry through tech in the future. We hope to embrace it, if not pioneer it ourselves.

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Designing today for living tomorrow.

To explore the future of sustainable architecture, and to take a look back at our iconic history, visit our website www.glh.co.za

METROPOLIS ON PARK: Completed 2016

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THY TYRWHITT: Completion 2018

JOHANNESBURG Sixth Floor, 7 Anerley Road, Parktown

PRETORIA Office 1, 267b West Avenue, Centurion

PHONE +27 (0)11 486 2770 FAX +27 (0)11 486 0552

PHONE +27 (0)12 663 1918 FAX +27 (0)11 486 0552

WEB www.glh.co.za

PO Box 1476, Parklands, 2121

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company in profile

PRASA:

keeping South Africa on the rails Stanley Karombo, gets the low down on plans ahead for investment, modernisation and station upgrades

Tara Ngubane, PRASA CRES CEO

PRASA invests R2-billion in station upgrades and modernisation The Passenger Rail Agency of South Africa (PRASA) CRES says it is in the process of improving and upgrading its stations for the arrival of new trains. PRASA CRES has a budget of more than R2-billion for the 2016/2017 financial year, says Tara Ngubane, the PRASA CRES Chief Executive Officer responsible for management of PRASA properties.

PRASA’s R172-billionn modernisation programme to completely revamp the aged urban Metrorail commuter service will include modernising signalling, rail lines, rolling stock, as well as stations over 10 years.

PRASA has prioritised 135 of its key stations throughout the country to be given an adornment. An upgrade at Park Station is in progress, and PRASA has budgeted more than R1-billion over the next three years for these upgrades. “We’ll be launching new

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trains in October this year, so some of the stations have started the preparations,“ the Port Elizabeth-born Ngubane says.

Ngubane managed to turn around PRASA’s real estate division fortunes from an annual revenue of R220-milliom in 2012 to its current performance of R550-million during her three-year tenure at the helm.

A self-confessed gym fanatic, Ngubane reduced the division’s loss from R200-million to R19-million during this time.

She has worked in various financial management and internal auditing roles at Barloworld, Total South Africa and Old Mutual. She has been working at PRASA for the past nine years, four of them as Chief Procurement Officer, before being appointed CEO of PRASA CRES in 2012.

During this time, she was mainly concerned with developing and implementing policies and strategies to guide the Group’s operational expenditure.

PRASA loses R380-million to vandalism and arson PRASA says it has lost more than R380million to vandalism and arson attacks on its trains in the Western Cape over the past three years.

“It’s about time that we and the lawenforcement authorities come out very hard on such acts,” says Ngubane. This is not just a Metrorail problem – it’s a national problem.”

Ngubane condemns the torching, vandalism and theft of its property at most PRASA premises, but especially those close to the communities. She also notes that company assets are being vandalised during community service

delivery protests and that at times the protests have nothing to do with PRASA. “It’s a big challenge. It’s like filling a bucket full of holes,” she says, adding that people need to be educated about the importance of public facilities. She says the protests, theft and vandalism are unacceptable.

“This unbecoming community behaviour is really worrying because it negatively affects commuters and employees and has resulted in damage to our properties, which would cost millions to rebuild,” she adds.

PRASA CRES has now started replacing some of the most-targeted metal items with plastic materials for plumbing.

Looking forward South African consumers had to brace themselves for a double blow in April with petrol prices rising sharply and a 25 basis-point hike in interest rates also coming into effect. Eskom was also given the green light to raise electricity tariffs by 9,4% in April.

But all is not gloomy for passengers.

Ngubane expects same ticketing and swipecard technology like that of other public transport operators Rea Vaya and Gautrain to be rolled out in the Metrorail stations once the modernisation programme is completed.

Ngubane, who after work, spends her time with her family says that “A cashless environment is the way to go, and integrated ticketing will be here in the not-so-distant future.”

PRASA to launch a 1MW Solar Energy Power Source PRASA is set to invest a massive R308million on renewable and diversification of energy mix over the next three years.

This investment is against the backdrop of a very successful 1MW solar PV project, which was recently completed at Wolmerton depot north of Pretoria.

The construction of the solar PV plant started in June 2015 and was completed two months ahead of schedule, in March 2016, costing just under R23-million. Since the commissioning of the plant, PRASA is

company in profile

Kaparo Molefi, Acting Executive: Facilities Management

realising energy usage shift of 280MWh from the national grid, saving the company a direct monthly electricity cost of R193 000 for that specific depot. Wolmerton Depot is the third-largest rolling stock maintenance depot at PRASA. It houses more than 650 employees who perform various maintenance tasks on the trains and infrastructure daily.

PRASA’s Energy Management Programme SAPOA recently caught up with Kaparo Molefi, the Acting Executive for facilities management at PRASA CRES. PRASA CRES property portfolio has 585 stations, of which eight are main depots where the rolling stock maintenance takes place, and more than 80 are small maintenance depots, according to Molefi. “We have a corporate office in Pretoria and divisional headquarters in Braamfontein, as well as regional offices in four provinces and many other offices at all stations across the country.

The energy management programme was initiated to ensure that PRASA stations and facilities are energy-efficient and contribute to a reduction in the ever-rising cost of electricity, says Molefi.

At its inception in 2012, PRASA partnered with Eskom demand-side management through its rebate programme and audited the top 15 energy-consuming stations and depots. The programme was focused on installation of energy-efficient light bulbs, automatic light sensors and timers for all of PRASA’s office buildings, common areas and air-conditioning systems (HVAC equipment).

“PRASA is very committed to the renewable and diversification of energy mix, to the extent that we have started

investigation of gas power generation for Park Station and the Braamfontein depot,” says Molefi. “The benefits of the renewables, especially gas, are that they are environmentally friendly, clean, efficient, convenient and cost effective.”

The R308-million investment for the next three years will focus mainly on renewableenergy solutions. “The focus will be on the main rolling stock depots and flagship stations,” he says. “These will include Salt River ERS depot, Pretoria station and Durban Station.”

Tumisho Makofane, Executive: Strategic Portfolio Programme Management

Upgrades and Improvements PRASA CRES is rolling out its upgrade and improvement programme to transform train stations into better, more accessible modern hubs.

The agency has forked out R 1,2billion for the new-look Park Station market precinct, which consists of accommodation, office buildings, retail and entertainment, says Tumisho Makofane, Executive Manager: Strategic Portfolio Programme Management.

“The commercialisation programme takes care of the building and development of exciting new commercial and entertainment spaces at stations,” he says.

Germiston, Mabopane and Saulsville stations are expected to undergo the same refurbishment as was done at the Cape Town station. Makofane notes that during construction of Germiston, Mabopane and Saulsville projects, 1 200 jobs are expected to be created.

The Parade Concourse upgrade at Cape Town station includes the refurbishment of the old station entrance that, during apartheid, was used by black commuters.

Standing empty for a long time, it’s now an added annex that will create better flow throughout. The upgrade was completed in 18 months at a cost of R126-million.

Working closely with cities, PRASA CRES aims to turn stations into profitable commercial hubs to generate greater revenue, keep commuter prices down and enable the agency to create a better service.

Johannesburg Park Station is one of the busiest in the country, with more than 200 000 people moving through it daily.At the Germiston station, Makofane says PRASA will upgrade and lease with a number of retailers and major banks for ATMs to provide services on this concourse. These include Vodacom, Steers, Pepkor, Debonairs, Zebros Chicken and several local businesses.

t: +27 (0)11 773 1700 communique@prasa.com www.prasa.com/cres SOUTH AFRICAN PROPERTY REVIEW

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If money talks, what would it say about your bank?

Would it say your bank is something to bank on and give credit to, and that they show you the right kind of interest? sasfin.com

business | wealth | banking

Sasfin Bank Ltd. Reg no. 1951/002280/06 An authorised financial service provider licence no. 23833 A registered credit provider NCRCP22 and a member of the Sasfin Group

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company in profile

Looking for an equity partner in your property venture?

I

nvesting in property is a capital-intensive and time-consuming exercise. While commercial banks will provide funding to property ventures, they generally require a substantial equity contribution from the developer or investor. Few developers or investors have the equity needed to implement the opportunities they have identified.

Sasfin Capital’s Property Equity Division is perfectly placed to fulfil this need and become the equity partner of choice to the property sector.

Our service offering

About Sasfin Sasfin Holdings Limited is a bank-controlling company that listed on the JSE in 1987. Through its subsidiaries, notably Sasfin Bank Limited, the Group offers a range of comprehensive, modular banking and financial services focused on the needs of entrepreneurs, corporate institutions and highnet-worth individuals.

Sasfin believes that a clientcentred, personalised relationship with clients is absolutely essential to deliver the correct financial solution.

In addition to being an equity partner, Sasfin Capital’s Property Equity Division provides a range of solutions to clients across the property spectrum, including mezzanine funding, debt raising, deal structuring, risk assessment and the ultimate exit of an investment.

Property Equity also has a network of partners and associates that can collaborate to ensure the opportunity in a transaction is maximised. The division operates across many sectors of the property market including: ●● Residential developments and rental schemes ●● Retail ●● Industrial ●● Office ●● Student accommodation ●● Specialised properties, e.g. healthcare sector and filling stations Specific focus areas for Property Equity are: ●● Residential rental schemes specifically aimed at the affordable end of the market and at students. The rising interest rate cycle, densification of the cities and the cost of transport are all driving demand for affordable residential accommodation in close proximity to major metropolitan areas. Student accommodation is also in high demand at all of South Africa’s tertiary education institutions because of explosive growth in student numbers and a historical undersupply.

●● Properties with good quality tenants on long-term leases. ●● Short-term residential developments on an opportunistic basis. Developments that serve as a primary residential dwelling and are priced to cater for a large segment of the market will be considered.

Property Equity’s primary focus in on the mid-market property investor with transactions between R50-milliom and R200-milliom, although we can consider larger opportunities. The division considers each opportunity on its own merits, with a “no one size fits all” mentality.

Recent transactions that have been concluded and implemented include: ●● A substantial multi-phase residential scheme aimed predominantly at students.

The scheme is in close proximity to one of South Africa’s major universities and includes a retail component and a private gym for residents of the scheme. ●● Assembling an inner city residential portfolio focused on the Johannesburg CBD. Three separate buildings have been identified and purchased to date. Two of these buildings are redevelopment opportunities.

Sasfin has its own in-house legal, credit, administration and deal-making resources to ensure an efficient and effective assessment and implementation of your transaction.

For more information, contact Barry Chapman, Head of Property Equity at Sasfin Capital.

t: +27 (0)11 531 9196 Barry.Chapman@sasfin.com www.sasfin.com SOUTH AFRICAN PROPERTY REVIEW

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company in profile

Who is Turner Incorporated?

Bianca Turner

T

urner Incorporated was established in 2012 when Bianca Turner and Stephen Nthite joined forces. The firm initially operated from Randburg. Starting as a partnership, it was later registered as an incorporated company. Nthite decided to pursue his business interests full time and left the firm; Turner carried on under the registered name of Nthite Turner Inc, trading as Turner Inc. She started her practice with mostly insurance litigation and a small portfolio of property work.

The firm grew exceptionally quickly and, within nine months, it became necessary to find larger premises.

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Turner Inc moved to Bryanston to ensure easy access for their clients.

Both the insurance and property departments flourished, so Turner set her sights on insolvency law and growing the firm into different areas of the law.

She developed a labour department, an RAF department, insolvency, business rescue, and a debt review department; she also expanded the debt collections department.

This year Turner Inc teamed up with independent associate Louw-Mari Nell who is an admitted conveyancer and notary, allowing the firm to help clients with a full spectrum of legal services.

The core focus of the firm revolves around the values of integrity, excellence, building relationships, and growth. Turner takes her duty of care in respect of the firm’s clients and the public seriously. Attorneys, clerks and general staff are expected to act with utmost honesty and reliability in respect of clients’ affairs. Attorneys and clerks are encouraged to attend courses and pursue further learning. “In law, one of the most valuable assets is knowledge,” says Turner.

“It is a constant process of learning and developing new skills.”

She has established a culture of close relationships with clients. The firm spends a lot of time and effort to find out what clients’ goals are, what their procedures entail, and where they want their company to get to.

“We adapt to suit their needs,” says Turner.

“This means we are probably one of the most flexible and innovative firms in the profession in relation to the fee structures that we apply.

No two clients are treated in the same way – each is approached and handled according to their specific needs and requirements, whether it relates to mass reporting or special fee arrangements or a quicker turnaround time. We do not follow the traditional route of ‘litigate at all costs’; instead, we tailor our services to clients’ needs. We take the time to train clients in the law that applies to their field.” This helps their clients to keep legal costs down and ensures that when litigation does become unavoidable, the contractual and legal basis is in order.

“Finally, our focus is on growth. The firm started in 2012 with two people and five files. We are currently more than 20 people and almost 4 000 files strong – and we are still not at capacity.”

Turner Inc plans to expand into KwaZuluNatal in 2019, and later to the Cape.

Turner Inc is proudly female-owned and run. “It is common knowledge the market is saturated with male attorneys and that most firms are owned and/or run by either only men or mostly men,” says Turner. “From my perspective, I have seen how more and more (talented) female colleagues leave practice once they have children or get married – or lose interest.

Practice is traditionally not very flexible towards women with small children, and ownership in the firms is harder to come by. I want to create a platform for women to obtain and exercise responsible authority.

company in profile

The team

Instead of a competitive environment, I aim to create a collaborative environment. Along with this, I want to create an environment where women in authoritative positions have a strong sense of duty as opposed to one of entitlement. It has been tough getting that culture to take root, but little by little we are getting there.

“I want to add to the body of growing examples for young girls – to show them that they have every bit as much to offer, that it’s okay for them to be ambitious and that they can achieve the same levels of excellence as men can.”

Turner Inc offers a fresh approach to law. The firm believes this is what makes them different from all of the other law firms. “First, our main focus has never been to make as much money as possible,” says Turner. “There are economic realities, of course – but money will always take second place to clients’ needs. Secondly, I am a strong believer in contributing to racial equality. We live in Africa, and this firm has always been and will always be one of inclusion, diversity and tolerance.

It is paramount, especially in the times in which we live. We have a huge wealth of undeveloped potential that can make this country take a respectable place in world society.

“Finally, we don’t rubber-stamp our social responsibility. We actively engage in charity and upliftment drives. We currently support the Hoedspruit Endangered Species Centre, Dogtown, the SPCA and a variety of organisations that help children with serious illnesses. Our staff are constantly

encouraged and supported to study further and to obtain additional skills so that they can be advanced to better positions. This has a ripple effect: when you empower a person and put them in a position where they are able to adequately look after their family, their children become better educated and more likely to contribute to society in a positive way. I see this as a duty of every business owner.”

Turner Inc has, unlike most other smallto-medium firms, an excellent technology base and infrastructure. “Because I have geared the firm for growth, I have reinvested heavily in the firm. We have an extensive electronic legal library, top-of-the-line PCs, a secure network with built-in security and backup, comfortable top-quality furnishings, an excellent accounting system and an advanced dicta service.

“I have chosen offices that are easy to access for all of our clients – we are right next to the William Nichol offand on-ramps.

“Because growth is a constant focus, our document management system, filing system and network were set up from the beginning to be adaptable to growth.”

From a property perspective, Turner Inc offers a full spectrum of property litigation, conveyancing and construction law. The firm attends to drafting of all leases (commercial and residential) in compliance with existing legislation. It drafts sale agreements and construction and urban development agreements, and assists in ancillary services. It also deals with evictions – commercial, retail, industrial and

residential (under the PIE Act, ESTA and the common law). In addition to this, it deals with commercial, retail and industrial property litigation, and sectional title and HOA litigation, and assists bodies corporate and HOAs in securing proper management rules and memoranda of incorporation.

“We are currently advising our sectional title property managers on the proposed changes to the Sectional Title Act and the impact on litigation.”

Where does Turner see the firm in five years’ time? “Everywhere in the country,” she says. “We are establishing a trusted, unique and innovative brand of law firm.

To achieve this, we have to expand into national branches. Internally, we’re satisfied with the spectrum of services we currently offer. The insurance litigation and debt collection departments are enormous and growing by the day. The firm has almost become organic in the way it can grow and sustain itself. The immediate focus now is to expand the property litigation, conveyancing and insolvency departments.”

t: +27 (0)11 028 8140 bianca@turnerinc.co.za www.turnerinc.co.za SOUTH AFRICAN PROPERTY REVIEW

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company in profile

“Securing capital efficiency, creating affordable assets” T

urner & Townsend is a market-leading capital-programme professional services company trusted to drive better business outcomes for our clients across the property, oil and gas, mining and infrastructure sectors.

Some of our more recent clients and projects include the new head office for Google in Johannesburg and that of a leading news agency based in Sandton, the refurbishment of the Hilton in Durban, the new “IT Dev Ops” facility for ABSA in Kloof Street in Cape Town, and the Kabulonga mall for Pylos in Zambia.

With a heritage rooted in cost and commercial management, we provide programme and project management, project controls and contract services consultancy during every phase of the project life cycle.

We have a deep understanding of capital programmes and apply this expertise to drive industry best practice and innovation.

We are independent of engineering and construction disciplines, and we put our clients’ interests first, providing an uncompromised service that solves project and programme challenges.

We turn data into insights to confidently make informed decisions faster, achieving higher levels of performance and minimising risk for our clients.

Turner & Townsend has spent the past 34 years striking a perfect balance between a replication of its esteemed global business model and an unrivalled adherence to local considerations in Africa, and is now looking to take this ethos to an even wider clientele on the continent as it strives to become a truly pan-African entity.

As part of a 70-year-old international professional services company – boasting more than 4 000 staff, 90 offices and eight regional counterparts around the world – our African operations have gone from strength to strength since inception in 1982, diversifying and expanding to replicate the renowned service provision kick-started in the UK all those years ago.

Our market advantage and differentiators derive from far more than simply volume.

“I think it comes down to a number of things,” says Turner & Townsend Africa Managing Director Ian Donaldson. “Foremost are our clients and the relationships we have with them; our understanding of them and the knowledge built up in our business over the years; and the way we harness and manage that knowledge to their best advantage.

“Secondly, we are very focused on what we know we do well. This is also aided by our

independence and our partnership model.

It is the people in the business who own it, so we’re not making decisions to keep shareholders happy at the expense of our clients.

“The final facet is quality. The reason we have so much repeat business and so many strong client relationships is that we are noted for the quality and consistency we deliver.”

The property markets that Turner & Townsend serves: ●● Commercial ●● Hotel and leisure ●● Health ●● Retail ●● Education ●● Residential The services Turner & Townsend delivers to the property market include: ●● Cost management ●● Portfolio management ●● Programme management ●● Project management ●● Technology project management ●● Project assurance ●● Due diligence ●● Sustainable building consulting

Timothy Cable, Director t: +27 (0)82 079 8408 tcable@turntown.co.za www.turnerandtownsend.com 90

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company in profile

Attacq’s work-live-play developments are sound investments for future growth A

ttacq is a capital growth fund that differentiates itself from its peers through a quality portfolio and the exciting Waterfall project. Attacq aims to deliver exceptional sustainable capital growth through creative local and international real estate developments and investments.

It pursues this vision through its strategic drivers: develop, invest, grow.

Attacq has consistently delivered growth in capital to its investors through its strategic property holdings and developments. It has grown its gross assets to R27,1-billion (as at December 2015) from its initial gross asset value of R600-million at 30 June 2005. “A large part of this success can be attributed to finding innovative ways to get things done and partnering with the right people,” says Attacq Chief Executive Morné Wilken.

Attacq focuses on sustainable capital appreciation through the development and ownership of a balanced portfolio of properties with contractual income streams. “We don’t pay out distributions to our shareholders, rather choosing to reinvest excess cash into other opportunities, such as our development pipeline and other local and offshore investment opportunities,” explains Wilken. “So our developed properties provide us with income as well as some capital growth, and we take that income and reinvest it in new opportunities to drive capital growth.”

The Attacq strategy includes offshore diversification with more than 24% in gross assets in hard-currency economies. Attacq’s international portfolio is doing very well and expanding. The decision to invest outside of South Africa was taken to diversify Attacq’s portfolio, to create a rand hedge and take advantage of the growth opportunities in foreign markets as well as the stability of the developed markets. Attacq’s investment in the MAS has proven to be a good one. MAS has recently expanded its investment horizon to include central and eastern Europe, specifically Romania. Attacq’s Cyprus investments (of July 2015) have favourable expansion opportunities.

As part of the Serbia investment made in December 2015, shareholders capitalised a development fund with €20 million of equity for new developments. AttAfrica will complete another development in Kumasi, Ghana in April 2017.

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“Property is a long-term asset, especially the right retail mall in the right catchment area,” says Wilken. “Attacq’s strategy is based on long-term sustainable capital growth with a long-term view similar to the asset class we invest in.”

In South Africa, Waterfall continues to be one of the most attractive development pipelines, given its size and excellent location.

The opening of the Mall of Africa represents the start of a new chapter for Waterfall; it’s expected to act as a catalyst for the further development of Waterfall City and for the Waterfall node as a whole. Waterfall City is the jewel in the diversified Attacq portfolio of developments and investments in developed and emerging markets. Waterfall investment accounts for 39% of Attacq’s gross assets.

Blue-chip tenants have been and continue to be attracted to Waterfall City. “They recognise that Waterfall is a premium destination in an exciting area for investment,” says Wilken.

“Waterfall City is developed as a live-workplay urban space where people can enjoy a balanced lifestyle in a pleasant urban setting that takes both people’s needs and those of the environment into account. This philosophy reached beyond purely environmentally sensitive construction but is embedded in the total holistic urban design.” Waterfall City with its iconic Mall of Africa is attractive both in terms of location and the demographic of the surrounding area.

Mall of Africa is the retail catalyst for the city, offering an exciting and attractive lifestyle destination beyond just shopping. The scale of the Mall of Africa brings significant shoppers’ choice and acts as a drawcard, which in turn makes it attractive for leading retail local and international brands to secure retail space in the mall. The size caters for significant footfall, thus making it attractive for tenants.

The development was based on a sound prior demographic study, investigation and forecast of an acceptable yield. The response to the Mall of Africa was overwhelming and exceeded expectations. More than 123 000 people visited the mall on opening day, and more than 100 000 on its first Saturday of trade.

“Mall of Africa was valued at R4,9-billion as per our December 2015 interim results,” says Wilken. “The mall will also act as a catalyst for economic activity in the area with a potential

turnover in the region of R4-billion annually for the retailers.”

Attacq adopted urban design principles for all its developments at Waterfall to put new buildings in line with international best practice. Many of the buildings in Waterfall City are sterling examples of environmentally sensitive design and build projects.

“The aim of Attacq’s urban design principles is to ensure that all buildings at Waterfall City conform to our good environmental standards. Green building is the base standard approach at Waterfall City,” explains Wilken.

In addition, the standards provide targets for construction teams to use locally sourced materials, and to set and report on recycling targets per construction project. Design, construction and retrofit of buildings that utilise green building practices are encouraged at Waterfall. In the design and as-built rating process, certification is awarded for buildings that achieve 4-star, 5-star and 6-star ratings.

Attacq prides itself on living its core values and being a responsible corporate citizen that invests for the greater good of society. “At Attacq we look beyond our own bottom line and participate in, develop and invest in the growth of people,” says Wilken. “The Attacq Foundation is a catalyst and channel for sustainable social investment. We have made investments in CSI, enterprise development and socioeconomic development in excess of R10,6-million over the past two years with commitments of investment worth almost R5,4-million for the near future.

“Attacq will continue to develop, invest and grow wisely as a sound listed capital growth fund with a strong investment and development pipeline. We will continue to pursue good business opportunities in South Africa, developing markets as well as established markets.”

De velop | Invest | Gr ow

t: +27 (0)87 845 1136 reception@attacq.co.za www.attacq.co.za

SOUTH AFRICAN PROPERTY REVIEW

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2016/04/28 1:24 PM

company in profile

Mobility moves more than people – it moves money too

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his is the principle that underpins the work of Urbansoup, a specialist firm of transport architects and urban designers.

Established in 2012, Urbansoup is a Level 2 BEE-rated company formed by architects Ray Harli and Yonah Odendal, who are both Arup alumni, and Denver Hendricks.

Their collective experience spans more than 40 years in the industry.

The practice specialises in designing Transit Oriented Developments (TODs). These developments are typified as mixed-use multi-modal transport hubs that maximise commercial opportunities for developers and landowners. TODs provide large urban communities with convenient access to commercial and residential nodes, which in turn stimulates economic activity.

Urbansoup are the lead designers for the new R360-million Kazerne TOD in Newtown, Johannesburg. This 55 000m2 mixed-use development provides more than 200 retail units ranging in size from 6m2 right up to 400m2. Having this diversity ensures that a large spectrum of the retail market is captured.

“If you can increase mobility

“We use transport as the golden thread to stitch together economic opportunities in our cities,” explains Harli. “In South Africa we often underestimate the number of publictransport users. There are high volumes of people moving both locally and across borders. These transport hubs designed for trains, buses, taxis and pedestrians can stimulate greater development and investment opportunities for landowners.

“A developed country is not a place where the poor have cars.

It’s where the rich use public transport” – Paraphrased from Enrique Peñalosa, Mayor of Bogotá, Colombia Urbansoup not only considers the immediate built environment but also develops a detailed understanding of the broader movement patterns at a precinct level. “Understanding the key movement corridors that connect a new precinct to

other nodes helps to strategically move and direct people towards the new development, stimulating economic activity in these areas.” says Hendricks.

The project is currently under construction and is scheduled for completion in December 2017. Once complete, the additional commercial activity at the Kazerne TOD is likely to catalyse future development opportunities in the surrounding areas.

Urbansoup is involved in the entire development process from inception to completion. The practice offers a full range of multi-disciplinary services and collaborates with leading transport planners, traffic engineers, government departments and economists to plan and develop high-quality TOD environments.

“Transit-oriented design can offer developers a competitive edge,” says Odendal.

“Building a development is one component, but the success of a precinct hinges on its connectivity, which ensures sustainable economic activity and growth. That’s the ultimate aim … and we can help make that happen.”

for people in cities, you can increase commercial opportunities for landowners and developers” The design strategically places these units along existing pedestrian routes, and integrates them with the new bus and taxi facilities that are being provided. Through the use of hi-tech materials, natural lighting and ventilation, solar power and other green technologies, they were able to significantly lower the operating costs.

Our strategy is focused on creating transport environments that maximise economic activity and, as a consequence, the commercial value of the development.

Mobility moves both people and money.

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t: +27 (0)11 026 8090 info@urbansoup.co.za www.urbansoup.co.za

It’s about who you know SAPOA events

... not only what you know

At Aucor Property we know that our expert team and their extensive network of buyers is what makes property sell.

Aucor Property, a stand-alone division of the Aucor Group, SA’s leading authority on asset acquisition and disposal, is at the forefront of the real estate auction industry, bringing a broad range of commercial, industrial, retail and residential property to the auction floor. With a national footprint, Aucor Property’s dedicated and experienced team of Business Development Experts use their proven track record and extensive network to successfully manage the sales and purchase process of property on auction.

Aucor Property offers a range of services and sale methods including: auctions, public tenders, private treaty sales, valuations, asset marketing services and solutions all backed by proven marketing strategies that deliver results.

Aucor Property’s clients include listed funds, investors, private companies and individuals.

Tel: +27 11 033 6600 | info@aucorproperty.co.za | www.aucorproperty.co.za SOUTH AFRICAN PROPERTY REVIEW

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Magnificent Waterfall development continues to turn heads T

he more you find out about the Waterfall development, the more you begin to understand why this phenomenal “city” truly sets a new standard for living in Johannesburg.

The magnificent development can be found midway between Johannesburg and Pretoria, on a 2 200-hectare tract of land triangulated between Woodmead, Kyalami and Midrand formerly known as the Waterval Farm.

Waterfall’s location is at the nexus of a growing residential and commercial node in Gauteng, which is gaining much attention as the development grows. The development is extraordinary in that it is unaffected by the constraints of “older” developments and existing infrastructure. In fact, Waterfall offers developers and planners an opportunity to create what will eventually become a new “green” city that has been developed from a completely clean slate, all in accordance with a contemporary urban design and approved planning principles.

The estate has been developed on Waterval Farm, an extensive piece of land once owned by the Gibson Brothers, who bred cattle and ran a stagecoach business between Johannesburg and Pretoria. The farm was sold in 1934 to Moosa Ismail Mia, who built a religious training facility and a school for Indian orphans on parts of the land. Later, the government began expropriating the land for development, with Eskom’s Megawatt Park and Buccleuch interchange built on what was once the farm.

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It was with this in mind that the Mia family decided to develop the land on the basis of a 99-year leasehold.

The property, asset and operational manager for the development is the Waterfall Management Company (WMC).

WMC is responsible for managing and coordinating all the current and future developments on and for the Waterfall development on behalf of the Mia family.

WMC also holds extensive expertise in the field of leasehold and as such, is the appointed specialist in the leasing agreements for the developments on Waterfall.

The land is large enough to support a massive amount of development, which one can already see taking place. There is enough space to never feel crowded, so the designers of the development have

been able to combine all the elements needed for a holistic lifestyle environment.

Today, Waterfall offers six residential estates, aimed at meeting diverse lifestyle stages and requirements of residents. These include the Waterfall Equestrian Estate, Waterfall Country Estate, Waterfall Country Village Estate, Waterfall View, and two matureliving estates – Waterfall Hills and Waterfall Valley. Additionally, Waterfall recently signed an agreement with Balwin Properties to develop a further 13 000 residential houses on the land. These stands will range from social housing units to more up-market ones (to the value of R3,3-million), and will ensure the accessibility of the Waterfall development to people from various income groups.

Starting with the top end of the spectrum, stands at Waterfall Equestrian Estate fall within

company in profile a high-cost bracket. Buyers can design their own houses, within certain architectural guidelines for the sake of good taste and ecofriendliness. Slightly more modest-income earners can design their own homes in the Waterfall Country Village Estate and Waterfall Country Estate – both offer a phenomenal standard of living and a lifestyle that caters for security and outdoor living. For those who are retired, Waterfall Hills and Waterfall Valley offer houses in a range of 10 styles, with a frail-care facility also available.

The Waterfall development isn’t designed as a “snobbish” enclave, but rather as a microcosm of all that’s good about South Africa – and something to aspire to. Since a safe lifestyle shouldn’t be exclusive to the wealthy, there’s an area of the development devoted to affordable houses and apartments – Waterfall View.

In today’s terms, these are very affordable.

“The purpose of the various estates is to give consumers and property owners – no matter what stage of life they are at – the opportunity to experience the extraordinary benefits of estate living,” says Willie Vos, Chief Executive Officer of Waterfall Management and Operating Company. “For example, larger stands are available for the discerning buyer, but we also have more compact housing structures that will appeal to young single professionals or young families. In our matureliving estates, we have created a range of amenities that make life safe and easy, and give residents enormous peace of mind.”

Throughout the estates, many amenities have been developed, including an equestrian arena and a boutique hotel that’s the centrepiece of this sought-after development.

The residential side of the Development has facilities suited towards single people, married couples, families and the elderly.

The Waterfall Country Village clubhouse

has a restaurant as well as a fully equipped gym, and there are also tennis courts and a number of walking and biking trails for all residents of Waterfall to enjoy.

The commercial side of the development also offers office space (where a number of businesses have moved or built new offices).

Importantly, it also includes top schooling facilities, a Netcare Waterfall City Hospital, a variety of shopping facilities (including the recently opened Mall of Africa), restaurants and gyms. These are just few of the outstanding facilities that define the Waterfall Development.

Besides the recent opening of the Mall of Africa, a new retail area is also about to open – and it’s perfect for anyone looking for something a bit “different” to the usual shopping-mall designs. The Waterfall Wilds is opening in June 2016, with the Keith Kirsten nursery as its core attraction, along with other outlets that will help support the creation of a leisure destination for families. There will be two restaurants, a furniture and decor shop, and a place for kids to play.

“Waterfall Wilds is another attraction of the Waterfall development that will offer those living here and in the surrounding areas of the development another 2 900m² of retail space, which has been designed to have a low visual impact on the environment,” says Vos. “The design of the building is a little less conventional than you may find in the rest of Waterfall.”

The whole centre is being created around the nursery. Keith Kirsten is a celebrity horticulturist; this is his first involvement in a retail operation for more than a decade. It will be run by his colleagues the Goodwin family, with Kirsten taking a hands-on role. Waterfall Wilds will also have an exclusive gym.

“We want this to be an outdoor centre with a South African look and feel, so we’ve used different materials and cladding from the norm,” Vos says. “We’ll have shade netting on the outside of the nursery, which hasn’t been seen in nurseries until now. We’ve also gone for a lot of design features that are quite new as far as retail outlets are concerned.”

The design of the building takes into account the environmental features of its setting, surrounded by grassland on three sides with a view of the Jukskei River. “Much has been done to try to make it blend in with this natural environment,” Vos says. “To help make it family-friendly, parking spaces have been made deliberately wider than usual so getting into and out of cars is easy for the elderly or parents with strollers. The two restaurants will also be family-friendly.”

Waterfall Wilds is opposite Waterfall Corner and close to the Waterfall Valley Estate.

Today, the average consumer is not only looking for a more convenient lifestyle, but also for security and peace of mind, especially when it comes to their home and protecting their family. The Waterfall development not only offers this but also gives its residents a convenient live-work-play environment – one that is attractive and that offers South Africans a truly phenomenal place to call home.

TM

t: +27 (0)10 591 4950 rosa@waterfall.co.za www.waterfall.co.za SOUTH AFRICAN PROPERTY REVIEW

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regional news

SAPOA KZN Regional Committee embraces precinct management T

he KZN SAPOA Regional Committee has embraced the new energy surrounding precinct management and believes it could be the answer to revitalising urban decay.

It is a great entry point for private-public partnerships and is a win-win situation for all in the property sector through the inevitable increase in property values.

The KZN SAPOA Regional Committee has been tasked with creating a multistakeholder forum in eThekwini and setting up a single voice for the municipality to communicate with. This is an endorsement for SAPOA as the representative of the owners of the rates base. SAPOA KZN has appointed Andrew Layman, the former Chief Executive Officer of the Durban Chamber of Commerce, to set up the forum and research the options of a formalised legal structure to roll out “urban improvement precincts” (as they are known in Durban) throughout the City.

Layman gives us further insight into precinct management below.

agreed by majority vote to support the process, pay an additional amount as a levy on top of their property rates. This extra funding is available to the property owners for them, via a management board, to determine how they would like to enhance their precincts.

In the South African context, the capacity of municipalities to provide equitable services

The value of precinct management In many countries throughout the world, local governments have been unable to arrest urban decay without the active support of property owners and other members of private sector constituencies.

It is for this reason that in the US and the UK strong movements have emerged during the past 20 years.

The UK has more than 200 business improvement districts (BIDs), which were motivated by the New Labour government in 2004. In the US it may be described as the “main-street” movement, as actions were initiated to regenerate the former commercial importance of these precincts.

We have an excellent local example of this in the Umhlanga Village which, in the wake of the La Lucia and Umhlanga Ridge developments, lost a good deal of its economic lustre. The restoration of vibrancy is attributable to the establishment – and excellent performance – of two urban improvement precincts (UIPs). In line with similar entities, which are known by many different names, such as city improvement districts, (CIDs), BIDs and urban renewal districts (URDs), property owners, having

Edwin van Niekerk, SAPOA KZN Regional Councillor

to meet all expectations is severely limited, with the result that the necessary “top-up” activities, principally in the “crime and grime” spheres, are inclined to dominate the enhancement programmes. Successful UIP management includes service level agreements with a municipality to ensure that the services delivered are adequately commensurate with the normal rates paid.

This allows the UIP to plan for a constructive “top-up” of security, maintenance and cleanliness, and design other complementary plans to make the precinct more attractive to businesses, investors, tourists, pleasureseekers and residents. The objective of these interventions is to increase property values in the longer term.

This is to the advantage of municipalities as much as to investors and owners, because increased values result in more income from rates. In eThekwini, the pace at which rates income has increased is too pedestrian – especially in the inner city, where it has

actually declined in real terms – to enable the city to play an optimally active role in its economic development. For this reason, the municipality has committed itself to a partnership with the private sector to promote the establishment of more UIPs. The private sector in this initiative is led by the KZN branch of SAPOA, which is already involved in negotiations around the legislative framework with the National Treasury, which is equally enthusiastic about private sector participation in precinct management.

At present, the legislation supports “special rating areas” and is not definitive on the critical aspect of property owner decision-making. It does, however, ensure levels of accountability, the lack of which has resulted in some criticism of UK BIDs, and is quite clearly at odds with an earlier trend towards exclusion. (Gated suburban communities are an extreme example of this.) The reality is that if UIPs are to facilitate local commercial activity and economic growth, they must manage accessible precincts and, indeed, seek opportunities to extend their prosperity into poorer neighbourhood communities.

It is quite possible to achieve these objectives, which may appear paradoxical to some, through effective management.

This includes holding the municipality and other agencies to account for the provision of expected facilities and consistent enforcement of laws. This is achieved less by confrontation than by cooperation, and a good deal of Umhlanga’s success may be attributed to the mutual understanding that has been achieved between Brian Wright and city officials – an understanding that, incidentally, is at the heart of the private-public partnership being explored

by SAPOA KZN. The Florida Road UIP is relatively newly established but is already making good progress. Many of the issues that made property and business owners unhappy about this once-vibrant precinct are being addressed. A somewhat different vibrancy will be recovered, one that will promote business activity and encourage visitors.

It represents a new wave of collective enthusiasm for UIPs, which will be increasingly important to Durban’s development.

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regional news

SAPOA Port Elizabeth:

behind the scenes and update N

etworking events, advocacy meetings, industry updates and educational seminars have been buzzing at SAPOA Port Elizabeth over the past year.

Regional Secretariat Cheryl Jonker says that the dynamic Regional Committee played an integral part in providing valid and required information into areas calling for attention and action. Each committee member brings a wealth of knowledge and expertise from various divisions in our diverse industry to the meeting table.

The SAPOA Port Elizabeth Regional Committee comprises professional valuers, property owners and developers, bankers, property managers, development agents and university educators – a brilliant combination of professionals. Mark Bakker, the Managing Director of Bruce McWilliams Industries in Port Elizabeth and Chairman of the Eastern Cape branch of the South African Institute of Valuers (SAIV), has recently been re-elected as Chairperson on the committee for the fourth term in a row because of his knowledge, absolute passion, dedication, commitment, excellent contribution to the property industry and support of SAPOA PE. He believes that if you want to see anything thrive, you have to get involved to make it work.

This philosophy is evident in his affiliation with various other committees and associations.

The key to a committee’s success is in its collaboration and commitment to the stakeholders it serves. But commitment would be futile without the interaction and participation from the regional stakeholders. For SAPOA PE, the joining in unity of the committee and stakeholders ultimately provides the official

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“voice of commercial and industrial property”, which in turn benefits all investors in our city, be it in the private or the public sector.

The following advocacy matters are currently being addressed with the professional assistance from Lekgolo Mayatula at SAPOA headquarters: ●● Municipal consultation in respect of delays on member applications processing ●● Municipal consultation on water pressure issues and concerns ●● Investigation and resolution of illegal dumping in and around the Nelson Mandela Metro ●● Consultation with the Executive Mayor on pertinent matters in association with the NMB Civil Society Coalition ●● ECIA request for assistance relating to issues experienced due to the lack of a Municipal Building Control Officer in collaboration with the Joint Practice Committee ●● SAPOA is providing support and assistance to the ECIA on Heritage Preservation Overlay Zones (HPOZ) ●● Spatial Planning and Land Use Management Act (SPLUMA) updates and meetings with the Municipality Human Settlements Directorate ●● Joint Practice Committee discussions and advocacy on various Industry matters Numerous meetings are taking place and sustainable relationships are being formed to address and maintain relevant matters affecting the property industry in the Bay.

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Other events that have taken place over the past 12 months include: ●● Regional Committee meetings – these are held monthly ●● Networking evenings (a word of thanks to Investec and FNB for sponsoring some of the events)– • Fire Protection Building Requirements, which entailed information on basic fire protection requirements for various types of buildings by Henrik McCleod of the NMB Fire Department • SPLUMA, Heritage Mapping and Town Planning. The event entailed an open discussion with a panel of experts in respect of these pertinent matters • SAPOA AGM Breakfast Session with FNB economist John Loos • Breakfast Seminar with NMB University’s Professor John Smallwood on the role of property developers, owners and managers in construction health and safety

●● The SAPOA PE Golf Day held at the PE Golf Club.

Thanks to our sponsors, including the Rode Group Property Consultants.

A tentative booking has been made at the PE Golf Club for 27 September 2016. ●● Annual Property Survey.

The annual survey is undertaken by SAPOA in conjunction with SAIV, and is sponsored

by FNB. Invitees from various sectors of the property industry take part in this comprehensive survey of industrial, office and retail rentals and vacancies, which covers most areas of Port Elizabeth and Uitenhage.

Port Elizabeth regional industry stakeholders are invited to join SAPOA in order to become active, participate and add your valuable input to the “voice of commercial and industrial property” because it affects you and your business!

Mark Bakker with Regional Secretariat Cheryl Jonker

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events

Partnering in facilities management Public and private sector host seminar in Johannesburg The Facilities Management Seminar was held in Johannesburg in May. The aim of the session was to get the public and private sector to partner in facilities management for the benefit and prosperity of the property sector

Nicole Baumgarten, Chairperson of the SAPOA Property & Facilities Management Committee

Paul Serote, Head of PMTE

Paul McCrystal, Chairman of SAFMA

Craig Henry from SABS

Bill Ward, Member of the SAPOA Property & Facilities Management Committee

Topics discussed included, among others, facilities management standards, trends and challenges.

The public sector also gave a detailed perspective on its state within the industry.

Various organisations in the public and private sector were present, including the Property Sector Charter Council (PSCC), Department of Public Works & Property Management Trade Entity (PMTE), South African Facilities Management Association (SAFMA), the South African Institute of Black Property Practitioners (SAIBPP) and SAPOA.

FROM LEFT Johan Brandt from FlamiProx Utility Managers, Portia Tau-Sekati from the Property Sector Charter Council, and Dumisane Malinga from SAIBPP

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Construction Group

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events

SAPOA engages with Gauteng municipalities

By Maud Nale Photographs by Dryden-Schofield

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APOA had the privilege of engaging with the Executive Directors of Planning & Development from the City of Johannesburg, City of Ekurhuleni and City of Tshwane on 12 May. All three Executive Directors – Makgorometje Makgata (City of Tshwane), Yondela Silimela (City of Johannesburg) and Motubatse Motubatse (City of Ekurhuleni) presented their strategic planning projects and the processes that they have put in place in order to facilitate development within their areas of jurisdiction and the City Region as a whole.

City of Tshwane The City of Tshwane is divided into seven regions and, according to Stats SA, the metro had the highest number of developments in Gauteng between 2012 and 2015. The city follows the development objectives as defined within its Metropolitan Municipality Spatial Development Framework and Regional Spatial Development Frameworks.

The city is aware of its infrastructure limitations and aims to put extensive resources into addressing this. The city is the first among the three metros to have an approved Land Use Management By-Law and consolidated land use scheme.

Boksburg, Brakpan, Edenvale/Lethabong, Germiston, Kempton Park/Tembisa, Nigel, Springs, other neighbouring townships, and the former councils of Kyalami and East Gauteng Services. The City has identified catalytic projects known as strategic urban developments (SUDs); these include developments such as Riverfields, Tambo Springs, Green Reef, Twenty One, Carnival Junction, PrasaGibela, S&J Industrial, Lords View, Glen Gory and Leeuwpoort.

These projects (and many more) focus on precinct developments; therefore they are assessed by a special unit within the municipality to ensure that they receive priority attention in order to facilitate development and meet the city’s goals.

Jeanie Pelser and John Martin of iProp

City of Johannesburg The City of Jo’burg is the economic hub of the province and experiences one of the highest numbers of urban migration, which requires sustainable solutions specifically on aspects such as human settlements, city connectivity and mobility, job creation and managing population density. The city has taken a decisive stance to invest its resources in engineering infrastructure and, with the participation of the private sector, the city should be able to create a development enabling environment.

Makgorometje Makgata of the City of Tshwane, Yondela Silimela of the City of Johannesburg and Motubatse Motubatse of the City of Ekurhuleni

City of Ekurhuleni The City of Ekurhuleni, commonly to as the “city of many towns”, of the former East Rand, which the following towns: Alberton,

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referred consists includes Benoni,

SOUTH AFRICAN PROPERTY REVIEW

Yondela Silimela of the City of Jo’burg with Brad Wantenaar, Brandon Williams and Bafikile Simelane, all from NMC

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For information, contactplease Dr Yewande Adewunmi/Professor Samuel Azasu Formore further information contact For further information please contact For further information please contact her information please contact School and Management, SchoolofofConstruction ConstructionEconomics Economics and Management,

School of Construction Economics and Management, School Construction Economics and Management, University of the Witwatersrand, Johannesburg - South Africa Construction Economics andof Management, University theWitwatersrand, Witwatersrand, 1 Jan Smuts -Avenue, Johannesburg, South Africa University ofofthe Johannesburg South Africa of the-Witwatersrand, Johannesburg - South Africa E-mail: david.root@wits.ac.za/samuel.azasu@wits.ac.za of the Witwatersrand,University Johannesburg South Africa E-mail: david.root@wits.ac.za/samuel.azasu@wits.ac.za Email: david.root@wits.ac.za/samuel.azasu@wits.ac.za yewande.adewunmi@wits.ac.za /samuel.azasu@wits.ac.za E-mail: Tel:+27 (0) 11 717 7662/+27 (0) 11 717 7652/+27 (0) 11 717 7676 vid.root@wits.ac.za/samuel.azasu@wits.ac.za Tel:+27 (0) 11 717 7662/+27 (0) 11 717 7652/+27 (0) 11 717 7676 Tel:+27 (0) 11 717 7662/+27 (0) 11 717 7652/+27 (0) 11 717717 76767676 Tel:717 +277652/+27 (0)11 717(0)7662 / +27 (0)11 717 7652 / +27 (0)11 11 717 7662/+27 (0) 11 11 717 7676

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2015/02/23 8:16 AM 2015/02/23 8:16 AM

events

Certification Ceremony for JPC Employees The certification ceremony for employees of Joburg Property Company (JPC) took place on 19 May in Johannesburg. Recipients completed the Introduction to Commercial Property and Essential Commercial Property respectively.

JPC CEO Helen Botes

A

ccording to Helen Botes, CEO of JPC, the process started two years ago and is a collaborative effort between SAPOA, JPC and The University of Witswatersrand (WITS).

“We have recognised that we are a developmental institution, and we need to develop our staff to become one of the leaders in delivering property and facilities management. It is our aspiration to position the organisation as thought leaders in the public sector property space, and the efforts have culminated into what we see today.”

Botes further highlighted the importance of such partnerships in aligning JPC’s organisational strategy with its deliverables “Learning and development is at the core of JPC, and we look forward to many more formidable partnerships such as these.”

Neil Gopal, SAPOA CEO, only had congratulatory words for the certificate recipients. “Today is the result of all your hard work. Look back at this day with pride and achievement and reflect upon your journey, as it will be a very rewarding one.

Celebrate your hard work and dedication and be very proud of what you have accomplished.” His words to JPC and WITS, “ Thank you to JPC for partnering with SAPOA and trusting us. Thank you to Wits for your dedication and hard work. I wish you all the very best for the future.”

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FROM LEFT SAPOA CEO Neil Gopal with Professor David Root

FROM LEFT Prof David Root with certicate recipient Elmar Odendal and JPC CEO Helen Botes

events

Programme Director Lindeni Shoba

FROM LEFT Lindeni Shoba, Mbali Gumede, Makhosi Tisani, Jabulile Dos Santos and Mala Padayachee

A proud moment for all JPC certificate recipients

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SAPOA Mpumalanga hosts networking breakfast Urban Management and CIDs: what is happening internationally, nationally and locally

A

t the Mpumalanga regional branch’s networking breakfast held on 27 May 2016, Anne Steffny from Anne Steffny and Associates and James Aling from Mbombela Place Management (and regional chairperson) gave members an update on the state of urban management and city improvement districts (CIDs). A comprehensive overview was provided on the principles and benefits of urban management structures, with a focus on CIDs and BIDs in the US, Canada and South Africa. Aling indicated that urban management is a “hot topic” at the moment, being identified as one of the mega property trends according to a PwC presentation at last year’s SAPOA Convention, and with some of challenges and changes being experienced in the legal environment in South Africa.

The urban management movement started in Canada about 45 years ago when the first Business Improvement Area/ Association (BIA) was formally established.

Today the US has more than 1 000 BIDs and Canada has more than 575 BIAs. These urban management structures have been instrumental in turning decaying CBDs of major cities such as New York around, and continue to contribute towards the health and growth of urban nodes and neighbourhoods. In South Africa we have a number of successful CIDs, SRAs and UIPs operating in Johannesburg, Cape Town, Durban/eThekwini, Tshwane and Mbombela.

Local examples of CIDs in Mbombela included the Riverside Park CID, the Nelspruit CBD CID and the recently established CID for the Riverside Industrial area.

The recent challenges to some of the CIDs and CID legislation in Gauteng have provided an opportunity to review the legislation. In this regard, Steffny confirmed that SAPOA, the National Treasury and the CID Forums in the country have embarked upon a process of research into successful urban management structures, policies and legislation internationally and nationally with a view of proposing national enabling policies and,

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in time, legislation for the establishment and management of urban management structures in South Africa.

Aling concluded the presentation by saying that “CIDs and other urban management partnerships were the only real sustainable way to manage the public space in neighbourhoods, precincts and cities moving forward, especially in a country where successful partnerships between the private and public sector are needed to augment capacity and ensure a common vision and approach to managing the urban public space.

ABOVE Nelspruit developments around Riverside Park BELOW, FROM LEFT SAPOA Mpumalanga Region Vice-Chairman Derek Todd, Mpumalanga Place Management’s Anne Steffny, Riverside Park Precinct Association’s Renate Scholl, HL Hall & Sons Properties CEO and SAPOA Mpumalanga Regional Chairperson James Aling

SAPOA events

innovation with excellence

+27 (11) 217 7700 www.zenprop.co.za

SOUTH AFRICAN PROPERTY REVIEW

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UPCOMING

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Reaching leading legal professionals within the property industry

Date

Event

Gauteng

12 July

Red Book Revision consultation

East London

19 July

East London Breakfast Seminar

Port Elizabeth

20 July

PE Networking Event

Mpumalanga

21 July

Mpumalanga Networking Event

Gauteng

28 July

Power Hour Breakfast: Topic TBC

KwaZulu-Natal

28 July

KZN Breakfast Presentation

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August Region

The SAPOA Proper t y Advocate Magazine

Date

Event

East London

4 August

East London Golf Day

Gauteng

5 August

SAPOA Women’s Day

Gauteng

11 August

Research Breakfast: Topic TBC

Port Elizabeth

17 August

PE Power Hour Breakfast

Gauteng

TBC

Gauteng Networking Event

● Regular town planning, legislation and advocacy updates; ● Doing business in Africa; ● Emerging markets and global growth, financial ● ●

● ● ● ●

● ●

and economic trends; Ownership, mergers and acquisitions, leasing, management agencies, REITs, tax, property ownership laws, and development of the property ownership sector in South Africa; Development plans approval, subdivisions, town planning, re-zoning, high-density developments, mixed developments (business/residential, IDZs), and sectional title developments; Engineering: storm water, roads and bridges within the concept of connecting cities and supporting the commercial property sector; Environment: innovative building technology, environmental impact assessments, carbon tax policies, and safety and health regulations at building sites; Private and public sectors: useful contact numbers and specific topics on municipal planning and the Department of Public Works projects; Education: the institutions that offer property as a profession, the innovative methods that are being developed and their application in practice; Attorney and industry profiles, movers and shakers: the people behind the industry; and Leading advocate profiles.

For Editorial enquiries, contact Mark Pettipher: +27 (0)21 856 1276 / mark@mpdps.com For advertising, contact Robbie Pansegrauw: +27 (0)21 856 0321 / rob@mpdps.com 110

SOUTH AFRICAN PROPERTY REVIEW

September Region

Date

Event

Port Elizabeth

6 September

Port Elizabeth Golf Day

Mpumalanga

15 September

Mpumalanga Networking Event

Port Elizabeth

21 September

PE Networking Event

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

SAPOA events

ENSafrica | Africa’s largest law firm

ENSafrica.com SOUTH AFRICAN PROPERTY REVIEW

ENSafricaAd210x297Mar2016_award_strip.indd 1

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2016-04-22 11:42:22 AM

off the wall

Thinking out of the box?

Dutch company Fiction Factory can custom-make a super-stylish Wikkelhouse in a single day … then ship it to you in segments and construct it in double-quick time. It’s about three times more durable than traditional construction Edited by Anne Schauffer

W

hat about a fabulous Wikkelhouse, designed and developed by Fiction Factory, a company of Dutch creators? Originally a decor construction studio (the company still does this), Fiction Factory now “dabbles” in other things too. Almost anything, really: the company manufactured a 5m x 5m poppy and an enormous, stage-filling dragon for a musical. It also created the prototypes of a series of true-to-life rhinoceros heads for the stand of a well-known fashion label. The company claims to turn the almost-impossible into the possible, and prides itself on never giving a straight “no” as an answer.

And Wikkelhouse? Four years of research and development have led to a pioneering construction technology that involves a unique, rotating house-shaped mould.

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The base of the Wikkelhouse is corrugated cardboard. Layer after layer of this topquality cardboard is wrapped around the mould, and the 24 layers are bonded together with eco-friendly superglue. The result is an incredibly robust sandwich structure with optimal insulation qualities. Through this wrapping process, a heat insulation and construction method are integrated in a sustainable way. Afterwards, each segment is sealed in waterproof foil and finished with wood – individual segments invisibly linked together. Yes, it really is waterproof. Even its acoustics are unequalled.

Wikkelen is Dutch for wrapping, hence the name Wikkelhouse. Because the Wikkelhouse is sustainably produced and made of materials that have minimal impact on the environment,

it is three times more eco-friendly than traditional housing. The segments can also be reused repeatedly and are 100% recyclable.

A Wikkelhouse is a wonderfully flexible little dwelling, and it meets the criteria for both temporary and permanent housing – and anything else you’d like it to be. Each one is tailor-made by specialised craftsmen, so you can choose to have additional windows, different finishes or your own colour scheme.

It’s yours.

The modular setup makes the house highly flexible. Made up of 1,2-metre-deep segments that can easily be connected and disconnected, you can add extra segments for extra metres. You can create your own floor plan – and change it later. As Fiction Factory says, “Truly anything goes.”

Fancy a kitchen in your Wikkelhouse?

A bathroom? A shower? Include Fiction Factory’s smart home-segment in your Wikkelhouse layout, and you’re set for life.

You don’t even need a foundation – and, because each segment only weighs 500kg, when it’s time to move house, you take your Wikkelhouse with you.

A Wikkelhouse can be erected within a day, and supplied with glass façades or closed.

It’s a unique and contemporary design that creates liveable, unique and creative spaces.

The only downside is that, for now, they’re only built in Europe…

Wikkelhouse.com

SAPOA events

INNOVATIONS IN STRUCTURAL ENGINEERING

BROUGHT TO YOU

BY WSP | PARSONS BRINCKERHOFF

From luxury hotels and education facilities, to sports stadiums, industrial facilities and landmark office buildings WSP | Parsons Brinckerhoff is globally renowned for innovation in structural engineering. Our experts bring global expertise to African projects, ensuring our clients receive world-class engineering solutions for their iconic projects.

We are passionate about our continent’s sustainable development. Iconic projects like the Fulton Award-winning Fairscape Precinct in Gaborone show how our passion for beautiful, innovative design helps our clients make a difference to the way we build.

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500

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EMPLOYEES

OFFICES

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Learn more about this and other projects on www.wsp-pb.co.za Photo Caption: Fairscape Precinct, Gaborone, winner of the Fulton Award for Innovation in Concrete 2015

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Specialised Knowledge and Expertise 3

2

4

1 Medical facility for 200 Rivonia Road in Morningside, Johannesburg. Architects: Geyser Hahn Architects.

2 The Union office development for Eris Properties in Accra, Ghana. Architects: Boogertman + Partners.

3 & 4 Head office for Business Connexion for BCX HQ Offices Co-ownership JV in Centurion, Pretoria. Architects: Stauch Vorster International. QS services in JV.

Whilst timeously and adequately providing traditional quantity surveying services DelQS identified and developed certain services vital to the bottom line of investors • Elemental construction cost estimating • Financial viability analysis (in-house developed program : precise and logical in presentation) • Building contract expertise • Final settlement with contractors • Cost control and reporting (in-house developed program: proactive and audit trail) • Africa projects (expertise and track record) • Specialised developments (retail, hospitality, healthcare, student housing, etc)

QUANTITY SURVEYING

Nico Roos

Liza Botha

Wilco Lourens

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Gerhard de Leeuw Akopo Africa

Corné de Leeuw

Christine Larson

SOUTH AFRICAN PROPERTY REVIEW

DISPUTE RESOLUTION

PROPERTY VALUATION

www.delqs.com | JHB +27 (11) 642 8751 | PTA +27 (12) 460 3304 Associated offices: GHANA | KENYA | MAURITIUS | NAMIBIA | NIGERIA | TANZANIA | UGANDA