Business Day HomeFront 07 June 2019

HOMEFRONT 13 OCTOBER 2016 WWW.BDLIVE.CO.ZA 7 JUNE 2019 WWW.BUSINESSLIVE.CO.ZA

MUST-READ

Masters of metal art PAGE 2

Construction and developer insight PAGE 10

Inner-city housing solutions PAGE 12

Struisbaai’s new hotel venture PAGE 14

Legaro Properties’ 78 Corlett Drive in Johannesburg was awarded six stars by Green Star SA in 2018

Setting new sustainability standards Water shortages and rising energy bills are driving the nationwide demand for sustainable property. We look at how green intitiatives in this sector are setting up SA for a brighter future

PAGE 6

HOMEFRONT ART AND DESIGN

Metal maestros They work in metal, sculpting, casting, forging or 3D printing to create distinctive art and furniture pieces. This trio is among SA’s best

WORDS: KIM MAXWELL :: PHOTOS: ADRIAAN LOUW AND SUPPLIED

Conrad Hicks Launching this month, the Implement collection of hand-forged metal furniture and sculptures

by Cape Town blacksmith Conrad Hicks is textured with distinctive hammered markings. He uses only traditional joining techniques in an intuitive process, allowing his materials to determine the final form as he works.

Hicks explores the history of human evolution and anthropology in his art, drawing a correlation between his process and those of early toolmakers.

“It is the pursuit of beauty, not technology, that has driven our evolution,” he says. “The beauty we pursue is actually an engineering choice, intuitively made.”

Hicks studied sculpture in the 1980s, then worked in art and restoration in London. Drawn to blacksmithing by the discipline of an old craft, he opened a forge workshop in Cape Town in 1991 and discovered the expressive potential of steel and copper. His studio at The Bijou, a former Art Deco cinema in Observatory, houses a vast collection of tools and machines. It includes a 400-year-old anvil salvaged from a scrapyard.

Hicks’s collectible pieces include Wife? Bench, which is charged with solidity and energy. Other works such as Chaise Muse and Copper Chaise are more ethereal, the copper beaten so thin that it appears to float.

Chaise Muse

“Currently I am working on a fourmetre sculpture, my largest piece to date. This involves the use of scaffolding and a forklift, which normally does not form part of my work process”

A table/stool from Hicks’s Implement collection

Adriaan Diedericks

Adriaan Diedericks

Exhale III, 2016

Bronze sculpture artist Adriaan Diedericks says he often draws on his rural Piketberg upbringing for inspiration. The Stellenbosch University fine arts graduate has a foundry in the Strand.

His pieces can be found in various overseas private collections and in upmarket local landscaped settings such as the wine estates Quoin Rock and Bartinney. “Limited editions protect the investment

value in my oeuvre,” he says. “Depending on the sculpture size, the larger the sculpture, the smaller the edition, typically.”

Diedericks likes to sculpt the human anatomy.

Creating life-size torsos, truncated works and outstretched human forms such as Exhale III gives this young artist great pleasure. “When sculpting hands and faces, one is not simply working with the intricacies of capturing form and expression, but

especially the identity of a human being,” he says.

“The inclusion, similarly to the exclusion, of these parts carries meaning.

Depending on where the process takes me, I decide whether to add or remove from my sculptures.

“My love for anatomical studies can be applied and investigated through the bronze medium, therefore a sculpture piece such as Medium Torso is perfect to plan, sculpt and cast,” he says.

HOMEFRONT

Of 11 different bronze types, silicon bronze is his top choice. “Hard yet malleable, durable yet receptive to colour manipulation, silicon bronze as an age-old medium in a contemporary society has maintained its relevance and value since the time of its ancient Mesopotamian forefathers – that fascinates me.”

This craft requires physical strength and dexterity. “Currently I am working on a four-metre

sculpture, my largest piece to date. This involves the use of scaffolding and a forklift, which normally do not form part of my work process,” says Diedericks.

“The level of focus needed while suspended and working with liquid hot plasticine is definitely a game changer. This, combined with the task of ultimately piecing together more than 80 bronze panels, will be a marvellous challenge.”

Torso I (medium), 2018

Truncated I, 2013

Charles Haupt Furniture as sculpture or sculpture as furniture?

Industrial designerturned-artist Charles Haupt of Cape Town’s Bronze Age Studio sums up what he offers admirers of his limited-edition furniture and designs.

“I am fortunate that I work in a realm that shifts between art and design.

It allows me the freedom to express the things that inspire and interest me, without the normal constraints of a commercial designer,” he says. “But at the core I’m an industrial designer with a concern for function, striving to make beautiful sculptural objects that are functional but not decorated.”

There is underlying geometry in Haupt’s designs.

From a young age he’s been interested in how things work and why they exist or look the way they do.

Tropism Mensa Tertium

“In nature there is such a wealth of beauty in the structures, patterns and rhythms, in both the biological as well as the inorganic worlds.”

Haupt’s industrial designer training means he makes a design, prints it in 3D and then sculpts it.

“Coming from an industrial design background, I’ve always looked at how technology can become a tool I can use. One such tool is algorithmic or parametric 3D modelling. The basis is to set certain parameters and functions in digital software, which I control to create a 3D model.

“Using the algorithms, I can shape and control the outcome and experiment with different results with small changes to the algorithms. This process was used to mimic the plant structural growth patterns that resulted in my Tropism series of tables.”

The bold forms in this limited-edition bronze range shows Haupt’s fascination with nature’s mathematical patterns and explores the natural logic of growth rings and the branching of trees.

The three-legged tables are built layer by layer, and their calibrated contours adjusted and assembled by hand.

Resulting models are then printed in 3D, covered in wax and cast in bronze.

Haupt says his method is a crossover from modern technology to the age-old lost wax bronze casting process that has been in use for thousands of years.

His limited-edition series called Num Num is sculpted by hand. Drawing inspiration from the numnum, an indigenous shrub also commonly known as the Natal plum, Haupt enlarged the distinctive “thorns” to form dramatic sculptural bronze table bases and stands.

Conrad Hicks’s solo exhibition Implement will be on show at Southern Guild gallery in Cape Town until July 17.

Num Num Branch II PRODUCED BY BLACKSTAR PROPERTY PUBLISHING 1st Floor, Block H, Sable Square, Cnr Bosmansdam and Ratanga roads, Milnerton, Cape Town 021 447 7130

A EDITORIAL TEAM Editor: Debbie Loots Designer: Samantha Durand

PUBLICATION ADVERTISING SALES

Copy Editor: Christine de Villiers Production: Joanne le Roux

Susan Erwee Sarah Steadman

susan.erwee@thecreativegroup.info sarah.steadman@thecreativegroup.info

083 556 9848 083 222 9153

FOCUS ON: ATLANTIC SEABOARD

A A luxury boutique guesthouse priced at R42m plus VAT, exclusively mandated to Harcourts Atlantic

ADVERTORIAL

Luxury property upturn Harcourts Atlantic is poised to ride the wave of success as the market starts turning in favour of high-end property WORDS AND PHOTOS: SUPPLIED

ccording to Harcourts Atlantic, the Atlantic Seaboard is still rated as one of the world’s preferred ultraluxury destinations, accounting for the bulk of high-end property sales regardless of poor transactions during 2018.

There are many positives: the property market’s historical cyclical upturn is eminent, President Cyril Ramaphosa has a clear vision for economical growth and SA’s favourable currency makes it an ever-popular destination for overseas investors.

Harcourts Atlantic is therefore conducting an aggressive marketing campaign, especially in terms of extending its digital scope. New technology is a crucial arm of the company’s local arsenal to ensure it becomes a leader in one of Cape Town’s most lucrative property areas.

With a phenomenal growth of 115% in the past five years, Harcourts SA is now one of the largest real estate companies in the country. It has also doubled its number of agents.

Harcourts was established in SA in 2009 and today has 150 offices across the country. It has

John McDermott

doubled its market share since inception.

Furthermore, Harcourts SA is part of the Harcourts International family founded 130 years ago, which has sold property amounting to more than R494bn in 2018 alone.

Harcourts has a substantial network comprising 900 offices in 10 countries, with 7,000 consultants globally seeing 2,500 referrals between the Harcourts offices in the course of last year.

With such combined efforts, the company is able to offer its clients the best possible opportunities.

John McDermott and his partner, Jorica Mengjiao Jin, are exclusive luxury property specialists for Harcourts Atlantic and now have valuable Chinese connections thanks to Mengjiao Jin’s network.

This has lead to lucrative enquiries from local and overseas Chinese nationals.

Harcourts Atlantic is confident it will secure a greater market share through its experienced team that is committed to forging meaningful personal relationships with clients.

“We expect to take the area by storm and are aiming to become the flagship of Harcourts SA,” says McDermott.

Jorica Mengjiao Jin

GET IN TOUCH

The price of this Clifton penthouse, also exclusively mandated to Harcourts Atlantic, is available on request

Harcourts Atlantic Tel: 083 225 0287 (John); 074 344 6631 (Jorica) E-mail: john.m@harcourts.co.za; jorica.j@harcourts.co.za Website: harcourtsatlantic.co.za

HOMEFRONT HOT TOPIC

Setting new sustainability standards Water shortages and rising energy bills are driving the nationwide demand for sustainable property.

We look at how green intitiatives in this sector are setting up SA for a brighter future WORDS: MIRIAM MANNAK :: PHOTOS: SUPPLIED

Century Property Developments’ The Hills Game Reserve Estate in Garsfontein, Pretoria

The Yacht Club on the Cape Town Foreshore, by Amdec Property Development

S

A’s property sector is becoming greener every year. According to the 2018 World Green Building Trends report, the number of developers belonging to the Green Building Council of SA (GBCSA) rose from 31% to 51% between 2015 and 2018. This will likely translate into more green developments, including residential projects.

The report shows that by 2021, 48% of South African developers will dedicate 60% of their projects to

green endeavours – up from 28% in 2015.

Various elements are driving the market, including the increasing cost of water and energy and their declining availability. “Water shortages and loadshedding make resourceefficient homes increasingly attractive,” says Anthony Stroebel, GBCSA board member and head of strategy for the Pam Golding Property Group. “Properties listed with green attributes such as recycling, energy efficiency and water-

“Water shortages and load shedding make resourceefficient homes increasingly attractive” Anthony Stroebel, head of strategy, Pam Golding Property Group

HOMEFRONT

Multidisciplinary consultancy Platform designed this Betty's Bay home to have as little impact on the environment as possible

GREEN STAR BUILDINGS Fourleaf Estate, Port Elizabeth Africa’s first residential development to receive the GBCSA’s Edge final certification, this property is up to 29% more energy efficient and 25% more water efficient than the average regular home.

78 Corlett Drive, Johannesburg This office development

by Legaro Properties was the highest-rated green building in the country in 2018, and got six stars from Green Star SA. The design incorporates minimalist geometries, with louvres serving as a passive shading device.

32 Napier, Cape Town Situated in De Waterkant, 32 Napier’s energy efficiency, ecofriendly building materials and various water-wise interventions have garnered it Green Star SA Multi-Unit Residential certification with a four-star rating.

Steyn City's clubhouse in Midrand

saving features receive considerable attention.”

NEW AWARENESS Sustainability is about more than keeping your utility bills low and safeguarding your water and electricity supply. SA’s property industry is driven by increasing awareness around environmental issues such as climate change. “Homeowners, tenants and investors want to know what is being done to reduce the impact on the environment,” says Amdec Property Development MD Nicholas Stopforth.

Grahame Cruickshanks, the GBCSA’s managing executive of market engagement, confirms growing environmental awareness among South Africans, particularly regarding the impact of their lifestyles. “This is influencing the decisions they make about the homes they want to live in.”

The GBCSA’s independently verified certification systems, Edge and Green Star SA, offer consumers peace of mind

“Homeowners, tenants and investors want to know what is being done to reduce the impact on the environment” Nicholas Stopforth, MD, Amdec Property Development

by providing a reliable measurement of their homes’ environmental performance.

Jessica Hofmeyr, Century Property Developments sales, rentals, marketing and operations executive, shares Cruickshanks’ opinion. “People are more educated on the subject, and sustainability is becoming a deciding factor on where they stay,” she says. “The demand grows by the day.”

is added to enhance a building’s performance.”

Green architect David Talbot, founder of multidisciplinary consultancy Platform, explains that it all boils down to resilient design, which is defined as the intentional planning of buildings, landscapes, communities and regions in response to vulnerabilities to disaster and disruption of normal life.

“Resilient design has become a genuine trend RESILIENT DESIGN among developers and What makes a home, architects, one that helps apartment or entire occupants deal with residential development sustainable starts with how it Eskom and water outages,” Talbot says. “Individual is built, says Cruickshanks. homeowners are looking “Many developers are at this more and more, too. using the best practice It is almost a fundamental approach to designing requirement and no longer a building’s envelope a nice-to-have.”

– walls, floor, and roof – appropriately for the region, taking into account specific WATER-WISER elements such as insulation, In arid SA, water is a big correctly sized and oriented issue, particularly from windows and doors, a property development shading, as well as building point of view. As the effects materials with the correct of water constraints are thermal mass. This is the becoming more palpable ability to store and release around the country, more heat at different times of the developers are going the day,” he says. “Technology extra mile to save every

Legaro Properties’ 78 Corlett Drive in Johannesburg

drop. Simply installing rainwater tanks is no longer enough.

“We have implemented systems that detect water leaks immediately, and our latest developments such as The Precinct within the Waterfall Area, The Parks in Riversands and The Campus in Auckland Park have grey-water systems in place,” says Hofmeyr.

Amdec Property Development, too, has upped its water-efficiency offering. It has fitted its most recent development, The Yacht Club in Cape Town, with a reverse osmosis plant that provides 35,000 litres of clean drinking water every day, taking it off the municipal water grid completely.

Amdec’s future Harbour Arch development will be equally water-wise. “With water scarcity being the new normal, developers must implement waterwise strategies from the ground up,” Stopforth says.

CLEVER LANDSCAPING When looking at lowering a development’s water

HOMEFRONT GREEN ESTATE RULES Before investing in an estate, first establish its sustainability profile in a high risk environment, says Louise Martin of Estate Living. Though it has become common for new estates to follow green practices, established ones such as Arabella and Helderberg Village Estate in the Western Cape are now retrofitting their buildings by installing water treatment devices, for instance. What’s more, their homeowners association rules are reviewed regularly to keep up to date with new sustainable developments.

“We aim for designs that introduce the maximum amount of natural light to reduce the requirement for artificial lighting” John Chapman, director, Rabie Property Group

Kikuyu, Balwin Properties’ new development in Waterfall, Midrand footprint, the role of landscaping cannot be ignored. This goes beyond planting water-wise vegetation. Val de Vie in Paarl, for instance, has implemented innovative irrigation technology interventions that have decreased its Pearl Valley Golf Course’s irrigation footprint by a third over the past summer season.

The type of paving can also help residential developments be more sustainable. At Century City in Cape Town, Rabie Property Group is doing its bit by, where possible, having storm water running into the ground instead of draining off hard surfaces and roads.

“This assists with the natural regeneration of the water table within developments,” says Rabie’s director, John Chapman.

“By designing your development’s landscape in a certain way, you can also capture storm water in retention ponds,” adds Talbot. “Municipalities are encouraging civil engineers and developers to build such ponds in their developments’s landscaping to retain and store excess rainwater, which can be used for irrigation or even to flush toilets.”

WASTE NOTHING Another trend among developers is to reduce their projects’ waste output.

According to Talbot, the construction phase of property developments tends to generate a lot of waste that often goes to landfill. Fortunately this is starting to change, thanks to new legislation.

“The City of Cape Town has implemented rules that prescribe that waste management plans have to be submitted along with building plans. This is pushing contractors to recycle more waste rather than send it to landfill,” Talbot says.

Innovative building techniques that produce less waste than when using bricks and mortar are also gaining traction. Crosslaminated timber (CLT) construction, for example, involves the use of large prefabricated sustainably produced wooden panels to build walls, roofs and floors. According to Talbot, the environmental impact of CLT is lower than that of many conventional building methods. “Bricks, for instance, need to be fired, which uses a lot of energy. In Europe CLT is even used to build multistorey buildings.”

MORE THAN SOLAR Energy efficiency has always been a key driver of the green building sector in SA – one that more property developers are now taking to the next level. Solar panels alone no longer suffice.

“From an energyefficiency perspective, we focus on LED lighting, better façade design, double glazing and other efficiency measures,” says Amdec investment manager Antonie Jordaan.

In addition, Rabie Property Group accommodates solar panels where possible and installs heat pumps instead of geysers across its projects.

“We aim for designs that introduce the maximum amount of natural light to reduce the requirement for artificial lighting,” says Chapman. “This, along with energy-efficient glazing, reduces heat gain in summer and heat loss in winter, thereby decreasing a building’s electricity usage and lowering its carbon footprint.”

While there is a price tag attached to these solutions, the investment certainly is worth it, Chapman adds.

“Harvesting energy from the sun and using long-life LEDs reduce the running

Blok’s EIGHTONN apartments in Sea Point, Cape Town costs over the long-term life cycle of a development.”

RETROFITTING As the number of green developments grows, more homeowners retrofit their existing homes. This also applies to developers like Century Property Developments, which constantly re-evaluates its plans from a sustainability point of view. “We have built a solar plant at our Carlswald and Crowthorne luxury apartment complexes in Midrand,” Hofmeyr says.

“Both complexes feature new water-management technology that allows us to monitor the amount of water used. We have installed rainwater catchment systems too.”

Talbot confirms the popularity of retrofitting, adding that it is not limited to residential projects. “Big funds like Growthpoint are retrofitting their existing spaces with green building technologies and having them rated.”

TOP GREEN RESIDENTIAL DEVELOPMENTS Steyn City in Midrand has used energysaving resources in all its buildings from the outset, and thousands of indigenous trees were planted across the sprawling estate filled with birdlife and small wild animals.

Steyn City’s 3,000m2 clubhouse with its grass roofs and thriving plant life has minimal environmental impact.

By involving the local Diepsloot and Cosmo City communities in the construction of the clubhouse, the estate also provided local employment.

Balwin Properties is well known for its environmentally conscious building practices, from the use of ecofriendly appliances to sustainable solarsupplemented electricity.

Its Kikuyu and The Whisken developments are some of the first in SA to bring more economical and cleaner energy to residents through the introduction of solar energy. CEO Steve Brookes says it is a concept they are looking to roll out in future developments.

MD Jacques van Embden says: “This is added to the already efficient glazing, water heating and smart energy products and appliances we always include as fundamentals of a good building and home, ensuring we are working harder to create more sustainable buildings and living habits.”

“These will be among the first Edge-certified projects to include solar PV technology, offering energy-saving benefits to residents and setting an exciting trend in green homes,” says GBCSA managing executive Grahame Cruickshanks.

Tongaat Hulett will bring a new community to life with the soon-tobe-built Ntshongweni Urban Development.

This mixed-use precinct is expected to set into motion socioeconomic transformation for the N3 highway area and surrounds.

Environmentally sustainable, peoplecentric and strategically located, the innovative design will support the site’s ecology and provide for needs of the people who use it.

Blok’s new development in Sea Point, EIGHTONN, includes a rainwater harvesting and borehole connection and filtration systems that run into water tanks kept in the basement of the building.

HOMEFRONT

Women v men TREND

WHO IS BUYING? - Single female buyers have increased, with 71,727 homes purchased by them in 2018.

That is 10,000 more homes than those bought by their male counterparts.

- Male buyers purchased 62,032 homes over the past year.

- On average, men buy properties with a higher value than those bought by women.

- Of the nearly 8-million registered properties analysed in SA, 83% are residential. These 6.7-million residential properties hold a value of R5.4-trillion. Gauteng residential properties constitute R2-trillion of that total.

There is a steady change in buying patterns of residential homes, and females are leading the charge

- Of SA’s residential total, 67% are freehold properties, 18.3% are estates and 14.2% are sectional title homes.

M

ore women are buying homes than men in SA. Fact. “Data clearly shows that female buyers have steadily increased since 2016, noticeably overtaking the male and married-couple markets. It is a trend indicative of female buyers becoming more economically empowered,” says Lightstone Property lead analyst Cindy Bezuidenhout.

“Underpinned by a growing awareness of the benefits of property investment, the rise of female buyers is part of the trend towards more single-person households — a global tendency along with the rise of female-headed households,” says Pam Golding Properties senior research analyst Sandra Gordon.

SINGLE It may also reflect how many people are delaying marriage or not marrying at

WORDS: STAFF WRITER ILLUSTRATIONS: SHUTTERSTOCK

all. “In a way it is a normalisation of the market,” says Gordon. “Women account for 50% of the population in SA and so could reasonably be expected to account for half of homes purchased by single people.”

BOND APPROVAL Gerhard Kotzé, MD of estate agency RealNet, says Lightstone Property’s figures confirm that single female buyers have increased. “But it also shows that the average purchase price paid by these single women was just more than R700,000, compared with about R900,000 paid by single men and R1.1m paid by married couples.”

Currently a household income of about R33,000 qualifies for a R1m bond, assuming that the applicant has discretionary income after paying other expenses to pay a monthly instalment of about R9,900. On the current base home

loan interest rate of 10.25%, Kotzé says a woman would only afford a bond of R733,000 on a monthly salary of R24,000.

INCOME INEQUALITY According to Lightstone Property, although single females lead in terms of volume ownership across SA, single females fall into the lowest average sales price. “One could deduce that the gap between male and female average sale price is attributed to the income inequality between the two groups,” says Bezuidenhout.

Kotzé says chances are single women would buy even more homes and increase the size or price of those they buy, were it not for disparity in SA. “The gender pay gap is having a very clear effect on what women can afford and limiting them to smaller and less expensive properties.”

Volume of sales and average purchase price over recent years 80,000

R1.4m

70,000

R1 .2m

R1m

50,000 R800,000 40,000 R600,000 30,000 R400,000

20,000

R200,000

10,000

R0

0 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019

Single female

Source: Lightstone Property

Single male Volume of sales

Married couple Average sale price

Multiple buyers

Average sale price

Volume of sales

60,000

HOMEFRONT REPORT BACK

Lessons for SA’s construction and property developer industry

A recent conference motivated for a process change that could ease property development blockages, throw a lifeline to the building industry and stimulate employment WORDS: STAFF REPORTER PHOTOS: SAM FOURIE AND SHUTTERSTOCK

C

ostly delays caused by red tape approval processes at local municipalities are halting SA’s mixed-use and residential property development and harming a struggling construction sector. The knockon effect is hampered economic growth.

At last month’s Western Cape Property Development Forum annual conference in Cape Town, feedback from the banking community, developers, architects and urban planners was that if residential or mixed-use projects are not cancelled outright due to approvalrelated delays, the costs are passed on to property investors’ pockets. The industry wants to see measurable targets.

UCT’s Department of Construction Economics and Management senior lecturer Rob McGaffin said it now takes an average of four to eight years to complete a development in Cape Town – double the time it took a few years ago. McGaffin and industry colleagues are part of UCT’s Nedbank Urban Real Estate Research Unit (Ureru), which is working on a property development

process model to identify blockages curtailing the development of private and public infrastructure and the construction industry.

VIABILITY “A two-year delay creates a massive increase in the gap between capital cost and income generated by that project, causing a decline in return on investment for the parties concerned,” said McGaffin. This affects project viability, where property development then requires additional capital injection.

Developers are also hit by market factors and may have to wait out low property cycle swings until rentals can increase again. “When local returns are not feasible, more South African property investments are being taken offshore. This is not good for regenerating the local economy,” he said.

LOSSES Ureru research shows that a 30-day delay to a 1,000m2 development results in a R530,000 total income loss or a loss of more than R17,000 a day.

Developmental delays are common throughout SA. Western Cape Property Development Forum

chairperson Deon van Zyl said companies on the ground working with property developers reported that it typically takes between 54 to 90 weeks to award a building tender. This against a backdrop of “new property sales rates dropping and second-hand residential sales slowing considerably” and also of “commercial rental pushbacks”.

Van Zyl said that property and the real estate industry fall within the largest sector contributing to the local economy, namely finance and business services. So it is “only a matter of time” before these figures register the knock-on effect of the industry crisis.

BUREAUCRACY Western Cape Government provincial minister of economic opportunities Beverley Schäfer acknowledged that the amount of red tape and bureaucracy faced by businesses and investors dealing with government is a major constraint restricting business development.

“I know the property sector continues to encounter a number of red tape issues that cause

unnecessary delays in planning and construction,” she said. She explained that the Western Cape Government introduced a Red Tape Reduction Unit to track where the bureaucratic blockages lie after “research showed that red tape cost SA R79bn in 2004, the equivalent to 6.5% of GDP and 16.5% of the total wage bill”.

Schäfer said the construction sector needs support as it contributes more than R23bn to provincial GDP in the Western Cape, employing 220,000 people. “Recent Stats SA data for building plans passed in the province shows there are still obstructions. The number and value of building plans passed in the Western Cape in January and February this year showed a decline – the total of building plans passed was 20% lower than last year.”

She acknowledged that some of the decline is a result of slow processes and a lack of speedy, efficient decision making by government.

BUILDING On a national level, Absa Home Loans property

HOMEFRONT SA CONSTRUCTION BAROMETER PwC estimates that every R1m spent on construction activity in SA translates into an additional R220,000 in GDP and the creation of nearly three new jobs.

In its 2019 sub-Saharan Africa construction growth outlook, Fitch Solutions predicts that the country’s construction industry will emerge from recession in 2019, but show growth of only 2.4%.

The City of Johannesburg stated in April 2019 that it has an infrastructure backlog of R170bn.

bankruptcy protection, making it the fifth local building company to enter business rescue in less than a year.

Construction company Basil Read was placed in voluntary business rescue in June 2018.

PwC associate director of capital projects and infrastructure Greg Ker-Fox told Civils Online that major players in the South African construction industry, with the exception of WBHO, are in a weaker position than a decade ago.

Bloomberg reported that Group Five’s stock was suspended in March 2019 after the company filed for

A construction site in De Waterkant, Cape Town

“Research showed that red tape cost SA R79bn in 2004, the equivalent to 6.5% of GDP and 16.5% of the total wage bill” Beverley Schäfer, Western Cape Government provincial minister of economic opportunities

analyst Jacques du Toit said Stats SA data for the country’s private-sectorfinanced residential building activity in Q1 2019 showed the number of building plans approved for new housing was down by 19.3% year on year in the three months to March. Yet the volume of new housing units completed for this period was up 47.9% year on year.

In 2018, the Western Cape led the country in terms of building plans approved per square metre, Schäfer said, with R130bn in new developments in the province since 2009. Van Zyl pointed out that statistics from the City of Cape Town show building occupancy certificates dropped 49% year on year from 2017 to 2018. Square metres of building work completed dropped by 60% for the same period.

Rabie Property Group director John Chapman said the company went from typically selling 25 to 30 homes a month to only five or six a month during 2018.

“In Cape Town the taps didn’t run dry but the market dried up,” he said, adding that a downward sales trend last year affected not only the Western Cape but also developers throughout SA. He said blockages in approval processes of new projects worsened the situation. As an example, he offered Rabie’s plans to build a R1.5bn City Park urban mixed-use building development in Cape Town, where the challenge became “trying to control costs because the timing shifted out”. Rabie cancelled the project after numerous approval delays.

Mitchell Du Plessis Associates was involved in the building of the Cape

Town Stadium, the V&A Waterfront and the MyCiTi integrated rapid transit system. The company initiates and takes projects to completion. “The red tape is incredible,” said project manager Jedd Grimbeek.

“Our frustration is in the initiation phase, in getting the green light to proceed.

That timeline is too long.

The risk is being transferred from government and the financial institutions to the developers, consultants and contractors. [We need] real change and not just talk.”

McGaffin said delays hurt the big players in construction and property development a lot, but have a greater impact on smaller entities who don’t have the resources to ride them out.

“We’re undermining the entry of new players into this market,” he said. “We need many players to keep it competitive.”

HOMEFRONT URBAN

Rebuilding cities TUHF founding member Nano Makwela talks urban regeneration, rentals and the human side of financing small property entrepreneurs WORDS: KIM MAXWELL :: PHOTOS: SUPPLIED

W

e often hear that urban regeneration is a South African solution for vacant office buildings in cities and, similarly, that entrepreneurship is the answer to a stagnant economy. An organisation called TUHF has matched these two elements together.

TUHF is a national on-lending financial services provider that

Nano Makwela

Hollywood Heights in Johannesburg.

Solly Ramalamula recognised an opportunity in Hollywood Centre at the corner of Nugget and Helen Joseph streets in downtown Johannesburg in 2014. Originally the site of a clothing manufacturer, the building was run down and had frequent break-ins.

Ramalamula started working with TUHF on a conversion in 2015. The total cost was R22m. Today, the building has 101 apartments, a mixture of bachelor, single and twobedroom units. Ramalamula owns and runs Take Shape Property Management, which assists property entrepreneurs in managing their properties.

gives financial access to those applicants who demonstrate the potential and integrity to take on the purchase, conversion or refurbishment of inner city buildings.

In its 16 years of operation, TUHF has financed more than R4bn in inner city residential rental property. Its current loan book includes more than 30,000 residential units, now valued at R3.1bn. TUHF also assists

hundreds of successful property entrepreneurs in operating sustainable residential rental businesses, providing affordable, decent inner city accommodation.

The TUHF Johannesburg head office, where the bulk of its property portfolio operates, employs about 45 people in financial, legal and operations aspects. The organisasion has branches in Durban, Cape Town, Bloemfontein, Port Elizabeth and East London.

Questions to founding TUHF member and senior portfolio manager Nano Makwela.

Explain your model based on providing housing and rental stock. People move from rural areas to, say, Johannesburg. They want a place to stay, their own space. So we fund clients to buy properties and refurbish them for rental purposes.

During the early days TUHF offered bridging finance to tenants who formed a cooperative to buy properties in Johannesburg’s inner city. Many decided to take ownership of these buildings as they were unhappy with the conditions of buildings they were living in as landlords managed them poorly.

Back then, a housing subsidy was available through the Department of Housing, but turnaround times on applications were an issue, which is where TUHF stepped in.

At the time, the TUHF bridging finance did not address urban regeneration, which is why the TUHF business model had to change.

Today, TUHF is committed to providing access to finance for small and medium enterprises (SMEs), creating spatial and economic integration, urban regeneration and fiscal impact in the areas that we operate in.

HOMEFRONT How does it change cities for the good?

TUHF enhances the vitality of our urban neighbourhoods through investing in urban regeneration — transforming derelict buildings into asset classes that provide people with a better way of life. Creating socioeconomic activities involves developing places where people want to live, work and play. Through proactive participation in the urban areas we operate in, we support jobs, skills development and true transformation — changing the face of ownership and economic growth.

We are the only commercial property financing company in SA to provide empowerment equity finance to previously disadvantaged individuals.

Our Intuthuko Equity Fund has enabled us to make a meaningful contribution towards urban land reform.

Explain TUHF’s focus on massive small.

Urban densification requires the scale of hundreds of thousands of units to be derived from small projects, on a mixed-use and mixedincome basis. This is what we refer to as massive small. We empower smaller entrepreneurs to be catalysts of this urban development.

As an SME financier, our mandate is to finance property entrepreneurs

to provide affordable and low-income housing; transforming property ownership and therefore actively contributing to urban land reform. We aim to create efficient cities through urban densification that help generate economic activity in urban areas.

How does an SME qualify for financing?

We describe ourselves as a character-based lending institution. An entrepreneur likely to meet our lending criteria has the following characteristics: openminded and willing to take advice; self-disciplined to manage cash flows the property generates; have integrity in terms of property management and in ensuring the building is compliant (by law) and be committed to being an entrepreneur. All TUHF clients are expected to maintain their buildings according to our standards, keeping them compliant, clean and sustainable.

In addition, we provide training and mentorship through the TUHF Entrepreneurship Property Programme available to our clients. It promotes knowledge expansion in property, the industry and the exchange of ideas between entrepreneurs. It is facilitated in partnership with the University of Cape Town.

Where does the funding originate?

Our main business involves raising finance from capital markets for our clients, the property entrepreneurs.

We raise these funds through our shareholders.

Our primary shareholder is Futuregrowth. Others include the National Housing Finance Corporation and asset managers such as Sanlam, Stanlib, the Public Investment Corporation and Mergence. TUHF normally raises about 80% of the finance for each project.

Why is the modern era of demolish and rebuild not sustainable?

New builds are capital intensive as there are a number of paid professionals working on a project at any given time, from start to finish — architects, engineers, construction staff and project managers. New builds are generally unaffordable for entry-level clients; these would be considered more appealing for established property entrepreneurs with deep pockets. Our purpose is to create an enabling environment for emerging property entrepreneurs.

Property fit is a very important part of the criteria in our lending process, as it not only deals with urban development but effective

urban management postproject completion. We ensure that the nature and size of the project an entrepreneur invests in is matched to the client’s talents and experience.

Where can your new development or redevelopment projects be found?

We have branches operating in every major city, including the Western Cape, Free State, Eastern Cape and KwaZulu-Natal.

Specific Gauteng neighbourhoods where TUHF has helped finance a number of projects include Bertrams, Hillbrow, Joubert Park, Rosettenville, Yeoville, Springs and Vanderbijlpark CBD. Over a number of years, we were involved in some developments within the Maboneng Precinct.

We have funded projects in Cape Town in Observatory, Salt River, Woodstock and Brooklyn with commercial success and development impact core drivers.

Offices are moving from urban centres.

Is redeveloping “downtown” relevant in 2019? Yes. TUHF saw a gap 16 years ago in inner city Johannesburg for redeveloping “downtown” freehold and sectional title buildings as accommodation via on-

“There is still high demand for rental stock in urban areas due to urban density — TUHF has a lifelong job to try to meet this demand”

lending financial services.

There is still high demand for rental stock in urban areas due to urban density — TUHF has a lifelong job to try to meet this demand.

Commercial banks and lending institutions don’t understand development finance like we do. This is why, through our products and services, we have remained relevant in the market.

At TUHF we are passionate about spotting and unearthing potential.

In declining areas, we see thriving property markets. In run-down buildings, we see the potential for families to live in a safe and secure environment. In people, we see the entrepreneurial capability to create well-run businesses, providing employment and multiplying our economy. * Nano Makwela holds an MSc in Development Studies from Leeds University in the UK.

TUHF IN NUMBERS 33,923

— residential units financed in five provinces since TUHF started.

2,796

— permanent and shortterm jobs created in 2018, mostly during construction of funded projects.

598 — inner city buildings registered with local councils and paying rates and taxes.

R3.1bn — amount invested in 94 suburbs across all eight metros.

S Mohanlall Mansions in Durban CBD. To meet demand for residential and retail space in the heart of Durban’s CBD, the owners of S Mohanlall Mansions sought financing for building renovation and established a partnership with TUHF in 2014. To date, the owners have expanded the building’s retail offering from two to eight ground-floor units. Spaces were kept small to keep rentals affordable, providing opportunities for community business success.

The residential apartments are self-contained bachelor units from 12m² to 30m². The primary tenant demographic is working individuals plus a small percentage of students, owing to the property’s proximity to Durban University of Technology and the University of KwaZulu-Natal’s Howard College Campus.

HOMEFRONT PROPERTY NEWS

Africa’s southernmost Protea Hotel by Marriott

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ape Town boutique developer Devco Group recently signed an agreement with Marriott International to open a Protea Hotels by Marriott property as part of its mixeduse The Admiral Beach Hotel & Apartments development in Struisbaai. Located on the southernmost tip of Africa, the Protea Hotel by Marriott Cape Agulhas will open in

2023. The Admiral Beach project will consist of the hotel; 85 apartments, the first of which are now on sale (pictured right); and a business/commercial phase.

Protea Hotel by Marriott Cape Agulhas will comprise 160 rooms, a speciality restaurant, indoor and outdoor bars, a sheltered deck and a swimming pool, plus fitness facilities.

It will be situated on the beachfront of the 14km stretch of coastline.

“We are proud to be partnering with this international brand,” says Devco group director Deon Winterbach.

“We look forward to welcoming travellers to the southernmost hotel in Africa.” Construction commences in 2020.

New Steyn City development Ramaphoria to boost

residential real estate?

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S

teyn City has expanded its apartment living offering with the launch of 104 on Creek.

Located on the banks of the development’s own creek and within walking distance of a fishing dam, it offers peace and tranquillity close to Johannesburg.

This new development, which has views of the creek and the city skyline beyond, is designed to ensure privacy and comfort.

The complex consists of two- and three-bedroom homes, all with doubleglazed windows, air conditioning, Siemens appliances and superior

fittings. Priced from R2.6m and measuring between 96m² and 133m², the units include undercover parking and residents will enjoy the use of a resort rim-flow pool and a patisserie on site.

The show apartment of 104 on Creek will be ready for viewing from mid-June.

Sales boom at Sitari in Western Cape

W

ith sales of R1.3bn since its launched, awardwinning Sitari Country Estate in Somerset West is now one of the fastestselling large-scale estates in the Western Cape.

“Since its inception in August 2014 until the end of

April 2019, a period of four years and eight months, sales at Sitari Country Estate have totalled R1.3bn,” says Claudius Combrinck, executive director of Uvest Property Sales, the onsite real estate agency.

Although many developers were impacted

by slower buyer uptake in 2018, Sitari’s sales bucked that trend.

“This was our secondbest year in terms of sales by rand value since inception,” says Combrinck.

“Sales at the estate averaged at just less than 14 properties a month from January 1 to December 31 2018, across plots, homes and apartments.”

He says 2019 sales have been consistent too. Despite the fact that it is an election year, the company recorded nearly R27m in sales during April.

Combrinck attributes the estate’s success to having market-aligned product offerings, with homes priced from less than R3m and apartments ranging from R1.5m to R2.5m.

esidential property sales are on the up if market movements in May are any indication, according to BetterBond CEO Rudi Botha.

Sentiment often plays a bigger role than interest rate fluctuations and Botha believes “Ramaphoria” has returned to local real estate.

“This is evident from the huge increase (22%) in the number of offers to purchase and home loan applications made in the first two weeks of May, compared with the first

two weeks of May last year,” he says.

An upturn is likely since the successful conclusion of the elections, Botha says, as there is confidence that President Cyril Ramaphosa will deliver on promises to attract large-scale foreign investment, revive a sagging economy and facilitate jobs and small business creation.

“Many prospective buyers and investors were waiting to see whether the elections would go ahead peacefully and whether Ramaphosa would remain as president.”

Botha says local banks appear to share the view that the property market is set for a strong upturn and concomitant increase in home values, as they are competing fiercely for new home loan business.

“In recent months there has also been an increase in 100% home loans being granted to borrowers with good credit histories, low debt loads and reliable employment,” he adds.

BetterBond is one of the leading bond originators in SA.

Canopy by Hilton makes R550m African debut

H

ilton has signed a management agreement with Growthpoint Properties to open its debut lifestyle Canopy by Hilton brand in Africa. The Canopy by Hilton Cape Town Longkloof hotel should welcome 150 guests when it opens in 2021.

Located a stone’s throw from the city’s historical epicentre, the hotel will bring to life the heritage of the 112-year-old Longkloof

Studios site. The project forms part of a precinct redevelopment by SA’s largest Reit, Growthpoint, and represents a R550m investment in the city.

“Canopy by Hilton was created to redefine the lifestyle hotel space for travellers who want an upscale hotel to help introduce them to desirable neighbourhoods around the world,” says Canopy

by Hilton global head

Gary Steffen. “Every detail in the design and facilities is created with that ethos in mind. Our Longkloof property will be no exception, capturing the dynamic vibe of the precinct and its reputation as a trendy hangout for Cape Town urbanites.”

DHK Architects will redevelop the building.

Canopy by Hilton will be Hilton’s third hotel brand in Cape Town.

HOMEFRONT LEGAL WISE

Short and sweet SA is in the process of regulating the short-term rental sector of the hospitality industry in response to cries from so-called regulated hotels and B&Bs to ‘level the playing field’ WORDS: ANNE SCHAUFFER :: PHOTOS: SHUTTERSTOCK

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ecently Tshifhiwa Tshivhengwa, CEO of the Federated Hospitality Association of SA, said that Airbnb had created “unfair competition”, because informal accommodation providers “were not abiding by any laws or regulations”.

In response to similar views from other key sources, the government published the Tourism Amendment Bill, which stipulates that short-term home rentals will fall under the Tourism Act. Bottom line, the Department of Tourism has bowed to pressure from the regulated hospitality industry to control Airbnb, and the minister will lay down thresholds for Airbnb in SA – it may include limits on the number of nights guests can stay, maximum annual income allowable before an Airbnb establishment had to convert to a business, whether it was compulsory to be in the house during rentals, minimum security features or determining zones where Airbnb rentals are allowed.

Another issue that concerns local government is how to differentiate between residential municipal property rates and business rates. Sars, too, would have to comment on the tax implications of the bill with regard to additional private income earned from Airbnb.

This highly successful sector is seen as a disruptor, much like Uber, and there is strong debate about why it should be regulated to appease businesses that are taking strain because of Airbnb.

The impressive income figures from Airbnb – money generated directly, the spin-off in added tourism and the related employment figures plus the fact that these are small businesses (precisely what SA needs) – mean that regulations are not welcomed by the sector.

LEGAL STANDPOINT Airbnb.com’s terms of service include a provision

that requires hosts to warrant that a listing they post for or a guest’s stay at an accommodation “will comply with all applicable laws (such as zoning laws), tax requirements and other rules and regulations (including having all required permits, licences and registrations); and will not breach any agreements you have entered into with any third parties, such as a homeowners’ association or condominium or other agreements”.

MUNICIPAL BYLAWS There is no law prohibiting short-term rentals in general, but each municipality has the power to create and enforce bylaws and zoning regulations around shortterm rentals. Cape Town, for example, has developed its own set. Property owners need to check whether local bylaws exist around shortterm rentals and, if so, how to comply.

The question is, what constitutes a business? As more and more one- or two-person concerns cut costs by working from home, it’s a blurry line that is largely ignored. Subscribing to online platforms such as Airbnb is becoming popular, as South Africans feel the pinch and want to supplement their funds.

LETTING IN COMPLEXES AND ESTATES If you rent a property, check whether your lease allows subletting. If you don’t and you’re discovered to have transgressed, you and your subtenant can be evicted.

Most sectional title body corporates and homeowners’ associations have rules about rentals, according to Maria Davey of Meumann White Attorneys.

“Familiarise yourself with the rules of the scheme or the constitution of the association, as many prohibit short-term rentals and require the trustees

or directors to consent to leases,” Davey says. “Neither the Sectional Titles Act nor the Sectional Titles Schemes Management Act address short-term letting and it is, therefore, permitted, but they do allow the trustees – as resolved by the members of the body corporate – to make or amend conduct rules, which could include a restriction or prohibition on short-term renting or the listing of units on a platform such as Airbnb if such a prohibition is not already in place.

“It’s imperative that you, the owner, include a copy of the conduct rules along with any other document the tenant is required to sign. You will after all be liable to the body corporate or homeowners’ association for your tenant’s misdemeanours. Similarly, a tenant who sublets is liable to the owner, so it’s imperative that the tenant makes all rules applicable to his subtenant.”

“Include a copy of the conduct rules along with any other document the tenant is required to sign” Maria Davey, Meumann White Attorneys

“I recently purchased two apartments and have tenants at R15 000 per month. I am, very pleased, it is a great investment.”

Steve Brookes, Balwin CEO

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