Business Day HomeFront 22 September 2017

HOMEFRONT 13 OCTOBER 2016 WWW.BDLIVE.CO.ZA 22 SEPTEMBER 2017 WWW.BUSINESSLIVE.CO.ZA

MUST READ

From hobby to bespoke business PAGE 2

Right way to go off the grid PAGE 4

Container living hits Maboneng PAGE 12

The Sheds, Waterfall Estates, Midrand

Developments to rent in a flexible economy Whether it is because their clients are not qualifying to buy or

Summit stresses African potential just don’t want to, developers are responding to a growing need PAGE 16

by expanding into rental units

For more information please contact: our Rosebank Office on 011 268 1637/1 or Melrose Arch Office on 011 684 2995/6 pamgolding.co.za/property-developments

PAGE 8

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HOMEFRONT DESIGN

Design flair and retail grit Cape Town’s Monya Eastman has put her corporate skills into a thriving furniture design business now headed for Gauteng WORDS: HILARY PRENDINI TOFFOLI :: PICTURES: SUPPLIED

M

onya Eastman started with a philosophy degree and ended up with a bespoke furniture business. For seven years a buyer for the Foschini Group, Eastman couldn’t find the simple classic furniture pieces she wanted and ended up designing them herself.

She and her husband Jeremy, a risk analyst with iJET, were renovating their new Green Point home when she took the plunge and designed, in solid wood rather than imported veneers, the pieces she desired. Eastman had them made in Woodstock.

The response from family and friends was so enthusiastic she decided it was time to resign from her job and turn a hobby into a business. “Hobby” in Afrikaans is “stokperd”.

So she named her new venture Stokperd, and went, as she puts it, “riding off on my stick horse into the wild blue yonder”.

WINNER

The Lark coffee table

That was five years ago.

Her stick horse proved a turbocharged winner and soon she was visiting clients’ houses, measuring spaces and creating whatever the home owners wanted, from kitchen and coffee tables to shelves, beds, headboards and lights — all her own designs, including the lights.

Eastman’s existing range — by then on a website — was also sought after,

especially since people could have items custommade in different woods or sizes. Soon she brought in powder-coated metal items. Everything was outsourced. She designed on paper and took her sketches to her suppliers.

Early on Eastman began providing furniture designs and décor suggestions for Ideas Cartel, one of Cape Town’s collaborative workspaces, a networking environment for freelancers. The first was in Waterkant Street and the second in Loop Street, a spacious venue skilfully combining vintage and contemporary, which she uses as an inspiring office space though she spends more time with what she calls “my wood guys and my metal guys”.

TRAINING During her time at the Foschini Group Eastman covered diverse retail ground in fashion before moving to @home. It was excellent training for a wannabe entrepreneurial dynamo from Welkom whose tertiary education was not commerce, but a philosophy honours degree from Rhodes University.

“With @home I gained insights into the furniture industry and spent time with suppliers learning about manufacturing, negotiation and range building which are useful business skills. But in big corporations there’s too much power play and ladder climbing for me.

HOMEFRONT MONYA EASTMAN ON BUILDING A BRAND The office as we know it is being reimagined.

Are work spaces now your main focus?

Not exclusively, though from a business perspective larger jobs make more sense financially. Office spaces have changed so much.

Even corporates, especially in the commercial field, are spending more on making their offices look good. They realise their employees must work in a space conducive to productivity. They must have attractive surroundings and good light, for example, instead of your standard overhead interrogation light.

“Office spaces have changed so much” Monya Eastman, Stokperd

“Overseeing manufacture was not my thing either. What I dreamed about was making beautiful things myself.”

How significant has social media been in building your brand?

Instagram has been a massive help. It’s an instant thing. When I put a pic on Instagram of a piece I was working on, even before it was finished I got messages saying “I want it. How much is it?”

On our Facebook page we

GAUTENG Her eyes are now fixed on Gauteng. Eastman has already supplied the big branding and signage agency Seek and during the weekend of October 13-15 will show her lights, bar stools and drinks trolleys at the Sanlam Handmade Contemporary Fair on Hyde Park Corner Rooftop. Having sorted out the tricky stuff she calls “the packaging issues” with her Cape Town suppliers, she will relocate her business and home next year.

New York is also in the pipeline for this driven designer. She has been

Unit G4, Old Castle Brewery, 6 Beach Road, Woodstock, 7925 021 447 7130

You always give products on your website unusual names.

Who is the inspiration?

I named the lights in our lighting range after women who lit up their worlds, like Thuli Madonsela who shines bright, inside and out. Women such as Boudicca, Coco Chanel, Mirabai and Sappho. My first order when I started Stokperd was a dining table for my sister so I called it the Sister Table.

My Yoko rosewood desk is the most famous unknown desk in the world.

approached to collaborate on the interior design of an office space in Soho.

Although Pinterest is a big source of inspiration for Eastman, she is not a slave to trends. “I don’t want things to date. I like design that’s functional and classic, and will still be relevant when the latest fad has come and gone.”

The Thuli light above a desk. Top: the Mirabai light PRODUCED BY BLACKSTAR PROPERTY PUBLISHING

did a Father’s Day contest to win one of our Trolley Dollys. The response was huge. People had to tell us why Pops is Tops and what his favourite drink was. You have to be creative when you have no money. Talented design blogger Diana Moss has a large website and she gave us a lot of social media exposure, so I made her a cabinet named Peggy after the buttoned-up copywriter in Mad Men (portrayed by actress Elisabeth Moss).

Mr Blonde barstools A

EDITORIAL TEAM Editor: Kim Maxwell Creative Director: Mark Peddle Designer: Samantha Durand

PUBLICATION

Copy Editor: Michael van Olst Content Business Manager: Catherine Davis Production: Joanne Le Roux

ADVERTISING SALES Michèle Jones Susan Erwee

michele.jones@thecreativegroup.info susan.erwee@thecreativegroup.info

084 246 8105 083 556 9848

HOMEFRONT WATER AND ENERGY

Going off the grid Faced with shortages and tariff increases, more homeowners are taking steps to reduce their reliance on municipal infrastructure WORDS: MIRIAM MANNAK :: PHOTOS: SUPPLIED

I

n terms of electricity and water security, South Africans are in for a bumpy ride. The interest in lowering dependence on municipal energy and water systems, and even going off the grid entirely, is growing.

“What is increasing in popularity is complementing one’s water and energy consumption with self-generation,” says André Harms, founder of sustainability consulting firm Ecolution Consulting.

He says this interest fluctuates between water and energy. “Electricity spiked with load shedding and price hikes. Water is spiking with shortages and restrictions.”

With energy, the most popular are solar geysers and solar panels, either with or without battery storage, and uninterrupted power systems for critical circuits. In terms of water,

CONVERSION BREAKDOWN Karien Gerber and Phillip van der Merwe from Pretoria East have taken their suburban farm largely off the municipal water and energy grids. Features include a 1kW solar panel system with battery storage to run their fridge, freezer, TV and laptops and a 1.5kW solar system comprising seven panels to power their home during the day.

“We also did a solar conversion of our geyser.

The advantage is that we can still heat our water electrically should temperatures be too low,” says Gerber. “We replaced the fridge, freezer and washing machine with energy-efficient AAA-rated appliances.”

Rainwater is collected in three 8,500l tanks, topped up with water from a solar-powered borehole.

“Grey water is used for irrigation,” Gerber says.

“We are exploring options to use rainwater from tanks for flushing toilets.”

Harms says: “This interest constitutes systems for the capturing, recycling and treating of grey water for irrigation or sanitary purposes.”

FIRST STEP Installing solar geysers, solar panels and grey water recycling systems should not be a homeowner’s first step towards more sustainable and off-grid living.

Nedbank’s 2017 Smart Living Guide, which offers households practical tips about living more sustainably, says consumers should first re-evaluate their consumption habits.

The guide advises ensuring that a home’s energy consumption is reduced as much as possible through behaviour change and efficiency interventions.

Group MD of One Energy Mark Willoughby agrees. A household’s

electricity efficiency drive should typically start with an energy audit.

“This will help you understand your usage patterns by showing you where you are using what electricity. Use this data to adjust your behaviour,” he says. “Pool pumps, for instance, use the most energy after geysers. Run it for one or two hours a day, or when you need it, instead of the entire day.”

LED LIGHTS The second step is fitting homes with LED lights, which can reduce energy used for lighting by up to 90%. “LEDs last 10 years, which is way longer than traditional energysaving lights, saving you money,” says Willoughby, whose company installs residential solar systems and geysers across the country.

Step three constitutes the gradual replacement of energy-guzzling

“Do your homework. There are many fly-by-nighters who take shortcuts. This can lead to burst geysers and other damage” Mark Willoughby, Group MD, One Energy

appliances such as fridges, washing machines and freezers with AAA-rated equipment. Says Harms: “Consumers should also contemplate replacing taps and shower heads with water-wise fittings.”

Once these steps are completed homeowners can invest in solar panels, solar geysers and water interventions such as grey water harvesting systems. While the equipment comes at a price, doing nothing could be considerably more expensive in the long run.

MOUNTING BILLS “Starting at an average electricity rate of R1.75 a kWh and factoring in a conservative escalation of 15% a year if Eskom gets its way, an average family in the East Rand could see their energy bill double in five years with no interventions,” Willoughby says. This household’s total cumulative electricity spend in five years with no interventions could amount to R494,000.

Fortunately, residential solar systems have

dropped in price due to increased demand.

“A 3kW solar system that cost R110,000 four years ago now costs R65,000,” Willoughby says. It requires R100,000-R130,000 to take a home 70% off the grid. Payback time is between four and five years. “You can do this in steps, though.”

The best tip in terms of installing solar panels, geysers and water recycling systems is to do one’s homework. Ask for a needs assessment and quotes from two or three credible suppliers, the Nedbank Smart Living Guide advises.

Willoughby says you should always go for reputable suppliers and always choose installations with a South African Bureau of Standards certification.

“There are many fly-by-nighters who take shortcuts. This can lead to burst geysers and other damage. You don’t want to lose R50,000 because you wanted to save R800.”

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HOMEFRONT

Steyn City, Midrand

LETTING BOOM

Developments to rent in a flexible economy Whether it is because their clients are not qualifying to buy or just don’t want to, developers are responding to a growing need by expanding into rental units WORDS: GEORGINA GUEDES :: PHOTOS: SUPPLIED

I

Sable Ridge, Buh-Rein Estate, northern suburbs, Cape Town

n August, Balwin Properties announced a strategic alliance with Transcend Residential Property Fund for the planned release of 8,900 quality affordable rental apartments across five developments in Gauteng over the next six years.

Balwin will market and secure the lease agreements for the apartments. Transcend will have the opportunity to buy the fully tenanted apartments from Balwin.

“The planned developments worth an estimated R6.4bn will see us deliver up to 8,900 premium apartments expertly designed to offer quality finishes not yet seen in the affordable rental market,” says Balwin Properties CEO Steve Brookes. “This new rental product supplements our existing build-to-sell business and we have put in place capacity to support

the additional volumes over and above the about 3,000 apartments which we already deliver each year.”

Green Park in Boksburg is the first development the alliance will roll out, consisting of about 1,200 apartments with solar energy solutions and high-speed fibre connectivity. Subject to necessary approvals, the first apartments should be delivered to Transcend in early 2018.

ALLIANCE “This alliance is perfectly in line with our strategy to focus on a defensive asset class that delivers affordable housing rentals to a heavily underserviced portion of the real estate market, outside conventional inner-city residential housing,” says Rob Wesselo, CEO of Transcend.

“Rentals are expected to range from R4,000 to

HOMEFRONT R8,000, which is currently the sweet spot for a growing middle class in SA’s urban centres.”

Developers around SA are increasingly turning to a rental model in part to service a portion of the market where affordability is crucial and bond approval (for purchasing) is perhaps harder to come by.

“A symptom of SA’s ailing economic growth is the impact on consumer affordability, especially for first-time home buyers looking to enter the residential property market,” says Rhys Dyer, CEO of bond originator ooba.

VOLUMES DROP First-time buyers are more sensitive to economic downturns, as reflected in ooba’s statistics. First-time home buyer volumes have dropped from 52% of total applications in Q2 2016 to 47% of total applications in Q2 2017.

Further, the first-time buyer average purchase price showed insignificant year-on-year growth of 2.9%, while quarter-onquarter growth from Q1 2017 to Q2 2017 showed negative growth of -0.9%.

“The decline in the first-time buyer market is worrying considering that for some time, the growth in the first-time buyer average purchase price outstripped the total average purchase price, while applications from first-time buyers consistently made up more than half of all applications received by ooba,” says Dyer.

PRIME LAND Century is a developer that incorporates rentals into its offerings. “We currently own prime land within the Gauteng region which cannot be replaced, so

rather than create stands and sell them and have to keep generating more and more of a single product, we have decided to rather create multi-use developments.

“This means that we can then rent the units or houses out as well as the commercial sections, and have annuity income as well as a fixed asset that gains capital,” says Jessica Hofmeyr, Century Property Development executive in charge of sales, rentals, marketing, operations and interiors.

She says that while Century has always offered rental options, its focus on this market has increased as more people prefer to rent. “We have found that individuals who rent for between R6,000 and R14,000 become lifetime renters. Individuals would rather be tenants than owners, mainly because of cost.”

PACKAGE

The Sheds, Waterfall Estates, Midrand

Century lets a threebedroom ground floor unit for R11,500, but that unit would cost R16,000 in bond repayments, plus a R2,000 levy and R850 in rates and taxes — and maintenance of the property would be the responsibility of the owner.

The developer also offers some value-added elements as part of their rental unit package. “We offer free Wi-Fi and Showmax, the gardens are maintained, and we have a monthly event that is paid for by us: outside movies, art and wine evenings, quiz nights and so on,” says Hofmeyr. Weekly art, dance or exercise classes are other options that would generally be included in the rental fee.

Hofmeyr says Century has had an “outstanding” response to the increased focus on rentals. “We have

Steyn City, Midrand

“Rentals are expected to range from R4,000 to R8,000, which is currently the sweet spot for a growing middle class in SA’s urban centres” Rob Wesselo, CEO, Transcend

Green Park rental apartments, Boksbug — to be built by Balwin

HOMEFRONT who have not bought from the developer, Scheffer says. Yet MSP’s agents still recommend purchase over rental wherever possible.

“We believe that property is an asset that truly stands the test of time and if possible, a potential buyer should always try to enter the market as soon as possible in order for this investment to start working for him or her,” says Scheffer.

POSITIVE RESPONSE

The Sheds, Waterfall Estates, Midrand rented out all of our stock and are looking forward to launching our new developments in Waterfall, Riversands and Linksfield.”

However, she says Century has some rentals of up to R55,000 a month, so it is clear rentals are an appealing proposition

for the higher end of the market as well.

RENTAL OPTION Multi Spectrum Property (MSP) is a developer well known for the BuhRein development in Kraaifontein, Cape Town.

It has recently expanded

into Gauteng. The company incorporates a rental option into its offering — the “multi spectrum” referring to sales, rentals, developments, commercial and finance.

“We are an aggressive developer with 50% to 60% of buyers being investors.

The need thus arose that we needed to add rentals as a service to keep a healthy relationship and offer a one-stop service to clients,” says MSP’s customer relations manager Werner Scheffer.

MSP also provides the rental service to clients

Rentals are driven by many reasons — including that people might be in an area for only a specified time for work requirements, or they might want to live in an estate or area before buying.

Scheffer says the response to rental offerings has been positive, especially due to high demand for rentals in Cape Town.

MSP rentals manages a portfolio of close to 600 properties. It offers rental and damage protection, which ensures landlords can be confident of receiving rental income, even if the tenant misses a payment.

At Steyn City, where about 800ha of land between Sandton, Fourways and Lanseria

is being developed into the largest parkland residence in SA, rentals are an important part of the business model. This is because homeowners who have purchased a stand often want to live in the lifestyle resort while their new home is built.

“It has been part of our business model from the outset, although we have seen a growing demand for rentals in the past year,” says Tammy Menton, executive head of sales, marketing and events at Steyn City.

As a result, Steyn City now has limited stock availability, Menton says.

Lessees have the option to buy later, especially if the stock is owned by Steyn City properties.

MARKET SHIFT Whatever the reasons for developers to introduce rental offerings and rental management solutions into their property mix, it is clear this is a growing trend, especially in the present economic climate. Developers with mixed offerings have responded to the shift in the market — and their clients are taking them up on it.

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HOMEFRONT HOUSING

Fresh push for container homes Maboneng residential project Drivelines will test the appetite for unconventional accommodation WORDS: SUNGULA NKABINDE AND SUPPLIED :: PHOTOS: SUPPLIED

CARGOTECTURE Capital Five Consulting interior designer Lauren Thompson produces Cargotectureassembled containers with optional completed interiors and off-grid technology. Homes, offices and businessin-a-box options are manufactured in Gauteng and Cape Town.

A Drivelines standard studio apartment is 30m²

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he collaboration between Propertuity and New York architect business LOT-EK to develop a large-scale residential project built from shipping containers will revive interest in the viability of out-of-the-box property developments.

The Drivelines project in Maboneng, Johannesburg, follows similar developments such as Citiq Property’s Umhlanga Junction Extension, a 75-bed student apartment block in Brixton, and Mill Junction student accommodation in Newtown, which combined used grain silos and shipping containers.

Citiq owns and manages container development 27 Boxes, a Melville retail shopping centre. Citiq is still involved in these

projects in an ownership capacity, but is not actively developing new container accommodation or retail units.

Propertuity and LOTEK believe that shipping container construction projects are particularly suited to SA, where demand for inexpensive building solutions has never been more pressing.

QUALITY SPACES Drivelines is aimed at young people looking for affordable housing, but who are discerning enough to want to live in quality spaces. The rentalonly units are compact but airy. Large windows provide good light. Each has its own outdoor area. The development is community-centric, aimed at encouraging residents to interact with one another using open walkways

An architect designs and constructs the hybrid containers which are combined with light steel frame structures and prefabricated elements.

“Banks usually won’t finance a container home but will finance a fixed property — ­ the steel frame element,” says Thompson. “I love the versatility of Cargotecture. Gone are the days where it was viewed as only lowcost housing or really expensive off-grid living.”

Costs depend on finishes used. However, there are potential time savings compared to bricks and mortar options in that the units are assembled off site. They can also be taken off grid and placed in rural or urban locations where services are lacking.

Projects include: A music school, scalable to grow with demand; A granny flat for an owner who plans to rent out her bricks and mortar home; An office for a client where municipal regulations prevent a fixed property; A business-in-a-box coffee shop pod; A hair salon that the client might franchise.

HOMEFRONT and a central green area.

Giuseppe Lignano, cofounder of LOT-EK, says the collaboration with Propertuity emerged from a shared vision that recognises the aesthetic potential of “the marginal, the raw, the abandoned”.

Says Lignano: “You need innovators and people who will strive for growth by trying new design ideas and, in the case of containers, are also interested in trying out a new technology.

“It takes a lot of convincing — which is what we’re doing around the world — and also takes time. But projects such as Drivelines are creating both public demand and confidence in these kinds of developments for prospective clients and decision makers.

“We wanted to create a happy, quiet place in the middle of Joburg’s crazy energy,” he says.

Shipping container developments are popular in the UK, the Netherlands, the US and China, but are still a long way from becoming a trend in SA. Lignano says private developers and public institutions are conservative when

“We wanted to create a happy, quiet place in the middle of Joburg’s crazy energy” Giuseppe Lignano, co-founder, LOT-EK

it comes to moving from established practices.

FINANCING Structural engineer Arthur Blake, who designed developments such as 27 Boxes and Sixty-one on Countesses in Windsor, Randburg, says banks are reluctant to provide financing for shipping container developments.

He says it is not a question of demand, but that banks do not have the appetite for unconventional projects.

“The Windsor development had tenants within the first week. If someone were to build a block of container apartments in Yeoville, it would have tenants within an hour. So demand is not the problem,” says Blake, who wrote his MBA thesis

Drivelines, Albertina Sisulu Street, Maboneng, Johannesburg on the acceptability of container housing in SA. “At first people are apprehensive about living in a shipping container because the image they get in their head is that of a shack, but when they see the finished structure, their minds are immediately changed. They don’t realise that it can be beautiful. Some of the

nicest buildings in America are built from shipping containers. It’s only about 15% cheaper than bricks and mortar construction projects but that can be a significant cost reduction for a large-scale project.”

ADVANTAGES The greatest advantage of container projects is that they can be built more than

three times faster than a conventional property development because they require less skilled labour.

For example, there is no need for brickwork and plastering, says Blake.

On the downside, container apartments are not likely to offer much value as an investment option because the market for unconventional housing

is smaller. Blake says most people wouldn’t opt for container homes.

But a unique house will attract a unique profile of tenant or potential buyer.

“People want ordinary houses partly because they want to be able to sell whenever they want to, or to be able to attract tenants at any given time.”

ADVERTORIAL

New marketplace to disrupt SA’s property market The eazi.com platform aims to make the buying and selling process transparent WORDS AND PHOTOS: SUPPLIED

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fter 12 months of development and six months of beta testing, eazi.com — SA’s new property platform — officially launched on September 1. CEO Shaun Minnie is confident that eazi.com offers increased value to those wanting to buy or sell property.

“Our goal is to make buying and selling a home easier while increasing the value of your investment.

We are relentlessly pursuing an easier, more transparent and more profitable way to buy and sell property in SA,” says Minnie.

What makes them different? “We’re not another low-cost online estate agent. That’s not to say we don’t save our customers an enormous

amount of money — we do.

Our fixed transaction fee of R29,500 (payable only on a successful sale) includes everything a traditional estate would do for you, but that’s not what makes us unique,” says Minnie.

Features include:

• The eazi.com platform

allows offers to be made and received any time of the day or night, anywhere in the world;

W hen offers are received they are displayed on the site. All parties that showed interest in the property are updated and have the opportunity to submit an improved offer;

T he process is entirely transparent and ensures the best market price is achieved;

•

•

• Enhanced media includes video walkthroughs, drone footage and professional photography of every property.

“The South African property market has fundamentally changed in the last few years,” says Minnie.

“Information that used to be available only to estate agents is now available to buyers and sellers — or at least, it should be.

“Our site displays all properties sold in your area with the actual sales price, so you can evaluate if you’re submitting or receiving a fair offer.”

For now, eazi.com is focused on Cape Town, but has plans to launch in other major cities over the next few months. www.eazi.com

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HOMEFRONT INVESTMENT

Africa’s pockets of excellence The Africa Property Investment Summit has highlighted that the continent still offers excellent investment growth potential WORDS: GEORGINA GUEDES :: PHOTOS: SUPPLIED & ISTOCK

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he Africa Property Investment Summit and Expo took place over two days at the Sandton Convention Centre in August. Local and international Africa property stakeholders gathered to explore real estate opportunities and developments on the continent. Here are five trends highlighted at this year’s event.

1. Africa still offers great opportunities “We are here because we believe in Africa,” says Malcolm Horne, Group CEO of Broll Property Group South Africa. “There is the potential that policy reforms, if implemented, will unlock the true value of Africa, bringing about sustainable, long-term growth.”

While the 2011 narrative of “Africa Rising” was overhyped, he says the scepticism of the last two years has been overdone.

The economies of many African countries that underperformed (Nigeria specifically) rely strongly on their oil market. As the oil price fell, their growth suffered.

“I believe we will look beyond the commodity super-cycle, improve fiscal discipline and create sustainable policies,” says Horne.

Economist for Africa Research at Standard Bank South Africa Michael Kafe says that in east Africa, Kenya and Tanzania are growing at 4.7%. “Coming down to the southern part of the continent, if you take out SA, which is dragging down the rest of the region, Zambia, Botswana and even Malawi are all growing at 4% to 4.5%.”

Kafe says Ghana is showing 6% growth and will probably continue to grow faster than that. Cote d’Ivoire is growing between 6% and 7.5%. If you take out the big

boys behaving badly on the continent, Africa’s not a bad place to be at the moment.

“It’s the second-biggest growth continent. If you exclude the bad boys, average growth is 3% to 3.5%, and even if you include them, the average is 2% to 2.5%,” Kafe says.

2. Mozambique and Ghana countries to watch Nigeria has bottomed out but Ghana and Mozambique are the countries earmarked for investment and growth potential.

“Ghana’s secure economy has always been its trump card. It is user-friendly and secure, which played out in the recent elections,” says Leonard Michau, head of sub-Saharan African operations at Broll Property Group.

Horne says the new Ghanaian government has pro-business policies with positive reforms that have boosted investor confidence.

This has seen the GDP growth skyrocket from 3.5% to 6%, and it is anticipated this trend will continue.

Mozambique, despite its political problems, is another nation to watch.

“No one wants to go there now, but mark my words, in five years’ time we will be looking at that country and we will marvel. If they get their gas projects right, estimates from the International Monetary Fund say it will grow 20%-25% between 2020 and 2030. It will be the fastest-growing economy in the world,” says Kafe.

The consensus appears to be that Nigeria will take a long time to rebuild its losses and it needs to focus on areas other than oil.

3. East Africa becoming a tiger Deloitte South Africa MD Martyn Davies says the balance of economic power in Africa has shifted

radically to the east. “There was a fundamental seismic shock even from July 2014.

Oil plummeted to $27 a barrel and is now peaking at $60. Nigeria and Angola revealed themselves to be what they are — hand-tomouth economies.”

He says there is a stronger growth trend in east Africa, where investors are not so much investing in Africa, but investing “in near Asia”.

“With the direction of trade, exports and the like, we are seeing the east African region becoming

integrated with Arabia and Asia. If you draw a line straight down the middle of Africa, the eastern countries have better growth and are relatively better governed.

The western side has structurally deficient economies. In the middle, they are highly confused — the DRC among others.”

4. Retail real estate surpluses driving changes Michau says there is much surplus stock in the retail real estate market in Nigeria and investors will want to

GROWTH 6% - Ghana 6%-7.5% - Cote d’Ivoire 4.7% - Kenya and Tanzania

4%-4.5% - Zambia, Botswana and Malawi

HOMEFRONT “Mozambique will grow 20%–25% between 2020 and 2030. It will be the fastestgrowing economy in the world” Michael Kafe, economist for Africa research at Standard Bank South Africa

Radisson Blu Abidjan, Cote d’Ivoire see space taken up before they commit further money to investments.

He says a similar situation exists in retail in Ghana, but there, with a slight uptick in consumer spend, will be improvement in the sector by year-end.

The same, Michau says, goes for office spaces where there’s a slight oversupply.

This will probably result in some rental reductions, but there are still many positive opportunities.

Horne says there has been a shift in Ghana, Mozambique and Nigeria from large shopping malls to smaller convenience centres.

There is also a move towards pop-up stores in vacant retail spaces so that business owners can test the space and the market.

“Landlords are offering

Kumasi City Mall, Kumasi, Ghana

increased tenant assistance.

They’re not just sticking their heads in the sand and saying to tenants that it’s their job to attract customers,” says Horne.

He says many retailers have had to reduce their margins because of the depreciation of local currency, which also affects consumer disposable income.

“This has led to a downgrade of building specs. Do we need fancy retail malls? We need a return as well. So speak to the market. This may require a fundamental adjustment in terms of how we approach things,” says Horne.

5. Opportunities in hospitality Andrew McLachlan of the Rezidor Hotel Group says

that throughout Africa, only 35% of hotels are branded.

This creates an opportunity for hotel operators to convert existing unbranded hotels to be managed by hotel groups, says McLachlan, Rezidor vice-president of business development for Africa and the Indian Ocean Islands.

“This gives the hotel access to a bigger sales and marketing network, and the ability to increase top-line revenue and bottom-line profit, at the same time benefiting from training and skills.”

He says there is a global trend for this kind of business model among large hospitality groups.

Known as “asset light”, it focuses on management rather than ownership of the asset, in partnership with the real estate owners. “In

Radisson Blu Maputo, Mozambique Africa over the past 12 months, there were 417 hotels under construction, and 85% of those are on hotel management agreements.”

There is a severe undersupply of existing hotel rooms on the African continent, McLachlan says, which presents an opportunity to build more rooms — especially in big gateway cities.

“Take Lagos, for example.

It has 18-million people — it’s the biggest and most populated city in Africa — but it has fewer hotel rooms than Sandton.”

Opportunity also exists in smaller cities for more affordable accommodation brands.

McLachlan says there is a focus on east and west Africa, specifically Nigeria, Kenya and Cote d’Ivoire.

McLachlan does, however, have a note of caution for would-be hospitality investors. “You’ve got to be really committed to Africa and understand that it’s not a short-term strategy.

“Hotels enter into 20-year agreements, so everything you do is a long play. You need an agile business approach to be able to move as quickly, or have the patience to move as slowly, as some of these markets change,” says McLachlan.

What emerged from the summit is that there is more on the African continent to celebrate than to fear.

Investors need to pick their commercial, retail and hospitality property investment destinations with care, consider their business models and refrain from putting all their eggs in one basket.

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CORNUBIA INDUSTRIAL BUSINESS ESTATE

LAST DEVELOPMENT OPPORTUNITY NOW SELLING Just released by Tongaat Hulett Developments, this is the final opportunity to create a lasting legacy in the catalytic development of Cornubia, KwaZuluNatal. This prime corner site offers a locational advantage with busy main road exposure and lends itself to a range of development possibilities.

UNLIMITED POTENTIAL • 3.5529 hectares of bulk land in prime location Cornubia Industrial Business Estate • Possible development platform of 16 477 m2 • Site to be serviced prior to construction • Prime location: corner Chris Hani and Syringa Roads with access off Syringa Road • Level, corner stand with road access leading from the MR79 (Old North Coast Road) • Locational advantage with busy main road exposure • Endless possibility as unzoned opportunity • Access to captive audience, labour-rich area and in close proximity to the amenities in the Cornubia Town Centre • Surrounded by active, integrated business and residential communities BALLITO

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types from motorised to non-motorised and pedestrianisation, this mixed-use, mixed-income and fully integrated development affords strategically important investment opportunities given DURBAN its accessibility, vision and scope.

CORNUBIA INDUSTRIAL BUSINESS ESTATE: VISIONARY AND BOLD Located on the North-Western side of Cornubia, this zone is intended to provide, preserve and use land or buildings to enable the creation of a contemporary Industrial Business Estate, which can accommodate a wide range of uses including warehousing, assembly, service and light industrial, distribution, logistics, showrooms, offices and retail set within a landscaped environment.

To register your interest, submit a proposal or make a viewing appointment, contact: Soo Meyer +27 31 560 1900 / +27 83 310 2206 Soo.Meyer@Tongaat.com

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HOMEFRONT PROPERTY NEWS

R450,000 monthly rent for Cape Town estate

R

ents are breaking new ground for a Cape Town agency — an estate in Constantia has fetched an astonishing R450,000-a-month lease and a house in Bantry Bay is being let for R220,000 a month.

Dogon Group Properties says it has not yet had a rental in Cape Town to rival

the Constantia lease. “This is indeed a record for us, if not a record for SA.” The leases confirm the latest findings by the PayProp rental index that the Western Cape is the most expensive place to rent, says Dogon.

The agency says average monthly rentals on the Atlantic Seaboard range between R20,000 and

R45,000 for flats, while the average family home rental is between R50,000 and R80,000 a month. Rentals exceeding R150,000 are not unusual.

Some luxury homes in Southern Suburbs areas such as Bishopscourt, Newlands and Constantia can achieve rentals of R100,000 a month, Dogon says.

Mauritius seafront offer for foreign investors

A

fter recent changes in the Mauritian government’s property investment legislation that provides more opportunities for foreigners to buy real estate, Seeff has launched a seafront development in Balaclava, a 15-minute drive from the popular northern village of Grand Baie.

Ocadia is named after

the turtle endemic to the Indian Ocean, and in reference to the Turtle Bay Sanctuary within which the development is located.

The 16 apartments and four penthouses on Le Goulet beach feature architecture that incorporates organic and mineral materials such as wood, glass and stone that enhance the natural light. The apartments are

priced from R16m while penthouses are R27.5m. All offer panoramic sea views.

Investing in real estate in Mauritius is an attractive proposition for South Africans keen to reroute their business to the island.

Among the incentives are a harmonised tax rate of 15%, tax-free dividends and no capital gains tax.

Details available from jacques.nell@seeff.com

SA’s top 10 estates ranked

A

n annual ranking of the country’s top 10 residential estates illustrates a trend for developers to create small neighbourhoods within estates as opposed to an older model where houses were evenly spaced around the property.

This was a finding of the September survey released

by AfrAsia Bank and New World Wealth global market research group. The following estates hold the top places:

1. Val de Vie in Paarl retains its position as SA’s top residential estate for the third year. Highlights include vineyards, polo fields, an equestrian centre, a highly rated golf course, fynbos scenery, parks, lakes and mountain backdrops.

House/apartment prices range from R3m to R50m.

2. Steyn City. The newly built Johannesburg estate was ranked fourth last year.

Once complete, Steyn City will be the most extensive estate in the country in terms of facilities and activities. It includes an equestrian centre, a golf course and more than 250ha of landscaped parkland.

House/apartment prices range from R2m to R30m.

3. Zimbali. Located next to Ballito, 45km north of Durban, it is arguably the

country’s most picturesque estate with its own natural lagoon and forest. House prices range from R5m to R50m.

4. Fancourt in George is SA’s top development for golfers, with three highly rated courses on one estate.

House prices range from R3m to R50m.

5. Waterfall Equestrian Estate is in Waterfall City in Johannesburg, overlooking the recently built Mall of Africa. Arguably the most exclusive estate in the country. Stands are large and start from about one hectare. House prices range from R10m to R70m.

6. Steenberg is one of SA’s pioneer estates. Originally a vineyard, Steenberg was redeveloped by JCI in 1990 to include a golf course, hotel, spa and housing estate. House prices range from R5m to R35m.

7. Mjejane Lifestyle is the only wildlife estate on the list. On the Crocodile River banks (bordering and open to Kruger Park), the estate offers 200 stands where about 50 houses have been built to date.

House prices range from R5m to R30m.

8. Whalerock Ridge is a 100ha estate in Plettenberg Bay where residents have

views over Robberg Beach.

House prices range from R3m to R35m.

9. Waterfall Hills Mature Lifestyle Estate is in Waterfall City, Johannesburg. It is the only retirement estate in the top 10. House prices range from R3m to R6m.

10. Fransche Hoek Estate is a relatively new development in Franschhoek with private vineyards and fruit orchards. House prices range from R10m to R60m.

“Val de Vie is the final word in luxury from start to finish, but each area tells a different story as you move through the estate,” says Val de Vie’s marketing director Ryk Neethling.

“There are apartments, houses of all sizes, hotel accommodation and pristine stretches of farmland, each providing a different feel and experience.”

George Cilliers, co-principal of Lew Geffen Sotheby’s International Realty in the Winelands, says Val de Vie property values continue to rise despite market conditions.

“Residential property prices have increased by as much as 40% to 60% in some parts of the estate, depending on the nature of the property.”

Cilliers says the prices of vacant ground have shown the most growth.

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Come and have a look at our luxury apartment 12029, available daily for viewings WARREN BECKER 082 302 3004 | warren@thehoughton.com ALAN BECKER 082 718 8100 | alan@thehoughton.com Houghton on 12th, 53 Second Ave, Houghton | Show apartment 12029