south african property review february 2015

S O U T H A F R I C A N

PROPERTYR E V I E W

February 2015

South African P

roperty Review

Property developers, m

anagers, owners and urban designers February 2015

Transformation: the journey thus far

AFRICA SERIESEthiopia:

a phoenix rising?

GROWTHPOINTDriving transformation

REFURBISHMENTKeeping up

appearances

United Kingdom: a royal power

United Kingdom:

The

WORLD series ● Our monthly country-by-country focus ●

Cover with spine_FEB_SUBBED.indd 1 2015/01/14 9:19 AM

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JHI General Adverts_210w x 297h_Outlined.pdf 3 2014/09/30 3:34 PM

Neil's Letters FEB.indd 4 2015/01/22 10:52 AM

P R O P E R T Y F U N D

Abland

Abreal

Oilgro


PROPERTYR E V I E W

February 2015

2 From the CEO8 From the Editor’s desk10 Industry news14 Education, training and development18 Legal update What’s fair is fair20 Planning and development An update on SPLUMA24 New members Welcome to SAPOA26 Theme leader Transformation: the journey thus far30 Africa uncovered Ethiopia34 Eye on the world The UK: a royal power40 Feature Growthpoint’s pinnacle of transformation44 Feature Keeping up appearances48 Feature Transforming with Transnet Property50 Feature Investing in potential53 SAPOA events Liaising over lunch54 Partnering with PwC57 Statistics58 What’s on SAPOA upcoming national events62 SAPOA educational programmes and workshops64 Off the wall Simplifi ed living


PROPERTYR E V I E W

February 2015

South African P

roperty Review

Property developers, m

anagers, owners and urban designers February 2015


AFRICA SERIESEthiopia:

a phoenix rising?

GROWTHPOINTDriving transformation

REFURBISHMENTKeeping up

appearances

United Kingdom: a royal power

United Kingdom:

The

WORLD series ● Our monthly country-by-country focus ●

Cover with spine_FEB_SUBBED.indd 1 2015/01/14 9:19 AM

ON THE COVERFrom chaos to charisma, the South African landscape is changing to become more inclusive as spatial and social transformation take centre stage

Editor in Chief Neil Gopal Editorial Advisor Jane Padayachee Managing Editor Mark Pettipher Editor Candace King Copy Editor Ania Rokita Production Editor Dalene van Niekerk

Designer Dirk Knoesen Sales Riëtte Stevens Finance Susan du Toit Contributors Martin Ferguson, Eugenia Makgabo, Lekgolo Mayatula, Michelle Marais

Photographers Michael Glenister, Elvis Ntombela, Brett RubinDISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations

regarding any goods or services advertised within this edition. Copyright South African Property Owners’ Association (SAPOA). All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from SAPOA.

The publishers are not responsible for any unsolicited material.

Designed, written and produced for SAPOA by MPDPS (PTY) Ltde: [email protected]

Published by SAPOA, Paddock View, Hunt’s End O� ce Park, 36 Wierda Road West, Wierda Valley, SandtonPO Box 78544, Sandton 2146

t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 e: [email protected]

FOR EDITORIAL ENQUIRIES email [email protected] or [email protected].

Printed by

e: [email protected]

contents

Contents_FEB_SUBBED.indd 1 2015/01/14 2:15 PM

2 SOUTH AFRICAN PROPERTY REVIEW

from the CEO

Exclusively detrimental

Currently a hot topic, long-term exclusive lease agreements in shopping centres

have been at the forefront of industry discussion because, we believe, they allude to anti-competitive behaviour.

The saga surrounding exclusivity clauses in long-term lease agreements continues – as recently reported in the media, Wal-Mart Stores Inc has come under legal � re by local supermarket chains as they endeavour to defend their business from the US retailer’s “store encroachment” in shopping centres.

Having recently introduced food to its retail o� ering, Game, a chain owned by South African food and goods wholesaler Massmart Holdings Ltd (which is owned by Wal-Mart Stores Inc), the US retailer has experienced great opposition from local food retailers who

tenants are concerned with the term of the grocery anchor tenant’s lease. Furthermore, all respondents indicated that the grocery anchor tenant’s lease is almost always renewed, and 94% of the respondents indicated they would not prefer exclusivity clauses in their leases.

When asked which initial lease term they were most likely to support for the grocery anchor tenants, 77% of respondents said 10 years. Fifty-six percent strongly agreed that exclusivity clauses have no bene� t and are actually detrimental to the management of assets.

Based on some of the comments provided by the respondents, exclusivity clauses prevent the landlord from placing boutique stores in a shopping centre. They also prevent the landlord from optimising a tenant mix that is best suited for the shopper coming to the centre. One respondent said that market changes bring new formats that cannot be predicted, so exclusivity is not an option for long-term value.

While very few of the respondents felt that exclusivity clauses give security of income and allow certainty of shopping centre viability over the long term, most feel they’re not bene� cial and block independents from entering shopping centres.

SAPOA continues to liaise with the Competition Commission with regards to the investigation of exclusive leases in order to reach an appropriate outcome.

Neil Gopal, CEO

have sued to enforce lease clauses barring new food retailers.

Massmart Holdings Ltd CEO Guy Hayward recently commented in the media that “the behaviour by the retailers just feels intuitively anti-competitive. It’s going to reduce choice for customers.”

Apart from reducing choice, the � ght over exclusivity clauses will have a negative impact on Massmart Holdings Ltd’s growth. In light of this, Massmart Holdings Ltd lodged a complaint on 31 October 2014 with the Competition Commission against Pick n Pay, Shoprite and Spar to ban lease exclusivity.

In light of the continued enquiries made by SAPOA to the Competition Commission to investigate exclusive leases at shopping centres, we as the industry feel that this matter needs to be addressed urgently.

The importance of hearing the industry’s concerns is at the core of what SAPOA does as an industry-orientated and member-driven organisation. Our survey shows that while lease agreements with key anchor food retailers are crucial for shopping centres in terms of various aspects, exclusivity clauses within lease agreements are not favourable.

Based on the outcome of the survey, the participants felt that long-term leases are crucial when it comes to securing grocery anchor tenants. Most felt that long-term leases are also important when it comes to the required � nancing of developments and acquisitions, the improvement of the quality of assets, the certainty of income and the tenant mix.

However, the survey showed that 100% of the respondents indicated that other

Opinions from the industry on exclusive lease agreements

Based on comments provided by the participants in the survey which SAPOA conducted, most felt that exclusivity clauses within lease agreements are unfavourable. Here are a few:

● Exclusive clauses prevent the landlord from placing boutique stores – a bakery, butcher, small green grocer.

● Market changes bring new formats that you cannot predict, so exclusivity does not guarantee long-term value. Brands also go out of fashion, which is a similar problem.

● They prevent the landlord from optimising a tenant mix best suited to the shopper coming to the centre. Grocery anchor tenants also change the products they sell over the term of the lease, thereby competing with other tenants.

● Independents o� er a product variety and a service, which the nationals cannot always o� er.

● The landlord is unable to manage his asset in the best interest of the actual asset. Exclusivity is only bene� cial to the retailer, and enforcement of the

exclusivity is usually detrimental to the tenant mix.

● Exclusivity clauses limit the entry of independents. They also reduce the overall rental/m2 because independents pay a higher rental for the space they would otherwise take if not for the exclusivity clause.

● The arrival of Food Lover’s Market, the improvement of Checkers against Pick n Pay and the Massmart Food concept have proven that exclusivity has more downsides than upsides.

CEO Review_FEB new layout_SUBBED.indd 2 2015/01/14 2:55 PM

3SOUTH AFRICAN PROPERTY REVIEW

from the CEO

With long-term exclusive lease agreements in shopping centres under the spotlight, SAPOA CEO Neil Gopal highlights the industry’s opinion on the matter

97%of respondents said that

without receiving long-term leases, whether exclusive or not, grocery anchor tenants

would not be inclined to enter a shopping centre

59%said that leases with an

initial period of more than �ve years should not contain automatic renewal options, and the options should not be on the same terms and conditions as the original

lease agreement

100%said that the grocery anchor

tenant’s lease is almost always renewed

94%said that they would not

prefer exclusivity clauses in their leases

56%strongly agreed that

exclusivity clauses have no bene�t and are actually

detrimental to the management of assets

77%said that they support a 10

year initial lease term for the grocery anchor tenants

100%said that other tenants are concerned with the term

of the grocery anchor tenant’s lease

88%said that shopping centre sizes is irrelevant when it

comes to long-term leases with grocery anchor tenants

said that long-term leases with grocery anchor

tenants are extremely important for required

�nancing of developments and acquisitions

54%

Source: SAPOA Lease Agreement Survey

CEO Review_FEB new layout_SUBBED.indd 3 2015/01/14 9:43 AM


from the CEO’s desk

4

SAPOA SUBMISSION DOCUMENTBUSINESS RESCUECOMMENTS SUBMITTED BY SAPOA IN REGARD TO THE SPECIFIC PREJUDICE SUFFERED BY LANDLORDS

18 NOVEMBER 2014

A. INTRODUCTION

The South African Property Association (SAPOA) was established in 1966 and it is a unique, member driven organization

that aims to represent, protect and advance members’ commercial and industrial property interests within the property

industry in terms of ownership, management and development. SAPOA’s members include Landlords, Developers,

Property Managers, essentially key role players in the property industry. It is for this very reason that our members are

directly impacted by the Business Rescue Provisions and the consequences that stem from same.

SAPOA represents approximately 1300 companies and organisations (some of which include ABSA, Nedbank, Investec

Property Group, Old Mutual Properties, Liberty Properties, Eskom, Transnet, East London IDZ, Growthpoint Properties,

the V&A Waterfront Company, ACSA, Eris Property Group, Encha Properties, Zenprop, Rede� ne Properties, Hyprop

Investments and Resilient Properties etc). Our members own and control about 90% of all commercial, retail, o� ce and

industrial properties in South Africa to the value of approximately R500bn and constitute some of the largest ratepayers

in South Africa.

SAPOA is cognisant of the fact that the Companies Act, 2008 and particularly Chapter 6 which deals with Business Rescue

Proceedings aims to provide for the organization and management of distressed companies. There is a need for businesses

to � ourish in order for the economy to grow, and we are in agreement with this very crucial notion. We are however of the

view that this should be done reasonably and in the best interests of all parties involved, giving greater consideration to

the overall social and economic outcomes.

B. FORMAL COMMENTS

The following concerns have been raised below by our members in their capacity as Landlords:

1. Major prejudice to landlords1.1 In business rescue proceedings the landlord is really placed in a terrible position for the following reasons:

1.1.1 The tenant continues to use the leased premises usually without paying rental or utilities;

1.1.2 The landlord is liable to pay Council for electricity, water, sewerage and refuse removal but the landlord does

not recover these costs from the tenant in business rescue;

1.1.3 If the tenant is not in arrears at the time that the tenant goes into business rescue, the landlord cannot

appropriate the tenant’s deposit or cash the tenant’s bank guarantee;

1.1.4 the landlord cannot prevent the tenant from occupying the premises;

1.1.5 other creditors of the tenant in the business rescue process will not supply goods or services to the tenant

unless the tenant pays for them upfront. The landlord cannot stop providing services or utilities or prevent

the tenant from being in occupation of the property;

1.1.6 the landlord loses its tacit hypothec if it is not perfected prior to the business rescue process;

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1.1.7 the landlord loses all its security in the business rescue process- deposit/guarantee and/or tacit hypothec;

1.1.8 recent court decision in Western Cape High Court in the matter of Tuning Fork (Pty) Ltd t/a Balanced Audio

v Greef and Another 2014 (4) (SA) 521 (WCC) held that the principal indebtedness had been extinguished

by the implementation and adoption of the business rescue plan and therefor as the principal debt was

extinguished, the surety was not liable. This decision further erodes the landlord’s security;

2. Leases are bilateral contracts2.1 A lease is a prime example of a bilateral contract where each party’s obligations to perform is undertaken in return

for the other party’s performance. If a tenant wants to occupy the premises they must pay the rent. If the rent is paid

the landlord must give free and undisturbed occupation of the premises and continue to provide the services.

2.2 Business practitioners are relying on the s 133(1) moratorium on legal proceedings to resist eviction but not paying

or securing the rent. The landlords not only get no rent but are expected to continue to pay for and provide services

such as electricity, water, sewerage and refuse removal as well as other services such as security and access to

common areas. They may even be obliged to pay back charges due by the tenant.

2.3 Landlords are e� ectively sponsoring the business rescue and providing post-commencement � nance without any

rights or any security.2.4 If the rent is up-to-date at the date business rescue commences (and many companies deliberately see that

it is) the landlord cannot cancel the lease, rely on its hypothec nor recover the unpaid rent during the business

rescue process.

3. Landlord has limited rights3.1 A landlord has limited rights legally and practically.

3.2 The landlord’s voting power in the business rescue proceedings is minimal because it is based on the arrear rent.

Landlords should have a vote based on the total value of the rent due for the remaining of the lease in order to make

the process fair.3.3 All the remedies that the landlord has to force the business rescue practitioner to pay the rent or otherwise treat

it fairly require court action. The cost and delays of court action are not justified. Landlords should not have to go

to court to assert the rights that they should have automatically under the lease as a bilateral contract and under

the law.3.4 The rent due must be paid in full and not reduced by the business rescue practitioner to a certain percentage in the

rand because of the bilateral nature of the obligation to pay rent in full.

4. Better o� under insolvency laws4.1 Under the insolvency laws the landlord can exercise its hypothec as security for payment of at least three months’

rent (Insolvency Act, 1934: Section 95).

4.2 The business rescue process provides no clear provisions to preserve what security the landlord has from third

parties such as mortgages, pledges, suretyships and other personal sureties. Landlords should always be able to

exercise those rights against third parties in order to get payment of the amounts reciprocally owed by the

company occupying the premises.

5. Post-commencement financeWhere the business rescue practitioner does not pay the rent despite the obligation to do so, unpaid rent must be

deemed to be post-commencement � nance and provide the landlord with a secured claim.

6. Damages6.1 In addition to the landlord’s claim for payment of all bilateral obligations under the lease, landlords have a dam-

ages claim arising from any premature termination of the lease. Their claim must include the cost that landlords

incur, namely:6.1.1 the loss of the original tenant installation costs which were amortised over the period of the cancelled lease;

6.1.2 the time taken to re-let the premises which can take as long as six months or more (especially if cancellation

occurs in November/ December in any year);

6.1.3 the broker’s costs for � nding existing and new tenants;

6.1.4 reinstatement costs for reinstating the premises.





7. Business rescue process is not working

7.1 The business rescue is not working.

7.2 Business rescue practitioners are taking far longer than the period required by the Act to put a plan together.

Some rescue plans have taken two years to complete.

7.3 In the meantime they ignore the company’s obligation to pay the rent or to secure the rent.

7.4 Most companies go into business rescue when it is already far too late.

7.5 Most companies go into business rescue simply to delay payment to their creditors when the only realistic solution

is liquidation.7.6 Where there are a number of leases involved (eg as in the business rescue of Ellerines) the business rescue

practitioners’ cherry-pick the best leases, don’t pay the rent in full and cancel the others without paying rent thus

giving the landlords a double disadvantage.

7.7 Many of the business rescue practitioners are not su� ciently competent to rescue a business or to perform the task

e� ciently. Delays are very costly. This is worst for landlords because they are losing rental due to them and paying

third parties such as public utilities to enable them to provide services to the distressed company.

8. Proposed changes8.1 We attach a marked-up version of the relevant sections of the Companies Act with suggestions how landlords can

be fairly treated by the business rescue process.

8.2 The business rescue process will not work if it is used in such a way that it favours unscrupulous company directors

and shareholders and incompetent business rescue practitioners (whose costs are secured).

8.3 All rights against the directors and shareholders of the company must be preserved and not expunged by the

business rescue plan.

9. Extreme prejudiceLandlords are su� ering extreme prejudice compared with other creditors of companies under business rescue and urgent

amendments to the Companies Act, 2008 are required.

Yours faithfully,

________________________Neil GopalChief Executive O� cer




• On 1st of July 2014 Sections 1 to 32 and 53 to 61 of SPLUMA would come into operation.

• On 1st of September 2014 Sections 33 and 52 of SPLUMA would come into operation.

b) It has however come to our attention through the various benefi cial forums that have been

established by the Department of Rural Development and Land Reform that various provinces and

municipalities have challenges with the set implementation date for SPLUMA which is 1 September

2014. These challenges are due to issues such as a lack of capacity and the fact that some provinces do

not have by-laws in place. The suggested implementation date by the provinces and municipalities

for SPLUMA is 1 February 2015.

c) It was suggested, which we are in support of, in principle that a Diff erentiation Model be considered

where most of the metropolitan municipalities can implement SPLUMA in its entirety on the set date

as they do not have capacity problems and are better positioned to implement SPLUMA. Further,

that it could serve as a cross-learning exercise where the other municipalities would learn from the

metropolitan municipalities in terms of implementation challenges and successes.

d) However, should this not be a possibility, we are of the view that should a new date be set for

municipalities readiness, such time should not be in the distant future as this would certainly not be

in the best interests of the country.

e) In light of the aforementioned recommendation we are of the view that Section 60 of SPLUMA

should be prioritised and implemented as a matter of urgency due to the negative impact it has for

both the public and private sectors and essentially the country.

f ) We humbly refer you to the transitional provisions provided for, more specifi cally Subsection (2)

which states that “all applications, appeals or other matters pending before a tribunal established in

terms of Section 15 of the Development Facilitation Act, 1995 (Act No. 67 of 1995) at the commencement

of this Act have not been decided upon or otherwise disposed of must be continued and disposed of in

terms of this Act.” It is the implementation of this very provision that will begin to aid both sectors in

making a contribution towards the economy.

We thank you for your assistance herein and look forward to hearing from you.

Yours faithfully,

________________________Neil GopalChief Executive O� cer

c) In light of the aforementioned objectives we have had concerns from of our members in

their capacity as property owners regarding certain aspects of the implementation of the Act.

We would therefore like to highlight our concerns regarding the prejudicial effect or

unintended consequences on the commercial property industry as a result of such

implementation which in essence have social and economic ramifications.

d) We note that Part 7 of the Act states the following:

“In considering the application a responsible authority may require additional information

from the applicant, and may also require the applicant to undertake an environmental or

other assessment, which assessments may be subject to independent review.”

Although we are in agreement with the abovementioned section it is our understanding that

the issuing of Water use Licenses (WULAs) which are required for any activity which occurs

within 500m of a watercourse has become problematic. This process has been proven to be

complex, lengthy and uncertain. There seems to be an issue of potential over regulation as

despite having an Environmental Impact Assessment approval and planning approval

construction activity is suspended if one does not have a WULA. Further the timing to get

approval is often lengthy and this directly has a major impact on development and being able

to meet timeframes required by tenants and occupants.

e) We would kindly like clarification on the issue of the river reserve determination as we

have been advised by the eThekwini municipal officials that the municipality is unable to

obtain approval for any new water treatment works or for any expansion of an existing works

as the Department have decided that they want to now do river reserve determinations for all

the rivers between the Mvoti and Umkomaas and that until this is completed the Department

will be unable to approve any activity which changes the flows in any of the rivers. This will

negatively impact property owners, developers and farmers.

We would like to establish how long the process will take and get an understanding of the

extent of the ecological requirement for the aforementioned process.

We shall appreciate being provided with three (3) alternate dates to choose from on which

you will be available to meet with the SAPOA delegation in order to find amicable solutions

to issues which essentially contribute towards disincentives towards investment in

Ethekwini. We thank you for your assistance herein and look forward to hearing from you.

Yours faithfully,

______________________

Mr Neil Gopal Chief Executive Officer


It is the implementation of this very provision that will begin to aid both sectors in



We thank you for your assistance herein and look forward to hearing from you.We thank you for your assistance herein and look forward to hearing from you.We thank you for your assistance herein and look forward to hearing from you.We thank you for your assistance herein and look forward to hearing from you.We thank you for your assistance herein and look forward to hearing from you.














We thank you for your assistance herein and look forward to hearing from you.We thank you for your assistance herein and look forward to hearing from you.We thank you for your assistance herein and look forward to hearing from you.

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Neil's Letters October.indd 4

2014/09/11 5:19 PM

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from the Editor’s desk

In the space of a week, I experienced the best and the worst customer service. Without

naming and shaming the retailers involved, the former occurrence was pleasant, unbelievable in fact; the latter put me completely off the particular store – and the shopping centre it’s in.

While that may seem slightly imprudent, the fact remains that consumers are at the end of their wits. With South Africa’s economy slowing down, escalating rates and taxes, the dreaded e-tolls, water shortages and electricity blackouts, yo-yo-ing petrol prices, and the rising cost of living, times are indeed tough for the consumer. Add bad customer service to this brew and the result can be detrimental to a retailer brand.

The overall indebtedness of consumers remains a problem in the country. According to Statistics South Africa, South African indebted consumers collectively owe about R1,44-trillion.

Yet despite being strained and pressured, consumers appear to still be shopping. According to recent data from the MasterCard Index of Consumer Confidence, South African consumer confidence improved for the second half of 2014.

With a score of 58,7, a slight improvement of 2,4 points compared to last year’s score of 56,3, the index currently describes consumer confidence as “neutral-positive”.

But consumers remain unhappy as they deal with a plethora of challenges and irritations from the retailer and service-provider sectors.

New research conducted in South Africa and Nigeria by French research firm Ifop reveals that 80% of people feel annoyed when receiving unsolicited marketing messages on their mobile phones.

In other negative consumer news, South Africans are dissatisfied with the laptops they’ve purchased, according to research recently released by the South African Customer Satisfaction Index, which showed that in 2014 South African consumers gave an average customer satisfaction score of 75,1 out of 100 for their laptops – four points lower than in 2013.

How can we not help you?Bad customer service could kill a brand and hurt a shopping centre – retailers take note

Consumers are lashing out and it’s believed that the controversial Cell C Johannesburg highway banner is only the beginning.

However, irate consumer behaviour is not only limited to South Africa. According to the results of a new survey of 10 000 people worldwide, poor customer service kills sales. Conducted by American Express, the research was conducted using an online survey, which drew responses from 10 000 people in the US, Canada, Mexico, Italy, the UK, India, Japan, Singapore and Hong Kong.

In Canada, 57% of the survey’s respondents said they had abandoned a purchase as a result of poor customer service in the past year. In the US, the figure was 60%. In Mexico and Singapore the figure was 68%, while in India the figure was the highest at 71%.

The survey further revealed that the percentage of respondents who believe that companies are paying less attention to providing good customer service has increased significantly to 40%, compared to 32% in 2012 and 24% in 2011.

With regards to the Cell C debacle, bad customer service can kill a company.

According to analyst David Shapiro, Deputy Chairman at Sasfin Securities, only Vodacom and MTN will survive the mobile war – he predicts that we will not see Cell C or Telkom Mobile in a few years’ time. While Shapiro attributes this to market capitalisation, poor customer service can be another nail in the coffin.

Apart from the death of companies and brands, bad customer service can have a negative impact on shopping centres in terms of tenant mix and tenant satisfaction. Retailers with tainted reputations can lead to other retailers not wanting to be situated near them in a shopping centre.

Furthermore, the loss of bad tenants can add to the already-existing issue surrounding anti-competitive behaviour in shopping centres. While the battle over exclusive lease agreements continues, the dynamics of the retail arena are shifting as the fight for space is heating up. At the moment, fashion retailers at shopping centres are beginning to trump traditional food retailers in terms of space and anchor-tenant status.

Redefine Properties’ Chief Operating Officer David Rice told The Citizen that, “If you are developing a new centre, there will be food, but with existing and well-developed centres [that] we are adding on to, do you need food as an anchor? We don’t think so.”

With the continued rise in the number of international brands that are entering the South African retail market, competition is bound to heighten.

Fashion is taking the role of an anchor,” said Rice. “So you get double the rent, it will cost less to put them in and it suits the demographics perfectly.”

With the Consumer Protection Act already wreaking havoc among landlords, shopping centre owners will want to maintain a healthy tenant mix. On the flip side, retailers will want to avoid poor customer service in order to maintain their image. You never know when the next slander billboard will be erected for all to see.

Candace King, Editor

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industry news

New life is being breathed into Northgate Island in Brooklyn, Cape Town, a former “big box” retail development being upgraded to

high-profile, A-grade office space with a green urban park, to be rebranded as Northgate Park. Northgate Island was originally developed to capitalise on the success of Canal Walk retail traffic but the development has been plagued by vacancy. Subsequently, 85% of the 18 000m² property was acquired for R110-million in a joint venture between Arbitrage Property Fund and Buffet Investment Services, with the intention of repurposing the under-performing asset into an A-grade office park focused on providing an affordable, well-positioned, attractive offering with ample parking.

The redevelopment represents a further investment of R30-million by the development consortium. “Situated directly on the intersection of Section Street and Koeberg Road between the N1 and the M5, with high visibility to passing traffic, Northgate Park is an easy seven-minute drive (against the traffic) from Cape Town city centre, about 10 minutes from the southern suburbs and 20 minutes from the northern suburbs, making it one of the most conveniently located office developments in Cape Town,” says Ilan Kaplan, MD of Arbitrage Property Fund. “It’s quicker to reach than Woodstock or Century City with little to no congestion at the access and exit points on the highway. For staff using public transport, the location on Koeberg Road is ideal – it has a prominent taxi zone and a planned MyCiTi bus route.”

The office accommodation in Northgate Park will comprise open spaces with high ceilings, large floor plates with very few columns, and floor-to-ceiling windows on each side, providing an abundance of natural light within a trendy and modern ambience. There is also potential for the bulk of the redevelopment to be increased. “Such is the favourable response from the market that 60% of the space is already let,” says Kaplan. “We have secured several blue-chip tenants and have received brisk enquiries for the bulk of the available space. Moore Stephens has taken up 3 000m² of space, while Vida e Caffè is to occupy 1 250m², including the head office. Existing tenants include SA Home Loans, Dulux, Tile Africa and Homemakers Fair.”

The buildings will have fibreoptic internet connectivity, access control with 24-hour security and a range of energy-efficient features. An application for a Green Star rating is currently under way. “We are creating a sense of movement and dynamism to reflect the energy from the activity on one of the best-used highway junctions in Cape Town,” says Stephen Whitehead, Director at Boogertman + Partners Architects. “Northgate Park is set to benefit those using the buildings and act as a catalyst for the further transformation of its environs.”The redevelopment is scheduled for completion in March 2015.+27 (0)21 421 5550, Northgatepark.co.za

Northgate Park launched as a trendy office redevelopment

In response to increased demand for residential property in Johannesburg’s

thriving Rosebank area, a new executive apartment hotel, The Capital on Bath, was launched in January. Nedbank Corporate Property Finance is the financier behind the deal, providing R100-million to the Capital Hotel Group for the development of the hotel, which comprises 52 apartments and 100 hotel rooms.

Situated in the heart of Rosebank on iconic Bath Avenue, the apartments and rooms boast unprecedented views and impeccable finishes, while the hotel offers a gym and outdoor pool, state-of-the-art security and keyless access, a café and bar, laundry and housekeeping, air conditioning and Wi-Fi.

Ken Reynolds, Regional Executive: Nedbank Corporate Property Finance, Gauteng, says that Rosebank has attracted much interest from savvy investors looking to invest in this rapidly growing, popular area.

“Rosebank has seen much commercial development and investment since the Gautrain station was launched in 2011, and has been declared one of 35 priority areas in Johannesburg to receive improved service delivery and infrastructure,” he says. “In the past three years, close to R7-billion has been spent on development of new office buildings and the refurbishment of older commercial buildings in the area, including the extension and upgrade of Rosebank Mall. According to the Rosebank Management District, the area has become Johannesburg’s third-largest high-rise business centre.”

While commercial development and investment in Rosebank has been ongoing, there has been limited residential development, which has led to demand for residential property in the node. Well positioned for easy access to the Johannesburg CBD, Illovo, Melrose and Sandton, Rosebank has become one of Jo’burg’s most desirable addresses for businesses and executives alike. “In addition

to the attractiveness of Rosebank itself, The Capital on Bath is within walking distance of the Rosebank CBD and the wealth of shopping and entertainment it offers; the Rosebank Gautrain station; and the excellent schools and private hospitals in the district. Taking these factors into account, the demand for this development is to be expected,” says Reynolds.

The Capital on Bath is the seventh in The Capital Hotel Group’s portfolio of executive apartment hotels in the Sandton area. “We are consistently ranked number one on the STR Global Hotel Benchmark Survey for our Group’s performance in Sandton,” says Marc Wachsberger, MD of The Capital Hotel Group. “It is therefore a natural progression for us to move into Rosebank with the same core values in mind, offering brilliant basics to our corporate clients while meeting their budget. In this regard, Nedbank has been a fantastic client and capital provider. They just get it.” +27 (0)11 294 4274, Nedbank.co.za

Nedbank enables executive apartment hotel in Rosebank

News Review_FEB_SUBBED.indd 10 2015/01/14 10:04 AM


industry news

One of SAPOA’s primary objectives is to defi ne excellence in the

property industry.

O N L I N E R E G I S T R A T I O N A T S a p o a c o n v e n t i o n . c o. z a / a w a r d s

As part of this objective, the SAPOA Awards for Innovative Excellence in Property Development provide public recognition for top-quality design and functionality, and a benchmark for excellence in property.

Be part of this exclusive award category in the most prestigious property awards programme in South Africa. Cement your position as an industry leader and align your company with the industry’s peak leadership body in recognising excellence.

Position your company as a market leader and reap the bene� ts from positioning as a champion of South Africa’s property industry, innovation and excellence.

Winning a SAPOA Innovative Excellence Award provides members of the project team with a multitude of bene� ts.

Don’t miss the opportunity of celebrating the success that results from determination, and the resilience demonstrated by our industry in providing exceptional property.

ENTRY FEE R9 500 (excl. VAT)QUERIES Jane Padayachee [email protected] or +27 (0)11 883 0679ENTRIES CLOSE 16 February 2015

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Growthpoint wins international lighting awardGrowthpoint Properties

Limited won the � rst-ever International Lighting Project of the Year award at the 2014 Lux Awards in London recently. In a massive energy-saving project, Growthpoint undertook a low-energy retro� t, introducing more than 100 000 energy-e� cient lamps and light � ttings in 157 of its multi-tenanted o� ce, industrial and retail buildings across South Africa, over a period of 10 months.

The solution was provided by Aurora Lighting and Standard Electrical, helping Growthpoint – and South African businesses – achieve carbon savings of 12 000 metric tons a year and demand savings achieved of 5,5MW for an annual energy savings of 22 500 MW hours. Chosen as the most outstanding project outside the UK and the Republic of Ireland, Growthpoint’s pioneering energy e� ciency beat out remarkable projects from Germany, UAE and Turkey.

“We are thrilled about this recognition,” says Growthpoint CEO Norbert Sasse. “Energy e� ciency at our properties is important to our environmental sustainability. It also takes pressure o� the national electricity grid and supports our clients by helping to keep their occupation costs lower.”

Commercial properties are large global energy users, and increasingly businesses are burning the candle at both ends, explains Werner van Antwerpen, who heads up sustainability and utilities

at Growthpoint. “We realised the necessity of reducing the impact on the environment by prioritising electricity reduction.”

And, as South Africa’s largest JSE-listed REIT, Growthpoint is having a massive positive impact on energy saving in South Africa. Growthpoint teamed up with Eskom and the Green Building Council of South Africa to create a benchmark rating system for electricity and water consumption for the industry – the WEBdex rating – and then applied it to all of Growthpoint’s buildings.

A � rst step to improving consumption was for Growthpoint to replace ine� cient lights on buildings. Aurora Lighting and Standard Electrical were tasked with providing the solution.

The colossal low-energy retro� t is one of several energy-e� ciency projects undertaken by Growthpoint. It is also embracing alternate energies with rooftop solar panel projects, which have been very successful at Lincoln on the Lake in Umhlanga, Infotech in Hat� eld, and at Rustenburg’s Waterfall Mall.

“What’s good for the planet is also good for business,” says Van Antwerpen. “Reducing electricity and water consumption reduces utility charges. We constantly push the boundaries of sustainability and are focusing on creating space for our clients to thrive.” +27 (0)11 944 6249, Growthpoint.co.za

industry news



industry news

Following the global trend of demand for more flexible, serviced office space, the latest addition to Sandton’s commercial

property sector challenges what many developers have considered the “norm”. Situated at 150 Rivonia Road in Sandton, the development has been designed around meeting the demand from entrepreneurs and small to medium enterprises (SMEs) for more flexibility when it comes to office rentals. What truly sets it apart from other commercial lease offerings is that tenants have unique access to a private investor network, giving investment-ready companies the opportunity to attract and secure such investment.

This has created a stir among many SMEs as this is the first time such a concept has been introduced in South Africa. The Business Exchange, developed by investment guru David Seinker, offers both local and international businesses fully serviced and flexible office space, while also providing complete access to marketing, digital and public relations services.

“We developed this commercial space concept around the rising trend and demand for more flexibility and fully serviced offices, offering not only space but also access to resources that many SMEs do not have and which many cannot afford as additional outsourced services,” says Seinker, “We introduced access to an investor network as our market research showed that this was a growth-limiting factor for most SMEs.

“We anticipate much investment as these private investment funders are ranked among some of the wealthiest individuals in Southern Africa and have completed investment deals totalling R62-million to date. Sandton will always be in demand because of its infrastructure and proximity to various businesses but setup costs, rental agreements and a lack of flexibility and resources can be crippling for entrepreneurs as they start up their ventures. They are driving the demand for such flexibility and access to resources in the Sandton area, and many property developers are being forced to take note.”

The Business Exchange, offering a variety of office setup options, features a reception area and welcome lounge for all tenants, fully equipped meeting rooms, complete IT and telecoms infrastructure, parking, and a café, restaurant and bar within the building.

The space will house 40 businesses with rentals starting from R11 000 a month. In addition, the company is offering a virtual package for budget-tight entrepreneurs who require a prime address with access to meeting-room facilities.

The company will also be targeting international corporates who require flexible office space, enabling them to grow into Africa. “150 Rivonia Road is the first building to launch under The Business Exchange,” says Seinker. “In the next five years, we aim to house more than 1 000 businesses across the country. From there, we will look to expand further into Africa.”

The Business Exchange in Sandton will open its doors in February 2015. +27 (0)11 589 9020, Thebusinessexchange.co.za

Latest Sandton addition challenges traditional developments

PGP to market Rosebank’s new Park Central

Attacq closes successful R640-million capital raise

Pam Golding Properties (PGP) has been awarded an exclusive

mandate to market Park Central, a luxury high-rise residential property development in the heart of Rosebank. This was announced recently by the PGP Group CEO, Dr Andrew Golding.

“Pam Golding Properties is honoured to market the properties of a residential development that is both revolutionary in its concept and unprecedented in its scope for the area,” he says. “The block will also assist in further stimulating the rapidly growing local economy of Rosebank. With its modern design, Park Central is set to become the landmark residential building of the Rosebank area. Offering a compelling combination of ‘green’ and Manhattan-type lifestyles within a secure environment, this residential development will offer the people of Johannesburg a completely new model of urban living.”

Golding explains that Park Central has been designed around a pedestrian precinct

incorporating landscaped parks and sky gardens, and will have all of the convenient facilities of Rosebank available, including the Gautrain Station and the Rosebank Mall, both of which are within easy walking distance.

Medical facilities, hotel and conference facilities, schools, art galleries, a public library, parks and a number of office blocks, company headquarters and other commercial buildings are also within easy reach of the development. Park Central is being developed on the corner of Baker Street and Keyes Avenue in Rosebank, and will consist of more than 400 luxury one- and two-bedroom apartments, as well as three-bedroom penthouse units with a choice of the highest quality finishes, said Golding.

The sectional title apartments will be priced from R1,75-million and marketed off-plan. Peet Strauss, Development Manager at the PGP Hyde Park office, points out that with R7-billion in investment in commercial buildings alone, the Rosebank precinct has undergone rapid growth in recent years.

Attacq Limited successfully closed a R640-million

capital raising recently. Originally seeking to raise capital of about R500-million through an accelerated book-build, strong demand resulted in increasing the capital raise to R640-million through the placing of 29 629 630 shares at a price of R21,60 per share.

The R640-million was raised to allow Attacq the ability to acquire the remaining 18,8% of its key asset, the Waterfall pipeline, and take full control of the strategic

planning of Waterfall, including the rollout of its infrastructure. This strategy has been formulated jointly with Atterbury Property Holdings, which is increasing its deployment of development capacity in other markets including central and eastern Europe, a direction that supports Attacq’s diversification strategy.

Atterbury’s exclusive right as developer of Waterfall will also be amended to allow Attacq the option to partner with other developers as a means of accelerating the Waterfall development.



industry newsindustry news

Morné Wilken Chief Executive Officer of Attacq

This will come into effect from 2018. Atterbury will still retain a 20% undivided interest in the Mall of Africa, Waterfall’s super-regional mall opening in April 2016.

In keeping with the continuing strategic relationship between Attacq and Atterbury, Attacq has secured a pre-emptive right for defined material developments to be undertaken by Atterbury, locally and internationally, ensuring Attacq’s continued access to Atterbury’s development pipeline. “The excellent result of Attacq’s capital raising reflects a healthy appetite in the market for Attacq shares and demonstrates strong support for our strategic direction,” says Morné Wilken, Chief Executive Officer of Attacq.+27 (0)10 596 8892, Attacq.co.za

registration information

Training CoordinatorPo Box 78544, sandton 2146 T: 011 883 0679 F: 011 883 0684 Email: [email protected]

Easily accessible

This is a customised, central training platform that can host all training material

Available any way, anytime and from anywhere

Built-in communication functionality

full four day Programme

SAPOA E-Learning

accredited and certified with

www.sapoa.org.za

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Launched in September 2014

saPoa has developed an e-learning training method for its members. this training platform includes the

filming and production of video content which enables saPoa to manage the delivery of training material to audience groups, who will be able to access training

material on their desktops, tablets and mobile devices.

“The residential property market in Rosebank has grown hand in hand with this and the demand for well-situated property in the area has been unprecedented,” says Strauss. “Rosebank is now being associated with a highly colourful, dynamic and convenient urban-chic lifestyle.”

Strauss says that with state- of-the-art security, the safety of residents will be given top priority. Some of the amenities that will be available include secure pedestrian precincts, a landscaped park, 30 sky gardens scattered throughout the building as common green space, a clubhouse, a swimming

pool, entertainment areas, a coffee shop, a bar/restaurant, a crèche, a gym, a braai area that includes a pizza oven, and lounge and entrance foyer with a concierge.

The building will have a Green Star SA rating. “Park Central is the largest and most exciting residential development concept to ever come online within the Rosebank precinct,” says Strauss. “It is an indication of how much confidence the developers have in the property market in the area. PGP is looking forward to marketing these quality homes.” +27 (0)11 325 0659, Pamgolding.co.za

News Review_FEB_SUBBED.indd 13 2015/01/14 12:46 PM


education, training and development

With skills development as a key Property Sector

Transformation Charter pillar and priority element, it’s imperative for the commercial property industry to address issues pertaining to skills shortages and transformation within the sector.

Transformation in the property sector continues to be a very important focus area. Furthermore, time is of the essence for the property industry to adapt its Property Charter as the April 2015 deadline to align the Property Charter with the Department of Trade and Industry’s Revised BBBEE Act and Codes is looming.

In light of this, SAPOA is undertaking research to determine the capacity and skills development needs relating to skills throughout the industry, regardless of whether they are employed by companies that belong to SAPOA or not.

Martin Ferguson, SAPOA’s HR, Education, Training and Development Manager, collaborates with thought leaders in South Africa’s property sector

Casting light on skills developmentIn light of skills shortages in South Africa, SAPOA is undertaking research relating to capacity and transformation in the commercial property industry

“If we are going to try to address the industry’s challenges, we need to develop a comprehensive understanding of the skills gap within the property sector,” says SAPOA President Amelia Beattie.

Beattie highlights that SAPOA has long recognised that our industry’s workforce needs to be future-ready, and that the widening skills gap needs to be addressed now more than ever.

“High levels of investment in human capital and strong education systems are drivers of economic growth,” she says. “In order to prepare ourselves for future growth and for the sector to be globally competitive and contribute positively to the South African economy, we need to identify the critical and scarce skills in the sector.”

The research was highlighted at a recent SAPOA breakfast session, which was attended by human resources managers from some of the industry’s leading companies.

The research seeks to understand facets affecting capacity in the property industry. The results will be used to understand and analyse the skills shortages in the industry; to determine the growth and/or decline of jobs that the industry experienced over the past 10 years; and to determine the current status quo in terms of employment equity.

Furthermore, the research will determine the scope, depth and investment of commercial property education and training required, as well as determining the future capacity required and identifying possible stumbling blocks to achieving the growth needed.

The research will also determine the level of funding and bursaries required to address the industry skills shortages. In line with this, the organisation has invested itself in the funding of budding property students.

In an effort to address issues of transformation in the property industry and to alleviate the skills shortage in the country, SAPOA established a bursary fund scheme that has garnered some success since its inception.

“About five years ago, the SAPOA Bursary Fund was initiated with the sole objective to create a fund in the commercial property industry for scholarships and bursaries for previously disadvantaged individuals,” says SAPOA Chief Executive Officer Neil Gopal. “These students are taken through a four-year degree, with the fund fully managed at the SAPOA head office, which keeps the intensive administrative matters out of our member’s hands. The students are placed with member companies by SAPOA upon completion of their degree.”

SAPOA HR, Education, Training and Development Manager Martin Ferguson addresses the industry’s HR managers about SAPOA’s research on capacity and skills development needs in the commercial property sector

Photographs by Michael Glenister

HR_FEB_SUBBED.indd 14 2015/01/14 10:30 AM



Gopal says that since the first intake in 2010, seven students have graduated through the SAPOA Bursary Fund, and most have already been placed with member companies. Another six students will graduate in 2015.

“In the grand scheme of things, these numbers are small and there is much more work to do,” says Beattie. “We need to continue to mobilise the corporate citizenship arms of our members, to help ensure that the skills gap in our industry is addressed.”

“We need about 50 students to graduate every four years, which is going to require time and money as well as the industry’s support,” says Gopal. “We are thankful for the sponsorships but we need more funds to really make an impact on the skills shortages. SAPOA, on behalf of the commercial property industry, makes an

appeal to all its member companies to join our current sponsors and make sponsorships and donations to our bursary scheme.”

Beattie believes that education is a powerful tool and that it can make a meaningful difference in transformation. SAPOA’s skills development initiatives could provide a focused solution for the transformation area of skills development by enabling members to channel spend to a recognised education programme.

Once completed, a summary of the results will be published on the SAPOA website. Furthermore, the full report and an implementable skills plan is earmarked to be released at the 47th Annual SAPOA International Convention and Property Exhibition in Durban in May this year.


SAPOA President Amelia Beattie is passionate about education

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HR_FEB_SUBBED.indd 15 2015/01/14 10:34 AM



The Estate Agency Affairs Board (EAAB) is rolling out

the first three-year Continuing Professional Development (CPD) cycle, which commenced on 1 January 2015. From this date, the EAAB will be offering participants an extensive diary of workshops and events around the country.

It is also envisaged that participants will shortly be able to accrue a set number of verifiable CPD points via e-learning mechanisms. This will particularly assist those participants who do not reside, or conduct business, in the major metropolitan areas.

It should be noted that some participants who previously attended specified EAAB audit compliance workshops during 2013 and any one of the annual roadshows in 2014 are entitled to accrue CPD points for attendance at those events.

These points will be allocated to the participants concerned for the 2015 calendar year. As with all other verifiable CPD points, these points will be reflected on the My EAAB portal per individual.

Applicable feesAfter undertaking extensive research, the EAAB has determined that the following fees will be payable by all estate agents on the CPD cycle for the 2015 calendar year:

● Non-principals: R2 000 per annum due on or before 28 February 2015.

● Principals: R2 500 per annum due on or before 28 February 2015.

Such fees are payable by participants yearly in advance by no later than 31 January of each calendar year. Payment of these annual fee entitles participants to attend as many

CPD workshops, events and interventions presented by the EAAB as may be necessary for them to acquire the mandatory 15 verifiable CPD points per year.

It is to be emphasised that no provision is made for payment at the workshops, events and interventions themselves. Participants who have failed to pay upfront will be denied entry to CPD workshops, events and interventions.

The EAAB will be addressing the requisite statements of account in this respect to all participants on the CPD cycle in due course. It would be appreciated if payment thereof could be effected by participants by no later than the dates referred to above. This will enable the necessary administrative arrangements for the CPD workshops, events and interventions to be timeously finalised.

Using the My EAAB portalIt is expected that all participants will frequently access the My EAAB portal at Eaab.org.za, so as to be fully aware of, and regularise, their CPD activities, and to ensure compliance with the mandatory CPD requirement of accruing 15 verifiable and five non-verifiable CPD points per year.

The My EAAB portal will also contain a comprehensive diary of scheduled CPD workshops, events and interventions for the 2015 calendar year, thus enabling participants to decide which specific events, when and at which venue they would prefer to attend as the most convenient to them. The obtaining of the required verifiable CPD points can thus be planned for in advance by participants.

It will be found that the My EAAB portal contains both declaration and a personal development plan. These documents must be electronically completed by each individual participant and submitted to the EAAB.

The declarationThe declaration is relevant to the proposed accrual by each participant of the required five non-verifiable CPD points per year. Participants may accrue such points from a maximum of three of the identified non- verifiable CPD categories.

A participant may, for example, declare that, in the first year, two points will be obtained in the professional development category, two points in the personal development category and one point in the corporate social investment category. The same principle will thereafter apply for the ensuing two years of each CPD cycle.

A further declaration will similarly be required to be submitted by the participant for each of the additional years of the CPD cycle. While the declaration form has been designed to be as user-friendly as possible, participants are required to carefully consider and reflect on the nature of the non-verifiable CPD activities they wish to pursue in each of the three years of the CPD cycle, with special regard as to how the obtaining of those points can add value, both personally and professionally, to their role as practising estate agents.

The personal development planCompletion of the personal development plan by participants will ensure their meaningful

EAAB CPD cycle roll-outThe EAAB is rolling out the first three-year CPD cycle this year,

with the assistance of workshops and events nationwide

participation in, and commitment to, CPD workshops, events and interventions. Participants must have specific regard to those identified CPD activities which they believe will be the most beneficial to them personally, and in the business and professional estate agency environments in which they operate and interact.

Empirical evidence suggests that participation in relevant CPD events is invaluable in not only in creating structured career path progression but also in addressing the educational and compliance gaps that will invariably exist where estate agents are concerned.

CPD should, essentially, be positively viewed and embraced by participants as a valuable career-enhancing opportunity, rather than negatively as an onerous imposed chore that must be complied with.

SubmissionThe declaration and personal development plan must, after completion, be submitted by participants to the EAAB by 31 January of each calendar year. Participants will, however, be granted a further period of three months after 31 January within which to reconsider their original CPD choices and to make any changes they feel are necessary to accommodate their desired developmental programmes.

From 1 May of every year, the declaration and personal development plan as submitted by each individual participant will be accepted by the EAAB as constituting the finalised CPD programme of that participant for that year. Participants will, accordingly, be routinely required to comply with the submitted plans.

HR EAAB_FEB_SUBBED.indd 16 2015/01/14 10:38 AM



SAPOA partners with various universities, including the

University of Cape Town, University of Pretoria, Free State University, University of Johannesburg, Nelson Mandela Metropolitan University, and the University of the Witwatersrand to offer professional property education courses.

SAPOA runs several basic- to high-level education courses ranging from three days to one- year certificate programmes. The courses are offered on a national basis, making them

easily accessible to the commercial property industry.

SAPOA also offers workshops in all our regions on various relevant topics that are of interest to the commercial property industry.

As a member-based association and with various professionals in the industry, we are calling on members from all regions to register their interest with the SAPOA HRD Department as a lecturer and/or workshop presenter in the following topics:

● Property economics ● Property valuation ● Property investment and REITs ● Asset or portfolio

management ● Property and facilities

management ● Tourism in the

property market ● Financial feasibilities ● Commercial property finance ● Property tax ● Property law ● Town planning ● Property development ● Architectural design

● Green buildings and energy efficiency

● Project management ● Construction, health, safety

and building regulations

Interested members can send their CVs to Mafonti Morobi at [email protected], detailing the following:

● Area of expertise ● Highest qualifications ● Working experience ● Residential area ● Contact details ● Lecturing experience

Lecture with SAPOAAre you interested in lecturing on a SAPOA educational programme or being a

presenter at a workshop? SAPOA is now offering you the chance to do so

HR EAAB_FEB_SUBBED.indd 17 2015/01/14 10:38 AM


legal update

Eugenia Makgabo is an Admitted Attorney of the High Court and Acting Legal Manager at SAPOA

What’s fair is fairWith the advent of the Consumer Protection Act, consumers who enter into contracts have more ground to stand on as the spotlight on unfair stipulations in contracts has been strengthened

Contracts are entered into between parties

with the intention to create legal obligations that, in principle, speak to the core of the law of contracts. The elements of a valid contract are consensus, capacity, formalities, legality, possibility and certainty.

The law of contract is concerned to a great extent with fairness in contractual transactions. However, fairness in contracts cannot be looked at in isolation: it essentially goes hand in hand with specific considerations. These include equity, good faith and public policy.

In my view, all three considerations are crucial, and a strong case can be put before the court if all of the considerations can be proved to have been violated. There are, however, circumstances that would automatically lead to a contract being void. For instance, should consent be obtained fraudulently, by mistake or by duress, this would equate to a contract being struck out by the courts. Good faith is viewed as honest and sincere intention or belief. This concept should be carried out from the formation of the contract until the enforcement of the contract. Good faith has been debated over the years and the view is that courts should have a robust approach to this concept in order to transform thoughts around contracting, with the ultimate goal being to have substantive equity in contracts. Equity is defined as fairness.

Public policy is defined in Barkhuizen v Napier. The Constitutional Court stated as follows: “Notions of fairness, justice and equity, and reasonableness cannot be separated from public policy.

Public policy is informed by the concept of Ubuntu.” Simplified, this can be described as norms, values and standards that are representative of respect and ethical behaviour. This standard would be determined by societal views of morality. Public policy seeks to grant protection to parties and a method of weighing whether the contract was prejudicial to a specific party.

Contracting parties’ positionParties that have entered out of their free will into a contract are held to a higher standard. Such parties are expected to have read and understood what they have contracted into and ultimately put their signature to. Generally, persons who sign contracts are bound by the ordinary meaning and effect of the words.

The term “you have signed your life away” is one parties are expected to be aware of. Caution is expected to be exercised at all times. This approach of our common law was confirmed by Professor HR Hahlo of Wits University in 1981:

“Provided a man is not a minor or a lunatic and his consent is not vitiated by fraud, mistake or duress, his contractual undertakings will be enforced to the letter. If through carelessness or weakness of character he has allowed himself to be overreached, it is just too bad for him, and it can only be hoped that he will learn from his experience. The courts will not release him from the contract or make a better bargain for him. Darwinian survival of the fittest, the law of nature, is also the law of the market-place.”

This seems to be a very harsh and strict approach. The courts should have a balanced view taking into consideration broader

aspects of contractual law and holistic circumstances. Regard should be taken to the context and purpose. Protection would more likely be given to parties who are illiterate, come from disadvantaged backgrounds where they have had minimal exposure to such transactions, and have poor language skills – in other words, people who are classified as having unequal bargaining positions at the conclusion of the contract. Such parties are assumed to have been taken advantage of, and protection should therefore be imminent.

It was held in Afrox Healthcare v Strydom that, “The elementary and basic general principle was that it was in the public interest that contracts entered into freely and seriously, by parties having the necessary capacity, should be enforced,” and that, “The question is whether upholding the relevant clause or other term would be in conflict with the interests of the public as a result of extreme unfairness or other policy issues.”

Further it was held in Barkhuizen v Napier that “Thus a term in a contract that is inimical to the values enshrined in our Constitution is contrary to public policy and is, therefore, unenforceable.”

Protection in terms of the Consumer Protection ActThe advent of the Consumer Protection Act No. 68 of 2008 has provided solace for consumers who enter into contracts. The position has remained and been maintained that the correct way of protecting consumers against unconscionable contracts or clauses is to provide mechanisms in consumer legislation.

Legal Review FEB_SUBBED.indd 18 2015/01/14 10:41 AM


legal update

According to the Act, a supplier is defined as: • A person who markets

any goods or services.A consumer is defined as (in respect of any particular goods or services):• A person to whom those

particular goods or services are marketed in the ordinary course of the supplier’s business; and

• A person who has entered into a transaction with a supplier in the ordinary course of the supplier’s business, unless the transaction is exempt from the application of this Act by Section 5(2) or in terms of Section 5(3).

Consumers are protected under the Act, with the exception of a juristic person whose asset value or annual turnover at the time of the transaction equals or exceeds the threshold value of R2-million.

Section 48(1)(a) prohibits a supplier from offering goods or services on terms that are unfair, unjust and unreasonable. Section 48(2) then gives specific examples of prohibited agreements and terms. These include the following conditions:• It is excessively one-sided in

favour of any person other than the consumer or other person to whom goods or services are to be supplied;

• The terms of the transaction or agreement are so adverse to the consumer as to be inequitable;

• The consumer relied upon a false, misleading or deceptive representation as contemplated in Section 41, or a statement of opinion provided by or on behalf of the supplier, to the detriment of the consumer;

• The transaction or agreement was subject to a term or condition, or a notice to a consumer contemplated in Section 49(1);

• The term, condition or notice is unfair, unreasonable, unjust or unconscionable; and

• The fact, nature and effect of that term, condition or notice was not drawn to the attention of the consumer in a manner that satisfied the applicable requirements of Section 49.

The courts are empowered to consider certain facts when determining whether the contract is unfair. These include:• The fair value of the goods

or services in question;• The nature of the parties to

that transaction or agreement, their relationship to each other and their relative capacity, education, experience, sophistication and bargaining position;

• Those circumstances of the transaction or agreement that existed or were reasonably foreseeable at the time that the conduct or transaction occurred or agreement was made, irrespective of whether this Act was in force at the time;

• The conduct of the supplier and the consumer, respectively;

• Whether there was any negotiation between the supplier and the consumer, and if so, the extent of that negotiation;

• Whether, as a result of conduct engaged in by the supplier, the consumer was required to do anything that was not reasonably necessary for the legitimate interests of the supplier;

• The extent to which any documents relating to the transaction or agreement satisfied the requirements of Section 22; and

• Whether the consumer knew or ought reasonably to have known of the existence and extent of any particular provision of the agreement

that is alleged to have been unfair, unreasonable or unjust, having regard to any: – custom of trade; – any previous dealings between the parties; or – the amount for which, and circumstances under which, the consumer could have acquired identical or equivalent goods or services from a different supplier.

ConclusionThe court can decide whether the agreement was indeed unconscionable based on the satisfaction of the above factors.

The two positions are set in law. If, under the Act, one is considered as a consumer, then the avenue to take would be to seek redress by going to court and allowing the court to decide whether indeed the contract is unconscionable, unfair and unreasonable. The other position is that there is a duty of care that is expected from the contracting parties to have read the contract, and assented by way of signature and conduct. The onus would therefore lie with the aggrieved party to prove that a contract which they had consented to was unconscionable.

This would be very hard to prove in a court of law, and the question of negligence is likely to be examined by the court, as the aggrieved party could be viewed as having acted negligently and therefore suffering the consequences for such an act. It is important for parties entering into a contract to bear in mind that the purpose of the contract is ultimately to mitigate risks and manage expectations. The sanctity of contracts must be upheld at all times, while unscrupulous parties who act in a mala fide manner must feel the might of the law.

It is important for parties entering into a contract to bear in mind that the purpose of the contract is ultimately to mitigate risks and manage expectations

Legal Review FEB_SUBBED.indd 19 2015/01/14 10:42 AM


planning and development

An update on the Spatial Planning and Land Use Management Act (SPLUMA)

1 Background1.1 The purpose of this circular is to inform you of the latest development and progress made in the � nalisation of the proposed SPLUMA Regulations, to enable the implementation of SPLUMA.1.2 SPLUMA was signed into law by the President on 2 August 2013, and formally published in the gazette on 5 August 2013.

The Minister of the Department of Rural Development and Land Reform (DRDLR) gazetted and published Draft Regulations in terms of Section 54 (1) of SPLUMA on 4 July 2014 for a period of 60 days for comments. The DRDLR further re-published the Draft Regulations for a period of 30 days, with the new date for the closing of the commenting period set at 10 November 2014.

The DRDLR is currently in the process of considering the comments received. The purpose of the re-publication was to allow for more time for interested parties to provide comments on the Draft Regulations. It must be noted that the re-published Regulations are exactly the same as those published on 4 July 2014.1.3 On 3 October 2014, a national working group (NWG) was established to propose suggestions on the completion of the Draft SPLUMA Regulations. The meeting resulted in the establishment of � ve thematic working groups (TWGs), whose function was to deliberate on the � ve themes of the Draft Regulations. Furthermore, the TWGs met on 9 October 2014, when key issues for consideration from the � ve thematic areas were presented and discussed. The composition of the � ve TWGs was such that there was representation form each province. The representation includes various national departments, provincial government and municipalities.1.4 The NWG met on 16 October 2014, and it was agreed that the framework approach to the drafting of Regulations is preferred.

Lekgolo Mayatula is SAPOA’s Planning and Development Manager

The purpose of this circular is to inform SAPOA members

of the latest developments and progress made on the fi nalisation

of the proposed SPLUMA Regulations, to enable the

implementation of SPLUMA

On 23 October 2014, the convener of the NWG concluded Chapter 6 of SPLUMA required immediate regulation, in order to implement SPLUMA.1.5 Some principle decisions were taken on 16 October 2014. These were then rati� ed at the meeting on 23 October 2014, and included: • That the proposed Regulations should take

the form of a set of Regulations and should as such give broad minimum standards to be completed with, recognising the di� erence in competencies of the three spheres of government involved;

• That the proposed framework Regulations are to contain a minimum set of Regulations to enable the implementation of SPLUMA;

• That the Regulations are to be supplemented by a set of Standard Draft Municipal Land Use Planning Bylaws to be presented to municipalities for their adoption, with or without amendments;

• That SPLUMA may have di� erent sets of Regulations, some of which may come at a later stage, especially where they are not needed right now to be able to implement SPLUMA;

• That it is recognised that the Regulations and the proposed bylaws will not be the only regulatory instrument for land use planning, and that they will also be supplemented by various sets of guideline documents and pro-forma documents such as standard agreements, standard notices, application forms etc;

• That suitable exemption clauses be adopted to make provision for provincial and municipal di� erentiation. (This is dependent on the content of the Regulations);

• That it is imperative for SPLUMA to be implemented as soon as possible;

• That the supporting regulatory instruments be expanded and further developed as time goes on and more experience is gained;

Town Planning_FEB_SUBBED.indd 20 2015/01/14 10:48 AM



Section Bylaw content

33(1) &(2) Additional matters

37(2) T&C of MPT members

37(4) MPT members nomination procedure

40(1)-(4) MPT procedures, operations and oral hearing

44(1) & (2) How and where application is to be submitted and handled

43(1) List of matters to be considered in conditions of approval

44(1) & (2)Detailed time frames for application procedures (add to 10 + 4)

44(3) Standard matters for consideration by all decision-makers

46 Process after approval iro SG and Registration of Deeds

47(1) How and where application is to be submitted and handled

48-50 Investigations,engineering services and parks and opens spaces

Section Guideline content

33(1) Where to submit application and to whom

34(1) & (2) Pro-forma agreements and district involvement

34(3) Pro-forma notice

35(1)-(4) MPT type, categorisation and authorised official resolutions

37(2) T&C of appointment of MPT members and N&S of not in Regs

37(3) Legally vetted guidelines for Section 139 intervention

37(4) Provide pro-forma notice

38(2) Guidance on process to remove disqualified MPT member

38(3) Guideline on disclosure of interest

40(1)-(4) MPT operation and procedures

41(1)-(2) How to regulate for submission of applications

42 Public interest, transformation imperatives and agricultural land

42(2) How to ensure compliance with environmental legislation

• That theActbe scrutinised todeterminewhich sections of the Act requireRegulations right now to be able toimplement SPLUMA as a minimum.Chapter 6 of the Act was singled as aChapter to be considered Inmore detailbyTWG4;and

• ThatTWGwould interrogate the existingproposed Regulations to determine, inlight of the above, which of the clausescanremain,whicharetobeadjustedandwhich are to be omitted, and for thoseto indicate whether or not these shouldbe taken in later Regulations, bylawsorguidelines.

2 Resolutions of the 3rd NWG meeting2.1ThenewstructureoftheproposedDraftSPLUMA Regulations to be drafted, whichprimarily focuses on regulating Chapter 6of SPLUMA, was adopted by the NWG on4November2014.2.2 Thematic Working Group 1 and 4’spresentation on the section of Chapter 6 ofSPLUMA to be regulated, including sectionsrequiringbylawsandguidelines,wasadoptedbytheNWG,andincludesthefollowing:

Regulate now Brief content proposal

33(1) & (2) Mun to decide on application process and alignments

34(1) Provide for minimum content of JMPT agreement

36(2)-(4) Minimum regulation on nomination procedure

37(2) Regulations on terms and conditions of MPT members

38(5) & (6) Minimum regulation on nomination procedure (replacement)

40(1)-(4) Mun to determine way of MPT operational issues

40(5) & (6) Use existing Reg 69 and accessibility of S 31(2) of Act

41(1) & (2) Mun to determine applications, approval and thereafter

44(1) & (2) 10 months to complete and four months for decisions

45(2) Procedure to intervene and cost allocation

47(1) Mun to determine applications, approval and thereafter

51(2) Appeal to ready for decision 150 days

52 (Yes & No) National interest

On 3 October 2014, a national working group was established to propose suggestions on the completion of the Draft SPLUMA Regulations. The meeting resulted in the establishment of five thematic working groups (TWGs), whose function was to deliberate on the five themes of the Draft Regulations. Furthermore, the TWGs met on 9 October 2014, when key issues for consideration from the five thematic areas were presented and discussed. The composition of the five TWGs was such that there was representation form each province. The representation includes various national departments, provincial government and municipalities

Town Planning_FEB_SUBBED.indd 21 2015/01/14 2:11 PM



Section Guideline content

43(1) Standard matters in conditions of approval (b) proscribed

33(1) & (2) Additional matters

37(2) T&C of MPT members

44(1)-(2) Written submission, and where and how to do oral hearings

44(3) Detailed time frames suggestion

45(3) How to deal with and consider intervener applications

46 Dealing with applications not in accordance with title conditions

47(1) Notification process of submission and relevant considerations

47(4) How to deal with conditions to benefit of state

51(3)-(7) Pecuniary and proprietary interest

52What is national interest, how to deal with it, who deals with it and status of decision

2.3 The dates for the completion and approval of the Regulations as proposed by the NWG on 4 November 2014 included:• TWG Chairpersons and Deputy Chairpersons

2nd meeting: 17 November 2014• Final NWG 5th: 3 December 2014 • Proposed Closing NWG Meeting/NCF: 10

December 20142.4 The legal drafting team would in the 14 days after 4 November 2014 revisit and redraft the exiting proposed regulations, mindful of the decisions/instructions given by the NWG meeting on 4 November 2014.

It is of utmost importance that the content of the Regulations be finalised as soon as possible to be able to fully inform the team

to be drafting the proposed Standard Draft Municipal Land Use Planning Bylaws so as to be clear on the extent of the content thereof, and to prevent interpretation issues.

3 Proposed schedule till 1 July 20153.1 It has to be accepted that a new date for envisaged SPLUMA implementation be communicated. There has to be a date set to work towards so as to inform a timeline for completion of minimum actions.

Since 1 July 2015 marks the date of implementation of the new municipal financial year, it was proposed that 1 July 2015 would be the new target date. It is a rather tight framework, and to reach this objective, the cooperation and commitment of all involve would be required.3.2 Agreement was thus made with regards to administrative and other functions of municipalities and provinces, which is to ensure that implementation of SPLUMA is budgeted for, and preparation in regard thereto is planned towards the date of 1 July 2015.3.3 The schedule of dates to ensure the effective start towards the implementation of SPLUMA is indicated below:

• SPLUMA Draft Regulations approved by the Minister: 1 January 2015

• Bylaws, delegations and tariffs: 1 April 2015 • Land use regulators, MPTs and Appeal

Authority: 1 July 2015• Provincial SPLUMA legislation: 1 July 2015• Training and capacity building: 1 March

2015 to 1 July 2015

3.4 Further communication in this regard is to follow. The DRDLR would like to thank you for your continued participation in this process to improve the spatial planning and land use management functions of the three spheres of government in South Africa.

Schedule towards the implementation of SPLUMA

Oct-Dec 2014 Jan-Mar 2015 Apr-June 2015 1 July 2015 2015-2016

Regulations

Bylaws, delegations, tariffs, etc

Setting up land use regulations (MPTs & approval authority)

Provincial SPLUMA legislation

Training and capacity building

Commencement date

It has to be accepted that a new date for envisaged SPLUMA implementation be communicated. There

has to be a date set to work towards so as to inform a

timeline for completion of minimum actions

Convention Save The Date ad Full 2.indd 2Town Planning_FEB_SUBBED.indd 22 2015/01/14 10:52 AM



ANNUAL SAPOA INTERNATIONAL CONVENTION AND PROPERTY EXHIBITION

DURBAN - ICC19 - 21 MAY 2015

THE REAL IN REAL ESTATEproperty, people, purpose & passion

Enquiries: Jane Padayachee:t: +27 (0)11 883 0679 f: +27 (0)11 883 0684

e: [email protected]

www.sapoaconvention.co.za

Save the date!

ANNUAL SAPOA INTERNATIONALCONVENTION AND PROPERTY EXHIBITION

DURBAN - ICC19 - 21 MAY 2015

ave the date!

E s t . 1 9 6 6

Convention Save The Date ad Full 2.indd 2 2014/11/10 10:10 AMTown Planning_FEB_SUBBED.indd 23 2015/01/14 10:52 AM


new members

Welcome to SAPOA

ECA Consulting

By Candace King

We welcome the newest members to have joined the organisation, showcasing who they are, what they do and why they joined

ECA Consulting is a civil and structural engineering consultancy that is proud to

be part of infrastructure development in South Africa’s cities, towns and rural areas, transforming the lives of many citizens.

For the past 21 years, ECA Consulting has surpassed industry standards, with a team of highly skilled, award-winning engineers and design specialists. Founded in 1993 in Vryheid, KwaZulu-Natal by Ernst Cloete, ECA Consulting originally specialised in commercial and industrial development. The company soon expanded to o� er consulting civil engineering services in related disciplines, including civil construction, water provision, roads and transportation, public sector infrastructure, regional planning and property development.

Apart from expanding its scope, the company has widened its operations to include additional o� ces in Mbombela, Mpumalanga and Ladysmith, KwaZulu-Natal.

ECA Consulting o� ers various specialist services to assist private and public sector clients in disciplines such as water and waste water treatment facilities; bulk water supply networks, pumping schemes and

reservoirs; structural design; roads and transportation; property development and township infrastructure; and geographic information studies (GIS).

“We pride ourselves on being one of the most dynamic, reliable and thorough structural civil engineering companies in South Africa,” says Eugene James Bosch, Managing Director of ECA Consulting. “At ECA Consulting, we adapt our services and designs to meet with the needs of developers, so they can align their business with the demands of an ever-changing market. The intended end land use of townships is also taken into consideration when we design and implement the required services. At ECA Consulting, we coordinate development activities, converting ideas into real property.”

Bosch explains that enduring relationships have been built over the years with many government departments, such as Public Works, with the planning, design and construction of schools and clinics throughout a number of municipal areas. “We have a reliable track record of completing municipal and provincial road projects for several provincial and municipal roads authorities by adhering strictly to exact standards and timelines,” he says.

Urban and rural townships bene� t substantially from ECA Consulting’s GIS services, which use proven methods for collecting community-speci� c information on real and pressing needs such as schools, clinics, roads and bulk water systems.

Since 1993, ECA Consulting has been involved in the development and refurbishment of water puri� cation and waste water treatment facilities. Extensive knowledge on water treatment processes has enabled ECA Consulting to introduce new technology, building on the water treatment principles of the engineers who’d gone before.

ECA Consulting also assists with the construction of temporary package water treatment plants, providing communities with clean drinking water until a bulk or regional water supply is brought online.

The team’s knowledge and experience makes it particularly adept at handling emergency municipal water supply situations, ensuring that municipal o� cials can focus on communication, while ECA Consulting handles everything else.

Working alongside many municipalities, ECA Consulting enjoys playing a pivotal role in the upgrade and enhancement of public facilities, says Bosch. “We o� er design services, and assist emerging contractors on site to facilitate the construction of a� ordable and low-cost residential housing. We are fully dedicated to the upliftment of our people.”

ECA Consulting believes in the transformation of South Africa, and is veri� ed as a small enterprise with a Level 3 BEE contribution classi� cation and with a recognition score of 80%. ECA Consulting is a 100% South African-owned company. All the company’s shares are held by the employees themselves. ECA Consulting is also a member of the Association of Consulting Engineers of South Africa.

With a mission statement of “Changing lives through the delivery of sustainable, cost-e� ective engineering solutions with integrity”, the company is also committed to assisting previously disadvantaged individuals. “Our commitment to training and mentorship is evident in our in-service civil and structural engineering training programmes and annual bursary awards,” says Bosch. “A large portion of the company’s budget is directed towards development and education.”+27 0(34) 983 2825, Ecaconsult.co.za

Eugene James Bosch, Managing Director of ECA Consulting

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new members

New Members_FEB_SUBBED.indd 25 2015/01/14 11:06 AM


theme leader


Transformation in the property industry has come a long way since the inception of democracy; however, the journey has only just begun

By Candace King Photographs by Elvis Ntombela

property practitioners will have to be created. “Transformation is imperative,” he says. “It leads to job creation. It leads to money staying in the country, which affects South Africa’s balance of payments. It also leads to skills development. It’s good for our country’s economy as well as its stability.”

Strides have been made in the property sector. Over the past four years the industry has seen the rise of new and influential black property players such as Rebosis Property Fund Chief Executive Officer Sisa Ngebulana and Delta Property Fund Chief Executive Officer Sandile Nomvete.

Such players have successfully listed black-managed and substantially owned funds worth billions of rands on the JSE. Furthermore, credit goes to companies such as Growthpoint Properties Limited, Redefine Properties, Hyprop Investments Limited, Vukile Property Fund Limited, Resilient Property Income Fund and SA Corporate Real Estate Fund that undertook BEE transactions in the early to mid-2000s.

“Transformation is imperative.

It leads to job creation. It leads

to money staying in the country,

which affects South Africa’s

balance of payments. It also

leads to skills development.

It’s good for our country’s

economy as well as

its stability”

Thomas Matlala, President of the South African Institute of Black

Property Practitioners

As cranes dominate the South African skyline, our built environment is

constantly being reshaped, with new property developments, grand refurbishments and regenerative projects mushrooming across the country.

While physical development and spatial transformation are imperative for the future stability, inclusiveness and growth of South Africa, the real estate sector has over the years increasingly focused its attention not only on the bricks and mortar but also on the individuals working within the sector, with a particular emphasis on the previously disadvantaged and on black economic empowerment (BEE).

Transformation in the property sector has come to the fore and is now regarded as a must-have, says South African Institute of Black Property Practitioners (SAIBPP) President Thomas Matlala.

Matlala emphasises that a transformed property sector is beneficial for the country as a whole; and that black-owned property companies boasting bright and skilled

Thomas Matlala, President of the South African Institute of Black Property Practitioners

Sisa Ngebulana, Chief Executive Officer of Rebosis Property Fund

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theme leader


Hyprop Investments Limited and Redefine Properties also played a key role in transferring skills, balance sheet support and assets to then- unlisted funds Vunani Property Investment Fund, now Texton Property Investments, and Dipula Property Fund (now Dipula Income Fund).

Apart from the private sector, government has also partly played a role in promoting the emergence of black property players. In 2011, the Department of Public Works (DPW) stopped signing long-term leases with established property companies or individual landlords who lacked empowerment credentials. This was a catalyst for the listing of funds with BEE credentials.

Progressive yet slowDespite the achievements made, black ownership only constitutes about four percent of the total R400-billion market capitalisation of the South African listed property sector. Unfortunately, black people are still highly under-represented in the high echelons of real power and decision-making in most listed property companies.

According to IPD South Africa research for 2013 and 2014, out of a total of 261 non-executive and executive directors, only 53 are black and 189 are white. Black people are over-represented as non-executive directors, meaning they don’t play a role in the operational management of these companies. The report shows that there are only six black executive directors on the boards of listed property companies.

“While much has been achieved in the past 20 years in the property industry through the entry of black players and women, more still needs to be done,” says Matlala.

“The Property Sector Charter by default doesn’t have the same teeth as the other Charters in South Africa,” says Ngebulana. “For argument’s sake, the Mining Charter acted as a much bigger catalyst for BBBEE given the procurement levels it prescribed. As a mining house you had to comply to qualify for new mineral order mining rights. In the property sector, government doesn’t necessarily have this leverage – the DPW is the only mechanism available at a national

City of Johannesburg Executive Mayor Parks Tau

FROM LEFT Marius Muller, Chief Executive Officer of Pareto Limited; Ipeleng Mkhari, Chief Executive Officer of Motseng Investment Holdings; and Samuel Azasu, Associate Professor of Real Estate at the University of the Witwatersrand

“Transformation is non-negotiable;

it should be at the pinnacle of

everything we do. And it needs

to be broad-based”

Parks Tau, Executive Mayor of the City of Johannesburg



theme leader

level to influence transformation, and even there it is limited to the Incubator Programme applied to only a handful of listed funds.”

Transformation, believes Nomvete, is part of a larger project to ensure that everyone thrives and leads meaningful lives. For him, economic transformation is crucial to creating a stable society. If such transformation is not implemented, he warns, the consequences will be dire and grim.

“Unless we actively pursue change, we could find ourselves with our very own ‘South African Spring’, where the ‘have-nots’ no longer ask to be included in the mainstream economy, but agitate for change through an uprising,” he says. “It is, therefore, very important for us as a society and a sector to avoid such a scenario. In future, as historically disadvantaged individuals increasingly muscle their way into the mainstream economy, the focus will no longer be on skin colour but on class – the rich versus the poor. I believe this would be the greatest challenge for the country.”

Acting on changeTwo decades into our democracy, it’s time to act, says Matlala, adding that now is the time for government to implement and enforce policies.

This, among other key transformation topics, was addressed at the 2014 SAIBPP Convention. Held at the Turbine Hall in Newtown, Johannesburg, the one-day Convention offered the property industry a chance to openly discuss its contribution to the overall transformation of the country

given the sensitivity and legacy of property ownership in South Africa.

“We have some of the best policies in the world – but if we can’t implement these policies properly then we won’t achieve anything. Thus implementation is key,” says Matlala.

Pareto Limited Chief Executive Officer, Marius Muller, agrees. “You can’t blame the policy and the vision when you have implemented it badly,” he says. “We need to marry making a profit with transformation. There needs to be an incentive that business responds to. Making the change, I believe, is a commercial issue.”

“Transformation is not only about addressing the issues of the past; it must make compelling business sense,” says Samuel Azasu, Associate Professor of Real Estate at the University of the Witwatersrand.

Azasu believes that there’s a trust deficit between the public and private sectors. “When trust is broken, the backbone of business weakens,” he says.

“Government doesn’t make a difference; it’s the people within the government that can make a change,” says Muller. “Transformation is about changing what is wrong – it can happen and it can be commercially viable.”

While there are challenges when dealing with government, it’s imperative for the public and private sectors to join forces in the transformation journey. Partnerships are key in the transformation of the country, says City of Johannesburg Executive Mayor Parks Tau.

“Business needs to advocate and lobby for transformation, and needs to work side by side with government during this process,” explains Tau. “There are a number of areas where we can collaborate in order to drive the process of transformation.

“There’s great opportunity within the property sector in terms of driving transformation. We need to build and develop a city that’s world-class – we need to create access to the city. If we do not, we will never achieve true transformation.”

“There is an under-representation of black people in the sector, thus there is a great need to ensure transformation,” says Nomzamo Radebe, Managing Director of JHI Properties. “There has been a notable change in the sector; however, this progress is slow.

“There is recognition and we have a voice, but we are only a handful and a drop in the

Nomzamo Radebe, Managing Director of JHI Properties

Sandile Nomvete, Chief Executive Officer of Delta Property Fund

“Unless we actively pursue

change, we could find ourselves

with our very own ‘South African

Spring’, where the ‘have-nots’ no

longer ask to be included in the

mainstream economy, but agitate

for change through an uprising”

Sandile Nomvete, Chief Executive Officer of

Delta Property Fund


theme leader


Saul Gumede, SAIBPP Past President and Executive Director of Dipula Income Fund

“We have changed the

lives of people but we

haven’t changed the game.

We need to be able to change

attitudes, unite and bring

forward ideas of improvement

and changes for the better.

We need to be agents of

change ourselves”

Xolani Qubeka, General Secretary of

the Black Business Council

ocean – and we need to tackle this head-on. We have made strides but we still have a long way to go.”

Having come from humble beginnings, Radebe says that education was the key to her progress and it remains a significant element in her life to this day.

According to Ipeleng Mkhari, Chief Executive Officer of Motseng Investment Holdings, we need to have very aggressive, skills-driven programmes that bring new entrants with the right skills into this market.

The next 20 yearsApart from investing in and stimulating education and training, Matlala says that partnering with government will be beneficial for enhanced transformation.

“We need to train students to be the future business leaders,” says Matlala. “When there’s a problem in society, we cannot solely leave it up to the politicians. If you turn to government then you need to work with them – we need institutions and government.”

Matlala believes that leadership, a fundamental instrument of transformation, is lacking in the country. “This country lacks leadership, business lacks leadership,” he says. “The death of business leadership at this time is crippling. What is it that we as business can do to assist our issues?”

“We need to take the emotion out of the equation and stop playing the historical disadvantaged card,” says Muller. “We need to take responsibility and not blame. Socioeconomic development is not about providing a cheque; it’s about making a difference – provide the rod instead of the fish.”

“Transformation is non-negotiable; it should be at the pinnacle of everything that we do. And it needs to be broad-based,” says Tau.

In terms of the road ahead, SAIBPP Past President and Executive Director of Dipula Income Fund Saul Gumede says that SAIBPP’s long-term goals include creating a financially stronger organisation, being more involved in upskilling and education, and intensifying its transformation agenda. “We need to move into a different gear in order to strengthen transformation,” he says.

Partnerships between established and transforming businesses is imperative, says Mkhari, and getting black women into the industry is also crucial.

“Getting the elements of funding and transformation right is challenging – partnerships can assist here,” she says. “The intent from the public and private sector is where change begins.”

“Change is confused with the word transformation,” says Radebe. “It’s a process that equalises value. We require a paradigm shift to achieve transformation.”

“We have changed the lives of people but we haven’t changed the game,” says Xolani Qubeka, General Secretary of the Black Business Council. “We need to be able to change attitudes, unite and bring forward ideas of improvement and changes for the better. We need to be agents of change ourselves.”

Xolani Qubeka, General Secretary of the Black Business Council

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eye on Africa


eye on Africaeye on Africaeye on Africaeye on Africa

The Africa series:

our monthly

country-by-country

focus

▼ Population 94,1-million (2013)▼ Major cities Addis Ababa (3,4-million),

Dire Dawa (0,6-million) ▼ Currency Birr (ETB)▼ Total area 1 104 300km²▼ GDP growth 10,6% (2013/2014)▼ Key industries Agriculture, food

processing, beverages, leather, textiles, chemicals, cement

Ethiopia at a glance

When one thinks of Ethiopia, extreme poverty and famine are the � rst

things that come to mind. While these ills have plagued the country for decades, Ethiopia’s image is changing to one that’s prosperous and full of opportunity.

Thirty years ago, Ethiopia su� ered a famine that has been dubbed of “biblical”

From famine to economic fame, Ethiopia has risen to the top in three decades as one of the world’s most poised emerging markets By Candace King

proportions, which resulted in the death of more than one-million people. Today, the country is transitioning into modernity and is experiencing high economic growth as one of the fastest growing non-oil economies in Africa.

Situated in eastern Africa, west of Somalia, Ethiopia is now regarded as one of the world’s top � ve emerging economies right up there alongside China and India. With continued rapid growth across all sectors, Ethiopia is becoming an African powerhouse.

Forget the BRICS and meet the PINEs, said Time magazine in March 2014. As the famous emerging markets of Brazil, Russia, India, China and South Africa have slowed and new exciting markets have ushered in, the Philippines, Indonesia, Nigeria and Ethiopia are the new emerging kids on the block.

Increased political stability, reduced trade barriers and improved governance have all played a role in Ethiopia’s rise. In 2011, Ethiopia’s impressive 11,4% GDP growth placed it on the map as one of the world’s fastest-growing economies.

In the 2012/2013 � scal year, Ethiopia’s economy grew by 9,7%, the 10th year of robust growth in a row. In 2012, Ethiopia was the 12th-fastest-growing economy in the world. Over the past decade, the average annual real GDP growth rate for the country was 10,9%. From now until 2017, several projections suggest that Ethiopia’s growth will average between seven and 10 percent.

As Africa’s second-largest in terms of population, the biggest landlocked country on the continent, and sub-Saharan Africa’s � fth-biggest economy, Ethiopia has come to be known as a growing nation with a wealth of potential.

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eye on Africa

31SOUTH AFRICAN PROPERTY REVIEW 31SOUTH AFRICAN PROPERTY REVIEW

eye on Africa

Ethiopia

Africa uncovered



eye on Africa

Addis Ababa prime rents and yields

Prime rents Prime yields

O� ces US$15/m2 per month 10%

Retail US$30/m² per month 10%

Industrial US$4/m² per month 16%

Residential US$4 500 per month* 8%

Source: Knight Frank LLP * Four-bedroom executive house – prime location

Macroeconomic indicators2012 2013(e) 2014(p) 2015(p)

Real GDP growth 8,8 9,7 7,6 7,2

Real GDP per capita growth 6,2 7,1 5 4,7

CPI in� ation 20,5 7,4 7,9 7,6

Budget balance % GDP -1,2 -2 -0,4 -0,3

Current account balance % GDP -6,5 -5,4 -9,4 -10,9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations

Economic and opportunistic wealth aside, Ethiopia is rich in natural resources and boasts cultural and ethnic diversity. The country’s history is even richer: it’s regarded as the true cradle of humankind as fossils dating back 3,2-million years were found in Ethiopia’s Afar Triangle, the oldest record discovered of one of humankind’s earliest ancestors.

Unique among African countries, Ethiopia (along with Liberia) is considered the only county in Africa to never have been truly colonised. The ancient Ethiopian monarchy led by Emperor Haile Selassie maintained its freedom, with the exception of a brief Italian occupation from 1936 to 1941.

Thereafter, monarchic rule came to an end in a coup in 1974, resulting in Ethiopia becoming a socialist state. With the onslaught of coups, uprisings, wide-scale drought and massive refugee problems, the regime was � nally eradicated in 1991 by a coalition of rebel forces, the Ethiopian People’s Revolutionary Democratic Front, leading to stability. A constitution was adopted in 1994, and Ethiopia’s � rst multi-party elections were held in 1995.

Ethiopia is home to one of the oldest Christian churches – the Ethiopian Orthodox Church – and was a founder member of the United Nations and the African base for many international organisations.

Ethiopia’s economy today mainly relies on agriculture, which constitutes close to 50% of Ethiopia’s GDP, with co� ee as a key export. In the 2012/2013 � scal year, it grew by 7,1%, while industry, accounting for 12,3% of GDP, rose by 18,5% and services, with 45% of GDP, increased by 9,9%. This momentum is expected to continue in 2015.

Negatively, frequent drought, poor cultivation practices and climate change a� ect Ethiopia’s agricultural sector, which has led to the government pushing to diversify into

The Ethiopian property industry With urbanisation rapidly growing, Ethiopia is undergoing great physical change and development is taking shape. Ethiopia’s citizens are experiencing the change too as the country caters to a rising middle class.

One study has shown that Ethiopia creates millionaires faster than anywhere else on the continent. Ethiopia imports about 10-million litres of wine a year to serve the growing middle class. The government highlights that it is on track to meet most of the Millennium Development Goals – by 2025, Ethiopia will become a middle-income country.

Currently, the country is experiencing a property and infrastructure boom, especially in the capital Addis Ababa, where “Afropolitans” – Africa’s urban and trendy middle class – thrive. As you drive out of the capital, newly built a� ordable government housing and private housing developments can be seen.

Infrastructure spending in Ethiopia, as a percentage of GDP, is the highest in Africa. Through its development plan, the government is focusing heavily on transport and energy. During the second phase of the Growth and

eye on Africa

manufacturing, textiles and energy generation. Business opportunities are diverse, and include commercial farming and intensive horticulture, industrial development, agri-industry, construction, mineral mining and metal works as well as services in the tourism and hospitality sectors.

While banking, telecoms, insurance and micro-credit industries are restricted to domestic investors, Ethiopia has attracted signi� cant foreign investment in textiles, leather, commercial agriculture and manufacturing.

Foreign investment has also begun to pick up. Chinese investment has made quite a mark in Ethiopia: Huajian, one of China’s biggest shoe manufacturers, has invested heavily, and currently employs more than 500 people at an industrial park outside Addis Ababa, with ambitious plans for further expansion. Ethiopia’s economy continues to follow its state-led � ve-year Growth and Transformation Plan implemented in 2010, and has thus far achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development.

180-310

310-1 500

1 500-4 500

4 500-28 000

Population in thousands

eye on Africa


eye on Africa


Transformation Plan, which runs from 2015 to 2020, Ethiopia is set to spend US$20-billion on its power-development programme. The funding will go towards the construction of 10 to 12 additional power-generating projects.

The state owns all the land under Ethiopia’s constitution and offers long-term leases to tenants. Land use certificates are now being issued in some areas, allowing tenants more recognisable rights to continued occupancy and making more concerted efforts to improve their leaseholds.

Retail marketThe retail sector in Ethiopia is still in its infancy, characterised by local retail operators. Slowly but surely, foreign retailers are accessing the Ethiopian retail market, with the government open to foreigners managing state firms.

Currently, in the Addis Ababa retail market, there are no stand-alone malls, with retail property located on lower and ground levels of office blocks. Examples include Dembel City Center and Getu Commercial Center.

Residential marketAccording to Knight Frank, the Addis Ababa residential market is strong, with the serviced apartment sector proving to be particularly successful off the back of the boom in the hospitality sector.

Knight Frank’s Africa Report 2013 says that “Serviced apartments associated with ‘brand’ hotels can rent for as much as US$6 000 per month. Rents for good-quality villas are generally in the order of US$3 000 to US$4 500 per month, and some are used as offices. However, rents will always be higher for commercial use because there is an increased property tax for landlords who are leasing commercial premises.”

But with the rapid growth of Ethiopia’s middle class, the retail market is sure to expand. According to research by Sagaci Research, there’s potential for 15 to 20 new modern supermarkets and five to 10 new shopping centres in Addis Ababa between now and 2018.

Industrial and office marketThe Ethiopian industrial sector is beginning to display signs of future potential. Currently, the market mostly comprises local and light industrial activity. According to Knight Frank’s Africa Report 2013, industrial “zones” are just starting to appear, located in areas such as Kality and Akaki.

In terms of the office sector, there has been a reasonable amount of office construction in Addis Ababa, largely focused on the prime areas of Bole and Kazanchis. This has generally been in a format that incorporates retail at lower levels, sometimes to an intrusive extent, which is to the detriment of the office element of the building.

OPPOSITE Meaning "new flower", Addis Ababa was

founded in 1887 by Emperor Menelik

ABOVE Edna Mall in Addis Ababa, Ethiopia's capital

BELOW LEFT A member of the Mursi tribe from

the isolated Omo valley in southern Ethiopia

BELOW RIGHT A trader selling dried goods and spices

eye on Africa




A royal power Not to be confused with Britain or

Great Britain, the United Kingdom (the UK) consists of four countries – England, Scotland, Wales and Northern Ireland – and is inhabited by an estimated 64,1-million people, making it the 22nd-most populous country in the world.

Along with the four home nations, the UK has 14 overseas territories, including the hotly disputed Falkland Islands, Gibraltar and Indian Ocean territory. Queen Elizabeth II, who ascended the throne upon the death of her father King George VI in 1952, is the monarch of the UK; its constitutional monarchy is commonly referred to as the British monarchy.

London, home to the Queen’s residence, is the capital city of both England and the UK, and is not only an important � nancial centre with the fourth-largest urban area in Europe but it also has the largest gross domestic product (GDP) in Europe.

▼ Population 64,1-million (2013 est.)▼ Major cities London, Birmingham, Glasgow,

Liverpool, Manchester, Leeds and Edinburgh▼ Currency Pound sterling (GBP) ▼ Total area 243 610km²▼ GDP growth 1,7% (2013)▼ Key industries Banking, insurance, business,

aerospace, pharmaceutical, automotive

Key facts

The

WORLD series ● our monthly country-by-country focus ●

From kilts to castles and The Beatles to James Bond,

the United Kingdom has earned its place among the global

powers not only for its phenomenal exports but

for its globalised economy

By Michelle Marais

Pound for poundAfter the economic recession of 2012, the UK’s economy has bounced back to positive growth. However, since 2006, when it reached its highest economic freedom score ever, the UK has largely been on a path of declining economic freedom as a result of expansionary public spending and subsequent government debt.

Government involvement is primarily exercised by HM Treasury – the government’s economic and � nance ministry, which is headed by the Chancellor of the Exchequer –and the Department for Business, Innovation and Skills.

In 2013, the UK was the fourth-largest exporter and importer in the world, importing 40% of its food supplies, and had the second-largest stock of inward foreign direct investment and the second-largest stock of outward foreign investment, making it one of the world’s most globalised economies.

Source: UK Employment Trends: CBI/Accenture Employment Trends Survey (Cbi.org.uk)

Eye On The World UK_SUBBED.indd 34 2015/01/14 11:41 AM


eye on the world

● Although the UK’s population is growing faster than ever, its home-building rate is among the worst in the world.

● Nearly half of all London households live in � ats, compared to just 14% in England as a whole.

Did you know?

The service sector dominates the UK economy, contributing about 78% of GDP. This sector includes banking, insurance, business services and other service industries, most of them operating in London. The aerospace industry, pharmaceutical industry and automotive industry also play a major role in employment and exporting. The UK’s economy is further boosted by North Sea oil and gas production; its reserves were valued at an estimated R432-trillion in 2007.

In 2014, the country was considered to have a high-income economy, and with a score of 74,9 is categorised as very high in the Human Development Index, ranking 14th in the world. With economic growth forecast at 3,2%, the UK is currently creating more jobs than the European Union combined, which has resulted in unemployment falling at a record pace.

Internationally, the UK remains a power as it exercises considerable economic, cultural, military, scienti� c and political in� uence.

Playing houseConsisting of more than 27,8-million residential properties, the UK housing market plays a large part in the country’s economy. In 2012, the average mortgage was more than three times the size of buyers’ income, making it evident that Britons are well aware that purchasing property is one of the biggest investments they will ever make.

The � nancial crisis in 2008 had a signi� cant e� ect on the housing market, which is very sensitive to the overall economic climate – house prices fell in the UK by about 15% between January 2008 and March 2009.

In addition, the number of property sales in the UK dropped almost by half from its peak of 1,67-million in 2006 to 0,86-million in 2009. Since then, the number of sales has recovered somewhat, reaching 1,07-million in 2013.

Housing tenure in the UK has seen great change over recent years. Between � nancial year 2001/2002 and � nancial year 2011/2012 there was an increase of 8,3% in total dwelling stock.

EnglandThe make-up of England’s housing sector changed dramatically between 2001 and 2012, growing by nine percent over this period from 21,2-million to 23,1-million.

The signi� cant growth in private rental stock was mirrored by a decrease in local authority housing stock. Much of the decrease can be attributed to large-scale housing stock transfer, while the remainder of the decrease has been a result of low local authority building rates and the introduction of the right to buy.

In recent years, the UK government has pursued a number of high-pro� le housing policies, including the Local Infrastructure Fund and the Get Britain Building Investment Fund, which both aim to boost the house building rate.

Source: FocusEconomics Consensus Forecast United Kingdom, December 2014

Long-term trends: three-year averages2010-2012 2013-2015 2016-2018

Population (million) 63,1 64,5 65,8

GDP (US$-billion) 2 543 2 879 3 110

GDP per capita (US$) 40 295 44 621 47 236

GDP growth (%) 1,4 2,5 2,5

Fiscal balance (% of GDP) -7,9 -5 -2,3

Public debt (% of GDP) 83,9 90,8 89,3

In� ation (%) 3,5 1,9 2,1

Current account (% of GDP) -2,7 -4,1 -3,2

-20

0

20

40

60

80

100

1202004-06 2007-09 2010-12

Net Exports

Investment

GovernmentConsumption

PrivateConsumption

0

20

40

60

80

1002002-04 2005-07 2008-10

Agriculture

Manufacturing

Other Industry

Services

Economic structure


The fi nancial crisis

in 2008 had a signifi cant

effect on the housing market,

which is very sensitive

to the overall economic

climate – house prices

fell in the UK by about

15% between January

2008 and March 2009

GDP by Sector | share in % GDP by Expenditure | share in %



eye on the world

● The UK’s currency is the pound sterling, which is also the world’s third-largest reserve currency after the US dollar and the euro.

● Founded in 1694, the Bank of England was the first privately owned national bank in any country.

Did you know?

ScotlandSince 2001, the makeup of Scotland’s housing sector has also changed quite significantly. The overall number of dwellings in the country has seen growth of 8,5%, rising from 2,31-million in 2001 to 2,51-million in 2012.

The proportion of local authority housing is higher in Scotland than any other country. However, there was a decrease from 23,9% in

2001 to 12,7% in 2012 in this type of tenure, while private rented dwellings increased by 89% – a figure not seen since 1969.

Much of the decrease in housing stock by tenure can be attributed to housing stock transfers, which saw many thousands of dwellings being transferred from local authority control to housing associations.

The Scottish government has set out a strategy and action plan for housing for the next decade, known as Homes Fit for the 21st Century.

WalesThe change in Wales’s housing sector is no less dramatic than in England’s or Scotland’s. The overall number of dwellings has seen a similar increase in growth of nine percent in the period between 2001 and 2012.

The growth in owner-occupied housing was mirrored by a decrease in local authority housing stock from 187 855 to 88 392. Much of the decrease can be attributed to large-scale housing stock transfer, with registered social landlords now being responsible for all the social housing in half of Welsh local authorities.

U.S.A.6.7%

Other EU 2723.8%

Germany12.6%

Netherlands7.5%

France5.4%

Other Asiaex -Japan

6.5%

China8.0%

Other29.6%

U.S.A.10.5%

GermanyOther Asiaex -Japan

11.4%

Other EU 2719.7%

11.3%

Netherlands8.8%

France7.4%

Other30.8%

Other11.9%

Food9.4%

Other12.1%

Manufact.Products68.2%

Manufact.Products65.4%

MineralFuels 13.3%

MineralFuels 13.2%

Food6.3%

Primary markets | share in %

Primary products | share in %

Exports Imports

Exports Imports

Trade structure


The proportion of local

authority housing is higher

in Scotland than any other

country. However, there

was a decrease from 23,9%

in 2001 to 12,7% in 2012 in

this type of tenure while

private rented dwellings

increased by 89% – a figure

not seen since 1969. Much

of the decrease in housing

stock by tenure can be

attributed to housing stock

transfers, which saw many

thousands of dwellings

being transferred from

local authority control

to housing associations

Primary markets | share in %

Primary products | share in %



eye on the world

Eye On The World UK_SUBBED.indd 37 2015/01/14 12:00 PM


eye on the world

Source: TheCityUK (Thecityuk.com)

Nonetheless, Wales has seen the largest proportional increase in properties rented from registered social landlords, showing an increase of 5,4% during this period.

From a policy perspective, the Welsh government’s Housing White Paper (2012) sets out a programme of legislative and non-legislative action against its three strategic objectives of more homes, better homes and better housing services.

The country’s Housing Bill, which has been passed by the Assembly, aims to make a difference in people’s lives – as does the Renting Homes Bill, which is due to be introduced in 2015.

Northern IrelandNorthern Ireland has seen the strongest rate of growth in the overall number of dwellings by some way at 13,6%, from 668 000 units in 2002 to 759 000 units in 2012.

Northern Ireland has also seen a marked decrease in properties rented from local authorities, from 120 000 in 2002 to 93 000 in 2012. At 12,3% of overall dwelling stock, this means that Northern Ireland has almost double the proportion of England (7,3%) and Wales (6,4%), and is second only to Scotland (12,7%).

Another change of note is the growth of private rental dwellings, which almost trebled from 47 000 to 121 000 for the same period,

meaning that private rented dwellings made up 15,9% of dwelling stock, up from seven percent in 2002. This is second only to England, which has 18,5% of its dwelling stock made up of private rents.

Housing policy has also been devolved in Northern Ireland. The recent Facing the Future: Housing Strategy for Northern Ireland acted as a consultation on the aims and goals of the Northern Ireland Department for Social Development.

With these figures in mind, it is clear that the housing market in the UK has seen great change since the turn of the century. The overall level of dwelling stock has increased by more than eight percent since 2001, and there has been substantial change in the proportions of different tenures across this time period.

While the overall level of dwelling stock has improved, the number of houses that are built in the UK continues its long-term downward trend.

This lower level of house building may also have had an effect on the average price of houses. Prices have continued on a long-term upward trend but have seen large fluctuations, both at a UK and regional level. The most notable price increases have taken place in London, which has seen a rise of about a third, making the purchase of property nearly impossible.

With these figures in mind

it is clear that the housing

market in the UK has seen

great change since the turn

of the century. The overall

level of dwelling stock has

increased by more than eight

percent from 2001, while there

has been substantial change

in the proportions of different

tenures across this time period



eye on the world



opinion

Growthpoint’s pinnacle of transformation

With transformation more important than ever, Norbert

Sasse, Chief Executive Officer of Growthpoint Properties Limited,

highlights his company’s commitment to transformation

and empowerment

Growthpoint’s board and management have always appreciated and understood the

need for transformation. While founded in 1987, Growthpoint only became an active, growing company from about 2001, when still part of Investec, and well after the end of apartheid and the dawn of democracy in South Africa.

So we’ve always operated in a South Africa where achieving meaningful participation by including historically disadvantaged South Africans in our economy is a business imperative – we’ve always understood the need for transformation and empowerment.

Norbert Sasse, Chief Executive Officer of Growthpoint Properties Limited

Putting this understanding into action, Growthpoint was one of the very first listed property companies to execute an empowerment transaction. We introduced our first Black Economic Empowerment (BEE) partners in an unprecedented fully funded R1-billion deal in 2005, the largest empowerment of its kind in the property sector at the time.

The BEE consortium comprised the broad-based empowerment companies: Amabubesi Investments, Miganu Investment Holdings and Unipalm Investment Holdings, each of which owned one-third interest in the BEE consortium that held its interest in Growthpoint via AMU Trust. Each of the groupings was required to include a broad base of shareholders in its respective consortia.

The trust acquired about 14% of the total Growthpoint linked units in issue at the time, with a unique mezzanine funding structure especially designed for the deal. As part of the transaction, the BEE consortium also acquired a 14% interest in the Growthpoint management contract, which was sold to them by Investec Property Group Limited.

Strengthening transformationOur new BEE partners added valuable strategic input for Growthpoint and made positive contributions at shareholder and board level. Key role-players and shareholders in Amabubesi included Bulelani Ngcuka, Sango Ntsaluba, Thabiso Tlelai and Peter Moyo; while Mzolisi Diliza and Dr Penuell Maduna were the key representatives of Miganu. Cape-based entrepreneur Ragavan Moonsamy and Lazarus Zim were the largest shareholders in Unipalm.

Diliza, the representative for Miganu, was already a director of Growthpoint thanks to our earlier Mines Pension Fund transaction, and two further representatives of the AMU Trust, including Moonsamy, were also appointed to Growthpoint’s board.

Diliza participated in the original BEE commission chaired by Cyril Ramaphosa, which was set up to deal with the economic transformation of South African business. As CEO of the Chamber of Mines of South Africa

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opinion

Property Point is all about training and supporting entrepreneurs to develop their enterprises into fully independent companies that are able to compete effectively in the open marketplace

and coupled with his mining background, Diliza also participated in the Mining Charter, which was trailblazing for the industry and the first Charter to be gazetted into law, beating the Department of Trade and Industry (DTI) to the finishing line. Diliza has been, and remains, a champion of transformation at Growthpoint as chairman of our dedicated Transformation Committee.

Shortly after that initial BEE transaction in 2005, we completed a second transaction in 2006, with black-controlled management property investment holding company Phatsima Properties led by Herman Mashaba. This transaction followed Growthpoint’s takeover of Metboard, with Mashaba being the chosen empowerment partner for Metboard and a director at the time.

Phatsima acquired 2,3% of Growthpoint’s units in issue, which then had a market value of R280-million, also fully funded with specially created mezzanine funding. As an integral part of the transaction, Phatsima also acquired a 2,3% interest in the Growthpoint asset management contract from Investec Property Group.

Mashaba, who held a 40% indirect beneficial interest in Phatsima, was a non-executive director of Growthpoint and continued to represent Phatsima in this position. Today, he is Deputy Chairman of Growthpoint. Other key role-players and shareholders in Phatsima included the ABM Kalla Family Investment, Selomane Maitisa, the Field Band Foundation, Jacqueline Mafumadi, Tim Modise and Joyce Dube.

The implementation of both BEE transactions was a major step towards ensuring that Growthpoint’s BEE equity ownership and control responsibilities were addressed in terms of the DTI Codes of Good Practice on Broad-Based Black Economic Empowerment (BBBEE).

The transactions introduced BEE partners represented by influential role-players who have added value to Growthpoint and its shareholders, and simultaneously benefited historically disadvantaged South Africans.

Collectively, by the end of 2006, our transactions placed about 17% of the shares of the company in black hands.

In February 2007, the DTI gazetted the BEE Codes of Good Practice, and the sector was drafting a Property Sector Transformation Charter. At the same time, Growthpoint sought to lead the market through early adoption of the principles in the Property Sector Charter by focusing on each of the elements contained in the Charter, but in particular through enterprise development.

The point of changeIn early 2008 Growthpoint launched

the Property Point with the aim to boost small- and medium-sized enterprises (SMEs) serving South Africa’s listed property sector by giving them a toehold in a highly competitive marketplace.

Property Point is all about training and supporting entrepreneurs to develop their enterprises into fully independent companies that are able to compete effectively in the open marketplace.

As a hands-on property owner, Growthpoint recognised our unique position to sponsor selected micro and small businesses through skills training and personal development, and then support them by ensuring tendering opportunities within Growthpoint and its service providers.

Property Point was the only enterprise development project of this kind in the listed property sector at the time, and it still stands out among the sector’s innovative initiatives by offering a range of entrepreneurial opportunities for small businesses.

Six years later, Property Point has had significant impacts. To date, 904 full-time equivalent jobs have been created by its beneficiary companies, and R217,8-million worth of market linkages has been facilitated for the 86 SMEs that have been on the programme. Some 1 730 entrepreneurs have attended its “To the Point” training and information sessions.

It has also helped to diversify our supply chain and supported our procurement from black suppliers. Today, our preferential procurement score is 16,9 out of 20 on total procurement spend – which amounts to about R2,2-billion towards BBBEE-compliant suppliers. This achievement has taken a massive and active effort by Growthpoint.

Our transformation initiatives resulted in Growthpoint leading the listed property sector’s BBBEE for more than four years, achieving a Level Two BEE rating in 2010 based on our commitment to the seven pillars of the Property Sector Charter scorecard: ownership, control, employment equity, preferential procurement, skills development, social responsibility and enterprise development.

For the largest listed property company in South Africa, this was no simple task. Our BEE programme had to be far-reaching and broad- based, and serve to benefit a large number of previously disadvantaged individuals.

Growthpoint remained at the forefront of transformation in the sector until the welcome emergence of funds such as Dipula, Rebosis, Delta and Ascension in the sector.

Growthpoint 1_SUBBED.indd 41 2015/01/14 12:09 PM


opinion

Notwithstanding our continued enthusiastic support for transformation, given the nature of our business model as a Real Estate Investment Trust (REIT) – we distribute all our earnings, which requires us to continually issue new shares to raise capital to achieve growth – the aggressive growth of our company, and the changes to the DTI Codes, remaining meaningfully empowered at ownership level is a massive challenge.

As new shares are issued, we cannot force our shareholders to follow their rights. Thus black ownership is highly susceptible to dilution.

Even with this challenge, Growthpoint strives to play an important role in the transformation of society, including economic and social change. This is evident both in terms of our strategic external partners and on an operations level. We place a high importance on nurturing relationships that further transformation and BEE, and we are still attracting new black investors.

In August 2014, Southern Palace Properties, a wholly owned subsidiary of black-owned and managed diversified industrial holding company Southern Palace Group, acquired a 7,95% stake in Growthpoint.

It was acquired from the Government Employees Pension Fund (GEPF) through its asset manager, the Public Investment Corporation. The transaction makes Southern Palace the largest non-institutional shareholder in Growthpoint and the largest shareholder after the GEPF, which still has a 10,96% shareholding in Growthpoint.

Giving back through propertyGrowthpoint specifically – and REITs in general – has an important role to play in bringing the benefits of property ownership to more South Africans. Historically, property ownership is not part of black culture, stemming from the former Group Areas Act where black people were told where they could live and were prohibited from owning property.

To successfully overcome this legacy, both individual and collective efforts are required. SA REITs have a key role to play in providing affordable access to property ownership of South Africans. Where property ownership still remains out of the financial reach of many South Africans today, REITs are a uniquely affordable and liquid way to access the benefits of property ownership.

For Growthpoint, transformation remains a key performance area, and we will continue to focus on all aspects of the Property Sector Charter with our transformation initiatives.

Growthpoint’s commitment to transformation is also supported by our education and social infrastructure initiatives, which make up our corporate social responsibility. From our Growsmart literacy programme, which has supported the work of 302 schools in the Western Cape reaching some 70 000 learners, to our support of the Thandulwazi Maths and Science Academy, we help to create platforms for access to good-quality education, and support a future generation of educated, skilled leaders.

Our R410 000 bursary programme supports learners at tertiary level. A portion of these funds is contributed directly to SAPOA, and is allocated to deserving underprivileged students.

As our core business is to develop, invest and manage a diverse portfolio of property, we are intensely aware that by creating property assets for communities, we provide a platform and opportunities that go beyond the value of the asset alone.

So far, we have contributed R11,7-million towards the development of community, youth and skills centres, completing one every year since 2011 in areas such as Diepsloot.

Growthpoint entered the second half of 2014 with representation of 48,4%, in accordance with BBBEE reporting of the Property Sector Charter. This headway is even more remarkable if you consider that Growthpoint didn’t have a single staff member prior to June 2007, when it acquired its property asset management and property administration businesses of Investec Property Group, adopting an internal management structure.

We continue our efforts to employ more people from previously disadvantaged groups, as well as to improve gender representation, especially in our core skills areas and our senior management.

Growthpoint has created an enabling environment for designated groups to achieve using both recruitment and organic growth – through skills training and development and succession planning – to achieve its employment equity targets.

Through our BEE and other transformation initiatives, we have learnt many important lessons. Transformation is a journey. We are committed to going along the road of transformation and to actively furthering empowerment in the property sector with a far-reaching and broad-based BEE programme.

Growthpoint will remain an active participant in South Africa’s economic transformation.

SA REITs have a key role to play in providing affordable

access to property ownership of South Africans. Where property ownership still

remains out of the financial reach of many South Africans

today, REITs are a uniquely affordable and liquid way

to access the benefits of property ownership

Full page SAPOA mags.indd 1Growthpoint 1_SUBBED.indd 42 2015/01/14 12:19 PM


opinion


PROPERTYR E V I E W

July 2014

South African P

roperty Review

46th Annual SA

PO

A International C

onvention and Property Exhibition: report back and Innovative Excellence A

wards July 2014

Innovative Excellence

AwardsAnd the winners are…

WORLD SERIESGlobal markets in the hot seat

AFRICAAngola: oil-rich and growing fast

REAL ESTATE and the

South African economy

OVERALL

WINNER

YOUR NEW PRESIDENTMeet Amelia Beattie


PROPERTY

In hand and online, SAPOA’s South African Property Review has a far-reaching appeal - not only does the print version get mailed to

a 2000+ targeted database, it also enjoys a monthly online impression rate of over 3675 hits, with an average read of upwards of six

minutes per issue.


PROPERTYR E V I E W

December 2014 /January 2015

South African P

roperty Review

CSI and education D

ecember 2014 /January 2015

EYE ON AFRICAUganda: prosperity and heightened development

PAYING IT FORWARDCorporate social

investment: not just for seasonal goodwill

PROPERTY TRENDSThe industrial sector revolution: alive and well

MOTHER CITY HOSTEDSAPOA meets the Mayor

PRESIDENT’S MESSAGEAmelia Beattie refl ects

on the year to date

Cover with spine Dec/Jan_SUBBED.indd 3 2014/11/10 2:09 PM


PROPERTYR E V I E W

July 2013

SHINE ON, SAPOAOur Convention report back

PROPERTY EYE CANDYExcellence winners announced

SA REITsThe dream becomesa reality

THE TALENTED MR NOMVETEDelta’s rise and rise

South African P

roperty Review

Architects in focus July 2013


PROPERTYR E V I E W

August 2013

Heritage, where the heart is

SASOL’s SANDTON HQAlchemy brings the magic

WALKING ON BROKEN GLASSWomen shatter the ceiling

VUKILE’s NEW WUNDERKIND

Why Dr Moseneke made the move

South African P

roperty Review

Wom

en in property August 2013


PROPERTYR E V I E W

September 2013

Inspired, innovative and independentBroll’s multi-disciplinary property services

ARROWHEADAlways on target

ALL-STAR ASSETSA listed property in the lead

THE PRECINCT EFFECTThe rise and rise of trendy nodes

South African P

roperty Review

Attorneys in focuos Septem

ber 2013


PROPERTYR E V I E W

October 2013

South African P

roperty Review

Project m

anagers October 2013

Showing off modernityHertford office park

INVESTMENT FUNDINGVunani’s quest for true value

FACILITIES MANAGEMENT

It’s all about integrated service

SANDTON CITY MOVES UP A GEARMuller mulls over retail offerings

PROPERTYPROPERTYPROPERTYThe Africa series:

our monthly

country-by-country

focus


PROPERTYR E V I E W

September 2013

Inspired, innovative and independentBroll’s multi-disciplinary property services

ARROWHEADAlways on target

ALL-STAR ASSETSA listed property in the lead

THE PRECINCT EFFECTThe rise and rise of trendy nodes

South African P

roperty Review

Attorneys in focuos Septem

ber 2013


PROPERTYR E V I E W

November 2013

South African P

roperty Review

Engineers & quantity surveyors N

ovember 2013

Banking on green investmentsMore than just finance

CAPE TOWN CBDCity development open for business

ECOFRIENDLY MASTERPIECE

Efficiently showing off engineering and

design aesthetics

GOING THE EXTRA GREEN MILEA very real passage towards sustainability

PROPERTYS O U T H A F R I C A N

PROPERTYR E V I E W

December 2013 / January 2014

Alice Lane on showA wonderland of aesthetic excellence

AFRICA SERIESNamibia in focus

BANKING ON DESIGNSetting new standards in interiors

South African P

roperty Review

CSI and interior design D

ecember 2013 / January 2014

PROPERTYs

ssssss

ssssss

ssssss

sssss

MEET

THE MAYORS

Parks Tau

Patricia de Lille

CSIAre you doing

your bit?


PROPERTYR E V I E W

February 2014

ArchitectureNew-age aesthetics

AFRICA SERIESBotswana: from rags to riches

EMERGING MARKETSAffordable housing and student accommodation

South African P

roperty Review

Architects and architecture February 2014

GAUTRAINUnlocking the property pipeline

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PROPERTYR E V I E W

March 2014

Taking ‘Atvantage’ of great project management

AFRICA SERIESZimbabwe:

time to play the market

THE WORLD UNDER CONSTRUCTIONConstruction management:a pillar of development strength

South African P

roperty Review

Construction m

anagement M

arch 2014

REPORTING ON AFRICATaking a constructive approach to Africa’s future

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PROPERTYR E V I E W

April 2014

South African P

roperty Review

Attorneys, brokers and auctioneers A

pril 2014

AMAzing contemporary architecture

RICSA female-

president fi rst

AFRICAMozambique: more than

prawns and beaches

THE BIG DEALThe point when growth changes the way of doing business

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PROPERTYR E V I E W

May 2014

South African P

roperty Review

Urban design and regeneration M

ay 2014

Commuter AXIS to Jo’burg’s rail network

NEW LEASE ON LIFEUrban regeneration and

spatial transformation change the game

EYE ON AFRICAMauritius:

sun, sea, sand and citizenship

DEVELOPING AGAINSTTHE GRAIN

Harvesting studentaccommodation

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R E V I E W

June 2014

South African P

roperty Review

46th Annual SA

PO

A International C

onvention and Property Exhibition June 2014

Making a di� erence� e 46th Annual SAPOA International Convention and Property Exhibition

HARBOURING SUCCESSThe V&A: a destination in its own right

MOTHER KNOWS BEST

Diving into opportunities

in the Mother City

BOWING OUTEstienne de Klerk

on a year of legislation, tabled motions and a

commitment to education

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Getting your brand noticed by the leading decision makers in South Africa’s commercial property industry - you know it makes sense

DeveloperPRO

PER

TY November 2013

DeveloperDeveloperRelaunch

issueCradlestone MallRetail development under way

PDP class of 2013Rewarding the GSB, UCT, SAPOA course

Futuristic dream or visionary future?24

Bridging the gap in the City of Tshwane14

DeveloperPRO

PER

TY

February 2014

Modderfontein metropolisShanghai Zendai’s city plan

Towering feat: a catalyst for investment38

Cornubia: Durban’s mixed-use marvel35

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DeveloperPRO

PER

TY

May 2014

Mall of AfricaAtterbury’s retail roll-out: the sky’s the limit

Developing an oceanic fairy tale28

A work in progress

18

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Published quarterly, SAPOA’s Property Developer is mailed out along with it’s sister publication the South African Property Review.

The Property Developer is also available online.

Published by SAPOA, Paddock View, Hunt’s End O� ce Park, 36 Wierda Road West, Wierda Valley, SandtonPO Box 78544, Sandton 2146

t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 www.sapoa.org.za

Contact Riëtte Stevens - +27 (0)71 877 5520 - e mail [email protected]

www.sapoa.org.za

DeveloperPRO

PER

TY

October 2014

Alexandra township mixed-use developmentPaving the way for future investment

Repurposing industrial buildings 20

Area review: Remotely on the rise 18

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Keeping up appearances

Retail refurbishments are on the rise in South Africa – a

sure sign that shopping centres are staying on top and on trend

By Candace King

Amid sluggish economic growth and rising living costs, South Africa’s shoppers

appear to have been thrown into the deep end. But despite this consumer choke-hold, the retail sector remains robust, with a flurry of activity taking place in not only the new development of retail centres but also the refurbishment of existing malls.

Across the country, refurbishments are taking place, from prime regional shopping malls to smaller neighbourhood and rural community centres. More excitingly, retail nodes are being developed – a concept that is mushrooming in the retail sector.

Situated in the east of Johannesburg, the iconic Eastgate Shopping Centre is set to undergo a major revamp, expanding its already impressive offering to ensure it stays on top of the latest retail trends.

Owned by the Liberty Group, Eastgate has been a landmark in the east of Johannesburg for more than 30 years, forming an integral part of the Bedfordview community. Easily accessible from the freeway between Oliver Tambo International Airport and the Jo’burg CBD, it remains the lifestyle experience of choice for visitors.

With just over 280 stores, Eastgate offers it all, from South Africa’s leading retailers to the biggest international brands; from high-fashion boutiques and street concept stores to restaurants, cinemas and rooftop dining, and a host of specialty stores, ongoing events and entertainment.

It’s frequented by more than 1.6-million loyal shoppers every month – and Liberty’s vision for Eastgate will ensure it remains a premier lifestyle destination in Johannesburg’s eastern suburbs.

Eastgate will experience a redevelopment over a period of approximately 24 months which will include tenant refurbs and expansions, the addition of new international brands, more parking and a brand-new entertainment offering.

An IMAX Theatre, two new Cine Prestige theatres and a new Ster-Kinekor movie house will be introduced on the roof level of the centre, which will complement the restaurant and food area, with additional entertainment on the piazza and roof level. Furthermore, Edgars will be expanding into the existing Ster-Kinekor space, to occupy a mega store of 13 000m².

As part of the store expansions, national retailers Markham, Jet and Foschini will be going through refurbishments and expanding their footprint within Eastgate. Woolworths will also be expanding its already impressive premises at Eastgate with an expansion that will add Witchery and Trenery concept stores to its lifestyle brand offering.

Shoppers will see this extension going out into the parking area at Entrance 2, which will allow for a new entrance to the shopping centre.

With this expansion, Eastgate will expand the current north-facing parkade with two additional levels of parking to accommodate shoppers. The reticulation will also be improved to make the parking more convenient. This will bring an additional 1 300 parking bays to the centre.

The project will also address improving sight lines, vertical circulation, and the repositioning of the lifts and toilet facilities for added convenience.


BELOW Rural retail gem Paledi Mall has been extended from 13 089m² to 24 081m²,

growing from 50 to more than 95 shops

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While Cotton On opened in October 2014, Eastgate is set to bring more international brands, including Zara and Topshop to its retail offering. These will be opening their doors in 2015/2016, offering the Eastgate shopper additional “on-style” fashion.

The final phase of the project will include the modernisation of some parts of the façade of the building. Some of the entrances will be updated to reflect the new, modern aesthetic throughout the centre.

From distress to finesseNestled in the heart of the densely populated suburb of Southdale in the south of Johannesburg, Southdale Shopping Centre is experiencing a new lease on life with a complete revamp.

Built in 1969, Southdale was in desperate need of a change: the centrally situated neighbourhood centre had become outdated and slightly run-down. In order to realign with the requirements and demographics of shoppers in the area, the owner of the centre, 1Eighty – a member of One Property Holdings – has dedicated time and money to the complete turnaround of the centre.

Chris van Reenen, Chief Executive Officer of One Property Holdings and a director at 1Eighty, says the centre was in desperate need of modernisation. “While tenants have remained loyal, the centre was in dire need of an overhaul to significantly boost the appeal for shoppers and visitors, and to attract new and national tenants – a factor that impacts positively on both existing tenants and shoppers,” he says. “Well positioned in a typical ‘convenience’ setting, Southdale has always been a community centre, enjoying considerable local support from industries and businesses, which have a strong presence

in the area, as well as from the highly populated surrounding residential areas, including Soweto.”

Of late, however, says Van Reenen, there has been some “leaking” of shoppers to other centres, emphasising the need for it to be improved to make it a more appealing community centre.

“Positively, market research reveals local demographics that indicate mainly a middle-class income segment with a high percentage comprising a relatively young profile between the ages of 20 and 44 – including families – which augurs well for the future of the centre and for potential inflows of additional shoppers,” says Van Reenen. “Having already implemented improvements to the fashion and food offering, we are starting to see an

influx of visitors to the centre, despite the revamp still being under way.”

With approximately R28-million already invested in phase one, a further R10-million is earmarked for the second phase, with the entire refurbishment project amounting to approximately R70-million in total.

Phase one of the project was completed at the end of 2014, while completion of phase two, comprising the revamp of the exterior and parking lots, is anticipated for the end of 2015.

“Key factors in enhancing the shopping experience include the integration of spaces in the centre, mainly with the use of increased volume, natural light, steelwork and colour for visual appeal, as well as improvements to the flooring,” says Van Reenen.


Once tired and outdated, Southdale Shopping Centre is experiencing a complete overhaul, with anticipated completion at the end of 2015

The iconic Eastgate Shopping Centre is set to undergo a major revamp over the next year, adding 14 000m² to its current footprint of 123 694m² which includes the Office Towers



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Southdale currently comprises a gross lettable area of 33 000m², incorporating 30 500m² of retail space and a three-storey office block of 2 500m². Currently the centre has 877 parking bays, but the entire parking lot will be resurfaced and upgraded, and a further 113 parking bays will be added as part of the revamp. Van Reenen says repositioning of tenants in the shopping centre includes the expansion of added-value retailers such as Ackermans, which has relocated into a new 600m² store to its new specifications, with Jet Store now occupying the adjacent 600m² shop (to be expanded by an additional 600m² to a Jetmart store). Mr Price has been enlarged, while Fashion Express has relocated and Cash Crusaders has been moved into a new shop close to Capitec Bank.

“We have also revamped a number of other smaller shops and are working with the tenants to get their merchandise, look and feel, and general offerings up to our specifications,” says Van Reenen.

A number of new tenants have already been signed up, with 800m² to be occupied by Goldwagen (automotive parts), 450m² for Affordable Tyres, 201m² for Cre@tivity, 169m² for Sheet Street, as well as Levingers Dry Clean & Shoe Clinic, The Fish & Chip Co, Chesanyama and other fast food outlets.

One Property Holdings’ strategy is to acquire distressed centres, renovate and re-tenant them, and completely turn them around. Successful projects include Sasolburg Junxion, Northmead Mall in Benoni and Megapark Mall in Kriel, Mpumalanga.

Werner Franck, Managing Director of Vertias, One Property Holdings’ Project Management division, says recycling is a key focus. “In taking over old buildings and renovating them, we aim to use as much of the existing materials as we can, retaining the history and elements of the property where possible.”

Energy-saving features incorporated during the refurbishment include raising the roof and ceilings to increase natural light and reduce electricity consumption, insulating all new areas and installing a solar system where possible.

Rural revampOutside of Gauteng, rural retail centres are also experiencing revamps, the latest being Paledi Mall in Limpopo. Situated in the rural town of Mankweng, 29km east of Polokwane on the R71 Tzaneen Road, Paledi Mall recently got a refurbishment and an extension worth R125-million. Financed by Nedbank Corporate Property Finance to developers the Twin City Development Group, the community shopping centre has been extended from 13 089m² to 24 081m², growing from 50 to 95 shops.

The R282-million centre is anchored by Spar, Shoprite and Woolworths stores. It also offers a Sasol filling station located at the entrance from the R71, a Supa Quick Fitment Centre, a free-standing KFC drive-thru and 897 parking bays.

The town of Mankweng is set to grow in the coming years, which will inevitably have a major impact on the demand for retail facilities in the area. Currently, the University of Limpopo is the main attraction in the area; there is also a hospital and various schools. Furthermore, student accommodation facilities are to be developed over the next three to five years.

D’Anvo Jones, Regional Head: Nedbank Corporate Property Finance, Pretoria, says that Twin City Development pioneered retail in previously disadvantaged areas and has achieved unrivalled success. “The company is well-respected in the industry for its ability to deliver projects of this calibre, and we are pleased to have been able to provide agile financing solutions for this development,” he says. “We believe that the refurbished and extended Paledi Mall will create a relevant

and appealing retail option for Mankweng residents and for those studying at the University of Limpopo, and that it will be yet another successful project for Twin City Development.”

“We are very excited about the redevelopment of Paledi Mall,” says Johan Visagie, Managing Director of Twin City Development. “We are confident that the centre will become the ultimate shopping destination in the region because of its position and accessibility, along with the strong tenant mix and modern design.”

“Nedbank Corporate Property Finance is proud to have enabled this refurbishment and extension, which will expand the limited retail offerings that were available in Mankweng, thus illustrating our leadership position in commercial property funding in South Africa,” says Jones.

It’s all about the nodeThe latest trend in the retail sector is the establishment of strong retail nodes that are ideally situated.

With a strong focus on retail opportunities, Accelerate Property Fund has commenced with a master plan to refurbish its flagship retail asset, Fourways Mall, as well as surrounding properties in the north of Johannesburg near William Nicol Drive and Witkoppen Road into a retail node.

The redevelopment will see an additional 90 000m² of space added to the centre, which will result in Fourways Mall occupying 175 000m² after completion, making it the “biggest super-regional development” in South Africa.

As a retail-angled fund, Accelerate Property Fund is set to zone in on the Fourways area. The fund also owns Cedar Square, The Buzz Shopping Centre, Fourways Game, Leaping Frog and Fourways View. The development is set to begin in the first quarter of 2015.

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Accelerate Property Fund’s Fourways Mall is set to form part of a greater retail node via a grand refurbishment plan



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Transforming with Transnet Property

By Candace King Photographs by Michael Glenister

SAPOA believes that education is an imperative platform to be involved in

within the property industry. In light of this, the organisation has partnered with several high-ranking tertiary institutions and large and significant public entities in order to make a difference and alleviate the major skills shortage in the country.

Via an arrangement with Transnet Property, SAPOA in conjunction with the University of the Witwatersrand runs a customised version of the SAPOA Property Management Programme (PMP), specifically aimed at Transnet Property’s female employees in middle management.

Recently, 19 women from Transnet Property graduated through the programme with a 100% success rate. “Our women have done it – this shows their commitment to use every opportunity to empower themselves,” said Thabo Lebelo, Transnet Group Executive: Transnet Property, at the graduation ceremony.

Transnet Property is very proud that a 100% success rate was achieved with the first group of 19 students. Since having completed the course, which began in February 2014, the group has formed a Women’s Forum and is currently considering various projects within the Transnet Property division that they can become involved in.

One of the students was also recently accepted to and attended the acclaimed Property Development Programme (PDP) hosted by SAPOA and the University of Cape Town. Several of the other students in the group of 19 women attended a conference on leadership in the public sector as part of their continued development. One of the students in the group was also recently promoted within Transnet Property.

PMP in perspective SAPOA, as the commercial property employer body, and the property industry at large have long felt the need for a standardised and in-depth property management course that is focused and trains property managers in the basics of property management, said Martin Ferguson, SAPOA’s HR, Education, Training and Development Manager.

“The intention was to develop a course that will formalise the process for entering the property management field and create an industry standard for the property manager,

with a nationally recognised certification in property management,” he said. “The property management course was developed to offer an appropriate mix of practical and theoretical learning, and to reflect existing international and national trends in the industry.”

The University of the Witwatersrand, through Wits Enterprise, provides the necessary training, skills and expertise in a holistic manner and enables the students to acquire a comprehensive overview of the property management function, with sufficient detailed understanding and knowledge, in an industry that is severely hampered by a skills shortage and a lack of formal training.

“Wits has a strong relationship with Transnet, and it continues to grow,” said Professor David Root, Head of the School of Construction, Economics and Management at the University of the Witwatersrand.

“We need to provide specialised skills in the property sector that will contribute towards the strengthening of the sector,” he said. “We must provide the ladder of opportunity for students in order to acquire skills. Too long has the industry been dominated by men – I’m pleased to see the dynamics changing as we now have 51% female and 49% male participants in our Wits property programme.”

Students who have completed this programme are embraced by the commercial property industry, and today many of South Africa’s largest property portfolios and shopping centres are managed by people who have obtained this qualification.

The course encompasses all aspects of property management, thereby ensuring that the students acquire a comprehensive understanding of the numerous functions of the property manager, and enables

With a strong focus on skills development, public-private

sector collaboration and industry transformation, SAPOA,

Wits Enterprise and Transnet Property are passionate about

empowerment and partnership

“Our women have done it –

this shows their commitment

to use every opportunity

to empower themselves”

Thabo Lebelo, Transnet Group Executive: Transnet PropertyThabo Lebelo, Transnet Group Executive:

Transnet Property

Raisibe Lepule, Transnet Group Executive: RMO

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students to perform a variety of property management functions to the depth required by professional property management companies and practitioners.

The course contains a large component of practical training in the areas of marketing, lease negotiations, financial administration and management, general accounting, interpersonal relations and communications with various stakeholders, and the physical management and maintenance of buildings and infrastructure.

“The course provides skills in the key aspects of the property management functions, from the marketing of property space, the effective negotiating of leases and the preparation of business/management plans and detailed budgets to the analysis of financial statements, proactive credit management, preparation of management reports, and the interpretation and application of relevant legislation,” said Ferguson.

Future female property players“As women today, you all know where you come from – and it hasn’t been easy,” said Lebelo. “You were disenfranchised. It’s now your time to use your skills and the knowledge you’ve gained.”

“For taking up this challenge and being the first group to undertake this, I commend you,” said Raisibe Lepule, Transnet Group Executive: RMO. “The potential that you presented through your projects is there, so don’t give up.” The second group of 20 women commenced the programme in November 2014. “We wish to thank the University of the Witwatersrand for partnering with SAPOA and equipping these delegates with a commercial property qualification, and for helping us to raise the skills levels in our industry,” said Ferguson.

Addressing the students, Ferguson added, “Congratulations on your achievements. Let this be a step towards a bright future in commercial property management with Transnet Property. With a reputable organisation that supports and cares about the skills development of its employees the way Transnet does, you must take charge of your own personal development and your own careers, growing your knowledge, experience and qualifications.”

“Don’t underestimate your plans, ideas and project proposals,” said SAPOA’s Chief Executive Officer Neil Gopal. “Several years ago, the V&A Waterfront in Cape Town was planned by SAPOA PDP students.” Gopal also highlighted that SAPOA will continue this journey with Transnet Property, and will continue to drive its Bursary Fund.

“SAPOA would like to thank the University of the Witwatersrand and Wits Enterprise for the professional manner in which it runs the PMP course. We thank Transnet Property not only for being a valued member of SAPOA, but also for its excellent and continuous support on a nation-al level and for acknowledging SAPOA as its training partner. Finally, we thank the 19 women who dedicated themselves to the programme. SAPOA wishes you all the best in your future endeavours in the world of property” - Neil Gopal, SAPOA CEO

SAPOA HR, Education, Training and Development Manager Martin Ferguson and Professor David Root, Head of the School of Construction, Economics and Management at the University of the Witwatersrand

Thabo Lebelo, Transnet Group Executive: Transnet Property and SAPOA Chief Executive Officer Neil Gopal

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Investing in potentialEarmarked as one of South

Africa’s key sectors, the tourism industry is

responsible for a large percentage of the country’s

economic growth. Foreigners from around the globe are

realising this, resulting in a number of them investing in the country’s potential

By Michelle Marais

From the verdant valleys of the Cape Winelands to the white sandy beaches of

the East Coast and contemporary skyscrapers decorating Johannesburg’s skyline, South Africa is home to cities as diverse as the people who inhabit them. This, along with its weaker currency, have made South Africa a sought-after tourist destination; subsequently catching the eye of in� uential foreign investors.

Grape expectationsConsidered South Africa’s gastronomic capital, Franschhoek in the Cape Winelands produces quality wines at exceptional value, even more so when compared with the wine regions of France, Italy or the Napa Valley.

According to Wines of South Africa, wine tourism is one of the fastest-growing and most lucrative sectors of the global tourism market, and contributes about R4,3-billion annually to the country’s tourism revenue.

It then comes as no surprise that the world’s power players are grabbing at every opportunity to invest.

Testament to this is Val de Vie wine and polo estate. In 2013, the estate became the site of the � rst-ever Chinese investment in the South African wine industry when Perfect China, a 51% shareholder in Perfect Wines of South Africa, purchased the wine cellar, attached 25-hectare wine farm and historic manor house.

British billionaire Sir Richard Branson recently joined the list of foreign investors when he acquired Mont Rochelle Hotel and Mountain Vineyard, adding the luxury estate to his eclectic Virgin Limited Edition property portfolio.

Branson’s investment comes shortly after a similar investment was made by the Indian billionaire entrepreneur Analjit Singh. Singh acquired three adjoining Franschhoek farms – Dieu Donné, Von Ortlo� and Klein Dassenberg – for about R80-million, and also purchased a substantial stake in multiple Platter � ve-star awarded Mullineux Family Wines located in the Swartland.

More recently, the Mantis Collection chose Pearl Valley Golf and Country Estate as the home of their latest hotel. Mantis founder and Chairman Adrian Gardiner con� rmed that the Valley Hotel will be the largest hotel in the region. “With 80 rooms, we can cater for larger events but remain small enough to provide the quality service and personal attention for which Mantis and Pearl Valley are renowned,” he said.

The suites on o� er – starting from R1 299 000 – will be fully furnished single or double suites, all beautifully rendered by international design house MI Designs.

Aside from the commercial and hospitality development opportunities available to buyers, the winelands are also attracting a slew of property buyers intent on becoming permanent residents.

Since October 2013, about 42 farms to the total value of almost R235-million were sold, while about nine larger lifestyle and commercial farms were sold for between R10-million and R30-million.

It then comes as no surprise that the world’s power players are grabbing at every opportunity to invest.

polo estate. In 2013, the estate became the site of the � rst-ever Chinese investment in the South African wine industry when Perfect China, a 51% shareholder in Perfect Wines of South Africa, purchased the wine cellar, attached 25-hectare wine farm and historic manor house.

recently joined the list of foreign investors when he acquired Mont Rochelle Hotel and Mountain Vineyard, adding the luxury estate to his eclectic Virgin Limited Edition property portfolio.

a similar investment was made by the Indian billionaire entrepreneur Analjit Singh. Singh acquired three adjoining Franschhoek farms – Dieu Donné, Von Ortlo� and Klein Dassenberg – for about R80-million, and also purchased a substantial stake in multiple Platter � ve-star awarded Mullineux Family Wines located in the Swartland.

Pearl Valley Golf and Country Estate as the home of their latest hotel. Mantis founder and Chairman Adrian Gardiner con� rmed that the Valley Hotel will be the largest hotel in the region. “With 80 rooms, we can cater for larger events but remain small enough to provide the quality service and personal attention for which Mantis and Pearl Valley are renowned,” he said.

R1 299 000 – will be fully furnished single or double suites, all beautifully rendered by international design house MI Designs.

development opportunities available to buyers, the winelands are also attracting a slew of property buyers intent on becoming permanent residents.

the total value of almost R235-million were sold, while about nine larger lifestyle and commercial farms were sold for between R10-million and R30-million.

Fthe East Coast and contemporary skyscrapers decorating Johannesburg’s skyline, South Africa is home to cities as diverse as the people who inhabit them. This, along with its weaker currency, have made South Africa a sought-after tourist destination; subsequently catching the eye of in� uential foreign investors.

Grape expectationsConsidered South Africa’s gastronomic capital, Franschhoek in the Cape Winelands produces quality wines at exceptional value, even more so when compared with the wine regions of France, Italy or the Napa Valley.

tourism is one of the fastest-growing and most lucrative sectors of the global tourism market, and contributes about R4,3-billion annually to the country’s tourism revenue.

Boasting 80 rooms, the � ve-star Pearl Valley Hotel will be the largest hotel in the region

Did you know?Eight of the top 100 restaurants in South Africa are found in Franschhoek.

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City by the seaWith its rich history, topographically hilly landscape and large natural port, Durban has become one of South Africa’s major metropolitan cities.

The city is known as the home of sub-Saharan Africa’s largest and Africa’s best-managed port, and is a major centre for both business and tourism. A strong economy underpins the city, which has led to Durban receiving a lot of attention from local and foreign investors hoping to have a chance to be a part of Durban’s (and Africa’s) future potential.

Thanks to its rich natural resources and well-developed infrastructure, it’s considered a competitive region for foreign investment, attracting investors from China, India, South Korea and the Americas – particularly for re-export opportunities through the port.

According to Head of Economic Development Russell Curtis, many investors are also keen to be part of the massive infrastructure upgrade taking place in the city, which totals more than a trillion rand worth of investment.

One such investment opportunity presented itself in the form the recently declared Industrial Development Zone – a precinct located strategically 30km north of Durban. It is home to the state-of-the-art King Shaka International Airport, which is considered to be one of South Africa’s top 10 investment opportunities, and is geared to promote foreign and local investment.

The “green” economy is another exciting area generating interest. US company Hydro Alternative Energy (HAE) is looking at ocean currents as an energy source, with only two potential locations in the world, one being the city of Durban. HAE is currently raising the capital to develop this project further.

The city’s property sector is also showing a slow but steady increase. Industry players are reporting a rise in holiday-home buying in recent months, which hit rock bottom during the 2008-2009 recession.

Samuel See� , See� Property Group Chairman, believes perceived value has been a key driver of sales to both local and o� shore buyers, since the drop in leisure property prices and salve volumes was much more pronounced than in the case of the primary home market. “The weak rand has also boosted sales to foreigners,” he says.

Emphasising this was Chairman of Lew Ge� en Sotheby’s International Realty, Lew Ge� en, who said the latest available statistics from property data company Lightstone prove that foreign buyers are looking at areas beyond Cape Town and Johannesburg.

ABOVE The suites at the Pearl Valley Hotel

will be fully furnished single or double suites, all

beautifully appointed by international design house

MI Design

BELOW As a major centre for both business

and tourism, the city of Durban is home to

sub-Saharan Africa’s largest and Africa’s

best-managed port

ABOVE The suites at the Pearl Valley Hotel

will be fully furnished single or double suites, all

beautifully appointed by international design house

MI Design

BELOW As a major centre for both business

and tourism, the city of Durban is home to

sub-Saharan Africa’s largest and Africa’s

best-managed port

“For example, foreign buyers purchased 670 properties worth about R800-million in KwaZulu-Natal in 2013,” he said. “We are also seeing a growing trend among foreign buyers to purchase properties in South Africa as investments rather than for own use – a healthy vote of con� dence in our real estate market.”

Place of light It began in 2009 with the regeneration of one derelict warehouse building into what has become Johannesburg’s creative hub – Arts on Main. Today, Maboneng, a Sotho word meaning “place of light”, is one of the leading urban-renewal movements – not only in the fast-paced city but in South Africa as a whole.

By re-centralising and making use of otherwise empty buildings, the Maboneng precinct is lifting the overall reputation of Johannesburg locally and abroad. Not only is the area providing opportunities for new entrepreneurs, it’s also attracting tourists and

Did you know?Durban harbour is the ninth-largest harbour in the world.



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foreign investment into the city, and boosting the economy. The � rst sectional title unit in Main Street Life (the � rst residential development in the precinct) was sold at R8 788/m² in July 2010. The latest unit in the same building was signed in June 2013 for R12 700/m². This amounts to nominal growth of 45% in 36 months, and equates to an annual growth of 15%. In addition, units in Main Street life are presently achieving yields of up to 10% compared to peaking nationwide average property yields of 6,2%.

Maboneng 2.0, the name given to the second development phase, plans to create a sustainable neighbourhood through the development of buildings and public space. A further R500-million is expected to be invested in the neighbourhood, and hundreds of jobs are expected to be created. To date, about R300-million has been invested in the precinct, and some of the most valuable properties in Johannesburg are part of the neighbourhood. These include Jewell City, currently valued at R350-million.

With the guarantee that many more buildings in the neighbourhood will continue to be uplifted, inevitably resulting in properties increasing in value, the Maboneng precinct has gained a reputation for being a prime investment opportunity for locals and foreigners interested in the regeneration of Johannesburg.

Check-in, please Cape Town has emerged as the most popular city in southern Africa for new hotel investment,

despite the oversupply that depressed the industry since 2010 World Cup. Joop Demes, Chief Executive O� cer of Pam Golding Properties Hospitality, says the acquisition of the Protea Hotel Group by Marriott in 2014 sparked foreign direct hotel investment focused on the Western Cape and Johannesburg, with the US, China and the Middle East leading the surge. Because of a favourable exchange rate, international demand is increasing, with Europe and the US as the key markets, and a sharp increase in investment from China.

“There is strong interest and demand for existing underperforming hotels as well as for green-� eld opportunities,” Demes says.

The hospitality side of Pam Golding Properties Lodges and Guesthouses has facilitated 56 foreign direct investment transactions, worth almost half-a-billion rand. Taking these � gures into consideration, there is no doubt that South Africa’s hospitality industry is not only expanding but that the properties on the market are world-class.

The country’s growing tourism sector not only ensures that visitors from around the globe � ock here, it also opens their eyes to South Africa’s potential and, subsequently, exciting investment opportunities.

Cape Town has emerged as the most popular city

in southern Africa for new hotel investment, despite the

oversupply that depressed the industry since 2010 World Cup

foreign investment into the city, and boosting the economy. The � rst sectional title unit in Main Street Life (the � rst residential development in the precinct) was sold at R8 788/m² in July 2010. The latest unit in the same building was signed in June 2013 for R12 700/m². This amounts to nominal growth of 45% in 36 months, and equates to an annual growth of 15%. In addition, units in Main Street life are presently achieving yields of up to 10% compared to peaking nationwide average property yields of 6,2%.

second development phase, plans to create a sustainable neighbourhood through the development of buildings and public space. A further R500-million is expected to be invested in the neighbourhood, and hundreds of jobs are expected to be created. To date, about R300-million has been invested in the precinct, and some of the most valuable properties in Johannesburg are part of the neighbourhood. These include Jewell City, currently valued at R350-million.

buildings in the neighbourhood will continue to be uplifted, inevitably resulting in properties increasing in value, the Maboneng precinct has gained a reputation for being a prime investment opportunity for locals and foreigners interested in the regeneration of Johannesburg.

Check-in, please Cape Town has emerged as the most popular city in southern Africa for new hotel investment,

despite the oversupply that depressed the industry since 2010 World Cup. Joop Demes, Chief Executive O� cer of Pam Golding Properties Hospitality, says the acquisition of the Protea Hotel Group by Marriott in 2014 sparked foreign direct hotel investment focused on the Western Cape and Johannesburg, with the US, China and the Middle East leading the surge. Because of a favourable exchange rate, international demand is increasing, with Europe and the US as the key markets, and a sharp increase in investment from China.

existing underperforming hotels as well as for green-� eld opportunities,” Demes says.

Properties Lodges and Guesthouses has facilitated 56 foreign direct investment transactions, worth almost half-a-billion rand. Taking these � gures into consideration, there is no doubt that South Africa’s hospitality industry is not only expanding but that the properties on the market are world-class.

only ensures that visitors from around the globe � ock here, it also opens their eyes to South Africa’s potential and, subsequently, exciting investment opportunities.

ABOVE The lucrative o� ering at Val De Vie Estate in the Western Cape has attracted foreign investment

feature

BELOW Maboneng Precinct:

Arts on Main’s upstairs cocktail bar

Did you know?Johannesburg is the capital of Gauteng, which is the wealthiest province in South Africa, and has the largest economy of any metropolitan region in sub-Saharan Africa.




SAPOA events

Liaising over lunchSince SAPOA Immediate Past

President Estienne de Klerk conceived the idea, the SAPOA media lunch session has become an integral campaign of the organisation in order to engage, enlighten and bond with the property industry’s wordsmiths and with leading media houses.

SAPOA hosted the third media lunch in early December 2014. It was attended by SAPOA Chief Executive Officer Neil Gopal, SAPOA President Amelia Beattie as well as journalists and media representatives.

Continuing with the same flair that De Klerk brought to the lunch table, Beattie addressed the media with passion, highlighting all the successes, issues and challenges that SAPOA is actively involved in, as well as discussing its future plans.

In terms of skills development, said Beattie at the lunch, SAPOA

process; and working with the government (especially the Department of Public Works) with regards to skills development and improved communication.

The continuation of the successful SAPOA Meet the Mayor campaign was also highlighted, with Beattie saying that SAPOA will continue to host the Meet the Mayor dinners. These are expected to take place in eThekwini and East London in 2015.

After a fruitful session of socialising, the third media lunch instalment was a great success. Gopal would like to thank all the journalists for their continued support in publishing SAPOA-related content in the media.

SAPOA looks forward to the next media lunch, which will take place before the 47th Annual SAPOA International Convention and Property Exhibition in eThekwini between 19 and 21 May 2015.

believes that it is imperative for the commercial property industry to actively address skills shortages and transformation within the sector. “If we are going to try to address the industry’s challenges, we need to develop a comprehensive understanding of the skills gap within the property sector,” she said.

In light of this, SAPOA officially announced the launch of a research study during the lunch, highlighting that it seeks to investigate the issues affecting capacity in the property industry. The results of the research will be used to understand and analyse skills shortages in the industry.

Other matters that were addressed included the initiation of the SAPOA Africa Committee, which is currently being amalgamated; the addressing of exclusivity lease clauses in shopping centres; the lobbying around the business rescue

SAPOA shed light on its latest endeavours at the lunch table with the industry’s media By Candace King

Photographs by Michael Glenister

SAPOA President Amelia Beattie

ABOVE Moneyweb journalist Ray Mahlaka and SAPOA Publications Editor Candace King BELOW, FROM LEFT Marketing Concepts Media Liaison Anne Lovell and Commercial & Industrial Property News Editor Nerine Zoio

ABOVE Engineering News and Mining Weekly Senior Online Writer Leandi Kolver and SAPOA CEO Neil Gopal BELOW LEFT SA Property Insider’s Thabang Mokopanele BELOW RIGHT Property24 Editor Julia Hinton


Media Lunch_SUBBED.indd 53 2015/01/14 1:13 PM


editorial

Partnering with PwCThrough recent engagement, PwC is contributing towards SAPOA initiatives in 2015

to bring strengthened real estate matters to the greater property industryBy Candace King

Over the past few months, SAPOA has been engaging with PwC to o� er more

real estate thought leadership to the industry.With o� ces in 157 countries and more

than 195 000 people, PwC is a multinational professional services network that aims to create value for its clients, people and communities in a changing world.

Through a proposed industry initiative, SAPOA highlighted several opportunities that include presentations at quarterly seminars, participating in educational programmes, joint research, involvement in industry newsletters, conferences, and the publishing of articles in SAPOA’s magazines.

The focus will be around several areas, including technical aspects, governance factors impacting the real estate industry, research and the distribution of thought leadership. Technical focus areas will include tax and REIT updates, IFRS updates and integrated reporting. Governance, e� ective capital project oversight, trust and transparency, and practices and trends in executive remuneration will also be dealt with. Factors impacting the real estate industry will also be taken into account. Such factors include sustainability, construction trends, hospitality and retail outlooks, and alignment of corporate and � nancing strategies.

In light of research, the entities can share and distribute each other’s research publications such as emerging trends in real estate, real estate news briefs and outlooks.FROM LEFT SAPOA CEO Neil Gopal and PwC Partner and Director Ilse French

South Africa retail and consumerproducts outlook

South Africa hospitality outlook

Technology update

South Africa QuarterlyReal Estate News Briefs

Technical updates

Tax updates

Real Estate 2020Sopr

So

Local

Emerging Trends in Real Estate-

Re

Em- A global view-

Global

US & Canada- European- Asia Paci�c

Management Insights- Real Estate topics

Achieving Total RetailConsumer expectations drivingthe next retail business model

Distribution of PwC thought leadership

Source: PwC Real Estate proposed industry initiative with SAPOA, May 2014

PWC and SAPOA_SUBBED.indd 54 2015/01/14 1:15 PM


editorial

Date Time Session Proposed topic Presenter/s

13 February 8am – 9.30am Power hour breakfast Trends in the South African construction industry Andries Rossouw

30 May 9am – 12.30pm Half-day workshop The future of retail in Africa John Wilkinson/Peter Hoitjink

Capital projects and infrastructure: overcoming obstacles to improve Africa’s infrastructure

Jonathan Cawood

Enhance shareholder value: alignment of corporate and � nancing strategies

Craig du Plessis

14 August 8am – 9.30am Power hour breakfastTax and REITs: responding to the current challenges

Craig Miller

Executive remuneration: practices and trends in the real estate industry

Martin Hopkins

27 November 9am – 12.30pm Half-day workshop Sustainability: beyond green value Jayne Mammatt

Getting to grips with integrating reporting Jayne Mammatt

Real estate 2020: building the future Ilse French

Factors impacting the real estate industry

SAPOA/PwC 2015 event schedule

Source: PwC Real Estate proposed industry initiative with SAPOA, May 2014

Sustainability

Technology

Hospitality outlook

Retail outlook

Mergers and acquisitions

Capital availability – pension funds and banks

Insurance: developments in property insurance market, risk factors and indemnity cover

PWC and SAPOA_SUBBED.indd 55 2015/01/14 1:15 PM


SAPOA reports

Retail and offi ce under the spotlight

Through its latest sector reports, SAPOA highlights the key fi ndings for the retail and offi ce sectors

By Candace King

SAPOA recently released its latest reports for the retail and o� ce sectors. Compiled

by IPD South Africa, the SAPOA Retail Trends Report Q3 2014 and the SAPOA O� ce Vacancy Survey Report Q4 2014 were released in December 2014.

SAPOA Retail Trends Report Q3 2014For the year ending September 2014, the centres in the IPD retail sample recorded a year-on-year increase of 6,5% in annualised trading density (sales per square metre). In real, in� ation-adjusted terms, this translates into marginally positive growth. Retailer’s cost of occupancy, measured as gross rental as a percentage of sales, was largely unchanged over the past quarter, but it is currently 100bps higher than at the height of the recession.

As at September 2014, vacancy levels remain below four percent in centres above 25 000m²; smaller centres have seen vacancy rates rise signi� cantly over the past six months. Gross rentals continue to grow faster than sales, which has seen the retailers’ cost of occupancy increase. Cost of occupancy is currently the highest in the 10-year history of the series and is almost exclusively driven by higher administered costs.

The average foot-count per square metre recorded for the quarter ending September 2014 was down by � ve percent from a year before, adding additional proof to the argument that shoppers are frequenting malls less often and combining purchases in order to save on associated travel and parking costs.

There continues to be a divergence in the performance of the various merchandise categories. Categories that have outperformed include mostly retailers of non-durable and semi-durable goods, while categories that have lagged include retailers selling durable goods and discretionary items.

SAPOA O� ce Vacancy Survey Report Q4 2014The South African macroeconomic environment continues to face headwinds. In saying that, several key drivers of the o� ce sector have

started showing signs of stabilisation. As at Q4 2014, the national o� ce vacancy rate, as recorded by SAPOA, was 11,1%, down from 11,6% a quarter before. The 50bps improvement was the biggest single quarter decline in the overall vacancy rate since the second quarter of 2007. Despite the improvement, the vacancy rate remains high and would be expected to weigh on real asking rental growth in the short to medium term.

The latest quarter saw asking rentals post their � rst above-in� ation year-on-year increase since 2010 by growing by 5,8%.

The current phase of the cycle should be viewed in the context of the period from 2000 to 2001, when both the o� ce vacancy rate and macroeconomic fundamentals were at a similar crossroads.

The latest quarter saw an improvement in the vacancy rate of all o� ce grades, with the exception of prime o� ces, which saw a marginal increase.

Both A- and B-grade o� ces recorded improvements of 40bps relative to the quarter before. The prime o� ce vacancy rate ended the quarter 40bps up on 6,3%. Un-let new developments continue to be the cause of the prime o� ce vacancy rate moving higher.

As was the case in the previous two cycles when vacancies were nearing peak levels, inner-city o� ce vacancies are signi� cantly higher than that of city decentralised o� ce nodes.

During the quarter ending December 2014, the national inner-city o� ce vacancy rate improved to end at 14,9%, while the country’s city decentralised nodes posted an aggregate vacancy rate of 9,7%, 50bps down from the previous quarter.

Development activity, although slightly down on the quarter before, remained high at Q4 2014 with ~707 000m² under development.

While development activity has been trending up since 2010, the amount of speculative development has been trending down ever since the recession.

Despite the 50bps improvement recorded during the current quarter, the o� ce sector can still be seen as being in a slowdown phase because of increasing vacancies and slow rental growth when viewed on an annual basis.

OFFICE VACANCY SURVEY REPORT

Q4: 2014 DECEMBER 2014

SAPOA C ONTACT DET AIL S

T: 011 883 0679 F: 011 883 0684 Email: [email protected] Web: www.sapoa.org.za2

The S outh African macroeconomic environment continues to face several headwinds. In saying that, several key drivers of the o�ce sector has started showing signs of stabilisation.

Financial & Business services – a key leading indicator of o�ce demand – recorded growth of 1.9% for the year ending S eptember 2014. While this is well of the lows of the recession, arguably a level of at least 3.5% is needed to catalyse an upwards shift in employment

came in at 51 (with 50 being neutral) – meaning overall sentiment in the business community is now marginally positive – possibly implying that executives are still taking a wait-and-see approach before committing to larger business premises.

Non-farm jobs growth recorded an encouraging 2.6% increase for the second quarter of the year. More of the same is needed in order to tip the o�ce cycle into a situation of excess demand as the total number of non-farm jobs are still below that of 2007 levels.

Economic Drivers of the Office Sector

Source: StatsSA, RMB/BER

12,0% 12,00

10,00

8,00

6,00

4,00

2,00

-2,00

-4,00

-6,00

-

100

90

80

70

60

50

40

30

20

10

04 07 10 13 04 04 06 08 10 1207 10 130

10,0%

8,0%

6,0%

4,0%

2,0%

0,0%

Pages from SAPOA Office Vacancy Report_Dec 2014.pdf 1 2014/12/15 2:55 PM

Source: StatsSA, RMB/BER

For further information on the reports, visit

Sapoa.org.za

Real GDP growth Business Con� dence Index Non-farm jobs growth

Figure 1: Economic drivers of the o� ce sector, 2004-2014

SAPOA Reports_SUBBED.indd 56 2015/01/14 1:16 PM


statistics

Power blackouts impact retailersWith the sudden and frequent power blackouts in South Africa, the retail sector is set

to be impacted, with discretionary retailers more exposed than food retailers

South African retailers will see sales growth impacted by the recent signi� cant power

outages. According to research undertaken by Renaissance Capital, feedback from some local retailers suggests that food retailers are better positioned than discretionary retailers as a result of their fresh o� erings, resulting in most stores having generators. (Most discretionary retailers do not have generators.)

Shopping mall-based stores – speci� cally non-food – are likely to see a greater impact as feedback suggested most malls in South Africa have generator backup for basic lighting and foot-count drops signi� cantly when

outages occur. Street-based stores tend to have more natural lighting and thus are likely to hold up better than mall-based stores.

Woolworths, Spar and Pick n Pay have all claimed to have almost 100% generators in their stores because of the cold storage and fresh o� erings. Also, the basic daily need for food products means that they are likely to be more resilient to a major drop-o� in sales growth than discretionary retailers.

Discretionary retailers require power for visibility of products and credit-scoring transactions. It is sensed that shopping-mall and credit-based discretionary retailers are likely

to be the hardest hit – stores such as Foschini, Truworths, Clicks and Lewis.

Renaissance Capital believes that some of the lost trade will be o� set by greater demand when the power is on. “We � nd that, as a result of the food o� erings, food retailers are likely to be more defensive to power outages. We are more cautious on discretionary because of the greater exposure to power outages and strong run-up in share prices from mid-October 2015,” states Renaissance Capital in its report update.

Renaissance Capital will review its numbers post-January 2015 trading updates.

Figure 1: SA retailer feedback on power outages

Retailer % of stores with generators Company comments

Woolworths 99% of stores- Almost all (99%) of the stores have generators. - Stores remain open in bigger malls even when footfall is impacted by power outages. Food in stores and sustained power generation

make the stores more defensive to pure discretionary retailers.

Clicks5% of stores;

mall-based stores have basic lighting backup

- Very few malls have power generators that are able to maintain power to the whole mall. - The major retailers with refrigeration normally all have backup generators to avoid large losses on the cold chain products. - With very few exceptions, when the power goes down in a mall, customers essentially vacate the mall en masse (except for

the few who intend to buy/� nish buying the food in the store they are in). - Once a mall is down (and it is known or subsequently seen), few customers arrive. - The larger shopping mall experiences normally take in a lot more activity than a single shop (i.e., it is often an outing

with the family, with the average stay of four to � ve hours). - It therefore does not make a lot of sense for Clicks to have a generator for its store when customers are largely absent. - Clicks will not be providing any info on the trading impact at this stage.

Foschini0% of stores;

mall-based stores have basic lighting backup

- Stores do not have generators. The company is keeping a record of turnover lost during blackouts. - All stores are well equipped to trade o� ine, so that is not a problem for the Ggroup. In stores outside of shopping

centres, there is usually su� cient light; these stores can continue trading without power. - Stores in shopping centres are a di� erent story. The majority of shopping centres does not have generators

to run the whole centre, but rather generators for emergency lighting only. When the power goes out, the centres become very dark and stores need to close as customers cannot properly see the merchandise (and for security reasons). The exception to this would be the big food retailers, who have their own generators for perishable goods.

- When the power goes out, customers leave the shopping centre and very often do not go back when the power goes back on. All in all, these power outages are a� ecting the retail sector quite badly.

Pick n Pay100% of corporate stores

and 90% to 95% of franchise stores

- 100% of corporate stores have generators, and these are able to power the lights, tills, refrigeration and all service area requirements. - It is more di� cult to con� rm the number of franchise stores with generators – but it is safe to assume that 100% or close to 100%

of franchise store have generators, which can at least run the tills and the lights. - Although the company’s stores are open and trading, customers may be put o� centres that are dark – or assume Pick n Pay is closed

because they can see a number of line shops that are closed. This could be exacerbated by tra� c snarl-ups caused by tra� c lights that do not work during load shedding.

- Di� cult to assess the potential impact of load shedding on the business. Pick n Pay is geared up, but there are other factors that may a� ect turnover.

Spar 85% to 90% of stores

- The vast majority of retailers have generators. The company initiated this as a focus after the last Eskom crisis and has assisted a number of retailers in purchasing generator systems. Unfortunately, not all stores have a full service; i.e., they have purchased generators with only su� cient power to run lighting and tills, but not all the operations. Thus even where the generators are in use, this does not imply the store is not impacted by outages.

- As Spar is independent of the retailers, it has not yet attempted to quantify the loss to the wider business. There is no doubt that retail is being impacted by the outages, even where backup generators are in use (but much less than if the stores did not have generators).

Source: Statistics South Africa, the South African Reserve Bank and RICS (2012)

Sector Update: Consumer Goods and Retail South Africa, Renaissance Capital Equity Research, 11 December 2014

Stats_NEW_FEB_SUBBED.indd 57 2015/01/14 1:17 PM


what’s on

Upcoming events in 2015

Region Date Event

Midrand 2 to 6 February 2015 BCTP

Gauteng 13 February 2015 PWC Power Hour Breakfast

Port Elizabeth 18 February 2015 Regional Meeting

Gauteng 20 February 2015 Power Hour Breakfast

Midrand 23 to 27 February 2015 FMP

Gauteng 26 February 2015 Breakfast Engagement on SPLUMA

February

Region Date Event

Bu� alo City 3 March 2015 SAPOA Bu� alo City Breakfast

Western Cape 4 March 2015 Post Budget Power Hour

KwaZulu-Natal 5 March 2015 ICPP Training

Port Elizabeth 6 March 2015 Breakfast Event

Gauteng 9 to 11 March 2015 ICPP Training

TBC 9 to13 March 2015 ECPP Training

Gauteng 10 to 13 March 2015 MIPIM

Gauteng 12 and 13 March 2015 ICPP Training

Port Elizabeth 18 March 2015 Regional Meeting

Polokwane 19 March 2015 Council Meeting

TBC 24 March 2015 Research Breakfast

KwaZulu-Natal 25 March 2015 ICPP Training/Audit Risk

TBC 25 to 27 March 2015 ICPP Training

March

Region Date Event

KwaZulu-Natal 7 April 2015 SPLUMA Breakfast Session

Port Elizabeth 10 April 2015 Heritage in Nelson Mandela Bay

Mpumalanga 10 April 2015 Lease Agreement Workshop

Port Elizabeth 15 April 2015 Regional Meeting

Gauteng 16 April 2015 SAPOA Human Resources/Board Meeting

April

Region Date Event

Western Cape 6 May 2015 SANS 100400 Workshop

TBC 7 May 2015 SAPOA National Council

Gauteng 13 May 2015 Research Breakfast: Operating Costs Report

KwaZulu-Natal 19 to 21 May 2015 SAPOA Annual Convention

TBC 20 May 2015 British Council of O� ces

KwaZulu-Natal 20 May 2015 SAPOA AGM at Convention

KwaZulu-Natal 20 May 2015 Board Meeting

TBC 29 May 2015 PWC Half-Day Workshop

May

What's On_FEB_SUBBED.indd 58 2015/01/14 1:22 PM

59

what’s on

SOUTH AFRICAN PROPERTY REVIEW

Region Date Event

Gauteng 5 June 2015 Protection of Personal Information

TBC 9 June 2015 Research Breakfast

TBC 13 June 2015 Protection of Personal Information

Port Elizabeth 17 June 2015 Regional Meeting

East London 23 to 25 June 2015 ICPP

KwaZulu-Natal 25 June 2015 Golf Day

USA 28 to 30 June 2015 BOMA International Conference

June

Region Date Event

Gauteng 2 July 2015 Negotiation Skills Masterclass Programme

Gauteng 7 July 2015 Introduction to Brokering Seminar

Port Elizabeth 15 July 2015 Regional Meeting

Gauteng 28 July 2015 Golf Day

July

Region Date Event

Gauteng 4 August 2015 Research Breakfast

Gauteng 6 August 2015 SAPOA Audit Risk Meeting

KwaZulu-Natal 11, 12 and 14 August 2015 ECPP Training

Gauteng 11 August 2015 PWC Breakfast

Polokwane 12 August 2015 Breakfast: Town Planning Scheme

Gauteng 13 August 2015 Lease Agreement Workshop

East London 14 August 2015 Golf Day

Gauteng 14 August 2015 PWC Power Hour Breakfast

Gauteng 17 to 21 August 2015 FMP Training

East London 19 August 2015 Introduction to Brokering Seminar

Port Elizabeth 19 August 2015 Regional Meeting

TBC 20 August 2015 Introduction the Brokering Seminar

Gauteng 20 August 2015 SAPOA HR Meeting

TBC 20 August 2015 SAPOA Board Meeting

Gauteng 25 to 28 August 2015 ECC Training

Gauteng 28 August 2015 MOMFA

August

Region Date Event

Port Elizabeth 1 to 3 September 2015 ICPP Training

KwaZulu-Natal 3 September 2015 Negotiation Skills Masterclass Programme

Gauteng 7 and 8 September 2015 ICPP Training

TBC 7 to 11 September 2015 ECPP Training

Western Cape 8 to 11 September 2015 ECPP Training

Port Elizabeth 8 September 2015 Golf Day

Polokwane 10 September 2015 SANS 10400 Workshop

September

Events and dates subject to change.

What's On_FEB_SUBBED.indd 59 2015/01/14 1:25 PM


what’s on

Region Date Event

KwaZulu-Nata; 1 and 2 October 2015 SACSC Annual Congress

Gauteng 1 and 2 October 2015 IPMP Training

Gauteng 2 October 2015 Legal Power Hour

Western Cape 6 to 8 October 2015 ICPP Training

Polokwane 13 October 2015 Golf Day

KwaZulu-Natal 15 October 2015 Networking Breakfast

Gauteng 17 October 2015 Research Breakfast: Industrial Industry Report

TBC 22 October 2015 Audit Risk Meeting

KwaZulu-Natal 23 October 2015 Networking Breakfast

Gauteng 23 October 2015 Brokers Economic Update

Gauteng 26 to 30 October 2015 BCTP Training

Port Elizabeth 29 October 2015 Gala Dinner

October

Region Date Event

Buffalo City 3 December 2015 Developers’ Gala Dinner

December

Region Date Event

Polokwane 16 September 2015 Council Meeting

Port Elizabeth 16 September 2015 Council Meeting

TBC 17 and 18 September 2015 National Council Meeting

TBC 17 September 2015 Networking Event

TBC 22 September 2015 Golf Day

Western Cape 26 September 2015 Property Development Workshop

Gauteng 28 to 30 September 2015 IPMP Training

KwaZulu-Natal 29 September 2015 SANS 10400 Workshop

KwaZulu-Natal 30 September 2015 SACSC Annual Congress

September

Region Date Event

Gauteng 4 November 2015 ECPP Training Course

TBC 5 November 2015 SAPOA HR Meeting

TBC 5 November 2015 SAPOA Board Meeting

TBC 6 November 2015 Legal Power Hour

TBC 10 November 2015 Research Breakfast

KwaZulu-Natal 11 November 2015 Gala Dinner

Gauteng 11 November 2015 Negotiation Skills Masterclass Programme

TBC 13 November 2015 Networking Evening

Gauteng 16 to 20 November 2015 FMP Training

Gauteng 17 November 2015 FM and IAMP Training Courses

Port Elizabeth 18 November 2015 Council Meeting

Polokwane 20 November 2015 Council Meeting

Gauteng 20 November 2015 Brokers and Legal Update

Western Cape 21 November 2015 Property Development Workshop

Polokwane 26 November 2015 Gala Dinner

TBC 27 November 2015 PWC Half-Day Workshop

November

REGISTERSouth African Property O

wners Association - P

roperty Register

Register ad.indd 20What's On_FEB_SUBBED.indd 60 2015/01/14 1:35 PM

61

what’s on

SOUTH AFRICAN PROPERTY REVIEW20 SOUTH AFRICAN PROPERTY REVIEW

legal update

For advertising opportunities and rates contact Riëtte Stevens

c: +27 (0)71 877 5520 t: +27 (0)11 883 0679 f: +27 (0)86 216 9026 e: [email protected]

S A P O A P R O P E R T Y

REGISTER2 0 1 5 - 2 0 1 6

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

● 53 categories, full and part category page sponsorship● Highlighted data entries ● Data entries with logos

● A� ordable small advertisements half and quarter page ● Boxed column and part columns

2

S A P OA P ro p e r t y R e g i s t e r 2 0 1 4 - 2 0 1 5

Architects

ARG DESIGNP.O. Box 13936, Mowbray,The Western Cape, 7705t: +27 (0)21 448 2666f: +27 (0)21 448 2667AA PAPAGEORGIOU ARCHITECT &

ASSOC INCORPORATEDP.O.Box 11288, Randhart,Gauteng, 1457t: +27 (0)11 907 2015 f: +27 (0)11 907 2020 ACG ARCHITECTS CCP.O.Box Cape Town,The Western Cape, 7915t: +27 (0)21 448 6615f: +27 (0)21 448 6621

ACTIVATE ARCHITECTURE (PTY) LTDP.O. Box 321, Saxonwold,Gauteng, 2132t: +27 (0)11 788 8095f: +27 (0)11 788 8097

ADENDORFF ARCHITECTS & INTERIORS CCP.O.Box 40301, Walmer, Port Elizabeth,Eastern Cape, 6065t: +27 (0)41 581 4765f: +27 (0)86 618 2183

AMA 3 (PTY) LTDP.O.Box 1299, Gallo Manor,Gauteng, 2052t: +27 (0)11 807 7505f: +27 (0)11 807 7509 ARC ARCHITECTURAL CONSULTANTS

PRETORIA P.O.Box 13399, Hatfield, Gauteng, 0028t: +27 (0)12 362 7350f: +27 (0)12 362 7349

ARCHI-M STUDIO 3 CCP.O.Box 9650, Bloemfontein, The Free State, 9300t: +27 (0)51 430 8714f: +27 (0)51 448 5384

ARCHITECTURAL DESIGN ASSOCIATES (GROUP) (PTY) LTD P.O.Box 87076, Houghton,Gauteng, 2041t: +27 (0)11 880 0600f: +27 (0)11 880 0603

AUCOR PROPERTY P.O.Box 157, X1 Postnet Suite, Melrose Arch, Gauteng,2146t: +27 (0)11 033 6600f: +27 (0)11 033 6600

BALSHAW & FOGARTI ARCHITECTS CCP.O.Box 12932, Centrahil, Port Elizabeth,

Eastern Cape, 6006t: +27 (0)41 373 4340f: +27 (0)41 373 4324BATLEY PARTNERS ARCHITECTURE &

DESIGNP.O.Box 52685, Saxonwold,Gauteng, 2132t: +27 (0)11 326 5000f: +27 (0)11 326 5002

BENTEL ASSOCIATES INTERNATIONALP.O.Box 87619, Houghton,Gauteng, 2041t: +27 (0)11 884 7111f: +27 (0)11 884 7110

BILD ARCHITECTS (PTY) LTD P.O.Box 95664, Waterkloof, Pretoria,Gauteng, 0145t: +27 (0)12 346 1295f: +27 (0)12 346 1249BLACKSHEEP DESIGN 223 Tribella, 166 Rivonia Road, Morningside,

Gauteng, 2192t: +27 (0)87 700 8291f: +27 (0)86 225 6665BNM 3 BHISHOP.O.Box 5, Bhisho,Eastern Cape, 5605t: +27 (0)40 635 1951f: +27 (0)40 635 1961

BOUDRY ARCHITECTS & ASSOCIATES P.O.Box 51838, Waterfront, The Western Cape, 8002t: +27 (0) 21 448 3955f: +27 (0)21 448 5910

CHAMELEON ARCHITECTSP.O.Box 4063, Tygervalley, The Western Cape, 7536t: +27 (0)21 949 2530f: +27 (0)21 945 4183CHRIS OWTRAM ARCHITECTURE

P.O.Box 1926, Pinegowrie,Gauteng, 2123t: +27 (0)11 022 6260f: +27 (0)86 648 8262 CO-ARC INTERNATIONAL ARCHITECTS INCP.O.Box 52604, Saxonwold,Gauteng, 2132t: +27 (0)11 447 1344f: +27 (0)11 447 1343

CONSULT THREE ARCHITECTS P.O.Box 71671, Central, Port Elizabeth, Eastern Cape, 6006t: +27 (0)41 585 0086f: +27 (0)86 513 2278 CSAR 3

P.O.Box 52673, Saxonwold, Rosebank,Gauteng, 2132t: +27 (0)11 880 2466f: +27 (0)11 447 3441

DAKOTA DESIGN (PTY) LTDP.O.Box 1356, Rivonia, Gauteng, 2128t: +27 (0)11 803 0000f: +27 (0)11 803 0000 DAVID CRAIG ARCHITECTS CCP.O.Box 153, Louis Trichardt, Makhado,

Louis Trichardt,Limpopo, 920t: +27 (0)15 516 2460f: +27 (0)86 524 3827 DBM 3 JHB (PTY) LTDP.O.Box 69535, Bryanston, Johannesburg,

Gauteng, 2021t: +27 (0)11 467 5299f: +27 (0)11 467 6067DBM ARCHITECTS PTA (PTY) LTD

P.O.Box 95780, Waterkloof,Gauteng, 0145t: +27 (0)12 809 3941f: +27 (0)86 619 6662DESIGN THREE SIXTY (PTY) LTDP.O.Box 15721, Vlaeberg,The Western Cape, 8018t: +27 (0)214626630f: +27 (0)21 462 6634

Roof Terrace Suite, 8 Arnold Road, Rosebank, 2132t: +27 (0) 11 788 8095 F: +27 (0) 11 788 8097Directors:

Edward Brooks: [email protected] Magner: [email protected]

Reon van der Wiel: [email protected] w w . a c t i v a t e . c o . z a

Ranked as the #1 engineering design firm by revenue in

Engineering News-Record magazine’s annual industry rankings, AECOM is a premier, fully integrated infrastructure and support services firm, with a broad range of markets. AECOM’s operations in Africa boast more than 1,900 people with a proud history of delivering excellence and developing

solutions for our clients across all industry sectors.

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Property Register 2014-2015 Section 1.indd 2

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P.O. Box 13936, Mowbray,The Western Cape, 7705t: f: +27 (0)21 448 2667

AA PAPAGEORGIOU ARCHITECT & ASSOC INCORPORATEDP.O.Box 11288, Randhart,Gauteng, 1457t: +27 (0)11 907 2015 f: +27 (0)11 907 2020

ACG ARCHITECTS CCP.O.Box Cape Town,The Western Cape, 7915t: +27 (0)21 448 6615f: +27 (0)21 448 6621ACTIVATE ARCHITECTURE (PTY) LTD

P.O. Box 321, Saxonwold,Gauteng, 2132t: +27 (0)11 788 8095f: +27 (0)11 788 8097ADENDORFF ARCHITECTS & INTERIORS CCP.O.Box 40301, Walmer, Port Elizabeth,

Eastern Cape, 6065+27 (0)41 581 4765+27 (0)86 618 2183AMA 3 (PTY) LTDP.O.Box 1299, Gallo Manor,Gauteng, 2052t: +27 (0)11 807 7505f: +27 (0)11 807 7509

ARC ARCHITECTURAL CONSULTANTS PRETORIA

P.O.Box 13399, Hatfield, Gauteng, 0028t: +27 (0)12 362 7350f: +27 (0)12 362 7349 ARCHI-M STUDIO 3 CCP.O.Box 9650, Bloemfontein, The Free State, 9300 +27 (0)51 430 8714+27 (0)51 448 5384

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Developers DEVELOPERS

Abland

Property Register 2014-2015 Section 2.indd 22 2014/10/10 11:00 AM

S A P O A P R O P E R T Y

REGISTER2014 - 2015

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wners Association - P

roperty Register

2013 - 2014

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BOUDRY ARCHITECTS & ASSOCIATES P.O.Box 51838, Waterfront, The Western Cape, 8002+27 (0) 21 448 3955+27 (0)21 448 5910

CHAMELEON ARCHITECTSP.O.Box 4063, Tygervalley, The Western Cape, 7536+27 (0)21 949 2530+27 (0)21 945 4183CHRIS OWTRAM ARCHITECTURE

P.O.Box 1926, Pinegowrie,

CO-ARC INTERNATIONAL

CONSULT THREE ARCHITECTS P.O.Box 71671, Central, Port Elizabeth,

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BOOKING DEADLINE: 07 July 2015 Material deadline: Logo entries 04 July 2015 Column entries 04 July 2015 Display adverts 05 August 2015

Register ad.indd 20 2015/01/14 1:38 PMWhat's On_FEB_SUBBED.indd 61 2015/01/14 1:39 PM


SAPOA educational programmes and workshops

What’s new in education

Property Investment and Financial Programme

Property Leadership and Management ProgrammeWe developed the following programmes to satisfy our members’ educational and skills requirements. They are:

● Property Investment and Financial Programme ● Property Financial Programme ● Property Leadership and Management Programme

Various SAPOA educational programmes cover investment and finance as modules. We are looking at developing a programme focused on investment and finance for the commercial property industry in partnership with the Henley Business School. We will keep our members updated on the progress made.

The SAPOA educational programmes are designed to cater for the commercial property industry from entry- level to executive programmes. We currently have a Property Development Programme at senior management level and an International Property Leadership Programme at executive management level, and we wish to develop

a programme at junior to middle management level on management and leadership with the Henley Business School. We will keep our members updated on the progress made. Make sure you are registered with the SAPOA Membership Department to receive our educational mailers for the dates and times of these workshops.

SAPOA educational programmes for 2015

The SAPOA Education, Training and Development Department is planning the following educational programmes for 2015

Property Financial Programme (PFP)This PFP was presented for the first time in 2014. It consists of three levels and is targeted at administrators, supervisors and managers from financial and leasing departments in property management companies.

● PFP (Basic) This is a basic financial programme aimed at people who have no formal experience or knowledge of financial concepts in the commercial property industry. The programme covers the introduction to the financial and accounting environment, working capital management,introduction to time value of money and customer identity (the various types of clients).

● PFP (Intermediate)Property finance (and other financial aspects relating to commercial property) is a highly specialised field. We cover advanced time value of money, budgeting, capital budgeting and decision-making, lease analysis and utilities management in this programme.

● PFP (Advanced)The advanced PFP training programme is the final level of the PFP series. It covers:

● The lease negotiation process; ● Principles of valuation i.t.o. the discounted cash flow model,

the income capitalisation model and the direct capitalisation model to determine whether the value of a property is calculated correctly; and

● Analysis of financial statements and dealing with risk.


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SAPOA educational programmes and workshops

SAPOA’s Education, Training and Development Department is planning several workshops for 2015. We have identified two topics – valuation and property development – and will host a series of workshops per topic at monthly intervals. Delegates may enrol for the full workshop series at a discounted fee; those who only wish to attend the workshop of their choice can do so at the normal SAPOA workshop fee

SAPOA workshops planned for 2015Valuation series of workshopsEach of these is a full-day workshop, and will deal with: 1.1 Time value of money for

property practitioners 1.2 Commercial property

economics1.3 Advanced income

capitalisation valuations 1.4 Principles of discounted

cash flow valuations 1.5 Principles of feasibility

studies 1.6 Valuation of properties

under construction1.7 Highest and best

use valuations

Lease Negotiating Workshop

The Financial Intelligence Centre Act (FICA)

Occupational Health and Safety Act: Legal Liability (Half-day)

Sectional Title WorkshopThe HRD Department has received quite a number of requests for a sectional title workshop after we ran our lease agreement workshops. We will host a full-day workshop on sectional titles.

Green Building Council WorkshopsWe will be partnering with the Green Building Council on some of its workshops. Make sure you are registered with the SAPOA Membership Department to receive our educational mailers for the dates and times of these workshops.

The National Building Regulations Act: “The SANS 10400 Regulations” (One day workshop)

Property development series of workshops

The Property Lease Agreement WorkshopThis is a full-day workshop to be presented by a property lawyer. The following is an outline of the contents:

● Essentials for a lease agreement

● Rights and obligations of the lessor and lessee

● Specific leases ● Legislation affecting leases ● Recent case law

affecting leases

Each of these is a half-day workshop, and will deal with:2.1 The fundamentals of property development 2.2 Town planning and the legal framework of developments 2.3 The development feasibility study 2.4 Raising finance for property developments2.5 Delivering the property development 2.6 Handing over the development

The Lease Negotiating Workshops are run over two days, where negotiating skills, techniques and role plays will form part of the programme. A before and after assessment will be conducted as proof of the negotiating skills acquired. The maximum delegates per workshop will be limited to 14.

The Financial Intelligence Centre Act No 38 of 2001 (FICA) was signed into South African law 13 years ago. The Act covers “Anti-Money Laundering and Counter-Terrorism Financing Legislation”. Compliance FC officials have stated that the time has come to exercise zero tolerance. The warm-up window period has closed and the centre is now vigorously implementing the Act.

In this workshop we will deal with occupational health and safety risks, who is the employer, duties and responsibilities of the employer, safety representatives, and their functions and investigations. The last part will deal with managing risk and the impact of the amended Construction Regulations that came into effect in August 2014.

SANS 10400 issued in terms of the National Building Regulations and Building Standards Act 103 of 1977 sets the requirements to ensure buildings will be maintained, designed and built in such a way that persons can live and work in a healthy and safe environment.

Since the application of the SANS 10400 Building Regulations came into effect almost three years ago, there has been much confusion as

to what they entail and what must be complied with. The workshop will cover the philosophy and intent behind the Regulations, to enable attendees to interpret and understand the requirements of the National Building Regulations. Various sections of SANS 10400 will be covered to ensure that attendees are made aware of the basic requirements of developing and maintaining buildings to ensure the health and safety of persons.

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It started as a counter-culture movement in the 1970s and 1980s, pioneered by a handful

of people who appreciated living off-grid and on the land. Over the past 40 years, the small-home movement has changed direction and emphasis many times but remained widely popular among those who prefer a simplified living in small spaces.

Putting their own spin on the resurging trend is Clara da Cruz Almeida from Collaborate000 Architects and Johannesburg-based design brand Dokter and Misses, who collaborated to bring to life a modern nano-home called POD-INDAWO.

The design process was centred around challenging existing attitudes towards conventional living spaces, and the most efficient way to create an intervention within sustainable living – and the contemporary urban landscape.

Each 17m² POD is manufactured off site to specific client specifications, allowing the owner to start with an empty shell or to kit out its interior. Once delivered on site, the modular, prefabricated home is connected to electrical and plumbing services. It can even be set up for off-the-grid operation.

Several units can be positioned in various configurations to form larger, multi-use living areas. Because the POD is designed as a lightweight structure, it can be placed anywhere on 24m² of open land and moved to another site at any point in the future. However, installing this small home in South Africa requires approval from council.

In today’s day and age, downsizing a primary residence makes a lot of sense to anyone who feels “footprint guilt” or a financial squeeze, or simply wants time to enjoy their small space rather than spend hours cleaning or fixing it.

Making inroads into ecofriendly, customisable living solutions, the POD’s design and size allows all these things, and – taking the recent load-shedding into consideration – the drastically reduced energy bill is a welcome bonus.

For Dokter and Misses, simplicity and ease were vital in the realisation of the POD’s design. The design duo rose to the challenge by creating a living space that is both functional and energy-efficient; a space that could ideally be treated as a “starter” home, elegant guest cottage, home office or holiday home.

Before setting out to design the interior, the brand realised that it needed to convey a sense of calm. This was successfully achieved by keeping it predominantly white, with dollops of mint-green and grey to add colour. The wall-mounted storage encourages the owner to display items, while ample closed storage helps prevent clutter. The POD’s interior is as custom-made as they come. Everything from the kitchen to the bed, fold-down table and fold-away couches was specifically designed to optimise space-saving and to maximise the POD’s living area. The only products used in the prototype that were sourced from an existing range are the lighting and bathroom fixtures from DAM.

With the first prototype completed, the team is reviewing the costs but says one can expect to pay between R200 000 and R700 000, depending on specifications.

Whatever the reason – environmental, economic, spiritual – opting for a smaller home has many benefits. Here’s to celebrating innovative local design, and hoping to see the POD-INDAWO in communities across the globe soon.

SpecificationsThe total net internal area, including

the mezzanine, measures 17,28m².

The deck is 9m².

Did you know?“Indawo” means “place” in Xhosa.


off the wall

Simplified livingDesigned specifically for the South African context, POD-INDAWO is a design intervention that affords home-owners a comfortable, functional small-space experienceBy Michelle Marais Photographs by Brett Rubin

Off The Wall_FEB_SUBBED.indd 64 2015/01/14 1:51 PM

As one of Africa’s largest engineering consultancies, WSP plays an important part in our continent’s sustainable development. We aim to future proof our projects while preserving our nation’s heritage. Everything we do is approached with passion and caring. This is manifest in our handling of Pretoria’s prize Jacaranda trees while working on the city’s new Bus Rapid Transit (BRT) system. The BRT system in Pretoria is just one example, where we are bridging the gap for commuters. Rapid Transit means less congestion, less pollution, and shorter commutes. It was decided to preserve and relocate these trees, rather than destroy them.

BROUGHT TO YOU BY WSP

31,500 500 39EMPLOYEES OFFICES COUNTRIES

Learn more about this and other projects onwww.wspgroup.co.za

JACARANDA CITY’S BRT


www.delqs.com | JHB +27 (11) 642 8751 | PTA +27 (12) 460 3304 Associated offices: GHANA | KENYA | MAURITIUS | NAMIBIA | NIGERIA | TANZANIA | UGANDA

QUANTITY SURVEYING DISPUTE RESOLUTION PROPERTY VALUATION

Dr Corné de LeeuwAkopo Africa Nico RoosGerhard de Leeuw www.delqs.com

QUANTITY SURVEYING

Dr Corné de LeeuwAkopo Africa Nico RoosGerhard de Leeuw

1 Head office for Ecobank in Accra, Ghana. Architects: Arc Architects

2 West Hills Mall in Accra, Ghana for a subsidiary of Atterbury Properties. Architects: Arc Architects

3 Student accommodation in Pretoria for the Feenstra Group. Architects: Boogertman + Partners

4 Vdara Office Park in Johannesburg for Bakos Brothers. Architects: Integrale Architectural Design

1 2

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Proactive Quantity Surveying

Our track record speaks for itself. DelQS was established in 2000 and has since built up a remarkable track

record. We have provided quantity surveying services for almost all building

types ranging in construction cost from relatively small to multi-billion Rand

developments. Building and property economics is a specialty.


south african property review february 2015

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