Real Estate Investor Magazine
December 2022/January 2023 edition: full text
Every page of the December 2022/January 2023 issue as text. To see a page as it was designed, open it in the magazine.
Read it as a magazinerei.co.za
DEC 2022 / JAN 2023
OFFSHORE
Investing in UK Property
BUDGET SURPRISES
Hiddden costs of buying a home
PROPTECH
Disruptive technology in property
RETHA VAN ROOYEN
Student Accommodation 101
THE TEAM
EDITORIAL
Founder & Editor-at-Large Neale Petersen
neale@rei.co.za
Head of Content Dayne Stern
dayne@rei.co.za
Digital Strategist Asheeq Cader
asheeq@rei.co.za
Digital Designer Caro Kleynhans
caro@rei.co.za
Accounts Manager Marisa George
marisa@rei.co.za
CONTRIBUTORS
Dayne Stern Schalk van der Merwe Wesley Cowan Brian Andrew Sophie Gamborg Grant Smee Emile Grobbelaar Bathobile Chime Jackie Smith Travis Barington Alison Groves
Digital Strategist Manager Alexander De Villiers
Audited
*17,120 (July - September 2022)
*19,650 views
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DECEMBER 2022 / JANUARY 2023 SA Real Estate Investor Magazine
alexander@rei.co.za
CIRCULATION
All rights reserved. No portion of this publication may be reproduced or used in any form without prior written consent and permission from Reale Media. The publisher gives no written guarantees or assurances and makes no representation regarding any goods or services written or advertised within this edition. Prospective investors should always consult their attorneys, advisors or accountants before investing. Copyright © Reale Activation. Pty (Ltd)
EDITORS LETTER
Change is inevitable, except from vending machines
I
If the last few years have shown us anything, it is that the rate of change is accelerating and it doesn’t look like slowing down anytime soon. While this climate of uncertainty adds risk to traditional investment strategy, it also brings new opportunities for the investor who is not afraid of embracing change.
This means that being flexible with investment strategy and agile with operations is vital if you don’t want your portfolio or business to be left behind. Im’ not saying that we should follow every new investment trend. For instance, I still don’t know what NFT’s are and I’m too afraid to ask at this stage, but I do know that If I can’t understand it, it’s probably not for me.
One property investor who is certainly not afraid of embracing change features on our cover as this
t’s safe to say that the last three years have been rather eventful. From the COVID pandemic and associated onerous lockdowns, to Russia’s sabre rattling and economies around the world teetering on recession, there has been no shortage of drama and tragic comedy on the global stage.
month’s Master Investor. Not discouraged after a few failed attempts, Retha van Rooyen started her student accommodation company in 2019, and has managed to double the growth of her business every year since then. Retha has subsequently written a book about the subject to share her remarkable entrepreneurial journey and inspire other investors to explore this lucrative yet complex property investment model.
I would also like to take this opportunity to thank you personally, our valued readers and partners, for being a crucial part of REI Media’s journey and ongoing success. Like almost every South African company, we have had our fair share of trials and tribulations over the last year, but it is how you rise up to face the next challenge that defines your direction. The challenges don’t get easier, but with enough practice, overcoming them does.
So, on behalf of the whole REI Media team, we send to you our best wishes for the festive season and an abundance of health, wealth and happiness in 2023. This is the perfect time to reflect on the year passed, to rejuvenate your energy for the year ahead, and most importantly, create happy memories of good times spent with family and friends.
DAYNE STERN HEAD OF CONTENT
Open your arms to change, but do not let go of your values.
- Dalai Lama XIV
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CONTENTS
DEC 2022 /JAN 2023 #153
TRENDING
03 Editorial View 08 Cover Story Profile 24 Company Profile
INVESTING
32 The Untapped opportunity of rental inspections 36 When last did you achieve inflation beating ROI 42 Commercial Property Sector 2022: Where Has the Growth Come From?
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36
WEALTH
66 Is it time for a strategy change? 70 Equipping black property leaders to take their place in the SA economy
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EDUCATION
50 23 tips to run a better business in 2023 58 The Rise of Sectional Title Homes in South Africa 63 Upskill Yourself
DECEMBER 2022 / JANUARY 2023 SA Real Estate Investor Magazine
FINANCE
78 The ten hidden costs of buying a home 84 The Upside of Interest Rate Increases: Higher Returns on Your Home Loan Deposit
TECHNOLOGY
108 How much does it cost to pass away 114 How to FICA a Deceased Estate
OFFSHORE
130 More South Africans are investing in UK Property 122 Offshore investment opportunities in exclusive Swiss Alps Ski Resort
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NEW DEVELOPMENTS
140 The City Centre lifestyle exceeds all expectations 146 Are South African building owners taking EPC seriously?
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RETIREMENT
92 Disruptive technologies to deal with disruption 98 Why Commercial Real Estate is the perfect use case for No-Code Tech
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MASTER INVESTOR
Student Accommodation 101
When it comes to starting and running a successful Student Accommodation management company in South Africa, Retha van Rooyen can write a book on it. In fact, she already has. And not just any book; Creating Wealth with Student Accomodation in South Africa is the definitive guide for any property investor interested in this field.
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RETHA VAN ROOYEN
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MASTER INVESTOR
I
nvesting in Student Accommodation has the potential to be a lucrative property investment strategy, especially for property entrepreneurs looking to scale up their portfolio. Demand is ever growing and opportunities abound, but there can be costly pitfalls for the unwary or ill prepared.
students across 25 properties in four South African cities.
“The Student Accommodation business can be very rewarding but is certainly not for the fainthearted,” cautions Retha with a warm smile. “It’s all fine having a few students staying in a granny flat in your garden, but if you want to scale the business up to the next level you will need In her recently published book determination, a sense of humour, - Creating Wealth with Student plenty of patience, and a passion Accommodation in South Africa - for helping South Africa’s youth.” Retha recounts her inspirational entrepreneurial journey from a Retha explains that she wrote her somewhat shaky start, to founding book as a business guide for the the successful My Student House property investor who wants to business which currently manages run Student Accommodation as a the accommodation of 798 successful business. “I’m the first
MINI BIO
Name: Retha van Rooyen Background: 3 kids and a husband BUSINESS HERO/MENTORS: Vusi Thembekwayo and Grant Cardone Mentor: Richard Branson LIFE MOTTO: “I don’t know how now, but I will when I’m done” Dr Seuss
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RETHA VAN ROOYEN
to admit that we were woefully unprepared when my partner officially launched the first student accommodation business in the beginning of 2020 and we had to learn many difficult lessons along the way. Then COVID pandemic struck and the enforced lockdown nearly put us out of business for
good, but with lots of hard work, a strong strategy with intent, and a great team of 17 amazing staff, we have achieved an amazing turnaround since then. Now for the next step, we’re aiming to grow the business over the next year to accommodate 1500 students around South Africa.”
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MASTER INVESTOR PROFILE
But before we get into the nitty gritty details of Student Accommodation as a business, Retha shares her personal story of how she found the inspiration and motivation to venture out of her comfort zone and find success as an entrepreneur.
How it started
instructor. Instead of being bored, I had a flash of realisation that I had been living my life without intent and was just being used as a tool for my manager’s career advancement.”
“I had bought and sold a few properties up until 2017, but never considered myself as a real real estate investor. I was busy with a full time job and my family, so I wasn’t investing in the property market with any clear intent or purpose.”
“There are two clear turning points that changed this path and I am so grateful that I was present in the right frame of mind to see these incredible life changing opportunities for what they were.”
In 2016, I was invited to one of those corporate mindset training courses that you only really look forward to because it's a day out of the office. The course was based on Napoleon Hill’s 1937 book, Think and Grow Rich and was delivered brilliantly by the
“I knew I had to start my own business but the first few tries were not as successful as I had hoped. You’ll laugh if you know me, but my first failed attempt was trying to breed cockroaches
“I didn't choose the property life, but the property life chose me,” says Retha with a chuckle.
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RETHA VAN ROOYEN
to sell to petshops as pet food for snakes and spiders. That didn’t work out, and after trying and failing in a vending machine business and then a rabbit meat business I was nearly ready to give up on entrepreneurial ideas.”
But just as I was at my lowest the second epiphany happened after reading Robert Kiyosaki’s influential book Rich Dad Poor Dad. It struck a deep chord with me and after much thought, I decided to invest in myself and my future by signing up for quite an expensive three day training course. I must have looked shell shocked when I walked out of the presentation because one
of the presenters saw me, gave me a hug and said that although this is scary, you will be laughing about this day a year from now. He was wrong - it only took six months to laugh about that day.”
Retha and her family moved to Cape Town later that year and she was eager to take advantage of the booming property market. “I reviewed hundreds of properties and rental models but none made sense in terms of return on investment. That is until one of my property investment students - Lihle King Nxoyi - came to me with a potential property which could be developed for student
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MASTER INVESTOR PROFILE
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RETHA VAN ROOYEN
accommodation because of its with student squatters. I almost proximity to a local university.” walked away from the opportunity but I was very fortunate to meet someone with the experience of managing a 100 student building in Cape Town. She demystified how the business works and became a partner for the company’s first year as well as a trusted advisor “By the end of and close friend.”
the my first year of investing in property with intention, I owned 11 properties”
Enrol in Student Accommodation
But information about student accommodation as a business was hard to find and there were many horror stories about property zoning or how the National Student Financial Aid Scheme(NSFAS) could implode and leave landlords
“Not everyone is going to be lucky enough to meet someone like that when you really need to. That is part of the purpose of writing my book; to give an account of my learning experiences and pass on the knowledge I wish I knew when I started My Student House. I wanted the book to be a valuable resource and guide for anyone who is exploring the idea of Student Accommodation as a business.”
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COVER STORY
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MY STUDENT HOUSE
Student Accommodation Study Notes
Part journal, part business guide, part business coach; Retha’s book, Creating Wealth with Student Accommodation in South Africa, has been written for anyone interested in starting and running a successful Student Accommodation business. The following edited excerpts provide cursory highlights from a few pages of the book. If you would like to study this subject up to expert level you can purchase a copy of Retha’s book here.
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COVER STORY
“
There's never a dull moment in this business. Sometimes I wish for dull moments.” smiles Retha. “There will be challenges to overcome on a daily basis; maintaining student discipline in your properties, managing cash flow when the universities pay out late, and keeping order in a mountain of admin and complex paperwork are some of the things you can expect. But the rewards make it all worthwhile. It's an opportunity to run a successful business that provides students, who might come from disadvantaged backgrounds, with a safe place to live and to pursue their studies so that they can change the course of their future.”
the student accommodation lease, whereas this is not necessary for residential tenants.
One of the most important distinctions between S.A. and normal residential rental property is that students are not considered as normal tenants and are governed by a different set of laws in South Africa. Your SA property is not the students’ primary residence; it is as if the student is staying with you on an AirBnB basis. This does make it easier to evict a student from your property if the need arises as they have a primary home to which they can return.
SA as a property investment
It is important to understand that SA requires a hands-on approach, especially at the level where you Any property where students live own or manage several properties while studying can be classified with a large volume of students as S.A., be it a private apartment, and staff. university residence, shared room or garden flat. Normally services You need to treat your SA property and costs are included as part of like a business. It requires sales and
What is Student Accommodation (S.A.)
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MY STUDENT HOUSE
marketing, accounting, customer care, human resources and all other functions you would expect of a business. This also means you can write off expenses and only pay company tax on your profits. Expenses can include a company vehicle, premise costs,
laptops, fuel and maintenance costs on the property, and more. In fact, one of the biggest benefits of running SA as a business are the tax benefits, but this requires specialist expertise and I strongly advise you secure the services of a tax professional.
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COVER STORY
Another major property investment benefit with SA is that you can switch over from a residential valuation where the banks determine the property value using the purchase prices of surrounding properties, to a commercial valuation where the
income generated by the property is used to determine the price.
For example - we purchased a residential property in Bellville for R2.6m. Six months later we had generated income through SA so the commercial valuation
jumped to R5.2m. That's an extra R2.6m on our balance sheet in half a year. Once you have a couple of these properties on your books, you can use your balance sheet to purchase more properties when the opportunity arises.
they operate differently when it comes to student accommodation payments.
There are 26 universities in South Africa across all nine provinces. Presently, there are more than one million university students in South Africa and the government plans Tertiary Institutions There are many different types of to add 500 000 more students in tertiary learning institutions but the public institutions by 2030. majority of South African students attend either university or college. Since most colleges are private The main difference between the institutions they can make their two is that universities are state own rules. Each college operates owned while colleges are private differently and you would have to institutions.There are, however, 50 do your “homework” on the specific TVET colleges in South Africa which college if you intend catering for are state sponsored colleges and their students.
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Understanding NSFAS
depends on the specific university or TVET college. In 2019, top universities in urban areas paid up to R55 000 per year whereas a smaller university in a rural area might only pay around R15 000 per year. The rate is generally lower for TVET students compared to university students, and these amounts change every year and you need to refer to the published rates annually.
If you are interested in student accommodation you will need to know what the National Student Financial Aid Scheme (NSFAS) is and how it works. Basically, it’s a government backed bursary scheme that provides poor and working class South African students with financial aid to study at universities and TVET (state sponsored) colleges, but does not cover fees for private There are many business benefits institutions. in catering for NSFAS students; The amount that NSFAS pays generally these students can towards student accommodation commute from home and require
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MY STUDENT HOUSE
accommodation close to campus, to move to another property you and you’re entitled to charge can be left with an empty bed for the maximum amount of rent the rest of the year. that the bursary allows which is sometimes double the rate of what a private student would pay. The SA Lease Your lease should be very clear what is, and what is not, included in the rent. You need to specify all the details on the lease agreement such as whether there is a download limit on the WiFi, or “This is not a whether you charge for laundry using coin operated machines passive income or prepaid electricity and water generating meters.
hobby that can be completely outsourced to another rental agency.”
But there are negatives too; NSFAS payments are usually late and most universities don’t allow you to charge deposits for NSFAS students, so If a student decides
One of the most common SA questions I hear is “who signs the lease? If the student has NSFAS funding they must sign the lease as the NSFAS bursary is seen as a contract between the student and NSFAS. However, there are instances where NSFAS don’t pay the full amount or cancel the bursary half way through the year due to the student not fulfilling the bursary criteria. This is why I strongly recommend getting a parent or relative to
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COVER STORY
sign a surety document which Collecting Rent binds the signatory to honour Depending on your business the student's debt. model, you will either be collecting rent from bursary officials or Your insurance will not cover a directly from the students or tenant’s personal items so your their parents. lease should clearly state that if a student’s belongings are stolen, Bursaries usually require a monthly you’re not liable to cover any invoice or a once off invoice in replacement costs. I advise that the beginning of the year before security cameras are installed they make payment. in all common areas, especially If you are dealing with a student for the fridge and laundry room. directly, you should hand deliver
MY STUDENT HOUSE
the account statement and any overdue amount by the third day after the due date. Make sure you send parents or surety individuals monthly statements so that they are aware of any defaults and can address the situation before the outstanding amount becomes too large to cover.
response is a resounding Definitely NOT. Student Accommodation is the best property investment decision I have ever made. Like everything in life, there are challenges to overcome and lessons to learn
Arrears collections at the end of the year can be extremely difficult, especially if NSFAS has withdrawn funding for one of the students.You should weigh up the costs of taking the legal route vs writing off the debt. Legal fees start at R8000 for an unopposed judgement and escalate from there depending on how many times the case goes to court.
Start SA today
I’ve been asked if I ever regret getting into student Accommodation and the
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COVER STORY
but the rewards are so great that and expect the rentals to come it makes everyday so worthwhile. rolling in, you will need to get your hands dirty. But although Student My advice for anyone interested Accommodation is probably in getting into this business - better suited to someone who has aside from getting your hands previous experience in renting out on a copy of my book of course properties and managing tenants, - is that Student Accommodation I do believe that anyone with the is quite an advanced property determination and strategic intent investment strategy. It is not can do very well for themselves possible to sit on the sidelines in this business.
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PAGE 32
INVESTING
The Untapped opportunity of rental inspections Many property professionals still consider rental inspections to be no more than a compliance formality.
BY SCHALK VAN DER MERWE
PAGE 36
PAGE 42
Commercial Property Sector 2022: Where Has the Growth Come From? Against all odds, the commercial property sector has fought back and is showing positive signs of growth and recovery for 2022.
BY WESLEY COWAN
When last did you achieve inflation beating ROI Opportunity Private Capital offers a solution that allows you to invest in the early stages of the property development cycle.
BY EDITORIAL
INVESTING | EDUCATION | FINANCE | WEALTH | TECHNOLOGY | RETIREMENT
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“Ensure your financial security and maximise your property portfolio for sustainable wealth creation.”
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CAPITAL INVESTMENTS
When last did you achieve inflation beating ROI?
By Editorial
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SA Real Estate Investor Magazine DECEMBER 2022 / JANUARY 2023
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CAPITAL INVESTMENTS
O
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pportunity Private Capital offers a solution that allows you to invest in the early stages of the property development cycle, receiving consistent returns and protection on your capital. With this offering, the results are that investors have achieved inflation beating returns consistently for the last eight years.
This entire structure is based on protection of the investor’s capital in the form of the development assets. Thus, the development assets are held as security until the investor is repaid.
A boutique investment company based in Cape Town, operating since 2006. Risk-managed investment opportunities are provided for private investors to invest directly in property What Investment developments in the Western Cape Opportunities are Now region. As investors get access to investing directly in these new Available for Investors? developments, it enables them A new investment cycle has just to achieve attractive, inflation- been opened for investors with the projected returns anticipated from beating returns. 14% - 18% per annum, dependent The average annual returns on the amount invested. achieved over the last 5-year period has been 16.75% p/a. ENQUIRE NOW
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Address:
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Therefore the invitation is to investors who understand, (i) the nature of these investments, (ii) the security structures and (iii), where this investment fits into their larger profile.
To pique your interest, one of our co-founders Nick Morgan was in conversation on Ontbytsake in September to discuss how investments were progressing The information contained in this document does not constitute a financial service as defined in the Financial Advisory and Intermevalue being provided diary and Services the Act nor is it intended to solicit investment or to promote a financial product in any way. Opportunity Private Capital do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only. You investors. should consult your own investment, tax, legal and accounting advisors before engaging in any transaction.
Investment Disclaimer: This is a private placement. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a Lender or prospective Lender’s investment portfolio. No investors or prospective investors should assume that any information presented and/or made available by Opportunity Private Capital or its Associates is a substitute for personalized individual advice from an advisor or any other investment professional. No guarantees as to the success of the investment or the projected return are offered. They have undertaken to present as much factual information as is available. Every precaution has been taken to offer sufficient security for the investment monies given by investors. Neither Opportunity Private Capital, nor the Borrower has been registered as a regulated collective investment scheme pursuant to the Collective Investment Schemes Control Act 45 of 2002 (“CISCA”) and neither Opportunity Private Capital, nor the Borrower, nor NSST, nor the Attorneys is licensed under CISCA.
Protection of Personal Information Act (POPIA) Disclaimer: Opportunity Private Capital undertakes to treat the client or prospective client’s personal information as confidential and to process this personal information in a fair and lawful manner. The collection, use and storage of your personal information for reasons directly relevant to the relationship between OPC and yourself or for other legitimate purposes, including, but not limited for contacting and doing business in the Real Estate sector as we provide investment opportunities for private investors to earn return on their capital by funding residential property developments.
2nd Floor, Edward 2 Building, Edward Street, Bellville, 7530
number: 2004/013672/07
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Email: invest@opportunity.co.za Email: invest@opportunity.
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COMMERCIAL INVESTING
Commercial Property Sector 2022: Where Has the Growth Come From?
By Wesley Cowan
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Against all odds, the commercial property sector has fought back and is showing positive signs of growth and recovery for 2022. The sector’s rebound is clearly illustrated in GrowthPoint’s latest financial results, with the company reporting a 8.5% decrease in group vacancies.
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COMMERCIAL INVESTING
A
nd while the sector continues to fight against uncontrollable odds such as inflation and interest rate hikes, I believe that the industry has weathered the worst of the storm in the shortterm. It has transformed over the past few years and we are cautiously optimistic about the future.
While high vacancies in the office sector cannot be denied, the logistics property sector is a firm frontrunner and has contributed to a large portion of the sector’s growth for 2022. Demand from the logistics property sector for warehousing and vacant land in industrial areas is leading the way.
by 15000m2.
Property developers have also noticed the uptick and are cashing in. While developers still welcome the opportunity to develop warehouses for a confirmed tenant, there has been a notable upsurge in the development of speculative warehouses, and developers are filling these successfully prior to completion.
Why Logistics & Why the Western Cape?
Rode’s Report on the South African Property Market for Q3 2022 detailed a nominal rental growth of 5.3% for spaces of 500m2 (compared to Q3 2021). The report further states that the market was boosted by low vacancies and Interestingly, there are few vacant demand for logistics warehousing. industrial premises on offer – particularly in the Western Cape While there is significant growth - giving rise to a seller’s market. and uptake across the country, The major uptake in space can be the Western Cape province has largely attributed to the growth outperformed the rest. With barely of eCommerce, for example; any industrial sites on offer, clients Takealot.com has acquired an are clamouring for space. This additional 35000m2 of space and creates a unique opportunity for has extended its existing premises investors and landlords.
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Rode’s Report seconds this, noting that ‘Cape Town is looking as fresh as a daisy’. “Nominal rentals for prime space of 500m2 is up by 6.7% from Q3 2021. In the office sector, various companies are relocating their head office to the Western Cape in a sustained semigration movement.
“2020 was a defining year for industrial property and this trend continues. Today, we are going as far as to use industry contacts to secure stock before they are listed.”
The Year 2022 will forever be defined by some of the largest logistics property deals that the industry has experienced in recent history. In Gauteng, prominent brands such as Isuzu, Media24 and Crusader
Logistics expanded and found new premises in 2022. In the Western Cape, Truworths, The Foschini Group and Media24 Logistics were some of the frontrunners in securing new premises while in KwaZulu Natal, Zacpack led the way.
Deals concluded in this sector equate to north of 500 000m2 in 2022. We are pleased to be showing positive growth and I believe that the same can be said for the majority of the industry at large.
Wesley Cowan Director Galetti Corporate Real Estate
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PAGE 50
EDUCATION
23 tips to run a better business in 2023 The end of a year and the beginning of the next is when thoughts turn to improving one’s health. The same applies to small business owners.
BY EDITORIAL
PAGE 58
The Rise of Sectional Title Homes in South Africa The lock-up-and-go lifestyle offered by sectional title living may soon supersede the demand for full title (or freehold) homes in South Africa.
BY GRANT SMEE
The basics of selling a home | Trending Online Selling a home can be a complicated process, especially for those who have never done so before. While real estate professionals are there to guide sellers through every step of the way.
BY EDITORIAL
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“Stay informed with the latest research and explore new opportunites to up skill yourself and grow your career.”
SA Real Estate Investor Magazine DECEMBER 2022 / JANUARY 2023
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Skills Development In The Workplace
Ca l l i n g a ll business o wn e rs a n d in t e rn s
The Skills Development Act in South Africa was created to help develop the skills for South African people in the workplace, enabling job seekers to improve their chances of finding work and keeping a job.
Its purpose is to improve productivity in the workplace for employers, the competitiveness of employers as well as to promote self-employment.
EMPLOYER BENEFITS
• Train young people to groom for employment • Create jobs (while assisting in alleviating poverty in SA) • Tax incentives • Improve BBBEE Skills Development scoring
EMPLOYER OPPORTUNITIES
• Mandatory grants access - 20% of the 1% skills levies you have paid will be paid back to you. • Discretionary grants access – internships, learnerships, bursaries and skills programmes.
IF YOU WOULD LIKE TO ENQUIRE HOW YOUR ORGANIZATION COULD BENEFIT FROM SETA FUNDING, PLEASE CLICK ON THE LINK BELOW OR EMAIL AND WE WILL MAKE CONTACT WITH YOU.
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INVESTOR INTELLIGENCE
23 tips to run a better business in 2023
By Editorial
The end of a year and the beginning of the next is when thoughts turn to New Year’s resolutions – time to lose weight, return to the gym, improve one’s health. The same applies to small business owners.
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INVESTOR INTELLIGENCE
T
he year 2022 has been a tough year and the perfect storm for businesses. The difficult recovery from the Covid-19 pandemic, the fallout from the Ukraine war, disruption of global supply chains, skyrocketing energy costs, the local Eskom energy crisis, political instability and climbing inflation are just some of the things that have impacted negatively on local businesses and their clients.
“These are likely to continue,” says Denzil Steyn, president of the Durban Chapter of global peer to peer network, Entrepreneur’s Organisation (EO). “However, business leaders need to avoid the much quoted mistake of continuing to do the same thing but expecting a different outcome.”
According to Statistics South Africa, the total number of liquidations in South Africa increased by 44.8% in August 2022 compared with the same period a year ago. The total
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number of liquidations increased by 18.8% in the three months ended August 2022 compared with the three months ended August 2021.
“Entrepreneurs need to think and act differently in 2023, not only through growing their business skills but by learning from successful peers who have ridden out and even grown during one of the most turbulent economic times.”
Apart from formally underscoring the much quoted fact that this country has one of the highest SMME failure rates in the world, the University of the Western
Cape’s entrepreneurship specialist Prof Christian Freidrich (an extraordinary professor at UWC’s School of business and profess at the University of Applied Sciences in Giessen, Germany) has dug a little deeper. He says that a massive research
programme spanning the last 15 years has revealed that a smaller business can rise or fall on the decisions of the entrepreneur who owns it. This is because the owner is the source of action in a firm, makes the key decisions and deals with important customers, suppliers, and employees.
To close off 2022, EO Durban members have shared 24 tips which they believe are integral to running a successful business during 2023:
Denzil Steyn, CEO of Intellisec & president of EO
01. Build your team, set
direction and execute systematically and passionately, in that order.
02. Don’t demand loss
recovery from a chosen path. If it is not working,
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INVESTOR INTELLIGENCE
learn, let go and reset direction.
04. It’s tough and lonely at the
top. Invest in membership of an 03. Love what you are doing. If organisation such as EO where there is no love, figure out what you can enjoy the support of is draining you and make the peers in the business arena. changes fast.
Tarryn Tait, CEO of Basics & Beyond
05. Growth is not always
linear. Sometimes to go forwards, we have to go backwards
06. Focus on the things
you are good at. When a teacher marks an exam and there is 1 wrong answer, they don’t score it 1/10, they score it 9/10. Focus on the right metrics.
07. Feelings achieve
nothing, action = change
08. Communicate early and who you have around you.
honestly.
14. Stay focused and be
09. It’s not the survival of the disciplined.
fittest, it’s the survival of the most adaptable. Learn to adapt.
Bruce Rowe, CEO of MPowered
10. Having a company purpose
gives you direction for any and all ideation and decision making
11. Have absolute clarity on
what your 3 or 5 year vision is. Make it achievable and get buy-in.
12. Establish a business
operating system that your team uses to help keep the business moving forwards.
13. Always be
thankful for what you have and
INVESTOR INTELLIGENCE
Mark Essey, CEO of Capability BPO 16. It is all about cashflow, so
many businesses close their 15. Pay attention to what your doors with big profits on paper gut is telling you. Even if it is a and not in the bank. tweak, listen. 17. Try not to let issues go unresolved. They always come back to visit when you can least afford them to.
Cindy Norcott, CEO of Pro Talent
18. Hire people better
than you, treat them well and trust them and you will see your business grow to the next level.
19. Move quickly
and heed the saying that “It’s not the big who eat the small, it’s the fast who eat the slow”. Be responsive to changes and react quickly
20. Always keep a close eye free advice, free shipping. Give
on costs because they creep up people more than they have any quickly. Go through every line right to expect. item on your expenses column each month with the intention of reducing your costs by 10%.
21. You will never save
yourself into success. Success comes from sales. Make sure you are always in selling mode and that every staff member in your company understands that sales is part of their role.
22. Never accept
“That’s not my job” from any of your staff and always model a humble, can-do approach.
23.
In every transaction with clients, throw in extra value, whether it is a free smile, extra convenience, support,
SECTIONAL TITLE INVESTING
The Rise of Sectional Title Homes in South Africa
By Grant Smee
The lock-up-and-go lifestyle offered by sectional title living may soon supersede the demand for full title (or freehold) homes in South Africa. According to Lightstone Property’s recent statistics, the volume of transfer of freehold homes has declined since 2018, meaning that the days of high demand for sprawling lawns and white picket fences may soon be numbered.
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SECTIONAL TITLE INVESTING
I
n contrast, the volume of transfers of sectional title homes and homes located in estates has climbed steadily since 2018 (with a brief dip in 2020). While freehold homes still made up most of the transfer volume in 2021, the popularity of sectional title homes, homes in new developments and homes located in estates continues to surge across South Africa.
properties located in estates are notorious for high levies. This is largely due to security costs and added amenities. If there is onsite security, a restaurant, squash court or swimming pool on-site – its cost is being covered by the homeowners.
Excess supply of full title homes
The trend of low House Price Inflation (HPI) in South Africa cannot be denied. The excess supply of homes on the market has given rise to a prolonged buyers’ market in some parts of South Africa, while in high demand lifestyle areas, sellers remain in control.
Adding to the appeal of these homes are lower insurance costs, shared maintenance costs and a sense of community. When it comes to investing, Lightstone’s latest data also revealed that, compared to full title homes, sectional title properties have A large part of the excess supply enjoyed a lower inflation rate lies in freehold homes and new since 2010. developments in over-developed, densely populated areas. Homes However, while the popularity in areas where there are security of these homes will continue to concerns are also moving slowly. dominate over the next few years, it is adding extra cost pressures Looking to new developments, to homeowners. Sectional title property developers like Balwin homes, new developments and Group have been cashing in on
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the demand for high-density, lockup-and-go living. However, in some developments, many new units are standing empty. “This is largely due to the sheer number of units on offer to homebuyers. When deciding whether to invest, buyers will also be weighing up their possible return for units in densely saturated areas.”
“The term ‘sectional title’ refers to ownership of homes in a complex, estate, or development. You don’t own the complex; you simply own the unit that you reside in.”
host of factors. These include your life stage, your plans for the next five to ten years and your affordability.
Full title pros:
1. Privacy: “Having extra space and walls around your property gives you a strong sense of privacy.” 2. Freedom: “You have the freedom to get pets, paint your walls in the colour of your choice, and undertake internal and external renovations as you please. You don’t need to request permission from anyone, aside from letting your neighbours know, as a courtesy, should you renovate.”
Full title cons:
1. Unexpected costs and upkeep: “Any maintenance or repair work will need to be handled and funded by you.” Full title vs sectional title 2. Neighbours: “There is very little recourse in situations When deliberating on full title when neighbours are noisy, or sectional title living,potential disruptive or fail to maintain homebuyers should consider a their properties”.
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SECTIONAL TITLE INVESTING
3. Security: “This is of growing Sectional title cons: concern in South Africa. While 1. Less space and freedom: “With many homeowners have put the exception of sprawling significant security measures in estates, most sectional title place, these add to the cost of properties are in close proximity the home and don’t eliminate to one another.” risks.” 2. Debt liabilities and special levies: “Each owner is responsible for special levies Sectional title pros: should renovations or upgrades 1. Structure and upkeep under be deemed necessary.” the body corporate: “The body corporate keeps everyone While the rise of sectional title in check and ensures that properties is evident, the choice each property is correctly of the right home is simply based maintained. Levies are used on preference. Be sure to do the for maintenance and services math and work with a reputable that ensure the property always agent when shopping around. looks good and retains its value.” 2. Security: “Sectional title properties are generally equipped with 24-hour security in the form of guards, cameras, and motorized gates. In many cases, anyone entering the premises will need to be signed in.” 3. Communal living: “For those who enjoy the idea of having Grant Smee shared amenities such as gyms, Managing Director cafes, pools etc., sectional title presents an array of options.” Only Realty Property Group
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LISTING CAPE TOWN
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PAGE 66
WEALTH
Is it time for a strategy change? Although most people were probably not surprised by the Reserve Bank's latest interest rate increase, the news was not warmly welcomed by all investors
BY EMILE GROBBELAAR
PAGE 70
Equipping black property leaders to take their place in the SA economy Black property leaders with knowledge and skills should be given more opportunity to participate in the South African economy.
BY BATHOBILE CHIME
SA buyers snapping up apartments in Mauritius | Trending Online With several airlines have resumed flights to Mauritius, the just-launched Phase 4 in the well-established Mont Choisy Golf & Beach Estate in Grand Baie is also set to take off as buyers begin flocking in to view the site.
BY EDITORIAL
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“How to structure your portfolio and invest for sustainable wealth creation and secure steady streams of passive income.”
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INVESTOR INTELLIGENCE
Is it time for a strategy change?
By Emile Grobbelaar
Although most people were probably not surprised by the Reserve Bank's latest interest rate increase, the news was not warmly welcomed by all investors. The steady rise in interest rates influences a bonded property portfolio's cash flow; therefore, an adaptive strategy must be considered and implemented.
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Emile Grobbelaar Wealth Master Executive Wealth Masters
INVESTOR INTELLIGENCE
D
uring the recent historically lowinterest-rate period, we were fortunate to have had investment opportunities in new developments that provided us with the capital growth required for refinancing while also providing a positive monthly cash flow. That is why we have strongly focused on assisting our investors to buy properties in new developments over the past few years. Usually, the ROI of a new development is too low to provide an initial positive cash flow. Still, we managed to find perfect investment properties for our members.
Buying a refinance-type property with a positive monthly cash flow from day one allows you to do your first refinance on the property much quicker than usual. You could even refinance the property in year one or two.
in a new development we bought which had a positive monthly cash flow, will/could now be cash flow negative – in other words, it will have a monthly shortfall.
Who will be paying this money?
There are two answers to this question: 1. The Trustees of the Trust holding the property will need to make payments into the portfolio/ property personally, which is not ideal as this can influence their lifestyle negatively, which is why investors often give up on growing their investment portfolio too early.
The following answer will solve the cash flow problem created by the higher interest rate and avoid the need for a Trustee to cover a shortfall personally.
The answer: 2. Buy a property with a positive cash flow, also known by our However, the situation has now members as a 'provider-type changed due to the increase in our property'. interest rate. That same property
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This means that the strategy we've been following over the last few years of only buying properties in new developments must change. The savvy investor must adapt to the current economic climate, as one would with any investment portfolio.
“You always want to have properties you can refinance in your portfolio to take advantage of OPM, that’s Other People's Money.”
A change in strategy is not bad news; some parts of our country still have strong buyer's markets, so good value buys are available if you have the right team looking for the right deal for your needs. The higher interest rate will also put some people under further financial stress, which will allow the investor to buy more distressed properties at bargain prices.
I think investors should consider buying one or two "provider-type" properties before buying another "refinance-type" property, at least until the market conditions have changed again.
If you are looking at expanding the positive cash flow properties in your portfolio or if you require an analysis of your current Unfortunately, at this moment, properties, please get in touch all refinance-type properties (new with us. development properties) will probably be cash flow negative. We must now be wise and alternate our ENQUIRE NOW purchases between positive cash flow (provider-type) properties and refinance-type (high capital growth) properties.
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INVESTMENT EDUCATION
Equipping black property leaders to take their place in the SA
By Bathobile Chime
Black property leaders with knowledge and skills should be given more opportunity to participate in the South African economy.
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INVESTMENT EDUCATION
T
he weighting of access to commercial land and opportunities is disproportionate and needs intentional participation by all. South Africa’s real estate market is a close-knit industry, there are several diversity challenges which need to be addressed across the listed property sector, corporate real estate services
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and the development space.
The 2021 State of Gender Diversity in the Listed Real Estate Sector report found that 13 out of 28 Real Estate Investment Trusts had 100% male executive directors. Transformation and gender diversity are still important agenda items that need to be addressed in the sector today.
Access to markets
Black businesses have organised People will argue that it is about themselves and are ready for mitigating financial and performance opportunities but often they don’t risk of working with new entrants, get invited to the table in the form however the way to deal with this of private sector bids, or the bids is to enforce mandatory SMME are exclusionary in design. There participation on bids in terms is a need for black businesses to of scope delivery and financial be given fair opportunities to pitch participation. Lead firms need to ensure delivery for the work – this a accountability as major challenge for black practitioners in “There is a need part of promoting making the industry the property game. for financial more diverse and institutions to inclusive. The While corporate pool of capable grant access relationships exist, once practitioners go out on while at the same black people with skills exists – the their own, opportunities time, do some m a rket n e e d s dry up because they may to acknowledge hand holding, not have the extensive company experience big sister-style t h a t a n d g e t comfortable with and backing of a large arrangements.” allowing them to co m pa n y p ro fi l e . participate. In general, people work with those who they have relationships with, and breaking Access to land into the circle is challenging. The There is also a need for black industry needs to be encouraged property practitioners to participate to be more inclusive. Legislation in the ownership part of the property exists at supplier and procurement value chain. They have done the level, yet individuals and companies hard yards in the property services find ways around this. businesses and need a graduation
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INVESTMENT EDUCATION
path to asset ownership with fewer Incentivising change of barriers. Their deep knowledge and behaviour experience must be recognised as a Government and Corporate South bigger part of the capital they bring Africa needs to do more to incentivise to the table when credit committees a change in procurement behaviour. consider funding applications. We need a larger supplier base and more people having access to Access to funding opportunities which will open up For SMMES, landing more lucrative the industry, giving small to medium contracts is difficult without funding sized businesses an opportunity and guarantees in place. Limited to grow. A change in mindset, access to capital stifles growth. If a collaboration and partnerships business doesn’t have the financial is called for. muscle to go out or mechanism in place to grow, they won’t break out of their shell.
What is needed is more mentorship and partnerships between bigger businesses working with smaller businesses to do skills transfer and training. Traditionally in the property industry, the same handful of companies are the ones winning the majority of the projects. A sharing of knowledge and skills transfer initiatives to the youth is essential to ensure that the property industry remains a major contributor to the South African economy.
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Bathobile Chime Divisional Director & Client Solutions Cushman & Wakefield Broll
PAGE 78
FINANCE
The ten hidden costs of buying a home There’s more to pay than the asking price. Let's lift the lid on the true cost of buying a home to help first-time buyers budget properly.
BY EDITORIAL
PAGE 84
The Upside of Interest Rate Increases: Higher Returns on Your Home Loan Deposit Seeing the ‘upside’ of interest rate increases may seem like an impossible prospect, but those hikes increases savings.
BY JACKIE SMITH
Five top tips to reduce your bond | Trending Online Affordability is always top of mind when it comes to buying a home, regardless of whether interest rates are going up or not,, your first decision will be how much you can afford to pay each month on a bond.
BY EDITORIAL
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“Learn the system, understand the importance of financial responsibility and build a secure legacy for your family.”
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PROPERTY FINANCE
The ten hidden costs of buying a home
By Editorial
There’s more to pay than the asking price. Property professionals Paul Stevens (CEO, Just Property) and Samantha Craddock (Partner, Kaplan Blumberg Attorneys) lift the lid on the true cost of buying a home to help first-time buyers budget properly.
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PAUL STEVENS
SAMANTHA CRADDOCK
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PROPERTY FINANCE
1. Bond initiation fee
Your bank will charge you for initiating and opening your bond. This fee may not exceed R6,037. It can be added to your bond amount if necessary, but you’ll save on the interest charges if you pay it upfront.
2. Legal Fees
Buying a home generally involves three types of conveyancing attorneys, who each charge a fee: bond attorneys, cancellation attorneys and transfer attorneys. The bond attorney will register your bond and prepare the related documents. Their fee is based on the bond amount to be registered, guidelines issued by the Law Society of South Africa and the type of property, with sectional title properties attracting additional costs.
You might be able to negotiate slightly but expect to pay around R15,000 ex VAT for a R500,000 bond and R55,000 ex VAT for a R5 million bond.
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A bond cancellation attorney is required to cancel an existing bond on a property - for example, if you have a bond on another property you’ve sold (perhaps in order to buy your new home). (You will require the services of a cancellation attorney when your bond is paid up too.) This fee is independent of the required “90 -day” penalty interest a bondholder is entitled to charge when the bond is under cancellation.
Fees will be according to the Law Society of South Africa’s conveyancing fees guidelines. The average bond cancellation fee for cancelling one mortgage bond ranges between R 4800 – R 5200 (an additional fee will be added for an additional bond to be cancelled)
The transfer attorney is appointed by the seller but the buyer pays them for registering ownership of the property in the buyer’s name with the Deeds Office. Their fee is based on the property's value and according to guidelines issued by the Law Society of South Africa.
An amount for items like postage SARS within six months of the and FICA will be added. property transfer. (If a seller is VAT registered, you will pay VAT Expect to pay around R 13 000.00 instead of transfer duty. This is ex VAT for a R 500 000 property often the case when buying a and R 57 000 for a R 5 000 000 property in a new development.) million property. Budget for around R50,000 on a R2 million property and R366,000 It is important to note that the for a R5 million property. Find examples above do not account the 2022/23 SARS Transfer Duty for the related disbursements, for tables here. example, postage and petties, FICA identification fees, and deeds 5. Monthly bond office searches.
administration fee
Your financial institution will charge a small monthly admin The Deeds Office will charge you a fee, usually under R100. fee for registering your bond over the title deed. This fee may be paid by your transferring attorney, 6. Insurance premiums who will then bill you for it, and To get a bond, you will probably be you can expect to pay around R required to take out homeowner 755 for properties of R500,000 to insurance/structural replacement R 2350 and up for purchases of insurance. This is on top of your normal household insurance. R 5 million. Costs vary and you don’t have to take the product recommended by 4. Transfer duty your financial institution, so shop This tax is normally the largest around. Depending on your credit cost you will need to pay over scoring and or risk assessment, and above the purchase price life cover could be a condition of of a property. It must be paid to your mortgage loan agreement.
3. Deeds Office Fee
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PROPERTY FINANCE
7. Moving costs
Depending on whether you use a minivan or a pantechnicon, you could be charged anywhere from a few thousand rands up to tens of thousands. It is always cheaper to move mid-month, so try to arrange that.
Shortly after registration (mostly in freeholds), a deposit is charged to open a new water and/or electricity account at the council’s office – approximately R 350 water deposit and R 450 electricity deposit. Owners of sectional title property will pay a set levy every month.
8. Connecting to utilities
10. Security, Owners of freehold property maintenance and will need to register for water, renovations
electricity and a landline. You’re looking at a few thousand rands. Don’t forget about the cost of an internet connection and fibre.
Some suburbs have security in place, which you will need to contribute to. And you will need to decide whether to contract with an armed response company. If your home doesn’t have a good 9. Rates and levies The liability for a purchaser could system in place, this is a good time entail making provision for 1 – 2 to ask the security company about months’ worth of the municipal a package deal for an upgrade. rates & the body corporates levy premium, payable in advance – Use the BOND CALCULATOR subsequent to the registration to determine your monthly date. You will pay monthly rates for home loan repayments, how rubbish collection and sewerage, much you can afford to borrow, and taxes based on the value of and what deposit amount is your home. required.
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Top Tips To Lessen The Pain
• Give yourself two to three years thousands of rands in interest of really serious saving. Tighten over your bond term. your belt and put as much as possible away for a deposit. • If there’s an attorney you know well, you could ask the seller to • Spend six months before you appoint them as the transferring start looking for a house to attorney. If not, remember that improve your credit score - this you can try to negotiate the will help you get the best rate conveyancing attorney’s fees on your bond. before agreeing. You can call for Pro-forma cost statements from • Find an estate agent you any Conveyancing Attorney trust who comes highly firm to roughly set out the recommended for the suburb transfer and bond registration you’re considering. They will fee applicable to the purchase be able to give you a true idea price you have in mind. of current pricing and other tips about the area. • Shop around for the best deal on homeowners’ or bondholders’ • Negotiate on the asking price insurance, movers, etc. - a good agent will do this for you. • Remember, it’s cheaper to move during the month than at the • It doesn't cost you a cent to let a end/beginning of the month. bond originator like BetterBond get you the best deal on your bond from the banks, and it APPLY NOW could save you hundreds of
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INTEREST RATES
The Upside of Interest Rate Increases: Higher Returns on Your Home Loan
By Jackie Smith
As a potential homebuyer, seeing the ‘upside’ of interest rate increases may seem like an impossible prospect, but the same rate hike that increases the money you owe also increases the money in your savings account.
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INTEREST RATES
T
his same rule applies to home loan deposits invested in an interestbearing account. While deposits on home loans remained low priority for many during the COVID-19 pandemic, the latest statistics from ooba Group’s Q3 ’22 oobarometer indicate that an increasing number of South Africans are recognising that they can use deposits and earned interest to
“Every rand counts in this challenging economy and that the higher the deposit amount, the higher the potential earnings.”
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their advantage, with the yearon-year growth of the average deposit size (as a percentage of the purchase price) up a whopping 18.2%.
How much interest will your deposit earn?
In an effort to illustrate the beneficial impact of interest rate hikes for homeowners who have put down a deposit, let’s compare the possible interest accrued of various deposit amounts against the current interest rate (9.75%) and the interest rate of November 2021 (7.25%).
The Q3 22’ oobarometer revealed that the average national purchase price of a home is R1 402 408 and that the average deposit is R127 567 (constituting 9.1% of the purchase price) so these figures will be used as a starting point to give a realistic representation of the possible earnings of homeowners who choose to put down a deposit.
Table Illustrating the Deposit Interest Accrued at the Historical Interest Rate of 7.25%
Table Illustrating the Deposit Interest Accrued at the Current Interest Rate of 9.75%
These possible earnings are calculated on the average length of time it takes for a property to transfer, with three months being a relatively short time to see maximum earnings. However, in
instances where there are delays in the process or when buying off-plan, a deposit can accrue interest for up to two years until the transfer is complete.
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Tips for maximising deposit returns
Homeowners wanting to maximise the earnings on their deposit should consider the costs involved in managing it – especially when the deposit is paid to a transferring attorney.
H o m eb u y e r s a re l egal l y mandated to pay 5% of the total interest accrued to the Legal Practitioners Fidelity Fund and are also required to pay for the ‘hidden’ administrative costs of a deposit such as the price of a Bank Guarantee and getting FICA’d. The buyers has zero transparency of their money as their deposit is held in the seller’s conveyancer’s name.
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“Put your earned interest aside to add to your monthly repayments once the transfer is complete – this will help you to pay off your bond sooner.”
The second option for managing your deposit – paying it over to an estate agent – does not include the transferring attorney’s requirement to pay over 5% of the total interest. But many estate agents no longer offer this service following the change to the Property Practitioners Act earlier this year.
Buyers Trust is a third-party option that looks to maximise deposit returns by including all administrative costs in its minimal admin fee, which is 1% of interest accrued. Opening the account in the buyer’s name gives the buyer more transparency over their deposit investment until the transfer process is complete.
Buyers Trust is designed to reward fiscally savvy homebuyers for their decision to put down a deposit, as this decision demonstrates discipline and long-term thinking. We encourage buyers to put these interest earnings to good use by offsetting them against recovering some transfer costs or they can
be recycled back by paying it into paying off a home loan.
Use the BOND CALCULATOR to determine your monthly home loan repayments, how much you can afford to borrow, and what deposit amount is required.
ENQUIRE NOW
Jackie Smith Head of Buyers Trust (a subsidiary of Ooba Group)
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PAGE 98
TECHNOLOGY
Why Commercial Real Estate is the perfect use case for No-Code Tech No two commercial real estate firms are the same. This becomes painfully obvious when they try to purchase software.
BY TRAVIS BARINGTON
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Disruptive technologies to deal with disruption COVID-19 has accelerated the need for, and the move towards, increased digitalisation across industry.
BY BRIAN ANDREW
Trends that will be key to successful property investments | Trending Online The global economy is in an uncertain and unpredictable state currently characterised by rising interest rates, energy supply constraints, climate change and volatile geopolitics.
BY EDITORIAL
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“Embrace the technological revolution and stay abreast of the latest innovations in Proptech and the digital world.”
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DIGITALISATION
Disruptive technologies to deal with disruption
By Brian Andrew
COVID-19 has accelerated the need for, and the move towards, increased digitalisation across industry. RS South Africa outlines some of the solutions and trends to look out for.
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T
he COVID pandemic has eCommerce, not only from existing impacted and continues clients but also from new and to impact every aspect occasional customers. of our lives. Across industry, widespread factory closures and drastically restricted logistics globally, meant that downstream manufacturers soon found they had major “The key drivers are supply chain disruptions. Many changing customer had to shift swiftly to using predominantly online sourcing expectations, the need and procurement services. for greater efficiency, Suppliers had to fast-track the and the realisation expansion of their online sales that data can be used and services. Transportation to spot trends.” and logistics became a major challenge for everyone.
In essence, to tackle the challenges, virtually every aspect of the business, and throughout industry globally, required some form of additional digital, often disruptive technology. Clearly businesses that had embraced digital transformation were better positioned to adapt. Since the start, we have seen, and continue to see, a significant increase in B2B and B2C business, including
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In our case, RS was ready to respond quickly and decisively to the COVID-19 crisis in 2020, and was able to provide continued support to customers worldwide, initially prioritising health and allied services and those working on supplying critical and essential equipment and infrastructure. Supply chain continuity was
largely ensured, as the crisis management team was able to plan and act swiftly, shifting inventory around a global network of 14 distribution centres (DCs) to where it would be most needed. As a single point of service and support with a broad range of over 650,000 stocked electronic and industrial products and solutions, RS was able to continue to satisfy customer needs.
Ease of use, AI-based personalisation tools, and online real-time sales support have brought us repeat business. Many businesses have suffered financially due to COVID-19 and this has increased the emphasis on improving efficiency.
eProcurement is a key starting point, and demand is growing for tools such as RS PunchOut and RS PurchasingManager®. PunchOut is a tool that integrates into your own eProcurement system giving you quick and easy access to products and your purchasing information. PurchasingManager® is a free, webbased order management tool that provides a complementary workflow and spend management system. Customers have found that ease-of-use and process streamlining have produced significant benefits, in particular cutting costs and increasing staff efficiency.
RS is a UK based multinational company that is also listed on the London Stock Exchange. The company’s strong digital, omni-channel offering was easily expandable to support increased online sales. Through communication and collaboration, purchasing staff have been able to extend support for key customers in essential businesses. By encouraging a digital mindset, and connecting teams working remotely, while the DCs rapidly adjusted to operating with social distancing and appropriate PPE, RS also offers eOrdering and employees were inspired to go eInvoicing which are extensively the extra mile. used by some of SA’s largest
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beverage and automotive manufacturers. These valueadded solutions automate the procurement process for small and medium orders for MRO (maintenance, repair and operations) products, helping to save valuable production time.
“One of the major causes of hesitation in the wider adoption of digital acceleration is the change it engenders in the workplace.”
The aim is to shift from manual to digital tasks, remove low-value repetitive jobs and improve employee productivity. Supporting people through this change requires a behavioural shift in reeducating employees right through the company. The pandemic has demonstrated that dramatic
changes in working practices (homeworking, for example) can be made with positive results for all. The key is ‘test and learn’. Make evolutionary, small changes in a structured way. Work with the people to see that the change is achieving the required effect.
For sure, digitalisation will cause disruption to processes, and major changes to culture and working practices-but COVID-19 has certainly provided us with a painful demonstration of how much greater the cost of disruption could be without it.
Brian Andrew Managing Director RS South Africa
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TECHNOLOGY
Why Commercial Real Estate is the perfect use case for No-Code Tech
By Travis Barington
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No two commercial real estate firms are the same. This becomes painfully obvious when companies try to purchase software. No matter how well thought out an off-theshelf piece of software is, there is no way that it can universally satisfy the needs of every property company.
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C
ompanies putting together their tech stacks usually have to hire software developers to cobble together different solutions using APIs, data warehouses, and custom code. With the current price of a good developer, real estate companies can find themselves paying more to tailor a tech stack to meet their unique needs than they do for the software itself.
According to Statista, the average company across all industries used 110 SaaS applications in 2021, up from just eight in 2015. In the commercial real estate industry this includes specialised software for accounting, ERP, CMMS, CRM, lease administration, portfolio management, market research, energy management, and so much more. Oftentimes workflows and processes don’t work together well, if at all, resulting in confusion and data silos throughout the organisation. You end up with underutilised
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software and a mess of difficult to find and inaccurate data. The bottom line is this approach wastes resources and causes teams to miss business opportunities.
“As promising as that sounds, there isn’t a one-size-fits-all answer to getting started with nocode solutions or building a trusted data layer.”
Other industries like healthcare, education, retail, and e-commerce have struggled with similar problems related to software integration and customization. Many of them have successfully embraced “no-code” software solutions to enable their team to
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Open page 101 in the magazine →make these changes without the need for an entire development team, or often no development team at all. The commercial real estate industry has an opportunity to use the same strategy of adopting flexible low-code and no-code software applications to equip real estate business experts with practical IT capabilities.
There is no set definition for “no-code” since the term can mean different things to different people, but broadly speaking,
no-code programming refers to using software or platforms that do not require coding knowledge in order to create or customise applications, websites, or other digital tools. This could include drag-and-drop builders, workflow automation platforms, or even simple Excel macros. The appeal of no-code solutions is that they can often be used by people with no technical background, which can make them faster and easier to implement than traditional coding solutions.
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Perhaps contrary to your instincts, the first step in integrating and customising a property firm’s IT systems is accepting the chaos inherent in disparate software products. Your team could waste a lot of time and resources trying to reinvent the tech stack. But by adopting a central no-code platform and creating a trusted data layer these systems can begin to work together and you can create solutions that meld with your own workflows. Managers can feed historical data into this new analytical framework. There, algorithms can enrich the information with contextual metadata and conform the data to an architecture that can prevent inaccuracies. If configured correctly, this layer also enables data-chain governance (ie., allowing sensor data to inform building controls systems) and monitoring plus support functionality.
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defined. Then a person or team must be tasked with researching the different no-code software platforms available since they all are a bit different and have their own strengths and weaknesses. Once a platform is selected a training program needs to be designed and implemented. Even though there is no coding involved, these platforms can be difficult and intimidating for team members. Only by easing the transition to a new software system can organisations be sure that these investments will actually be used.
Before the technology can be created the problem that it needs to fix should be clearly
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Open page 103 in the magazine →Which no-code platforms you should test depends on the complexity of your organisation’s needs. There are some pretty simple ones that you may already be familiar with that have very robust functionality such as Salesforce and Airtable. These types of platforms usually provide hundreds of pre-built solutions and templates for a variety of use cases such as sales, project management, human resources, expense and vendor management, and service requests. Unfortunately, there are not many commercial real estate specific no-code platforms to
choose from but that is starting to change and in the meantime, with a bit of research, industry agnostic solutions may already offer the capabilities your firm requires.
“Right now, innovation outweighs adoption in real estate. Our clients’ ability to absorb and stack on is slower than the pace of innovation.”
MRI Software, one of the commercial real estate industry’s largest software providers, has recently launched a nocode/low-code product that promises to help property firms bring together all of their software into one customizable dashboard. MRI’s suite of software
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Open page 104 in the magazine →solutions already encompasses investment management, property management, facilities and workplace management, and payments, and can be customised to be useful for almost any other organisational process. The new offering is called MRI Agora Insights and it allows for advanced analytics across MRI and non- MRI data sources. Its ability to bring together structured and unstructured data, IoT data, and APIs has the potential to help property organisations more easily build a trusted data layer using a no-code approach.
that every industry eventually matures from using multiple disconnected point solutions to a go-to platform of choice. He explained that the battle between operating systems is common, but short lived elsewhere. “The OS wars ended with MacOS and Windows, the CRM wars ended with Salesforce.com, and the cloud wars ended with Azure and AWS,” Abhyankar noted. “It’s time for the entire PropTech industry to adopt a platform that is smart, open, and hyper-connected, where technology from any provider, including MRI, our partners, third parties, and even our competitors MRI’s Chief Product Officer can connect together to enable Saurabh Abhyankar believes innovation.”
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Open page 105 in the magazine →While trying to force users into one operating system might be a way for tech companies to create a moat, it can backfire. As users struggle to adapt the system to their needs the critical problem of interoperability becomes more important. Eventually, users will prefer an operating system that allows them to customise its use to their needs, even if it means playing nice with a competitor. From an efficiency standpoint, it is much easier for tech companies to find a way to work with other programs and data schemas than for each company to create its own work around.
Property companies that fail to prioritise integration of their ITsystems will struggle to ever make a return on their digital investments. No code and low-code platforms may be the solution that will allow real estate organisations to quickly develop and deploy applications that integrate with their tech stack without having to invest in costly development resources. In addition, low-code software can be easily customised
to fit into existing workflows making it a versatile solution for a complex industry.
This article was originally published by Propmondo.
IMAGES: PROPMONDO TWITTER
Travis Barington CEO and Co Founder Propmondo
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RETIREMENT
How to FICA a Deceased Estate As South Africa’s leading FICA compliance experts, one of the questions we frequently get asked is “How to FICA a Deceased Estate?”.
BY DOCFOX
PAGE 108
How much does it cost to pass away Many people make the mistake of thinking a funeral policy is sufficient to cover the costs of passing away.
BY EDITORIAL
Six Trends That Will Define Retirement Property in 2023 | Trending Online While many of the trends that emerged in the residential property market in 2022 have been the direct result of interest rate hikes this year, the retirement property sector has remained relatively unaffected by these shifts.
BY EDITORIAL
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“Plan now and prepare to enjoy your golden years in the level of style and comfort you deserve.”
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How much does it cost to pass away
By Editorial
Many people make the mistake of thinking a funeral policy is sufficient to cover the costs of passing away. The bad news is that it is not nearly enough.
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B
efore looking at the “fine print” of the cost of dying, there are two main points you should determine:
The good news is that with a Legacy Protection PlanTM from Capital Legacy, all your legal costs associated with death can be covered.
1. If your Estate is solvent and If there is enough liquidity in A SOLVENT ESTATE: your Estate to settle it. To determine if your Estate is solvent, you must deduct your 2. The reason being, that an liabilities from your assets. If the Estate may be solvent, but not total of your assets is more than liquid enough to pay for all the your liabilities, then your Estate legal and other fees required is solvent. to wind up your Estate. It may then happen that the Executor A LIQUID ESTATE: must sell some of the assets to An Estate is liquid if there is enough cover the legal costs. money available to pay for the
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Open page 111 in the magazine →legal costs associated with dying. If there is not enough money to cover your legal costs, your Estate is illiquid and the Executor of your Estate may have to sell some of your assets to pay for the winding up of your Estate.
COSTS ASSOCIATED WITH PASSING AWAY: 1. EXECUTOR FEES
This is the industry standard fee charged by the Executor or assisting professional to wind up your Estate. A maximum of 3.5% + VAT of the value of your Estate will be charged. An Estate worth R3 Million will pay, for example, approximately R120 750 in fees. In terms of South African Law, Executors may charge 3,5% (plus VAT) of the gross Estate and 6% (plus VAT) of any income into the Estate after death.
2. CONVEYANCING ATTORNEY FEES
Fees are calculated on a sliding scale depending on the value of your house as determined by an assessor. A home worth R1 850 000 being transferred to a Beneficiary could cost the Estate R30 544 in fees.
3. TESTAMENTARY TRUST FEES
This is the fee charged by the Trustees to administer the Trust you create in terms of your Will, normally to look after the money you leave to your minor Children. On average, 1.15% of the net asset value is charged to establish the Trust, and 1.6% is charged annually for the ongoing administration of the Trust. The total cost of a Trust with R1.5 million in assets over 15 years would be R377 250. Please bear in mind that when you have a Legacy Protection PlanTM with Capital Legacy, all these fees are covered by the plan.
4. MASTER’S FEES
This is the fee charged by the The fees paid to the Master of the Conveyancing Attorney when High Court regarding their fulfilment property needs to be transferred. of their role in the administration of
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your Estate. The fee is calculated on the worth of your Estate and is capped at R7 000.
5. CORRESPONDENCE FEES
These are the fees associated with corresponding with the Master of the High Court. It could be for documents, duplicates of documents, stamps, and postage. There is no fixed amount, but usually it is not significant.
8. ESTATE LATE BANK ACCOUNT
Banks generally charge in the region of R600 and upwards to open an Estate late bank account.
9. BOND CANCELLATION COSTS
If your Executor is required to cancel a bond over the fixed property, the Estate will have to pay the bond cancellation costs. Bond cancellation attorneys must be appointed through the bank 6. CLEARANCE FEES that issued the bond. Costs to One of the requirements to transfer cancel the bond range around the a property is obtaining a clearance R5 000 mark but can be higher certificate from the city council or depending on the lender. municipality. This will be issued only if the rates and taxes are paid 10. PROFESSIONAL in advance. Some areas require FEES up to 6 months paid in advance. The Executor of your Estate may need to use professionals 7. ADVERTISEMENT to assist with the winding up of COSTS your Estate, the cost of which will Two advertisements must be have to be paid by the Estate. placed in a local newspaper and An example is if you are married the Government Gazette. The with the accrual system. In such costs can vary between R1 000 a case the Executor might have and R1 500 depending on the to make use of an accountant to publication selected. determine the accrual.
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Any costs incurred in maintaining an asset will have to be borne by the Estate. Examples are for gardening services to maintain gardens, plumbers, or electricians if a house is one of the assets.
12. INHERITANCE TAX
Not only will all outstanding taxes have to be paid from the Estate before it may be finalised, but the Executor will have to determine whether Capital Gains Tax (CGT) or Estate Duty is payable at death. The first R3,5 million in Estate Duties are exempt from tax.
13. ONGOING SHORT- TERM BILLS
Bills such as medical aid, school fees, car insurance, water, lights, rates, etc. still need to be paid
even though bank accounts are frozen. Even though these are not legal fees related to winding up the estate, it is prudent to make provision for these costs to ensure your family’s lives are not completely disrupted.
14. OTHER IMMEDIATE EXPENSES
There are many more costs that escalates yearly such as the costs for arranging the funeral, catering, and travel.
These fees eat away at the legacy you plan to leave behind. Do not burden your family. Protect your legacy. Contact Capital Legacy and get covered now!
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How to FICA a Deceased Estate
Supplied by DocFox
A
FIC
As South Africa’s leading FICA compliance experts, one of the questions we frequently get asked is “How to FICA a Deceased Estate?”. Let’s explore what a Deceased/Late Estate (Estate) is and what Customer Due Diligence (CDD) documents and disclosures are required from an Accountable Institution’s perspective to FICA these Estates.
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Late Estate is formed when a Testator (someone who has made a validly executed Will) becomes deceased and is used as a means or a vehicle by which the various assets that were listed in the Will and which now form part of the Estate are distributed and to which heirs. Heirs are the beneficiaries that are listed in terms of a Will and upon a deceased’s death, stand to inherit the deceased’s property, which may include immovable property (ie: a house) or movable property (ie: proceeds of a life insurance policy, an investment, cash etc).
In addition, an Executor is generally nominated in a Deceased’s Will and is appointed by the Master, being charged with the responsibility of administering and distributing the assets of the Estate as well as accounting for and managing its liabilities or debts. The Master is the supervisory authority for the administration of the Estate, who assists the Executor in his/ her duties, and whose primary
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function is to ensure the seamless administration of the Deceased’s financial affairs and the protection of the heirs listed in the Will.
“If the deceased was married in community of property, the joint estate is frozen, which necessarily adversely affects the surviving spouse in being able to access accounts/estate assets.”
Generally speaking, an Executor nominated in a Will, who in some cases may be a family member of the deceased and is perhaps a lay person in terms of the law relating to the administration of
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Open page 117 in the magazine →estates, may elect to enlist the assistance of an Attorney/Law Firm/ Auditor/Auditor’s Firm as an Agent or Authorised Person. However, the ultimate legal responsibility for the administration of the Estate rests with the Executor.
If the value of the Estate assets exceeds R250 000, Letters of Executorship are issued by the Master, whereas if the value is less than R250 000, Letters of Authority are issued, in terms of which the nominated person does not have to fulfil the complete set of obligations in terms of the Administration of Estates Act 66 of 1965 due to the Estate’s value. Practically speaking, on the death of the Testator, the bank accounts and assets of the now deceased are frozen and no transactions may occur without the permission and authorisation of the Master.
As previously mentioned, the primary document in an Estate is a validly executed Will, from which various pieces of important due diligence information can be garnered. But there are also
Learn the lingo
DECEASED ESTATE A deceased estate comes into effect once a person dies. The Estate refers to all the assets and the liabilities that belonged to the deceased at the time of death.
MASTER OF THE HIGH COURT This is the person who will oversee the Estate process and will ensure that the Executor fulfils his/her requirements and duties according to the laws regarding Estates.
EXECUTOR This is the person to be appointed by the Master, is generally nominated in the Deceased’s Will, and is responsible for administering and distributing the assets of the Estate as well as accounting for and managing its liabilities or debts and ensures that the wishes of the deceased documented in their will gets carried out.
INTESTATE If an individual dies without having a valid will their estate is considered to be intestate and will be dealt with according to the Intestate Succession Act 81 of 1987.
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situations in which a Testator sets up a testamentary trust (or mortis causa trust) and bequeaths/leaves property to a trustee/trustees in his/her Will to be administered in favour of selected beneficiaries on the death of the Testator. This type of trust will only come into being on the death of the testator. Wills are, however, the more standard primary document and the CDD disclosures and documents are set out below with this in mind.
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Below are examples of potential documentation and disclosures that may be required, bearing in mind each Accountable Institution’s risk-based approach and risk rating matrixes and is by no means exhaustive.
For purposes of this article, we will look at examples of standard evidence (for low and medium risk clients) and enhanced evidence (for those higher risk relationships) that could be requested: • Client disclosure in a client onboarding form/mandate letter with accompanying copy of Letters of Authority/ Executorship issued by the Master giving authority to the Executor to act; • A copy of the Deceased’s Will; • Notice of Death • Death Certificate • Bank document confirming the Estate's bank details from a standard due diligence perspective may be requested and for enhanced evidence, certified copies of these documents • In terms of the Parties to be
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Open page 119 in the magazine →FICA’d, for the Deceased, disclosure by the client, which will likely be the Executor, confirmed against an ID document and residential address dated within the last three months (standard) and certified copies of these documents (enhanced). • For Related Parties such as the Executor/s and Heir/s, client disclosure confirmed against the Will with a supporting ID document, residential address and contact details from a standard perspective and certified copies and a document evidencing the address from an enhanced perspective. • For Agent/s or Authorised Person/s, client disclosure with supporting ID document (natural person)/ CIPC documentation (legal person), residential address (natural person) and registered address (legal person) and contact details as well as documentary evidence authorising the Agent to act on behalf of the Executor/s (ie: Power of Attorney) from a standard viewpoint and
certified copies and a document evidencing the address from an enhanced perspective. Deceased Income Tax Number, Marital Status, source of funds and wealth, reason for the transaction or relationship and the Deceased’s last industry or occupation, client disclosure in an onboarding form is acceptable for low and medium risk clients, whereas for higher risk relationships, documentary evidence may want to be requested
This article serves as a guide and ultimately your business’ RMCP should inform the type of due diligence that needs to be carried out when dealing with a Deceased Estate. For more information on how to FICA a Deceased Estate, please reach out to our Compliance Team: compliance@docfox.co.za
ENQUIRE NOW
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OFFSHORE
More South Africans are investing in UK Property There has been a growing demand in South Africa for UK investment property - let’s have a look at the reasons why
BY SOPHIE GAMBORG
PAGE 122
Offshore investment opportunities in exclusive Swiss Alps Ski Resort Ever dreamed of owning a second home in the Swiss Alps. Dream no more; thanks to a new policy exemption
BY TONI ENDERLI
SA buyers snapping up apartments in Mauritius | Trending Online With several airlines have resumed flights to Mauritius, the just-launched Phase 4 in the well-established Mont Choisy Golf & Beach Estate in Grand Baie is also set to take off as buyers begin flocking in to view the site.
BY EDITORIAL
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"Explore investment strategies across the globe that capitalise on advantages offered outside of South Africa’s economic borders."
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Offshore investment opportunities in exclusive Swiss Alps Ski Resort
By Toni Enderli
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Ever dreamed of owning a second home in the Swiss Alps. Dream no more; thanks to a new policy exemption, Launchernalp Resort AG is permitted to sell apartments and chalets as commercial real Estate to non-Swiss residents. This is great news for South African investors looking to own offshore assets with some of the most beautiful mountain scenary in the world.
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I
n an increasingly unstable global economy, Switzerland is proving to be a popular safe haven for investors due to its neutrality, political stability, strong currency and low levels of inflation and unemployment.
Now, for the first time, a new policy exemption now allows South Africans to invest in one of the strongest and most stable offshore investment destinations. Lauchernalp Swiss Resort is rated among the best year-round tourist destinations in the world. Despite its popularity, Lauchernalp has retained its boutique charm and friendly warm atmosphere.
“This is a great legacy investment for families as there are no death duties in Switzerland”
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Open page 125 in the magazine →Situated within a UNESCO World Heritage site away from the major tourist areas, this ski and health spa resort offers unspoilt mountain vistas of the surrounding Swiss Alps. The Resort is conveniently located within a two and a half hour radius from Zurich and Milan, both just a 12 hour flight from South Africa.
and penthouses. The next phase of Lauchernalp Tourmaline Apartments has been launched, with listings starting from 395 000 CHF (R7.35 million)
What about Tax?
Due to the complexity and regular changes in tax law and regulations, we recommend a specialised tax practitioner should be consulted Investment Options for your individual case. The diverse property options Generally, there is Rental Income allow for “hassle-free” ownership Tax, Capital GainsTax and Wealth and an attractive 4%-5% annual Tax to be aware of. net return on fully managed and serviced, Studio, One Bedroom Rental Income Tax generated & Two Bedroom Apartments, is based on the location of the
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property from a municipal and Canton level. Taxable rental income is calculated by deducting rental cost from generated rental income. The taxable rental income is taxed at a rate dependant on the owner’s worldwide income tax bracket and can differ drastically depending on the tax residency of each owner. Capital Gains Tax or real Estate Gain Tax becomes payable when a property is sold for a higher price than the original purchase price. The gain/profit is taxed at a rate that is dependent on the number of years the property was owned. Wealth Tax is only taxed on a national/federal level and is therefore dependent on the tax residency of the owner and is only paid where the owner is resident.
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In addition to securing a dream holiday destination for the family, there are many other long-term investment advantages with immediate benefits for the South African investor.
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Lauchernalp is the 7th highest Ski Resort in Switzerland, offering ski-in, ski-out integrated luxury residences in the heart of the Alps. Open for foreign ownership Attractive capital gains & Strong rental yields Fully furnished Studios, one & Two Bedroom Apartments and Penthouses. Terraces with open balconies offering panoramic mountain views Members’ lounge and bar, Spa areas with sauna and steam rooms High speed internet for High definition entertainment and remote working freedom Turn key professional rental management & maintenance linked to Concierge services
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Title & Transfer
Arrangements have been made with various Swiss based financial institutions to offer investors the most attractive interest rates available. The typical loan-to-value ratio is between 50%-60% of the purchase price. This is set with the customer at the bank’s discretion.
The official Swiss notary from Lauchernalp resort AG will act on behalf of both buyer and seller. The notary will draw up the deed of sale and all documents required for the transfer of the legal ownership and has the duty to protect the interest of both parties. By signing, the buyer Contact us now for assistance in entrusts that the appointed notary’s a consultation with the banking office with the duty of ensuring all institution of your choice. legal formalities are respected, particularly the registration of the ENQUIRE NOW deed in the Land Register, and releasing the acquired property from any previous mortgage.
Financing Your Property
A great quality of life and a stable legal framework make Switzerland an attractive location and one of the safest places for offshore investment in the world. The strength of the Swiss franc allows Government bonds to be offered at very low interest rates.
Toni Enderli Sales Director Lauchernalp Resort AG
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More South Africans are investing in UK Property
By Sophie Gamborg
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There has been a growing demand in South Africa for UK investment property - let’s have a look at the reasons why and what is the motivation behind these investor's hedging against the rand, and what you should be aware of when investing offshore.
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his year has seen huge volatility in the global stock markets and cryptocurrency; and investors have become cautious. In June this year bitcoin was down 60% and the global markets posted the worst first-half performance in decades. It is therefore not surprising that investing in tangible assets has become much more appealing as investors diversify their portfolios. If the stock markets crash you risk losing significant capital, whereas if the property market were to crash you still own that asset and are level
with the rest of the property market.
For South Africans, UK investment property provides a hard currency income from rental returns, which allows investors to secure a more fixed income, especially when building longer term portfolios. It provides a degree of security for a South African wanting to put in place a plan B, either in the form of an investment for their children, should they wish to study overseas, or as a retirement option. Property offers stable, long-term returns despite market fluctuations, especially when based
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Open page 133 in the magazine →in a politically stable, 1st world, high ranking economy such as the UK.
An attractive factor is that South Africans have the opportunity to leverage off attractive international interest rates, especially in comparison to the high lending rate in South Africa. The UK offers interest only mortgage repayments and up to 70-80% loan to value. The only requirement for a South African is that they are earning at least R300,000 per year to be eligible for this.
Prices start from £270,950 -
yields of 5.5% for long term rentals and 19% for corporate lets
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Open page 135 in the magazine →UK INVESTING
But is now the right time to buy?
Which are the best UK property Markets The latest UK property headlines to focus on?
paint a picture of doom and gloom; the mortgage market is volatile, house prices are down, interest rates are up and there have been huge changes within the government. With 3 different prime ministers this year alone and a change to the head of the monarchy, is now the time to look at buying UK investment property?
Arguably yes, we believe it is a great time. The increasing rate of inflation combined with higher interest rates is pushing first time buyers out of the market as they struggle with the increased cost of living and into the Private Rented Sector. According to The Guardian, demand for rental homes in the UK is “up by 23% in a year, as rents hit a record high”. In November this year The Times quoted that the average monthly UK rental was £1,175, an increase of 11% in a year and demand continues to heavily outweigh supply.
The best UK cities for buy-to-let property investment are those that offer high rental yields, good quality of life for residents and prospect of above average house price growth potential whilst remaining affordable. Birmingham and Newark-on-trent, are two examples we have identified as great options. Birmingham is the UK’s second city after London and the ideal location for investors who want quality property in a top UK city but are not able or willing to pay London prices. The city is undergoing billions of pounds of regeneration with inner city development, including the new HS2 railway network; which will connect London to Birmingham in under an hour! The city has become a hotspot for companies looking to relocate: Goldman Sachs, HSBC, Deutsche Bank to name a few. In the past decade house prices have risen 56% and it is expected house prices will increase a further 20%
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in the next 4 years. PWC ranked In Newark, house prices were up Birmingham among the top cities 20% in 2021 alone according to in Europe to invest in. Halifax, making it the second-best performing town across the UK and prices are still very affordable for prospective investors. Yields are also incredibly strong, driven “The UK property by a severe lack of supply within the town centre. The town is to news may be receive a £25 million grant from negative but the the UK government as part of the outlook for buygovernment fund initiative. It is steeped in history, with its own castle to-let investors and magnificent Nottinghamshire is very positive. countryside, yet up to speed with Get in while the excellent commuter links, it is no wonder that young families and market is low.” professional couples are flocking there.
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Open page 137 in the magazine →UK INVESTING
Prices starting from £117,500 -
Yields anticipated at 6.86%
Buying property in a foreign country can be a daunting process, however, our team will hold your hand and guide you every step of the way. We are here for the long run and our goal is to help people build generational wealth with a global investment property portfolio.
CONTACT US
Sophie Gamborg Property Specialist LIO Global SA
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NEW DEVELOPMENTS
Are South African building owners taking EPC seriously? The three-year extension as the new deadline for the mandatory display of an Energy Performance Certificate (EPC) on all relevant building classes.
BY ALISON GROVES
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The City Centre lifestyle exceeds all expectations Ask yourself where in Johannesburg can you find a world class residential estate with access to stunning recreational facilities
BY EDITORIAL
Luxury student development The One, sees R437m investment on launch day; 209 units sold | Trending Online Sold Property data for Stellenbosch Central is off the charts after launch day sales at The One broke the average yearly Sectional Title Unit sales, in just one day! Here’s why these units are being snapped up at a rate of knots.
BY REI MEDIA
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“Stay informed with the latest news on all the incredible new commercial, industrial and residential developments that continue to spring up all over South Africa.”
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The City Centre lifestyle exceeds all expectations
By Editorial
Ask yourself where in Johannesburg can you find a world class residential estate with access to stunning recreational facilities that are available within 2000 acres of immaculate parklands.
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Open page 141 in the magazine →STEYN CITY
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Open page 142 in the magazine →NEW DEVELOPMENTS
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rom the 300m beachlike lagoon to the 18- hole Nicklaus design championship golf course, a 45km floodlit promenade for jogging, a 50km MTB track, an indoor aquatic centre, a gym, tennis courts, fishing dams, children’s play nodes and an equestrian centre, complete with clubhouse; it’s easy to see why the Steyn City’s flagship development, The City Centre is a first choice for many families seeking the ultimate in urban living and lifestyle.
Always On!
With access to back-up power, water reservoirs and piped gas, luxury takes on a new meaning – offering homeowners and tenants seamless living in the comfort and convenience of City Centre.
Unique design
Built as a series of 38 treed villages sprawling down an attractive hillside, the City Centre creates an exquisite balance of creative design and the convenience of living in your own highly secure
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city with 24/7 patrols and security hub. Each home is a harmony of luxury, space and comfort, with high ceilings, and bedrooms large enough to accommodate king size beds with ease, while the award-winning residential estate provides a rich sense of community and a connection to endless space and nature as well as access to world class facilities.
There’s something for the whole family. To coax younger ones outdoors and away from screens, Steyn City has a number of children’s play nodes, along with a Skate Park, Dino Park and enchanted Pirate Ship – and, of course, the development’s new Steyn City Lagoon complete with beach-style Laguna kiosk, water slides, beach volleyball, pedalos and kayaks, promises to make every day a holiday.
There are schools on site, as well as AAA-grade offices at Capital Park for people wishing to skip rush hour traffic and school run stress. And for that special occasion or vacation, chartered flights are
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Open page 143 in the magazine →STEYN CITY
offered at Steyn City’s Ultimate Centre have become available for Helistop. rental. Given the recent interest rate hikes, rentals are soon to become a more attractive option for families The City Centre seeking a new space, and if they experience now can sign on for longer than a year, available for rental so much the better, especially given that long-term rentals are the mid- Families and executives who have point between flexibility and the always wanted to experience establishment of a comfortable life at Johannesburg’s premier home base. luxury address, but weren’t sure if apartment living was for them, A selection of luxury family are able to experience the unique residences has recently been lifestyle at Steyn City now that a made available for long term rental selection of developer homes at City including one-bedroom apartments
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Open page 144 in the magazine →NEW DEVELOPMENTS
as well as two-, three- and fourbedroom luxury homes.. Rental terms are a minimum of twelve months, upwards of R15,000 per month. This range ensures that there is something for everyone considering a home at the City Centre, from established families to young professionals starting out in life.
Click here to take a sneak peak into one of the City Centre’s spacious family size apartments.
For more information about City Centre rentals, visit www.steyncity/ citycentre.co.za or contact our team on ccsales@steyncity.co.za or 010 597 1170.
VIEW SOME OF STEYN CITY'S FLAGSHIP APARTMENTS
Rentals from R29 500
Sales from R5.9 MILLION
V I EW
CONTACT STEYN CITY
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Open page 145 in the magazine →STEYN CITY
Rentals from R48 500
Sales from R10.3 MILLION
VIE W
Rentals from R67 500
Sales from R14.1 MILLION
VIE W
BOOK A VIEWING
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Open page 146 in the magazine →GREEN BUILDINGS
Are South African building owners taking EPC seriously?
By Alison Groves
The three-year extension gazetted this week, with 7 December 2025 confirmed as the new deadline for the mandatory display of an Energy Performance Certificate (EPC) on all relevant building classes in South Africa, offers some reprieve. However, there’s no time to waste and property owners and building managers must do more to ensure they do not contravene legislation.
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or too long, driving sustainability and increased efficiency have been given lip service by many property owners. However, those who are found to be non-compliant with the EPC regulation could be liable for a fine not exceeding R5 million, imprisonment for a period not exceeding five years, or both. Of course, how strictly this will be enforced remains to be seen, but the consequences could be significant. Here at WSP in Africa, we feel that formalising sustainability practices and standards locally have reached a tipping point.
While many large corporates have adopted ESG (environment, social, and corporate governance) practices as a core part of their financial reporting deliverables, smaller companies who form the bulk of the economic landscape in the country see no perceived value in doing so.
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The EPC process could herald the start of a momentum shift in the country. The UK has been doing this kind of certification for well over a decade resulting in a greater awareness of energy efficiency. For example, you cannot transfer property in the UK if the building has less than a B rating. Considering that A is the most efficient rating possible and G the least efficient rating, this is significant. As a first step, local property owners could be embarrassed by having to display a poor rating and will be inspired to work towards improving the energy efficiency of a building.
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Open page 149 in the magazine →While a lot of work still needs to be done in South Africa to instil a culture of sustainability and energy efficiency, the EPC is certainly a step in the right direction. Of course, improving the energy performance of existing buildings through retrofits and designing more efficient buildings from the ground up will only truly yield the desired results if user behaviour changes in the country.
“More must be done in the country to increase awareness of the need to be more sustainable especially given government’s focus on decarbonisation and achieving Net Zero emissions by 2050 as part of The Paris Agreement.”
Having an A rating means very little if tenants do not act responsibly around their own energy usages. Fortunately, we have seen that people are receptive to this and certainly understand the importance of being more energy efficient especially given the continuous rolling blackouts taking place. However, there is still a great need for education and awareness campaigns especially when it comes to EPCs and sustainability in the local market.
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Open page 150 in the magazine →The challenge comes in around misconceptions when it comes to decarbonisation and Net Zero. The former refers to the deep removal of carbon from all stages of the building process. For example, the design of the building, and the materials used like the concrete, steel, and so on. Once the building has been completed, there is nothing to be done about decarbonation. Furthermore, it is critically important to promote locally sourced materials for the economy to grow.
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We are fortunate in South Africa that the country is manufacturing a lot of the materials required for construction. Using these materials that align to decarbonisation efforts will have a significant p o s i t i v e s o c i o - e co n o m i c impact. The challenge comes in to determine what carbon is in materials. This is a long and arduous process where every country has unique requirements and needs.
Alison Groves Regional Director WSP in Africa
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Open page 151 in the magazine →www.rei.co.za
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Open page 153 in the magazine →Firstly, allow me to introduce myself as REI Magazine’s new content editor. I’m excited to continue providing and improving the quality of investor information and real estate insights that you have come to value since our first REI Magazine edition was published in 2007. We have a few innovative ideas for the REI platform that we will be introducing over the next few months so keep your eyes on this space.
And what a particularly inauspicious time it is in the world right now. As if the economic impact of COVID pandemic was not enough for global economies to deal with, Putin's unhinged warmongering in Ukraine is shaking up the world’s fragile geopolitical balance to the point that we find ourselves on the brink of World War Three.
While there is an adage that claims opportunity in volatility, the potential for a major international warfare means that institutional investor’s appetite for risk is at an all time low, especially in emerging markets such as South Africa, and this does not bode well for our economic outlook in the near future. Energy and food costs will soar which will drive up market volatility as well as the cost of equity; and this will result in downward pressure on returns.
Investor’s knee-jerk reaction to volatility in the equity markets often causes stock prices to fall, which results in a downward adjustment in wealth across the board. Less wealth and low risk appetite means less investment to keep the commercial real estate wheels churning. During periods of heightened global volatility, we can expect many investors to pull their money out of commercial real estate in favour of “safer” investments such as bonds and commodities.
When it comes to assessing the macro impact of a protracted large-scale war on commercial
real estate, we only really have the precedents set by the two previous World Wars to study. In these cases, America, Japan and Europe shifted economic production to feed the war machine. Instead of investing in traditional goods and services, resources and capital were disproportionately redirected from normal economic activity into the war effort. A direct result was less home building and less investment into new office buildings, retail centres, hotels and such for the duration of the previous two World Wars.
However, in the immediate aftermath of World War Two there was a surge in demand for real estate as soldiers returned home to settle down and build homes for their families. Job creation was accelerated and the expansion in civilian employment led to increased demand for commercial real estate, and values saw a healthy rise across the real estate board.
The fact that commercial real estate is an illiquid asset class makes it difficult to quantify the long-term impacts of a protracted war. Generally speaking, heightened market volatility is not ideal for investors with a short term horizon. Those close to retirement or needing investment income will suffer from a fall in equity markets and a decreased demand for commercial property. But those investors with patience and diverse income streams could be well placed to survive the storm, and could prosper if they have the resources to take advantage of generational investment opportunities.
As it stands, the staunch sanctions levelled against Russia have torpedoed their economy to the point where many expect it will take years, if not decades, to recover. And while we all hope for a swift and peaceful resolution to the hostilities, it seems wise to be prepared for a protracted conflict in Europe, and the economic impact will certainly spill over to
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Open page 154 in the magazine →Look out for our next issue in Feb 2023