Real Estate Investor Magazine
December 2023/January 2024 edition: full text
Every page of the December 2023/January 2024 issue as text. To see a page as it was designed, open it in the magazine.
Read it as a magazinerei.co.za
DECEMBER 2023/JANUARY 2024
UNLOCKING PROPERTY HOT SPOTS
Prime Investment Opportunities in a stable interest rate landscape
CAPITALISE ON THE HYBRID WORKING BOOM
Property Owners Leverage Rapid Growth
STRATEGIC PROPERTY MASTERY
Navigating risks & reaping rewards
RIVERLANDS
Unveiling Cape Town's New Urban Oasis: David Cohen unpacks the upside of this visionary new growth node
UTILITIES
Corporate and Investment Banking
Creating landscapes of commercial property success
With innovative, sustainable Commercial Property Finance solutions, we are future-proofing the African continent by empowering our clients to expand their businesses.
cib.absa.africa
Authorised Financial Services Provider Registered Credit Provider (NCRCP7)
1
DEC 2023/JAN 2024 Real Estate Investor Magazine
COMMERCIAL
Real Estate Investor Magazine DEC 2023/JAN 2024
2
REAL ESTATE INVESTOR (REI) MAGAZINE is South Africa’s leading magazine for real estate investors and advances real estate industry best practices. It offers a comprehensive view into the REI world, including expert insights on successful investors, strategies, industry trends & news.
December 2023/January 2024 - Issue #163
EDITORIAL
Founder & Editor-at-Large
GRAHAM MILLER graham@rei.co.za
Lead Digital Strategist
ASHEEQ CADER asheeq@rei.co.za
Digital Strategist
KAY-LEIGH BIER kay-leigh@rei.co.za
Digital Designer
ADVERTISING
MARISA GEORGE marisa@rei.co.za
3
Website Specialist
Accounts Manager
NEALE PETERSEN neale@rei.co.za
HEATHER SPANGENBERG design@rei.co.za
DEC 2023/JAN 2024 Real Estate Investor Magazine
info@rei.co.za
+27 21 761 3848
WEBSITE
www.rei.co.za
rei.co.za
DECEMBER 2023/JANUARY 2024
UNLOCKING PROPERTY HOT SPOTS
Prime Investment Opportunities in a stable interest rate landscape
Navigating risks & reaping rewards
MAGAZINE COVER IMAGE: David Cohen – CEO of Signatura
CONTRIBUTORS
Carlo Mariani Jaco Grobbelaar Guy Gillespie Roelof van den Berg Schalk van der Merwe Jonathan Acutt
Sophie Gamborg Daniel Lombard Berry Everitt Paul Roux-de Kock Michelle Dickens Brendan Michie
CIRCULATION
PUBLISHERS
Audited
*17818 (July - September 2023)
RIVERLANDS
Unveiling Cape Town's New Urban Oasis: David Cohen unpacks the upside of this visionary new growth node
Property Owners Leverage Rapid Growth
STRATEGIC PROPERTY MASTERY
CAPITALISE ON THE HYBRID WORKING BOOM
READERSHIP
*1 125 345 Page Views (12 months)
DISCLAIMER: All rights are reserved. No portion of this publication may be reproduced without prior written approval. The opinions in this publication are those of the contributors and authors. The publisher makes no guarantees or assurances regarding any goods or services advertised or published. Prospective investors should always consult their own advisors, accountants, or attorneys before investing.
Real Estate Investor Magazine DEC 2023/JAN 2024
4
Spring into Success: Shed elevate your property
P
roperty investing and wealth building are fundamentally anchored in mindset, irrespective of market cycles and the challenges they bring. The most triumphant investors exhibit tenacity, humility, and an unwavering commitment to overcome obstacles—much like the recent triumph of the Springbok rugby team in the 2023 Rugby World Cup.
It's tempting to take the easy route, embracing a 'regular Joe
Public' approach to property investment. However, building a portfolio for sustainable wealth and a successful retirement demands more than just dipping your toes. By shedding the 'Mom and Pop' investor mindset and embracing a wealthier, more professional perspective, you align yourself closer to your goals. Suddenly, the idea of owning a substantial property portfolio or retiring a decade earlier becomes not only conceivable but exciting.
Residential properties serve as the typical starting point, but have you considered diversifying into alternative property types? Start by maximizing your existing assets. Review properties with an eye for potential profits—could minor renovations justify a rental increase or enhance the property's resale value? Perhaps converting your house into a multi-let or adding a granny flat could unlock hidden potential.
It all begins in the mind, with the setting of ambitious goals. Aim higher, be more radical, and stay up to date with real estate trends. Property is a potent wealth-building tool when wielded with precision— akin to the hammer of Thor!
Fuel your mind with grander dreams and elevated targets to bolster confidence. Explore property development deals, student accommodation,
5
DEC 2023/JAN 2024 Real Estate Investor Magazine
the ‘Mom & Pop’ mindset and game into the big league
industrial investments, or high-yielding offshore properties. While these ventures may carry added risk or require extra effort, diligent due diligence can uncover hidden treasures for your portfolio.
If there is one thing that the ‘Springboks’ have taught us in the past two months, is that when you pull together as a group with a common vision, tenacity and purpose, anything is possible. In the same way that each member of the Springbok squad brought individual unique skills to the World Cup team to create an unbeatable force. Together we make the investment journey a dream experience for ourselves.
Remember, professional investors collaborate. They co-invest, seek expert advice, and surround themselves with a team of specialists. Having REI on your property team can dispel fears and guide you in the right direction.
obstacles, we observed a noteworthy trend of individuals and families choosing to semi-migrate to coastal and remote areas. The allure of superior municipal services, enhanced security, and an improved lifestyle continues to underscore the enduring appeal and resilience of property as a sound investment choice.
Stay ahead in real estate, shield yourself from misinformation, and remember; knowledge combined with action is the ultimate power. Wishing you success in all your business and property endeavours over this festive period.
Successful investing!
NEALE PETERSEN Founder & Editor-In-Chief
The past year has flown by, and as we enter the festive season, let's hope for global stability, peace, and prosperity for you all in the new year. Our commitment is to empower you on your property journey with knowledge, connections, and lucrative opportunities.
Reflecting on a year filled with property market challenges, including multiple interest rate hikes, persistent load shedding, and high inflation, it's remarkable that property investment remains one of the most robust avenues for above-average returns. Despite these
MASTER QUOTE:
“Never give up on a dream just because of the time it will take to accomplish it. The time will pass anyway...” - EARL NIGHTINGALE
Real Estate Investor Magazine DEC 2023/JAN 2024
6
REI ON THE WEB
our education and partner content.
READ online top news stories, consume
WATCH video interviews, webinar
replays, or access our Investor E-Books. Access all our other online real estate services and investing in property with new property developments.
www.rei.co.za
REAL ESTATE INVESTOR MAGAZINE
VISIT us online @ rei.co.za and SUBSCRIBE
to the Digital Edition of Real Estate Investor Magazine for FREE. Your path to building generational wealth in property.
NEWSLETTER
SIGN-UP for REI’s Weekly
In-Focus Newsletter to elevate your inbox with fresh News updates, insights, and engagement.
MEMBERSHIP
Package or Professional and Master Packages for excellent benefits.
JOIN the REI Community by becoming a FREE Member with our Starter
STARTER
PROFFESIONAL
MASTER
Free
R99 pm
R999 pm
ENQUIRE NOW
ENQUIRE NOW
ENQUIRE NOW
View Terms & Conditions
View Terms & Conditions
View Terms & Conditions
WEBINAR
REGISTER now for our insightful Investment
Webinars and our MasterClasses. Unlock knowledge, engagement, and personal growth. Become a webinar presenting sponsor and panelist and get qualified leads and answers to key questions and information from your potential clients.
EVENTS
ATTEND our LIVE In-Person Educational inspiring
& transforming event experiences. Become a presenter, panelist, or moderator at our LIVE In-Person events.
METAVERSE
VISIT REI’s engaging 3D Media Room in the
Metaverse where you can view products and services as well as transact in the Metaverse.
Real Estate Investor Magazine DEC 2023/JAN 2024
8
December 2023/January 2024
TRENDING
04 REI TEAM & CONTRIBUTORS 05 EDITOR’S VIEWPOINT - Neale Petersen 07 REI SERVICES 11 REI MAGAZINE ARCHIVE NEWSSTAND 13 ASK THE EXPERTS - Carlo Mariani 15 ASK THE EXPERTS - Berry Everitt
COVER STORY
17
MASTER INVESTOR - David Cohen, Managing Director of Signatura 27 COMPANY PROFILE FEATURE - Signatura
37
37
FINANCE
57
A COMPREHENSIVE GUIDE – Part 1 of 4 Part Series - Mastering the art of fair and harmonious lease termination negotiations 69 UNLOCK ULTIMATE RELAXATION - Why investing in Leisure Sectional Title is a hot trend for savvy investors
57
DEC 2023/JAN 2024 Real Estate Investor Magazine
INVESTING
9
17
MASTERING THE ART OF PROPERTY INVESTMENT - Navigating risks and reaping rewards 43 PROPERTY HOTSPOTS - Best Places to invest in property today 49 RESIDENTIAL DEVELOPMENTS - New Developments launched recently
TECHNOLOGY
79
87
COMMERCIAL
79
109
UK PROPERTY INVESTMENT - Unlocking Financial Immigration to navigate exchange rates 115 UNLOCKING OPPORTUNITIES IN NAMIBIA - Prime destination for SA investors - 4 Top reasons to invest
109
RETIREMENT
125
RIGHTSIZE YOUR RETIREMENT - Five Experts Ways for a smooth downsizing experience
WEALTH
UNLOCKING INFRASTRUCTURE DEVELOPMENT - Infrastructure development is in a period of substantial growth CAPITALISE ON THE HYBRID WORKING BOOM - Property Owners leverage rapid growth in hybrid
OFFSHORE
95
101
TRANSFORMING DATA INTO COMPETITIVE EDGE - Augmenting AI with generic & proprietary insights PROTECT YOUR RENTAL AGENCY - Unraveling the risks of Business Email compromise
131 TRUSTS AS WEALTH MANAGEMENT TOOL - Exploring the Wealth-Enhancing benefits of Trusts 135 TIMING THE PROPERTY MARKET - Deciding when it’s right to sell your residential property
135
Real Estate Investor Magazine DEC 2023/JAN 2024
10
11
DEC 2023/JAN 2024 Real Estate Investor Magazine
Real Estate Investor Magazine DEC 2023/JAN 2024
12
ASK THE EXPERTS
Send your questions to info@rei.co.za or post on our FaceBook or LinkedIn pages and we will direct them to the necessary expert
Navigating Financial Challenges: Empowered Solutions for Investors in a pickle – Avoid these 3 common mistakes!
Carlo Mariani Founder THE PROPERTY COACH
“I
am a small buy-to-let investor who owns 3 rental properties in Johannesburg and Pretoria. Unfortunately all 3 properties are cash flow negative and have been like that for the last 3 years since I bought them.
The vendors that sold me the various properties confirmed that I could get at least a 10% rental return almost immediately and also said that the capital growth could be at least 6% per annum. This is definitely not the case, in fact I am lucky to get even a 5% return on my rentals and the property is probably has around a 4% capital gain over 3 years. I attempted to sell the property
13
DEC 2023/JAN 2024 Real Estate Investor Magazine
but the general property sales market is struggling particularly in Johannesburg.
I am also dealing with tenant rent defaults. They are now putting a huge strain on my cashflow as my shortfalls are increasing and my funds are starting to run dry. I am going to be in a position where I am going to default on my bonds and even my levies. What advice can you give me to help me get out of this financial mess I got myself into going forward?
T
he key to getting out of any financial mess is to never get into one, to start with. Once you are in a mess, don’t bury your head in the sand.
Q&A
How not to get into a property “mess” to start with?
Invest in property based on hearsay or vendor’s claims and you’re likely to be ultimately in big trouble. To be a successful property investor you need local and practical knowledge and skills.
Too many investors are fixated on house prices but what is critical is the rent you get. Do you have a solid command of the supply & demand dynamics of the rental market in your target area? What is the sustainable achievable rental for the property? What type of renters like to rent in the area?
What vacancy ratio should you be expecting? What default ratio should you be planning for? A combination of discussions with rental agents (not sales agents), local property investors and available reports like the TPN Area Investor Report will give you what you need to forecast your profit and cash flow.
Having guided and supported thousands of aspiring and growing property investors over the years, I have noted too many make these 3 fundamental mistakes: 1. They don’t have a cash buffer of 2 to 3 months of operating costs for
their investment property to cater for the inevitable months where you won’t have (paying) tenants 2. They have poor understanding on how to screen rental applicants, how to manage tenant payment risk and what to do (and not to do) when a tenant is late on rental payment 3. They over-estimate the rent they can get and under-estimate vacancies and other expenses that come with owning a property
If you’re unable to honour your property financial commitments, quickly contact your home loan provider before the bond repayment debit-order bounces. Have a frank discussion with them and see what financial support you can get. You might be positively surprised.
Just because you are now having challenges, don’t write off property investing. It remains the most proven route to build wealth. The key is not to just buy any property and wait (and hope) but to buy the right property, in the right area, at the right price, with the right financing and the right tenants.
Get back to the drawing board. Empower yourself with knowledge. Invest again.
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
14
ASK THE EXPERTS
Forecasting 2024: South African property market predictions revealed by industry
Berry Everitt CEO CHAS EVERITT INTERNATIONAL PROPERTY GROUP
W
hat are your expectations and the trends you are expecting from the property market in 2024 with an election coming up? What are the predictions for interest rates, inflation, rental sector, and the property market in general, is it time to buy or not?
T
here will be two main keys to the anticipated revival of the South African real estate market next year, the first of which is a drop in the repo rate leading to lower mortgage rates.
While the South African Reserve Bank (SARB) followed the lead of the US Federal Reserve and kept its repo rate on hold at 8.25% this week, an uptick in the inflation rate means there is still a possibility of another increase in January before home loan interest rates start to moderate, and activity in the real estate market starts to increase significantly.
A strong reason for such a rate increase would not only be to combat inflation but also to shift the differential between SA and US interest rates closer to the 3,5% gap reached two years ago. A bigger gap makes SA more competitive in attracting foreign
15
DEC 2023/JAN 2024 Real Estate Investor Magazine
investment, strengthens the Rand and lowers inflation.
Many investors have already increased their appetite for emerging markets like SA because they believe that the US interest rate hiking cycle has ended. This bodes really well for a stronger Rand, greater economic growth and job creation, and for increasing consumer confidence.
Consumer price inflation in SA is expected to slow more this year and to settle at around 4,5% in 2024, which is the midpoint of the Reserve Bank's target range. This will bring further relief to many households that have been struggling to make ends meet and enable many more to qualify for home loans.
The possibility that the global economic picture could change rapidly if conflict deepens in the Ukraine and/ or the Middle East. This could create food and fuel shortages that would once again raise inflation all over the world and limit consumer appetite for new real estate purchases either in their home countries or internationally.
The general election in SA that could also disrupt the market for several weeks and make some buyers more cautious as they wait for the outcome.
Q&A
As things stand now, though, things are definitely looking more positive for the SA market in 2024 and early 2025. Affordability, which has been a problem for homebuyers due to the rising cost of living over the past two years, will improve and be less of a constraint on home purchases as interest rates start falling.
At the start of the year, there will also be plenty of inventory for astute buyers and investors to choose from, as those homeowners who have 'run out of runway' after the trials of the past few years are forced to sell.
The demand will definitely be in the R600 000 to R5 million price range, and we anticipate that home loans will also be readily available to those with clean credit records.
In the rental sector, demand is expected to remain high and ensure good returns for investors, especially in the best performing R7500 to R12 500 a month category, provided that landlords remain extremely vigilant when vetting tenants. They simply must ensure that they work only with managing agents who have the right systems to conduct all the necessary credit and background checks, or they risk ending up with more problems than profits.
Everitt also notes that in the commercial real estate sector, specialised warehousing in strategic locations between city centres is becoming an increasingly profitable investment due to the high growth in online purchasing.
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
16
MASTER INVESTOR
DAVID COHEN: Visionary Real Estate Transforming Lifestyle Commercial Norms
By Neale Petersen
David Cohen is the innovative Managing Director of Signatura Property Developers. Signatura are a market leading residential and mixed-use property developer specialising in urban and peri-urban areas in the Cape Town and Garden Route precincts.
17
DEC 2023/JAN 2024 Real Estate Investor Magazine
DAVID COHEN
Developer Cities, Defying
Real Estate Investor Magazine DEC 2023/JAN 2024
18
MASTER INVESTOR
O
riginally after being born, educated and raised in the United States after earning a degree in finance and international business from New York University, David then moved to Israel where he worked as a trader and analyst for a large bank in Tel Aviv in 2011. In 2012 he moved back to Philadelphia in the US to work as as a Wealth Manager for Merril Lynch.
David always wanted to enter the real estate industry. He says property is the most universal and also the largest asset class in the world. It is something that humans from all walks of life discuss and understand. Although they might do it differently here compared to other countries, they always relate to each other through how we live.
David then moved permanenetly to South Africa. He first joined Signatura in 2013 as a Project Developer before being appointed as Managing Director in January 2015.
Signatura plan, design and sell apartments for investors and owner occupiers who are looking for well planned and uniquely designed apartments. They differentiate
19
DEC 2023/JAN 2024 Real Estate Investor Magazine
DAVID
• Bachelor York • Master FAMILY: MOST gets old. HOBBIES: FAVOURITE PERSONAL dark to
DAVID COHEN
themselves from other developers by creating an integrated structure. Essentially, they don’t just become a developer with a property sales arm for selling apartments, but they also manage short and long-term mixeduse lets through their subsidiary companies such as Perch.
Signatura have just launched their
first high-profile ‘flagship’ mixeduse property development to much fanfare. It is also by far their their largest and most ambitious development to date. The new cutting-edge development called Riverlands located on the previous River Club precinct in Observatory is located in one of the new fast growth development nodes in Cape Town.
COHEN BIO
QUALIFICATIONS: of Science (B.S.)degree in Finance and International Business from New University; Arts in Government from Reichman University in Tel-Aviv, Israel. Wife Hayley and two kids, Aya and Rafi ENJOYABLE ASPECT OF BEING IN PROPERTY: Every project is different so it never Ultra Distance Trail Running – he is doing Marathon Des Sables next year. BOOKS:The Godfather; The Count of Monte Cristo; Sapiens MOTTO: ‘Outside of a dog, a book is man’s best friend. Inside of a dog, it’s too read.’
MASTER INVESTOR
This prime Riverlands development is amixed-use with a combination of 14 000m2 office space (led by Amazon’s as anchor tenant) followed by other keen office tenants snapping up rentals, with a 12 000m2 retail area and over 220 residential units in the first phase.
Signatura ensure they provide internet services which are investor friendly. They sell value as they want investors to have an implicit gain in their apartment value the day they do the handover. He says, ‘Some developers try and squeeze as much as they can out of every deal, but we know that we will keep getting buyers if we are willing to share the upside.’
David stays updated on industry
trends and ensures the business remains innovative and adaptable by reading and observing a lot of what is going on. He also spends lots of time engaging with architects, designers, furnishers, or anyone who is spotting the trends coming through first. He gets inspired with ideas on his travels. He still has family in the United States, so he is there almost every year. He is a lover of all things innovation, especially things that make our lives greener and happier.
His leadership philosophy is to give people their independence to run things how they like. He has a relatively flat organization. He says, ‘ If you have good people, you must back them. They also know that the buck stops with
21
DEC 2023/JAN 2024 Real Estate Investor Magazine
DAVID COHEN
Q & A WITH DAVID
1. WHERE DID YOUR JOURNEY TO SUCCESS START – LIST KEY MILESTONES & CHALLENGES? I’m lucky enough to have been trained by my father-in-law, John Rabie who founded the company. His wealth of experience and knowledge was the best primer to enter the game.
We have had many challenges on the way, inflation, Covid, steel strikes, you name it. However, developing
The Onyx, our apartment-hotel asset was a game changer in how we think about long-term value.
2. SHARE A SPECIFIC PROJECT OR INITIATIVE YOU CONSIDER A TURNING POINT IN YOUR CAREER? Our first office to resi conversion was The Radission Hotel and Residence, now the new Pullman hotel.
That was a great experience and quite ahead of the time as we did it in 2015, now because of Covid, they are talking about office conversions all over the world.
3. ANY SIGNIFICANT SETBACKS, FAILURES OR CHALLENGES? Sure, we have had projects that didn’t go to plan or that never even got off the ground because of planning. We never launched a project in Woodstock because we got knocked back at Heritage Western Cape.
4. HOW DO YOU APPROACH RISK TAKING IN BUSINESS? CAN YOU SHARE AN EXAMPLE WHERE A CALCULATED RISK PAID-OFF? Our business is full of risk. It’s a terrible business. You fix your revenue at the beginning (if you are lucky and can sell) and the only thing that changes and it never goes down are costs, so you have to really be a bit of a fortune teller, gambler and all around lover of risk to be in this business.
We joint ventured with Jody Aufrichtig and Nick Ferguson, the guys who own the Woodstock Exchange and The Biscuit Mill on a project in Woodstock which became WEX1. The land was not an insignificant line item, but we thought something was happening and it did.
Real Estate Investor Magazine DEC 2023/JAN 2024
22
MASTER INVESTOR
We completely sold out well ahead of completion and it was actually the continuation of the boom that started in 2014 and only subsided towards 2019.
5. WHAT ARE THE 3 MOST IMPORTANT FACTORS WHEN EVALUATING A DEAL? Location, price and size
6. WHAT ROLE DO YOU SEE TECHNOLOGY PLAYING IN THE FUTURE OF YOUR INDUSTRY & HOW DO YOU PREPARE FOR IT? Difficult one. We are on the bricks and mortar side for sure but how people interact with buildings - work from home, etc is important for the future. We created the first completely digital accessible building in our Flamingo development in Sea Point - no physical keys.
7. HOW DO YOU ENVISION THE FUTURE TRENDS OF YOUR INDUSTRY? WHAT STEPS ARE YOU TAKING TO STAY AHEAD? Its not a industry that can scale as it has so many players in it. Talk to anyone who will listen about what is going on.
8. ANY KEY INSIGHTS, KNOWLEDGE OR LESSONS THAT YOU GAINED THAT YOU WOULD LIKE TO SHARE? The answers are our there, you just have to be humble enough to know that you don’t have them.
9. MOST IMPORTANT LESSONS YOU HAVE LEARNT FROM THE EXPERIENCE IN YOUR CAPACITY AS AN INVESTOR? Lifestyle cities will always trump commercial cities - Cape Town vs. Joburg; Rio vs Sao Paolo, etc.
23
DEC 2023/JAN 2024 Real Estate Investor Magazine
DAVID COHEN
10. HOW DO YOU MAINTAIN A WORK-LIFE BALANCE WHILE MANAGING PROFESSIONAL RESPONSIBILITIES? The Digital world has created both a never ending work cycle but has also allowed for me to be away from my office. I see my kids every day and make sure I am always around.
11. WHAT ADVICE WOULD YOU GIVE ASPIRING ENTREPRENEURS OR PROFESSIONALS LOOKING TO MAKE THEIR MARK IN THE INDUSTRY? Learn as much as you can. Don’t think you will be CEO in two years. Patience makes all property people geniuses in the end.
12. WHAT DON’T PEOPLE KNOW ABOUT YOU? I’m very much a homebody. I like to be at home or on the mountain.
13. IF YOU WOULD DO ANYTHING ELSE, WHAT WOULD IT BE? Game Ranger
14. WHAT DO YOU WISH YOU COULD DO DIFFERENTLY? Would love to be in the more affordable space. Could happen soon.
15. WHAT LASTING LEGACY WOULD YOU LIKE TO LEAVE IN THE WORLD? I’m not too interested in legacy. There are billions of people in the world. As long as I haven’t hurt anyone too badly and my family is happy, that’s enough for me.
David certainly sets his sights high for both his business and personal life. Next year he is tackling the Marathon des Sables (or MdS). This is a multiday race held every year in southern Morocco in the Sahara Desert. This six-day race of about 250 km (an ultramarathon), approximately the distance of six regular marathons. The longest single stage is 91 km long.
Real Estate Investor Magazine DEC 2023/JAN 2024
24
25
DEC 2023/JAN 2024 Real Estate Investor Magazine
Real Estate Investor Magazine DEC 2023/JAN 2024
26
COMPANY PROFILE
DECADES OF EXPERTISE Over 10 Years of Success, People-Centric and Property Development
In 2012 John Rabie embarked on a new chapter in his life by founding South Africa’s first ‘private label’ property development company, Signatura, dedicated to re-energising Cape Town’s inner city and peri-urban areas. Their business model encompasses identifying existing sites and transforming them into significant real estate investment opportunities through the application of excellence and innovation in three key areas: architecture, landscaping, and interior design.
27
DEC 2023/JAN 2024 Real Estate Investor Magazine
SIGNATURA
Pioneering Principled
Real Estate Investor Magazine DEC 2023/JAN 2024
28
COMPANY PROFILE
I
n the beginning John was the original founder of the Rabie Property Group, who first started developing residential property back in 1978. Over three and a half decades, he has successfully led his company through two major recessions, a change in political dispensation, a global financial melt-down, and then a pandemic while winning several national and international awards along the way.
29
DEC 2023/JAN 2024 Real Estate Investor Magazine
SIGNATURA He pioneered public-private partnerships and was involved in significant mega-mixed-use developments in Cape Town including Marconi Beam, Westlake Estate, Royal Ascot in Milnerton, Big Bay, in Bloubergstrand and the advent of Century City. In 2019 he also launched his European development company called Neworld.
SIGNATURA
The new dawn Today Signatura is setting the trend in the redevelopment of urban spaces in South Africa, with the focus strongly on the globally celebrated city of Cape Town and selected areas of the Western Cape such as Mossel Bay, George and Knysna. Now led by his son-in-law, David Cohen, as Managing Director with John Rabie as Chairman of the Group, this powerful combination of experience, vision and innovation is collectively steering Signatura through the challenges and opportunities of the 21st century.
While responding to the unique circumstances of the South African development landscape, Signatura also stays in step with trends evident in the great urban centres of the world such as New York, London, and Paris. These include the movement of clients from their suburban mansions to lock-up-and-go apartments in the City Bowl and the Atlantic Seaboard, exchanging the hassle of maintaining a large house and garden for the convenience of being near the urban centre and its cosmopolitan vibe.
Real Estate Investor Magazine DEC 2023/JAN 2024
30
COMPANY PROFILE
To meet this need, Signatura has come to specialise in master-crafting larger multi-unit developments where a bigger infrastructure and a greater number of residents allow for the provision of spacious luxury amenities like landscaped leisure areas, swimming pools and co-working spaces. Working with some of the finest architects and landscape and interior designers in the country, this luxury-oriented developer continually evolves the meet everchanging lifestyle needs and fulfil their mission of providing top-quality homes for discerning buyers.
And the market has responded enthusiatically. Since 2012, Signatura buyers have snapped up over R3 billion in prime Cape real estate. Signatura’s enviable trackrecord of sold-out success stories goes back to very first launch in July 2012, when they launched The Outlook in Vredehoek.
• • • • • • • • • • • • • • • • • • • • • • •
Ivanette in Vredehoek Chelsea on Main in Green Point 53 on Kloof in Fresnaye The Reserve in Sea Point The Brittany in Sea Point The Residence in Fresnaye The Chelsea in Green Point The Address in Sea Point The Richmond in Green Point The Algakirk in Sea Point The Barkley in Fresnaye The Sentinel in Sea Point Radisson Blu in Cape Town CBD WEX1 in Woodstock WEX2 in Woodstock The Signature in Green Point The Beacon in Green Point The Onyx in Cape Town CBD The Quarter in Green Point The Cosmopolitan in Sea Point Deer Park Place in Vredehoek The Flamingo in Sea Point Le Jardin in George
Developments Sold Out • The Outlook in Vredehoek • Horizons in Vredehoek • Robyndale in Kenilworth • Azzurri in Sea Point • Altino in Vredehoek • High Glen in Atlantic Seaboard • 45 on Exner in City Bowl
31
DEC 2023/JAN 2024 Real Estate Investor Magazine
SIGNATURA
“Adding my name, decades of experience, and my no-compromise dedication to outstanding quality gives buyers the peace of mind that they are purchasing property of the very highest standards of design, construction and finishing.” John Rabie, Founder & Chairman - Signatura
Real Estate Investor Magazine DEC 2023/JAN 2024
32
COMPANY PROFILE
Developments For Sale Currently Signatura has six prime developments with brand new apartments, penthouses and townhouses for sale in Cape Town and the Garden Route. • Arbour Nature Estate in George • Seahorse in Knysna • Mossel Cove in Mossel Bay • The Meadows in George • The Rose on 117 in Green Point • Willow Lane in Milnerton
New ‘flagship’ Riverlands Development Their latest ‘flagship’ development being launched is Riverlands a world-class new urban oasis situated on the banks of the rehabilitated Liesbeek River, less than 10 minutes from the centre of Cape Town.
This 14-hectare mixed-use precinct is without question the Mother City’s most exciting new growth node and will create a strategically important link to the M5 highway across the Black River.
Short & Long-term Rental Management If you are looking to create an income stream from your residential investment property, Signatura’s add-on services can take care of all of the hassles and headaches of being a landlord.
Investing in residential real estate is a great way to build wealth. As an asset class, a buy-to-let property offer unique benefits, combining a rental income stream that can fund your investment by paying off your
33
DEC 2023/JAN 2024 Real Estate Investor Magazine
SIGNATURA
mortgage, with long-term capital growth that can produce marketbeating returns.
But there is a drawback: the business of finding and managing a tenant can be complex, timeconsuming and involves potentially serious legal and taxation issues.
Signatura has addressed these needs through an integrated approach with important secondary services like Signatura Rentals, for long-term rental management, Perch Short Stays for short-term rental management in the Airbnb space, and Bunny Digital, for the seamless provision of fibre optic
cabling and concealed WiFi units. In all of these areas, efficiency equals better margins for owners as Signatura leverages the scale in their developments to reduce operational costs and put more money to the bottom line for the owner.
This innovative approach has also seen the company push for better energy and water-saving solutions as well as adapting new technologies like keyless, smartphone-based access control.
All of these additional services and innovations contribute to greater peace of mind for the investor, knowing he or she can buy off plan with confidence underwritten by a visionary South African development company.
ENQUIRE NOW
Website: www.signatura.biz Telephone: +27 (21) 419-2808 Email: info@signatura.biz
DOWNLOAD BROCHURE
Real Estate Investor Magazine DEC 2023/JAN 2024
34
¼
)('"#& %!$ " % $ ! (''(
»
¬
g )('"#& %!$ % " % $ ! %(''( !( N[cT[`MP LJRJLIcMU
g WKHGRcMMTJR`ERC[BBMcREcRJM@@M> "% D% " ( 69( % "( 6ff&< ";'( 7 %# <#& %S
x& ( p $%n :$% (3 k& "'(
g «[>*M/cI & & ( p % "
g >EJBM0/\MRb¡M>J f&¤( " 3 $(n !( & (
g :$9! % & ( 5 4$ 3((3 ( & $% <''(3 & McJb>MR`C[`R`CMR>MILJ`M>MTRJM@@M>P LJR`CMRE2cM>RE1R`CMRB>EBM>`=
g
g GBB@L0[/EcR2L`CRJM@@M>.JRTM`[L@JRLJR0>M[`MTREcR -E0WE,R2CM>MRWKHGRLJRTEcMR2L`CLcRNLcb`MJP +R`CLJRLc0@bTMJR>LJ*R>[/cIFRJ[c0/EcRJ0>MMcLcIP [cTR[T\M>JMRNMTL[R0CM0*JR
<p( f" %<;¤$ " §M>R`ERb>0C[JMR£z $ $ ((% (3 $ ;<p$ 9 !( & ( p
½
ËM[TREb>R[>/0@MÑ 6 (Î"¤ '( & !( & f& 3<f D !" f(3 ±<( ±$'$9( f( $ !(n x& ( p (f &¶¶¶ & (Î"¤ '(% & !& & f& 3<f & ( 3<( 3$'$9( f(
x&% (f#( <p( $% 73( #Þ(3
# !( &''&$ 9 <(%#& % "( %&¤( (Î"¤ '(%
!" $'' $¤ "f !& !( (¤% " 3 f& 3$#& % & !( %"'( & !( & ( p "( < &9( !( $ !( # x !( !( !( &% (f#( ;<p( $% " 9&&3 Þ
¾
& 3 $9$ " &n
g 4!" "( !( %<% ( %$( f& 3$#& % & %"'( g & 3& !(p $ ( 3 & "p g 4!" $% !($ ¤"$"9( % " <% H L d KH K R HE Ë E RzRGHH E@@ Rz HE RW g ULL R GU K- E g !&<'3 !(p ((3 " !&¤( '&" !( ;<p( $% & 4!(( "( !(p &¤ f& "f " ;& 3 &9$ " &S
(&¤% H>MTL`RHCM0*J
g zCMREcTRE>LILc[`E>RBM>1E>NJR0>MTL`R0CM0*JP B RIL\MJRB>M+[BB>E\[@R1E>R`CMR@E[c
B ØÒ ugh ÓàÓÒà y Ò u à by:
¿
+
ËM[TREb>R[>/0@MÑ # !(( } % ¤&( & { & v &< t <% &¤( s{vtr !" n t (3$ t !(f o %¶¶¶
¢ ( & x<f!"%(
$% $9 (3
ìéèçéâáÚÕáÝäáãÖÛÔÓÒÔãÖÛàÙÒÑÓ×ÐØãàÐÖÛàÙãØÎÌëãÙáÕéËÊÉÚéäß ÉæÝÉáÇäÝÆËÇÕáÏéÊáÉéáÆÇáÍÅÄÄÞàÍåÈêàëÒÃÜÂÌÐÖÓÁ g <p( " 3 %(''( ¤<% %$9 !( # U
R R Ç Ç q q ÊÇÕÉáÝáìÇ ÊÇÕÉáÝáìÇ m m é é
À
g # !( # x f& "$ % !( (¤% " 3 f& 3$#& % & !( %"'( & !( & (
g WKHGRcMMTJR`ERC[BBMcREcRb¡M>R2CMcR SI y <> I< I<4<AX I< f <X I I<4I < R 4I><I y <4I <R <I< b < <I<4< f 4> . < T <4>>RI4 b y 2< R y 2<4I <XI b y << zRLJRJLIcMTR[cTR RE>R`CMR[IMc`RLJR > X y < <4I y <4I / <4< 4\I<4<4<4<\ < 4 I< << I<4I <>A<S f >4< (P y < L <4<I< b < 4 b < f <4I y <4><< I< <p( } ( % $ t & "f $ ! 0Ec f O TMc`R`CMR`>[cJ[0/EcRLJR@L*M@¡R`ERIER X f < by << I2<I<4I y <>I q RI>< .
t & (p" f$ 9 5 < # " %( 6 c & (p
[CM[T SXX >4\I< << 4 < <
© 2023 <>A<S f >4 . <S< <F >4 <I<>A<<WS< < I<
I< IR< < < I>R < $<4\I 2< 4I>\I<>I I <4I <4 F< 4< >>$;
INVESTING
Mastering the Art of Property Investment
39
PAGE
Unlocking the potential of South Africa’s infrastructure development
37
PAGE
TRENDING ONLINE
Unlocking Insights: South Africa’s 2024 Property Market Forecast from a Developer’s Perspective
Real Estate Investor Magazine DEC 2023/JAN 2024
36
INVESTING
MASTERING THE ART OF INVESTMENT Navigating risks and
By Jaco Grobbelaar
Investing in property has long been considered one of the safest and most rewarding forms of investment. There are many rewards of property investment that add to its allure. However, as with any investment, investing in property comes with its own set of risks and challenges.
37
NOV/DEC 2023 Real Estate Investor Magazine
NAVIGATING RISK
PROPERTY reaping Rewards
Real Estate Investor Magazine NOV/DEC 2023
38
INVESTING
S
till, I truly believe investing in property is one of the safest investments you can make. And I’ll tell you why:
Property is tangible Unlike stocks or bonds, property is a physical asset that you can feel, touch, and see. This tangibility provides a sense of security that many investors find reassuring. In fact, it’s one of the key advantages of investing in property.
“The biggest risk is to take no risk at all.” CASEY NEISTA
Property is a basic human need Property investments also act as a solution to a fundamental human need – shelter. Everyone needs a roof over their head, which means an entry-level property will always be in demand. This consistent demand is a reliable foundation for investing in property.
Demand drives property prices up From a fundamental economic perspective, property prices are influenced by the simple law of supply and demand. In South
39
DEC 2023/JAN 2024 Real Estate Investor Magazine
NAVIGATING RISK
Africa, the population is steadily growing but from a supply side, land is limited, and they are not making any more of it! This means that property prices will continue to increase, making property an attractive investment option.
Understanding risk in property investment This might sound contradictory, but the risk associated with property investment is another reason to invest. The basic measurement for risk in the investment world is
standard deviation. It measures how much your return on investment deviates from the average return on investment.
Now, consider all the properties you or your relatives and friends have ever owned. Have you ever known one to plummet in value? It is a rare occasion. The standard deviation in property is extremely low because returns are very constant. Property prices also do not deviate drastically from one year to another and usually increase (whether slow or fast) from year to year.
The same is true for rental income and your net rental yield. Rentals increase very consistently from year to year and very seldom go lower. The standard deviation for rental income is also extremely low because rental returns are very consistent. Again, rental prices do not no deviate drastically from one year to another.
Managing risk in property investment While property is generally a lowrisk investment, risk comes in when you start using leverage (debt) and when you have a monthly shortfall to service your debt. For
Real Estate Investor Magazine DEC 2023/JAN 2024
40
INVESTING
example, when your monthly rental income is less than the mortgage payment, levies, rates and taxes, rental commission, etc, you could be in trouble. This is where a lowrisk investment can very quickly become a high-risk endeavour.
So, how do you hedge yourself against such risk? You do it by building your property portfolio in such a way that there are no shortfalls on your property. Or if there are shortfalls on your property, you must have a strong reserve fund to subsidise your monthly shortfalls. Ideally, you want your reserve fund to cover at least five years of shortfalls.
The best way to prepare a reserve fund is to refinance your properties to market value. Then, park the funds made available in the access bonds of the properties so you don’t pay interest on the money while you are not using the funds. These funds can then be used to subsidise your monthly shortfall, providing a safety net in case of unexpected circumstances.
A reserve fund is so important as subsidising shortfalls out of your pocket can become very dangerous. What if interest rates
41
DEC 2023/JAN 2024 Real Estate Investor Magazine
go up? What if you lose your job? Suddenly, you won’t have a monthly income to subsidise the shortfalls anymore!
Even though property is a lowrisk investment, your reserve fund is critical, especially when you finance and refinance your properties. You need to have a certain percentage of the property value in cash in case something goes wrong.
For example, you can start with a reserve fund containing 10% of the property value and then increase it to 15% eventually. In other words, if you have a R1 million property, you want R100k in your access bond and move towards having R150k. But you do not have to save up for this. You can refinance your property and keep this amount separate in your bond (access/flexi ) after you’ve had the property for a year.
Read our article on how to Maximise your Property Investment with Access Bonds.
Balancing the risks and rewards of property investment Property investment offers a compelling avenue for building
NAVIGATING RISK
wealth and financial freedom, especially when leveraged responsibly. And while it’s essential to understand the potential risks, don’t allow them to put you off property investment. Use the safe investment of property and add leverage to your portfolio to increase the asset base and the internal rate of return even more.
By adopting prudent financial practices, maintaining a reserve fund, and assessing risk intelligently, property investors can navigate the path to prosperity while minimising potential pitfalls. The key is to do it responsibly, so you don’t turn your property portfolio into a high-risk investment.
ENQUIRE NOW
JACO GROBBELAAR CEO & Founder Prosperity Enterprises
Real Estate Investor Magazine DEC 2023/JAN 2024
42
INVESTING
PROPERTY HOT SPOTS Western Cape dominates to invest in property,
By Neale Petersen
The South African residential property market boasts a collective stock value exceeding R6.8 trillion (August 2023), with Freehold dominating at 81%, Sectional Title at 12%, and Lifestyle Estates at 7%. However, the past four years have presented challenges to property owners due to the pandemic, high interest rates, inflation, and economic downturn, affecting new buyers and landlords.
43
DEC 2023/JAN 2024 Real Estate Investor Magazine
INVESTMENT HOT SPOTS
as the best area hands down!
Real Estate Investor Magazine DEC 2023/JAN 2024
44
INVESTING
W
hile many faced disappointment, seasoned investors remain strategic, focusing on understanding market dynamics, analyzing price trends, and balancing supply and demand. To guide investors, let's explore property hotspots, good capital gains, and lucrative rental returns.
Understanding Property Hotspots Property hotspots are areas where prices surge beyond the national average due to specific micro circumstances. These opportunities yield above-average returns on investment (ROI) if purchased wisely. A good capital gain typically occurs over a longer period, averaging between 2% and 6% house price inflation since the 2008/9 market crash.
For rental properties, an annualized ROI of 8-12% is considered good, with anything exceeding 15% being spectacular. However, high returns require diligent management, marketing, and customer service.
Factors to Consider that Investors should evaluate: • Expected cash flow from rental income (benefiting from inflation).
45
DEC 2023/JAN 2024 Real Estate Investor Magazine
•
Property Types Offering High Returns and Profits • AirBnb - flats, townhouses to houses with multiple rooms • Student Accommodation • Residential Apartment complexes • Industrial units • Self-storage
INVESTMENT HOT SPOTS
•
•
•
High tenanted properties for steady cash flow. Expected intrinsic value increase due to long-term appreciation. Benefits of depreciation and available tax benefits. Cost-benefit analysis of renovations for improved resale value.
As the festive season approaches, short-term rentals like AirBnb, holiday houses, and student accommodation are gaining preference over traditional options, driven by increased tourism.
Western Cape The Cape Town residential property continues to see continued growth as the city is seen as the better place to live and do business. It is forcing a semigration trend where people are moving from other provinces such as Gauteng and Kwa-Zulu Natal to the Western
Cape. There are clear reasons contributing to this growth? • Municipalities and services are run extremely well • The road and area infrastructure are well maintained. • Employment rates are the highest in the country • Tourism drives high rental demand • The Residential property sector has consistently been the bestperforming market in SA for more than a decade with the highest house price growth • Above average rentals with very low vacancies
Ross Levin of Seeff Atlantic Seaboard says the Cape Town rental market is booming, both for longer term residential rentals and short stay accommodation. The return of tourism to pre-pandemic levels combined with the resurgence of events in the city such as the Formula E, Sevens rugby etc. all contribute to the high demand.
Lightstone’s assessment of the proportion of sales between R100k and R20m in 2019 and 2023 shows that the Western Cape’s share has jumped from 23% to 27%, while Gauteng has slipped from 43% to 39%. The opening
Real Estate Investor Magazine DEC 2023/JAN 2024
46
INVESTING
up of international investment, semigration and higher employment has put the Western Cape firmly onto the investment map.
In the Western Cape, particularly Cape Town, the residential property market continues to thrive due to well-run municipalities, maintained infrastructure, high employment rates, and tourism demand. Notable municipalities include Overstrand, Stellenbosch, and Hessequa.
The most active municipalities in the Western Cape are Overstrand, Stellenbosch and Hessequa, followed by Knysna, Prince Albert, Saldanha Bay, Kannaland, Swellendam, Bergrivier and Cape Agulhas, with Cape Town seeing its share of activity rise from 15% to 17%.
“The most increased town activity (as opposed to municipality) has been around Stellenbosch, and then along the West Coast (Langebaan, Yzerfontein and St Helena Bay), inland around Darling, Riebeeck Kasteel and Barrydale, in Cape Town (Scarborough, Hout Bay, Noordhoek) and then heading east along the south coast, in towns such as Gansbaai, Stillbaai, Mossel Bay and Knysna,” Lightstone.
47
DEC 2023/JAN 2024 Real Estate Investor Magazine
There are also a few countryside towns within the Western Cape that provide a serene, nature-centric environment, attracting those who are seeking an escape from the hustle and bustle of the city. Entrylevel homes in these types of towns are still affordable, often starting at R1.5 to R2 million.
“Buyers can enjoy spacious properties, beautiful landscapes, and a slower pace of life in areas such as Gansbaai, Pearly beach, Baardskeerdersbos, Villiersdorp, Franskraal, Genadendal, and Greyton. In fact, over the last three months, we've observed a notable increase in city residents looking to relocate to rural towns. This surge may be attributed to a growing preference for a serene and naturecentric lifestyle and remote working.
Other markets The other South African provinces overall are going through a drop in investor confidence because of mismanaged municipalities meaning poor services, poor road infrastructure, no investment, energy issues, excessive loadshedding, water shortages, and other challenges which are unique to those areas.
INVESTMENT HOT SPOTS
Gauteng's Sandton however is transitioning from a strong business district to a more luxury residential space, offering many redevelopment opportunities. Pretoria stands out as the world's most affordable capital city, attracting first-time buyers and families.
attracting young buyers and families. As interest rates stabilize, these hotspots offer promising investment opportunities for those who understand the nuances of each market.
Despite the allure of the Western Cape, other provinces grapple In KwaZulu-Natal, Ballito, and with the persistent challenge of coastal towns experience growth, inadequate municipal services. while the Eastern Cape sees a rise in The key to retaining residents and smaller towns, attracting semigrants attracting real estate investors and first-time buyers. Mpumalanga lies in a combination of interest emerges as a property investment rate recovery, inflation reduction, hotspot with a 17.3% house price and significant improvements in inflation, offering diverse options for municipal services. Until these first-time buyers, professionals, factors align, the Western Cape and retirees. is poised to maintain its appeal, drawing in individuals and investors Bloemfontein in the Free State from across other provinces. stands out as an affordable city,
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
48
RESIDENTIAL PROPERTY DEVELOPMENTS
RIVERLANDS, STELLENBOSCH, Cape Cape Town Town
PRICING from R1,4 million for Studios
RIVERLANDS
Sunbird will make up the first of two official residential buildings in Riverlands. Sunbird has a South and North Block which will completed by April to June 2025.
DEVELOPER: Signatura TYPE: Studios @ 33sqm, One bed 47sqm and & Two bed 65 sqm KEY FEATURES: • Great potential rental returns starting from R10k per unit • Heated swimming pool & gym • Oven, hob and extractor fan, built-n cupboards in kitchen and bedrooms with high-quality finishes • Laundry access • 6km walking/running track • Restaurants on North Block • 24-hour security • Eco Park • Heritage Centre • Shopping Centre
ENQUIRE NOW
49
DEC 2023/JAN 2024 Real Estate Investor Magazine
WESTERN CAPE
SALT RIVER, Cape Town
Real Estate Investor Magazine DEC 2023/JAN 2024
50
RESIDENTIAL PROPERTY DEVELOPMENTS
FERNDALE, RANDBURG - JOHANNESBURG
PRICING from R599,900 for One Bedroom Apartments
THE BASE
The Base Apartments is situated just off central Randburg CBD and is surrounded by a multitude of small to large businesses, corporations, universities, gyms, colleges, hospitals, plenty of shopping centres and night life opportunities.
Brand new, state-of-the-art shopping mall, Ferndale on Republic, is just 2 minute’s drive away. The Base is a 15 minute drive from Sandton, Bryanston or Rosebank. Making it the perfect base for young professionals.
AGENT: Ryan’s Realty TYPE: Apartments with one and two bedrooms KEY FEATURES: • 24 Hour Security • Smart Tech • Low Energy • Green zones • Natural Light
ENQUIRE NOW
51
DEC 2023/JAN 2024 Real Estate Investor Magazine
WESTERN GAUTENG CAPE
BRYANSTON, JOHANNESBURG
PRICING from R714 000
170 ON GROSVENOR
170 on Grosvenor is an exciting new affordable housing development in Johannesburg that offers 185 exclusive off-plan units designed for those who seek quality, convenience, and a vibrant lifestyle. Prime Location: Nestled at 170 Grosvenor Road, our development enjoys a strategic position within the heart of Bryanston.
AGENT: Adrienne Hersch Properties TYPE: Apartments with one and two bedrooms from 36sqm to 139sqm KEY FEATURES: • Prime location • Lifestyle Centre • Co-working area • Swimming Pool area • Play area • Coffee Bar • Laundromat • Gym & Yoga studio • Concierge services
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
52
A c o ast al oas is cr afted b y n ature H O MES FR O M R 2 00 0 00 | LAND FROM R 460 000
THE MOST SECURE LUXURY LIFESTYLE ESTATE
Sunrise ocean views, roaming wildlife, unrivalled nature, a touch of luxury, and a space centered around family-living – This is Bahari Bay life. Discover this hidden residential lifestyle gem, where homes are designed around modern-day
conveniences and coastal bliss within Shelly Beach, KZN’s South Coast. Pioneering eco-friendly living, Bahari Bay presents land opportunities from R460 000 and a range of 3 and 4-bedroom pet-friendly freestanding homes from R2.6 million.
UN RIVAL L E D ACC ESS TO O UT D O O R FAC I L I T I ES W I T H I N T H E ESTAT E
Mountain biking
Private lagoon and beach access
Tropical forest access
Dedicated walking trails
Catch-and-release fishing dams
For more Information
CLICK HERE
Interview with Gawie Venter and Neal Peterson
Bahari Bay Trailer
FINANCE
57
PAGE
Mastering the art of fair and harmonious lease termination negotiations
69
PAGE
Why investing in Leisure Sectional Title is a hot trend for savvy investors
TRENDING ONLINE
Unlocking Insider Secrets: How to negotiate a better mortgage bond rate
Real Estate Investor Magazine DEC 2023/JAN 2024
54
LEGAL
A COMPREHENSIVE Mastering the art of lease termination
By Simon Dippenaar
Whether you are a landlord or a tenant, lease agreements have an influence on what you may or may not do regarding the property you either own or live in. At some point, one or other party will want to terminate the lease agreement.
55
NOV/DEC 2023 Real Estate Investor Magazine
PROPERTY MANAGEMENT
GUIDE fair and harmonious negotiations
PART
01
OF PART 4
Real Estate Investor Magazine NOV/DEC 2023
56
FINANCE
I
f you’re the tenant, you may be ready to buy a property of your own. If you’re the landlord, circumstances may arise where you need to sell the property, or live in it yourself. There may be a rental dispute which causes the relationship between landlord and tenant to break down and you decide to terminate the agreement.
Lease agreements usually bind the parties to the terms and conditions of the agreement until the lease expiry date. How can you approach the situation to achieve a successful termination that is mutually acceptable, allows flexibility, and saves the time and money associated with formal legal processes?
57
NOV/DEC 2023 Real Estate Investor Magazine
PROPERTY MANAGEMENT
6 Key Strategies for a favourable lease termination negotiation
1. Know your lease terms Before you approach the other party, familiarise yourself with what your lease agreement says and understand what your rights and obligations are. Look for any clauses that specifically deal with the termination of the lease agreement.
These clauses may have conditions that will first need to be met and can cover a variety of considerations such as cancellation penalties or notice periods.
Check the market-related rent as well as vacancy rates in your area. If these are in your favour, let the other party know.
2. Communicate your needs When you are clear on your contractual obligations and rights, contact the other party and communicate why you would like to terminate the lease agreement. Explain your reasons and see if the other party is willing to accommodate your situation.
Avoid making demands or threats. Be honest and respectful. If the other party doesn't fully understand why you want to terminate the lease agreement, they may become defensive. Explain the benefits of reaching a mutually agreeable solution, such as avoiding legal disputes and maintaining a good relationship.
3. Explore the termination options Depending on what your lease agreement says and how the other party responds to your request to terminate the lease, you may have different options as you negotiate the termination.
Your options may include: - Early termination with a cancellation penalty
Real Estate Investor Magazine NOV/DEC 2023
58
FINANCE
- Termination with no penalties - Early termination and the obligation to secure alternative tenants - Transfer of lease rights and obligations to another tenant (assignment) - Rental of part of or the entire property to another tenant (subleasing)
4. Negotiate the best deal Once you have discussed the options with the other party, try to negotiate a solution that will be beneficial to you both. Don't delay discussions; resolve the issue as soon as possible before tensions arise.
Be mindful of notice periods and ensure you comply with everything required of you to prevent any unnecessary challenges that may accompany the termination negotiations.
5. How do I know what the best deal is? Compare the costs and benefits of your desired approach and determine which option will be the most attractive and affordable to both parties. Assess the risks and liabilities attached to each option as well as any possible contingencies or guarantees that may be necessary to protect you or the other party from future problems or disputes.
A good rule of thumb is to ask yourself whether the
59
NOV/DEC 2023 Real Estate Investor Magazine
PROPERTY MANAGEMENT
desired route is clear, fair, enforceable and consistent with both your lease agreement and any applicable laws or regulations.
6. Finalise the agreement Once you and the other party have reached agreement, confirm it in writing. You should both sign a formal agreement reflecting the terms and conditions. To be safe, consult a lawyer and ask them to advise on whether the intended approach is legally sound. The lawyer can also assist in drafting the formal agreement and ensure all the details of your solution are properly addressed.
Once finalised, you must then comply with your obligations and follow through with the agreement.
ENQUIRE NOW
SIMON DIPPENAAR Founder & Eviction Specialist Simon Dippenaar & Associates
Real Estate Investor Magazine NOV/DEC 2023
60
61
DEC 2023/JAN 2024 Real Estate Investor Magazine
Real Estate Investor Magazine DEC 2023/JAN 2024
62
PROPERTY MANAGEMENT
63
DEC 2023/JAN 2024 Real Estate Investor Magazine
RENTAL PORTFOLIOS
Real Estate Investor Magazine DEC 2023/JAN 2024
64
PROPERTY MANAGEMENT
65
DEC 2023/JAN 2024 Real Estate Investor Magazine
RENTAL PORTFOLIOS
Real Estate Investor Magazine DEC 2023/JAN 2024
66
67
DEC 2023/JAN 2024 Real Estate Investor Magazine
Real Estate Investor Magazine DEC 2023/JAN 2024
68
HOSPITALITY
UNLOCK ULTIMATE Why investing in Leisure is a hot trend for savvy
By Editorial
Investing and owning a leisure property at popular holiday destinations is becoming a rising investment option for investors. The benefit of going on holiday to an owned destination of choice coupled with earning secure investment rental returns is becoming an enticing prospect.
69
DEC 2023/JAN 2024 Real Estate Investor Magazine
SECTIONAL TITLE
RELAXATION Sectional Title investors
Real Estate Investor Magazine DEC 2023/JAN 2024
70
HOSPITALITY
T
he Beekman Group is a leisure hospitality provider and property developer headquartered in Port Shepstone on the South Coast of KwaZulu- Natal with over 50 years industry experience. The group is known as a leisure services provider of holiday accommodation and resort management services.
The Group was founded by the dynamic duo of John and Bram Beekman, who began their business journey with a humble paint contracting business, Beekman Group Painters, in 1970. Their complementary strengths led to rapid growth, eventually becoming one of Johannesburg's largest contracting companies. By 1980, the company had blossomed and was subsequently sold, marking the transition to their next venture.
Within the Beekman Managed Portfolio (BMP) is a collection of high-end resorts offering a combination of lifestyle and leisure property currently valued over R1,3 billion. They manage over 30 vacation destinations in five countries and manage a membership database of over 80,000.
71
DEC 2023/JAN 2024 Real Estate Investor Magazine
Entering the Vacation Ownership Industry Relocating to Durban in 1980, Bram and John ventured into the vacation ownership industry with their first development at Banana Beach on the KwaZulu-Natal South Coast.
Affiliated with RCI (UK), this venture marked their entry into the local leisure industry and laid the foundation for the official launch of The Beekman Group in 1981, a respected developer and marketing pioneer in Vacation Ownership. Their journey continued with the development of six vacation ownership resorts, including the Qunu Falls near Ixopo.
Revolutionising Vacation Ownership In 1993 The Holiday Club was established in South Africa and soon expanded into Australia and Botswana. The introduction of a flexible Points System transformed the concept of vacation ownership, providing members with a variety choices in Southern Africa and overseas. Fiona Broom emphasised the significance of this business development, stating, “The Holiday Club's innovative Points System revolutionised the vacation ownership industry,
SECTIONAL TITLE
giving members unprecedented flexibility and variety in their vacation options.”
More recently, Beekman Group has seized the potential of sectional title ownership as a contemporary alternative to traditional property investment models. Remaining at the forefront of this resurgent property market trend, the Group boasts an array of high-end developments in picturesque locales, appealing to a diverse range of investor preferences.
As sectional title ownership gains prominence among buyers and investors, their offerings stand out, providing individuals the opportunity to secure ownership of a luxury villa or unit within larger properties
or developments. This approach grants access to shared amenities and a host of benefits, contributing to its growing popularity within the holiday home and tourism sector.
Diversification within the Property Industry Having excelled in the leisure market, Beekman Group expanded into property development within the commercial and residential sectors. In 2002, the Group diversified into commercial property development, catering to the needs of major commercial clients. These developments have an approximate market value of R495 million and can be found in major business hubs in the Western Cape and KwaZulu-Natal.
Key Benefits of Investing into Leisure
• • • • •
Earn up to 12% annual net returns. Consistent Rental Income opportunity Holiday destination flexibility. Hassle-free ownership Exclusive access to all Beekman Managed Portfolio luxury resorts
PRICING • Exchange options to more than 4000 resorts locally and internationally • Exclusive discounted rates on selected facilities at all Beekman Managed portfolio resorts
Real Estate Investor Magazine DEC 2023/JAN 2024
72
HOSPITALITY
In September 2023, Beekman launched an ‘Invest in Leisure’ product which offers savvy investors the opportunity to own a sectional title hotel room or entire villa at one of their award-winning resorts.
Four leisure sectional title developments - ‘Invest in Leisure’ today:
1.The Kingdom Resort - Pilanesberg, Northwest, South Africa • LOCATION - Situated within 2 hour’s drive from Johannesburg and Pretoria less than 5-minute drive from Sun City & Pilanesberg - a top bush tourist destination focused on big 5 games. • GRADING - Resort boasts a top 4-star rating from Tourism Grading Council of SA • FACILITIES - Rare game experience, Day spa, Waterpark with lots of top outdoor sports facilities • INVESTMENT FUNDAMENTALS - Area attracts 30% of international tourists with peak summer weekends reaching 100% occupancy rates. • PRICING - Starts from an estimated R1,34 million
73
DEC 2023/JAN 2024 Real Estate Investor Magazine
2. Cayley Mountain Resort - Central Drakensberg, KZN • LOCATION - Overlooking Cathkin Peak and Champagne Castle ranges with lots of nearby attractions. • GRADING - Resort top 4-Star rating from Tourism Grading Council of SA • FACILITIES – Top facilities including Spa, Beach Club, Adventure sports, and multiple
SECTIONAL TITLE
•
•
sporting options INVESTMENT FUNDAMENTALS - Accommodation and purchase options include villas, hotels and suites PRICING - Starts from R1,34 million with proven returns of up to 12
Real Estate Investor Magazine DEC 2023/JAN 2024
74
HOSPITALITY
3. San Martinho beach Club - Bilene, Mozambique • LOCATION - Located in Bilene, Mozambique - 2,5km north of Maputo along 1.3km of pristine white beaches in a lush, tropical setting. • GRADING - Resort holds a 4-star rating from Mozambique’s Tourism board. • FACILITIES - Resort has variety of all the best on-site facilities including games rooms, gym, sporting facilities and a variety of aquatic adventures. • INVESTMENT FUNDAMENTALS - Attracts international tourists and accommodation and purchase options available for villas and apartments. • PRICING - Starts from an estimated R3, 4 million
75
DEC 2023/JAN 2024 Real Estate Investor Magazine
SECTIONAL TITLE
4. Menlyn Mix - Menlyn, Pretoria • LOCATION - Off-plan development situated in the prime location of Menlyn Maine precinct, Pretoria. Close to vibrant shopping ands restaurant scene in Pretoria with ample amenities for a full holiday or getaway experience. • GRADING - Facilities and amenities expected to earn 4-star grading. • FACILITIES – Sought after features pool, communal outdoor area, gym, business centre with meeting and video rooms • INVESTMENT FUNDAMENTALS – Sectional title is high in demand within Menlyn Main and modern 1,2 & 3 bedroom apartments
•
are available. PRICING – Starts from R 1,895 million with an expected annual return of up to 12%
The emergence of the Sectional Title model marks a shift in property ownership, offering a fresh and unique approach that enables investors to reap the rewards of high-end hospitality investments.
The Beekman Group surpasses investor expectations while managing a diverse portfolio of R1.3 billion in local property investments, overseeing more than 40 vacation destinations spanning five countries, and catering to over 80,000 members. For more information click on enquiries.
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
76
TECHNOLOGY
79
PAGE
Augmenting AI with Generic and Proprietary insights for supercharged Decision-Making in Business
87
PAGE
Unraveling the risks of Business Email compromise and its potentially devastating consequences
TRENDING ONLINE
The Evolution of Investment Strategies in the Real Estate Market
Real Estate Investor Magazine DEC 2023/JAN 2024
78
TECHNOLOGY
TRANSFORMING DATE COMPETITIVE EDGE Augmenting AI with Proprietary insights Decision-Making in
By Paul-Roux de Kock
In the near future, an estate agent will know who will list a property on the market in an area, and at what price, because AI-driven insights products will say so. Similarly, data will help a car dealer understand which vehicle and value-added products will provide the most joy to a specific customer on their floor while optimising their profit.
79
DEC 2023/JAN 2024 Real Estate Investor Magazine
ARTIFICIAL INTELLIGENCE
INTO Generic and for supercharged Business
Real Estate Investor Magazine DEC 2023/JAN 2024
80
TECHNOLOGY
T
hese property and auto industry scenarios are just two ways the almost limitless value of data is being unlocked to create strategic and operational benefits that help businesses sell more properties, vehicles, financial products – and almost any other consumer product or service.
Data has become an increasingly important asset over the past twenty years, and while data sources are not always effectively commoditised and their lack of “fungibility” can make it difficult to put a direct value on it, their strategic and operational value is widely recognised. Research shows that global C-suite executives believe that companies that “excel at integrating data into their strategy, operations and culture are largely outpacing their peers in revenue growth and profitability”.
Transforming data to insights is, however, the key, as idle data has little value. British mathematician Clive Humby said in 2006 that “data is the new oil” and he was referencing its potential value once it had been refined, processed and transformed into something useful.
The more complex and uncertain
81
DEC 2023/JAN 2024 Real Estate Investor Magazine
the world gets, the greater the demand for crystal clear insights from data because it helps provide a more predictable roadmap through economic disruption and political turmoil.
The strategic and operational value of data grows exponentially with more history and diverse sources of data, whether externally sourced or internally produced by products and systems, and of course in how data is processed and transformed to unlock insights which have a positive impact in the real world.
The purpose of building data sets and unlocking insights, in our world, is to enable our clients with “superpowered” decision making abilities when using our products to build a competitive advantage in their business.
Building data value Aggregating customer and market data to gain competitive advantage is not new, although the process used to be slow and limited in scope and scale.
Despite this, the value of data grew with time – the more history there was, the greater the opportunity to discern trends and improve
ARTIFICIAL INTELLIGENCE
interpretation by comparing data sets from one period to another. As an example, assessing deeds data at a certain date offers only a limited view of the property market if compared to analysing deeds data over our comprehensive historical property dataset.
Consumer technology changed the way data is collected and stored, but more importantly, it revolutionised how different data sources – from social media and GPS location to content choices and sales information – can be integrated to create deep insights into customer behaviour that were not possible before.
Now, AI and machine learning analyses a person’s “digital exhaust” which reveals so much more in terms of interests, activities and location. And when thousands or millions of “digital exhausts” are blended, the strategic and operational value of the data increases exponentially.
In a B2B context, widely available generic data is becoming less useful, but significant value can be added to the usability of the information if layered with unique data, some of which comes from
Real Estate Investor Magazine DEC 2023/JAN 2024
82
TECHNOLOGY
using proprietary products and systems – in our case, Lightstone’s Property Toolkit (the core delivery mechanism of our analytical products to property professionals), Lightstone’s EZVal (a home valuation workflow platform used by our banking clients) and Lightstone’s Signio (an online platform that facilitates finance and insurance transactions in motor dealerships) are examples.
It’s important we use data that’s reliable, accurate, complete, relevant and timely to effectively build algorithmic “superpowers”. Managing data is critical, whether from external partners or generated internally, and it is important to build tools which track the quality of those data sources and the impact it has on the outcomes of decisions our clients make when using our analytical products.
83
DEC 2023/JAN 2024 Real Estate Investor Magazine
ARTIFICIAL INTELLIGENCE
The power of predictive and prescriptive analytics Data improves operational efficiency and helps businesses make better decisions, and advanced AI processes and tools help our users move from merely understanding future outcomes (predictive analytics) to being recommended the most optimal course of action to take (prescriptive analytics).
Machine learning technology helps optimize decisions in “real time”. A finance and insurance representative in the automotive industry needs to offer valueadded products such as an extended motor warranty or roadside assistance, to a customer on the dealership floor, at the point when they are processing the transaction and cannot wait for the algorithm to play catch-up as new information is captured.
The predictive and prescriptive technology is created from the accumulation and integration of historical with real-time data to predict with mathematical accuracy the likely outcome of a given decision. In this example, it could include the data of past valueadded product sales, and real time application-specific data which is integrated with our comprehensive vehicle and property databases as well as other usable data sources. All of this data is used to train an algorithm to ultimately recommend the best course of action to our system users in real time.
We are now piloting algorithms to predict not only what's going to be the most valuable for the dealership to sell, but also what's
Real Estate Investor Magazine DEC 2023/JAN 2024
84
TECHNOLOGY
going to be the most useful for the end-consumer. We want our dealer clients to not just make additional money during the sale of the vehicle, but also to delight their customers for the duration of their vehicle ownership journey.
In the property space, Lightstone uses data and algorithms to predict which homeowners are more likely to want to sell, and this helps the estate agent focus on those homeowners who are better prospects. Combined with our Artificially Intelligent Automated Valuation Model (AiVM) we can also help the Estate Agent determine an optimal listing price. For example, we can estimate how long a property would be on the market if it is listed 10% above our valuation model price or 10% below, so they can make informed decisions based on their client’s specific need.
Lightstone’s first analytical product was an automated valuation model of homes which evaluated past sales of properties in an area and the spatial aspects of comparable sales around that property. The product is constantly updated, and the latest version, AIVM, uses artificial intelligence and machine
85
DEC 2023/JAN 2024 Real Estate Investor Magazine
learning to provide even more accurate property valuations, and uses new data sources, including satellite imagery of the size of the property.
We combine visual and transactional data to algorithmically determine the value of the property. The AIVM saves time and money, cutting mortgage decision time from days (when a bank sends a human valuer to conduct a physical valuation) to within an hour or two for automated valuations. This unlocks immense operational efficiency and a large part of that saving is passed on to the home buyer.
But even when a valuer still needs to carry out a physical valuation, it’s done using our data and information to make the physical valuations more accurate. So it's not just a “superpower” for the bank, it becomes a “superpower” for the entire industry, and those using our systems get their job done quicker and with greater accuracy.
All about finding a competitive edge Gathering and leveraging data is commonplace today, and that on its own is not enough to deliver a competitive advantage anymore.
ARTIFICIAL INTELLIGENCE
If the full potential of “the new oil” is to be realised and competitive advantage delivered, data must be protected, used wisely, shared appropriately and utilised intelligently to solve problems and unlock opportunities in the real world.
Importantly, the competitive value of data depends on the underlying integrity and usefulness of information, the integration of diverse sources of complementary
information, the technology which gathers and processes this information, and the quality of the data science deployed to deliver the insights and predictive algorithms.
This process of finding, refining, layering and interpreting data provides the insights which, if acted on correctly, can deliver transformative competitive “superpowers” to the industries we operate in.
ENQUIRE NOW
PAUL-ROUX DE KOCK Chief Analytics Officer Lightstone
Real Estate Investor Magazine DEC 2023/JAN 2024
86
TECHNOLOGY
PROTECT YOUR RENTAL Unraveling the risks of Email compromise and devastating consequences
By Editorial
Cybercrime is getting more common and more sophisticated, and businesses that regularly make large electronic transactions – like rental agencies – are tempting targets for criminals. World-wide, scammers robbed victims of 44% more money in 2022 than in 2021, and in South Africa alone the damage comes to around R2.2 billion per year.
87
DEC 2023/JAN 2024 Real Estate Investor Magazine
CYBERCRIME
AGENCY Business its potentially
Real Estate Investor Magazine DEC 2023/JAN 2024
88
TECHNOLOGY
O
ne particularly dangerous form of cybercrime attack is business e-mail compromise(BEC) – an e-mail seeming to come from a known source, making what looks like a legitimate request for payment or information. They are so hard to spot that you or someone you know has probably fallen victim to such a scam. Some of the world’s biggest companies have been hit by BEC attacks, including Google, Snapchat and Toyota.
PayProp CEO Michelle Dickens
says that residential rental agencies need to take extra care due to their frequent, large transactions, and the non-expert landlords and tenants they work with who may not know about the risk of fraud. A BEC attack might look like an ordinary request from a client or supplier, while actually being a scam carried out using a hacked or spoofed e-mail address. Criminals will often carry out extensive research and use social engineering techniques to make their e-mails as convincing as possible.
These criminals might impersonate:
• •
•
One of your landlords asking you to update their payment details A member of management at your company asking employees to transfer money or make a purchase A third-party supplier sending an invoice for work done.
89
DEC 2023/JAN 2024 Real Estate Investor Magazine
CYBERCRIME
“Criminals may pose as a legitimate sender by using a slight variation on a real address, or they might hack a real company e-mail account and use it to send fake invoices or other messages,” says Dickens.
And because rental agencies frequently receive monies from landlords and tenants, there’s a very real threat to their clients as well.
“It’s important to be aware that criminals might also use your e-mail address to send legitimatelooking payment requests to your
landlords and tenants, so your clients need to be made aware of the dangers too.”
How can you protect yourself from smart e-mail scams? BEC is first and foremost a type of social engineering attack, so any policy has to start with staff training and awareness. Inform your staff about the risks of BEC, and stress the importance of checking every incoming e-mail for signs of suspicion such as misspelled e-mail addresses – including those in existing e-mail chains, as they can also be intercepted and compromised.
Having the right systems and rules in place around payments can also reduce your risk of losing money to scammers, even if your staff are initially taken in.
Protecting service users is critical too It isn’t enough to have anti-fraud procedures in place within your organisation. Companies that deal with incoming transactions also need to make their landlords aware of the risks of handling accounts receivable, and can be held responsible by courts if they don’t.
Real Estate Investor Magazine DEC 2023/JAN 2024
90
TECHNOLOGY
Cybercrime Policy and Process Best Practices
•
•
•
Verify any payment requests, changes to a client’s account number or other payment details or procedures before making payments. Do so either in person, or (with trusted clients) via telephone call. No changes to payment procedures should be made based solely on an e-mail. Require dual approval to make a payment or change a recipient’s details. Two heads are better than one at spotting BEC attempts, and requiring a second person’s signoff also provides extra protection if one of your employees is in on the fraud. If possible, use automated systems to make rental payments rather than relying on employees to transfer money manually. With an automated system like PayProp, payments will strictly only be sent to the payment details provided by the beneficiary, and any changes to payment details can be strictly monitored and require multiple approvals.
In a recent case heard by the Gauteng Local Division High Court, conveyancing firm Edward Nathan Sonnenberg Africa was ordered to pay R5.5 million plus punitive costs to a property buyer after she became the victim of a BEC scam. The buyer had already successfully placed a deposit, and then paid the balance of the transaction electronically using bank details that had been e-mailed to her. However, criminals had hacked her e-mail account, intercepting the e-mail and replacing ENS’s bank account details with those of an account controlled by them.
91
DEC 2023/JAN 2024 Real Estate Investor Magazine
ENS’s own systems had not been compromised. However, because they had not warned the buyer about the risks of BEC or advised her of a verification process to use before making a payment, the court found that they hadn’t taken reasonable care.
Next steps Given this risk, rental agencies shouldn’t stop at sharing best practices internally. Also send out a regular warning about BEC to all landlords and tenants as standard, setting out your agency’s standard payment and verification
CYBERCRIME
‘Criminals may pose as a legitimate sender by using a slight variation on a real address, or they might hack a real company e-mail account and use it to send fake invoices or other messages.’
procedures. For example, your procedures may involve taking payments automatically using bank details provided at the start of the contract, and you may require confirmation of any change of bank details. Emphasise that any requests for money or information that do not follow these procedures are fake.
it,” says Dickens. “By arming your employees and clients with the information they need to recognise BEC and putting the right procedures and technology in place, you can reduce the risks to your business and the people you work with.”
ENQUIRE NOW
Using an automated system to collect and pay out rent can help protect your payment service users, as they will have to make fewer transactions by hand.
“BEC is an inherently difficult type of financial crime to defend against, which is why it’s critical to do everything you can to prevent
MICHELLE DICKENS Managing Director PayProp SA
Real Estate Investor Magazine DEC 2023/JAN 2024
92
www.rethavanrooyen.com
A ONE-OF-A- KIND SOUTH AFRICAN BOOK
By Retha van Rooyen - Student Accommodation investor and property management specialist
A MUST READ A MUST READ A MUST READ
LEARN HOW TO EASILY BUILD WEALTH BY INVESTING IN STUDENT HOUSING
ONLY R350
BUY NOW
COMMERCIAL
85
PAGE
Infrastructure development is in a period of substantial growth
101
PAGE
Property Owners Leverage Rapid Growth in Hybrid Working Solutions
TRENDING ONLINE
10 Ways to Harness Coworking Spaces for Business Expansion
Real Estate Investor Magazine DEC 2023/JAN 2024
94
COMMERCIAL
UNLOCKING INFRASTRUCTURE DEVELOPMENT Infrastructure development of substantial growth
By Roelof van den Berg
South Africa’s core infrastructure is in a period of substantial growth. Driven by government’s increased focus on public-project spend with a particular focus on public housing and economic infrastructure, the medium-term expenditure framework in 2023 is an estimated R903 billion.
95
NOV/DEC 2023 Real Estate Investor Magazine
INFRASTRUCTURE DEVELOPMENT
is in a period
Real Estate Investor Magazine NOV/DEC 2023
96
COMMERCIAL
B
ut, as noted by President Ramaphosa in his State of the Nation Address earlier this year, unlocking the full potential of infrastructure investment in South Africa has been hindered by a substantial scarcity of technical expertise and effective project management countrywide. To overcome this hurdle, the government has granted R600 million to project preparation in underserved rural regions and areas lacking adequate resources.
But effectively executing the planning, construction, maintenance, and operation of essential public infrastructure involves a level of complexity that the government cannot always navigate seamlessly on its own. Public-private partnerships (PPPs) exist to lessen this burden, as well as to maximise the impact of infrastructure funding and development, and execute projects with a high level of expertise.
Put simply, PPPs are collaborations between public and private entities that aim to successfully deliver, execute and manage projects such as transport networks, complementing each other’s
97
DEC 2023/JAN 2024 Real Estate Investor Magazine
strengths to achieve the highest possible project standards.
The Gap Infrastructure Corporation has worked closely with the public and private sectors over the years to substantially improve service delivery, strengthen the country’s infrastructure, improve lives on an individual level, and train the next generation of construction workers, project managers, and engineers through highly beneficial PPPs.
The Gap Infrastructure Corporation has worked closely with the public and private sectors over the years to substantially improve service delivery.
The ongoing success of this collaboration is strongly dependent on the simple fact that both the public and private sectors benefit from improved infrastructure to meet their individual goals.
However, to make PPPs a success, the public sector must fulfil a delivery management role, whereas the private sector’s project management expertise is particularly crucial to ensuring
INFRASTRUCTURE DEVELOPMENT
infrastructure is delivered on time and within budget, limiting time and expense creep.
Government’s key role in project delivery management Delivery management lies at the heart of any successful infrastructure project. It is a key leadership role often undertaken by a well-informed client with expertise in infrastructure development with the aim to specify, procure, and deliver infrastructure projects efficiently and effectively. Within the context of public infrastructure development and widely beneficial
partnerships with professional private developers, it is often the government’s responsibility to assume this critical role.
Ultimately, the government’s objective is to foster social and economic growth by investing in infrastructure. To accomplish this, it has implemented the Infrastructure Delivery Management System (IDMS), a comprehensive government system that encompasses planning, budgeting, procurement, delivery, maintenance, operation, monitoring, and evaluation of infrastructure projects.
Real Estate Investor Magazine DEC 2023/JAN 2024
98
Page 100
Open page 100 in the magazine →COMMERCIAL
The IDMS consists of various integrated systems, such as an infrastructure planning system, an infrastructure gateway system, a construction procurement system, a programme and project management system, and an operations and maintenance system.
Furthermore, the government’s dedication to infrastructure development is evident in its significant construction budget allocation this year. But the government also serves a greater role beyond funding major projects. It is also responsible for creating a cooperative environment conducive to collaboration and effective communication between public and private stakeholders, and acts as a facilitator for the regulatory frameworks under which their private partners function.
By assuming the delivery management role, the government aims to ensure the successful implementation of infrastructure initiatives that align with its service delivery goals and responsibilities.
The role of project management to meet government’s service delivery goals
99
DEC 2023/JAN 2024 Real Estate Investor Magazine
Project management is the reverse side of the infrastructure development coin, as private project management firms play a pivotal role in meeting government’s service delivery goals.
In a PPP, the private partner takes on a majority of the project’s risks, including technical, financial, and operational risks, which are often successfully managed by professional project managers.
Largely as a result of this project and risk management function, the adoption of PPPs in South Africa has been shown to accelerate infrastructure development progress, ensuring faster completion, improved project outcomes, increased cost savings and transparency, and a marked decrease in life-cycle maintenance cost as compared to traditional methods.
But the advantages of PPPs extend beyond efficiency. They offer value for money, efficient time and budget management, better risk distribution, innovation, adequate facility pricing, and are the most optimal solution for budget constraints.
Page 101
Open page 101 in the magazine →INFRASTRUCTURE DEVELOPMENT
Synergising public and private strengths One of the primary drivers behind the widespread adoption of PPPs is the inherent strengths that each sector brings to the table. By synergising their efforts, the public and private sectors can leverage each other’s unique capabilities, leading to more successful and efficient infrastructure development.
One of the key benefits is the transfer of skills from private businesses to the government. While the public sector is generally rich in human resources, it often lacks specialised expertise required for complex infrastructure projects.
On the other hand, the private sector possesses a wealth of experience, technical expertise, and tend to take an innovative approach to complex challenges, which can significantly improve deliverables. Through PPPs, the private sector can likewise actively contribute its expertise, provide invaluable insights, and implement and leverage a wide range of best industry practices and cutting-edge technologies.
Successfully achieving synergy within PPPs requires more than just recognising and utilising these respective strengths. It necessitates the establishment of effective communication channels, mutual trust, and a shared vision
ENQUIRE NOW
ROELOF VAN DEN BERG CEO Gap Infrastructure
Real Estate Investor Magazine DEC 2023/JAN 2024
100
Page 102
Open page 102 in the magazine →COMMERCIAL
CAPITALISING ON THE WORKING BOOM Property Owners Hybrid Working Solutions
By Editorial
IWG, the world’s leading provider of hybrid work solutions, has announced that it has added 612 new locations since January 2023. An overwhelming 95% of these new locations are being delivered via managed partnership agreements, delivering on IWG’s capital-light strategy. The rapid growth in new locations is being driven by property owners and partners seeking to capitalise on the burgeoning demand for hybrid working.
101
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 103
Open page 103 in the magazine →HYBRID WORK SOLUTIONS
HYBRID Leverage Rapid Growth in
Real Estate Investor Magazine DEC 2023/JAN 2024
102
Page 104
Open page 104 in the magazine →COMMERCIAL
G
rowing customer demand for hybrid working is being driven by two distinct yet complementary real estate trends. First, companies are reappraising their property portfolios and downsizing in city centres, replacing long, restrictive, and expensive leases with flexible space with operators like IWG. Second, they are taking on flexible workspace in local neighbourhoods, closer to where their people live and want to be, as part of the increasingly popular ‘hub-and-spoke’ office model, where employees divide their time between home, local offices, and city headquarters.
the globe, with IWG’s asset-light strategy meaning the company can expand and adapt quickly to meet this demand.
The desire among workers to avoid lengthy and costly daily commutes has also had a major
A sizeable proportion of IWG’s new locations are in the suburbs, smaller towns and cities which are seeing the strong demand for hybrid working solutions, with the Group expanding its network locations deep into the heart of the communities where they are needed.
IWG’s expanded network means these areas are now better served by flexible workspaces, allowing employees to work wherever most productive. Similar trends have been noted in Africa and across
103
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 105
Open page 105 in the magazine →HYBRID WORK SOLUTIONS
impact, with many aiming for improved work-life balance and to cut down on unnecessary expenses. According to IWG’s research, only one in five workers would commute more than 30 minutes daily, while 60% express a desire for a workspace within 15
minutes of their homes. A study of 2,000 hybrid workers** has also shown that hybrid workers enjoy an average increase of 4.7 weekly exercise hours, 71 hours of sleep per year, and improvements in their diet.
Real Estate Investor Magazine DEC 2023/JAN 2024
104
Page 106
Open page 106 in the magazine →COMMERCIAL
With almost 4,000 locations spanning across more than 120 countries in every time zone and leveraging its three decades of experience, IWG provides an array of workspace solutions for properties of all shapes, sizes, and descriptions. Whether it’s a two-storey building in an out-of-town business park, an office block in a prestigious downtown locale, or a former retail unit in a bustling shopping centre, IWG tailors its offerings to meet the diverse demands of its partners and customers.
Becoming an IWG partner or franchisee provides access to a wealth of expertise in flexible workspace solutions. Partners gain access to IWG’s platform to maximise the return on their real estate space by capitalising on the rapidly expanding demand for hybrid working. With an annual investment of
105
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 107
Open page 107 in the magazine →HYBRID WORK SOLUTIONS
around £50m into its technology platform, IWG provides partners with access to all the company’s expertise as well as design and fit-out support and sales and marketing capabilities.
Partner locations can go from concept to fully operational in as little as 10 weeks, while the partnership model provides string recurring monthly income without the headaches of lengthy renewals or void periods or overreliance on single leases.
The flexible workspace sector is projected to grow by 600% by 2030, and data from Indeed, the world’s largest job site, has reported a staggering 6,531% year-on-year increase in searches for ‘hybrid’ in 2022. As businesses embrace
hybrid working for the long term, IWG’s solutions become a strategic advantage for property owners seeking to capitalise on this trend.
Jump onto the bandwagon Many of these property owners have vacant space to fill with the decline in demand for traditional office real estate. They are choosing to partner with IWG’s industry-leading hybrid working platform and benefit from a choice of multiple brands including Regus, Spaces, HQ and Signature.
IWG’s unrivalled network coverage includes approximately 3,500 locations across more than 120 countries, and 83% of Fortune 500 companies are amongst our growing customer base.
We do so by providing the world's leading hybrid work platform with professional, inspiring and collaborative workspaces and digital services, all available via the IWG app.
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
106
Page 108
Open page 108 in the magazine →USCIS APPROVED REGIONAL CENTER
Permanent Residence Green Card includes spouse and children (dependents under 21)
Ability to continue to live and study anywhere in the U.S.
Qualified candidates gain employment authorization, or do business within a few months
Opportunity to obtain U.S. Citizenship (after 5 years of residency)
U.S. Citizens can travel visa-free to 180+ countries
SONJA CLARKE
sclarke@firstpathway.com
+27 83 408 5681 www.firstpathway.com
Page 109
Open page 109 in the magazine →OFFSHORE
109
PAGE
Strategic Investment in UK Property to navigate poor Exchange Rates
115
PAGE
Namibia emerges as a prime destination for South African property investors
TRENDING ONLINE
The Evolution of Investment Strategies in the Real Estate Market
Real Estate Investor Magazine DEC 2023/JAN 2024
108
Page 110
Open page 110 in the magazine →OFFSHORE
UNLOCKING FINANCIAL Strategic Investment navigate poor Exchange
By Guy Gillespie
It’s the talk of the town here in South Africa and everyone is weighing in on the conversation. When the British Pound hit 24,6 to the Rand in June this year, South Africans had to sit up and listen. Whilst many are furiously applying to live in the UK, others are happy to live out their days in sunny South Africa and simply financially immigrate.
109
NOV/DEC 2023 Real Estate Investor Magazine
Page 111
Open page 111 in the magazine →UNITED KINGDOM
IMMIGRATION in UK Property to Rates
Real Estate Investor Magazine NOV/DEC 2023
110
Page 112
Open page 112 in the magazine →OFFSHORE
L
et’s look at the latter, financially immigrating has huge advantages, stay close to family and friends, and enjoy everything South Africa has to offer, from our beautiful coastlines to the big 5. To having braais on the weekend and close to our infamous ‘Bokke’ rugby team.
Financially immigrating through investment property, is an excellent option. Buy-to-Let property in the UK is in high demand, as rental demand is at an all-time high and will be for years to come.
Where to invest in the UK? The UK government is acutely aware of the lack of housing, which the UK government is trying desperately to resolve, by investing billions into infrastructure and regeneration, of towns and cities north of London. The north is the key, giving rise to the biggest property boom the UK has seen in decades.
Manchester, Birmingham, Liverpool, Sheffield, Nottinghamshire, plus smaller commuted towns, are experiencing immense change and transformation. The north’s is sustainable, due to a staggering amount of large corporates companies setting up their head
111
DEC 2023/JAN 2024 Real Estate Investor Magazine
offices north of London, combined with the work from home trend.
How does it work? Buy-to-Let Investment Property in the UK is for all South Africans, who want to start the journey to financial immigration, as your rand goes further when you buy in the UK, due to the following reasons.
South Africans can get up to 70% bonds/mortgages in the UK, with a UK Bank. The interest rates in the UK are half of that of SA. The UK Banks also offer Interest only mortgages. The coverall costs to purchase & finance a UK property are also less. The running costs equivalent like levies, rates & taxes are lower.
To elaborate on the above. It is the norm for investors in the UK to use interest only finance for buy-to-let properties. This is a game changer for South Africans who can now access UK finance, which has a lower interest rate and an interest only option, further considerably lowering your monthly repayments. The combination of the interest rate, interest only bond and lower running costs, means your UK tenant allows you to be cashflow positive from day one of your investment, an impossible feat in SA.
Page 113
Open page 113 in the magazine →UNITED KINGDOM
Addressing the Shortfall. Many South Africans have the appetite to deploy 30% down for a property in the UK, plus costs to purchase, roughly R1.5 million on a R3.3-million-rand 1 bedroom bathroom in the UK. Knowing that their Rands is converted to Pounds is already a positive.
the pound seats. If you purchase a property in SA for the exact same value as the UK and use an interest only UK bond, you will have a little to no monthly shortfall in the UK, which eradicates your risk, exposure, and fears. Compared to SA, where the same investment will display a jaw dropping monthly shortfall.
Being far from away from the UK and living in a fluctuating exchange rate with the Pound, is what scares South Africans. The possible monthly shortfall could catch up to them quickly if the Rand loses more to the Pound.
This comes back to high running costs in SA vs UK, the lower interest rate in the UK vs SA and the power of the interest only bond.
The truth is when you run the numbers and compare apples with apples, a property in the UK is in
LIO-International’s role in your UK investment property journey. Lio offers off plan property Developments and Buy-to-let Investment Properties to their South Africa clients with benefits.
Real Estate Investor Magazine DEC 2023/JAN 2024
112
Page 114
Open page 114 in the magazine →OFFSHORE
Main reasons to invest in the UK?
1. We reduce your risk with well researched assets.
We only source off plan Properties from the most trusted names in the industry, who have a proven track record. Confirming you are buying a solid asset and its brand new. By ensuring we work with house hold names, we eliminate risk. You will received a well-researched development, in the best location with well-known architects, designers and builders. Certifying their product is well located, market related and always pushing the boundary’s to attract the elite tenants.
2.We cover you with warranty insurance
New Off Plan properties in the UK offer a 10 year warranty insurance, which is taken out by the developer to cover any defects found, once the buyer moves in, further reducing risk. Being new apartments also means they are the most sought after in their respective areas. Distance is a major factor for us in SA and many buyers may never see the investment they purchase. To ensure peace of mind, our colleagues are on the ground in the UK, can do a video walk through of the show flat with you online or take you around in person.
3.We sweat the assets
We work closely with the developer to deliver all the facts to you. The imitate breakdown of the costs, floorplans, design elements, timelines and more. We recommend holding onto the investment for a few years, maximising the rental returns, enjoying the initial low maintenance requirements and exiting when the development is in full stride, to ensure the greatest capital growth. . This methodically works for foreign investors, like us, to guarantee we always keep our investment properties new, up-to-date and attracting the grade A tenants.
113
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 115
Open page 115 in the magazine →UNITED KINGDOM
4. We offer a turnkey solution
Rental managing agents are also crucial to your property investment. We offer a turn key solution. You will work closely with our trusted partners who will source the right tenant for you. Either for long or short term rental, furnished or unfurnished, depending on your requirement. Handle prospective property viewings, inspections reports with the tenant. Hold the tenants deposit. Collect the rental income and pay it over to you, with a statement.
It is vital to use their services. Rental agents always know the highest appropriate rental returns possible in market year on year and will warrant you are getting the most out of the rental market. Their fees as the same as in South Africa and will go a long way in ensuring piece of mind for the years you own the investment.
If you looking to financially immigrate to the UK, we can help you understand all the facts and figures and endless merits of investing in buy-to-let property in the UK.
ENQUIRE NOW
GUY GILLESPIE International Property Specialist Smart Global Property Investments
Real Estate Investor Magazine DEC 2023/JAN 2024
114
Page 116
Open page 116 in the magazine →OFFSHORE
UNLOCKING OPPORTUNITIES Namibia emerges as for South African
By Editorial
Namibia is a beautiful and diverse country with a stable political and economic climate, making it a prime destination for property investment. Thanks to its stable political climate and resilient economy, Namibia is a solid option for real estate investment. With a diversified economic structure that includes mining, agriculture, and tourism, it promises sustainable growth.
115
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 117
Open page 117 in the magazine →NAMIBIA
a prime destination property investors
Real Estate Investor Magazine DEC 2023/JAN 2024
116
Page 118
Open page 118 in the magazine →OFFSHORE
S
outh Africans are particularly drawn to Namibia due to its close proximity, similar culture, and affordable property prices. Schantal Teichmann, franchisee of
Just Property Windhoek and Just Property Swakopmund, shares her insights into why investing in Namibian property is a good idea for South Africans.
Four top reasons to invest in property in Namibia
1. Strong rental demand Namibia has a growing population and a thriving tourism industry, which means there is a high demand for rental properties.
2. Capital appreciation Property prices in Namibia have been rising steadily in recent years and are expected to continue to do so. According to “The Brief’ website, Namibia's property market has witnessed a staggering 1,258% surge in average housing prices between January 1990 and March 2023.
While the coastal and central house prices had diverged between 2016 and 2022, recent data from 1Q2023 indicates a narrowing gap, with coastal houses now the most expensive (averaging N$1.6 million), followed by the central area (N$1.5 million), the North (N$869,000), and the South (N$795,000).
3. Tax benefits Namibia has several tax benefits for property investors, such as no capital gains tax or inheritance tax. According to Henley and Partners, a leader in investment and citizenship “foreign residents are generally only taxed on the income they generate in the country.
117
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 119
Open page 119 in the magazine →NAMIBIA
What is more, tax rates are relatively competitive compared with many other emerging markets, particularly with neighbouring countries such as South Africa. The top rate of income tax in Namibia is a modest 37%, but perhaps most notably there are no capital gains, estate, gift, inheritance, or net wealth/worth taxes.”
4. Lifestyle-benefits Namibia offers a high quality of life, with stunning scenery, friendly people, and a variety of outdoor activities to enjoy.
Real Estate Investor Magazine DEC 2023/JAN 2024
118
Page 120
Open page 120 in the magazine →OFFSHORE
If you are a South African interested in investing in property in Namibia, the process is relatively straightforward as long as the property in question doesn't fall under the category of agricultural land. You will need to obtain a non-resident buyer's permit, which can be done through the Namibian Ministry of Home Affairs. Once you have your permit, you can start looking for properties and making offers.
could provide exclusive letting and administrative services, she started Just Property Windhoek in 2005 and later opened Just Property Swakopmund in 2021.
Just Property Windhoek is a leading real estate agency in Namibia with a team of experienced and knowledgeable agents who can help you find the perfect property for your investment needs.
How can South Africans buy property in Namibia? South Africans can buy property in Namibia through Just Property. We have two teams of experienced and knowledgeable agents who can help you find the perfect property for your investment needs, whether that be a home purchase, investment property, or rental property management.
Overall, property investment in Namibia is a wise choice for South Africans looking for a stable and profitable investment. With its strong rental demand, capital appreciation potential, and tax benefits, Namibia offers several advantages for property investors.
Frequently asked questions Schantal, has lived in Namibia her entire life. When she saw an opening for a company that
119
DEC 2023/JAN 2024 Real Estate Investor Magazine
“My love for people motivated me to help people find and manage investments so that they could grow their wealth through property,” she says. Below, she answers five questions that South Africans frequently ask her.
Just Property is a leading real estate agency in Namibia, with a team of experienced and knowledgeable agents who are passionate about helping our clients achieve their property goals.
Page 121
Open page 121 in the magazine →NAMIBIA
Main reasons why are South Africans buying property in Namibia?
•
Political and economic stability Namibia is a politically and economically stable country, with a strong democracy and a growing economy.
•
Close proximity Namibia is located just a short flight from South Africa, making it an ideal destination for holidays and second homes.
•
Similar culture Namibia has a similar culture to South Africa, with a diverse population and a relaxed lifestyle.
•
Affordable property prices Property prices in Namibia are generally more affordable than in South Africa, making it a good value-for-money investment.
Real Estate Investor Magazine DEC 2023/JAN 2024
120
Page 122
Open page 122 in the magazine →OFFSHORE
Finding the right property Windhoek is the capital of Namibia and the epicenter of all commercial trading. It is a modern and vibrant city with a lot to offer residents and visitors alike. Windhoek is also a great place to invest in property.
The city has a growing population and a strong economy, which is driving up demand for rental properties. Additionally, the Namibian government is investing heavily in infrastructure development in Windhoek, which is further boosting the property
market. The type of property will depend on each client’s individual needs and budget.
The process for purchasing property in Namibia is fairly straightforward for non-residents. As long as the property in question doesn't fall under the category of agricultural land most of property ownerships are freehold. Negotiations are always conducted within the listed asking price in Namibian dollar and South Africa's rand is also accepted as a form of currency in keeping with the exchange rate.
121
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 123
Open page 123 in the magazine →NAMIBIA
The first thing you need to do as a potential buyer is to get a good conveyancer. You will be represented by them and they will interact with the real estate agent behind the listing. Your conveyancer will then execute a Deed of Transfer for the purchase and the exciting journey commences!
Namibian Residence by Investment Programme The Namibian government is also actively seeking foreign investment to boost the country’s economic growth and diversify the economy. The programme provides numerous opportunities for international investors seeking a foothold and growth on the African continent, including tax incentives, financing, and a one-stop bureau service for international companies.
According to New World Wealth’s December 2022 statistics, Namibia holds USD 26 billion in total investable wealth. The average wealth of a resident of Namibia (wealth per capita) is USD 10,050, ranking as the third highest in Africa after Mauritius and South Africa. The nation is home to around 2,100 high-net-
worth individuals and three centimillionaires (with wealth of USD 100 million or more).
Group Head of Private Clients at Henley & Partners, Dominic Volek says, for a minimum real estate investment of USD 316,000 in the new luxury golf and eco-friendly President’s Links Estate in Walvis Bay, successful investors will receive a five-year, renewable work permit which gives them the right to live, do business, and study in Namibia.
The total private wealth currently held on the African continent is USD 2.1 trillion and is expected to rise by 38% over the next 10 years, according to the Africa Wealth Report, published by Henley & Partners in partnership with New World Wealth.
Namibia is expected to be one of Africa’s fastest growing markets going forward, with high-networth individual (those with wealth of USD 1 million or more) growth of over 60% forecast for the next decade (until 2032).
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
122
Page 124
Open page 124 in the magazine →R3 495 000
R1 665 000
123
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 125
Open page 125 in the magazine →RETIREMENT
125
PAGE
Five Expert Ways for a smooth downsizing experience into Senior Living
TRENDING ONLINE
What You Need To Know For Retirement
Six Trends That Will Define Retirement Property in 2023
Real Estate Investor Magazine DEC 2023/JAN 2024
124
Page 126
Open page 126 in the magazine →RETIREMENT
RIGHTSIZE YOUR Five Expert Ways for a experience into Senior
By Editorial
Retirement should not be considered as the end of a chapter, but rather the start of one! This is an exciting phase when the stress of work life is replaced by travel, hobbies, relaxation, and being more social. However, before embarking on this new adventure, it’s often necessary to downsize to accommodate this new lifestyle.
125
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 127
Open page 127 in the magazine →LIFESTYLE
RETIREMENT smooth downsizing Living
Real Estate Investor Magazine DEC 2023/JAN 2024
126
Page 128
Open page 128 in the magazine →RETIREMENT
“T
here is a definite trend in South Africa to retire in secure estates where community, activities and healthcare are all in easy reach,” explained Jonathan Acutt, Managing Director of Acutts Real Estate. “This move does usually require downsizing from a larger family home into a more convenient space. This can be an incredibly stressful and emotional time as you part with possessions you’ve lived with for years.
Five ways to make this a much easier process. 1. Find your ideal home The first step is to find the right home for one’s retirement needs. You will need to consider location, access to amenities, healthcare services, and any other services and facilities to enhance your lifestyle in retirement years.
Many estates also have options ranging from apartments and maisonettes to free-standing homes, depending on your preference. Once you’ve found the home, you will have a clear idea of the space you’re working with and what you can bring with you.
127
DEC 2023/JAN 2024 Real Estate Investor Magazine
2. Consider the services One of the major benefits of living in a Senior Living estate is that you are relieved of your maintenance duties, and this extends to the garden as well. This means that you won’t need to bring your heavyduty gardening and cleaning equipment with you, as the estate garden and maintenance team will handle everything.
3. Start as early as possible Most things are best not left until the last minute and downsizing is one of them. The most effective way to get through the process is to start chipping away by donating and selling items you won’t be taking with you now. There might be friends and family who would love to give some of your furniture a new home, or you can make some extra cash by selling items.
4. Try categorising When going through household items, it’s best to separate them into items you’re going to keep, those you’re going to donate or discard, and finally those you want to sell. If you’re retiring to an estate, there’s likely to be
Page 129
Open page 129 in the magazine →SENIOR LIFESTYLE LIVING
facilities such as a clubhouse where you can host gatherings. This means you won’t need to keep that additional crockery, cutlery, and glassware, which frees up a lot of space.
5. Remember the benefits Many people find the process of downsizing quite freeing. You start to realise that the less ‘stuff’ you have, the less you have to worry about. It’s also important to focus on the emotional benefit that comes
with downsizing from a big home into a secure, lock-upand-go option. If you want to go visit family, go travelling, or simply get away for the weekend, you can do so.
Acutt concludes that, “When considering downsizing to a secure lifestyle estate, consider all the important priorities you seek such as state-of-the-art security, access to high-end facilities, nature walks, on-site healthcare, and welcoming clubs and communities.”
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
128
Page 130
Open page 130 in the magazine →Chester Finance
Cullinan Financial Services
PROPERTY FINANCE:
Key Criteria: Facility size >R2m First covering mortgage bond over property Ability to service the monthly interest (capital repayments are optional)
PROPERTY REFINANCING
PROPERTY REFURBISHING
PURCHASING A PROPERTY
PROPERTY DEVELOPMENT
WHY USE US?
Interest-only terms Flexibility on the tenor Fast decision-making process Competitive pricing
129
DEC 2023/JAN 2024 Real Estate Investor Magazine
JHB: 010 492 4880 • CT: 021 409 1632 | www.chesterfinance.co.za | info@chesterfinance.co.za
Page 131
Open page 131 in the magazine →WEALTH
131
PAGE
Exploring the Wealth- Enhancing Benefits of Trusts for Estate Planning & Protection
135
PAGE
Deciding when it's right to sell your Residential Property
TRENDING ONLINE
What You Need To Know For Retirement
Real Estate Investor Magazine DEC 2023/JAN 2024
130
Page 132
Open page 132 in the magazine →WEALTH
SECURING YOUR LEGACY Exploring the of Trusts for Estate
By Editorial
A trust is a legal entity with separate and distinct rights, like a person or corporation. In a trust, a party known as a trustor gives another party, the trustee, the right to hold title to and manage property or assets for the benefit of a third party, the beneficiary.
131
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 133
Open page 133 in the magazine →TRUSTS
Wealth-Enhancing Benefits Planning & Protection
Real Estate Investor Magazine DEC 2023/JAN 2024
132
Page 134
Open page 134 in the magazine →WEALTH
T
rusts can be established to provide legal protection for the trustor’s assets to ensure they are distributed according to
their wishes. Additionally, trusts can save time, reduce paperwork, and sometimes reduce inheritance or estate taxes.
Two main reasons for using Trusts
•
•
To protect against unforeseen events that could result in one’s hardearned wealth being attached by creditors. To protect against the financial impact of death, which includes costs related to one’s estate such as Estate Duties and Capital Gains Tax
To achieve that, your Personal Wealth should either be acquired within a Trust structure from the outset, or your existing Personal Wealth can be moved from your Personal Capacity to a Trust.
Three ways you can transfer wealth to a Trust. These are by way of Donations, Transfer on Loan Account or by effecting a Capital Contribution.
1. Donations The easiest way of transferring wealth to a Trust is through donations, as you are essentially ‘giving’ the asset to the Trust. A Donation results in your Personal Wealth being diminished, and the Trust’s wealth increasing in respect of the asset transferred.
133
DEC 2023/JAN 2024 Real Estate Investor Magazine
If you could, you could then simply donate all your wealth to the Trust, as in this way, your Personal Wealth would diminish to zero and the wealth would have been effectively transferred to the Trust. Unfortunately, even casual donations are subject to a tax called Donations Tax at a rate of 20% (25% for amounts over R30milion). Fortunately, each person can donate up to R100,000 per tax year free of Donations Tax, but this is often not enough to transfer all wealth to the Trust.
2. Transfers on loan account An alternative method, which in the case of assets, involves the sale of such assets to the Trust. The Trust does not typically pay for the Assets, and therefore the sale
Page 135
Open page 135 in the magazine →TRUSTS
creates a Loan Account whereby the Trust owes you an amount equivalent to the value of the assets sold/purchased.
complicates tax efficiencies between yourself and the Trust with whom you have a Loan Account.
Such transfers are not subject to tax, and are unlimited, however there are two main pitfalls that apply: • The Loan Account in your favour from the Trust is an Asset in your hands. The Loan Account therefore could be subject to taxation on death and is attachable by creditors. • The Loan Account could be subject to anti-avoidance tax laws. Such anti-avoidance laws revolve around Interest that should be charged on the Loan Account – the impact hereof is that Interest must be charged on the Loan Account which
3. Capital Contributions This is the last method. This is a highly technical form of transfer that is beyond the scope of a mailer, but is really effective when handling large amounts of wealth.
It is important to understand that the process of effectively transferring your wealth to a Trust is not a simple process and could take some time to achieve depending on the size or complexity of your wealth. It is however a journey that results in the ultimate protection of wealth against litigation and costs upon death.
ENQUIRE NOW
Real Estate Investor Magazine DEC 2023/JAN 2024
134
Page 136
Open page 136 in the magazine →WEALTH
TIMING THE PROPERTY Deciding when it's right Residential Property
By Brendan Michie
Whether or not South Africa will experience a buyer’s or seller's market for property in 2024 is challenging to predict, but several factors point towards a potential buyer’s market for some time to come. The economy is expected to remain weak, which will reduce the number of prospective homebuyers due to affordability constraints.
135
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 137
Open page 137 in the magazine →SELLING YOUR ASSETS
MARKET to sell your
Real Estate Investor Magazine DEC 2023/JAN 2024
136
Page 138
Open page 138 in the magazine →WEALTH
H
igh interest rates will lead to higher borrowing costs, indicating a market where buyers may have more bargaining power to potentially lower prices. On the other hand, a shortage of affordable housing in certain areas could push property prices higher, potentially supporting a seller’s market.
Either way, it is important for potential sellers to monitor evolving market conditions and educate themselves as much as possible on all aspects relating to the sale of their property.
One of the questions that arises most frequently for potential sellers is timing: ‘when is it too soon to sell a property you’ve bought?’ While there is no hard-and-fast rule when it comes to giving a definitive answer, we’ll briefly unpack the main factors involved in making the decision for yourself.
Timing - how soon is too soon to sell my property? Deciding when to sell a house you've bought depends on a few key considerations. 1. Market conditions matter—if the property market is down,
137
DEC 2023/JAN 2024 Real Estate Investor Magazine
selling at a good price might be difficult. 2. Your financial situation is a critical factor; selling at a loss may lead to a shortfall owing to your bank, especially if you’ve taken a large mortgage.
Your personal circumstances also play a role; selling due to a specific need might necessitate a quicker sale. Generally speaking, the longer you can hold onto your house after buying, the better for your financial health.
More time lets you build more equity (the difference between how much you owe on your mortgage and the home’s value) and take advantage of potential home value growth, while ensuring you can cover the costs associated with the sale of property.
Financial - what are the penalties or costs involved if I sell too soon? For some, unforeseen circumstances like loss of income or urgent relocations may require a faster sale. You might be forced to accept a lower price than you anticipated, or you might not make as much of a profit as you’d expected.
Page 139
Open page 139 in the magazine →SELLING YOUR ASSETS
Understand the hidden costs & penalties with selling your house
1. Bond cancellation fees Charged by your bank's nominated attorney to cancel your bond to allow the sale of the property.
2. Compliance certificates Required by law for a valid sale - such as electrical, solar and gas compliance certificates, the cost of which vary depending on the type of certificate and the condition of the property.
3. Estate agent fees These are the fees that estate agents charge to act as an intermediary between the seller and buyer, usually calculated as a percentage of the sale price.
4. Other legal and tax costs Such as legal assistance with any disputes that arise during the sale process. Furthermore, if the property is not used as your primary home, you may be liable to pay capital gains tax on the sale.
5. Clearance certificates A rates or levies clearance is a certificate provided by the relevant local authority, or complex/estate, on application by a conveyancer to transfer a property. This document certifies that there is no current outstanding debt due by the seller on the property.
Real Estate Investor Magazine DEC 2023/JAN 2024
138
Page 140
Open page 140 in the magazine →WEALTH
Practical - what needs to be one before you sell?
To sell your house successfully, there are some basic steps you can follow. First, understand why you're selling and set a realistic price based on expert advice. Know your target audience and hire the right estate agent. Study the current property market and demand in your area. Consider factors like location, condition, and price that affect the sale.
Learn about the selling process and stay informed. Make sure your legal and financial affairs are in order and seek advice if necessary. Don’t forget to consider the time of year, the economy, and mortgage options available to potential buyers. Paying attention to these details will increase your chances of selling your house at a good time for a good price.
When should you not sell and why?
Here are some specific examples of when it may be too soon to sell a house you've bought: 1. If you have only made a small down payment and you still owe a large amount on the bond. 2. If you have made significant improvements to the house, but have not had time to recoup this investment. 3. If you have to sell the house at a loss, and you will not be able to cover your costs. 4. If you are selling the house for a specific reason, such as to move closer to work, and you are not sure if you will be able to find a suitable replacement property.
139
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 141
Open page 141 in the magazine →SELLING YOUR ASSETS
If you are unsure whether or not it is too soon to sell your house, it is always best to err on the side of caution and seek professional advice from an attorney to help
you evaluate all your options or a reputable estate agent who is a specialist in the area where your property is situated.
ENQUIRE NOW
BRENDAN MICHIE Director Hammond Pole Attorneys
Real Estate Investor Magazine DEC 2023/JAN 2024
140
Page 142
Open page 142 in the magazine →NEWS UPDATES & ANNOUNCEMENTS
Fairvest Generates Robust Performance in a challenging environment
Fairvest Limited a JSE and A2X-listed SA REIT (Real Estate Investment Trust) and the largest South African-focused property fund with a portfolio worth R12 billion • Fairvest Limited announced results for the year to 30 September 2023 with • The Group’s stated strategic objective remains to continue its move towards a retail-focused fund by disposing of non-core assets. • Chief Executive Officer Darren Wilder said: “Fairvest has made excellent progress to de-risk its balance sheet, reduce vacancies and dispose of non-core assets.
•
•
•
•
Fairvest experienced positive letting activity and a strong performance from the portfolio. Vacancies decreased from 5.9% in the prior year to 4.5% at 30 September 2023 He was pleased with its disposals of just under R1 billion this year, as well as achieving like-for-like net property income growth and positive rental reversions. He said, ‘This is notwithstanding exceptional headwinds in the form of a weak economy, high interest rates and sustained load shedding.’ He said that Fairvest is operationally strong and agile in a rapidly changing environment.
WeWork South Africa is not affected by WeWork reorganisation
Following WeWork’s announcement to commence a strategic reorganisation process in the U.S. and Canada, WeWork South Africa confirms that it is not part of the North American process.
141
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 143
Open page 143 in the magazine →NEWS UPDATES & ANNOUNCEMENTS WESTERN CAPE
“WeWork South Africa is 100% independently owned by SiSebenza, and operates independently from WeWork in the US and Canada,” say Andrew Robinson and Stefano Migliore, the owners of WeWork South Africa. “Importantly, as an independent entity, we are not part of this strategic reorganisation process and there will be no impact on our members, vendors, employees, and real estate partners.”
“While our counterparts work to improve their business’ economics, position their community to grow, and enable their company to continue delivering best-in-class services to its members, our operations remain unchanged. We will continue to provide the service and experience our members have come to expect from us,” adds the local South African team whose focus is on expanding the WeWork brand into Ghana, Kenya, Mauritius, Nigeria, and growing its presence in South Africa.
Half a dozen Best in SA awards for Waterfall City
At the African Property Awards ceremony held at the exclusive Habtoor Grand Resort in Dubai on 19 October 2023, Waterfall Management Company received the Best Mixed-use Development in South Africa 2023- 2024 award for Waterfall City. This is the ninth time in a decade that the development has been honoured with this title.
Other Best in SA 2023-2024 accolades garnered by Waterfall City at the event included Best Mixed-use Architecture, Best Development Marketing and Best Developer Website, with the latter two accredited to both Waterfall Management Company and Attacq, the strategic development partner of Waterfall City. These four awards are testament to the continuous evolution of this vibrant smart city in the heart of Gauteng.
Real Estate Investor Magazine DEC 2023/JAN 2024
142
Page 144
Open page 144 in the magazine →NEWS UPDATES & ANNOUNCEMENTS
Redefine Properties showcases remarkable performance in a challenging environment.
Redefine a leading SA REIT has released its financial results for the year ended 31 August 2023. Key Takeaways:
1. Robust Financial Performance: Redefine Properties reported a distributable income of R3.5 billion, representing 51.53 cents per share for the year, surpassing the midpoint of their guidance range of 48 to 52 cents per share. 2. Strong Portfolio Growth: Redefine's asset portfolio increased by R7.9 billion during the year, reaching a current value of R96.8 billion. 3. Healthy Dividend Increase: The company declared a full-year dividend of 43.80 cents per share, despite challenges in the market. This reflects Redefine's strong liquidity position.
143
DEC 2023/JAN 2024 Real Estate Investor Magazine
Page 145
Open page 145 in the magazine →NEWS UPDATES & ANNOUNCEMENTS WESTERN CAPE
4. Stable Balance Sheet: Despite market volatility, Redefine maintains a stable and healthy balance sheet with a loan-to-value ratio of 41.1%. The company also has substantial short-term liquidity headroom of R5.5 billion. 5. Resilience in Rising Interest Rates: Redefine is well-protected against rising interest rates with 77.1% of total Group debt being well-hedged. This positions the company to withstand the impact of an "interest rate environment." 6. 6.4% Increase in Net Asset Value (NAV): Despite challenges in the property market, Redefine achieved a 6.4% increase in Net Asset Value (NAV) to R7.66 per share. 7. Operational Excellence: Redefine's focus on operational efficiency is evident in a collection ratio of 101%, demonstrating their ability to generate cash flow consistently. 8. Positive Outlook in Poland: Despite geopolitical tensions and inflation challenges, Redefine's retail assets in Poland have performed well, showcasing the potential for growth and stability. 9. Stabilised Local Portfolio: Redefine's local portfolio has largely stabilised, with improvements in key operating metrics, tenant retention, and vacancy rates, positioning the company for organic growth. 10. Adaptation and Opportunity: Redefine successfully addressed challenges in the market by diversifying funding sources through green bonds, reducing energy consumption, and investing in renewable energy.
CEO Andrew König says, "We have adapted and responded to challenges, strengthening our business as a result. We are not landlords; we are people."
Real Estate Investor Magazine DEC 2023/JAN 2024
144
Page 146
Open page 146 in the magazine →new magazine
Page 147
Open page 147 in the magazine →info@rei.co.za
Don't miss our next edition February 2024