Real Estate Investor Magazine
February 2024 edition: full text
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FEBRUARY 2024
HOSPITALITY INVESTMENTS
The rise of Sectional Title ownership
PROFITABLE ENHANCEMENTS
Optimising property value before sale
MASTERING LEGAL EVICTIONS
Step-by-Step Guide to serve notices effectively
GAUTENG PARTNERSHIP FUND
CEO Lindiwe Kwele: Advancing Equality in Gauteng's Human Settlements
Investor’s Haven
Strategic Location, Corporate Allure: Your Next Wise Investment”
- 170 On Grosvenor’s modern exterior. - Residents enjoying co-working spaces and the inviting coffee bar. - Swimming pool, a tranquil oasis within the development.
Explore 170 On Grosvenor, where 60% of units are already claimed. Besides luxurious living, this development strategically meets the demand from medium to large corporations in the area.
Why Invest: Strategically positioned for professionals, the development ensures consistent demand. Proximity to business hubs like Bryanston Country Club makes it a lucrative choice for investors seeking immediate returns and longterm appreciation.
Unit Types: From cozy 1-bed havens to spacious 3-bed gems, units cater to corporate tenants seeking upscale living.
Benefits: Corporate rental stability, location appreciation, and an appeal to professionals make 170 On Grosvenor an investor’s dream.
Secure your stake at 170 On Grosvenor, where
luxury and strategic investment converge.
Contact us at 010 824 5992 or visit
AHPROP.CO.ZA for personalized insights.
Your journey to financial prosperity starts here –
claim it now!
---
170
On Grosvenor
Elevate Your Investment
Portfolio
REI TEAM
EDITORIAL CONTRIBUTORS
Founder & Editor-at-Large
NEALE PETERSEN neale@rei.co.za
Website Specialist
GRAHAM MILLER graham@rei.co.za
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Digital Strategist
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CONTRIBUTORS
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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.
FEBRUARY 2024
rei.co.za
February 2024 - Issue #164
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.
HOSPITALITY INVESTMENTS
The rise of Sectional Title ownership
PROFITABLE ENHANCEMENTS
Optimising property value before sale
MASTERING LEGAL EVICTIONS
Step-by-Step Guide to serve notices effectively
GAUTENG PARTNERSHIP FUND
CEO Lindiwe Kwele: Advancing Equality in Gauteng's Human Settlements
COVER IMAGE: Lindiwe Kwele CEO of Gauteng Partnership Fund (GPF)
MEDIA KIT
Media Kit
2024
DIGITAL TRANSFORMATION IS
CHANGING REAL ESTATE
Real Estate Investor Magazine FEB 2024
4
EDITORS VIEWPOINT
Embracing change: Shaping a better property market and world in 2024!
A
s we usher in 2024, a pivotal year for change, the call for transformative action in the South African economy and property market is louder than ever. Despite facing challenges in the past like financial crises, a pandemic, and municipality and governance issues, opportunities abound.
Semigration trends, particularly in the Western Cape, continue to shape the market landscape. Coastal suburbs, especially in Cape Town, and up to Plettenberg Bay are all poised for robust growth. Time Out ranked Cape Town as the second-best city globally in 2024 after New York. Ranking ahead of the likes of Berlin, London, Madrid and more.
Renowned economist Dawie Roodt underscores the importance of informed decision-making and wealth preservation in navigating the challenges of 2024. Despite South Africa's issues, such as economic struggles, political instability, crime rates, and infrastructure challenges, Roodt believes there are compelling reasons to remain. The country's exceptional weather, natural beauty, inviting beaches, renowned wine regions, and warm culture are
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FEB 2024 Real Estate Investor Magazine
undeniable advantages. To thrive in the evolving global landscape, individuals must equip themselves with the necessary skills and technology.
As we navigate this dynamic environment, remember that property investing is not just about market cycles; it's about mindset. Triumph in real estate requires tenacity, humility, and an unwavering commitment to overcoming obstacles.
Here's to successful investing in the year ahead! Tenacity, humility, and an unwavering commitment to overcome obstacles.
Founder & Editor-In-Chief
Neale Petersen
by Neale Petersen
MASTER QUOTE:
“We can change the world and make it a better place. It is in our hands to make a difference.” - NELSON MANDELA
Real Estate Investor Magazine FEB 2024
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CONTENTS
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
INVESTING
37
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
FINANCE
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FEB 2024 Real Estate Investor Magazine
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
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37
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FEBRUARY 2024
#164
79
87
TRANSFORMING DATA INTO COMPETITIVE EDGE - Augmenting AI with generic & proprietary insights PROTECT YOUR RENTAL AGENCY - Unraveling the risks of Business Email compromise
COMMERCIAL
95
101
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
TECHNOLOGY
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
RETIREMENT
125
RIGHTSIZE YOUR RETIREMENT - Five Experts Ways for a smooth downsizing experience
WEALTH
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
NEWS
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
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Real Estate Investor Magazine FEB 2024
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NEWSSTAND ARCHIVES
UNLOCKING PROPERTY HOT SPOTS
Prime Investment Opportunities in a stable interest rate landscape
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rei.co.za
rei.co.za
DECEMBER 2023/JANUARY 2024
OCTOBER/NOVEMBER 2023
SEPTEMBER/OCTOBER 2023
CAPITALISE ON THE HYBRID WORKING BOOM
Property Owners Leverage Rapid Growth
RIVERLANDS
GET IMMEDIATE RETURNS
TENANTS, LANDLORDS & PROPERTY MANAGERS
PROPTECH’S POTENTIAL
SENIOR LIVING INVESTMENT GUIDE
Your 6-Step Guide to profitable investing
Former Bok star shares secrets to UK success
Unveiling Cape Town's New Urban Oasis: David Cohen unpacks the upside of this visionary new growth node
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5 Proven Strategies for savvy investors
BRYAN HABANA INTERVIEW
STRATEGIC PROPERTY MASTERY
Navigating risks & reaping rewards
OFF-PLAN INVESTMENT
4 Trends to keep your eye on
BLUE TITAN INVESTMENTS
Marco Gerazounis’ strategy for maximising investor returns
Who is responsible for what in a rental relationship?
9 Essential Considerations for Retirement Home Investment
UNLOCKING UK PROPERTY INVESTMENT
A novice guide for South African investors Renovation Project
INVESTMENT CASE STUDY
Profitable Guesthouse Renovation Project
REDWOOD ESTATE
The visionaries behind the new boutique connected living estate.
DEC 23/JAN 24
OCT/NOV 23
SEPT/OCT 23
MAY/JUNE 23
APR/MAY 23
MARCH/APR 23
FEB 2024 Real Estate Investor Magazine
rei.co.za
rei.co.za
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AUGUST/SEPTEMBER 2023
JULY/AUGUST 2023
JUNE/JULY 2023
OFFICE OWNERSHIP
RETIREMENT PROPERTY
INVESTING IN SOLAR
THE BIGGEST LIE IN PROPERTY
Unveiling the long-term advantages of owning your workspace
Illuminating the decision: Is solar still a wise investment?
5 Convincing reasons to jumpstart your investment now
Debunked: The truth behind property ownership myths
WEALTH MASTERS CLUB
Unveiling Coert Coetzee's distinctive property investment strategies
INVESTING OFFSHORE
How Shared Accommodation is a housing solution
RESIDENTIAL & INVESTMENT CONFERENCE
Uniting & Empowering our residential property future
GUIDE TO EVICTION LAWS IN SA
Understanding tenant’s rights & Landlord responsibilities
ACCELERATE YOUR PROPERTY BUSINESS
7 Time Saving tips to propel you to the next level
WOMEN IN PROPERTY Celebrating success in Women’s Month
RESIDENTIAL RETURNS
FUTURE PROOF YOUR WEALTH
Unravelling truth from fiction
INTEREST RATE HIKE
Crafting a Will for every stage and age of life
An essential 3-Step Guide to navigate risk
MASTERING TECHNOLOGY
Which hybrid lifestyle is best for you?
RAEL LEVITT The journey of a tenacious climb,
humbling fall, & triumphant return of Inospace’s founder
AUG/SEPT 23
JULY/AUG 23
JUNE/JULY 23
FEB/MARCH 23
DEC 22/JAN 23
NOV 22
Real Estate Investor Magazine FEB 2024
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ASK THE EXPERTS
Strategic Wealth Creation: Achieving 15% ROI in Impactful Distressed Property Investments
MEET OUR GUEST EXPERT
“I
've been exploring impact investment and distressed properties, owning three properties already. My primary goal is to get a minimum 15% upfront return on investment, coupled with positive monthly cash flow post-expenses.
With R150,000 to invest and a clean credit record, my focus is exclusively on Cape Town market right now. How can I initiate my investment journey in this sector? Your guidance is highly appreciated?”
T
Thank you for sharing your investment objectives with us. Based on the information provided, we recommend the following steps to help you going forward.
1. Assessment of your Current Portfolio: We will start the process
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FEB 2024 Real Estate Investor Magazine
DANIEL LOMBARD Director Assist Group
by evaluating your existing property portfolio through a complimentary Investor consultation. We determine the equity locked in your portfolio. We assess the net rental yields of your current properties. We identify the amount available for utilisation without jeopardising your portfolio's stability.
2. Establishing your Investment Goals: During the consultation, we'll work with you to define your property investment goals. We get to understand the time required to achieve these goals. We devise a suitable property investment strategy aligned with your objectives. 3. Allocation of Opportunities: We utilise the information gathered to allocate investment opportunities within the parameters of your goals. Regarding your specific inquiries, here's how we can address your needs below.
Got Questions? We've got Answers! Send your queries to info@rei.co.za or drop them on our vibrant community on Facebook or LinkedIn. Our team of experts is ready to assist you.
4. Buy and Leaseback Products: All our Buy and Leaseback products guarantee positive cash flow from day one.
For Example: A transaction of R 1 million with a R 150,000 deposit and R 850,000 bond results in a monthly bond payment of R 8,919 (@ prime -0.5% lending rate – 11.25%).
Net Rental Income amounts to R 11,458 monthly after deducting municipal rates, taxes, levies, management costs, and maintenance. Net income after the bond payment is R 2,479 per month.
5. Triple Net Leases: All our Buy and Lease Back leases operate on triple net leases. This means that even in the face of interest rate hikes, increased levies, municipal rate changes, or necessary maintenance, the tenant assumes
responsibility, ensuring your cash flow remains unaffected.
For our Prevu (Premier investors who have entrusted us with identifying investment opportunities), we offer a personalised approach. you have the liberty to specify their preferences regarding geographic areas and key metrics related to potential opportunities.
In turn, we exclusively present you with choices that align with their specified criteria. This tailored service ensures that our investors receive options that directly match their interests and requirements.
We eagerly anticipate supporting you in reaching your investment goals.
LEARN MORE
Real Estate Investor Magazine FEB 2024
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MASTER INVESTOR
LINDIWE KWELE: A Purposeful journey of Transforming Communities with honour and lasting impact
By Neale Petersen
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LINDIWE KWELE
Lindiwe Kwele, a dynamic leader, serves as the Chief Executive Officer (CEO) of the Gauteng Partnership Fund (GPF). At the core of their mission is the commitment to realising the government's constitutional imperative of fostering spatial transformation. With a vision deeply rooted in equality and fair access to urban resources, the GPF is dedicated to facilitating the development of integrated and sustainable human settlements in Gauteng.
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MASTER INVESTOR
H
er journey into the property industry was sparked by a pivotal moment when she assumed the responsibility of spearheading catalytic programs in the City of Tshwane. It was during this time that she realised the transformative power embedded in various facets of the property sector - a force capable of shaping spaces into inclusive, vibrant, and liveable environments.
Motivated by a desire to influence how the state harnesses its levers for transformation, Lindiwe's true passion lies in being an instrumental part of a solution that empowers individuals to achieve their dreams. Her vision extends beyond personal success; she aspires to create a lasting legacy that empowers numerous property developers.
Lindiwe envisions a ripple effect where these developers, in turn, generate sustainable economic opportunities for others, fostering a cycle of empowerment and growth within the industry. Lindiwe’s dedication to leaving a positive impact underscores her commitment to both the transformation of spaces and
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the upliftment of individuals, ultimately contributing to a more prosperous and equitable future.
In addition to prioritising her time, Lindiwe places a premium on her health. Setting clear boundaries, she adheres to these limits to ensure a sustainable and fulfilling life both within and outside the professional sphere. This commitment to balance reflects not only her resilience but also her determination to foster a harmonious lifestyle.
LINDIWE KWELE
Work-life balance Navigating the delicate balance between her professional and personal life, Lindiwe employs a strategic approach that centres on prioritisation. For her, the foundation lies in placing God first, followed by a dedicated focus on family, and then the demands of her work. This deliberate order serves as a compass for maintaining equilibrium.
She draws immense satisfaction from the impact her work has on society. She takes pride in contributing to economic inclusion, spatial justice, and transformation, all of which collectively enhance human dignity. This profound sense of purpose fuels her dedication to her role, making her job not just a profession but a meaningful contribution to the broader well-being of society.
Above and beyond In addition to her impressive career, Lindiwe has authored a compelling book titled 'Above
Real Estate Investor Magazine FEB 2024
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MASTER INVESTOR
and Beyond.' The profound message of this empowering literary work is encapsulated in the insightful words of Carlton Fis: "It is not what you achieve but what you overcome."
Ambitious, driven, and socially and politically aware, Lindiwe draws on her strong convictions and innate ideals to transcend discrimination and racism, shaping a remarkable career. As a proud daughter of Africa, she navigates the professional landscape with integrity and grace. However, her journey is not without its challenges, echoing the injustices faced by many women in the unpredictable realms of business and public service.
Confronted by unscrupulous colleagues, scurrilous journalism, and corporate betrayals, Lindiwe finds herself entangled in a political chess game, compelled to fight for her very existence. Undeterred and fortified by her personal convictions, she turns to God's Word for strength. Lindiwe takes the higher ground, confronts her detractors, and emerges victorious.
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Her story in her book serves as a testament to the resilience of the human spirit, demonstrating that we are more than the sum of our career achievements, bank balances, or social status. Surrendering to a higher purpose and allowing the guidance of the Holy Spirit, Lindiwe Kwele not only triumphs over adversity but also leads a fulfilled and inspiring life, showcasing the transformative power of faith and determination.
Where it all started Originating in the town of KwaDukuza (Stanger), Kwa- ZuluNatal, Lindiwe's educational journey began at Aldinville Primary School in Groutville. Progressing to Sacred Heart Girls College after primary school, she successfully matriculated in 1991.
LINDIWE KWELE PROFILE
Family: Wife and Mother of 3 children Qualifications: MBA, ABP, Executive (Economics & Public Administration) Hobbies: Golf, Gardening, Hiking Favourite Books: • The Holy Bible • Why Africa is poor and what Africans • 48 Laws of Power by Robert Greene • The Monk who sold his Ferrari by
LINDIWE KWELE
Lindiwe then pursued her higher education at the University of Durban in Westville (now UKZN), earning a B.Admin majoring in Economics, Industrial Psychology, and Public Administration.
Driven by a quest for continuous learning, Lindiwe undertook an Advanced Business Programme with the Technikon Natal Business Studies Unit. Her academic pursuits reached new heights as she earned an MBA from the esteemed University of Wales.
Science (GIBS). Lindiwe's educational and professional journey reflects her dedication to knowledge acquisition and leadership development, paving the way for a trajectory marked by expertise and accomplishment.
Career journey Embarking on a journey marked by commitment and service,
Demonstrating a commitment to leadership excellence, Lindiwe, after several years in diverse executive roles, further honed her skills through an Executive Leadership Programme with the Gordon Institute of Business
(1 boy & 2 girls) Leadership Program, B.Admin can do about it by Greg Mills Robin S. Sharma
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MASTER INVESTOR
Kwele's professional odyssey began as a junior researcher/ coordinator at the Institute for Democratic Alternative in South Africa (IDASA). In this role, she witnessed first-hand the dynamic shifts accompanying the political transformation in South Africa.
A pivotal chapter in Lindiwe’s career unfolded when she joined the Truth & Reconciliation Commission of South Africa (TRC), which was tasked with investigating and capturing gross human rights violations during the Apartheid regime.
This experience became a poignant turning point in Lindiwe's life, instilling in her a profound appreciation for the sacrifices made by selfless South Africans to secure the freedom enjoyed today. Her subsequent roles spanned diverse sectors, including the CCMA, Eskom Distribution, and a brief stint at Mondi Paper in Middle Management. Lindiwe's career trajectory then ascended to executive positions, showcasing her leadership prowess. Her journey led her to serve in various impactful roles, including Head of Business Support Unit
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at Ethekwini Municipality, CEO of Durban Tourism, CEO of Joburg Tourism, Deputy City Manager at the City of Tshwane, and GCOO at the South African Post Office. Today, Lindiwe Kwele holds the esteemed position of CEO at the Gauteng Partnership Fund (GPF), where she continues to contribute significantly to the development and transformation of human settlements in Gauteng.
The property journey to what she considers significance, where her purpose is to meaningfully impact society, began to take shape during her tenure with the City of Durban. Here, she successfully translated their vision into tangible outputs for the city, fostering a robust economy propelled by Tourism, the Automotive Sector, Property, and Trade & Investment.
Moving forward, her trajectory led me to the City of Joburg, where she became part of an exceptional team under Mayor Masondo. The synergy was palpable, and the city experienced an upward trajectory during this time.
Transitioning to the City of
LINDIWE KWELE
Tshwane, they embarked on ambitious plans, initiating the Inner City Regeneration Program with a focus on property redevelopment. Leading the first PPP project, Tshwane House, she served as a catalyst for inner city regeneration, although their vision to expand the Government Boulevard was curtailed after the 2016 Local Government Elections.
The challenge and opportunity presented by the South African Post Office (SAPO) marked another significant chapter. Acknowledging the global decline in postal services, we crafted an ambitious turnaround plan, pivoting toward Fintech and
eCommerce. Unfortunately, these plans faced obstacles due to differing strategic directions.
Amidst these professional highs and lows, one of the greatest challenges she encountered was when her professional integrity was put to the test. However, with unwavering faith, she persevered, and as the saying goes, good always triumphs over evil. In retrospect, each milestone and challenge has been a stepping stone in a journey guided by purpose and a commitment to making a positive impact. Challenges for women in leadership As a woman in the industry,
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MASTER INVESTOR
Lindiwe encountered significant setbacks, faced failures, and navigated numerous challenges throughout her career. Professionally, these challenges ranged from dealing with difficult and narcissistic individuals, contending with toxic workplace cultures, managing a workforce that struggled to adapt and resisted change, to staying agile in the face of technological advancements, coping with pressure, and confronting sexism, ageism, persecution, micro-aggressions, and toxic masculinity.
In overcoming these hurdles, she found solace and strength in the belief in emotional intelligence. Understanding that hurt people hurt people, she had embraced the importance of empathy and compassion, even in challenging situations. Acknowledging that we all have blind sports, she's made a conscious effort to invest in selfmastery, continuously learning and growing to better navigate difficult and toxic work environments.
The key lesson she has taken away is the significance of
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emotional resilience and selfawareness. By prioritising these qualities, she has been better equipped to respond effectively to adversity and foster a healthier work environment for herself and those around her. In a landscape where challenges are inevitable, the commitment to continuous self-improvement and emotional intelligence has proven invaluable in overcoming the complexities of the professional world.
Leadership style Lindiwe's leadership philosophy centres on leading by example, setting clear expectations, and empowering staff to make decisions while taking ownership of their work. She values empowerment and giving her team freedom but underscores it with responsibility and accountability. Friendly yet firm, empathetic, and decisive, Lindiwe encourages strategic thinking and upholds integrity. She inspires individuals to leverage their innate potential and be their best selves.
Her advice for aspiring entrepreneurs, property investors or business professionals
LINDIWE KWELE
looking to make a mark in the industry is to first understand the complexities of the industry, learn the craft and be hands on and if possible, find a mentor so that they don’t commit the same mistakes or reinvent the wheel.
For investors, she suggest that they do proper due diligence and feasibility studies before venturing into the industry.
Going forward she sees the GPF as being a leading and trusted implementing agency for the Gauteng Provincial Government, a self-sustainable entity that epitomises a culture of excellence and innovation. A caring GPF with a happy and committed workforce, a GPF that brings out the best in each and every employee.
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MASTER INVESTOR
Q & A WITH LINDIWE
1. What do you enjoy most about property and leading the company? Property is about human dignity and I enjoy seeing ordinary people in communities receiving title deeds, as this creates an economic cushion for future generations. I enjoy being part of a collective that is intentional about delivering the mandate of spatial transformation within the Gauteng Province, while empowering entrepreneurs and restoring dignity to communities.
2. What unique strategies or approaches have you implemented to differentiate from your competitors and to add value? Our Corporate Strategy centres on ESG and impact investing, prioritising diversified revenue enhancement. We offer innovative funding products, favourably priced junior debt to facilitate project feasibility and mitigate financing risk. Our strong Corporate Governance, demonstrated by clean financial audit reports over 13 consecutive years, underscores sound financial management.
We prioritise Compliance, Organisational Performance, talent management, Stakeholder Management, and Change Management. The Mount Kilimanjaro project elevates awareness and instils an ethical, values-driven organisational culture.
3. Can you share a specific project or initiative you consider a turning point in your career? What lessons did you learn from it? Leading the Tshwane House Public Private Partnership Project demanded delivering a bankable feasibility study ensuring affordability, value for money, and effective risk transfer to the private party. Collaborating with a multidisciplinary team, I managed the private party's adherence to budget and output specifications. The project aimed at tangible socio-economic impact, meeting green building guidelines. While I take pride in its success, the true reward lies in serving future generations.
4. How do you stay updated on industry trends and ensure your business remains innovative and adaptable? We are part of the greater property sector eco system, we are a member of various property associations, we are also in partnership
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LINDIWE KWELE
with the Council for Built Environment to ensure that we are innovating and adaptable. We work very closely with academic institutions to sharpen our continuous learning and innovation.
5. How do you envision the future of your industry, and what steps are you taking to stay ahead of emerging trends? The Property sector will always remain a sunrise sector, however there are new technologies within the built environment. The industry needs to adapt to the realities of climate change and we need to be intentional in impact investing to shape liveable spaces and achieve sustainable development.
6. Any key insights, knowledge or lessons that you gained that you would like to share? Over the years I have learnt to make lemonade out of lemon and that sometimes failure is not a bad thing, that it builds resilience and tenacity. The greatest glory is not in never failing but in rising every time I fail. I also know that my career and success would be defined by what I said no to and not what I said yes to.
7. If you have invested in real estate, include any investments you may have made and the most important lessons you learnt from the experience in your capacity as an investor? I believe that you can never go wrong in real estate investment for as long as it is in the right location you are guaranteed sound financial returns. Early on in my career I had bought some IPO shares, and I am reaping those benefits now as those dividends sometimes come when you need the money the most. I have learnt not to be impulsive in my choice of investing. That I must do a thorough due diligence before I commit my money to any potential investment.
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GAUTENG PARTNERSHIP FUND
GAUTENG PARTNERSHIP Empowering successful with Sustainable Capital
By Editorial
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COMPANY PROFILE
FUND GUIDE: Developments Solutions
The Gauteng Partnership Fund (GPF), established in 2002 by the Gauteng Department of Human Settlements, is a transformative development financial institution (DFI) with a singular focus on providing financial solutions that enable the development of integrated and sustainable human settlement projects in the province.
Real Estate Investor Magazine FEB 2024
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GAUTENG PARTNERSHIP FUND
T
he GPF exists to facilitate the development of integrated and sustainable human settlements for communities in Gauteng by raising and managing the capital required for the successful implementation of identified sustainable human settlements.
As a lending institution, GPF provides loans to private-sector developers, the majority of whom are Historically Disadvantaged Individuals (HDI’s), for the development of affordable rental and student accommodation, and social housing projects. They exist to enhance the lives of people in communities, contributing to creating liveable spaces for Gauteng residents.
Over the past two decades, the GPF has evolved its focus from the implementation of Social Housing to Affordable Rental Housing including Student Accommodation. As at its 20th Anniversary, the GPF’s mandate was further extended to include Mega Human Settlements, the Upgrading of Informal Settlements Programme (UISP) and the implementation of the Rapid Land Release Programme (RLRP) and Turnkey Development in strategic government owned land in Gauteng.
The GPF collaborates with both private and public sectors to leverage resources for the expedited delivery of affordable housing. Lindiwe Kwele, in her capacity as CEO since January
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COMPANY PROFILE
GPF’s Mission
The GPF's mission is deeply intertwined with addressing the housing shortage in Gauteng, a challenge of monumental proportions with a backlog estimated at over 1.2 million people. In a province with a population of over 15.2 million people, representing just over a quarter of the country's population, and with approximately 1.55 million people migrating into Gauteng between 2016 and 2021, the need for accelerated delivery of quality, integrated human settlements have never been more apparent.
2022, actively encourages private sector involvement, emphasising the pivotal role it plays in addressing the housing backlog in the province.
The organisation’s primary function is to leverage senior funding for affordable housing from financial institutions. Kwele expands on this, stating, “This translates into a value proposition that has and continues to seek to offer the market innovative funding products designed to provide the junior of debt, which is favourably priced relative to the market, thus facilitating project feasibility and enabling senior funders to mitigate their financing risk.”
Originally mandated to focus on social and affordable housing, the GPF has undergone several
transformation processes in response to changing sociopolitical and strategic imperatives related to housing delivery and human settlements. The success of its initial mandate is evident, with over 20,000 social and affordable housing units successfully delivered.
In 2017/18, the GPF received a mandate expansion to move beyond the affordable housing market and raise capital for mega projects, overseeing their implementation. This involved raising funds for the overall mixed-use development of mega projects, encompassing human settlements as well as social and economic amenities.
Further expanding its role, in 2019/20, aligned with the priorities
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GAUTENG PARTNERSHIP FUND
of the Sixth Administration of the Gauteng Provincial Government (GPG), the GPF's mandate was extended to include the Upgrading of Informal Settlements Programme (UISP) and the implementation of the Rapid Land Release Programme (RLRP)
in Gauteng.
Kwele has overseen the development and implementation of an aggressive capital-raising strategy, emphasising the organisation's commitment to delivering high-impact,
“Our clean financial audit reports over the past 13 consecutive financial years are indicative of an organisation with sound financial management and governance processes. This favourable audit status continues to build strong investor confidence,”
LINDIWE KWELE CEO of Gauteng Partnership Fund
integrated, and sustainable human settlements.
In the quest for successful partnerships, Kwele highlights the importance of maintaining a positive reputation. “Our clean financial audit reports over the past 13 consecutive financial years are indicative of an organisation with sound financial management and governance processes. This favourable audit status continues to build strong investor confidence,” she adds.
Partnerships The GPF's track record includes successful partnerships with
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COMPANY PROFILE
entities such as the Public Investment Corporation (PIC), the National Empowerment Fund, TUHF, and Future Growth, showcasing its fund management experience. Beyond financial partnerships, the GPF has developed critical skills in structured financing, project packaging, and investment facilitation.
Positioning itself as the preferred partner to government, property developers, and co-funding partners, the GPF boasts a history of promoting economic empowerment. This includes offering preferential rates to BBBEE-accredited developers, providing a range of attractive products, and stimulating job creation and local economic development through funded projects.
Lebogang Maile, the MEC for Human Settlements and Infrastructure Development, underscores the government's role in identifying infrastructure project opportunities that attract private sector investment. He notes, “Our role as government is to identify infrastructure project opportunities that can draw in
private sector investment, deal with systemic and structural challenges that are a hindrance to the construction sector playing its optimum role in economic recovery and development and remove any regulatory bottlenecks that frustrate infrastructure and human settlement projects.”
Transformation of living conditions The MEC stresses that the GPF's existence is geared towards aiding the implementation of human settlement projects with maximum social return, attracting greater private sector investment, and catalysing economic development and growth within the province.
Thus, the organisation's strategic focus not only addresses the immediate housing challenges but also presents a significant opportunity for property developers to participate in the transformation of living conditions in the province.
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GAUTENG PARTNERSHIP FUND
Empowering Communities: GPF's Comprehensive Housing Solutions Guide
Social Housing Fund The Social Housing Fund is tailored for social housing institutions requiring an equity injection, enhancing the debt-to-equity ratio for favourable financing terms.
Who Qualifies Any social housing institution or Project Special Purpose Vehicle (SPV) with a recognised legal form that provides rental or delayed ownership schemes to majority of families with household with monthly income less than R15 000 (adjusted according to Consumer Price Index CPI).
The institution must demonstrate to GPF that they have the technical resource capacity to successfully complete the project as well as efficiently manage the property thereafter. Under the Social Housing Fund, the GPF will invest a maximum 30% of the total project costs.
Types of Projects funded under the Social Housing Fund • Inner-city refurbishments or predominantly residential buildings. • Company
Essential Documentation: What you need for a successful Application • Comprehensive business plan (Recommended business plan framework is available on request). • Company registration documents • Essential Project information • Copy of latest Audited financial statements
APPLY FOR FUNDING NOW! Contact: Shiraaz Lorgat Tel: 082 603 2240 Email: shiraazl@gpf.org.za
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Student Accommodation Fund The Student Accommodation Fund aids service providers needing additional funding for projects. Under this fund the GPF will invest up to 30% of the total project costs. However, the GPF will provide 100% funding for projects with a total loan exposure of R10 million or below.
Who Qualifies Any company or project Special Purpose Vehicle (SPV) with a recognised legal form that provides student accommodation that conforms to the norms and standards of the Department of Higher Education and Training (DHET). • A company that can demonstrate access to unencumbered capital of a minimum of 10% of total project cost as equity. • The entity must demonstrate to GPF that they have the technical resource capacity to successfully complete the project as well as efficiently manage the property thereafter. • A company with a minimum HDI shareholding of 51%. • Where the developer has 51% black ownership share holding the following must apply; A main contractor with > 51% black ownership must be appointed and two professionals with more than 51% black ownership.
Other guidelines • The project must be located within a 5km radius of the targeted tertiary institution. • Transport must be provided by the project promoter for any projects further than 1km or alternative public transport must be demonstrated to exist to cater for the students • Priority will be given
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GAUTENG PARTNERSHIP FUND
• •
to projects located in townships and existing student accommodation hubs. Project must have a minimum of 15 units or 50 beds. The project must have a social amenities and Wi-Fi for the students.
Types of Projects funded • Inner-city refurbishments of dilapidated buildings • Conversion of offices to residential units. Confidential • Greenfield developments.
Essential Documentation: What you need for a successful Application • Comprehensive business plan. • Company registration documents. • Comprehensive project information. • Shareholder’s statement of assets and liabilities (Proof of availability of Equity) will be requested.
APPLY FOR FUNDING NOW! Contact: Shiraaz Lorgat Tel: 082 603 2240 Email: shiraazl@gpf.org.za
Commercial Housing Fund While the Commercial Housing Fund promotes the participation of experienced housing developers and rental property owners in the affordable housing market. Under this fund the GPF will invest up to 20% of the total project costs. However, the GPF will provide 100% funding for projects with a total loan exposure of R 10 million or below.
Types of Projects funded under the Commercial Housing Fund • Inner-city refurbishments of dilapidated buildings • Conversion of offices to residential units • Greenfield developments
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Funding criteria • No BBBEE shareholding required for the developer, however at least two professionals appointed must have 51% BBBEE shareholding • Maximum total GPF exposure 20% of development amount • Equity contribution of 20% • Loan term of 15 years • Moratorium of up to 24 months • 3% fee on GPF loan facility plus VAT – minimum of R300,000 • Pricing is base rate at prime plus margin of 100 basis point
Essential Documentation: What you need for a successful Application • Comprehensive Business Plan • Company registration documents. • Essential project information such as approved zoning, Geotech, elevation plans & elemental bill of quantities. • Shareholder’s statement of assets and liabilities (Proof of availability of Equity) may be requested.
APPLY FOR FUNDING NOW! Contact: Ms Sandra Ruiter Tel: 082 850 9170 Email: sandrar@gpf.org.za
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GAUTENG PARTNERSHIP FUND
Rental Housing Fund The Rental Housing Fund targets entities requiring additional funding for rental housing projects, providing equity-type loans for favourable financing terms. Under the Rental Housing Fund the GPF will invest up to 30% of the total project costs depending on the discretionary assessment of the project needs. The GPF will provide 100% funding for projects with total loan exposure of R10 million or below.
Who Qualifies? • A potential project that can yield a minimum of 15 affordable housing units in the Gauteng Province. • A company that can demonstrate access to unencumbered capital of a minimum of 5% of total project cost as equity. • The entity must demonstrate to GPF that they have the technical resource capacity to successfully complete the project as well as efficiently manage the property thereafter. • A project that is ready for implementation from a town planning perspective
Types of projects funded under the Rental Housing • Inner-city residential refurbishments of dilapidated buildings. • Conversion of offices to residential units • Greenfield developments
Essential Documentation: What you need for a successful Application • Comprehensive Business Plan • Recommended Business Plan framework is available on request • Company Registration documents • Tax clearance certificate. • Essential project information (Approved correct Zoning, Geotech, Elemental bill of quantities) • Plans and elevations. • Proof of ownership (OTP)
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•
•
Copy of latest Audited Financial Statements Shareholders statement of Assets and Liabilities may be requested
APPLY FOR FUNDING NOW! Contact: Ms. Sandra Ruiter Tel: 082 850 9170 Email: sandrar@gpf.org.za
Entrepreneur Empowerment Property Fund The Entrepreneur Empowerment Property Fund (EEPF) is designed to boost the participation of historically disadvantaged individualowned companies in the affordable rental property market.Under EEPF the GPF will invest up to 40% of the total project costs. GPF will provide 100% funding for projects with total loan exposure of R10 million or below.
Who Qualifies? • A company with 100% HDI shareholding. HDI women and youth owned applicants are encouraged. • A company with 100% HDI shareholding, HDI women and youth owned applicants are encouraged, • A potential project that can yield a minimum of 15 affordable housing units in the Gauteng Province • A company that can demonstrate access to unencumbered capital minimum of 3% of total project cost as equity. • A company that demonstrates appointment of at least 75% of professionals and contractors with majority HDI shareholding • First time property developers will be limited to the maximum total project cost of R20 million • A project that that is ready for implementation from a town planning perspective.
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GAUTENG PARTNERSHIP FUND
Types of projects funded under the EEPF • Inner-City refurbishments of dilapidated buildings • Conversion of offices to residential units • Greenfield dvelopment
Essential Documentation: What you need for a successful Application • Comprehensive business plan. • Company registration documents. • Essential project information. Confidential • Shareholder’s statement of assets and liabilities (Proof of availability of Equity) may be requested.
APPLY FOR FUNDING NOW! Contact: Ms. Palesa Tlowan Tel: 082 970 7806 Email: palesat@gpf.org.za
KASI 4 Real Kasi 4 Real is aimed at boosting the township economy by offering funding to homeowners for the development of rental housing units within their existing property. This initiative addresses economic empowerment, creates employment opportunities, and tackles the critical need for affordable housing within townships. The Kasi 4 Real programme is aimed at providing funding to the following market below.
Who qualifies? • Residents of any township within the jurisdiction of Gauteng • Residents from the township who are registered in the title deed. • Residents with adequate available space in their back yard to build minimum 4 bachelor units of minimum 15 – 25 square metres. • Applicants who will be able to contribute a minimum equity of approximately 3% (this depends on the cashflows of the project)
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COMPANY PROFILE
Essential Documentation: What you need for a successful Application • A detailed Business Plan • Company Registration Documents • Zoning Certificate from the relevant municipality • Cost estimates of the Project • Approved Plans • Title Deed/Proof of Ownership • Professional team information
APPLY FOR FUNDING NOW! Contact: Ms. Palesa Tlowan Tel: 082-970-7806 Email: palesat@gpf.org.za
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CASE STUDY
SUCCESS UNVEILED: The GPF Funding Journey Properties Case Study
BY TSHEPO DHLAMINI GPF investor GPF
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EABLE PROPERTIES
- Eable
I first approached Gauteng Partnership Fund (GPF) in 2014 after successfully acquiring my very first commercial land in Olievenhoutbosch. It was indeed a calculated risk however my background from the Real Estate market had indicated that it was a doable project provided I came up with a feasible scheme.
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CASE STUDY
I
had just missed the Funding Programme that GPF had been running where young black residential developers where being cultivated and supported based on 100% landing to develop from ground to roof. I was fortunate to have saved up enough pension from my employment history and cashed out to acquire the hector site.
I would call the below image the humble beginnings for the project. This was in 2015 after holding the land for just over a year and paying Tshwane Municipality for services. We conducted a Geo Technical Report as it was going to be required by GPF to ensure that we were able to build on the site and that the Civil and Structural Engineering drawings
and recommendations could be fully supported.
GPF then approved my junior facility in the early 2016 for approximately R11,6million and could not secure Senior Funding for me at the time. That’s where the journey of a new entrant in the market became real. I needed to raise an additional R18million of senior debt funding to have adequate funds to construct the scheme of 100 residential apartments.
This I the time I appreciated GPF’s patience and understanding to keep the facility alive despite the length of time it took me to secure senior debt funding. The guidance and support they provided me during this journey,
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EABLE PROPERTIES
was commendable and showed their commitment to empowering new entrants to the real estate development world.
I then managed to secure senior funding from National Housing Finance Corporation (“NHFC”) in October 2017 and I could have never succeeded if it was not for GPF’s continued support and motivation on my behalf that they believed in my vision and project presented.
The continued support we received from GPF again was what made this project eventually succeed because instead of construction taking the envisaged 12months, we eventually only managed to finalise construction and get occupancy in September 2019 being 24 months.
The following images are because of having a supportive partner in the development because due to the time it had taken me to secure senior debt funding, all project costs had increased, and we needed to inject further equity into the development before we can access funding from GPF.
Construction finally began in August 2017 and was estimated to be completed by July of 2018, however developing in the township had its own challenges which attracted violence and community engagement for the procurement process of local labour.
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CASE STUDY
GPF assisted us in rolling the interest that was meant to have commenced serviceability in August of 2019 and provided us with additional time to tenant the project to a level of servicing the loan adequately.
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We further extend our appreciation to GPF during the Covid pandemic for assisting us with restructuring of payments to clear arrears that occurred during that difficult time faced by the entire country and world.
EABLE PROPERTIES
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INVESTING
47
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A Comprehensive Guide to thriving in SouthAfrican Property Investment in 2024
55
PAGE
Safeguard your wealth by avoiding these mistakes in Property Investing
TRENDING ONLINE
Unlocking Insights: South Africa’s 2024 Property Market Forecast from a Developer’s Perspective
Real Estate Investor Magazine FEB 2024
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RESIDENTIAL
ACHIEVING EXCELLENCE: A Comprehensive Guide South African Property
BY JACO GROBBELAAR CEO & Founder Prosperity Enterprises
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FEB 2024 Real Estate Investor Magazine
INVESTING
to thriving in Investment in 2024
The property investment landscape is a dynamic arena, ever-changing with global economic shifts and technological advancements. As we step into 2024, it’s crucial to stay ahead of the curve and adapt to the evolving trends that shape the industry.
Real Estate Investor Magazine FEB 2024
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RESIDENTIAL
W
e’ve seen many changes in the local and global economy in the last few years that hugely impacted the property sector. From the rising interest rates to the unemployment rates, 2023 was an interesting year for property investors.
1. The global economic outlook: Gross Domestic Product (GDP) projections According to the International Monetary Fund (IMF), global growth is projected to slow from an estimated 3.4% in 2022 to 2.8% in 2023 before settling at 3.0% in 2024.
Despite the challenges, there are huge property investment opportunities out there. And I don’t know about you, but I’m going into 2024 with a renewed focus to take advantage of every single opportunity that comes my way! If you want to do the same, considering the following trends and factors will help you to build wealth and experience financial freedom through property investment.
The real GDP growth in South Africa (SA) was 1.9% in 2022, and Statistics SA projected it to be 0.9% in 2023. But Statistics SA has provided some cheerful news to SA by raising our GDP growth projection for 2024 to 1.8% - a hopeful outlook for investors!
2. Inflation dynamics: A balancing act According to Trading Economics, the annual inflation rate in the US was 3.1% in November 2023, which is significantly better than a year and a half ago when it was ±8%. The target rate, however, is 2%, which means that the US is still intentional to get inflation down. This could mean further hikes or keeping rates the same – we’ll have to wait and see.
In SA, the annual consumer price inflation was 5.5% in November 2023 compared to 5.9% in
INVESTING
October 2023 (Statistics SA). We are on target, so we can likely breathe a sigh of relief as it is unlikely that the Reserve Bank will increase interest rates further.
The current prime interest rate in SA is 11.75% and many economists believe that interest rates are nearing the top and will then begin to stabilise.
3. Opportunities unveiled: Property price growth Contrary to some concerns, the property market holds so many opportunities. Lightstone’s Residential Property Index (October 2023) reveals a current annual capital growth of 3.2% for property prices.
The map below shows the latest Lightstone Provincial House Price Inflation status.
Source: Lightstone Residential Property Index (July 2023)
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RESIDENTIAL
coastal properties for most of the time since 2014.
Interestingly, Lightstone says that coastal properties have performed better than non-
Annual property inflation: coast vs non-coast
Coast
Non-Coast
Although the returns are very close to each other now, freehold properties have outperformed
sectional properties for most of the time since 2010.
Annual property inflation: Freehold vs Sectional Title properties
Freehold
National
Lightstone also shows that properties valued at less than R250 000 have outperformed all other value bands for most of the last 10 years, although the growth has recently started to cool down. Properties valued between R250 000 and R700 000 have come in second most of the time since 2017.
Sectional Title
The Lightstone Area Value Bands Index below reviews inflationary rates for property based on the following values: • Luxury: >R1.5 mil • High Value: R700k to R1.5 mil • Mid Value: R250k to R700k • Low Value: <R250k
Annual inflation: area value bands
High Value
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Low Value
Luxury
Mid Value
National
INVESTING
4. Rental realities: Collections, good standing, and escalations When it comes to renting, there had to be a positive recovery at some point since the pandemic… According to the TPN Rental Monitor Residential Sector Q3 2023 Report, residential tenants in good standing have finally recovered to 83.34%. The upper to mid-level brackets recorded
their best good standing ever!
Rental growth rebounded impressively over the last eight quarters since Q3 2021 when we recorded Year-on-Year growth of just 0.2% (PayProp Rental Index Q2 2023 Report). It has recovered to be better than pre-pandemic levels and currently stands at 4.4%!
Quarterly rental growth rate (YoY) with a moving average trendline: Q1 2020-Q3 2023 Source: Payprop
A bright future awaits property investors Despite challenges, my optimism about the market's potential for growth and success remains unwavering. However, understanding how economic
factors influence our property investments is paramount to seize opportunities in this evolving landscape. So, let’s get into some of them: Right now, the average property price growth is ±3%, and the
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RESIDENTIAL
average net rental yield can be 6% to 8%. The ungeared return on property (your capital growth and net rental yield) is also currently very decent.
The market currently favours
buyers with high supply and lower demand. Rental demand is also recovering, with fewer tenants in arrears and rental income growing nicely. So, stay ready, take advantage, and secure those great deals!
Factors fuelling Property price growth
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Average property price growth
From 2003 to 2023, the average property price growth was 8.3%, which is significantly higher than the 3.2% we are currently experiencing.
Property’s input costs
The prices of construction materials, construction worker labour costs, and land prices, have increased faster over the last decade than property prices, which can also lead to higher future property price growth.
Rental escalations
Rental escalations determine your rental yields on the property, and they are also higher than property price growth in SA, possibly leading to higher property price growth in future.
Interest rates
Although they seem to be very high at the moment, they should start to decline in the near future. This can also have a positive effect on demand and increase property prices.
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INVESTING
The enduring potential of the property investment market is a truth that stands firm over time. In 2024, I foresee a positive shift with increased demand and rising property prices. Let’s embrace change, stay vigilant,
and capitalise on the wealth of opportunities that property investment offers. Here’s to a highly successful investing year in 2024!
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INVESTING
7 COMMON PITFALLS Safeguard your wealth mistakes in Property
BY CARLO MARIANI Founder The Property Coach
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INVESTOR INTELLIGENCE
by avoiding these Investing
Warren Buffett once said, “The first rule of an investment is doesn’t lose money. And the second rule of an investment is don’t forget the first rule. And that’s all the rules there are”. Investing in property is just that…an investment. So, let’s see what you need to do (and not to do) in order not to lose money.
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INVESTING
I
t doesn’t matter what the property market is doing and will be doing. Long gone are the days where the old motto “don’t wait to buy, buy property and wait” was great advice. The residential property market is a lot more selective nowadays and you absolutely must buy the right property, in the right area, at the right price, with the right financing, if you want to make money with property.
Thousands of aspiring and growing property investors would benefit from avoiding these expensive money-losing traps:
Pitfall #1
Financial Leaks: How Overpaying Interest on Your Home Loan Can Erode Your Property Investment Returns This happens when you don’t negotiate your interest rate upon approval in principle by the lender, either because you are in a rush or because you don’t have competing offers from different banks that you can use to play one bank against the other. Applying to just one bank is a beginner’s mistake. Further you should regularly seek further interest rates concessions
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as you demonstrate a track record of paying in full, on time, all the time. Your interest rate is not meant to be the same for 20 or 30 years. Call your bank today.
Pitfall #2
Maximizing Returns: The Importance of Negotiating Transactional Fees in Property Investment Transactional fees, including bond registration fees and conveyancing fees are exorbitant in South Africa. And they seem to be going up every year. Don’t ask “can I get a discount?”, rather ask “what discount will I be granted?”. The savings for just asking the question will be massive. I wish somebody told me this when I started buying properties some 20 years ago…
INVESTOR INTELLIGENCE
Pitfall #3
Investment Wisdom: Steering clear of personal preferences to optimise property choices and returns I have observed over and over working with my clients how they naturally tend to buy what they like and / or what they are comfortable with. That’s one of the key challenges for those that want to invest in the affordable housing market. They often say (or think inside themselves) “I would never want to live here” and they
miss out on attractive investment opportunities. Focus on supply & demand fundamentals, not on your personal taste.
Pitfall #4
Strategic Oversight: The pitfalls of acquiring properties with existing tenants and preserving your investment value Buying properties with tenants can be a double-edged sword, but in too many cases this turns out to be a bad deal. Why would an investor want to sell a property with a good tenant to another investor? Make sure your Offer to Purchase is structured with very tight clauses that protect you in terms of deposit monies as well as vacant occupation, if you are not comfortable with the current tenant(s).
Pitfall #5
Inspection Imperatives: How skipping property assessments can lead to costly investment setbacks Despite the recent changes and the introduction of the Seller Disclosure Form, my strong recommendation is that you always purchase a property subject to a professional
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INVESTING
inspection to be conducted by a qualified inspector within a short timeframe from date of acceptance of your offer. In most cases you will have to pay for this initial investment, but it is always a great investment to avoid bigger maintenance costs down the line.
property investors prefers to invest in sectional title units. While there are certainly good reasons for doing that, such as affordability, security, and convenience, investing in sectional titles is a lot more complex than most would like to think.
Pitfall #6
Pitfall #7
Governing your Gain: The costly consequences of overlooking Body Corporate Governance in property investment A great deal of South African
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Strategic Bargaining: The price you pay for overvalued properties in the world of Real Estate Investment This by far the fastest and most common way of losing money
INVESTOR INTELLIGENCE
with property, from day one. In my experience there are 4 key factors contributing to this: • Becoming emotionally invested in a deal or a property and not being willing to let go. • Using asking price for the basis of your negotiation, instead of true comparable sales. And not using great tools like Lightstone Property in the process of doing so. • Making your offer valid for 7 days, instead of just 24 hours, thus allowing the agent and the seller to solicit and obtain
•
competing offers. Relying on inflated guaranteed rentals from developers that distort the true investment returns.
My experience is that half of the “secret” to property success is to avoid basic mistakes such as the ones mentioned above. The list of mistakes above is certainly not the “all-inclusive” list but you will do well by avoiding them to start with.
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FINANCE
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A Step-by-Step Guide to serve notices effectively and legally
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Budget friendly upgrades to massively increase the value of your property
TRENDING ONLINE
Unlocking Insider Secrets: How to negotiate a better mortgage bond rate
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RENTALS
MASTERING LEGAL A Step-by-Step Guide effectively and legally
BY SIMON DIPPENAAR Founder & Eviction Specialist Simon Dippenaar & Associates
PART
02
OF PART 4
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RESIDENTIAL
EVICTIONS to serve notices
Are you a landlord? If so, we hope your tenancies are fruitful and trouble free. We hope you have amicable relationships with your tenants. Unfortunately, we know that isn’t always the case. Sometimes there is a breach of the lease agreement that, for whatever reason, is not remedied within the designated time frame and it is necessary to start eviction proceedings.
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RENTALS
W
hen this happens, you need to understand and follow the legal requirements and procedures involved in serving eviction notices to tenants. If you take the right steps, your eviction notice will be legally valid. This is a guide to serving an eviction notice correctly.
Legal grounds for eviction
Before serving an eviction notice, you must have valid legal grounds for an eviction. The court will only grant an eviction order if: • You are the owner of the land/property • The person occupying your property is an unlawful occupier • You have reasonable grounds to evict the occupier
Before resorting to eviction, you must have given your tenant notice of the breach of the lease agreement and sufficient time (as stipulated by law) to remedy the breach.
The court will take into account whether there is alternative accommodation available. The Prevention Of Illegal Eviction
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And Unlawful Occupation Of Land Act (PIE) defines an “illegal occupier” as a person who occupies land without the express or tacit consent of the owner or person in charge of the land, or without any right in law to occupy such land.
PIE also recognises the concept of “unlawful occupiers”, which refers to occupants who occupy land or property with the consent of the owner or person in charge, but their occupation is in contravention of a law or agreement.
Eviction notice An eviction notice is a formal written document you as the landlord provide to the tenant, informing them they must vacate the property. It is legal notice that you are starting eviction proceedings and should include, among others, the date when the notice is issued, the tenant’s name and contact details, the address of the property, and the grounds for the eviction, such as nonpayment of rent, violation of lease terms, illegal activities, or expiration of lease.
RESIDENTIAL
Avoid language that may be interpreted as threatening or discriminatory. Be concise and specific in your notice. A qualified eviction specialist can ensure your eviction notice is legally sound.
Serve the eviction notice personally In South Africa, eviction notices must be served personally on the tenant or other adult residing on the property. When serving the notice: • Choose an appropriate time to serve the notice (when the occupant is likely to be available) • Make sure the tenant acknowledges receipt of the notice (by signing and dating a copy, or having a witness present at the service) • Keep a copy of the notice and the proof of service for your records (it will be used for the eviction application)
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RENTALS
RESIDENTIAL
Alternative methods of serving the notice If you are unable to serve the eviction notice personally, you may use alternative methods, such as: • Registered mail • WhatsApp • Email • Attaching the notice to the property’s main entrance The lease agreement should indicate how legal notices need to be served. However, it is always advisable to have proof of receipt (signed acknowledgement, two ticks on WhatsApp, read receipt on email, etc.) to avoid any potential disputes.
Allow adequate time for compliance After serving the eviction notice, the tenant is entitled to a reasonable period to either remedy the situation or vacate the premises. The notice should specify the period allowed and will vary depending on the grounds for the eviction. It’s advisable to seek legal assistance or consult a qualified eviction specialist to determine the appropriate time frame.
Institute legal proceedings If the tenant fails to comply with the eviction notice within the specified time, you may institute legal proceedings, i.e., apply for an eviction order. Consult with an attorney or eviction specialist to initiate the eviction process correctly. They will guide you through the necessary steps, including filing an eviction application in court, and will represent you during the legal proceedings.
You must serve the eviction notice correctly for the eviction order to be granted by the court.
By following the steps outlined above, you can ensure your eviction notice is legally valid, giving you a solid foundation for instituting legal proceedings if necessary.
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IMPROVING
PROFITABLE PROPERTY Budget friendly upgrades increase the value of
By Neale Petersen
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FINANCE
ENHANCEMENTS: to massively your property
If you're thinking of sprucing up and start renovating your home or fixing your rental property for profit, make sure that if you invest in the improvements and upgrades that it always ticks all the boxes for immediate buyer appeal. The goal is to always have the property ready for selling when the time comes to ensure a bigger price tag.
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IMPROVING
A
ll those little repairs you were happy to postpone for another day (or year) on your properties may seem like glaring problems to a buyer once your home is on the market. There are two options for property sales success.
Decoding the dilemma to renovate or not? In the realm of selling your property, you're faced with two pivotal decisions. Option one relies on luck, hoping for a buyer who envisions your property not just as it stands but as a dream fixer upper. The second option involves strategic investments in key repairs and upgrades to ready your property for the market, ensuring it commands the listed price.
While the latter option may initially seem daunting, it can translate into substantial financial gains. Surprisingly, over a quarter of sellers who invest in property improvements achieve a significantly higher selling price, often surpassing the average listing. Even on a budget, small DIY home improvements can yield substantial returns come closing day. Uncover the path to
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a lucrative property sale through thoughtful decision-making and strategic enhancements."
Mastering the Art of Budgeting for Property Renovation Embarking on an economic property renovation journey requires a meticulous approach to budgeting. Precision is key when determining the total expenditure and setting realistic limits. The golden rule: avoid overestimating; instead, keep your budget conservative.
Once your budget is in check, shift your focus to identifying essential upgrades that can transform your property, immediately capturing buyer appeal and guaranteeing a profitable sale. Uncover the secrets to strategic budgeting and transformative enhancements for a successful property makeover."
FINANCE
Top 4 Renovation upgrades for exceptional return
1. Kitchen makeovers Buyers often gauge the true worth of a house by scrutinizing its heart—the kitchen. The design, layout, and functionality of this space play a pivotal role in attracting potential buyers. While the prospect of a kitchen renovation is enticing, it can also be a costly endeavour and is normally the most expensive to recoup. For those renovating with resale or rental in mind, finding the right balance between impact and expenditure is crucial.
Avoid getting too carried away by aesthetics and focus on strategic enhancements. Upgrade outdated taps, modernize countertops, and invest in new appliances and lighting fixtures for maximum impact with minimal outlay. Cabinets, being a focal point, can be a game-changer in transforming your kitchen.
To keep costs in check, prioritise cosmetic changes like retiling and tapware upgrades, steering clear of major service relocations such as electrical and plumbing. Uncover the art of kitchen transformations that not only add significant value to your property but also fulfil a practical function when the project is complete.
2. Bathroom renovations Transforming a tired or worn-out bathroom doesn't have to break the bank. The key is to be savvy with your spending. A general rule of thumb is to allocate a maximum of 2% of your current property value to bathroom renovations, preventing overcapitalisation.
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For instance, if your property is valued at R1.5 million, limit your bathroom renovation budget to R30,000. Simple yet effective changes like replacing the shower screen, taps, plumbing, toilet, and vanity cabinets can make a significant impact. Consider painting or, for a more dramatic transformation, retiling the walls.
In main bathrooms, upgrading or resurfacing the bath can be a game-changer, while in secondary bathrooms, removing the bath and expanding the shower area can be a cost-effective option. For larger renovations, keeping the plumbing in its existing location helps control costs. Upgrade the overall appeal by replacing outdated taps, plumbing, light fittings, and cabinets. These budget-friendly ideas can breathe new life into your bathroom without breaking the bank.
3. Creating a Home Office area The seismic shift to remote work during the pandemic has left a lasting impact, with many individuals continuing to embrace the flexibility of working from home. Experts anticipate this trend to persist for the coming years, making the creation of a home office a strategic and smart investment.
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Converting a spare bedroom or even a garage into a another room or dedicated home office not only provides the freedom to work in a comfortable environment but also allows for a clear separation from the rest of the household, fostering focused productivity.
As the remote work trend persists, prioritising the creation or renovation of a home office should undoubtedly claim the top spot on your renovation checklist. Prepare your space for the future with a functional and inspiring home office setup.
4. Improve the outdoor and entertainment areas The allure of inside-outside living, particularly with the addition of a covered braai room, is a highly sought-after feature in many South African homes. Embracing this trend not only enhances the aesthetic appeal of your home but also contributes significantly to its overall value. A covered braai room provides the perfect setting for year-round entertaining, allowing you to host gatherings regardless of the weather.
Practical alterations can easily accommodate these enhancements. Consider the addition of folding or sliding doors and windows, providing the flexibility to seamlessly connect or separate the indoor and outdoor spaces. These thoughtful modifications not only enhance the functionality of your home but also contribute to its market desirability and increased value.
In his book, '101 Ways to Massively Increase the Value of Your Real Estate Without Spending Much Money,' real estate investor Dolf de Roos sheds light on the art of making your property more valuable. While there are no guarantees in the realm of renovating for profit, a few strategic, low-cost
changes are sure to elevate your property's worth.
Enhancing the street appeal of your property is a cost-effective approach to increasing value. First impressions matter, and the exterior of your property significantly influences its perceived value. Simple steps
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like tidying the front garden and repainting the front facade can yield substantial dividends. We share 6 budget-friendly
improvement ideas that you can implement to make a meaningful impact on your property's value.
5 Upgrades to boost your property’s value on a budget
1. Painting Boosting the value of your property can be as simple as a stroke of paint, and what's even better is having someone else take care of it for you. Start by refreshing the exterior—the first impression is everything. Consider extending the paint job to the roof, enhancing the overall look of your home. Continue by revitalising the front fence and any other fences on the property.
Moving indoors, opt for lighter colours, as they tend to create a brighter and more inviting atmosphere. Don't forget the ceilings; a fresh coat of paint can work wonders in enhancing the overall aesthetic. With this quick and easy transformation, watch as your property takes on a new life, appealing to both potential buyers and passersby alike.
2. Cut the grass In the pursuit of enhancing your property's value, one of the most straightforward yet often overlooked steps is as simple as cutting the grass. The impact of a well-manicured lawn should not be underestimated, as leaving lawns uncut can significantly degrade the overall value of a property.
When selling, presenting a property with meticulously maintained lawns creates a positive and lasting impression for potential buyers. Embrace the transformative power of a neatly trimmed lawn, a subtle yet effective strategy to elevate the overall appeal and value of your property.
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3. Landscape your garden Landscaping can take many forms as does not necessarily mean that you need to employ a landscaper. Simple things such as putting down stone slabs, removing and planting trees, putting in flower beds, a vegetable garden with planter boxes, installing a fishpond, putting up a trellis, or fencing to create more privacy can be small changes that can make a difference in aesthetics of the house and garden.
4. Removing carpets and fixing flooring Worn carpets can be a significant eyesore, directly influencing the overall value of your property. However, replacing them doesn't have to break the bank. Affordable options abound, such as sourcing end-of-run carpets at budget-friendly prices.
Alternatively, instead of a direct carpet replacement, consider more cost-effective alternatives. Installing flooring tiles or uncovering beautiful floorboards in older properties can breathe new life into your space. With the help of a commercial contractor, floorboards can be sanded and lacquered with polyurethane, providing a rejuvenated and polished finish.
5. Installing a carport If a property does not have a garage or a carport this inexpensive addition can significantly improve the value of a property. To create more living space in your house many homeowners convert their freestanding garage into a spare bedroom or home office.
Once completed, can really increase the value of your property and event can derive another source of rental income from it.
If you explore these transformative solutions to refresh your property space without compromising your budget that can add exceptional
value to your property’s value and overall return.
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How Attacq’s Data-Driven approach is Reshaping Property Managementness
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Unveiling 5 Proptech Trends Shaping the Future
TRENDING ONLINE
The Evolution of Investment Strategies in the Real Estate Market
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PROPTECH REVOLUTION: How Attacq’s Data-Driven Reshaping Property
BY MICHAEL CLAMPETT Asset Management Executive Attacq Limited
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approach is Management
In the ever-evolving landscape of property management, innovation is the name of the game. The pursuit of innovation, within the context of the sector that I operate in, has taken the form of a resolute embrace of Proptech, or property technology. By embedding Proptech into our property management strategy, we have not only streamlined our operations but also revolutionised the way we engage with tenants, optimise resources, and enhance the overall customer proposition and experience.
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D
ata-Driven Decisions The cornerstone of Attacq's property management strategy is data-driven decisionmaking. In a world where information is power, Attacq has harnessed the potential of data analytics to make informed decisions swiftly, whereby the emphasis on data empowers us to adjust our operating model and respond to the changing needs of tenants, partners or end users (in our case this could be shoppers, office employees or residents in our residential buildings) at an accelerated pace.
Seamless Integration: Elevating Proptech across Leasing, Operations, Sustainability, and Customer Experience
leasing opportunities. This techempowered approach offers flexibility and data-informed leasing solutions, allowing potential tenants to tailor their offerings to better meet their needs.
Operations & Sustainability In terms of operations and sustainability, Attacq has also transformed its building management and sustainability initiatives through Proptech by optimising resource consumption and implementing sustainable practices. We have in these cases seen tangible benefits through not only reduced costs but also contributed to a greener future.
Leasing From a leasing perspective Proptech has transformed the way Attacq manages leasing processes. By leveraging technology, our business has streamlined its tenant-related activities, making it easier for prospective tenants to engage with the company and explore
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CASE STUDY
CASE STUDY - Mall of Africa
At the heart of Attacq's Proptech strategy is the utilisation of big data. By analysing customer behaviour, sales statistics, and shopper preferences, our on-the-ground teams have gained invaluable insights that inform their decision-making process. This data-driven approach has resulted in a deeper understanding of property performance and customer needs across the board.
Mall of Africa serves as a powerful testament to the impact of Proptech. Attacq utilised technology to gather insights which led to actionable improvements in tenant performance, store layouts, and customer engagement strategies, creating a more vibrant and profitable retail environment. As an example, one of our leading national retailers undertook a transformational renovation through data and customer insights. Attacq made strategic changes within the store, significantly reducing bounce rates and enhancing the overall shopping experience, showcasing how Proptech can drive tangible results.
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To further enhance our property management capabilities, Attacq plans to implement a Customer Relationship Management (CRM) tool in 2024. This aims to optimise the management of client relationships, track leasing deals more effectively, and improve overall operational efficiency.
‘We use technology to ensure the security and convenience of residents within our residential buildings, enhancing the overall quality of life for the residents’
Customer Experience By recognising the importance of customer experience, Attacq has used Proptech to elevate the overall ambience of its properties. This includes improving services, amenities, and overall ambience to create an environment that draws in shoppers and builds lasting connections.
Michael Clampett
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Applications in office and residential In response to the changing dynamics of the workplace, including trends such as workfrom-home, Attacq is proactively working on adapting office spaces, with the goal being to align these spaces with evolving tenant needs, ensuring they remain attractive and relevant in a rapidly evolving work environment.
Proptech is also making waves in the residential real estate sector, where access control is paramount. We, for instance, use technology to ensure the security and convenience of residents
CASE STUDY
within our residential buildings, enhancing the overall quality of life for the residents.
Looking ahead, Attacq continues to explore various technological initiatives to further enhance property management. With a focus on data-driven decisionmaking, innovative leasing processes, sustainability, enhanced customer experiences, and the integration of big data, Attacq is not only staying ahead of the curve but also setting the standard for the future of property management.
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TRANSFORMING REAL Unveiling 5 Proptech the Future
BY ANDREA CARR Head (R&D) e4
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ESTATE: Trends Shaping
Proptech, a dynamic force in real estate, is transforming the industry landscape. As technological innovation gains momentum, it not only enhances value creation but also brings about efficiencies, transparency, and an elevated user experience. Explore the horizon of Proptech trends reshaping the way we navigate and experience real estate.
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P
roptech is reshaping the real estate industry, with technological innovation continuously improving value creation for all stakeholders, generating efficiencies, improving transparency, and further refining
the user experience.
As in any industry, it’s essential for businesses and consumers to understand and utilise these shifts to guide their decisions and movements going forward.
5 Tech Trends reshaping Real Estate in 2024
1. Smart contracts
The real estate industry has long been plagued by inefficiencies, lack of transparency, and high transaction costs, but blockchain technology is changing this. Blockchain technology and smart contract development is revolutionising the way the world conducts real estate transactions. Smart contracts can automate the process of documenting the transfer of property ownership, creating efficiencies, and reducing paperwork while being more secure and cost-effective.
South Africa is unfortunately behind the curve when it comes to regulating, accepting, and adopting these technologies, but it’s still a significant and noteworthy trend in the local market. In the short term, we can expect that a fully digital fulfilment process can be applied where these contracts are created and signed and stored in an irrefutable ledger. But it’s going to take some years to replace the physical Deeds Office, as a government mandate and budget will be required to digitise this process completely, and it should be done in a phased approach.
Digitising a ‘Power of Attorney’ to pass transfer is also on the horizon but will require industry-wide buy-in to affect the necessary legislation to replace this physical process.
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PROPTECH
2. Fractional ownership
Being able to tokenise real estate assets makes it possible for blockchain to enable the concept of fractional ownership in a more secure, legitimate, and transparent way. Blockchain fractional ownership involves dividing tangible (or intangible) assets into smaller units. These get represented by digital tokens on a blockchain network. Each token corresponds to a specific fraction of the asset’s value – and the ownership of these can be formalised by an irrefutable ledger of record.
Though this isn’t a new trend, it will soon become normalised and accepted as a mainstream way of purchasing a highervalue physical asset that one wouldn’t traditionally be able to afford. Currently only a very small percentage of properties are purchased this way, but it’s set to become more popular – especially considering the current economic climate.
3. Artificial Intelligence (AI)
Artificial Intelligence (AI) and Machine Learning (ML) have ushered in a new era of efficiency in almost all industries, and the real estate sector is no different.
AI and the impact it’ll have on the industry is largely unknown now, but we can expect to see this technology used to assist with
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lead generation, customer service through smarter chatbots, and personalised digital marketing. Predictive analytics are also being used by real estate companies to forecast trends, identify potential investments, and make data-driven decisions.
4. Augmented Reality (AR) & Virtual Reality (VR)
Augmented and Virtual Reality will enjoy greater adoption, with the global AR and VR market in real estate expected to reach $2.6 billion by 2025.
This trend became necessary during the pandemic and continues to grow, allowing prospective buyers and tenants to tour properties remotely in a highly immersive manner. It’s especially beneficial for international or long-distance clients.
5. Smart Homes
It’s predicted that in some countries, smart homes will become the standard in 2024 and beyond, but South Africa has a notable barrier to adoption with its current electricity crisis. IoT-connected systems enable real-time monitoring and management of various aspects of a building, such as energy usage, air quality, security, and maintenance.
It increases efficiency and user experience while reducing costs. Though the power crisis presents a considerable challenge to those looking to adopt this trend in South Africa, sustainable power solutions and innovative funding options for these will still allow this trend to start taking hold.
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PROPTECH
Proptech company e4 who specialize in digitization is keeping a careful eye on these trends and using them, and others, to inform future business decisions. Strategically applied, R&D can be a silver bullet to maintaining a competitive advantage in an extremely competitive world. Our aim in 2024 is to land several initiatives that support our strategic roadmap.
The Proptech industry will remain a key focus for us, but we’re also expanding to other industries looking for digitised solutions to solve their existing challenges. The beauty of technology and the solutions we’ve produced in the past is that they can be applied to various industries quickly to effect change and process improvement fast – and this strategy will be key for us this year and into the future.
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COMMERCIAL
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The Rise of Sectional Title Ownership
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The 8 irresistible amenities reshaping the postpandemic Workspace
TRENDING ONLINE
10 Ways to Harness Coworking Spaces for Business Expansion
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REVOLUTIONISING INVESTMENTS: The Rise of Sectional
BY WAYNE BEEKMAN Director Beekman Group
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Open page 101 in the magazine →SECTIONAL TITLE
HOSPITALITY Title Ownership
In recent years, there has been a notable emergence of Sectional Title Ownership opportunities in the hospitality and tourism sector, offering a modern and advantageous alternative to traditional real estate investments. Current trends show that approximately one-third of all property sales revolve around Sectional Title Ownership, while transfer volumes for freehold homes have been continuously declining over the last five years.
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Open page 102 in the magazine →HOSPITALITY
B
eekman Group, one of South Africa's leading leisure development and property management players for over 50 years, has witnessed the impact of this growing property trend first-hand and remains at the forefront of this exciting market.
Key Factors Driving the Emergence We explore some of the factors that have contributed to this shift within the market and lends his insights as to why Sectional Title Ownership has become a more popular option for investors seeking hospitality, great returns and incredible benefits.
Sectional title ownership Sectional Title Ownership allows individuals to purchase a unit within a holiday resort property or development. When you purchase into a Sectional Title development, you buy an undivided share of the common property – usually a one to four bedroom villa – on the established resort property. Sectional Title Ownership, whether of a complete unit or an individual hotel suite, allows each
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owner to possess a title deed to said unit.
Essentially, you own the villa or hotel suite outright, and can choose to either rent it out to prospective holidaymakers, or take full advantage of your holiday home for up to 14 weeks a year, while enjoying the use of all on-site facilities at discounted rates.
6 Vital Catalysts behind
1. Remarkable Returns While property has historically been grow their wealth long-term, an introduced a new fear factor to the negative figures when it comes to
On the other hand, investing through over your investment, as well as more
2. Flexibility Sectional Title Ownership offers to utilize their property for personal desired. This versatility empowers investment more adaptable and
3. No Hassle Ownership and Maintenance With Sectional Title Ownership, managed by the agent. This includes and satisfy rental guests, cleaning,
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the resurgence of Sectional Title
perceived as one of the more stable investments for those looking to unpredictable economy, exploitative sellers, and booming inflation rates have prospect of property ownership, with many investors being driven into their return on investment.
a sectional title at a holiday resort provides an unparalleled sense of security stable returns, often as high as 12% annually.
greater flexibility in terms of property usage. Owners typically have the freedom stays, rent it out for income generation, or even sell their ownership share if investors to adapt to changing circumstances and market dynamics, making the potentially more lucrative.
investors can rest assured that the day-to-day maintenance of their property is fully furnishing your villa to a design standard that has been proven to attract servicing and minor maintenance of your villa, as well as rental marketing,
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finance and administration of your investment and even vetting and managing potential ill behaviour of rental guests, which leaves you with nothing to worry about but the growth of your investment.
4. Stability and Transparency Sectional Title Ownership structures tend to be more transparent in terms of costs and fees associated with property ownership. Unlike other real estate investments that might come with hidden fees and escalating maintenance costs, owning a Sectional Title typically offers clearer insight into financial obligations, helping investors make informed decisions.
5. Additional Holiday Benefits By owning a holiday property, investors may also gain access to a curated bouquet of Holiday Benefits, which may include free travel services, discounted facilities, exclusive deals, personal assistance, a varied number of holiday exchange options, and more.
6. Potential for Appreciation Owning a holiday property in a desirable location can potentially lead to appreciation in property value over time. As the property gains popularity and demand increases, investors stand to benefit from capital appreciation, providing a potential return on their
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Open page 105 in the magazine →SECTIONAL TITLE
Additional Sectional Title Offerings These offerings include holiday flexibility, maintenance-free ownership, and exclusive access to multiple luxurious resorts. Owners can generate a stable rental income and enjoy the option to exchange accommodations at various resorts globally.
Benefits for owners who invest in hospitality 1. Making personal use of your unit for a maximum of 14 weeks per year; 2. Contributing your personal
usage weeks to the rental pool in order to earn additional rental income, or; 3. Exchanging your personal usage time for a holiday at one of 4000 resorts worldwide.
According to Director and Founder, Stefan Botha of Rainmaker Marketing, 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.
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UNLOCKING BUSINESS The 8 irresistible post-pandemic
By Editorial
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Open page 107 in the magazine →THE NEW OFFICE
SUCCESS: amenities reshaping the Workspace
In the era of hybrid work models, businesses are rewriting the rules of the workplace, placing significant emphasis on amenities that complement their operations. As remote work becomes a norm, the battle for attracting and retaining businesses hinges on the allure of workspace features. Brokers, dive into the key amenities shaping the future of business leasing – a crucial guide for clinching successful deals in the evolving corporate landscape.
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T
he world of work has changed, and not before time. In an interview with hybrid expert Dr Gleb Tsipursky, IWG’s CEO Mark Dixon explains, “The old style of office-based working doesn’t just fail to meet our current needs, it’s also downright archaic.” Employees have more freedom to choose where they work, and many want access to workspaces
closer to their homes – a shift that’s driving global businesses to rethink their workplace strategies.
With more companies downsizing central headquarters and instead investing in a network of flex spaces, what standout qualities should brokers look for to best serve their clients’ needs?
EXPLORING THE PINNACLE Key Amenities steering Business Lease choices
1. Accessible locations Today’s workers want flexibility. Rather than being tied to one office, they their homes. This helps to minimise time spent commuting and improve
Businesses are catching on: an IWG study shows that 82% are diversifying these local workspaces even more accessible, companies are looking for to public transit is also a big plus.
2. Eco-conscious design Sustainability has come to the fore in recent years, and while hybrid working provide clients with workspaces that have sustainability features built in.
Eco-conscious construction that considers energy efficiency, water conservation, businesses boost their sustainability credentials.
3. Adaptability The pandemic highlighted the critical need for business adaptability. That’s terms of function, size, and location so they can respond to changing
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Open page 109 in the magazine →THE NEW OFFICE
in the Hybrid Work era
want the option to work from multiple locations, including workspaces close to their work-life balance.
their office network to include locations outside city centres. And to make amenities such as parking, EV charging, bike storage, and showers. Being close
cuts down commuting-related emissions, it’s also important to be able to
renewable energy, indoor air quality and green certifications all help
why companies are increasingly looking for office space that’s flexible in circumstances swiftly.
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This strategic move isn't just about agility— it's also financially prudent. Analytics, trading traditional long-term office leases for flexible spaces can ZAR 200 000.00 per employee.
4. Smart buildings Tying in with the sustainability theme is the growing demand for smart buildings of Things’ (IoT). Smart features such as IoT-controlled lighting, thermostats as well as keeping employees healthy, comfortable, and productive when
5. Glitch-free technology A hybrid working model depends on flawless technology. Every IWG location WIFI and top-tier video conferencing tools, ensuring glitch-free connectivity all our locations.
6. Mix of spaces Four in five workers surveyed by IWG said they’re more productive since empowering employees to work from multiple locations, wherever convenient, and collaboration.
Also, ensuring your workspaces provide different types of areas to support socialising means that employees can make the most of hybrid.
7. Self-sustaining communities Convenience enhances the hybrid working experience. Workspaces located and retail outlets close by exemplify the 15-minute city concept—where work, within a short walk or cycle from home, promoting a better work-life balance easy access to social and after-work activities.
8. Wellness amenities Wellness is another key focus for businesses that have adopted the hybrid wellbeing. Businesses are looking for workspaces that provide wellness to work for them as well as make office days more appealing. Such amenities rooms, green outdoor spaces for breaks, ergonomic furniture and services
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Open page 111 in the magazine →According to research firm Global Workplace result in average annual savings of over
controlled by the so-called ‘Internet and air quality all help with sustainability, they’re in the office.
comes with high-speed, business-grade and seamless collaboration across
switching to hybrid. That's because enhances productivity
focused work, collaboration, and
in mixed-use developments with food essential services and leisure are and providing employees with
THE NEW OFFICE
Amenities matter In the coming years, experts predict that the proportion of professional employees working the hybrid way will pass 50%. It’s therefore vital that brokers keep up with what businesses are looking for when it comes to providing employees with workspaces that meet their evolving needs. IWG workspaces align with all these key amenities, making them a top choice for businesses – 83% of Fortune 500 companies already use them.
Find out how a IWG partnership can give you immediate access to a global network of 4000 workspaces with unrivalled amenities.
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model, which boosts employees’ amenities, which attract employees might include gyms, meditation that promote health and wellbeing.
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Open page 113 in the magazine →OFFSHORE
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Prime Investment Opportunities Unveiled
TRENDING ONLINE
What You Need To Know For Retirement
Six Trends That Will Define Retirement Property in 2023
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DUBAI's RED-HOT RENTAL Prime Investment
By Editorial
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MARKET: Opportunities Unveiled
According to reports, Dubai has enjoyed one of the best performing rental markets over the last year with a surge in activity, high occupancy rates due to limited rental stock, and steady rental yields of between 4% and 8%.
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D
ubai is now regarded as the pinnacle of property investment across all global markets, offering lucrative rental returns according to Samuel Seeff, chairman of the Seeff Property Group. It is one of the hottest rental investment markets with high demand and limited stock, at least until such time as the new offplan developments are completed.
According to the Dubai Land Department, total property transactions spiked by 33.8% in volume and 36.7% value terms last year. The rental market surged by 23% in the third quarter with leads for rentals increasing by a phenomenal 119%. Sales of villas and townhouses in particular soared by 34% with sales in the secondary market for villas increasing by 38%.
Nombasa Mawela, licensee for Seeff Dubai, says the forecast for 2024 is even better, offering greater opportunity for South African investors to diversify their property portfolios for better returns. There is opportunity in getting into the market now with excellent off-plan developments tailored to the rental investment market, offering attractive financing plans. By the time the
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developments are complete, values will likely already have increased, leaving investors with a considerable asset, she adds.
The rental market comprises a mix of short-term rentals with people visiting the city in their millions. Dubai Tourism statistics show that some 15.37 million people visited between January and November 2023. There is also a strong residential rental market with a high percentage of renewals which offer good security for investors.
Dubai is now positioned as a “global hub for business, tourism and investment” with pro-investor policies and an attractive lifestyle, and Seeff says its allure is global with a diverse clientele and wealth continuing to flock to the city as opportunities expand. For South African investors, it could be an excellent store of wealth and hedge against the fluctuation of the Rand.
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Open page 117 in the magazine →OFFSHORE
While South African investors are often hampered by the weak Rand in terms of investing overseas, the upside is that the Dubai rental investment market is very accessible with pricing from around R2.3 million (AED 450,000). Mortgages are available for up to 75% of the purchase price. The developers are also providing flexible payment plans of up to five years for those not wanting a mortgage.
Seeff says investing in Dubai property provides the opportunity to shift some funds offshore into a lucrative investment destination. Entry level prices tend to compare well to the upper middle class and luxury sector in South Africa. The demand is such that investors can earn excellent returns which can part-fund your investment. On one particular development for example, taking the rental returns into account means you would only be paying around 66% of the value of the purchase price, the rest being financed by the rental income.
Uncover Dubai's Prime Opportunities for a Lucrative Portfolio
Mag 330 in City of Arabia
•
• • •
•
Priced from approx. R5.5M (AED1,078M) One-bedroomed unit 50% Payable over 2.5 years Balance after handover over a 4-year period ROI of 14.1%.
Merce House by Ellington in Uptown Dubai • Priced from approx. R13.4M (AED2,6M) • One-bedroomed unit • 20% Down payment • Structured payment plan • Rental yield 6%-8%.
Armani Beach Residences in Palm Jumeirah • Priced from approx. R25.9M (AED5M) • Two-bedroomed unit • 25% down payment • Three-year instalments • Rental yield of 5%-8%
You could later sell the property, or keep it should you decide to relocate to Dubai, or if you are looking for a second passport which is seeing an increase in demand from South Africa, you could probably sell the property and upgrade to meet that threshold.
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Open page 118 in the magazine →A coastal oasis craf t ed b y n at ur e H O MES FR OM R 2 00 0 00 | L A N D F R O M R 4 6 0 00 0
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 RIVA LLED ACCESS TO OUTD OOR FACILITIES WIT HIN THE ESTATE
biking
Private lagoon beach access
Tropical forest access
Dedicated walking trails
Catch-and-release fishing dams
For more Information
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9 Expert Strategies for longterm Income Security
TRENDING ONLINE
What You Need To Know For Retirement
Six Trends That Will Define Retirement Property in 2023
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ENSURING FINANCIAL 9 Expert Strategies for Income Security
By Editorial
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BLISS IN RETIREMENT: long-term
To unlock a prosperous and secure retirement here are 9 smart ideas and strategies that you can apply to maximise the value of your investments and ensure a lasting income stream. Your future financial well-being starts here.
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Open page 122 in the magazine →RETIREMENT
1.
C
ontinuous Education: Begin by educating yourself on finances and retirement investments. The early start is crucial, with even a slight delay impacting your future returns significantly. Inflation and compound interest rates make early investing imperative.
2. Strategic Retirement Timing With increasing lifespans, meticulous retirement planning is vital. Factor in inflation, realistic expenses, and ensure your investments align with a longer retirement horizon as people are living longer.
3. Estate Planning Mastery Establish the right structures for estate planning early on. Involve your partner in retirement investment planning, set clear savings expectations, and understand the impact on your estate. Utilize trusts, including a Family Trust for personal assets and a Holdings Trust for property-related wealth.
4. Balanced Portfolio Creation Avoid the mistake of overly
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conservative investments. Diversify your portfolio, allocating at least 30% to 50% on investment properties. While markets may be volatile, focus on ensuring that your returns outweigh your investments.
5. Accelerate Home Equity Pay off your primary residence early to build substantial equity. When strategically managed, this equity can be leveraged to finance additional property purchases.
6. Prudent Financial Habits Steer clear of living beyond your means. In an era of economic uncertainty, accumulating bad debt negatively impacts your retirement savings. Prioritize prudent financial habits.
7. Property Portfolio Building Regardless of age, start building a property portfolio. Utilize your equity to acquire properties, aiming for a diverse portfolio that generates passive rental income. Incorporate a trust structure for added benefits.
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Open page 123 in the magazine →INVESTOR INTELLIGENCE
8. Strategic Property Sales Timing property sales well can help pay off loans and generate extra funds. Consider selling a property or two at the right moment to bolster your savings.
9. Value-Enhancing Investments Grow the value of your assets by undertaking strategic renovations and adding
features to your properties. This proactive approach ensures increased property values in a shorter timeframe.
Investing in the right structures and properties paves the way for a powerful retirement nest egg, securing a safe and prosperous future.
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Demystifying Annual Allowances for Savvy Investors
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Navigating South African Fund externalisation & SARS Tax Compliance status process
TRENDING ONLINE
What You Need To Know For Retirement
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NAVIGATING OFFSHORE Demystifying Annual Savvy Investors
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Open page 127 in the magazine →CURRENCY EXCHANGE
INVESTMENTS: Allowances for
At the start of each new calendar year, South African residents may avail themselves of new annual allowances granted by the South African Reserve Bank under Exchange Control regulations. The idea is move funds in out of the country hassle free for any individual investor or businesses that operate offshore. These allowances expire at the end of each calendar year on 31 December.
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Open page 128 in the magazine →WEALTH
H
ere is an overview of these for you below:
1. R1 million Single Discretionary Allowance (SDA) SA resident individuals are granted an annual Single Discretionary Allowance (SDA) of R1 million per calendar year by the SARB, to externalise funds for any legal purpose. The SDA does not require foreign tax clearance from SARS.
2. R10 million Foreign Capital Allowance (FCA) In addition to the SDA, SA resident individuals can also avail themselves of a Foreign Capital Allowance (FCA) of up to R10 million per calendar year. Unlike the SDA, the FCA requires foreign tax clearance from SARS which is valid for 12 months.
3. Special approval applications If you want to externalise an amount greater than your annual allowances in the same calendar year, you can apply to the SARB for approval to do so. The special approval remains valid for 1 year and an extension may be applied for if required.
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Depending on why you are taking money offshore, you may have to review the following before you go ahead: • How much money can you transfer? • Do you need to open a foreign bank account? • Where will the money be invested? • What is the time frame for tax clearances to ensure that you obtain them in good time? • Are you financially emigrating and what are the implications in terms of SA exchange controls? • Can you leave your SA bank account open? • If you emigrate, what do you do with any assets left behind such as rental property, shares, retirement annuities? • Will you potentially inherit from an SA estate one day and what are the tax and banking implications? If you are considering a currency transfer to invest offshore, purchase a property, or simply want to send your hard-earned savings abroad, you can still do so by using any available balance on your annual allowances before 31 December.
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Open page 129 in the magazine →CURRENCY EXCHANGE
Foreign tax clearance is valid for 12 months from the date of approval, so applying now mans you can draw down on the balance over the next 12 months.
for clearance – one can apply using the investment statements whilst remaining invested so that your money can keep working for you.
You do not need to redeem your investments and have the “funds reflecting” in an account to apply
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UNLOCKING INTERNATIONAL Navigating South externalisation & SARS status process
By Editorial
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Open page 133 in the magazine →FOREIGN EXCHANGE
FINANCES: African Fund Tax Compliance
The process for South Africans to remit funds out of the country within the R1 million annual single discretionary allowance or against a SARS AIT Pin clearance for amounts ranging from R1 million to R10 million are required as detailed below. For larger amounts, a Special Clearance from the South African Reserve Bank is required.
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• •
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ecessary documentation of starting this process and transacting: Copy of their South African ID Proof of Address or utility bill or bank statement – not older than 3 months Sources of Funds - Savings, Trust Distribution, Inheritance, Property and Share sales.
•
•
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The account is opened within a matter of hours, thereafter they will be able to remit up to R1M for the calendar year through the account.
The recent procedural changes in the Tax Compliance Status (TCS) process by SARS, emphasising the need for tax compliance for Foreign Tax Clearance. The consolidation of TCS pins into a single "Approval for International Transfer" and updates in information requirements for AIT applications, including: • Asset statements, • Tax residency status, • Trust beneficiaries. • Entity interests • Loans information
Documents required are as follows: • Relevant material demonstrating source of
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•
•
•
capital to be invested. Statement of assets and liabilities for the previous three tax years. Source of funds, if savings/ cash: bank statement reflecting savings/cash value and review of past three years taxable income for income/ salary claims. Source of funds, if distribution from a trust: Copy of Trust deed, Resolution, details regarding source of funds of trust, bank statement of taxpayer reflecting the distribution from the trust, trust financials and latest share portfolio statement. Source of funds, if inheritance: Copy of Final Liquidation & Distribution account, bank statement reflecting inheritance received. Source of funds, if sale of property: Original letter of the Conveyancer or proof of receipt of proceeds, split of proceeds for jointly owned property, Capital Gains Tax calculation on sale of property. Source of funds, if sale of shares and other securities: Capital Gains Tax calculation on disposal of shares, portfolio statement reflecting sale of shares.
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Open page 135 in the magazine →FOREIGN EXCHANGE
In essence, these changes are procedural and not regulatory, aimed at streamlining the process rather than altering the rules. Individuals seeking Foreign Tax Clearance to transfer funds abroad under their annual allowances, granted by the South African Reserve Bank (SARB), must now ensure they are “Tax Compliant” as a prerequisite.
Previously, SARS provided two types of TCS pins, one for emigration and one for Foreign Investment Allowance (FIA). To simplify the process, these have now been merged into a single “Approval for International Transfer” (AIT).
SARS requirements for an AIT application, including: 1. A statement of assets and
liabilities for the previous three years, categorized as local and foreign. 2. Indication of South African tax residency status. 3. Declaration of being a beneficiary of a local or foreign trust. 4. Disclosure of any interest (direct or indirect) of 20% or more in local or foreign entities. 5. Identification of any loans held in local or foreign trusts.
For more details information, you can refer to the SARS website, or to get somebody to assist you to move funds offshore at the cheapest rates click on button.
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Open page 136 in the magazine →NEWS
admyt Secures transformative Fundraise with strong backing from REdimension Capital
PHOTO Devon Beynon & Kfir Rusin, Joint CEOs of admyt.
REdimension Capital and admyt are pleased to announce a transformative deal, where terms have been agreed for a ZAR30 million investment into the company and has agreed terms with REdimension Capital.
admyt is the leading digital parking management platform in South Africa which uses license plate recognition (LPR) software and smartphone technology to offer cashless, ticketless & touch-less parking. The investment will be used to drive product enhancements, expand the number of admyt-enabled locations and to scale its dominant user base across its focused nodes in South Africa.
The transaction is the first investment for the REdimension Real Estate Technology and Sustainability Fund, a fund advised by REdimension Capital and backed by strategic partners including Burstone Real Estate Partners, Growthpoint Properties, Rand Merchant Bank, Liberty Group and Sphere Holdings, amongst others.
Emira secures full ownership: Successful conclusion of Transcend acquisition
PHOTO Geoff Jennett, CEO of Emira
Emira Property Fund (JSE: EMI) successfully acquires Transcend Residential Property Fund, marking a strategic move to enhance diversification and maximise returns in the suburban multifamily residential rental property segment.
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Page 137
Open page 137 in the magazine →CEO Geoff Jennett underscores the conversion of a strong equity investment into a wholly owned subsidiary, reinforcing Emira's commitment to strategic growth. The delisting of Transcend from the JSE aligns with Emira's dynamic approach to capital allocation and portfolio management. This milestone contributes to Emira's broader strategy, leveraging incremental investments in both local and international markets. The portfolio, valued at R12.1bn, maintains diversity across commercial and residential assets in South Africa.
Cape Town soars to new heights with a state-of-theart R7 billion Airport project set to take flight in 2027
Cape Winelands Airport (CWA) near Durbanville, Cape Town, is set for a ground-breaking R7 billion expansion in 2027, led by local entrepreneur Nick Ferguson of RSA.aero.
The visionary project aims to redefine the skyline, generate employment, and introduce a second airport to Cape Town in the Winelands region. Deon Cloete, MD of Cape Winelands Airport, expresses excitement, emphasizing the commitment to world-class transportation, tourism promotion, and regional economic growth.
The revamped ‘Fisantekraal’ airport, under new ownership, will offer domestic and international flights, projecting a 25% market share by 2050 and accommodating 2 million global visitors and 3 million domestic travellers annually.
Alderman James Vos, MMC for Economic Growth, applauds the project, foreseeing a transformative era of opportunity and prosperity. The expansion includes crucial infrastructure developments, making it a symbol of the region's commitment to progress and prosperity. The first phase is estimated to cost between R5-7 billion.
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Open page 138 in the magazine →NEWS
The Investor of the Year property investors for
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Page 139
Open page 139 in the magazine →INVESTOR OF THE YEAR WESTERN AWARD CAPE 2024
Awards calls 2024 entries
The Investor of the Year (IOTY) Awards 2024, powered by SAPIN (South African Property Investor Network) and in partnership with ABSA, is calling on property investors nationwide to enter the annual IOTY Awards 2024. REI is also the official media partner in this event.
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Open page 140 in the magazine →NEWS
T
he IOTY Awards is a platform created to celebrate property investors positively impacting the South African property investment and development landscape. Whether a portfolio with one investment deal or a solid history of many property deals, the IOTY Awards are open to all South Africans
over 18, who believe they have what it takes to be the next top property investor.
Prizes and accolades galore In addition to the coveted title of Investor of the Year, category winners can look forward to a five-star holiday, electronic tablets, men’s and ladies’ watches
CLICK HERE to enter Awards
and property investment coaching as some of the prizes for the nation’s top and most influential property investors.
Andrew Walker, CEO and Founder of the SA Property Investors Network, expressed his enthusiasm for the event, stating, “The Investor of the Year Awards celebrates the tenacity and boldness of investors in the highstakes field of property investment recognising their achievements in creating wealth in a creative and impactful manner. He says, “the event also provides a unique opportunity for attendees to network with their peers and learn from seasoned property investment professionals. We want to
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encourage all South African property investors to enter the awards ceremony no matter their progress level to give their journey the boost it needs.
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Open page 141 in the magazine →INVESTOR OF THE YEAR WESTERN AWARD CAPE 2024
INVESTOR OF THE YEAR AWARDS 2024 - CATEGORIES
IOTY Awards Main Categories include: • Beginner: For those embarking on their property investment journey. • Intermediate: Aimed at investors managing a growing portfolio of two or more properties. • Big Leagues: Tailored for investors venturing into Development or Commercial Spaces.
IOTY Awards Sub-categories include: • Youth: For investors under the age of 35. • Green: Projects demonstrating a positive environmental impact. • Social Change: Portfolios contributing to positive social change. • Most Innovative: Portfolios showcasing a high level of innovation. • Women: Celebrating women’s contribution to property investment. • Township: Managed within Township communities. • Inner City: Investments within Inner City spaces.
Over the next 8 months the team at the SA Property Investors Network will embark on a nationwide search for the entrants to the Investor of the Year Awards 2024 who will undergo a rigorous judging process in the hopes of making it as a finalist.
IOTY Awards are challenging the misconception that property investment is exclusively for the affluent. We have witnessed numerous investors starting their
investment journey with minimal resources growing a multi-millionrand property investment portfolio.
“Wealth is grown using property investment strategies undergirded by the right education and a strong network, and support team. The IOTY Awards are a testament to these opportunities and achievements,” added Walker.
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Open page 142 in the magazine →EDUCATION
THE FIRST KUDU
Building a tech start-up in Africa: Stories and Lessons from HouseME By Ben Shaw & Lorne Hallendorff
About the Book ‘The First Kudu’ tells the story of HouseME, a rental technology company founded in South Africa that grew to 34 employees and 50 000 registered users, processing hundreds of millions of rands each year. The company won awards, raised several rounds of funding, and was sought after by competitors.
The narrative invites you to journey through the chaos with the young team and unpacks in gritty detail what goes into building a tech start-up – _with stories of fun and failure honestly told in equal measure. It was exciting. It was excellent. And then…it was dead.
Ben Shaw (former CEO) and Lorne Hallendorff (former COO) provide a whirlwind tour of what goes into building a start-up at the southern tip of Africa and what they would do differently, were they to do it again.
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Open page 143 in the magazine →About the Authors BEN SHAW Ben, a seasoned executive, and investment professional has raised start-up capital and led diverse teams across South Africa. His expertise spans investment banking, payment technology, property, and private equity, making significant contributions to ventures.
Co-host of "Shapers, Makers, Builders & Breakers," he advises small companies, emphasizing mentorship and African entrepreneurial ecosystem development. An Allan Gray Orbis Foundation Fellow, Ben represented South Africa in the CFA Institute Research Challenge, residing in Cape Town.
LORNE HALLENDORFF Lorne, an adept business leader, pioneers South Africa's first financial technology product, the Karri Card. Having orchestrated its setup and launch, he now drives its expansion.
With a background in technology start-ups and management consulting across Africa, Lorne is a Fellow of the Allan Gray Orbis Foundation and a former UCT SRC president. Notably, his 2023 short story earned an honourable mention in the Writer's Digest Awards, showcasing his literary prowess featured in "Reflections of South African Student Leaders, 1994 to 2017.
Book review The First Kudu is an illuminating narrative of property, technology, entrepreneurship, and purpose, written with diversity, passion and humour by entrepreneurs who muse on fun and reflect on failure.
This is not merely a story about a technology start-up at the tip of Africa. The chapters weave together anecdotes and real-life examples to capture the events, feel and pace of a start-up, whilst also extracting difficult lessons learned through the reality of building one. In the vast landscape of African entrepreneurship.
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Open page 144 in the magazine →UNTIL OUR NEXT
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Open page 145 in the magazine →EDITION
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