South African billionaire buying London landmark!

South African billionaire eyes buying London landmark!

Bidding 285 million pounds for Britain's tallest building.

The family office of South African billionaire Nathan Kirsh is in exclusive negotiations to buy the former NatWest headquarters, in the heart of the London, after bidding 285 million pounds for the skyscraper, the Times reported on Friday.

The newspaper said, without citing a source, Kirsh's bid for Britain's tallest building is thought to have outweighed those of rival contenders by at least 10 million pounds.

He beat off the London-focused Exemplar Properties and the private equity firm Doughty Hanson, according to the article.

The 2.2 acre estate was put up for sale by its joint owners, BlackRock UK Property Fund and LaSalle Investment Management, with a 290 million pounds price tag.

In addition to the skyscraper, which was renamed Tower 42 when NatWest Bank moved out, the site includes four other adjacent properties. Jones Lang LaSalle, the property adviser, conducted the sale.

Investec CM refinances Growthpoint BEE debt

Investec CM refinances Growthpoint BEE debt

Provides R888.5m of funding to settle the existing banks' exposure.
Johannesburg, Nov 16 (I-Net Bridge) - The AMU Trust, Growthpoint Properties Limited's largest BEE shareholder has refinanced debt raised in 2005 to fund the acquisition of 100 million Growthpoint Properties linked units as part of the company's landmark BEE transaction.

Investec Capital Markets has provided R888.5 million of funding to settle the existing banks' exposure and to partially reduce Growthpoint's mezzanine debt participation from R500 million to R200 million, thereby repaying R300 million to Growthpoint. This is being provided as a 4-year capital bullet facility.

The AMU Trust owns approximately 5.7% of Growthpoint Properties, worth approximately R1.8 billion, and represents the interests of Amabubesi Investments, Miganu Investment Holdings and Unipalm Investment Holdings.

"Investec welcomed the opportunity to participate in the funding and structuring of the transaction, enabling AMU to take advantage of the lower interest rate environment, provide funding flexibility and value extraction," said Rick Lupini of Investec Capital Markets in Cape Town.

Norbert Sasse, Chief Executive Officer of Growthpoint Properties Limited, pointed out that AMU continues to own 100 million Growthpoint linked units and that the BEE consortium has also extracted cash as a result of the debt refinancing.

"We are pleased that the beneficiaries of the AMU Trust were able to realise value from their investment, and that we've been able to distribute a portion of the Trust's existing cash resources to them. We continue to value the support and involvement of our BEE partners," noted Sasse.

The AMU trustees commented: "The refinance parameters provide the AMU Trust with a more flexible structure to utilise surplus cash, reduce the overall cost of funding and allow for upfront and semi-annual distribution of cash to beneficiaries."

Charges may await directors of failed Pinnacle Point property group

Charges may await directors of failed Pinnacle Point property group

Pinnacle Point Group's directors and former directors may face prosecution following the liquidation of the leisure property group and its subsidiaries earlier this month.

Cape Point Vineyards, which was part of the application for the liquidation of the group, wants an investigation into the affairs of all the directors and their subsequent prosecution if any wrongdoing is discovered.

The wine estate, which owns 1 percent of Pinnacle, said there was no way the property group could be rescued as it was seriously insolvent.

"There's nothing that one could have done, the group is irretrievably insolvent. We want an article 417/418 inquiry into the affairs of the directors and previous director. They should be prosecuted," Cape Point Vineyards owner Sybrand van der Spuy said.

Pinnacle Point was placed in final liquidation on November 4 after six of its subsidiaries were liquidated earlier in the month. Investec is a major creditor of the subsidiaries.

The subsidiaries - Pinnacle Point Resorts, Pinnacle Point Investments, Clarens Golf and Trout Estate, Property Promotions and Management, Eagle Creek Investments 74 and Festival Bay Trading 55 - were liquidated through a court order granted by the Western Cape High Court on November 2.

The listed holding company, Pinnacle Point Group, was liquidated following an application by Cape Point Vineyards.

Investec applied for the liquidation of the subsidiaries to recover amounts owed to the bank, arguing that Pinnacle Point subsidiaries and the holding group were commercially insolvent. Investec said the group owed it R120 million.

The bank initially submitted the liquidation application in February. The subsidiaries were placed under provisional liquidation in August.

Investec lawyers from Edward Nathan Sonnenbergs said the final orders were granted on an unopposed basis. The holding group's final liquidation at the instance of Cape Point Vineyards was also granted on an unopposed basis.

"Now that the companies have been placed into final liquidation, the liquidators are obliged to realise the assets in consultation with creditors. Investec is the major secured creditor... of the subsidiaries," lawyer Lisa Melis said.

"It is unclear what portion of Investec's claim will be settled by way of the realisation of the subsidiaries' assets."

Melis said the liquidators of the holding group had now instructed the law firm to assist with the winding up of the group, which would include an inquiry into its affairs in terms of the Companies Act.

Pinnacle Point had lodged six separate business rescue applications under the new bankruptcy protection provisions of the new act in July.

The firm lodged another host of applications during the hearing of its provisional liquidation in August.

Lawyer Leonard Katz asked the court to disregard these applications as they were a "complete abuse" of proceedings.

The applications were all removed, unprocessed, from the court roll shortly after provisional liquidation orders were granted.

In May, Pinnacle Point said it had secured the amount it owed Investec through the sale of its Pinnacle Point Resort.

The group said it had finalised a deal with Veritable Investments and Raptoguard to sell the golf and beach resort for R75m. At the time, Pinnacle Point said it owed Investec only R58m.

Pinnacle Point shares have been suspended by the JSE.

Business Report

18-month hiatus expected before property gains

18-month hiatus expected before property gains

Last week's decision by the Reserve Bank to leave the interest rate unchanged at 9 percent should not give consumers an excuse to go on a spending spree, warn the experts.

John Loos, property strategist at FNB Home Loans, cautioned consumers and said although the interest rate remained unchanged, it would be wise for households to make provision in their financial planning for future hikes.

He said although there was no certainty around how much to make provision for, the past two hikes saw the interest rate increase by four and five percentage points respectively.

"It doesn't necessarily mean not making one's desired purchases, but may mean lowering one's aspirations in terms of the home or car that one may have been considering purchasing, if there is no 'buffer'."

In an earlier report, Paul Barnard, executive financial planner at Consolidated Financial Planning, warned consumers that although unchanged interest rates made home and car loans relatively cheap, credit users should not overextend themselves.

He advised consumers to always budget for an interest rate 2 percent higher than the current rate and to increase installments accordingly. Barnard gave the example of a R1 million bond paid over 20 years at 9 percent. This would require a monthly installment of R8 997, meaning the total interest a consumer would have paid in the end is R1.2m.

"If you budget for an interest rate of 11 percent instead of 9 percent, your installment would be R10 322. If interest rates rise to 11 percent you will be able to afford the installment because you have budgeted for it."

He added that should the interest rates not rise and a consumer pays R10 322 instead of R8 997, the bond would be paid off in 14 years.

"If you adopt that approach and interest rates do not rise, then you will settle your debt early and save on costs of credit. If interest rates do rise, then you can easily absorb the increase because you are used to paying more than the minimum installment.

"Speak to your financial planner, who will advise you how to budget for your debt repayments and include a buffer of 2 percent."

Samuel Seeff, chairman of Seeff properties, said in view of the continued global and domestic economic pressure and the upward inflationary trend driven by fuel and utility hikes, a conservative approach would benefit the economy in the medium to long term.

He cautioned that while the low interest rate improved affordability for bond holders it should not be a signal for consumers to spend. They should rather focus on bringing down their household debt levels.

Seeff said he believed the introduction of a formalised policy that enabled first-time buyers to acquire 100 percent bonds was a good idea.

"I believe that prices and sales volumes will ebb along for the next 18 months and that only once there is a significant pick-up of the macro economy, underpinned by employment growth, are we likely to see any real uptick in the real estate market."

However, the CE of RE/MAX of Southern Africa, Adrian Goslett, was more optimistic.

He said RE/MAX believed the property market in South Africa had performed remarkably well compared to other markets.

Goslett said RE/MAX had found South African consumers felt better about the future of the local real estate market following improved winter sales.

"South Africa seems set to see a full recovery in the market, far quicker than our international counterparts. South Africa's inclusion into Brics (Brazil, Russia, India, China and South Africa) will also have a positive impact on the local market as this will attract investment and fuel in the economy and real estate market alike."

Cape Argus

Market 'not likely to turn for months'

Market 'not likely to turn for months'

Reacting to the latest housing data, Seeff chairman Samuel Seeff says he remains upbeat - but cautions that recovery of the property market will take longer than expected.

"Following the robust pre-2007 levels, there have been more than four years of slowed activity and market adjustment," he says.

"As with all markets, property is cyclical, and I believe we are now near the bottom of the curve and that prices and sales volumes are likely to ebb for at least the next 18 months before any noteworthy uptick. This would however, need to be driven by an economic pick-up, under pinned by positive employment growth.

"Because of significantly fewer new developments and new stock being built there is likely to be a stock shortage once the market turns."

He says the number of distressed properties continues to weigh on the performance of the market, and that normal activity levels can be expected to return only once there is a significant clearance of these.

On the upside, Seeff believes banks' deposit requirements will help bring more stability to the market in the long term. When home owners have some of their own money invested in their homes, they generally work harder to keep up their mortgage payments. This will enable owners to better withstand some of the updown effects characterised during this downswing and will result in fewer foreclosures.

The exception, he says should be first-time home-buyers, where he would encourage the introduction of a formalised policy that enables them to acquire 100 percent bonds.

There are still keen buyers in the market, but sellers need to be mindful of what buyers are prepared to pay and price correctly if they hope to sell their properties.

Buyers are negotiating strongly and on their terms. The upshot, he says, is that because of the slow turnover, there is real value to be gained at the top end of the market.

"Now is indeed a good time to buy, but buyers should be aware that these conditions are unlikely to continue indefinitely," says Seeff.

Dianne Brock, general manager of the Western Cape Institute of Estate Agents, says she is often asked to predict what direction the residential property market will take next.

"Right now Propstats data shows that that the traditional seasonal upswing is again a reality: spring always brings with it a new crop of house buyers and this year there has been increased activity, particularly in the entry level to R1.5 million bracket," she says.

"The more expensive homes are still difficult to sell, especially as so many of their owners, despite extensive media coverage on the subject, have not accepted today's lower market prices."

Looking at the bigger picture, Brock says that after attending several sessions on the state of the market, she agrees with economists like John Loos of FNB, who say there will be no significant upturn in house prices for three years.

"Here again, however, there are figures which indicate that the worst may now be over. Although growth may be insignificant, I think the likelihood of a further big drop in prices can be discounted. With national house price increases at 5.1 percent, prices are more or less holding steady against inflation. This suggests that now could be a good time to buy."

From the estate agents' viewpoint, Brock says the current scenario is quite promising because, with the total number of registered agents reduced from 86 000 to 25 000, competent agents are finding they can maintain a reasonable turnover.

"In many instances, competent, professional agents are now selling more units than they did in the boom times, but they have to work harder for them."

Weekend Argus (Saturday Edition)

Political climate 'will boost property market'

Political climate 'will boost property market'

There has always been a strong link between political confidence - faith in the future of the country - and home-buying confidence, says Bill Rawson, chairman of Rawson Properties.

"Surveys have shown that political confidence - or the lack of it - can often be more important than traditional decision-influencing factors like interest rate levels," he says.

"Right now the feedback from my colleagues and many others is that political and house-buying confidence has been significantly boosted by the far more decisive stance taken by President Zuma on maladministration, corruption and the advocating by out-of-line ANC members of policies not sanctioned by his cabinet.

"The dismissal of two cabinet ministers, the suspension of the police chief, the inquiry into the arms deal and the fact that whatever the outcome, Julius Malema has had to go on trial, have all sent out a positive message that South Africa will not be allowed to drift into a chaotic Third World state. These moves by the president, along with the Finance Minister's mid-term budget, have definitely restored confidence in a leadership that appeared to be losing control."

Rawson says what appears to be a stand against corruption at last will be especially welcome.

"Many years ago, Clem Sunter in his High Road presentations listed a lack of corruption as one of the three most important factors leading to a successful society. When state officials spend thousands of rands on useless airline trips and expensive hotels or sign leases (with colleagues) at three times the going rate, investors run fast.

"The more definite repudiation of nationalisation by various top state officials is also sending out a good message, and it is also encouraging that the main opposition party in Parliament is becoming increasingly multi-racial."

Weekend Argus (Saturday Edition)

Joburg denies R13bn debt

Joburg denies R13bn debt


The city of Johannesburg on Thursday denied it was R13 billion in debt after reports of a possible liquidity crisis.

Outstanding balances related to rates and taxes amounted to about R5.3 billion by September 30 this year, city spokesman Kgamanyane Stan Maphologela said in a statement.

"The cash position of the city has improved significantly in the first quarter of the current financial year. This can be attributed to improved levels in the collection of revenue."

On Wednesday, the Democratic Alliance said the city was running out of money because it was not collecting enough revenue.

DA caucus leader Mmusi Maimane called on the city to beef up its revenue department and set up a team to collect the outstanding R13 billion in debt.

"You don't need to be a rocket scientist to know what R13 billion could do for the city."

He said this was largely due to a dysfunctional revenue department that could not arrange for meters to be read correctly.

The city denied this and said the number of accurately billed customers has increased significantly.

"Revenue collection has responded to the interventions made in billing and credit management. Back office re-establishment has also resulted in accelerated query resolution," Maphologela said.

"The city is making inroads in the collection of old debt as indicated by the 102 percent collection level achieved during (July and September this year)."

The collection average over the last eight years has always been between 91 percent and 95 percent.

"There are certain historical areas where collection levels have always been low with the current socio-economic environment and this will always be an issue."

He said no business that sold services for credit could ever have 100 percent collection.

"We are currently on the 92 percent collection levels."

During January and February 2011, the city embarked on a credit control campaign, with the cutting of services but this was put on hold due to a public outcry.

Maphologela said the city established a task team to deal with queries.

The operating hours of main customer service centres were extended to seven days a week and an outbound call centre was set up to deal with outstanding queries.

The city had also sent pre-termination notices to customers and after 14 days services would be cut off as a last resort to collect outstanding debt.

"Given the current circumstances, the city of Johannesburg is bound by legal mandate to collect what is owned," Maphologela said

Massive new CBD for Soweto’s Jabulani

Massive new CBD for Soweto’s Jabulani

JSE’s top performing share behind the integrated development.

Calgro M3 - the JSE’s top-ranking share for the first ten months of 2011 - is behind massive developments in Jabulani, Soweto in an attempt to turn it into a fully-fledged central business district, such projects a property analyst believes is the future.

A 300 bed hospital, a state of the art performing arts theatre and an integrated residential housing development form part of the mix to upgrade Jabulani in conjunction with the Gauteng government and other stakeholders.

Calgro M3, as an unusual mass housing developer and the best performing share on the JSE (JSE:JSE) in the ten months to October, has identified Jabulani as one of the growth nodes in Soweto as it is within walking distance of the Rea Vaya rapid transport system , the train station, the Jabulani Mall and other amenities.

Another part of the upliftment of the area is the demolition of the dilapidated Jabulani hostels originally built to house migrants who once worked the mines along Johannesburg’s reefs decades ago. Over the years the workers’ families have joined them in the hostels where there are no ablutions and sewerage runs freely through the complex.

Also in the development is what people in the business of property call “walk ups”. These are two and three storey apartment blocks without lifts and form part of the RDP element of the development.

Developers Calgro M3 Holdings (JSE:CGR) are working on making sure the development is aesthetically pleasing, with shrubs and greenery dotted along the grounds. While the units are generally compact, the structures are sound with the basic necessities to accommodate any family as a start-up.

CEO Ben-Pierre Malherbe says this kind of development is the face of the future to cope with the ongoing influx of South Africans into cities.

Property consultant Francois Viruly says an estimated 10m people are expected to flock to Gauteng by 2014. Malherbe says these mixed=income housing developments are set to become an important benchmark in managing urban population dynamics in Gauteng.

In Meadowlands another development known as Fleurhof is under construction. It comprises sectional title units ranging in price from R279 000 to R299 000. Free standing units also form part of the mix costing between R289 000 and R296 000.

Fleurhof is also a fully integrated development in terms of government’s 2007 policy for RDP housing to form part of any new housing initiatives. Provision has been made for the building of crèches, churches, a community centre and other amenities within the development. The location ensures easy access to transport and the Johannesburg CBD. It’s also close to an industrial hub where many Soweto residents work.

This is also in line with government’s new thinking on housing developments that they must be close to places of work and transport. This node is also serviced by Rea Vaya.

Calgro says its model allows it to sell in the open market and to institutional buyers. Malherbe explains that unlike some traditional developers, Calgro buys the land, develops it and at the end of the day provides a turnkey product that cuts out town planners, civil engineers and contracting contractors. This in turn helps cut costs, enabling it to add value to the development.

Calgro has 30 developments in the pipeline in various areas over the next seven to ten years.

Vukile acquires R1.5 billion portfolio from Sanlam

Vukile acquires R1.5bn portfolio from Sanlam

And the PIC will acquire 70.2m Vukile linked units from Sanlam.

Johannesburg, Nov 14 (I-Net Bridge) - Property loan stock company Vukile Property Fund (VKE) is to acquire a portfolio of 20 properties, worth nearly R1.5 billion, from Sanlam Life Insurance.

The acquisition is expected to be effective in June next year, once a number of conditions precedent have been fulfilled, and will be funded through a combination of debt and the issue of new linked units. It said on Monday.

Vukile chief executive Laurence Rapp said the acquisition is in line with Vukile's new strategy of growing a quality portfolio of properties with strong contractual cash flows in order to achieve meaningful capital appreciation and sustainable growth in distributions.

"It will enhance the quality of our current property portfolio and will strengthen our presence in the Western Cape."

Rapp said Vukile has been managing this portfolio on behalf of Sanlam for some time and, therefore, has an in-depth understanding of the properties being acquired, making this a low risk acquisition opportunity for the company.

"The buildings being acquired are well located with good quality specifications," he said.

At the same time, the Public Investment Corporation (PIC) has reached an agreement with Sanlam, in terms of which it will acquire 70.2 million Vukile linked units from Sanlam.

Following the transaction between Sanlam and the PIC, Sanlam's holding in Vukile would decrease to 13.6%, of which 7.6% would be held by Sanlam policy holder funds and, as such, constitutes an institutional holding. The PIC's stake in Vukile will be around 20%, it said.

The introduction of the PIC as an investor is a positive development for Vukile as it will broaden its shareholder base and should lead to an increased JSE free float, it said.

"The PIC is one of the largest property investors in South Africa and the introduction of such an esteemed property investor is an affirmation of Vukile's new strategy," said Rapp.

The properties being acquired are: Bassonia Office Park, Bellville Barons, Bellville Santyger, Bellville Tijger Park 1, Bellville Tijger Park 2, Bellville Tijger Park 3, Bellville Tijger Park 4, Bellville Tijger Park 5, Bloemfontein Trador Cash & Carry, Durban Westville Surrey Park, Durban Workshop, Johannesburg Empire Road Offices, Johannesburg Houghton, Pretoria Sanlynn, Midrand IBG, Pretoria Rosslyn Joshua Doore Warehouse, Pretoria Sancardia, Sandton Ascot Offices, Sandton Rivonia Tuscany and Sandton Sunninghill Park.