Pickvest class action lawyers defend ‘opt out’ provision

Pickvest class action lawyers defend ‘opt out’ provision - Moneyweb

Lawyers bringing the class action application on behalf of the 18 000-odd investors in Highveld Syndications 15 to 22, the property syndication companies promoted by Pickvest, have defended their decision to automatically include all investors in the application and require individual investors to opt out should they not want to be a part of the action.

Having debated with senior legal counsel and researched class actions internationally, Theron & Partners – the lawyers bringing the application on behalf of investors – say class actions are rarely started on an opt in basis. In other words, where those concerned must actively opt into the action before their claims are included.

“We understand that such an option will be more suitable where the class is not easily identifiable. In the Highveld Syndication matters, the classes are easily identifiable,” explains Marina Verdoes of Theron & Partners.

All the individuals concerned in this matter invested some amount of money – an average of R250 000 per investor, according to the attorneys – in one or more of property syndication companies, Highveld Syndications 15 to 22.

If a class action was certified, by way of example, for HS 19 to 22 (which collectively have 9 000 investors) and investors were then given 30 days to opt in, Verdoes points out that this would create an “administrative conundrum”.

Perhaps more importantly, explains attorney and head of the class action Jacques Theron, the claims of investors – many of whom are pensioners who may not yet be aware of the action – might prescribe before the message of the action reaches them.

On the other hand, notes Verdoes, “If opting out is applicable, a few investors opting out over the period [30 days] would be much easier to handle”.

“If the certificate is granted and the court endorses the opt out option, investors will be afforded 30 days within which to indicate whether they do not want to join the class action,” she continues. “As part of the relief sought in the certification application, we have requested a list of all investors from the business rescue practitioner and will therefore be in a better position to contact investors directly.”

All this would seem to make the ‘opt-out’ basis of the class action a much safer option.

‘Investor support driving the action’

Reshana Pillay, partner at law firm Hogan Lovells, agrees the class action lawyers are “playing it safe” by launching the action on an opt-out basis. “It is however important for people to know whether or not they fall within the class definition so that they know whether they should either opt in or out,” Pillay says.

“If they opt out there is nothing that prevents them from pursuing their individual claim,” she notes.

According to Verdoes, however, “a large number of the claimants are pensioners who cannot afford to litigate in person against large companies and/or wealthy respondents”, which include the likes of property mogul, Nic Georgiou.

Georgiou is MD of Orthotouch, which bought properties in the HS companies on the grounds that it would maintain investors’ interest payments. It has failed to do so and recently had a new scheme of arrangement sanctioned in court as a compromise with investors.

Theron & Partners has applied to have this scheme rescinded.

Pillay, meanwhile, is not sure whether the court, when deciding on whether or not to certify the class action, will be keen on the R1 000 per-claim registration fee investors need to pay to participate in the action. “This will be decided in the certification hearing,” she says, supporting Verdoes’s comments that ultimately the court has discretion to order which option is more suitable.

“There is nothing in law that prevents the representative of the class to require payment of an amount upfront, whether the amount is fair and reasonable is debatable,” Pillay adds.

While roughly 7 000 investors have joined a class action group, the Highveld Syndication Action Group (HSAG), Theron confirms that not everyone has paid the registration fee. “A lot of people have promised their support and promised to pay over a few months,” he tells Moneyweb. “Investors are very much in favour of this class action and the support of the investors is obviously driving this certification application forward.”

Waterfall City: On track to be a new CBD

Waterfall City: On track to be a new CBD - Moneyweb

Maxwell Office Park, Waterfall

Attacq Limited’s Waterfall City, a 240-hectare development sandwiched between Sandton and Midrand, is on track to be “a new CBD” with more projects announced.

The company has earmarked R40 million to construct a three-hectare park which will anchor the commercial and retail offering at the development called Central Park.

Attacq CEO Morné Wilken, who likens the size of the park to “six rugby fields”, says the idea with Waterfall City is to create a new city.

As of December 2014, the company completed 211 000 square metres of the mixed-use development’s 1.4 million remaining development bulk, which will roll out in the next two years. Of the completed buildings, Attacq has sold 38 000 square metres and held 173 000 square metres of the development.

Some of the tenants which have already taken up space at Waterfall City’s completed buildings include Honda, Premier Foods, City Lodge, Westcon and Angel Shack.

Wilken says the number of buildings occupied at the moment is indicative of a lot “corporates who are consolidating at Waterfall City.”

About 176 000 square metres is currently under construction with Novartis, Colgate, Servest and more, expected to occupy Waterfall City this year.

Wilken says Waterfall City has secured a further 60 000 square metres development bulk which includes the new 25-storey PwC head office, boasting 40 000 square metres. “There is a lot of development potential going forward and it’s giving us substantial pipeline,” he says.

Mall of Africa

Attacq is also busy with a bridge, which extends from east to west and is parallel to the Allandale Interchange, to the tune of R150 million. The bridge will connect people to, among others, the Mall of Africa. At 131 000 square metres, it is said to be South Africa’s biggest single-phase mall development and is due to open in April 2016.

“Leasing [at the mall] is going well. We are holding some of it [space] back to open to international retailers which are in talks with us. We don’t have finality on that,” says Wilken.

The R3.2 billion mall is “more than 75%” pre-let with tenants including Forever New and Hennes & Mauritz (H&M), Woolworths, Checkers, Truworths, Mr Price, Edgars and more.

More public transport is planned at Waterfall City with the roll out of the Rea Vaya Bus Rapid Transit System routes. The development is surrounded by Gautrain bus routes which link to the Midrand station. A Gautrain station in proximity to the development was once mooted, but Wilken says while this might be Gautrain’s long-term plan, it is not seen happening “at the moment.”

Sole shareholder

The additional projects are just one component of a breakthrough for Waterfall City.

Attacq is now the sole shareholder in Attacq Waterfall Investment Company (AWIC), which has the rights to the Waterfall Estates development.

The company purchased a minority stake of 18% from Atterbury Property for R655 million, increasing its stake in the Attacq Waterfall Investment Company (AWIC) from about 82%.

Attacq says the acquisition is part of its strategy to manage the entire Waterfall City pipeline and working on an unrestricted basis with Atterbury and other developers.

“There is also a transaction with Atterbury where after 2018 we can deal with any developers. What this will do is create more activity, acceleration in the roll out of Waterfall City,” Wilken notes.

Industry players have raised concerns about whether Attacq has enough capital to see through the development. The company’s financial director Melt Hamman has responded saying that Attacq has about R11 billion of committed debt facilities for the development.

'Traditional buildings' get a green wash

'Traditional buildings' get a green wash - Moneyweb

Nearly eight years ago, green building was considered ‘the right thing to do’, but more developers and building owners now view it as an economic necessity.

This is according to Nedbank’s executive head of property finance Rob Lockhart-Ross. “New buildings represent about 2% of South Africa’s building stock and existing buildings represent some 98% – clearly we have to work on existing buildings.”

 

New buildings are more likely to have energy efficient initiatives than existing buildings, which are mostly built to traditional standards.

Brian Wilkinson, CEO of Green Building Council of South Africa (GBCSA), says a green building on average saves 25% in electricity and “if all the buildings did that [go green] we would not have an energy crisis”.

Developers are starting to take stock of the benefits of going green, through retrofits such as energy efficient light fittings, investing in rain harvesting technology, waste disposal and solar panel heating.

Beyond the cost saving elements, energy efficient buildings are said to be competitive, better marketed and generally preferred by occupants over traditional buildings.

Rating ‘old’ buildings

As green building continues to take off at a rapid rate in South Africa, the focus will now be on greening buildings that are built to traditional standards.

This is already happening with the GBCSA’s Existing Building Performance (EBP) tool, a first of its kind in the country. The tool, which was launched in 2013, assesses the management of a building in order to maintain optimal sustainability performance.

Since the launch of the tool about 65 non-efficient buildings have registered to be assessed for a green star certification. About 25 buildings of the total have applied for their energy efficient certification.

Already, two existing buildings have been awarded a green certificate and more are expected to be announced says the CEO of GBCSA Brian Wilkinson.

The latest green certificate was awarded to WSP House building in Bryanston, which was awarded a three-star green star rating.

The North Park (pictured below) in the Black River Park office park in Observatory, Cape Town, was the first building in the country to be awarded an existing building certification.

The North Park (pictured below) in the Black River Park office park in Observatory, Cape Town

The building was awarded a five-star green star certification from the EBP tool for its 75 000 square metre office park size.

Some of the buildings which are undergoing an EBP tool rating include Redefine Properties’ Cape Town CBD-based The Towers (previously Standard Bank Centre), Growthpoint Properties’ Fredman Towers, Grayston Office Park in Sandton and KwaZulu Natal’s Lincoln on the Lake.

Nedbank’s 105 West in Johannesburg, Menlyn Maine in Pretoria, Clock tower in Cape Town and WSP House Bryanston are awaiting an EBP rating. The regional headquarters for BP Southern Africa near the V&A Wharf Shopping Centre in Cape Town is also in line for a possible rating.

The GBCSA had no rating tool applicable to existing buildings, focusing its efforts largely on new buildings instead.

In April, the council certified its 50th building, representing a million square metres in space, says Wilkinson. “We hope to reach our 100th building in April this year. It took us six years to get 50 buildings,” he says. The registered buildings on the EBP tool will enable the council to reach its certification targets.

GBCSA’s technical manager Jenni Lombard says certification of a building using the EBP tool lasts only for three years to enforce the continued monitoring of buildings.

“With new built tools [referring to tools for newly constructed buildings] you get a once-off rating that you keep forever,” Lombard says. However, she expects that existing buildings will be reassessed every three years to renew their rating. “We need to know that the building managers are still maintaining and managing a building, in the same way.”

Wilkinson says in terms of green rating existing buildings, they can be awarded from a three- to six-star green rating – representing best practice to world leadership.

Despite South Africa being fairly new to green building compared with established markets such as Australia, the US and Europe, the country is considered the fastest-growing green building market.

Steyn City takes form to be an ‘estate like no other’

Steyn City takes form to be an ‘estate like no other’ - Moneyweb

Douw Steyn’s private residence with the golf course in the foreground.

Steyn City, the mega mixed-use development by insurance magnate Douw Steyn, is starting to take shape with the rise of residential units and promises of more expected to unfold.

The first phase of the multi-billion rand, 2 000-acre development – nestled between Dainfern and Diepsloot – was launched to the media on Thursday. It features 93 apartments, 19 clusters with a further 45 clusters to be built off plan and to be introduced to the market from March 12.

An artist impression of luxury apartments.

On top of this, six homes have been completed and there are 220 freehold stands – allowing owners to build their own homes.

The idea is to develop an “estate like no other” with a hospital and 50 000 square metres of commercial space in the pipeline. The commercial offering will follow the establishment of Auto & General’s head office, which was completed in 2013.  A retirement village, a primary and high school and two retail centres are expected. These pending developments are part of phase two.

Apartments at Steyn City.

Kent Gush, who is responsible for the marketing and sale of Steyn City’s residential offering, says one school and a 4 000 square metre convenient retail centre anchored by Spar will break ground in the next three to four months.

‘Affordable’ property?

The bidding starts high. A basic one-bedroom apartment sized at 74 square metres starts at R1.6 million. Two- to three-bedroom apartments covering up to 149 square metres will cost up to R3.9 million. Rental options are available with a basic unit estimated to be in the region of R10 000 per month. Freehold stands, between 400 to 600 square metres in size, range from R2.3 million to R16 million.

In the kitchen of a basic one bedroom apartment.

Cluster homes range from R6.2 million to R8.4 million and include mostly four bedrooms with an average floor size of 350 square metres.

Gush says homes in the mixed-use development are “20% to 30%” more expensive than what is offered in Dainfern estate. Gush adds that the average home in Dainfern, relative to Steyn City properties, costs on average R4.6 million.

The residential component of Steyn City.

The development also has a luxury apartment offering, which costs R13.9 million with a 350 square metre floor space. With the rate per square metre of the luxury apartments at Steyn City fetching R30 000 to R40 000, Gush says this is in line with what is offered in Sandton and Melrose Arch.

Steyn City Properties CEO Giuseppe Plumari refutes the perception that residential offerings like Steyn City only cater to well-heeled individuals. “If entry level is R1.6 million, you are appealing to a broader section of society. It is affordable; it’s not only for the rich …” he says.

Steyn City Properties CEO Giuseppe Plumari.

The development boasts an 18-hole Nicklaus design golf course, parklands, a mountain bike track, a clubhouse, gym, equestrian centre, spa and jogging tracks.

The start of Steyn City

The development, which started in 2006, has seen infrastructure investment to the tune of R6.5 billion, as part of the first phase. At the start of the development Plumari, who has been in the construction industry for 40 years, owned close to 200 hectares of land between Dainfern and Diepsloot. He partnered with Steyn to accumulate 800 hectares.

“I met Douw at a braai more than 30 years ago and we became good friends. I built a house and a private game farm for him,” Plumari says.

Residents from surrounding informal settlements create art work at a Steyn City underpass.

The master plan was drawn up to relocate about 20 000 citizens of Zevenfontein, a squatter camp which was located on the Steyn City site to Cosmo City.

The developers also partnered with the government to roll out new surrounding roads, sewerage and water infrastructure in a bid to obtain municipal planning approvals. The R511 William Nicol Road was upgraded in the vicinity of Steyn City, to expand arterial routes into six lanes as well as pedestrian and cyclist lanes – a laborious exercise which set the developers back by R300 million.

The development boasts many parks and playgrounds.

The total completion of the development is still fluid and is expected to cost more than R30 billion. Plumari cautions that the return on investment might take a while to materialise, with estimates of ten years. “It is going to take a very long time for us to recover R6.5 billion [spent already],” he says.

On the quiet

Although Steyn City has been less publicised than similar developments of its kind, press coverage has centred more around Steyn’s R250 million private residence, which trumps the cost of President Jacob Zuma’s Nkandla home.

Douw Steyn’s private residence.

But Steyn has hit back, saying he could have invested his money in Europe or the United States but chose South Africa – a vote of confidence in the country’s investment climate.

Plumari says it would not have made sense for information on the development to be announced if there was nothing to sell or show.

He says the construction and investment community is used to developments which market and sell off plan, but this was not the case for Steyn City.

A view from Inside the free standing homes at Steyn City.

“We are only launching on March 12 and that has been the case for a long time. We started breaking ground … The reason we did that is because we did not want to sell a dream or a piece of paper; we wanted to sell the real thing,” he told Moneyweb.

Not so mixed-use

The site where 50 000 square metres of retail is expected to roll out.

In the last decade, South Africa has seen the emergence of mixed-use developments, offering work and play living such as Waterfall City between Johannesburg and Pretoria.

Associate professor at the University of Cape Town Francois Viruly says the challenges with many mixed-use developments is that they target higher-end individuals and are not accessible to the middle class.

One of many art works at Steyn City.

Viruly adds: “Mixed-use developments need to come down a notch. The two worlds [high and middle class] can mix.”

Also, the large nature of mixed-use developments tends to put pressure on existing infrastructure. “Mixed-use developments are more complex than doing individual developments; you have to get the sequence right. When you do it, you have to consider doing the residential component first or commercial. They can alter the city and how it operates, but they also play a role in upgrading the environment,” he says.

Steyn City offers an equestrian centre.

BUDGET SPEECH 2015

Hi

The most relevant part of Minister Nene's Budget Speech for those involved in the Property Industry was the amendment to Transfer Duty. The new rates will only apply to property acquired on or after 1 March 2015 by any person, including companies, close corporations and trusts. 

In summary, the following was announced in the Budget:

Rate of transfer duty
Taxable Income (R)	Rate of Tax (R)
R0 - R750 000	0% of property value
R750 001 - R1 250 000	3% of property value above R750 000
R1 250 001 - R1 750 000	R15 000 + 6% of property value above R1 250 000
R1 750 001 - R2 250 000	R45 000 + 8% of property value above R1 750 000
R2 250 001	R85 000 + 11% of property value above R2 250 000

 Please don't hesitate to contact us if you require a detailed quote relating to the total costs involved in Property Transfers or if you want advice on how to mitigate against such costs.

 

Gareth Shepperson

Sirius Real Estate flat on listing

Sirius Real Estate flat on listing - Property | Moneyweb

Germany-focused property fund debuts on AltX.

JOHANNESBURG – Sirius Real Estate Ltd, a wholly Germany-focused property fund, traded in a tightly bound range on Friday morning, after listing on the JSE’s Alternative Exchange (AltX).

By 12:28, just more than 1 million shares had traded, out of a total issued share capital of 632,257,832. Having listed at R6 a share, the day’s low was a moderate R5.95, before edging back up to R6. At that price, Sirius has a market capitalisation of approximately R3.8 billion.

With a portfolio the company says is independently valued at R6.4 billion, Sirius is solely a specialist in German property, specifically 30 mixed-use business parks. The company is incorporated in the Channel Island of Guernsey.

Property Mogul - Issue 2 - now out - Property | Moneyweb

Property Mogul - Issue 2 - now out

The first piece of investment advice I received was when I turned 18. My father told me that I must invest a third of my savings in property, another third in equity and the remaining third in cash.

This investment philosophy was pretty ubiquitous in the 1980s and explains why so many South Africans still firmly believe that property investments, especially residential investments, should form the foundation of investment strategies.

However, the market has changed significantly over the past 20 years. Apart from many regulatory changes, which had a negative impact on investment-focus residential properties, the listed property sector has consistently been one of the best performing sectors of the JSE.

Affordable housing construction lags

Affordable housing construction lags

The lack of suitable affordable housing stock continues to bedevil the banking sector's ability to increase primary market end user finance, according to FNB chief executive Jacques Cilliers.

“Unless we overcome supply side challenges for new builds, lenders, despite their willingness and ability to provide end user housing finance to new homeowners, will continue to be hamstrung by insufficient housing supply,” Cilliers told a banking summit on Friday.

The theme of the summit was “A Partnership for Housing Delivery”.

The folly of holding on for too long

The folly of holding on for too long

The price only rises so far.

 

A wise investor once said: we all make mistakes when it comes to investing. Being wrong is not the problem, but staying wrong is.

I have been living on the Dainfern Golf Estate for more than 20 years. Over the years I have bought and sold many stands and properties on the estate and it would be fair to say that I know it well.

As Dainfern developed over time, good stands became increasingly scarce. One in particular caught my attention. It was one of the last stands with a river view and was owned by a retired estate agent who always claimed that he was going to hit the jackpot with the site.

A step closer to Sharemax successor`s shareholder register

A step closer to Sharemax successor`s shareholder register

NGHC dismisses bulk of Nova, Frontier and Centro’s interlocutory application.

A swift judgment in the North Gauteng High Court (NGHC) has paved the way for Moneyweb’s application to inspect the shareholder registers of several companies related to the restructured Sharemax investment scheme.

Judge Neil Tuchten dismissed the most contentious request from the Nova Property Group, Frontier Asset Management and Investments and Centro Property Group to force Moneyweb journalist Julius Cobbett to hand over all his correspondence with third parties during his extended Sharemax investigations.

Nova Property CEO on Absa, Grindrod funding issues

Nova Property CEO on Absa, Grindrod funding issues

Dominique Haese says "funding is in no way related to the Sharemax or SARS issues."

ANDRIES VAN ZYL: You are listening to RSG Geldsake presented by Moneyweb.

The Sharemax property syndication, which is facing a liquidation application by the South African Revenue Service, is once again in the news because, according to a communiqué, the Nova Property Group, which has taken over the interests of the Sharemax investors, has been unable to access critical funding from Absa and Grindrod banks.

Tonight we are talking to the Nova Properties incoming chief executive, Dominique Haese. Good evening, Dominique.

DOMINIQUE HAESE: Good evening, Andries. We appreciate the opportunity.

LETTER FROM LONDON: A snub and a murder raise unfortunate headlines

LETTER FROM LONDON: A snub and a murder raise unfortunate headlines | Columnists | BDlive

SA made the headlines in the UK for all the wrong reasons again on Monday morning. The top news items, rightly so, were on the killing of Bafana Bafana and Orlando Pirates captain Senzo Meyiwa.

His death is a loss too great to quantify for his family, loved ones, fans and the nation. But it is the manner of his death that reinforces the view that SA is a violent, gun-crazy nation, where life is cheap.

From the Marikana massacre to the killing of Reeva Steenkamp by Oscar Pistorius, much of the news coverage here is about violence in SA. It’s tough to get a positive message out amid all of that.

And there are many positives about our country — we’re not exclusively about crime and violence. This week, SA’s image was to be burnished by a series of planned events.

Instead, diplomatic relations between SA and the UK have become rather awkward.