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Showing posts from August, 2011

Offices stand empty

Offices stand empty In my previous posting, I highlighted Liberty's new Sandton property. If you go back through my postings you will see news about several of South Africa's biggest companies ( e.g. Old Mutual, Standard Bank and others ) building massive new office blocks in Sandton. This is in addition to the major corporations that have already moved there, including the Johannesburg Stock Exchange. This report deals with vacancies in the Johannesburg CBD. The trend is clear but is it reversable? Gareth Shepperson

Special Report Podcast: Mel Urdang - director: retail, Liberty Properties - Boardroom Talk with Alec Hogg | Moneyweb

Special Report Podcast: Mel Urdang - director: retail, Liberty Properties - Boardroom Talk with Alec Hogg Moneyweb Liberty’s R1.7bn Sandton City investment and property shares to invest in.

ConCourt dismisses bid on compensation

ConCourt dismisses bid on compensation The Constitutional Court did not agree with a KwaZulu-Natal family trust that the amount and time of compensation must be settled before their land was expropriated, in a judgment handed down in Johannesburg on Thursday. The matter related to properties along the Umgeni River which flows through parts of Durban. When notice of expropriation in order to canalise the river was received in 2004, Mohammed Yusuf Haffajee and others did not formally object. They were willing to vacate the property but wanted to enter into a private treaty. The expropriation date was set by the municipality for July 31 2005 without an agreement on compensation having been reached. The eThekwini municipality had tendered a compensation amount but it was rejected. The city believed that compensation and expropriation were separate, and that a disagreement on compensation did not invalidate expropriation. The applicants insisted that expropriation c

Questions to ask when buying into a sectional title scheme - Property | Moneyweb

Questions to ask when buying into a sectional title scheme - Property Moneyweb

R580m inner-city property development for Cape Town

R580m inner-city property development for Cape Town A massive R580 million development, including flats, parking and retail space within walking distance of Parliament, is set to change the face of the Cape Town city centre. Investment and property development company Eurocape's plans for the first phase include 9 900m² of retail space and parking. The development, in Roeland Street and sections of Hope Street, includes the building housing Equal Education's Bookery and may have a supermarket as an anchor tenant. This is the latest in a series of major city centre developments and comes as the national Department of Public Works is demolishing eight buildings in the vicinity of Parliament to create short-term parking for parliamentary staff. The first phase would cost more than R216m, including the land, and the cost of all phases would be R580m, said Simphiwe Mathebula, Eurocape's sales and marketing manager. Plans for phase one were at an advanced sta

Allan Gray to relocate HQ to V&A Waterfront

Allan Gray to relocate HQ to V&A Waterfront JSE-listed Growthpoint says it has committed R684m for a new development on the landmark V&A Waterfront with investment management firm, Allan Gray, as an anchor tenant. In June 2011 the company took transfer of 50% of the Waterfront in Cape Town in a R4.9bn deal which has been described as one of the country’s largest property transactions yet. The Allan Gray headquarters will fall within the Clock Tower/Silo Square precinct and is expected to be ready for occupation in April 2013. A development blueprint is in the process of being put together with work scheduled to begin In September 2011. A retail component is on spec to cater for the Allan Gray staff. CEO Nortbert Sasse says the property company’s long-term expectations for the V&A are for superior returns generated by completing all development opportunities. He also mentioned that the debt-funded Waterfront transaction took Growthpoint’s borrowings from R9.3bn to

Bonitas curators to auction scheme`s `investment` properties

Bonitas curators to auction scheme`s `investment` properties

'Time to stop bad-mouthing the property market'

'Time to stop bad-mouthing the property market' 'Time to stop bad-mouthing the property market' "Ongoing - and mostly unfounded - pessimism in the residential property market is threatening to become self-fulfilling prophecy." So says Berry Everitt, MD of the Chas Everitt International property group, who notes: "The truth is that there are a great many positive indicators for property at the moment, and our industry as well as the banks and the economists should be doing more to reinforce and underline these in order to strengthen the recovery." Writing in the Property Signposts newsletter, he says: "The truth is that home prices are rising again and while the average increase may not yet match inflation, more activity in the market and more sales will take care of that. "What is more, it is important to communicate the fact that those who buy now before prices really start escalating are making a good move, for two reaso

Property News Gauteng: Increasing number of young expats returning to SA

Property News Gauteng: Increasing number of young expats returning to SA : Extreme weather conditions and geological events in many parts of the world this year, as well as prolonged political protests, huge financi...

Residential fixed investment hit by the lagged impact of the recession

Residential fixed investment hit by the lagged impact of the recession The FNB Estate Agent Survey provides evidence to this effect. Residential fixed investment has been hard hit in recent years by the lagged impact of the 2008 recession and residential property market slowdown, which in turn was caused by a global recession along with significant interest rate hiking from 2006 to 2008. The decline in overall residential fixed investment started back in 2007, and has continued unabated up until early in 2011, according to the Reserve Bank’s (SARB) data. It is not only new building activity that has suffered but the additions and alterations market too, and sometimes even home maintenance has fallen short. The FNB Estate Agent Survey provides evidence to this effect. The sample of agents has been of the opinion that, since the start of the survey back in 2004, there has been a broad decline in the percentage of home owners undertaking “value-adding upgrades” or “maintainin

Valuation of Property

Valuing of property It is essential to understand how banks go about property valuations. The property media have done an excellent job in educating and informing the general public on property matters and their increased knowledge has become apparent in the questions they put to agents and the requests they regularly make for carefully researched information to back up the agent’s statements. Nevertheless many surprising “patches of ignorance” still exist – one of which concerns the valuing of property. South African valuers operate to international standards, but this does not mean that all valuations will be the same or be what the agent, seller or buyer feel they should be. The most important fact to grasp is that the bank valuer is there to assess how the property rates in relation to the price being paid for it, i.e. how much security its value offers the bank. A valuer is not there to check on the physical state of the property or what parts of it need repair.

Home owners holding on to property for longer

Home owners holding on to property for longer A recent property survey has indicated that home owners in Gauteng and the Western Cape are holding on to their assets for longer, hoping to realise higher prices in the residential market. Property giant, Lightstone’s Andrew Watt says home owners in these provinces have waited roughly six years before disposing of their property, but this waiting period seems to have increased to eight years, with the exception of KwaZulu-Natal. What has also emerged is a spike in house prices in the Eastern Cape over the past few months, but Watt says it is too early to speculate on the reason for this. Watt says house price inflation remains relatively muted although it is still positive with the affordable market remaining the pick of the value segments. Recent statistics gauging property price growth over the mid to long term, have shown the top performing luxury suburbs were, not surprisingly, in the Western Cape. The top performer in thi

Investec to salvage sour loans

Investec to salvage sour loans Investec has won a provisional liquidation order for about five Pinnacle Point Group (JSE:PNG) subsidiaries for which liquidators are expected to be appointed by the Master of the High Court by next week, lawyers for the specialist bank told Moneyweb. Investec’s lawyer Leonard Katz from Edward Nathan Sonnenbergs (ENS) said the liquidation was granted by the Western Cape High Court. ENS said the properties under provisional liquidation are: Festival Bay Trading 55 Pty Ltd, Pinnacle Point Resorts Pty Ltd, Pinnacle Point Investment PTY Ltd, Clarence Golf and Trout Estate, Eagle Creek and Property Promotions and Management (PPM). Investec is collectively owed close to R115m by Pinnacle Point subsidiaries. A source close to Pinnacle Point Group confirmed the provisional liquidation was granted on Thursday, but does not include PPM. “The liquidators will immediately commence the investigations and they will try and start to find buyers for the asse

First-time property buyers spending more : Property News from IOLProperty

First-time property buyers spending more : Property News from IOLProperty First-time house buyers are spending more on a property than they did a year ago, according to bond originator ooba on Wednesday. The July first-time buyer's purchase price figures show year-on-year growth of three percent to R609,417 ooba said in a statement. "Higher levels of activity amongst first time buyers are generally a positive indicator for the housing market, as demand increases and there are positive knock-on effects," said Rhys Dyer, ooba chief operating officer. He said the average first time buyer's purchase price had grown consistently in the past quarter, due to low interest rates and an easing of lending conditions, especially for deposit requirements. However, the overall price index recorded negative year-on-year price growth of 3.4 percent to R821,579 in July 2011 from R850,763 in July 2010. Forty-nine percent of home loan applications finalised by ooba

Investec Property Fund to bulk up on Retail

Investec Property Fund to bulk up on Retail Investec Property Fund is looking at bulking up on retail property as it remains underweight in that sector. It also has ambitions to include the Firs and Hyatt Regency, in Rosebank, in its portfolio and believes these properties will benefit from the good transport infrastructure of the Gautrain, thus boosting the listed fund. Sam Leon, the CEO of the R1.7bn Investec Property Fund, said the objective is to get to a fighting weight which is somewhere between R7bn and R10bn over time. However he could not put a timeframe saying it was not easy as the company would not bulk up for the sake of bulking. However, Leon concedes that the fund is underweight in retail. “It is illogical that we’re clearly underweight retail with under 10% of GLA (gross leasable area). We are looking to create the right retail product and then we will put it in the fund. But again it’s not for the sake of getting retail it’s for the sake of getting good prope

Home loan interest rates 'already higher'

Home loan interest rates 'already higher' : Property News from IOLProperty "In recent months we have seen a significant decrease in the rate concessions that banks are willing to give clients, from as much as 1,5% off prime to virtually nothing." "In other words, home loan interest rates are already effectively higher for many borrowers, even though the Reserve Bank has not yet officially raised interest rates."

Zoning Certificates: Developers beware

Zoning Certificates: Developers beware Court warns developers not to rely on local authorities to know the correct zoning of their property. The KwaZulu Natal High Court in Eagle Creek Investment 138 (Pty) Ltd v Hibiscus Coast Municipality and Another [2010] ZAKZDHC 24 (16 July 2010) gave developers an unusual warning. The court in its decision warned developers not to rely on local authorities to know the correct zoning of their property. In terms of the facts in the matter, the developer obtained a written zoning certificate from the municipality which stated that its property was zoned "General Commercial 2". On the strength of the information contained in the zoning certificate, the developer prepared and lodged building plans with the municipality for the construction of a motor vehicle dealership on the property. The municipality approved the plans and the developer commenced construction of the dealership. The owners of the neighbouring properties lodged obj

First signs of a swing by investors back to sectional title property

First signs of a swing by investors back to sectional title property With the stock markets dropping 15% in two weeks – then bouncing back, only to drop and rise again, manufacturing and mining output down, and with major SA corporations cutting staff, there has just recently been a discernible swing back to sectional title property.

Emigration property selling at three-year low

Emigration property selling at three-year low It must be remembered that expats buying property in South Africa don’t always do so with a view to returning permanently. “Nevertheless, we assume that this is a partial indicator of skills returning or intending to return.”

Is property geared for a slump?

Is property geared for a slump? According to FNB’s report, “economic data releases and events lead to the belief that we could see increased pressure on the market in the near term.”

Global office rentals on the mend.

Global office rentals on the mend While global office rents increased 4.3% year-on-year in the first quarter of 2011, according to CB Richard Ellis’s Q1 2011 Global Office MarketView, rentals in South Africa have remained stable, Broll Property Group reports. South Africa is currently a tenants’ market. Landlords are willing to look at favourable deals to retain tenants, but South Africa’s rentals are on par with international trends. We face the same challenges. Unemployment is rising and companies are downsizing and consolidating to ensure their future. Obviously, that affects their property requirements. The South African property market lags behind the EMEA market by 12 to 18 months.

Old Mutual’s R20bn town centre development

Old Mutual’s R20bn town centre development Old Mutual says it is working on a R20bn town centre in Midrand Johannesburg and among other separate initiatives it is looking at investing close to R2bn in expanding the Menlyn shopping centre in Pretoria next year.

Property vs Equities (and Bonds)

Special Report Podcast: Paul Stewart – MD, Plexus Asset Management - Boardroom Talk with Alec Hogg It is interesting that Moneyweb have chosen to go with the sub-heading " We are closer to the period of time when property perhaps underperforms for a period of time ". This heading is a little misleading as to the contents of the Podcast. If you look at the transcript, it is clear that historically property has outperformed equities and bonds and tends to rise with a rise in either of these sectors, thereby "enjoying the best of both worlds". The question is therefore posed as to whether such performance is sustainable. I say - History repeats itself and therfore Property should be an important part of any long-term strategy. Gareth Shepperson

Continuing Saga of Pickvest, PIC, Sharemax, etc.

Asset management boss in R1.2bn fight with property billionaire - Special investigations | Moneyweb Prieur du Plessis, the founder and executive chairman of Plexus Asset Management, appears in a R1.2bn battle with the Georgiou family. Regular readers will be familiar with apparent billionaire Nic Georgiou’s involvement in troubled syndication scheme Pickvest (formerly PIC Syndications).

SA’s only office dominated property portfolio lists

SA’s only office dominated property portfolio lists Vunani Property Investment Fund listed on the Johannesburg Stock Exchange (JSE) in a week where eight of the 11 initial public offerings due to take place on US markets were cancelled and one slashed its deal size in order to get the transaction done.

Seller must keep in full touch with the transfer process

Seller must keep in full touch with the transfer process I have posted this article from Moneyweb to remind all parties to a property deal (Sellers, Buyers & Agents) that the deal does not end when they sign the Offer to Purchase and that therefore, neither should their involvement. We send out detailed and comprehensive weekly reports on all our Transfers, knowing full well that some parties may choose to ignore them. Everyone should remember that signing an Offer to Purchase is only the first step in a process that culminates in registration in the Deeds Office ( and frequently goes beyond that ). We sometimes need to secure possession of a registered deed in a quicker time period than the Deeds Office usually takes to process it. We sometimes need to follow-up at municipalities for clients when the registration in the Deeds Office is not reflected in the Municipality's records. Our involvement therefore often goes beyond registration. The parties should also be inv

Property market depressed not dead - Seeff - Property | Moneyweb

Property market depressed not dead - Seeff "There is movement in the market, but this is lateral only as recovery continues to be affected by rising costs. Credit remains a significant stumbling block. There has been an increase in first time buyers as at the second quarter of this year, but according to FNB, still not enough to absorb the over-supply of stock."

New R650m development for Sandton

New R650m development for Sandton - Property The multi-million rand ten-storey development will go up on the corners of West and Katherine streets in Sandton, opposite the Sandton Gautrain station. It is due for completion in 26 months’ time and will consist of eight stories of sectional title office units and seven rooftop penthouses. Of these, the smallest, at 223m², could cost you around R9m. The larger unit at 483m² will set you back by R18m.

Standard Bank`s new R1.6bn Rosebank building

Standard Bank`s new R1.6bn Rosebank building Absa already spent R1.8bn on a new building, while Old Mutual is in a R3.8bn HQ project. Standard Bank is building a new office development in Rosebank Johannesburg at a construction cost of R1.6bn, an initiative that the bank says will allow for consolidation of occupancies in leased premises in the greater Johannesburg area as well as for growth in staff numbers.

Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!