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Showing posts from February, 2012

Hyprop total distribution up 7.3%

Hyprop total distribution up 7.3% Half-year distribution growth 10.4%. (I-Net Bridge) - The country's largest listed specialised shopping centre fund, with 12 directly owned shopping centres, Hyprop Investments (HYP,) has declared a total distribution for the year ended December of 383 cents per combined unit, an increase of 7.3% on the previous year. The final distribution of 137 cents, together with the special distribution of 65 cents paid on 17 October 2011, reflects aggregate growth of 10,4% compared with the corresponding period in 2010. Headline earnings per combined unit for the half-year were 406.3 cents versus 465.8 cents previously. Like-for-like growth from Hyprop's shopping centres in revenue and distributable earnings was 8.0% and 7.4%, respectively. Property expenses increased by 9%. Canal Walk and The Glen performed particularly well during the year, with distributable earnings growth of 9% and 10%, respectively. Distributable earnings from hotels reduce

EXCLUSIVE: Rael Levitt says it’s “personal”

EXCLUSIVE: Rael Levitt says it’s “personal” Says allegations are a “well-orchestrated and well-funded” attack. Allegations of foul play against Auction Alliance and its founder Rael Levitt are a “well-orchestrated and well-funded” attack on a company with a clean track record. On Tuesday, Levitt stepped down as CEO of the company. In an exclusive interview with Moneyweb, Levitt spoke out on the allegations of kickbacks, ghost bidders and collusion levelled against himself and his business. The claims stem from a Saturday Star report that a 13-year old paper trail revealed the company had paid kickbacks to attorneys, liquidators, and bank staff to ensure business went their way. The report also stated that billionaire Wendy Appelbaum was disputing the legality of an auction where she bought the wine estate Quoin Rock. The National Consumer Commission and the Estate Agency Affairs Board have confirmed that they are investigating Auction Alliance. Auction Alliance’s board has als

EAAB appoints inspectors to probe Auction Alliance

EAAB appoints inspectors to probe Auction Alliance Investigating allegations of foul play. JOHANNESBURG - The Estate Agency Affairs Board (EAAB) has appointed independent inspectors to look into the allegations of foul play against Auction Alliance. This comes after Auction Alliance’s board set up its own probe into claims of collusion between the firm and its CEO Rael Levitt, and banks, liquidators and attorneys. The claims stem from a Saturday Star report that a 13-year old paper trail revealed the company had paid kickbacks to attorneys, liquidators, and bank staff to ensure business went their way. The report also stated that billionaire Wendy Appelbaum was disputing the legality of an auction where she bought the wine estate Quoin Rock. Appelbaum claimed she later found out she was the only genuine bidder and consequently lodged a complaint with the National Consumer Commission, citing irregularities. Levitt responded by suing her for defamation. According to Margie Campb

CoJ verdict will have far-reaching implications

CoJ verdict will have far-reaching implications It’s the first comprehensive investigation into compliance notices. The hearings between the City of Johannesburg (CoJ) and the National Consumer Commission (NCC) concluded on Friday without a verdict being handed down. The hearings have been on-going since Wednesday with the National Consumer Tribunal (NCT) presiding over an application by the CoJ to have 45 compliance notices issued by the NCC against it set aside. GROUNDBREAKING While the two parties laid down their final arguments, the hearings are viewed as being ground breaking in terms of SA’s consumer legislation. This is because the NCT’s final verdict is likely to have far-reaching implications concerning the interpretation of the CPA. Said the chair of the NCT, Professor Tanya Woker: “We are breaking into new areas. It’s the first comprehensive investigation into compliance notices… We have to apply our minds into these legal issues; its new legislation (so) there is not

Property developments lure businesses from Pretoria CBD

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Property developments lure businesses from Pretoria CBD Urban sprawl to the east and south of Pretoria and the trend of decentralisation from the Pretoria CBD have resulted in the formation of nine basic office nodes in the Tshwane Municipality, says Jan Oelofse, leasing and sales broker for JHI Properties. Construction of the Podium n Menlyn is scheduled to be completed in mid-year. "These nodes are Arcadia, Brooklyn, Hatfield, Lynnwood/menlopark - the old east as it is known - Menlyn/ Faerie Glen, Pretoria's eastern suburbs, the new east Centurion, and Highveld Technopark developed in the south. "The office component in Pretoria's CBD has been and continues to be underpinned by government buildings and tenancies, but the private sector has to a large extent moved to the deconcentration nodes, a trend being followed by some government departments." Factors contributing to this included poor public transport, which had encouraged private transport, w

Sharemax: Auditor backtracks on opinion - Special investigation

Sharemax: Auditor backtracks on opinion - Special investigation Complaint against ACT Solutions prompts a change of heart on clean audit. ACT Solutions, auditor of the Sharemax syndication companies, has changed its mind on the clean audit it gave Flora Centre Holdings for the 2009 financial year. It is doubtful whether any of the Flora Centre’s investors are aware of ACT Solutions’ change of heart. Flora Centre is one of Sharemax’s older and larger so-called income syndications. In 2005 it took R118.5m from investors to buy the West Rand shopping centre. In August 2010, Moneyweb asked whether the Flora Centre’s 2009 financial statements could be believed. A copy of the financial statements can be downloaded here. The financial statements appeared suspicious because they had increased Flora Centre’s value by 89%, from R104m to R197m. There was little or no apparent reason for this huge increase. At the time, ACT Solutions director Jacques van der Merwe told Moneyweb: “We hav

Property loan stock "elimination"

Property loan stock "elimination" SA listed property will become more like REITs overseas. Wednesday’s Budget contained a passage that announced the impending elimination of one of the most popular types of listed investment: the property loan stock. Most listed property counters, including the two largest, Growthpoint and Redefine, come in the form of a linked unit. They are part share, part debenture. The structure is done for tax reasons, so that the companies can pay rental income to investors in the form of interest on debentures. But the Treasury said that this “dual-linked structure needs to be eliminated so that other entities do not undertake the same structure to avoid tax by relying on excessive debt. What does it mean for the sector? Growthpoint director, Estienne de Klerk says his company has been working with Treasury to implement new listed-property legislation. The result will have two main benefits. The first will be greater tax certainty. De Klerk e

Unexpected reasons to feel positive about Africa

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Unexpected reasons to feel positive about Africa It’s really happening for the continent this time. It’s easy to be pessimistic about everything these days, with the news headlines full of the crisis in Europe, the brutalities in Syria, unemployment in America, and the growing animosity between Iran and Israel. However, there are still some things that can serve as a source of optimism, and the economic potential of Africa is one of them. Let’s take a look at some reasons to think that Africa could be a source of tremendous economic growth and wealth creation over the next few years. Some of these may seem strange, but taken together, they add up to a story of major economic potential. 1.      Reasonably good fiscal positions Unlike many developed countries, African nations are actually generally going OK on the fiscal front. According to data from the IMF, the average ratio of public debt to GDP in Sub-Saharan Africa is around 42%, much better than the 80% debt-to-GDP bur

What happened to the buyer's market in property?

What happened to the buyer's market in property? We read headlines like "Property Bloodbath" and yet somehow I don't see too much blood being spilt out there, says Geoff Stroebel, principal of Stroebel Properties. It is presumed that in this time of serious recession in South Africa, that house prices would have stagnated considerably, and been at levels stable or low enough for buyers who were previously perhaps unable to enter the market due to price constraints, to indeed find affordable homes and perhaps a few bargains. Perhaps it is more evident in Cape Town, but this seems to be clearly not the general case, as sellers continue to expect to make unrealistic profits, even out of properties purchased 12 to 18 months ago as the market was entering its supposed decline. Yes, there are distressed sales occurring where people are forced to dispose of their asset due to financial woes, but one would naturally expect that after the rampant seller's boom of the m

Auction Alliance Board Statement : Property News from IOLProperty

Auction Alliance Board Statement The Board of Directors of Auction Alliance has commissioned an investigation by an independent company into allegations that have been levelled against the firm in recent weeks. "The Board considers the allegations against Auction Alliance and its CEO, Rael Levitt, to be of such a serious nature, that such a step is warranted," says Auction Alliance Board chairman Sango Ntsaluba. He adds that in order for the investigation to be properly conducted, the Board will make no further statements until it has been concluded. Auction Alliance Board Statement www.auction.co.za

Budget in a nutshell

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Budget in a nutshell - 2012 Budget The budget and your wallet... The budget and your wallet: Personal income tax relief of R9.5bn. 54% of the relief will go to taxpayers who earn less than R260 000 a year. General fuel levy increases by 20c a litre, the Road Accident Fund levy increases by 8c a litre. Sin taxes : A packet of 20 cigarettes will cost 58c more, a 750 ml bottle of liquor (spirits) R6 more, a 340 ml can of beer 9c more and a 340 ml can of cider will cost 8.84c. A litre of wine will cost 18c more. A new tax credit will replace the tax reduction for medical aid contributions. Tax incentive to encourage savings that may replace the current interest exemption thresholds. A 15% dividend withholding tax to kick in on 1 April. Pension funds, companies are exempted from this tax. Significant tax concessions and reduced red tape for small businesses. Electricity levy increased by 2.5c/kWh. Economic outlook: Budget deficit of 4.6% in 2012/13, 4% in 2013/14 and 3

Gareth’s Glance at BUDGET 2012

This is just my quick look at yesterday’s budget speech by Finance Minister Pravin Gordhan and particularly its impact on property. I have included a brief Summary of the Budget in a clear and concise PDF version on my LinkedIn Page at http://za.linkedin.com/in/shepperson OR if you are not connected on LinkedIn, it is available via e-mail on request. Whilst there would not appear to be any direct impact on the Property Investor or Property Owner, for example changes to the Transfer Duty or VAT Rates, there is nevertheless an impact by means of the following: 1.             There are changes to Personal Income Tax that will affect investment properties held in the Owner’s own name. 2.             There are changes to Dividends Tax that will affect those who invest through corporate entities and those who invest in listed property shares. 3.             There are changes to taxation of small business for those who hold property in small Companies or Close Corporations. 4.

Sharemax: Big bucks for syndication directors - Special investigation

Sharemax: Big bucks for syndication directors - Special investigation Fees of R4.3m paid on top of normal salaries. Reserve Bank’s concerns revealed. JOHANNESBURG - Directors of the Sharemax syndication companies have been well paid for their efforts to restructure the schemes. In total five directors stand to make R4.3m, mostly for consulting services billed at R1 500 an hour. For the two executive directors, Dominique Haese and Dirk Koekemoer, this money is paid over and above normal salaries received from Sharemax successor Frontier Asset Management . Haese’s salary at Frontier is R80 000 a month. Frontier is the company that manages and administrates the old Sharemax property portfolio. For this work it collects a percentage of assets under management. The amounts paid to directors are disclosed in rescue scheme circulars which were sent to all 34 000 investors of Sharemax syndication companies. When the circular was compiled, R2.5m had already been paid to the five syndica

Tenants vs landlords: Concourt mulls whose property rights take precedence

Tenants vs landlords: Concourt mulls whose property rights take precedence In a case brought to the Constitutional Court, a group of ousted tenants claimed their right to adequate housing was violated by the owners of their building, Aengus Lifestyle Properties, which cancelled their leases and raised rents by up to 150 percent. The tenants at Lowliebenhof in Smit Street, Joburg, argued that the cancellation was not compliant with their lease agreements. They claimed that the impact on the tenants would decrease their quality of life and leave seven of the group homeless. The Inner City Resource centre submitted that the landlord's right to increase its profit was not a plausible reason to deprive tenants of their rights. The lease cancellation and increased rent would have a disproportionate impact on the tenants and was tantamount to unfair practice. Aengus, a company that focuses on inner-city revitalisation and developing upmarket living spaces in Joburg, argued that its a

Joburg residents hope for justice after billing hearings

Joburg residents hope for justice after billing hearings Joburg residents, aggrieved by the City of Joburg's billing chaos, are waiting for the outcome of the National Consumer Tribunal hearings to be held this week. The hearings are the result of consumers having lodged complaints with the National Consumer Commission (NCC) about unfair treatment at the hands of the council. The consumer commission upheld the complaints, and after following legal processes, including giving the city the opportunity to rectify its mistakes, issued 65 compliance notices against the council, ordering it to abide by its decision. However, the council objected to the compliance notices and appealed to the tribunal to set them aside. The consumer commission is opposing the application to set the notices aside. The hearings will be heard over three days. If the council loses and refuses to abide by the tribunal's decision, it faces fines of between R100 000 and R500 000 per matter, but the co

Capco gets planning permission for project

Capco gets planning permission for project United Kingdom - The project includes 200 affordable homes. (I-Net Bridge) - Plans to redevelop the Seagrave Road car park site in Earls Court into a new residential quarter containing more than 800 new homes have been endorsed by Hammersmith & Fulham Council (LBHF), Capital & Counties Properties PLC (Capco, CCO) said on Friday. Capco welcomed the decision by the Council's planning committee to resolve to grant detailed planning permission for the proposals, which will replace the existing car park with a high quality, mixed use scheme comprising 808 new homes, ranging from townhouses to apartments around a new public garden square. The project includes 200 affordable homes that will be made available for the relocation of some residents of the Gibbs Green and West Kensington Estates in the event that regeneration of these estates occurs. As announced in December, Capco has a conditional agreement with entities in which certa

Vukile dispels poorer quality portfolio myth

Vukile dispels poorer quality portfolio myth JVs and emerging markets form part of its growth drive amid Sanlam acquisition. The Vukile Property Fund says its immediate plans post the acquisition of an R1.5bn portfolio from Sanlam is to continue looking for growth, especially in the retail sector. CEO Laurence Rapp says while it wants the fund to be a balanced one in having exposure to retail, industrial and commercial, the focus will be on retail. Once the R1.5bn Sanlam transaction is closed, it will take Vukile’s gross assets up to around R7.3bn. Speaking after a tour of Vukile’s malls in Daveyton east of Johannesburg and in Dobsonville, Soweto, south west of Johannesburg, Rapp said emerging markets are attracting business as suburban markets become more and more saturated. “We are very passionate about it through our experiences over the years and we want to capitalise on that by finding more space next to strong commuter links like taxi ranks and rail links,” Rapp said. He

I am still a fan of Rael Levitt and the Auction Alliance business model (with reservations)

I am still a fan of Rael Levitt and the Auction Alliance business model (with reservations) I have been hesitant to re-post this Article because I am a fan of Rael Levitt and the Auction Alliance business model. Only about a week ago, I was in the company of several prominent role players in the Property Industry, who were (ironically) expressing nothing but admiration for Auction Alliance and Rael Levitt's business model and business acumen. I mention that the conversation was ironic because of the headlines only a couple of days later. Take the headline of this Moneyweb Article as a prime example. At the end of the Article is an explanation of the circumstances involved in all the accusations against Auction Alliance, which is not reflected in the headline, so I will rather reserve my judgment until all the facts are revealed. I remain a big fan of Levitt and the Auction Alliance business model but I always have reservations when people have a preferance for " cash t

Residential market remains "over-valued"

Residential market remains "over-valued" The residential market adjusts to affordability challenges in 2 ways... INTRODUCTION –THE RESIDENTIAL MARKET ADJUSTS TO AFFORDABILITY CHALLENGES IN 2 WAYS – REAL PRICES FALL, OR CHARACTERISTICS OF PROPERTIES CHANGE. Currently, as implied in recent reports, we remain of the opinion that the residential market remains unrealistically priced, or “over-valued”, but believe that it is not possible to ascertain by how much. We argue that it is unrealistically priced based on our current perception of a weak economy which is not fuelling strong demand, and signs emanating from both our estate agent and valuers’ surveys that supply is very strong relative to demand. Indeed, since 2008, we have entered a period of real house price decline, and the FNB House Price Index is around 17% down since February 2008 in real terms (average house prices adjusted for consumer price inflation). This is a very normal part of the residential property c

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!