Author Archives: Matthew Campaigne Scott

Unorthodox Renewable Energy Ideas

In every sphere of life there are eccentrics. Why should renewable energy be any different. Rather than wait for the oil wells to run dry and coastal cities to disappear beneath rising sea levels, many people are looking ahead to cleaner alternative sources of energy. Some of the unorthodox examples that follow have been tried and are already catching on whilst others are very much in the minds’ of some very lateral thinkers. Here are some Unorthodox Renewable Energy Ideas.


Ancient Mudstones

300 million-year-old mudstones could one day reduce our dependence on conventionally-obtained fossil fuels, according to researchers at the University of Leicester. Shale gas can be found in the stones, much as it’s been found in sandstone for many years. But mudstone yields up to four times as much gas as sandstone. However, extracting the gas from the stones could be challenging since the stones aren’t consistent in their gas retention.

Balloons in space

Balloons in Space

Orbiting Mirrors to Transmit Solar Energy, does that sound like a Bond movie? A fleet of balloon like satellites, which would inflate once in orbit. That’s the brainchild of Massachusetts Institute of Technology engineering professor William F. Schreiber. Once inflated and orbiting, and as the Earth’s position changes with respect to the sun, the spherical mirrors would be adjusted continuously to catch and focus solar energy and transmit it in concentrated beams to receiving stations on Earth. At those receiving stations, that solar energy would be used to heat water into steam and drive turbines to generate electricity.

While Schreiber’s idea for using giant shiny balloons may sound a little eccentric, scientists increasingly have been looking at the possibility of using satellites to harvest solar power and transmit it to Earth. At the International Academy of Astronautics in Paris a statement was released to this effect: “It is clear that solar power delivered from space could play a tremendously important role in meeting the global need for energy during the 21st Century.” Similarly U.S. Air Force Col. Michael Smith, the director of the Pentagon’s Centre for Strategy and Technology, was quoted as saying that the concept has the potential to supply safe, clean energy to earth if it can be made to work.


Tornadoes are usually seen as very destructive forces, but one Canadian engineer believes that we can one day harness the power of the tornado to power entire cities. Louis Michaud believes that by pumping warm, humid air into his Atmospheric Vortex Engine (AVE), a chamber 200 meters wide with 100 meter tall walls, he can create an artificial tornado. The rotation of the tornado would then power wind turbines at the chamber inlets, creating enough electricity to power a small town. Michaud proposes using waste heat from power plants since they typically reject more than half of the heat they generate. He admits that the tornado would probably cause some extra precipitation in the surrounding area, but says that the whole setup would be inherently safe.

Save Energy – buy a cow: Bagging Methane Discharges from Cattle

We humans are notoriously poor at taking responsibility for our actions. So it should not come as a surprise that cows farting, excreting and belching is being blamed by some for climate change. In all seriousness though a 2006 United Nations report estimated that cows, along with other livestock like sheep and goats, contribute about 18 per cent of the greenhouse gases that are warming the planet — more than cars, planes and all other forms of transportation put together.

This is not without good reason since bovine discharges  are rich in methane, a gas that’s 21 times more efficient than carbon dioxide at trapping heat in the atmosphere. {Source: LA Times}

Researchers have developed a means of acquiring methane from cattle excrement and converting it to a biogas fuel that’s of a quality that can be fed into a standard natural gas pipeline. In Kern County, California, a company called Bioenergy Solutions uses that method to produce 650,000 cubic feet (18,406 cubic meters) of biogas from manure, enough to power 200,000 households. [Source:Levinson}

Argentina is one of the world’s leading beef producers. Herds amount to over 50 million cattle, outnumbering the human population. Scientists have created a special bovine backpack that captures a cow’s emissions via a tube attached to the cow’s stomach, and discovered that the animals produce between 800 and 1,000 litres of gas each day {Source:Zyga}

One might even call it a kind of wind energy.

Dancing Bodies

When was the last time you made the world a better place by clubbing all night? Sustainable Dance Club was formed in the Netherlands with the idea that dancing bodies could create enough kinetic energy to actually power a building. Lots of music festivals have turned to bicycle generators to power their concerts. And some hipster bars are even making customers pedal for a few minutes to get their pitchers of perfectly blended margaritas. Rotterdam was the first to install the Sustainable Dance Floor, but SDC is looking forward to taking their technology all over the world to other clubs, festivals, and wherever there are people willing to dance for the good of the Earth.

Projects range from permanent installations at museums in Miami and Philadelphia to pop-up events around the globe in Vancouver, Shanghai, Salvador and Abu Dhabi. Their mission statement is “To create personal experiences where sustainability and fun are combined. To inspire (young) people worldwide to adopt a more sustainable lifestyle.” They hope to spread the knowledge that living a greener lifestyle isn’t all about sacrificing the things you love.

Gym Power

Several innovative gyms are popping up that convert human energy into useable electricity. One of them, in Hong Kong, has exercise machines that look perfectly ordinary from the outside, but have generators inside that create energy from movement. So while you’re busy sweating it out, your efforts are creating electricity to power the exercise console and supplement the electrical juice it takes to keep the overhead lights on. The owner of the gym maintains that the average person can generate about 50 watts of electricity per hour on the machines. {Source “Blume”}.

Then there’s the Pedal-A-Watt bike stand, which works by powering a generator with the movement of the bike’s rear wheel, comes with an optional PowerPak that stores the energy you create for later use. The PowerPak has an outlet where you can plug in and power any appliance that runs on less than 400 watts of electricity. For a frame of reference, a large television uses around 200 watts, a stereo 20 watts, a desktop computer 75 watts and a refrigerator 700 watts {Source: Convergence; Tech 3; Inc.;HTW}

Clean and healthy energy is starting to catch on in U.S. gyms. There are now converters on exercise equipment in more than 80 locations in North America, including My Sports Clubs in New York City and Washington.

The Green Microgym, a 3,000-sq.-ft. (280 sq m) gym has more than 200 members, is doing so well that owner Adam Boesel has started franchising. The gym doesn’t generate enough electricity to be carbon-neutral yet, but if all the equipment gets used at one time, it can produce twice as much as it needs to run the facility at any given moment. {Source: Time}


Johannesburg’s Northern Suburbs Bucks the Buying-To-Let Trend

Although the FNB 2012 Estate Agent Survey indicates a slight rise in the buy-to-let buying in the market, its second quarter results show somewhat poorer general residential market demand.

Buy-to-let purchases are assessed by the survey to have increased to 11%, from 10% in the previous quarter. The growth in the percentage of buy-to-let buying is certainly more noteworthy when measured from its low point of 7% in 2010.

Having made that point it’s important to note that the percentage remains poor in comparison to the estimated 25% back in 2004 at the apex of the property surge. In addition to broad based financial pressure on households, despite interest rates being at a record low, the very ordinary performance of the rental market would also not appear to make buying-to-let a particularly exciting option at this point in time.

According to StatsSA’s consumer price index (CPI) surveys, modest rental inflation which, given current house price inflation in the region of 8.9% year-on-year according to FNB data, would probably be doing little to increase average yields on residential rental properties. The CPI for rentals in the May CPI showed 4.47% year-on-year inflation, marginally lower than the previous quarter’s rate of 4.53%. After showing some promise of strengthening in 2010 and early 2011, the CPI for rentals has thereafter shown a weakening growth trend. This does little to make buying-to-let more attractive at present.

Given that interest rates are at a record low there should be no prizes offered for predicting a weak rental market.  Low interest rates equals more first time buyers and consequently lower rate of retention of young tenants. However some aspects of the rental market have improved. According to tenant profile network, the percentage of tenants that are in good standing with regard to rental payments was 81% in the first quarter of 2012. While this percentage is unchanged from the previous quarter, it is up from 79% in the second quarter of 2011, and well up from the 71% low reached in the recession early in 2009.

With this mind it may come as a surprise when Pam Golding Properties reports that the rental market in estates like Dainfern, Fourways Gardens and Cedar Lakes in Johannesburg’s northern suburbs is more healthy than ever, making properties in these areas a plum asset that can deliver reliable returns.

For expatriates, being far from home, a sense of belonging is a high priority together with comfort , security and access to amenities. Facilities such as good schools in close proximity, a club-house, tennis courts and a golf course go a long way to making a family feel at home, which is why these specific estates are proving so popular with foreign and local tenants alike.

As a kind-of niche market this demand is at least partly attributable to the strong demand from corporations, especially multi-national companies doing business in South Africa.

Companies seeking upmarket accommodation for their senior staff members for periods of between one to three years are attracted to these homes. Properties in estates like Dainfern, Fourways Gardens and Cedar Lakes are offering excellent returns to those landlords who have an understanding of this corporate market and its unique requirements.

One advantage of letting to this market is that landlords and their agents deal with reputable companies that are financially solid and reliable. This is most reassuring for those owners who wish to rent out their prestigious properties, many of which are acquired specifically for investment purposes,” says Jason Shaw, manager of the Fourways/Dainfern office of Pam Golding Properties.

These three estates are not unique since there are a plethora of such developments in the greater northern suburbs of Johannesburg. But they exemplify a niche market in the buy-to-let market that is strikingly bucking the mediocre trend.

Wind and Solar Energy Trivia for the Enquiring Mind

Two of the most prominent renewable energy sources besides hydroelectric power, are wind and solar energy. Read on to discover some facts to satisfy your curiosity and broaden your general knowledge.

Wind Power

Wind power is one of the oldest renewable sources of energy. As its speed doubles, its capability can produce an eightfold increase of power generation.

There’s nothing new about wind power, from time immemorial people have used the wind to pump water.

How does wind power work? The rotor blades of a wind turbine work like the wings of an aeroplane. As air passes over the specially designed blades, “lift” is created. This lift, in turn, sends the blades spinning in a circular motion, which drives an electric generator. When winds reach about twelve Km per hour, the rotor is engaged and the wind turbine begins producing power.

These days one modern turbine can produce enough electricity to support up to 290 homes.

As of April 2010, U.S. wind capacity reached more than 35,000 megawatts, achieving in 2010 alone what had previously taken two decades – the installation of more than 10,000 MW of wind power capacity. Currently 35,000 MW of wind energy will prevent an estimated 62 million tons of carbon pollution annually, which is equivalent to taking 10.5 million cars off the road.

According to a U.S. Department of Energy study released in 2009, wind energy could provide 20 per cent of U.S. electricity by 2030.

Currently, Denmark, Spain and Portugal meet between 12 per cent and 20 per cent of their electricity needs from wind energy. By contrast, wind power supplies about two per cent of the US’s current electricity needs. America’s wind resource is the largest in the world.

Solar and wind power systems have 100 times better lifetime energy yield than either nuclear or fossil energy system per tonne of mined materials.

At the end of 2007, worldwide capacity of wind turbines in operation was just over 94 Gigawatts.

The world’s largest wind turbine is currently the Enercon E-126 with a rotor diameter of 126 meters. The E-126 produces 6 megawatts, enough to power approximately 5,000 European households.

By 2010, Europe was leading the world in the development of offshore wind power.

Wind power makes up 40 per cent of new generating capacity installations in Europe and 35 per cent in the USA.

Solar Power

It would take only around 0.3 per cent of the world’s land area to supply all of our electricity needs via solar power.

With 4% of the world’s desert area, photovoltaics could supply the equivalent of all of the world’s electricity. The technology of Photovoltaics is the conversion of sunlight into electricity – also called “solar cells”.

The area of roof space available in Australia is enough to provide all of the nation’s electricity, using solar panels.

Weight for weight, advanced silicon based solar cells generate the same amount of electricity over their lifetime as nuclear fuel rods, without the hazardous waste. All the components in a solar panel can be recycled, whereas nuclear waste remains a threat for thousands of years.

The invention of the solar cooker challenged the consumers of the new millennium. In some places of the world, solar cooking is popular usually in large cities where the renewable heat of the sun generates enough energy. When sunlight hits a space with an area of 1 square meter, there is about 1,000 watts of energy from it on that surface which is hot enough to run the solar cooker.

Solar power is capable of providing many times the energy demanded by the world but it is an intermittent energy source as it is not available at all times. The amount of sunlight is dependent on location, time of day, time of year, and weather conditions. A large surface area is therefore required to collect the energy at a practical rate.

Experts believe that sunlight has the potential to supply 5,000 times as much energy as the world currently consumes.

Leonardo Da Vinci predicted solar industrialization during the late 15th century.

Horace de Saussure, a Swiss scientist, invented the world’s first solar energy collector or ‘hot box’ in 1767.

Albert Einstein won the Nobel Prize in 1921 for his experiments with solar energy and photovoltaics.

The amount of energy that goes into creating solar panels is paid back through clean electricity production within anywhere from 1.5 – 4 years, depending on where they are used. This compares with a serviceable life of decades.

The theoretical limit for silicon based solar cells is 29% conversion efficiency. Currently, polycrystalline and monocrystalline solar panels generally available have efficiencies anywhere from 12% to 18%. With the addition of solar concentrators, the efficiency of photovoltaics is eventually likely to rise above 60 per cent.

The Earth receives more energy from the sun in an hour than is used in the entire world in one year.

Germany has nearly half the world’s installed solar cell capacity, thanks to a generous subsidy programme. In 2006, the country installed 100,000 new solar power systems.

Global annual photovoltaic installations increased from just 21 megawatts in 1985, to 2,826 megawatts in 2007.

Solar energy prices have decreased 4% per annum on average over the past 15 years.

Manufacturing solar cells produces 90% less pollutants than conventional fossil fuel technologies

The solar industry creates 200 to 400 jobs in research, development, manufacturing and installation for every 10 megawatts of solar power generated annually.

A world record was set in 1990 when a solar powered aircraft flew 4060km across the USA, using no fuel.

The worldwide production of solar cells increased by 60% in 2004. However production has been hampered in the past years due to limited supply of silicon.

The Mojave Desert in North America houses the world’s largest solar power plant. It covers 1000 acres (4 km²) of solar reflectors.  It produces 90% of the world’s commercially produced solar power.

Africa’s Sahara desert, using 15% efficient solar cells, could generate more than 450 Terawatt per year.

About half of worldwide production of solar panels is consumed by Japan. Their purpose is mostly for grid connected residential applications.

Solar and Wind energy are viable and renewable alternatives to filthy coal, oil and other fossil fuels. We ought to encourage every effort by business and local government in pursuit of programmes that seriously encourage their use. One example is Eskom’s solar Geyser programme where people are encouraged to make use of the subsidy or discount that Eskom and insurance companies are offering to replace ordinary geysers with solar powered ones. You can make a difference.


(Sources: Iberdrola Renewables, American Wind Energy Association, Global Wind Energy Council) Energy Matters; Wikipedia; Professor Andrew Blakers; SolarBuzz; Worldwatch Institute; Science Daily; The Four Green Steps.)

Ballito Bay Bursting at the Seams

So you thought Ballito bay was just a holiday town in a quaint sugar cane-growing patch on the North Coast of KwaZulu-Natal. Think again.

Ballito remains an ideal holiday destination with fine weather and beautiful vistas but it also has a growing business district, excellent private schools and several top class shopping centres, cinemas, hospitals and hotels.

Macro level infrastructure is having a big impact. The combination of the King Shaka International Airport to Ballito combined with the Gautrain in Johannesburg mean a greater number of Jo’burgers are taking advantage of the ease with which they can commute. Real Estate agents report the increased numbers of people moving to Ballito from Johannesburg looking for a better quality of life and lower crime levels.

Ballito Bay Bursting at the Seams

Ballito has also become a residential destination for Durbanites and others from KwaZulu Natal as jobs increase along the North coast. Big developments like Bridgecity, Dube Port and the giant Conubria development are attracting permanent residents to the North coast areas. These are not once off events. Rather they have inertia of their own as they attract further development and support business. Many are looking to Umhlanga and Ballito to reside as the retail and commercial sectors grow.

For some time upmarket Zimbali and Simbithi have attracted the sales at the higher end of the market but other gated communities are growing and entry level prices are ranging from R780 000 to R1million. Similar to Umhlanga though buyers believe that Ballito is a sound investment over time that will increase in value. Regarding frontline properties, many of these are being financed with cash or small bonds, the level of confidence in the area is clearly growing.

Ballito’s light-industrial growth shows the potential of a future city. Last year saw the launch of Ballito Services Park North which brings on line 9 light industrial zoned serviced platforms totalling 18.5 hectares offering multi-use options from warehousing and factories to show-rooms, offices and mini units. With a scarcity of zoned and serviced land for sale north of Durban and around King Shaka Airport, this opportunity is very attractive.

ComProp, a leading local property management group, researched and concluded that  a broad range of tenanted investment properties in Ballito are yielding an average of 5.95% income return in the first year. From a capital growth perspective, property values in the area were not heavily influenced by the recession and vacant land prices have continued to grow in value. Given that there are only 112 serviced sites available between Ballito Business Park, Ballito Services Park and Imbonini, northern business land will soon be difficult to acquire.

There is debate about infrastructure in Ballito in that much has made of the well-kept and designed roads among other micro imfrastructure. Crime and grime are said to be at a minimum. However holiday makers in December last year expressed a great deal of frustration with traffic and water resources. Those who saw the lines of holiday makers queuing up for water to flush their loos last December may have written off Ballito as another South African town that can’t get its act together.

Ballito’s biggest shopping centre, Ballito Lifestyle Centre’s Bruce Rencken said to local newspaper North Coast Courier during the water crisis: “Although the water crisis was unexpected and disruptive to our operations during our peak trading period, we were able to continue trading and brought in water tankers and chemical toilets. Fortunately the customer shopping experience was not significantly affected and customers were generally very understanding. Nevertheless, there certainly was a negative impact on trade and the ‘holiday experience’ of our visitors. Hopefully this has again highlighted to the authorities the importance of and urgency with which all infrastructure upgrades are effected and implemented as this is fundamental to sustainable and responsible development in Ballito.”

Many unexplained and unaccounted for power outages occurred during the December/January period. Umgeni Water warned in October last year that massive industrial and residential development north of Durban was putting pressure on the provision of water. At the time of the crisis the utility said it had plans to upgrade the infrastructure in 2012.

Mayor Sibusiso Mdabe has gone on record as saying R2.2 billion would be needed to upgrade the water supply to Ballito, a disclosure that has made residents hot under the collar at the prospect of a rates hike to fund the infrastructure.

In the not too distant past 15% of a developments cost would go towards upgrading the infrastructure of the area, thus creating a sustainable system of development. This is how the old Ballito was built. Some locals are of the opinion that Irregularities began when this levy was dropped, thus allowing a huge amount of housing to be built without the required infrastructure. This has slowly compounded to cause the water shortages being faced today. Some argue that had the new housing in the region been catered for, the community would not be facing these problems.

iLembe district municipal manager, Mike Newton, has said that, provided there were no external problems such as severe weather or electrical breakdowns, there would be no need for residents to panic this year.

Mike Newton said to the press that “The team from Umgeni Water is busy constructing an additional supply pipe to the major supply reservoir to deal with additional demands of this nature, as well as upgrading the pumping stations from Hazelmere Dam to supply the additional requirement.”

Umgeni Water has assured residents that the infrastructure required to improve supply to the Avondale Reservoir would be in place before December 2012. So watch this space.

There’s no doubt that if Ballito can overcome its infrastructure hurdles its boom is expected to continue both commercially and residentially. Watch out Umhlanga.

Blooms and Weeds in Bloemfontein

You may be of the opinion that Bloemfontein is the land of roses, conference venues and legal battles but there are other rumblings that prove the city to be very much alive.

It appears that there is a combination of private enterprise coming to the party and local Metro intransigence in Bloemfontein. The life breathing in Bloemfontein is a force of progress but it’s not without some dissatisfaction.

 Despite the weakness of the economy, flat rentals continue to rise in the city. This is not necessarily the result of conventional market forces. A local agent has been quoted as saying that the shortage of rental stock is the result of local Metro’s limited vision regarding new development. Little or nothing has been done to allow developers to increase the density of their developments.

Issues include: no new sites zoned for flat development being laid out; despite zoning certificates being obtainable for single erven, a projection of the future and current zoning uses for areas of the city are unobtainable; town planning for outlying areas of small holdings in Bainvlei and Bloemfspruit, the only areas where effectively development can take place – have still not been incorporated into the city’s town planning scheme. A local Real Estate Agent sums the situation up: “no practical provision is being made for new areas for the building of flats and apartments despite the current shortage of this type of accommodation”.

It’s clear that there is a need on a national level to review town planning schemes to ensure that they are up to date.

Blooms and Weeds in Bloemfontein

On the bright side there is some movement in the residential housing market, there are several up and coming areas which are proving popular with young buyers. One such area is Langenhoven Park. The statistics provided by Lightstone Property Solutions show that 30% of buyers are between the ages of 18-35 years old, with just over 50% of properties sold in the area priced between R800 000 and R1.5 million and with an average selling price of R1.033 million. There is however, a very high demand for rentals, as the suburb is ideal for investors wanting to buy to let.

Another area in high demand is Universitas, the majority of property in this area is being bought by buyers in the age group from 36-49 years and are in the same price bracket as Langenhoven Park with an average selling price of R1.137 million. Another trendy new upmarket suburb which has high appeal is Woodland Hills Wildlife Estate. The average price bracket here is in the region of R2.2 million to R3.5 million.

According to Fritz König, team leader of Engel & Völkers Bloemfontein: “Property sales are indefinitely picking up in Bloemfontein as there are many new developments. Some of the major attractions are investors looking at investing in student properties.

Bloem A-Grade Office Rentals Broll

Bringing us to the CBD: Bloemfontein CBD office properties are in high demand and sought after by municipal, government contractors, colleges and training centres.  According to the Broll Bloemfontein Office Market Report, although vacancy rates in the CBD are high at 25 per cent, rentals are currently holding steady at R75 per square metre having increased steadily since the end of 2009. This area still sees a lot of traffic and retail is flourishing.

Bloemfontein has a lot going for it strategically: It’s the only major centre for miles around, it’s also the sixth-largest city in the country and the judicial capital of South Africa; it lies on the N1 between Johannesburg and Cape Town. There is a disproportionately large amount of tenancy from government and educational/training centres in the CBD. For example government tenancy is approximately 12 000 square meters.

Commercial property in the city has a great deal of potential. Johan Botha, portfolio executive at Broll Property Group says demand for office space outweighs supply and rentals continue to increase. Various old buildings are being upgraded, for example, Fed Sure Building and Allied House. Evidently there’s just a single erven available for development, an 11 000 square metre patch earmarked for retail and offices.

Brandwag and Westdene have also become highly sought after for office space. These areas are a favourite in the private sector especially with national companies opening satellite offices. Office parks and corporate buildings are in high demand with old houses being converted into office space. A new development, the 43 000 square metre Second Avenue Development is due to start in 2013, creating a whole new business district in an urban village setting. It has been said that the intention is to replicate the atmosphere of Melrose Arch in Johannesburg.

 An exciting retail development is the arrival of Bloemfontein’s own Makro. There are presently 16 Makro stores about the country. Makro, the trading name for Masstores (Pty) Ltd is a subsidiary of Massmart Holding Ltd. Massmart is a listed company recently acquired by the US titan Wal-mart.  The store’s arrival is an encouraging indication of the economic development in Bloemfontein.

Developed as a freestanding building located on the crossing between two major national highways, and featuring an impressive 840 open parking bays, with a GLA of 17 049m2, the store, to be developed by The Moolman Group, will be located on the western side of Bloemfontein, at the junction of the N8 towards Kimberley and the N1 freeway. The site offers superb visibility and straightforward access from Bloemfontein and the surrounding areas, whilst sufficiently proximate to all the city’s amenities. The store is due to open in October this year.

Also on the retail front, Bloemfontein’s faithful old Fleurdal Mall is undergoing a substantial refurbishment.  Work on the 25 year-old Fleurdal Mall anchored by Checkers Hyper and House and Home, began in October 2011 and is due to be completed in November this year. The most significant improvement to the property is an updated appearance and with the intention of modernising the atmosphere. There will be a new canopy cause-way that will link entrances two and three.

The centre’s being extended from its current size of 19 000 square metres to 25 000 square metres. Parking has been reconfigured for better access and flow. Trading is continuing through the refurbishment. Ackermans and Mr Price will be increasing their trading area.  New stores to occupy the space include: Milady’s, Contempo, Pandora, Lotters Pine, Rage Shoes, Hi-Fi Corporation, Nedbank and Capitec Bank among others.

Like all South African cities security is always high on the agenda. Edcon, the clothing and textiles retail group, together with Independent Newspapers presented the city of Bloemfontein with a mobile policing unit in June, as part of a wider Partnership Against Crime initiative designed to assist the South African Police Service.

 The hand-over of this unit, brought to 18 the number of trailers that the Edcon group, as patron of the programme, has subsidised at an investment of over R1 million since 2006. The unit is equipped to police specifications and costs around R80 000 a unit. While the majority of mobile policing units have been deployed in Gauteng, Mpumalanga, Polokwane and Cape Town, this hand-over in Bloemfontein is the first one for the Free State region.

There is certainly a diversity of property dynamics present in the Bloemfontein market. Like all South African cities there is some tension between local government and the private sector with much being expected of the private sector who do seem to be playing their part in trying to boost confidence in the city.


South African Shopping Centres Continue to Flourish

Shop ’til you drop – Google Image

“I always say shopping is cheaper than a psychiatrist.” Tammy Faye Bakker

It could be that shoppers are gradually showing an inclination and increasing ability to manage their debt.  Benefiting from the declining interest rates may also be a driving force. Regardless, shopping malls continue to demonstrate a suppleness in the face of pressures like increased fuel prices, electricity hikes and municipal rates increases.

Despite discretionary spending being under pressure, the retail categories of household goods, textiles, pharmaceutical and clothing remain well supported, said Johan Engelbrecht, director retail management for JHI Properties to Denise Mhlanga of recently.

It seems that retail nodes where there is a sustainable flow of consumers, sales are performing well. Retail sales turnover for centres run by JHI for example report increases on average of seven per cent over the past year.

South African Shopping Centres Continue to Flourish.

JHI has renewed capital investment with the extension of Greenstone Shopping Centre near Edenvale. The shopping centre opened its new extension in December 2011 with fully let space of nearly 6 400 square metres. A new Edgars has dominated the launch and has been a great success with shoppers.

Rather than hold back or wait and see, JHI Properties intends to advance its retail business unit over the next few years and increase its portfolio of managed retail centres, including elsewhere in Africa. A revamp of the Kolonnade Mall in Montana, Pretoria North is on the cards for example.

Engelbrecht revealed that JHI has opened an office in East London since they intend to invest in an area of great expansion which stretches from Mthatha to Port Elizabeth.

The Cavaleros Group, that brought us Sheffield Business Park has made some significant investments into shopping malls of late. The property investment company spent R20 million making over Bedfordview’s  Village View shopping centre. The intention has been to keep the centre fresh and relevant, vital in the world of competing shopping centres. Apart from the overall refurbishment, three new restaurants plus a Steers and Nandos will enhance the dining appeal of the centre.

Village View in Bedford View – Cavaleros Group

Across the way in Norwood, Cavaleros Group owns the Norwood Mall. The mall sees some major reconfiguration taking place this year. An 1 800sqm Food Lover’s Market has been added to the upmarket retail mix. In the interest of improved flows and greater variety Mr Price Home, Rage, Crazy Store, Bata and Step Ahead are trading from new stores. Food Lover’s Market will open in August joining Norwood Mall’s collection of anchor tenants: Woolworths, Dis-Chem and Pick n Pay.

160 retail centres were developed nationally and are flourishing in townships and rural areas of South Africa between 1962 and 2009, covering about 2 million square metres of retail floor space and generating about R34 billion worth of business sales with an added 54 300 permanent jobs to the national economy since the 1980s.

In rural areas there are other dynamics involved. Rural shopping centres these days are benefiting from the Government social grants. South African Property Owners Association (Sapoa) report revealed that consumer spending is up 30 per cent in the last four years.  Naturally new shopping malls need to be strategically placed in order to avoid overtraded areas.

Marc Wainer of Redefine Properties says “I believe this is an ideal time to develop since interest rates and building prices are at very competitive levels.” He warns that this will not last indefinitely as contractor order books will start to fill up.

Elim Mall – Twin City Developments

With this in mind no doubt, Twin City Developments is developing a new community shopping centre, Elim Mall in Limpopo at a cost of R202 million. Twin City Development owns retail developments like Blue Haze Mall in Hazyview, Twin City Mall in Burgersfort and Twin City Mall Bushbuckridge. Phase one of Elim is to launch by April 2013 with nearly 50 shops.

More than 80% of shoppers within the centre’s catchment area currently shop in other towns. They will now have the convenience of a shopping centre within reach of their own community.

Nedbank is financing the development to the tune of R175 million. The gross lettable area (GLA) is 18 627 square meters with Shoprite as main anchor with a 3500 square meter store accompanied by a 2300 square meter Boxer store. Other features include a KFC drivethrough, an Engin garage and a 72 bay taxi rank.

Clearly Twin City has looked well into the future having purchased the adjacent land enabling it to extend up to 4500 square meters of GLA.

Also eyeing non metropolitan areas for investment is the Dipula Income Fund who already own the Blouberg and Nquthu Plazas which continue to flourish. The JSE listed company is investing R330 million into three shopping centres as it intends to advance its portfolio exposure to low-income households and spread its geographic base. The three malls are: the 6 000 square metre Randfontein Station Shopping Centre in Gauteng, the 14.700 square metre Bushbuckridge Shopping Centre in Mpumalanga and the Plaza Shopping Centre in Phuthaditjhaba in the Free State.

The purchases will raise Dipula’s portfolio to 181 properties with a total GLA of over half a million square meters. Retail property makes up 57% of the portfolio.

Endaweni in Diepsloot Extension

Investec Property plans to develop the 25 000 square metre new regional shopping centre to be known as Endaweni in Diepsloot Extension 10 at a cost of approximately R275 million. Endaweni Shopping Centre will be one of two centres, which will serve Diepsloot and its surrounding communities. Endaweni will link retailers directly to a community of about 150 000 people. The plan of the centre is such that it not only contains a range of national tenants but also accommodates a large quantity of restaurants, which are expected to be a major draw-card for the local communities. The mall is due to open in September 2013.

In November this year Limpopo’s Lephalale Mall’s first phase is due to open. Lephalale Mall is located at the corners of the main arterial Nelson Mandela Road, Apiesdoorn Avenue and Onverwacht Road, on the western edge of Onverwacht’s new CBD in a major residential growth node. It will serve residents of the established Ellisras town, Maropong and the surrounding areas.

Medupi Power Station Lephalale

The Lephalale Mall is a joint venture between Moolman Group and Uniqon (Pty) Ltd. The mall and surrounding node will ultimately consist of 70 000 square metres of retail and other commercial space once fully developed. The growing coal mining and power generating activities in the area are the driving forces behind Lephalale’s growing economy. The Waterberg Coal Field in Lephalale is one of the largest coal fields in South Africa. Lephalale Mall itself will be a catalyst in the area’s economic development, as it grows with its market, and attracts local spending.

The Moolman group was also party to a venture with Resilient Property and Flanagan & Gerard Property Development & Investment in Polokwane, Limpopo.  Another South African shopping centre destined to flourish,  The Mall of the North opened in April 2011. It recorded exceptional performance during its first year and continues to receive attention from retailers seeking to open stores at the mall. Driving its performance is its exciting retail mix of 180 shops with anchor retailers including Pick n Pay, Checkers, Edgars, Woolworths and Game, as well as a Ster-Kinekor cinema complex. Its tenant mix is constantly monitored against shopper trends.

Mall of the North won the South African Property Owners Association Innovative Excellence Award in Retail Property Development. It also won the prestigious Spectrum Retail Design Development Award from the South African Council of Shopping Centres.

Which brings us back to the city. Cape Town and surrounds in particular. Few new malls have been built of late but there is much upgrading and refurbishment.  N1 City, Tyger Valley Centre, The Blue Route Mall, Cavendish Square,  Somerset Mall, Canal Walk and the Promenade in Mitchells Plain have expanded or been given multimillion-rand upgrades.

Tokai’s Blue Route Mall

Work on Tokai’s Blue Route Mall will be completed in October at a cost of R83m. The upgrade expands the centre by 8 000m2 to 56 500m2. Upgrade construction on the northern suburbs’ 25-year-old Tyger Valley Centre started last March. The centre is being extended by 8 000m2 to 90 000m2 at a cost of R450 million.

Some analysts are suggesting that the market is marking time, that there is a consolidation in the retail property sector. However refurbishments and expansions continue and nothing seems to be stopping shopping malls opening and flourishing in rural areas. So either there’s still lot of people out there with money to spend or, in the words of Tori Spelling: “Bad shopping habits die hard.”

Johannesburg Inner city Renewal – Latest

Johannesburg’s inner city and surrounds continue to show signs of regeneration. Slowly but surely the streets really are being taken back.

BG Alexander in the inner city restored and managed by Joshco

Johannesburg inner city has nearly a quarter of a million residents living in approximately forty thousand units. Twelve per cent are in the R15 000 a month income bracket; eighty per cent earn R1500.00 or more. As many as 20% of inner-city residents are university graduates and 35% of these have technicon diplomas.

According to a survey by Trafalgar Property & Financial Services: the reasons given for choosing the inner city in which to live included affordability (22 per cent), proximity to work (11 per cent) and proximity to schools (11 per cent).

The goal of the Metro’s Inner City Regeneration Strategy is to raise and sustain private investment in the inner city, leading to a rise in property values.  One strategy is “discouraging sinkholes”, meaning, properties that are abandoned, overcrowded or poorly maintained, and which in turn “pull down” the value of entire city blocks by discouraging investment. There are two names that are certainly discouraging sinkholes in the inner-city and that’s Joshco and TUHF.

Pontebello in Hillbrow refurbishment funded by TUHF

The Johannesburg Social Housing Company (Joshco) was established in 2004 by the City of Johannesburg to provide affordable rental housing to the lower income market and to help eradicate the housing backlog.  At present, it manages more than 5 000 affordable rental accommodation units and has reduced default on payments from 87 per cent to only 6 per cent since it started operating in 2006.

In 2010 Joshco received the United Nations’ 2010 Scroll of Honour award for its holistic approach to providing shelter. It is the world’s most prestigious human settlement award; it recognises initiatives that have made outstanding contributions in various fields such as shelter provision, highlighting the plight of homelessness, and leadership in post-conflict reconstruction.

Joshco only provides rental accommodation to residents in the lower income bracket, and tenants can’t claim ownership or don’t become the legal owners of the property they’ve rented for a number of years.

The company intends expanding its housing portfolio to more than 10 000 units by June. Its aim is to develop over 11 000 housing units in Johannesburg. It currently manages about 7 600 rental units, of these, only 930 are instalment sale for ownership.

Recently eight buildings in derelict areas in the inner city have been refurbished by Joshco. Areas include: the CBD, Berea, Joubert Park, Hillbrow and New Doornfontein. These building were previously occupied by criminals and squatters.

The buildings were completely gutted and transformed into affordable communal accommodation. Rent is from as low as around R600 a month.

Casa Mia refurbished Hillbrow building by Joshco

In an interview with the Star Joshco chief executive Rory Gallocher said: “Years ago the only thing property owners wanted to talk about was selling up and getting out. However, things have changed. On the occasions that we have been in the market to buy property in the inner city, we have experienced difficulty finding buildings that are priced at a level that would allow it to work for our market because of high demand.”

The vision for individual buildings is “order and liveability” to replace “chaos and discomfort” through basic management. Joshco says it believes in proper management of buildings by implementing a well-informed and factually accurate plan, where rules are clearly stipulated.

Joshco is very mindful of the fact that inner-city residents are not middle or high income salaried people. A substantial amount are in low-wage employment and who are self-employed, either trading or doing domestic work. Many are small entrepreneurs whose activities function because of their location.

Gallocher believes that good management of buildings will attract business to the inner-city. The latest buildings are Casa Mia in Hillbrow, once a degraded residential hotel that was invaded; The Chelsea in Hillbrow; MBV in Joubert Park; La Rosabel in Hillbrow; Raschers in Loveday Street; Selby and Europa House in the CBD; and Lynatex in New Doornfontein, which is used for temporary, emergency accommodation.

On a slightly different tack is Johannesburg urban renewal property group TUHF (Pty) Ltd. TUHF provides commercial property finance to emerging and established entrepreneurs to buy and refurbish affordable rental housing residential buildings in the inner cities of Gauteng, Durban, Pietermaritzburg and Port Elizabeth.

TUHF is making a significant contribution to the purging of dereliction in the inner-city and the development of housing that is affordable and secure. So far TUHF’s footprint is R125m in equity investments.

TUHF has assisted entrepreneurs through financing and business support to purchase and refurbish 490 derelict buildings over the past nine years. The focus is on quality rather than quantity deals, to minimise the risk of bad debt.

Monis Mansions refurbishment funded by TUHF

The company has attracted equity investments from large and well respected organisations, namely the Public Investment Corporation (PIC) and the National Housing Finance Corporation (NHFC).  The NHFC’s current investment is a debt equity conversion of R75 million converting R40 million for 20% of B shares and R35 million for preference shares in TUHF.

Futuregrowth’s Development Equity Fund, on behalf of its clients, has acquired a 12.5 per cent equity stake in TUHF. TUHF, together with its investors, foresee an increase in investment in inner cities, and the stimulation of business which will lure companies to return, expecting a boon for the restaurant trade as well as eventually inspiring leading chains to scout out the area as well.

Futuregrowth was the first institutional investment manager to provide TUHF with a loan facility that has increased from R50m to R350m in a five year period. The Development Equity Fund is part of Futuregrowth’s suite of socially responsible investments.

TUHF previous success stories include: Pontebello in Hillbrow; Monis Mansions in Johannesburg’s CBD; Allenby Court in Highlands; Hollywood Heights in Hillbrow; Waverley Court in Hillbrow and Avon House in the Fashion District of Johannesburg. Most recently Dolphin Court, in Joubert Park was revamped with funding from TUHF.

Joshco and TUHF are making huge contributions to inner-city renewal in completely different ways. In essence their work is complimentary and supplementary in a diversity that tackles renewal in overlapping housing/accommodation markets. With such confidence in mind the residential market in the inner city seems unexpectedly rosy given the slowness of the economy.  One can’t help wondering how long it will take for the big banks to wake up and catch on.

On your marks, get set…Africa! SA Business moves into Africa.

On your marks, get set…Africa!

In the face of declining world markets and the lack of prospects in the West, Africa is looking more and more like a place to do business.

Africa, with all its angst and chaotic history and struggle with social upheaval is showing a resilience and sense of survival at which we can marvel.

The International Monetary Fund anticipates emerging economies in general and Africa in particular will expand by 4.5% this year and 4.8% in 2013. An interesting indicator has been residential property values, which, on average, rose by 8% in 2011. (AFDB Statistics)  Economic growth is expected to continue despite recessionary trends in some parts of the world.

Although income disparities exist across Africa an authentic middle class is evolving. It is estimated that sixty million African households have annual incomes greater than $3,000 at market exchange rates. By 2015, that number is expected to reach a hundred million.

Urbanisation is pushing up demand for all kinds of real estate:  office space, retail complexes and of course, housing. The growth of, and potential for, infrastructure projects abounds. This has the positive spins off for labour too.

South African business, it could be said, is scrambling. Recently Resilient, known for its successful serial development of non-metropolitan shopping malls outside of the major urban nodes, expressed dissatisfaction with local red tape and revealed it would spend more than 1 billion rand building 10 shopping malls in Nigeria.  The malls, 10,000 square meters and 15,000 square meters in size, will be built over the next three years in the capital, Abuja, and the city of Lagos respectively, the main commercial hubs. Shoprite, Africa’s largest food retailer, will be the major tenant.

Wal-Mart-owned Massmart last month said it would invest in African growth and hoped to grow its food retail business from about R7bn to about R20bn over the next five years. But it’s South African food retailers Shoprite and Pick n’ Pay’s whose sites are firmly set on Africa. Pick n Pay has increased its African growth, using R1,4bn from the sale of Franklins in Australia.

Shoprite, which has only about 123 stores in Africa compared to about 1730 locally, says another 174 stores will be added in Africa next year.  Pick n’ Pay on the other hand is aiming to expand into Malawi and the DRC within the year. The food retailer has over 93 stores in Africa North of South Africa. Zambia and Zimbabwe are on the cards for expansion. Woolworth, not to be outdone has opened 14 stores through its Enterprise Development Programme  in Nigeria, Uganda, Zambia, Kenya, Mauritius, Tanzania and Mozambique. Woolworths currently has a presence in 12 countries with nearly 60 stores across Africa, excluding South Africa.

Further investment in the African playing field could come in the form of buy-outs of South African food retailers by the likes of Tesco, Carrefour and Metro. Wal-Mart’s consumption of Massmart has already been well publicised.

On a slightly different tack, Don’t Waste Services (DWS), the largest on-site waste management company in South Africa, has publicized their intention to open affiliates in Botswana, Kenya, Zambia, Mauritius and Swaziland. The company – is active in the mining, retail, hospitality, healthcare and large industry markets and currently provides waste minimisation services to 300 corporate clients across their portfolios of sites. Having recently expanded into Mauritius, the company is keen to duplicate their successful model in other African countries.

On the real estate front JHI Properties Zimbabwe has added another 15 properties to its portfolio of over 50 since it is to manage unlisted property investment fund, Ascendant Property Fund (APF). JHI has already expanded from its South African home base into Zambia, Ghana, Namibia, Botswana, Lesotho and Nigeria. This further expansion comes as Zimbabwe is experiencing exceptional growth in the retail market at a rate of some nine per cent plus year on year. APF CEO Kura Chihota anticipates actively pursuing growth in Zimbabwe. “With Zimbabwe’s anticipated economic growth rate of nine per cent per annum, prospects look promising.” said Chihota recently.

JHI Properties was also appointed as the leasing agents for Joina City, a new upmarket ‘urban city’ in Harare incorporating four floors of retail with 18 floors of offices. Anchor tenants include big South Africa names Spar and Edgars.

Bringing us to Bigan. Bigan, that brought us Mombela Stadium in Nelspruit, Olievehotbosch Ministerial housing projects, the Oliver Tambo International Pier Project and ESKOM Coal Hauleage Road Repair, is negotiating partnering with Ghanaian real estate companies to build affordable houses for the poor and middle income earners.

Ghana’s housing deficit stands at about 1.5 million units. Bigan believes it has the capacity to deliver and help reduce Ghana’s housing deficit. Based on their experience in South Africa, Bigan’s Emmanuel Kere believes that the company can “support not only the (housing) sector in Ghana but infrastructure development in general.”

Bigan claims to build 30 000 houses in South Africa annually and has a lot to offer Ghanaian companies. Chairman of Bigen Africa, Dr Iraj Abedian said that the company was attracted to Ghana because of the country’s stable political environment and friendly business atmosphere. Bigan makes no apology that it intends to use Ghana as a springboard to launch operations into Senegal, Liberia, Nigeria and Sierra Leone.

The South African government is not exempt from taking an active role in the scramble for Africa either. The Public Investment Corporation (PIC), which manages over a trillion rand on behalf of civil servants, which accounts for 10% of SA’s JSE market capitalisation, is looking for potential private equity partners.  10% of the portfolio is to be invested outside South Africa, R50 billion is reserved for African investment.  60% of that, about R30 billion, will go to private equity according to PIC CEO Elias Masilela in an interview with Reuters. The PIC is likely to be a player in infrastructure investments as countries on the continent build and revamp their roads, dams, hospitals and power stations, he said.

Public Investment Corporation which has a presence in 18 African countries weighs in on infrastructure. In an interview with Goldman Sachs’s Hugo Scott-Gall, Sim Tshabalala deputy CEO of the Standard Bank Group said: “in most of sub-Saharan Africa infrastructure has all but collapsed, or is limited. It has to be rebuilt, so there are massive opportunities in project finance. A lot of infrastructure will be refurbished, mainly with support from the Brazilians and the Chinese. The link we have with ICBC (Industrial and Commercial Bank of China) also helps us identify opportunities and execute on them. In our case, ICBC is a 20% shareholder.”

Standard Bank, as a South African player in the African market has positioned itself well as a go between or conduit for other BRICs partners wanting to interface with the continent. Standard Bank has a cooperation agreement for example, to identify Chinese corporates and SOE (State owned enterprises) that are looking for opportunities on the continent.

Standard Bank has its work cut out for it as Intermediaries for foreign capital since it is estimated that Africa needs about US$90 billion a year to deal with its infrastructure backlog and currently is raising about US$70 billion. This is coming from a combination of sources: taxes, the banking system, and a large amounts coming from outside – risk capital. The banking system in individual African countries does not have the capacity to fund all of the necessary infrastructure activities, so there will be a lot of reliance on international capital markets and the international banking system.

Standard Bank is not alone in its growing presence in Africa, ABSA has received regulatory approval to start a greenfield insurance business in Zambia, bringing to four the number of sub-Saharan countries where the Barclays-owned bank will have insurance operations.  First National Bank (FNB) has revealed plans to invest nearly R2bn over the next 12 months as SA’s third-largest bank by customer numbers, to expand its footprint in SA and Africa. It is believed to be considering an acquisition in Nigeria and has sent scouting missions to Ghana. The bank, which operates in eight countries in Africa including SA, has about 7 -million customers in SA and 1,1-million in Africa. FNB Tanzania was its most recent addition, while its Zambian unit has already announced plans to have a nationwide branch network by 2016.

There’s no doubt that some South African companies are viewing Africa with a greater sense of urgency. The European Union’s financial troubles have revealed South Africa’s vulnerability to European troubles. More than 25% of South Africa’s bilateral trade is from the EU. If GDP in Europe declines that indicates fewer goods being shipped from Africa. This does not bode well for South Africa. Expansion and investment into Africa can broaden South Africa’s horizons not to mention its vulnerability.

But in the words of Standard Bank’s Sim Tshabalala: “As a South African I would love to believe in the sustainability of the country’s national competitive advantage as an entry point to the African continent. Increasingly, people are able to go directly to Kenya and Nigeria, for example, without going through South Africa, because these countries are building the necessary hard infrastructure and the required financial and legal infrastructure.”

So it seems that South Africa’s competitive advantage is diminishing as the rest of the continent develops. In the meantime many companies are seeing the gap and heading into the fray. It seems that the future really is now.

So I asked my 85 year old dad…“what do you think of when I say ‘Green’ dad”.

So I asked my 85 year old dad: “what do you think of when I say ‘Green’ dad”. There was a brief crackle on the phone and then came: “mould.” The generation gap on matters Green is clear.

I have to admit that as a 43 year I too didn’t think of the practice of making modern day sacrifices in order to conserve the rapidly depleting fossil fuels, when the word Green came up. Rather I would think of someone new on the job, who parks in the bosses bay on the first day, a ‘Green-horn’ if you will, it’s best not to mix those two words up.

Or perhaps “Green Fingers”. I used to have “Green Fingers” when I was more involved in our garden or is that having a Green Thumb? It means the difference between getting anything to grow and creating a micro-desert.

But the search for a Green definition remains elusive: The movement to green has been nearly a thirty year process beginning in the 1970’s with the solar-energy craze.  Early in the 1990’s for example, the green building movement began to take hold.  Expanding our thinking and consideration for the larger picture of the total environmental impact, thus driving demands for materials, commercial and home designs offering reduced long term costs, healthier living, greater efficiency and sustainability.

But for me Green is for gunge: Gangrene from war stories, brave soldier who fought in the trenches and got the Dreaded Lurgy. Then there’s the sludge down on Zoo Lake before the big clean-up of whenever-it-was.  Then there’s beautiful, wonderful mucous. Oh yes, oh quivering parent – there were those nappies that….never mind. Green gunge is every little boys early fascination until puberty hits then green becomes just another colour.

One mini Green definition I heard somewhere, went something like is this: “meeting the needs of the present without compromising the ability of future generations to meet their needs.” A little whimsical with a touch of daisy and shoo-wah, but pleasantly unimposing.  I rather like it.

Depending on where you are applying the term Green, ‘sustainable design’ may be a good substitute. True sustainability embraces a commitment to see the world as interconnected, to understand the impact our actions have on others and our environment, and to nurture the offspring of all species that will inherit the planet. To become truly sustainable, it is vital to equally address social sustainability, economic sustainability, and environmental sustainability like three legs holding up a stool. Okay, a little preachy.

The truth is, the Green movement is now orthodoxy, mainstream, convention if you like. It’s no longer the fringe realm of hippies and New Ages or people with pony-tails in general. For example, Green construction is huge in South Africa now and Green Stars are a coveted reward.  It reminds me of my children when they were of the age when a gold star on the forehead for good behaviour was the most coveted award in preschool. Now we have pinstriped executives scurrying around fulfilling the requirements of the Green Buildings Council so as to acquire more Green Stars for their buildings.

As if Green building isn’t enough we have green nappies, green fuels and green political parties. But a new interesting one I discovered is “green-hypocrisy”. Green campaigners argue that cheap short-haul flights have fuelled a massive hike in carbon emissions over the past few years. Celebrities in particular are criticised for struggling to reconcile their well-meaning efforts to develop green credentials and the demands of the modern world.  Sienna Miller and Chris Martin preach the importance of being ‘green’. They recycle obsessively, insist on green nappies and compost every scrap of organic vegetable peeling and they’re not slow to tell you about it. Yet they jet set the world over producing a carbon foot-print bigger than the rest of us.

It’s tough at the top. Looks like you can’t get away with anything these days. Did I say Carbon Footprint, let me tell you what my 85 year old dad said when I asked him what he thought of when I said Carbon Footprint….


Being Prepared to Pay the Price of Going Green

One may argue that ‘going green’ is not a sacrifice but rather an investment. Currently, green expenses are concealed. In the pursuit of all matters Green do we consider the concealed expenses? Let’s look at some common and not so common sense examples.

Home is Where the Heart is: the Micro Level

Seeking out the concealed expenses of going green requires common sense and no shortage of balance. A for instance:  if you change from disposable nappies to towelling nappies you may preserve some trees; then again, you must now acquire a solution to cleanse those nappies without inflicting harm on the environment somewhere else. Similarly you will need to consider the environmental impact of producing the towelling nappy.

It’s all about research and how much effort you are prepared to put into this process. Then you need to stay the course, unlike those guys who menacingly change lanes on the highway and end up reaching the same destination as everyone else milliseconds sooner. Not finishing what you started may just increase your expenses. So pick a lane and stick with it.

A few practical examples.

Concealed expenses exist in so-called ‘green’ plastics; we do not see the waste in the manufacture of the product, or the disposal of it. Glass is still a far better choice, no matter how ‘green’ the newer, lightweight plastic bottle is said to be.

Preparing a compost unit for kitchen scraps and other household waste seems like a good move. But there are hidden expenses if you don’t research building it correctly. Creatures are attracted by the tiniest scent of decaying food. Rats, dassies and stray cats can move into your garden and home before you know it. It’s worth investing in an animal-proof compost bin, it will save on the concealed expenses of damages and presence of the abovementioned vermin.

Purchase the best and sturdiest recycle bins for your Mondi bags, (or whatever they have in your area.)  If these heavy plastic bins are damaged the impact is severe on the environment since heavy duty plastic is a land fill’s permanent resident. Metal cans are best since they will break down. The concealed expense is the heavy plastic to the environment.

Planting trees seems unlikely to have concealed expenses, but when you consider the long term damage potential to water pipes, septic tanks and sewerage pipes, not to mention building foundations in just a few years of a poorly positioned tree, one can see why some common sense research is required. It may be the difference between gutters filled with fruit or lovely shade on a summer’s day.

There are concealed expenses to growing your own crops too. It’s important to factor into the equation the watering of crops, cost of tools and whether you’re prepared to do the labour yourself. Of course physical exercise is a plus on this scale. The rewards of healthier, fresher and more convenient food goes without saying, but it’s not free.

Finally products: Many consumers are prepared to pay a higher purchase price for green products. As many of these products have been marketed for relatively short periods of time, demand and supply for them is still limited and prices are higher due to a lack of significant economies of scale that are there for truly mass products.

Additionally the technologies entrenched in these items are new, keeping manufacturing costs high until companies figure out more efficient and cheaper ways of building these novel products. So the concealed expense is present but it seems it’s also understood by the consumer. Similarly, upkeep and repair costs will be higher than for conventional products, for the same reasons that product purchase prices are.

At the Macro Level

Most areas in South Africa average more than 2 500 hours of sunshine per year, and average solar-radiation levels range between 4.5 and 6.5kWh/m2 in one day. Solar power is a viable option for the future of power at the macro level, an ultimate green dream. But there are concealed expenses.

While it may seem like a wonderful notion to never have to pay for electricity again in favour of free, natural energy forms such as wind and solar power, the actual process of switching to this green living lifestyle can be exorbitantly expensive. While over time, these energy saving installations would pay for themselves and save you money in the long run, many people cannot afford these installations. Solar panels for example are incredibly expensive to the point where only the wealthy can afford them.

One redeeming situation is the Eskom Solar Geyser initiative whereby home owners are encouraged to replace their geysers with solar powered units subsidised by Eskom. The window opportunity closes in 2014 though.

Other rumblings are coming from Cosatu since many local firms producing solar power components have closed down due to cheap foreign imports. The resulting job losses are a not so concealed expense of going green.

On the wind power front, the Cape seems to be leading the way: applications for at least 88 wind farms have been received by the Eastern and Western Cape authorities and some of these wind farms are expected to have as many as 600 turbines located on them. Each wind farm application has to be accompanied by an environmental impact assessment. Each turbine is between 80 metres and 120 metres tall, the height of a 20-or 30-storey building.

While there has not been much public response to the wind farms, some communities have already lodged objections against the planned wind farms and one project, in Brittania Bay, has been delayed because of opposition from residents of the town. Elsewhere in the world objections are raised due to the harm caused to the environment, sound pollution and tarnishing of the natural scenery. Hence there is a concealed expense to consider there too.

So there are many ways to go green in the  world but a word to the wise is to do it right, do the research and use common sense and weigh up what you’re prepared to spend/sacrifice when you’ve calculated the concealed expenses.

On the one hand we can save money by taking shorter showers instead of long baths to reduce water consumption, turn off appliances, cell phones and computers when not in use and to conserve battery power (subsequently reducing the need to charge them as often.) On the other hand there is a price to pay for “going green” whether it’s capitalising poor communities to acquire solar powered geysers or compromising the beauty of nature with wind farms.

The Environment has one fundamental code that nothing is squandered, and all is a nutrient for something else in the cycle of life.  It’s also true that, there’s no free lunch.

Western Cape Tourism on the Offensive

According to the Western Cape only brings in 13% of South Africa’s domestic tourism revenue or R2,8 billion. That compared to KwaZulu-Natal with 26% of revenue or R5,7billion. But tourism in general grew by 5% in the Western Cape in 2011 contributing 10 per cent to the province’s gross domestic product (GDP) creating 70 000 jobs over five years.

The Western Cape Tourism department is mindful of the need to “encourage our locals to travel more within our cities. We need to reinvent our tourism sector and rethink the way we are doing things” Tourism MEC Alan Winde is reported to have said recently.

Mossel Bay and Plettenberg Bay are among coastal areas under pressure to refurbish, renovate and develop. Western Cape government’s Tourism department has announced a seafront development plan incorporating and connecting Kalk Bay, Muizenberg and Gordon’s Bay among others.

Previously disadvantaged communities seem to be targeted to become involved both as tourists and as proponents of tourism in their greater areas. Areas intended to benefit from upgrades to their tourism and entertainment infrastructure include Masiphumelele,  Ocean View and Mitchells Plain.

Fish Hoek will be paired with Masiphumelele and  Ocean View residents with the intention of making it a friendlier tourist destination. Formal stalls for craft work and displaying art in general will adorn the beach front.

Kalk Bay’s Main Road is to be revamped connecting communities previously effected by the Group Areas act. Muizenberg’s old retail and culinary district is to be refurbished and developed too.

Recently Tourism MEC Alan Winde referred to projects in Lambert’s Bay and Cape Agulhas as model examples of where communities previously excluded from decision making  were given the opportunity to become part of the process in the upgrading of their surroundings. An area like Monwabisi is to be similarly the target of investment.

“We need to encourage our locals to travel more within our cities. We need to reinvent our tourism sector and rethink the way we are doing things,” Winde said to the Cape Times.

The knock-on effect to properties in these areas is expected to be very positive. As upgrades take place for infrastructure and retail spaces, commercial nodes will increase in demand. Subsequently residential properties will find themselves on the up and up as areas improve and demand increases.

Meanwhile at the other extreme of the province next to the Eastern Cape Border, Plettenberg Bay’s ten-year-old plans to build a small boat harbour may be coming to fruition with an invitation to residents and interested parties to take part in an environmental impact assessment.

In March, Bitou council put pressure on Western Cape Marina Investments to take the small boat harbour project forward or lose the contract. WCM which won the tender in 2002, has finally  released  a document detailing designs to build the harbour in the Piesang River mouth, besides the Beacon Isle Hotel.

The development includes construction of residential blocks on either side of the river with a commercial zone to replace the derelict edifice which accommodates the Moby Dick restaurant and its adjacent buildings. The intention would be to transform Plettenberg Bay’s Central Beach area into a modern waterfront with a broad tourist friendly appeal.

The Central Beach is to be developed, becoming the site of a number of residential and commercial properties some of them multi-storey buildings which will completely change the look and feel of the beachfront . Dredging of the shallow Piesang estuary  will be mandatory  if it is to be deep enough to accommodate boats and moorings, and the harbour is to be flanked by buildings up to seven stories high in some cases on the northern and southern banks of the river mouth. The proposed small boat harbour  should also assist the operators of Plettenberg Bay’s whale and dolphin watching as well as charter fishing operations.

The overall expectation is that the whole enterprise will be the much needed shot in the arm to the struggling local economy with regard to construction contracts as well as job and tourism opportunities. The overall value to the local property market  is easy to underestimate given the long term nature of the developments.  Though tourism may suffer in the short term those who get into the market early will benefit as the dust settles and beach front occupancy climbs.

Looking at another example of development of Western Cape beachfronts we turn to Mossel Bay. A few important developments  in their area are likely to draw substantial capital as well as many people to Mossel Bay. Firstly Petro SA’s offshore latest drilling operations have received the go-ahead and work has  started.

Another project is the refurbishment of The Point precinct. This is the pivot of Mossel Bay’s tourism industry. The Point is about to be confirmed as a Provincial Heritage Site. The intention is to see it become a World Heritage Site within the next five years. In the refurbishment plan a public square is in the offing  as well as little carriageways and a museum.

A further development is to follow the successful model of the Victoria and Alfred Waterfront in Cape Town by creating a much anticipated waterfront. The Mossel Bay Harbour, the smallest of fully functioning harbours in South Africa is to be transformed into a tourism focused node with retail development a top priority.

Local government seems very much on-board . Minister Alan Wilde spoke to a local estate agency assuring them that growth in the Mossel Bay was a priority. An estate agent at the meeting said: “His message was that people needed to bring tourism and business together to move forward and reach for new goals.”

Some astute investors are already buying up property suitable for renting here, in the knowledge that demand for such properties will increase. With Petro SA’s new projects will come new staff needing rental accommodation.  This is expected to grow at 7% a year. The influx of professionals for this and the developments at the waterfront and harbour are expected by one estate agency to be a market that will grow by 4% a year, renting or buying. Also a 5% increase is expected for the conventional property market, including retirees and locals.

It’s clear that the Western Cape Provincial government is following the state’s lead in investing in local infrastructure. The CBD of Cape Town had a boost in infrastructure development in time for the 2010 world cup, now it’s the rest of the province’s turn.

There’s a new broom sweeping through Tshwane

There’s a new broom sweeping through Tshwane and it has some ambitious plans.

Beginning on the inside track back in April when the City corralled the Ethics Institute of SA and the South African Bureau of Standards into helping the city obtain a cleaned-up and world-class governance system.  Now on the outside, in the words of city manage, Jason Ngobeni, we want to take our city back “street by street.”

In essence Ngobeni’s talking about urban renewal. We’ve seen it in Jo’burg with the all the work of the Johannesburg Development Agency and we’ve seen it with Durban’s Golden Mile Beachfront restoration. Pretoria, like all South African cities has areas of decay that desperately need attention.

The main focus of the renewal is the inner city. Plans include the pedestrianisation of Paul Kruger Street from Pretoria station through to the National Zoological Gardens. Apparently the plans to do the blocks from Pretorius to Johannes Ramokhoase Streets and Church Square are imminent.

Looking at creating a kind of cultural precinct similar to the Johannesburg’s Newtown Cultural Precinct, is the Lilian Ngovi Square, ideally suited for the task given its open public space which will assimilate the State Theatre with the inner-city.

The safety and litter aspects of renewal are not forgotten by the city manager either. Ngobeni, in an interview on Radio 702, is quoted by the Pretoria News as saying that illegal taxi ranks and hawkers trading where they should not, are being “dealt with” and safety features such as illumination and CCV operations will be introduced.

Consistent with the on-going upgrading of government buildings running from the DTI in Sunnyside to the OR Tambo campus of the DIRC in Soutpansberg Road, Munitoria, which was partially damaged by fire back in 1997, will be replaced by the ambitious new council headquarters to be named Tshwane House.

Heading out of the inner city to Centurion the City intends rehabilitating the Centurion Lake and environs. The project is named SymbioCity. The ambitious and seemingly unlikely plan is to build Africa tallest building (110 stories) plus two other towers 80 and 60 stories high, plus hotels and the usual retail and convention spaces.  The project is on 10ha of prime land adjacent to the Gautrain Station. The project’s duration is expected to be eight years.

Not everyone is happy about this development. Local restaurateurs on the lake have expressed horror, not to mention anger as they claim not to have been consulted. Over 10% of office space in Centurion is presently vacant as reported by the SAPOA Office Vacancy Surveys. Questions of sustainable demand have been raised.

Time will tell if these plans will come to fruition. They come hot on the heels of announcements regarding the city becoming an ISO-9001 certified entity with the help of Ethics SA and the SABS.

Government has set a target for all municipalities to realise clean audits within the next two financial years, ending in March 2014. Tshwane has achieved unqualified audits in the 2010-11 and 2011-12 financial years so they are well on their way to achieving their ‘clean up’ goals.

Other internal goals include accurate billing of services, as this is a “critical aspect of sound and good governance aimed at ensuring sustainable use of the city’s resources” said Tshwane mayor Kgosientso Ramokgopa recently.

One may argue that this has been one of the foundational challenges in local government across the country, including Tshwane. To remedy the situation, Tshwane will, in the new financial year, launch a rollout of prepaid electricity meters.

That of course leaves the controversial matter of the city’s name change and whether that’s a matter for a new broom or not. The municipality claims to have exhausted its legislative obligations with regard to the Pretoria name change.  AfriForum, have argued that the consultation process was insufficient. So watch this space for the outcome.

Pretoria’s new broom is sweeping inside and outside; hopefully when the dust clears everything will be as cleansed as proposed.

Are South African Hotel Rooms Oversupplied and Overpriced

The hospitality industry which boomed in South Africa in 2010 has admittedly had some post World Cup benefit. The industry has also shed some of its fly-by-nighters. However the debate continues as to whether hotel rooms are overpriced and over accommodated. Regardless, the question remains, aren’t hotels a property industry problem and therein lies the root dynamic behind the quantity and price of rooms.

Stepping back and looking at tourism in general we are reminded of what valuable foreign currency it brings into the country. The hospitality industry provides coveted direct employment too. The potential for growth is huge and its knock-on effect on the commercial property world worth taking seriously.

South African tourists, who make up the largest section of the market, have to bear the brunt of the high hotel room rates which are often aimed at the overseas tourist. Despite the belief that foreign tourists are ‘loaded’ there is some resistance to our higher room rates. By comparison Brazil, which is similar to South Africa in some respects, is geographically closer to most of the same source markets that we rely on for inbound visitors. Upscale hotels in the major cities of Rio de Janeiro and Sao Paulo reported average room rates of between $300 and $400. Although the South African equivalent is around $190 at current exchange rates, the difference can arguably be absorbed by the cost of travelling to South Africa, a destination which is generally regarded as a long-haul destination.

Here’s the rub: High room rates have the knock-on effect of an oversupplied market. Customarily this should lower daily room rates as a result of market forces of supply and demand. However what has been observed is a reduction in occupancy rates. In some parts of the world various solutions are formulated to deal with oversupply. On the other hand other governments have not interfered and left it to market forces. It is important from the outset to ascertain where this oversupply exists and to quantify its extent.

One intervention by hoteliers is to discount room rates. The down side to this is the unintended message that the value has decreased too. To then return to the higher rate becomes a negative movement. Another strategy, instead of dropping rates, is to add value, offering two-for-one deals where visitors get one night ‘free’ on top of the original booking, extras such as free bottles of wine with a dinner in the hotel restaurant or vouchers for various entertainment in the city are supplied.

Countering this there is the school of thought that sees this as only a temporary solution whilst hotels engage in a price war of undercutting rates. The visible nature of hotel rates means short-term occupancy gains are quickly offset as competitors rapidly follow suit in cutting rates. This leads to a lower priced hotel market yielding lower revenues in the face of normally unchanged demand, proving that rate discounting alone does not induce additional hotel demand.

Looking at the big picture, some would encourage government intervention for the tourism industry in general. A more competitive ZAR/dollar exchange rate will help make hotel rates more affordable for the inbound tourist market. The Department of Transport could relook at increasing the number of airport slots for international airlines. This would help bring more visitors  and bring down costs through competition.

One country whose government hasn’t been shy to intervene in the tourism industry is Ireland. A country very dependent on tourism. In the wake of the Global Financial Crisis Ireland’s NAMA (National Asset Management Agency)  took control of over a 100 hotels with the intention of circumventing bankruptcies of the operators through paying out the creditors and then removing the remaining stock from the market. As a result, competition in the market was reduced and room rates were stabilised for the entire market. Although the removal of competition is seldom seen as beneficial in a market economy, especially when taxpayers’ money is involved, such drastic action is a further indication of the seriousness of the hotel room oversupply problem and the extent to which some countries will go to protect their tourism industries.

Coming round to property, many would point out that hotels are, in essence, in the property industry, and construction costs are the capital outlay that hotel incomes and profits have to provide a return on. For the last decade, tender price escalation, as an indication of construction costs, has averaged 12%, indicating that hotel returns are diminishing.

One may argue that new investments in the hotel industry should only have been introduced into the market if the potential for the market was there to ultimately sustain the room rate. By 2008, most market commentators had already forecast the “property bubble” bursting. The SA Reserve Bank Governor issued warnings to businesses and consumers to reduce debt and to forgo acquiring more. Most hotels that entered the market without taking into consideration those warnings, perhaps should not have been built in the first place.

The higher-than-inflation building costs whilst South Africa is experiencing deflationary conditions are similarly to blame for the high average daily room rates. The materials, labour and overheads are also to be considered. Recently the rise in cost of materials has been much more than inflation and other building cost indicators. The largest construction companies were also recently investigated by the Competition Commission for anti-competitive behaviour. Some of them have come clean and have been penalised.

To quote Hotel commentator Makhudu in his online blog article: ‘Hotel Oversupply’: “For the investor, the opinions that room rates are greater than normal means that hotel properties are currently overvalued. Some bankers have gone further than conducting debt reviews. Instead of recalling loans they have on hotel properties they have gone and interfered with the market dynamics by unilaterally dropping rates. Established hoteliers have bitterly criticised the actions of so-called ‘zombie hotels’ which have been taken over by banks and are undercutting rates for the sector in general.”

Reading the market with the wisdom that many of the most experienced hoteliers have, acting with owners who resist the skittishness that has come upon many investors of late, decisions about room rates will hopefully be made with sober judgement and a steady hand. It makes little sense to kill the goose that lays the golden egg. We should cherish every tourist that comes our way and reward them with reasonable rates. History may just remember us according to how well we cared for our golden geese.

BMW Beats the Banks

Whilst the European crisis and it’s ripples to South Africa have got grey suited local bankers all in a Windsor knot, one motor finance company is putting its hand up making itself available for, what is believed in some circles, to be signs of better times ahead for residential property.

In a move that in itself may boost the whole house marketing sector, luxury car manufacturer, BMW, has made public its plan to move into the home finance sector. Actually BMW have been easing its way into this world for some time.  But now there is a drive to acquire a greater number of applications.

In pursuit of motive for the movement into the housing market BMW’s response has been a bold one.  BMW intends to counter what it considers to be extremely poor service by banks. It seems that banks are quivering in the face of implementing Basel III.

Basel III is the third of the Basel Accords. It was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis.

With the onerous requirements of Basel III on banks, one ought not to be surprised to see that non-bank players are becoming more prominent in the SA home loan market. We should expect this to continue. Expect that the standard home loan interest rate will have to be set one or possibly even two percentage points above prime, because the cost to the banks of funding these loans will rise that much.

Back to BMW, an investigation by Finweek found that: BMW Finance provided “better service, a more competitive interest rate & lower administrative costs than any of SA’s big 4 banks.” “FNB was the only bank that came close to providing a deal that competed with that of BMW Finance. However, the bank’s initiation fees were higher & you are required to open a primary bank account with it.”

Bill Rawson of Rawson Properties said in a press release that the move by BMW Finance, in his view, makes complete sense because the existing BMW clientele base is almost certain to be an excellent initial target market.  The link-up between motor cars and homes also increases the security of the loans because homes are a more reliable asset than vehicles.

Watch this space for other motor finance houses following suit.

More up-beat than the effects of Basel III is the belief in a slow but steady upturn and recovery in the property sector. BMW’s lead with a plunge into the market is not all that has estate agents aflutter.

–          the average House Price Index is now at a two year high and rising at 8,6% per annum.

–          a 12% plus decrease in civil summons in the first quarter of this year.

–          a 42,4% decrease in liquidations

–          the number of 100% bonds issued has risen by over 35%.

(According to the FNB Property Barometer.)

Many analysts seem convinced that South Africa can ride out the effects of the European Financial Crisis. Although difficult times may be ahead they are unlikely to differ from the difficult times currently experienced.  The impression one gets is that though ill the market is not terminal and will continue to survive as a provider of necessary products for which there continues to be a market.

Resilient Goes Fishing – Africa’s gain is South Africa’s loss.

If not in South Africa, where does future expansion lie for the Johannesburg-based real-estate investment company Resilient, which has a local market capitalization of 11 billion Rand?

Des de Beer. Resilient Property Income Fund MD (courtesy FM)


Despite the World Economic Downturn South Africa has continued to successfully build and fill new shopping centres with both tenants and shoppers. Resilient has been at the forefront zeroing in on non-metropolitan shopping malls outside of the major urban nodes. Towns like Tzaneen, Rustenburg and Klerksdorp come to mind.


Resilient also holds strategic interest in Jabulani Mall in Soweto (55%), Highveld Mall in Emalahleni (60%), 70% of the I’langa Mall in Nelspruit and 60% of the Mall of the North in Polokwane . The firm also owns the Diamond Pavilion in Kimberley and the Tzaneng Mall in Tzaneen. Resilient holds 12.9% of the Capital Property Fund, 22.0% of the Fortress Income Fund – B and 18.6% of New Europe Property Investments plc. It also owns Property Index Tracker Managers, the company that manages the Proptrax exchange traded funds.


Now Resilient is looking to Nigeria for its future. This may have some people worried to see a big player like Resilient apparently ‘abandoning’ the local market. But looking offshore is nothing new to Resilient. Back in 2007 it was involved in the establishment of New European Property Investments, seeing shopping malls being built all over central Europe. The fund was initially listed on the London Stock Exchange, but went on to acquire a secondary listing on the JSE in 2009.


But looking locally, Patrick Cairns for Moneyweb writes: “Resilient’s strategy of managing shopping centres outside of the major centres in South Africa has been a very successful one. By focusing on under-serviced areas, the group has tapped into a growth story that has delivered excellent returns.”


Some would say this is due to a variety of reasons: for one, the reduced competitive playing field in small town retail nodes. Secondly shoppers in these towns are less likely to be debt-laden in comparison to their counterparts in urban areas. Increased levels of government social spending have also given more buying power to rural dwellers. This translates into a consumer group with high levels of disposable income available to use at Resilient’s shopping centres.


So what’s changed? According to The Citizen’s Micel Schnehage, Resilient’s Director Des de Beer explained that it’s the firm’s struggle with local government. “(Resilient) is hampered by extensive bureaucracy and red tape, resulting in expensive delays.” He went on to state that the era for Resilient to develop non-metro malls was over.


What seems to have been the last straw was the loss of documents pertaining to the Mafikeng Mall by local authorities 17 times. “They’re not accountable to anyone so they don’t really care,’’ said de Beer to the Citizen.


Apparently a partnership with the Sasol pension fund will result in the continuation of the development of malls in Secunda and Bergersfort.


But why Nigeria? Better yields is the short answer. De Beer is expecting returns of greater than 10%, and in dollars too. Resilient believes there is a sincere intention in Nigeria to see the country raised up and that officials are largely positive facilitators of that process. One may wonder if the company is being naive but recent reports of land being donated to developers to ensure development takes place certainly shows intent.

The Financial Mail reports that Resilient Property Income Fund Ltd plans to spend more than 1 billion rand building 10 shopping malls in Nigeria.  The malls, 10,000 square meters and 15,000 square meters in size, will be built over the next three years in the capital, Abuja, and the city of Lagos respectively, the main commercial hubs. Shoprite, Africa’s largest food retailer, will be the major tenant.


Bloomberg reports that Standard Bank Group Ltd, Africa’s biggest lender, and construction company Group Five Ltd. (GRF) are also partners in the deal.


The FM reports that De Beer would like to list the shopping centre fund in Nigeria once it reaches the right critical mass. This would be a similar approach to Resilient’s entry into Romania back in 2007 through New Europe Property.


One can’t help being a little concerned that if a big local player has chosen to go fishing elsewhere what are South Africa’s prospects as far as foreign investment goes? Time will tell.


It seems Africa’s gain is South Africa’s loss.

Johannesburg Tariffs – More of the Same

Jo’burg Flickr

With the first of July came the beginning of the new Municipal Financial year. Alas for Johannesburg ratepayers that means digging in deeper to those shallower pockets.

Most Jo’burg ratepayers would have had untimely notice of hikes services and rates due to the postal strike ‘conveniently’ coinciding with the mail drop.

Going back a few years to the previous rates shock, was the adoption of the Municipal Property Rates Act (MPRA). Henceforth property rates are based on the combined market value of a property, as stipulated by the (MPRA). In the past, rates were based on land value only.

The value of each rateable property in the City is listed in the General Valuation Roll. The General Valuation Roll is a legal document containing the property information for each and every rateable property in the city.

The market value of houses is much debated so how the municipality can be so certain is anyone’s guess. Earlier this year Erwin Rode and Associates, property economists and produces of what has popularly become known as ‘the Rode report’ caused an almighty backlash from Estate Agents for stating that the residential market was 25% overvalued.

On the other hand there are signs that the market is picking up or at least has reason to. The average House Price Index is now at a two year high and rising at 8,6% per annum; a 12% plus decrease in civil summons in the first quarter of this year; a 42,4% decrease in liquidations and the number of 100% bonds issued has risen by over 35%.(According to the FNB Property Barometer.)

The other part of the equation once the market evaluation has been done and you minus R150 000, is to multiply that by the “rate in the rand”. The Residential  Rate in the Rand was 0.004928 and is proposed to increase by approximately 6.7% to 0.005258 in the rand. Similarly the Business/Commercial rate is proposed to increase from 0.017248 to 0.01804 in the rand, 6.7%.

EThekwini (Durban) by comparison which is the leading city for both collecting and spending its budget, by the way, has a residential rate in the rand of 0.009 and Commercial/Business of 0.0179. Both of these are higher than Johannesburg’s’ and going up this municipal financial year. EThekwini is the country’s most expensive city to work or live in according to a South African Property Owners Association (Sapoa) commissioned study.

By way of a Gauteng comparison: Tshwane (Pretoria) has a 0.00209 rate in the rand for residential and 0.00418 in the rand for Business/Commercial. This has gone up by 12% for 2012/13 and another 10% in 2012/13.

Given that inflation is established at 5.7% can the municipalities justify the 6.7% increase in the rate in the rand? It’s generally accepted that increases above inflation simply accelerate inflation, and reduce the purchasing power of the rand. They hit hardest at the most vulnerable: the unemployed and pensioners. It was suggested by an opposition party leader in an open letter to the Jo’burg city manager that “The solution to the problems is to concentrate on the collection of rates revenue from the residents. If the City could pay the requisite attention to this problem, the extra money needed to provide the shortcomings in service delivery would be found. “

Johannesburg Tariffs

The burden to Jo’burg ratepayers doesn’t end there. Refuse removal is up 6.7% too. There are also increases for water and sewage.  Increases vary from 5,7%, up to a high of 15 %. The sanitation increase is 14.5% across the board. How these above inflation figures are justified is a mystery.

Eskom’s national increase of 16% touches everyone. In Jo’burg the proposed increases have been spread across the residents and businesses so that the lifeline tariff users will see an 11 % increase , the prepaid customers will see a 13 % increase, while the domestic tariff users  and businesses are having to foot an increase in the fixed charges of 5 % and the energy charge of 13 %. This means an increase for 1000kWh monthly usage of 11% , and at 501kWh at 10.7% . The business tariff increases are effectively 12% to 13% .

In the abovementioned open letter, an opposition party  expressed that the increases (Electricity) could have been reduced to “a maximum of no more than 10% across the board, except for domestic consumers above 2000kWh where a 16% increase could have been implemented, to fund the increases , the unaccounted for losses would have to be reduced accordingly by appropriate measures .” What those measures could be were not elaborated upon.

Coming back to rates, there is another side of the coin. The municipality may justify pushing up the rate randage in order to meet its demands because merely decreasing the rates could lead to the city being crippled financially.  This means that a process of reaching equilibrium is engaged. For example, where the property value has gone down, the rate randage is increased to compensate theoretically resulting in the ratepayer paying more or less the same amount.

Arguing the issue for the eThekwini Municipality in Durban, Head of Treasury, Krish Kumar said to the Daily News that while residential property prices may have gone down, commercial property prices may have gone up. This was taken into consideration.  He said the city wanted to avoid a situation where the municipal rates were based purely on the property prices because when the prices went up, the rates also skyrocketed. And when they went down, the city would not collect enough money and would fail to function.

Tariff Increases for four South African Cities

Tshwane Cape Town eThekwini Jo’burg
Electricity 12% 11.03% 11% 11%-13%
Waste Removal 25% 7% 7% 6.7%
Water & Sanitation See Separate Items 15% See Separate Items 5.7%-15%
Bulk Water Tariff 10% 6.5% 12.5%Res-15.5% Bus Combined
Sanitation 12% Combined 6.5% 14.5%
Rates 12% 8% 6.5% 6.7%

And what of non-payment? What is troubling is that while rates increase by 6.7% Jo’burg is expecting income to increase by 18%? The explanation for this by city spokesman Gabu Tugwana to the Star is: “What has been taken into account in that year-on-year is growth and tariff (which is limited to 6 per cent).” Regrettably, failure to pay by ratepayers is expected to increase.  Jo’burg’s budget for 2011/12 estimates  debt impairment at R1.76bn. In 2012/13, this is expected to go up 17 per cent to R2.05bn. Jo’burg’s adjusted budget for 2011/12 estimated debt impairment at R1.76bn. In 2012/13, this is expected to go up 17 per cent to R2.05bn then by 12 per cent the next year and 8 per cent the year after.

This brings up the issue of municipalities broadening their rate base. There is a need to look at Jo’burg’s indigent list and tap into those many RDP home dwellers who can afford to make some contribution.  If these communities are not engaged the culture of Apartheid days’ non-payment continues and a general culture of entitlement is fostered and the ratepayer base shrinks each year.

Tragically there just doesn’t seem to be the political will to pursue these options. Many would argue that the current rates model is based on shaky business foundations and is certainly not sustainable.  Regardless the Jo’burg ratepayers are going to have to fork out more this year.

Business Process Services/Outsourcing – a brave new world for South Africa.

To some Business Process Services may sound like yet another convoluted and ostentatious label applied by self-important people who may not otherwise be defined due to lack of substance, product or identity. Quite the contrary.

Business Process Services or Outsourcing, when it delivers, has the potential to genuinely lower administrative and operating costs, more quickly provide new services, improve customer satisfaction, and enhance focus on core business activities. Very simply, these

are the people that allow business people to focus on their core business whilst the likes of human resources, finance, accounting, contact centres. Document Management Services, Healthcare are taken care of by outsourcing to a third party


Without getting bogged down in detail, it’s sufficient to say that there are many divisions of BPS: there’s the back-office, like human resources; front-office, like call centres, there’s offshore and onshore BPS and even further breakdowns including IT based ITES-
BPO (Information Technology Enabled Service) and LPO – legal process outsourcing.

Looking at the big picture: the global industry is said to be growing by 40% per annum.  India is the world’s biggest player in the industry with revenue of US$10.9 billion from offshore BPS. It has a 6% share of the BPS industry in general but a 63% share of offshore BPS. On the other hand the South African call centre industry has grown by approximately 8% per year since 2003 and it directly employs about 54 000 people, contributing 0.92% to South Africa’s gross domestic product. Dwarf size compared to India but the potential is huge.


The South African Government’s upscaled Industrial Policy Action Plan (IPAP 2) has identified Business Process Services (BPS) as a key sector for investment attraction and job creation. The South African Government implemented a BPS or Business Process Outsourcing and Offshoring (BPO&O) incentive programme from July 2007. It is claimed that during the period July 2007 to March 2010, the incentive resulted in the creation of at least 6 000 new jobs and attracted R303 million in direct investment.


Since then, after negotiation with the private sector a further proposition has been made with the Monyetla Work-Readiness Programme, a dedicated investor friendly set-up process, and a

programme to improve industry service standards, in order to position South Africa as a preferred location for BPS operations.


Monyetla, which means ‘opportunities’, was launched in 2008 by the Business Trust, the Department of Trade and Industry (dti) and BPeSA as a pilot project to provide the unemployed youth of South Africa with employment through the BPO industry. The pilot project was a success story,  over 1,000 learners registered.  Due to its success the second phase was launched in July 2010, with 3,400 learners joining. Further phases continue to date. To become a certified employer of cho

ice on the project there are two criteria: Take on a minimum of 60 learners; and offer employment to 70% of them upon their successful completion of the programme. For every six learners employed, one team leader must be trained. So there’s a very specific outcome pursued here.


BPS leaders BPeSA,  Western Cape CEO Gareth Pritchard is reported to have said “With South Africa rapidly growing as a BPO provider both locally and abroad, it is imperative that we build our employee base, allowing South Africa to move from a reactive talent development strategy to a proactive one,” In the last decade, SA has built u
p a reputation as a world-class customer service destination that is able to deliver results for a number of the UK’s biggest brands, including ASDA, Virgin Mobile and TalkTalk.

South Africa has also attracted many top international call-centre outsourcers, including Aegis BPO, Fusion, Genpact, Stream, Sykes and Teleperformance, as well as IBM and Deloitte, which provide a variety of services in English, Dutch and Flemish for customers worldwide. Most recently, the Economics spokesman at the SA High Commission in London, Yusuf Timol, forecasted that there would be huge opportunities looming for capturing India-based BPO work in 2012 and beyond.


To emphasise whether South Africa has a future in this industry Frost & Sullivan’s business unit leader, ICT Africa, Birgitta Cederstrom says “Africa is increasingly popular as a preferred destination of contact centres; South Africa specifically has been a natural choice for contact centres due to its large and articulate English-speaking population and service-oriented business culture. Another strength is its expanding broadband connectivity, thus ensuring that the latest unified communications and collaboration tools will run efficiently.”


During Trade and Industry Minister Rob Davies’s Budget Vote in the National Council of Provinces (NCOP) in Parliament he said “To date, 23 applications for the BPS incentive scheme have been approved, potentially leveraging R4.1 billion worth of investment and 15 149 jobs over three years,”


“Close to 3 400 young trainees were trained under the second phase of the Monyetla Work-Readiness Programme, 70 per cent of whom were placed directly into employment.”  said Davies


This brings us to ‘where’.  A couple of years ago South Africa’s Call Centre Nucleus group was fully acquired by Aegis, India’s business process outsourcing arm of the diversified Essar group. The company purchased CCN as part of its st
rategy to invest R500 million in the next three years and create 5000 jobs in South Africa. Currently they are situated in two locations: Woodmead and Sunninghill, both in Johannesburg. The total seating capacity of over 1,300 seats.

Inc. (Nasdaq: ININ) is a global provider of contact centre automation, unified communications, and business process automation software and services.  Interactive Intelligence has more than 4,000 customers worldwide. In other words, a major player in the BPS world. Interactive Intelligence is about to occupy one of ATIO’s buildings in down town Johannesburg, which will now function as its regional headquarters serving all of Africa.


Amazon, America’s largest online retailer, has expanded its customer service operations into Cape Town, claiming to have created 600 jobs in its first two years of operation and an additional 400 seasonal jobs during holiday season.


A R125-million, 1 500-seat call centre integrating, training, office and recreational space has been constructed to enhance the global competitiveness of the Coega Industrial Development Zone outside Port Elizabeth. The Business Process Outsourcing (BPO) Park, covers five hectares and includes training facilities, lounges, a cafeteria and a restaurant, is the first of its kind in South Africa. The BPO Park is situated in Coega’s business service precinct, next to workers’ residential areas, and replaces a 200-seater call centre already in existence.


Then came Fusion, another world player in the BPS industry. Fusion Outsourcing’s headquarters, Fusion House at Century City, Cape Town; and the new Gauteng premises in the Johannesburg CBD are modern, state-of-the art contact centre facilities, from where  almost 1500 agents and support staff deliver customer services. In 2011 Fusion won the national industry awards for the 3rd consecutive time for both the Best Offshore BPO Centre of the Year, and the Best Offshore Customer Service Centre of the Year.


The market for such centres seems unpredictable. Anticipating the market for contact centres a while back, construction giant Grid, built a luxurious and state of the art built-for-purpose call centre in Mount Edgecombe next door to Umhlanga Rocks.  It’s fully occupied. On the other hand a cursory glance through the free on-line classifieds Gumtree, revealed an advertisement for “Call centre property to let or for sale in Kent Avenue, Randburg. Total GLA 6500m², 350 – 500 work stations, and 185 parking bays. Asking rental R60/m² net or for sale at R49 mil excl VAT if applicable. Available immediately.” So there are some surprises out there from a real estate point of view.


Not that long ago A 27,000sqm call centre in the Jo’burg CBD was sold, through a negotiated deal, for R97,5m. The seven-storey facility situated at Laub Street was sold on behalf of a major retailer and was snapped up by City Properties. The property was sold with a ten year triple-nett Edcon lease in place and in effect is a sale and leaseback transaction.


So it would be incorrect to say that BPS is not having an effect on property since they are definitely players in the market. But the extent that there is any ripple may call for some speculation.


BPS certainly is an industry worth monitoring from a commercial real estate perspective, currently as a growing number of international firms choose to set up shop locally and large numbers of staff will be required in specialised or converted to spec facilities.

Chinese Retail Booms in Durban

Dotted all over Southern Africa the little Chinese spaza-type shop is now part of the landscape. But in the cities many Chinese traders congregate in what is known as China Towns or China Malls. Although not new to South Africa, China Malls are booming in South African cities and are now flooding Durban, for some noteworthy reasons.

The Chinese community in South Africa can trace its origins back to the 1800 when labourers came to work on the mines in Johannesburg. During apartheid days Chinese were referred to as non-whites except for those from Taiwan who were given the dubious classification of ‘honorary whites’. Visas were tight in the pre 1990 days but now we have what’s being called the Shin Qiao (New Chinese) migrating and working here.

Johannesburg has been associated with the South African Chinese community for some time. But recently Cape Town and Durban have seen growth in Chinese traders in their retail districts. In Cape Town a third China Town shopping centre has opened in Voortrekker Road in Parow recently. There are another two in Ottery and Sable Square. This makes up just less that 200 shops with more planned in phase two at Parow.

It is estimated that there are as many as 50 000 ‘new Chinese’ in Durban as well as up and down the coast running shops of various kinds. Two new Chinese owned-and-run malls opened in Durban in 2011: China city in Springfield Park housing 150 shops and the extensive Oriental City Mall in the city on the corner of Anton Lembede and Mahatma Gandhi.

As early as 2010 the old and dilapidated The Wheel shopping Centre was re-opened as a China Mall. What was just a string of Chinese shops has now taken over two floors with every kind of ware available for the bargain hunter. Management is eyeing the third floor now for even more expansion.

Anthony Lee, manager at China City, quoted in Business in Durban Magazine Autumn 2012, says the port is a big draw. “Goods arrive here in Durban. They used to go to Johannesburg. More and more Durban is being seen as the place to do global business. “

Yinbiao Hao, spokesman for Durban’s Chinese Consular General, quoted in Business in Durban, said “Security is better. (In Durban) The police service is better. There is less bribery here.” Hao says awareness of Durban’s better governance has made the city a viable business option among Chinese businessmen.

Those in the office of Durban’s Chinese Consular General’s office believe events like the 2010 world cup and Cop17 have put Durban tourism and business on the map of Chinese commerce. Many Chinese hadn’t heard of Durban before these events and now marvel at the city’s reputation among the Chinese community in South Africa for its good governance.

Chinese Journalists covering Cop17 developed the motto: “Durban the perfect city for people to live and stay.” Now that’s publicity that’s hard to buy!

Going Green: So I asked my 85 year old dad…

So I asked my 85 year old dad: “what do you think of when I say ‘Green’ dad”. There was a brief crackle on the phone and then came: “mould.” The generation gap on matters Green is clear.

I have to admit that as a 44 year I too didn’t think of the practice of making modern day sacrifices in order to conserve the rapidly depleting fossil fuels, when the word Green came up. Rather I would think of someone new on the job, who parks in the bosses bay on the first day, a ‘Green-horn’ if you will, it’s best not to mix those two words up.

Or perhaps “Green Fingers”. I used to have “Green Fingers” when I was more involved in our garden or is that having a Green Thumb? It means the difference between getting anything to grow and creating a micro-desert.

But the search for a Green definition remains elusive: The movement to green has been nearly a thirty year process beginning in the 1970’s with the solar-energy craze.  Early in the 1990’s for example, the green building movement began to take hold.  Expanding our thinking and consideration for the larger picture of the total environmental impact, thus driving demands for materials, commercial and home designs offering reduced long term costs, healthier living, greater efficiency and sustainability.

But for me Green is for gunge: Gangrene from war stories, brave soldier who fought in the trenches and got the Dreaded Lurgy. Then there’s the sludge down on Zoo Lake before the big clean-up of whenever-it-was.  Then there’s beautiful, wonderful mucous. Oh yes, oh quivering parent – there were those nappies that….never mind. Green gunge is every little boys early fascination until puberty hits then green becomes just another colour.

One mini Green definition I heard somewhere, went something like is this: “meeting the needs of the present without compromising the ability of future generations to meet their needs.” A little whimsical with a touch of daisy and shoo-wah, but pleasantly unimposing.  I rather like it.

Depending on where you are applying the term Green, ‘sustainable design’ may be a good substitute. True sustainability embraces a commitment to see the world as interconnected, to understand the impact our actions have on others and our environment, and to nurture the offspring of all species that will inherit the planet. To become truly sustainable, it is vital to equally address social sustainability, economic sustainability, and environmental sustainability like three legs holding up a stool. Okay, a little preachy.

The truth is, the Green movement is now orthodoxy, mainstream, convention if you like. It’s no longer the fringe realm of hippies and New Ages or people with pony-tails in general. For example, Green construction is huge in South Africa now and Green Stars are a coveted reward.  It reminds me of my children when they were of the age when a gold star on the forehead for good behaviour was the most coveted award in preschool. Now we have pinstriped executives scurrying around fulfilling the requirements of the Green Buildings Council so as to acquire more Green Stars for their buildings.

As if Green building isn’t enough we have green nappies, green fuels and green political parties. But a new interesting one I discovered is “green-hypocrisy”. Green campaigners argue that cheap short-haul flights have fuelled a massive hike in carbon emissions over the past few years. Celebrities in particular are criticised for struggling to reconcile their well-meaning efforts to develop green credentials and the demands of the modern world.  Sienna Miller and Chris Martin preach the importance of being ‘green’. They recycle obsessively, insist on green nappies and compost every scrap of organic vegetable peeling and they’re not slow to tell you about it. Yet they jet set the world over producing a carbon foot-print bigger than the rest of us.

It’s tough at the top. Looks like you can’t get away with anything these days. Did I say Carbon Footprint, let me tell you what my 85 year old dad said when I asked him what he thought of when I said Carbon Footprint….


It Takes Two to Tango: Who’s dancing with corrupt public works officials?

So Public Works Minister Thulas Nxesi is hard at work stopping the haemorrhaging of funds and the corruption of officials in his floundering department. The dysfunctionality is rife and the mismanagement is astonishing. Corruption is under every leaf. But doesn’t it take two to tango? Who’s fingering private enterprise?


As anyone will recall from sibling rivalry that a game of “he did it-she did it” achieves little. But shouldn’t we be looking into who the protagonists are in the Public Works corruption saga? Apart from the guilty government officials, there’s someone else playing a significant role in this debacle.


Looking outside of this particular saga for a moment and at the infamous Arms Deal, lots of accusations and uninvestigated claims abound about government officials as far up as our own President. All worthy of answers and unbiased investigation – may truth prevail. Call it reactionary if you like or perhaps it’s a distraction but is it possible we could learn some of the truth by examining those who actually offered the bribes: those squeaky clean Europeans. After all there’s a stereo-type to maintain: isn’t corruption an African problem not a European problem?


Back to the South African government department of Public Works, the focus of attention is squarely on the officials. This is understandable, good and right. But there is a nameless faceless mass out there that has to be doing the corrupting, offering the bribes and greasing the wheels. Roux Shabangu would be an exception since he hasn’t managed to escape the glare of public media attention.


This is not to suggest yet another Third Force conspiracy either and one is not unaware that the corrupt historically have drawn more attention than the corruptor. But this should not negate zeal for the exposure of both parties in corruption, for the sake of weeding it out.


What now of the 22 irregular leases in Jo’burg involving payments of R64m, currently under investigation by the Special Investigating Unit? Let’s hope that not just the crooked officials are exposed but their private enterprise partners as well.


Nxesi is reported to have said: “We have instructed our lawyers to approach the high court to nullify these irregular lease agreements and institute action against whoever unduly benefited.” This is a start.


Public Works manages 1 277 leases on behalf of the SAPS. A task team of SAPS and Public Works officials are now investigating those too. Let’s see everyone come out into the light when those rocks are turned over. No protection for tango partners.


Which bring us to consider one of the consequences in the case of crooked leases: the inflated rates of the leases. Mr Nxesi said fraudulent and irregular leases, where the state paid exorbitant prices for leasing buildings, were so numerous that the property market in some areas had been permanently distorted! The knock on effect to the property industry is obvious.


Consider this next time you tut tut those wicked, naughty corrupt government officials. Someone from private enterprise is dancing the tango too. Before they shrink back into the shadows ask the question who’s doing the corrupting and how come they’re getting a free pass?


Ruby Tuesday, Backleasing and Owning Your Own Real Estate

The well-worn pages on lease-verses-buy in business textbooks makes much of a meal of equipment and motor vehicles but leaves glaringly absent the application to real estate.  Perhaps the omission is the result of the specialised nature of real estate, which makes it difficult to provide simple illustration of principles.  This brings us to Ruby Tuesday. Huh?


Depending on your generation or where you live you may know that Ruby Tuesday was a song recorded by The Rolling Stones in 1966. The song, was a number-one hit in the United States and reached number three in the United Kingdom and five in South Africa.


But Ruby Tuesday is also an American multinational restaurant chain, named after the Rolling Stones hit,  that owns  and franchises the eponymous Ruby Tuesday eateries. While the name and concept of Ruby Tuesday was founded in 1972, the corporation was formed in 1996 as a reincorporation of Morrison Restaurants Inc. The centre of operations is in Maryville, Tennessee, and from there 800 sites are operated worldwide.


Going back a few years, analysts were asking if Ruby Tuesdays was the Canary in the Coal Mine with regards to the World Financial Crisis. Facing default on its loans back in 2008 the restaurant chain looked set to fall off its perch.  Then began a programme of sale leasebacks which arguably saved the day. So what about sale leasebacks? Should companies  own their own real estate to sell and lease back in the first place?


Many companies have enormous sums tied up in commercial real estate that it owns and uses for its business, whether that’s warehouses, retail stores, head office or restaurants. In the US, department stores like Dillards and Sears own their own premises. Many restaurant chains like Ruby Tuesdays and Cracker Barrel own their own outlets. Zynga , the online gaming company recently acquired their headquarters building in San Francisco for over $200million. Google bought its new headquarters in New York in 2011 for nearly $2 billion. Microsoft and Wal-Mart also own a lot of their own property; however they are also examples of companies that have made much use of the sale leaseback.


Commercial real estate is considered a capital intensive asset and includes, among others: office buildings, retail centres and industrial warehouses. The properties are subject to a lease contract that generally has a base rent, additional ‘rent’ covering the property’s operating costs like rates and maintenance, a term of three to ten years with the option for renewal. The base rental rate varies depending on the credit of the tenant and the location and age of the building.


There is an argument that it doesn’t make economic and investment sense for a public operating company to sink large amounts of capital in its own real estate. In fact the argument is that a company should not own, or be in the business of leasing out its own real estate. Companies and in particular public companies should not be tying up capital in commercial real estate. Also, owning real estate may be considered a distraction from what should be the main focus of the business.


In fact since the advent of the World Financial Crisis, the companies that have invested in commercial real estate are being encouraged to sell these assets and do a sale/leaseback unless the assets are of a ‘strategic investment value.’ The argument is that capital tied up in real estate should be reinvested into the company’s core business where the rate of return is greater than in a real estate investment. And there lies the rub: The expected return from investing in an operating business is expected to be higher than a real estate investment.


So if what the investment firms’ have locked up in property isn’t producing a return other than that which is being saved on rent by owning the property, what is there to show for it? The amount saved is small in comparison to the lost capital investment.  It could be concluded then that to multiply returns there should be a disposal of real estate assets and a reinvestment of that capital in the business to produce growth.


Just a reminder as to what a sale-leaseback is:  a sale leaseback option allows a company to sell its assets and lease them back simultaneously. This can be beneficial for businesses that are in need of an inflow of capital.  Unlike a traditional mortgage, which often finances 70% to 80% of the property value, a sale-leaseback allows a company to get 100% of the value from the real estate.


Bringing us back to Ruby Tuesday. Although as a covert strategy, purists may argue that the accumulation of real estate as a “rainy day fund” is a somewhat archaic idea, one can’t help admire in hindsight Ruby Tuesday’s desire to own substantial amount of real estate for their locations as forward thinking.  As a ‘rainy day fund’ the idea is a fly in the ointment of the non-ownership school of thought.


Ruby Tuesday has announced plans to acquire Lime Fresh Mexican Grill. It has launched a new television advertising campaign and increased projected annualized cost savings to $40million. The company has also begun implementing its sale leaseback plan to raise $50million through the sale and leaseback of nearly thirty outlets ending the first quarter of 2013. By quarter’s end, the firm completed a sale-leaseback deal on 8 properties, resulting in nearly $18million in gross proceeds.


So who’s to say, in the midst of sound financial common sense, which is what one might call the school of thought that would have businesses own as little real estate as possible, we encounter a glaringly perfect example of benefits of having real estate assets like Ruby Tuesday. One point is that Ruby Tuesday may not have been able to dig itself out if it were not for sale leasebacks, a potential solution for many medium to large enterprises to acquire much needed business investment capital.

Then again to quote Ruby Tuesday’s own lyrics from a real estate asset point of view:

Don’t question why she needs to be so free
She’ll tell you it’s the only way to be
She just can’t be chained
To a life where nothing’s gained
And nothing’s lost
At such a cost

Brian Jones & Keith Richards 1967 © ABKCO Music Inc



Life for Land Lords Becomes a Delicate Balancing Act.

Gone are the days when prospective landlords, commercial or residential, can buy premises, shove in some random tenants and put their feet up as they listen out for the ka-ching of the till in the back ground.


Some may argue that it hasn’t been that way for a while, some delight in an end to the days of the Laird and the serfs. So let’s look at a current court case, a proposed new bill and an eight year old Constitutional Court judgement.


Currently the case of Maphango and 17 Others v Aengus Lifestyle is before the Gauteng Rental Housing Tribunal after having been before the Constitutional Court. The case involves the Prevention of Illegal Eviction from an Unlawful Occupation of Land Act. It is an act of Parliament which came into effect on June 5, 1998, and which sets out to prevent, among other things, arbitrary evictions.


Briefly put: Aengus Lifestyle properties bought a rundown block of flats in Braamfontein with the view to renovating it. This isn’t a slumlord at work here but a legitimate developer. In the process, Aengus has chosen not to renew tenants’ leases as they expire.  This way the building would empty in time, renovating the units as they became empty. It also means that Aengus can charge higher rentals in line with other renovated buildings in the area. This has been a common practice in the renewal movement of inner city Johannesburg and around the world.


As it turns out the Constitutional Court handed down judgement on the 13 March 2012 but was a somewhat deflated one. In a majority judgment written by Justice Cameron, the Court found that that the High Court and SCA failed to give adequate weight to the Rental Housing Act and that the landlord’s conduct may have amounted to an “unfair practice”. The Rental Housing Tribunal is empowered to determine whether a landlord committed an unfair practice, and it might accordingly have ruled in the tenants’ favour. The applicants are therefore directed to lodge a complaint with the Gauteng Rental Housing Tribunal before 2 May 2012. On 2 May 2012, the complaint to the Tribunal was filed and we all wait with baited breath as to the outcome.


Then there’s the proposed Rental Housing Bill. The public was invited to respond to the re-drafted Rental Housing Bill that was introduced on October 28, 2011, in the National Assembly. Submissions were closed on the April 5, 2012.


The bill intends to regulate the relationship between landlords and penurious tenants as well as government.  Of note is the fourth chapter of the bill laying out what is referred to as Rental Housing Tribunals. These are essentially tasked with mediating on matters arising between landlords and tenants. The tribunals will have the jurisdiction in matters relating to: lack of maintenance; exploitive rentals; overcrowding and unacceptable living conditions.


The bill will no doubt have to be tested by cases as they surface but it is certain the relationship between landlord and tenant will change considerably.


Which brings us to some new attention to a 2004 Constitutional Court judgement. Many a landlord’s heart’s sank on the day that Mkontwana v Nelson Mandela Municipality made its movement through the Constitutional Court back in 2004. The knock-on effect for both residential and commercial landlords was and is far reaching.


Jason Lee of Rawson Property group has, among others, expressed a need to review “the situation” “especially in the current scenario where tenants are increasingly finding it difficult to pay both their rentals and their utilities accounts.” He announces on the Rawson Website.


For clarity: the outcome of the aforementioned case was that the landlord became responsible for all municipality service debts incurred by the tenant. The burden now rests with landlords for all water and electricity utilities run up by the occupant.


On the other hand landlords are not permitted to withhold water and electricity utilities from defaulting tenants. Sewage services and rubbish removal also remain in place regardless of what is owed.


The question raised is whether this burden on landlords and banks is too much to bear. The risk with “tenants from hell” enormous.  In the event of selling a property a rates clearance certificate is mandatory before a transfer is processed.


Given the current law the best landlords can do is to work very hard on background checks, demanding lengthy histories from tenants with impeccable references. In addition to this tenants will have to come up with several months in utilities and rental deposits.


How this will be “reviewed” as Lee puts it, is another matter. Watch this space.


There’s no doubt that being and landlord these days requires a very skilled tight-rope walk, delicately executed. Oh and don’t forget the net.



Is minus 24% the new property skim milk

The Rode report just threw a cat among the pigeons.  Erwin Rode and Associates, property economists and produces of what has popularly become known as ‘the Rode report’ have ruffled some real estate feathers with their latest missive. Rode says that although house prices will increase marginally in nominal terms, they are in real terms still overvalued by 25 per cent. Seeff, Rawson and FNB all weigh in on the response.

Seeff Property Services chairman Samuel Seeff believes the report to be ‘one-dimensional’ and sends the wrong message to the ordinary buyer. This on the heels of an upbeat press release, earlier in January, stating that “this is probably one of the best buyers’ markets in decades. First time buyers and those looking for a second property can now find value in the market not seen for years. Buying in a down market can be one of the smartest moves, the bargain deals won’t last. “

Rode on the other hand says that ‘Correction’ will take time and he therefore recommends renting for the next five years  as there is likely to be no significant capital growth over this period.

Seeff though is sticking to its guns. “In contrast to the commercial market, the residential market is driven by emotional needs”, says Seeff. “About 95 per cent of buyers are not looking for investment returns or rental income, but want a foundation upon which to build a life.” Seeff makes the point that regular buyers are aiming at acquiring a home either for the first time or to grow , or move closer to school or work.  “No value can be put on owning a roof over your head’s” says Seeff emphasising the investment in ones future and stability.

Other realtors have similar comments. Tony Clarke of Rawson’s property remarked that: “My prediction is no growth in real terms over the next year, two years, and thereafter slow growth starting at between 2 and 4% per annum. There is going to be a slow uptake in new development property entering the market, which from a first time buyer’s perspective will retain its value.”

Clarke points out that if one purchases property, rental on top of return needs to be factored in.  Clarke also questions Rode’s position that first time buyers would do better to rent for the next five years or so and invest the difference saved on a bond. The question Clarke asks is “Invest in what? What he (Rode) is not taking into consideration is the fact that a lot of properties are being sold at a distressed level which is rightsizing property values anyway because those properties are in competition with normal properties.”  Clearly it’s going to take time before distressed properties cease being dumped into the marketplace and bringing real growth prices down.

Historically, house prices have escalated around 15 to 20 per cent per annum between 2000 and 2007. According to the ABSA House Price Index, this peaked in 2004 at an average of 32.2 per cent. In the two years leading up to the global housing market crisis of 2007, average house prices rose by 14.95 per cent. Following the crisis, there has naturally been a significant adjustment with average prices now at levels last seen about four years ago according to Seeff’s earlier press release in January.

FNB’s House Price Index Report provides a more measured response by initially putting forward that its House Price Index showed a slight acceleration at the beginning of January, climbing from revised year-on-year growth rate of 4.7% in December to 5.6% in January. This is the highest year-on-year growth since August 2010.

However in real terms, the report points out that “the recent growth rates imply that real house price decline continues. Consumer price inflation for December (January not yet available) was around 6.1%, and a 4.7%. House price growth rate in that month translates into about -1.4% real decline.  This means that in real terms, the latest revised figures put the average house price in real terms (adjusted for consumer price inflation) at -15.5% lower than the peak of February 2008.”

And yet the report reveals that: “ our own FNB Estate Agent Survey had also pointed to a surprising slight improvement in residential demand in the 3rd quarter of 2011, and this is believed to have been feeding through into house prices with a mild lag.”

But what of Rode’s 25% overvalued statement? “This, we interpret to mean that it would require a very significant decline in house prices in real terms in order to get back to what Rode deems to be an ‘appropriately priced market’ that would be in ‘balance’ or ‘equilibrium.’” The report responds.

The FNB report posits that there may have been a little overreaction to it since Rode is not predicting a sudden price correction but rather a gradual decline over a few years.  The report goes on to debate the finer points of Rode’s methodology and technical analysis, tentatively discussing alternative criteria.

One can’t help feeling the conclusion is somewhat uncomfortable for the sombre bankers as they are left sitting squarely on the fence. The report concludes: “ So are house prices overvalued by 25%? We can’t contradict the statement. All we can say is that we believe that it is not possible to say.”  Isn’t that a little like the teacher saying “everyone’s special”?

But they do squeeze this in: “ while we have stated the belief that urbanization in SA should bring about significant long term increases in real property values,” you can hear all the realtors say ‘yay!’ “…we must distinguish between the long term, and the ‘shorter” term. The long term move to higher real property values doesn’t happen in a straight line, but rather in big cycles driven by shorter term fluctuations between supply and demand. And indeed, in the near term we are also of the opinion that real house prices will decline further.” You can hear the realtors say ‘ahhh!’

In the end, as has been suggested, the market is simply unrealistically priced. Rode’s report has challenged what might be wishful unrealistic optimism on the part of realtors as they try and boost the image of a depressed market, but they and others like FNB haven’t taken it lying down either, challenging the methodology of Rode’s otherwise respected report. The healthy debate keeps the industry honest and perhaps positively realistic in the outcome.


Offshore Property Not for the FaintHearted

Timing is everything, and if it isn’t then learning from history is. Continuing to make the same offshore property investment bungles could be the result of a combination of emotional frustration, Afro-pessimism and a Moby Dick like obsession with the Rand.

In 1997 the South African government allowed its citizens to take R200 000 per capita per annum to invest offshore. One may argue that investors practically ran to the offshore hills from an outperformed JSE and evaporating Rand.  South African investors stood clutching their modest handful of Rands and looked up in wonder at a booming Wall Street. By 2001 the rand had fallen to R13.50 to the Dollar.

Who would believe that ten years later many countries would be on the verge of bankruptcy and that people would be grumbling about the “Strong Rand” and that the South African Equity market had outperformed most other markets over the same period?

But those in this game for the long haul will remind us that when all seems lost, it’s time to role up  sleeves and capitalise. Back in 2001 when fear gripped investors it was actually the right time to buy into SA equities. When the rand collapsed and afropessimism crept in, investors bought Dollars and Euros expensively and sold out of arguably undervalued markets and bought into markets trading at large premiums.

Looking back ten years, comparisons have been made to a R100 investment in the JSE all-share index at the end of 2001 that would have been worth about R400 by the end of June this year, versus only around R94 if invested in the MSCI world index over the same period. The main US equity index, the S&P500, is today still roughly 10% below its peak in 2000 in rand terms.  Emotions have been the main driver of the investments.

Says Investec Asset Management director Jeremy Gardiner  to the Financial Mail August 2011, Many SA investors, having watched with horror over the past 10 years as the rand doubled in value and the JSE delivered enormous returns, are again considering switching at the wrong time — this time out of developed markets and into SA equities and the rand. “Yet again, this decision is made on the basis of emotional frustration rather than recognising that both SA equities and the rand are now relatively overvalued.”

But a steady hand is required here since the strong performance of the SA equity market seems set to continue.  Offshore investment in general equities may well have dried up recently, it seems the JSE’s R125bn listed property sector is becoming a hot commodity among overseas investors. Big institutions putting down their names include Principle Global Investors, Black Rock and State Street.

On the receiving end GrowthPoint properties, has seen its overseas shareholding jump from 3% to 11% over the past year. Redefine – SA’s second-biggest listed property counter, with a market cap of R20.3bn – doubled its offshore shareholding from 4% to 8% in the same period. “Global investors are now taking note of the fact South African-listed property offers far more attractive returns – total returns of close to 30% last year – than other global real estate markets.” Says Growthpoint executive director Estienne de Klerk.

There is expectation of more overseas funds showing up locally over the next 12 months. Names bandied about include Hyprop Investments,  as well as whatever will materialise from the merger between Capital Property Fund and Pangbourne Properties, also whatever surfaces from the potential merger between Acucap Properties  and Sycom Property Fund and then there’s the  listing of Old Mutual’s R12bn property portfolio.

Macquarie First South Securities property analyst Leon Allison spoke to Finance Week recently and said that although returns over the next decade will be more subdued than has been the case over the past 10 years, current positive structural changes will make the sector more investor-friendly.

Bringing us back to offshore options. The rand’s strength favours taking money offshore. But the logic for offshore investment goes beyond any potential weakening of the rand. There is much to be said for the need for South Africans to diversify their assets. But there are more South Africans who have in the past got their offshore investment timing wrong. 2001 was the prime example, when a historic devaluing of the rand alarmed investors into the arms of foreign markets. At the peak of the rush, the second quarter 2001, 88% of net unit trust inflows went into offshore funds.

Now according to Marius Fenwick, head of the financial services arm of accountants Mazars:  “Now is the opportune time to invest offshore as the strength of the rand makes offshore investment attractive. Instead, offshore diversification should be used to hedge future rand depreciation and diversify through access to large global companies.” So here we go again…

But we know already this isn’t all about the rand. The great Bismark said: “Some people learn from their mistakes, that’s good. But isn’t it better to learn from other people’s mistakes?” Aren’t the underperforming overseas markets just waiting for South African investors? Rand or no Rand variance?

What are the options? Who are the players in offshore property investment?

First of all there’s Growthpoint that bought up a Sydney listed subsidiary applying its winning formula in Australia. Then there’s Emira, which has just put R117m into Growthpoint Australia, in their case they claim the rand had zero to do with their investment move. Emira has a 6.4% stake in Growthpoint’s Australian presence.

International Property Solutions markets UK and Australian residential property to South African investors. CEO Scott Picken was quoted as saying that South Africans wait until the rand is collapsing, panic and throw their money into offshore apartments as it hits bottom, he says. “Most investors have lost money offshore in this decade.”

Financial correspondent Scott Picken writes that comparative data shows that South Africans would have made much more money over 10 years measured in sterling by buying an average house in Johannesburg in 1997 than buying one in London at the same time. Only time will tell if the shoe is now on the other foot.

Other off shore institutional investors include Capital Shopping Centres. British Capital, run through Barnard Jacobs Mellet and Stanlib which has offshore unit trusts. Investec Property Investments has unlisted funds buying property in Europe and the US. There is also Catalyst which has an unlisted fund of global listed property funds.  Redefine is working through its London-listed Redefine International. Resilient has New Europe Property Investments (Nepi), which mainly owns shopping centres in Romania. All top performers.

Other choices in property include these very few funds which have actually lost money. Nedgroup Global Cautious (down 8,5%); Sanlam Investment Management Global Best Ideas (down 2,3%) a long term performer though; the Absa International fund of funds (down 15,8%)

Whether it’s  a strong Rand or the need to diversify one’s portfolio, these may be the times that offshore property funds offer the South African investor a long term strategy again, last made available ten years ago. Whatever the case this isn’t the time to think with the knee-jerk of emotion or a political bias.

Onshoring in the USA with notes for South Africa

Onshoring is seeing a resurgence in manufacturing in the United States. The knock on effect for industrial and commercial real estate is debatable. What lessons, if any, are there for the South African market?


Firms like Ford, Carlisle Tire and Wheel Company, Otis Elevators, General Electric and Whirlpool have relocated some jobs back to the U.S. or opted to upgrade existing U.S. plants rather than resort to off-shore operations. This is in the wake of the World Financial Crisis.


There is some political incentive; it may be the patriotic thing to keep manufacturing plants at home. But in the end it’s the big buck that cracks the whip.  In June 2010 Master Lock a world player in the manufacture of security products, brought over one hundred jobs home that had been previously off-shored.


US President Barak Obama used the ‘on-shoring’ of the Master Lock factory in Milwaukee to highlight the Democrats Blueprint for an America Built to Last. The ‘blueprint’ is essentially an incentive scheme for the on-going creation of manufacturing jobs in the U.S. Coupled with this is the removal of deductions for offshoring jobs overseas. The political message is clear.


Heavy equipment manufacturer Caterpillar is opening a giant facility in Victoria, Texas, in the process of shifting production from Japan back to the U.S. In February, the firm announced it would also shutter a 62-year-old plant in London, Ontario – Canada that makes locomotives and move production to Muncie, Indiana.  Jumping on the bandwagon is Japanese carmaker Honda which is investing $98 million in its largest vehicle engine plant in Anna, Ohio. A significant number of firms have moved some jobs back to the U.S. or opted to upgrade U.S. plants rather than resort to off-shore operations. So there is significant movement on the manufacturing landscape.


In some cases, firms are actually reopening mothballed factories. In others, firms surveying the landscape have opted to open plants in states within the U.S. with the lowest labour costs and unionization rates. Something South African corporates wouldn’t be able relate to given the uniformity of unionisation across the country’s provinces.


In South Africa labour remains arguably at acceptable levels in the manufacturing industry – for example we aren’t seeing PE’s motor manufacturing plants moving to Botswana due to unmanageable wage demands. South Africa’s Chemicals and the Agriprocessing industries are geographically anchored and aren’t able to be moved offshore. So labour in those industries is unlikely to fear offshoring any time soon.


Onshoring in the US though has contributed to a steady revival in manufacturing jobs within the U.S. since mid-2010. Employment in the sector is expanding at an annual pace of approximately two per cent. But manufacturing as a percentage of the U.S. workforce will continue to fair lower down the scale since higher productivity is one of the draw cards for Onshoring.


Higher productivity means fewer workers producing the same amount of goods. Without appearing cynical, it must be said that this would not bode well with labour in South Africa since it would seem more desirable to have greater numbers employed to produce the same amount of goods for the sake of employment figures. But since there is no such incentive in South Africa onshoring is not a relevant dynamic in the economy for that reason. There is also the migrant labour dynamic to consider.

But there are lessons to be learned from ‘the equation’ used by U.S. corporates when it comes to deciding on the location of new factories. Factors weighed include: shipping costs and real estate; infrastructure and supply chain competence; cost, quality and obtainability of labour; proximity to suppliers and customers; taxes and incentives.


Previously, cheap labour and shipping costs clinched it for China and other emerging countries. However the labour market in those same countries is not putting up with the pay and conditions heretofore endured. Labour costs in China for example have risen on average almost 20 per cent per year over recent years. The result is that there’s a higher premium to pay. Similarly volatile oil prices are being felt on the transportation leg. Some estimates have transportation rising 20 to 25 per cent in the next three years!


But back to labour, in the U.S. over the previous four decades, productivity has hit the roof. Output per worker in the manufacturing sector has grown 136 per cent since 1987. According to William Strauss, senior economist at the Federal Reserve Bank of Chicago, what it took 1,000 workers to do in 1960 requires only 184 workers today. In 2005 goods produced in China and shipped to the U.S. were 22 per cent cheaper than products made in the United States. By the end of 2008, the price gap had dropped to just 5.5 per cent.


Despite productivity gains, the manufacturing sector has stopped losing jobs, instead there have been gains. Hitting rock bottom at approximately 11.5 million workers in January of 2010, the U.S. market has added 421,000 new manufacturing jobs. The sector is growing at an average annual rate of about two per cent, the fastest rate of expansion since the mid-1990s.


A lesson for South Africa is that U.S. analysts believe that production never really disappeared. But there are factors that are strengthening it, including a lowering of wages for manufacturing employees. Real hourly wages for U.S. manufacturing employees have remained flat since 1970. In 2000 average wages were $14.35 an hour in 1970 and $14.63 in 2009, according to the U.S.’s Bureau of Labour Statistics. Would S.A. unions put up with that?  Could S.A. workers settle for less for the sake of keeping their jobs and still increase productivity?


Then there’s the issue of what is referred to in the U.S. as ‘right-to-work’. This legislation prohibits agreements between unions and employers to create “closed shops” and limits auto-payment of union dues. Closed shops are workplaces where every employee must belong to the union as a condition of employment. It could be argued that in S.A. the social/political pressure makes it impossible for such legislation to be considered or even at ground level, enacted.


Currently, 23 U.S. states have some sort of right-to-work laws in place and that’s where the plants are being reopened or built.


The difference in quality of U.S. labour is a factor too. “Many of the manufacturers moving back from Asia and India say the quality control there is atrocious,” says K.C. Conway, executive managing director of market analytics with Colliers International. “We have quality control, a well-trained work force. It’s much more robust here than in Asia.” South African manufacturing labour quality seems to vary in reputation across the board but excels in the automotive and agriprocessing industries for example. There doesn’t seem much to tempt local manufacturers to move to Lesotho or Swaziland for example since workers from those and other Southern African countries populate our workforce anyway.


Both the U.S.’s President Obama and S.A.’s President Zuma have spoken much about the improvement of infrastructure. In President Zuma’s case there has been large allocations to infrastructural improvement in this year’s budget. Theoretically this should reduce the cost of moving goods around the country. Obama has proposed $476 billion through 2018 on highways, bridges and mass transit projects for example.


In overview one school of thought is that U.S. manufacturing has never really gone away. The U.S. produced 18.2 per cent of all goods globally in 2010, of course it used to be so much more, and China has surpassed the U.S.  2010 marked the first year since the late 1800s in which the U.S. was not the largest producer. China, with $1.92 trillion in manufacturing output has taken the title.


Along these lines, one is pointed to the fact that although it’s true that the majority of consumer goods are produced in China, the U.S. specialises in heavy machinery and goods that are the product of highly-skilled labour. Automobiles, airplanes, aerospace components and pharmaceuticals are all divisions where the U.S. retains a hefty share of world production.


In the final analysis the assumption we may make is that the U.S. commercial real estate industry should be strengthened by on-shoring though not as dramatically as we may be tempted to conclude. The total industrial market vacancy rate stood at 9.5 per cent at the end of the fourth quarter of 2011. It declined in every quarter of 2011 and is down a full percentage point from its recessionary peak of 10.5 per cent at the beginning of 2010. For flex space, vacancies are a bit higher—12.6 per cent at the end of the fourth quarter—but there too the rate has declined from a peak of around 14 per cent in 2010. Manufacturing space tends to be very specialized and often manufacturing companies build their own buildings and they don’t need to buy the space that existed previously. The exceptions to this might be smaller secondary and tertiary suppliers that support larger manufacturers. Those kinds of firms tend to locate in flex space.


Although South Africa doesn’t find itself in an on-shoring situation the lessons above remain for us to observe. Manufacturing activity in South Africa rose to a two-year high last quarter, fanning expectations that growth in the economy’s second-biggest sector is gaining impetus. This surpassed those recorded among South Africa’s main trade partners during the same quarter. Manufacturing accounts for 15% of South Africa’s economic output and 13% of formal employment. In the fourth quarter of last year, it recovered from a recession in the previous two quarters, expanding by 4,2%, according to official data. The knock on effect on industrial and commercial property is presumed and likely but can be unreliable and inaccurate to monitor.

Stuttafords and Granny’s Old Piano

Johannesburg’s Stuttafords building is like granny’s piano. You inherited something that meant a great deal to somebody else and still means a lot to many others, but it may not mean anything if the history doesn’t do it for you.


Granny’s piano is probably out of tune and the felt hammers inside are worn, not to mention the state of those keys. To resell it would put very little in your pocket. However to restore it and make it available to the next generation could have enormous value all round.


Such is the situation that some of Johannesburg’s grand old buildings find themselves. The Ansteys building is a perfect example of a successful transformation of use from one generation to the next; a tired pink elephant transformed into a bright art deco mixed-use block for the stylish set.


Stuttafords, though is not vast the department store chain of old. A place where your mum dragged you through departments with obscure names like haberdashery, lingerie and Manchester, hopefully to reward you with a milkshake and assorted sandwiches at the self-service tea-room upstairs.  Stuttafords today is an up market, sleeked down version of its old world self. But an iconic reminder of those Grande old stores that used to dot the South African landscape remains.


The building fell under the Auction Alliance hammer last year. Stuttafords was established in Cape Town in 1857, and opened its first Johannesburg Store, the one on Pritchard Street, in 1893 in what was the retail hub of Jo’burg in those days. The building was conceived by Cape architect Charles Freeman, and the 10 storey building was the nearest Jo’burg had to a Skyscraper.


Like Granny’s piano it features a beautiful façade, but alas, also like her piano, the beautiful inside wood work has been gutted, in the building’s case, by squatters. The property is anchor tenanted by McDonalds until 2019, and only a portion of the property is occupied, with the remainder currently vacant. In fact the building has been vacant for ten years.  The property extends over an approximate GLA of 7, 787 m², and features plenty of parking.


It was previously reported that owners, Wayne and Renney Plit, managing directors and founders of AFHCO Holdings, owners of 62 inner-city properties, a pioneering firm in CBD renewal, were planning to build 133 apartments with International Housing Solutions (HIS).  The Greatermans building was similarly converted into 400 rental units at a cost of R80m, also with equity financing from IHS. But this was not to be.


Instead, the Stuttafords Building is to be fully restored and converted into a 120-room hotel. The first three floors will be occupied by the international easygroup/Lonrho hotel. The easyhotels chain markets itself as offering no frills accommodation at international standard at competitive prices. The plan though is to extend the hotel into the remaining six floors in the years to come.


It’s a boost for Jo’burg’s CBD to have an international hotel chain of the calibre of easyHotel put down roots.  So life will return to the old building again. The Plits are reported to have said that they have every intention of restoring the facade of the building to its former glory. So granny’s piano gets some airtime for a new generation of city slickers.


Urbanisation is slower than expected – but there’s no room for complacency

Over a hundred Years ago, it’s estimated that 95% of people living south of the Sahara were engaged in cattle nomadism, hunting & gathering, farming and fishing, leaving 5% of Africa’s population in urban settlements.  Prior to the growth of independence movements in the 1950s, 15% had become urbanised. According to UN figures of 2002 that increased to 37.2 with a projection of approximately 3.5% per annum the figure will look more like 45.3% by 2015.

There has been a mixture of dread and concern both politically and in sociological circles as to the outcome of the expected growth figures. Will Africa’s cities cope given that they have neither been built for such growth nor seem capable of accommodating increased infrastructure even if the funds were available?

So what do we make of some of the talk in research circles about urban populations growing slower than has been projected? In South Africa, Durban and Johannesburg have been bracing themselves for a tsunami of rural migrants only to find that there has been nothing like the rate of growth expected.

The late 80’s saw the scrapping of the Group Area’s act and the pass laws in general. People were allowed freedom of movement overnight. There was huge concern about cities becoming swamped. Johannesburg and other cities certainly have grown but not to the extent predicted while others haven’t at all.

In a paper published on the UN’s humanitarian affairs website it is opined that with little access to the formal job market, most rural people lack the resources to live in cities for long periods. They often maintain homes and families in rural areas and return there for marriages, burials and when they fall on hard times.

It seems this ‘circular migration’ is muddling the conventional assumption that Africa’s urbanizing so quickly. Based on latest census material there are more and more countries ‘urbanising‘this way. There are also more countries that are showing evidence of de-urbanisation.

In a paper released by the Africa Research Institute in February, researcher Deborah Potts, a reader in human geography at King’s College London, makes the case that the high standard of living and poor employment opportunities in African cities has created an air of economic insecurity in urban areas. The gap between rural and urban living standards has narrowed in some cases not making it worthwhile to venture into towns.

In South Africa for example Social grants for the elderly, children and the disabled can support a family living in a rural area where the cost of living is comparatively low. This has even kindled the growth of cash economies in some areas.

Then there’s what’s being termed ‘hidden migration’. It seems that many households have multiple locations given that some family members live in informal settlements and others at a rural location and there is movement between them. People keep moving until they find a reasonable standard of living.

Given that in South Africa’s case the previous census was over 10 years ago and figures for 2011 are still pending, there is a lot of guess work going on. However the Independent Electoral Commission uncovers a very mobile population, “People are drawn to areas of greater economic opportunity, but also where infrastructure and housing is provided”  says the commission.

Fears about urbanization can hardly be dismissed given that overpopulation has played a major role in the lack of basic services, high unemployment and a general sense of hopelessness and political dissatisfaction. High crime and service delivery protests are a worrying knock-on effect.

Interestingly there are other dynamics at play elsewhere in Africa. Local traditional authorities in some countries provide the stability of access to land. In such communities people are at least assured of the opportunity to grow their own food for the extended family.

An example cited by Potts is Malawi, a profoundly rural country. Due to the lack of jobs and the high cost of living in urban areas people don’t settle in the towns but rather engage in very basic subsistence farming in the rural areas.  Some remain mobile and move from place to place traveling, moving with the food as it were.

None of this suggests that sub-Saharan African villages and cities are dwindling. The urban population continues to increase, however so does the rural population. There is still a general move towards urban life, but it is a slow shift, not a tsunami.

Eduardo Moreno, head of the Cities Programme at UN-Habitat, says “It is very clear that urbanization is slowing down, and African cities are not growing as fast as they were 10 or 15 years ago. But when you compare it with Asia or Latin America, Africa is still experiencing the highest rate of urbanization of the entire developing world.”

The warning in all this, is not to become complacent. Although the floodgates haven’t opened and the cities haven’t been swamped to the extent anticipated, negligence of the country’s urban poor would be huge mistake. Expectations of those who seek better lives in the cities and towns have been largely dashed. People with nothing to lose are a powder keg waiting to explode.

This isn’t to be melodramatic; civil disobedience around South Africa is arguably at an all-time high.  But no country in history has been lifted out of poverty by remaining rural. China, in its five-year plans says that urbanization is its driver of development.

A hiatus in the urban growth rate should, if anything, give those in authority a moment to catch their breath to deal with maladministration and corruption so that improving infrastructure and creating jobs can be brought up to speed. If not we will reap the urban whirl wind originally feared.

Madonsela, Municipalities and Money

The impression one gets from press releases and other statements made by South African politicians is that the crumbling of local infrastructure and lack of service delivery is a recent phenomenon. But the writing has been on the wall for a long time. How will warnings today effect matters tomorrow. The on-going decline of municipal management does not bode well for investment, after all, what incentive is there. Then there is the likes of the Public Protector stepping in these days – is there hope?

You’ll be forgiven for thinking this is a recent statement: “The investigation has shown that South Africa has many instances of adequate municipal infrastructure and service delivery, but also an increasing proportion of deteriorating infrastructure, together with poor and often unacceptable quality of services.  Similarly, while some municipalities have exemplary practices in place in respect of many of the aspects of infrastructure maintenance, gross shortfalls in management policies and practice exist in many municipalities. “Such were the mild and restrained findings of a CSIR report in 2006.

Back in 2009 Traditional Affairs Minister Sicelo Shiceka announced that a grand turnaround strategy would be implemented in 2010 to improve national oversight of municipalities. “We want to build a local government that is efficient, effective, responsive and accountable” he intoned. After much huffing and puffing, think tanks, discussion groups, proposals, counterproposals, conferences, debates and many working lunches no doubt it’s uncertain what was actually done about municipalities.

By early 2011 a report was presented to the Cabinet by Finance Minister Pravin Gordhan on the attributes of municipal financial management and how it had discovered that at least 35% of municipalities in South Africa needed intervention from national government to carry them. By doing so, the intention would be, to try and snuff out unauthorised and wasteful expenditure.

The report was the most damning evidence yet. It recommended that urgent intervention was needed in at least 35% of municipalities because of poor financial management, weak governance and poor leadership.  The report revealed that 107 municipalities and two municipal entities accounted for R5-billion in unauthorised expenditure of which R1,1-billion had subsequently been written off. Moreover, 168 municipalities and 22 municipal entities had been responsible for irregular expenditure amounting to R4,1-billion.

The report noted that there was a “shocking” rise in the number of municipalities that are guilty of unauthorised, irregular or wasteful expenditure.

Back to 2006, to quote the old CSIR report: “It is clear that many municipalities will not be able to improve their maintenance policies and practices without strong direction and assistance from national government.  If municipal infrastructure maintenance is to be adequate, a great deal needs to be done.”

Enter Public Protector Adv Thuli Madonsela who on Wednesday 18th of April 2012 visited the Nala Municipality in the Free State province where she inspected a number of homes affected by a dysfunctional sewage system, a sewage pump that is not working and a purification plant that has not been working for weeks.

Madonsela’s responded to an invitation by representatives of residents complaining that their voices had not been heard by the Municipality or other state institutions. The focus: the failure to implement a forensic report conducted by a reputable private firm, in which several findings on maladministration were made and individuals blamed for improper conduct.

Madonsela revealed that despite a partial implementation of the report she would request information on the state of implementation of the rest of the report. It was further agreed with the representatives that the public protector would ensure full accountability by all persons implicated in the report, whether they were officials or office bearers in the municipality or service providers who allegedly defrauded the municipality by claiming and collecting fees for work not done.

After this various sites were visited including an unfinished RDP settlement, an open sewerage dam, a home still serviced by the bucket system and a broken sewage pump as well as a purification plant that has allegedly not been working for weeks. The Public Protector met with residents that had spontaneously gathered to hear from her and her team regarding her plans “to restore their dignity and ensure justice.”

In the press release was this much anticipated but often heard remark: “The Public Protector undertakes to work with the municipality, the province and national government to find answers and to ensure that services are urgently restored to the community.” Unlike many who have gone before her Adv Thuli Madonsela has an excellent track record for keeping her promises and doing what she says. Don’t mess with this Madonsela, ask SAPS.

But it’s a worrying state of affairs when the country’s Public Protector has to physically visit Nala Municipality down in the ‘Maize Triangle’ to set in motion a process that involves the intervention of the Freestate MEC for Human Settlements to restore basic services to a rural community that should otherwise be able to manage itself. How thinly spread do we want our Public Protector to be given the amount of defaulting municipalities we have.

From an investment point of view, we have an effective and willing Public Protector who is not above grievances brought by rural communities far from the ivory towers of high office.  But beware of where you put your money, earlier in the year a treasury report commented that local government finances had deteriorated significantly over the past four years and the “increasingly visible” failures were harming service delivery.

Municipalities are a vital conduit for service delivery, their lack of performance has resulted in political recoils, as seen in the run-up to last year’s local government elections. The report — on the state of local finances and financial management as at June 30 last year — said the slide in municipal finances had decreased, but they were still not showing signs of health and national and provincial government needed to mediate. Symptoms of danger included negative cash balances; the high level of creditors and debtors; the overspending of operating budgets and under spending of capital budgets.

A lack of service delivery has seen greater numbers embracing civil disobedience. With nothing to lose many people have taken to the streets in communities where there has been a breakdown of municipal services. A not so obviously apparent result of this is the flight of investment from these same communities. This does not fair well for property values in these areas either.

Currently, the news from Treasury is that only 30 municipalities (compared to 65 last year) had cash reserves in excess of three months and 114 (98 last year) had cash for less than one month. Municipalities consistently delay the payment of creditors because of a lack of cash. But maddeningly generous bonuses are still the norm, similarly so is the spending on a range of non-priority items and programmes.

The failure by mayors and councils to apply principles of good governance in their communities is destroying hope in the prospect of a rise in the value of property and the potential for attracting investment, ultimately the future overall value will diminish unless Adv. Madonsela and company represent a wave of high level activism heretofore unseen.


The Dig-out Port and the South Durban Basin

Yes you heard right, the speculation is over, the deal is through, Transnet has bought the old Durban Airport site for R1.8 billion. But that’s nothing compared to the investment of an estimated R100 billion over the next 25 years for the vast engineering job that will employ 20 000 people to accomplish it’s task.


The plan is for Transnet to create a whole new terminal with sixteen container berths, five automotive berths and four liquid bulk berths.  To give you an idea of the size of the operation, the port of Durban has the following Terminals – Durban Container Terminal, Africa’s busiest (seven berths), Pier 1 Container Terminal(eight berths) , Multi-Purpose Terminal (also known as the City Terminal- 14 berths), Durban Car Terminal (three berths), and Maydon Wharf Terminal (fifteen berths). (Source KwaZulu-Natal Dept. of Transport)


The whole development is intended to reach completion by 2037. But for those who like instant gratification, the first phase should be finished by 2019 at a cost of R50 billion. That causes one to wonder though , if it takes seven years to spend R50 billion and the project is due to continue until 2037 then that’s another 17 years to spend the other  R50 billion. Interesting, watch this space.


This news comes on the back of the governments R21 billion infrastructure upgrade for the Durban port over the next seven years.  The dig-out port though will ensure the doubling of the capacity for Durban as a container port, enforcing it as the largest in Africa. Durban already moves 67 per cent of the country’s container traffic flows through its port.


The Independent on Saturday quote Safmarine’s Southern Africa cluster manager, Jonathan Horn, as saying that a bigger, more effective port will help shipping lines such as Safmarine, improve transit times, service reliability and vessel turnaround, while offering the benefits of increased efficiencies and flexibility.


The result of the combined existing port and dug-out extension is that Kwazulu-Natal in particular and South Africa in general has a strategic asset, “an effective platform for forging trade linkages between provinces within the country, with neighbouring states and the rest of the world – particularly the Asian and South American subcontinents – offering the province considerable investment spin-offs and opportunities.” The Daily New quoted Ndabezinhle Sibiya, spokesman for KZN Premier Zweli Mkhize.


The implication for property in the area is huge. Already land sales are booming in the south Durban basin. The south Durban basin is already the second largest contributor to the country’s economy. Gauteng is the largest, making up 34 per cent of GDP, and KZN is just under 17 per cent of GDP. Transnet’s dig-out port indicates a catalyst for economic development for the city, the province and the country.


The Independent on Saturday quotes Keith Chetty, a commercial real estate manager at Lighthouse property group as saying: “The demand for commercial and industrial property has increased dramatically in recent times in and around the current port.”


Residents living adjacent to the old Airport would be hoping to get a pretty penny for their homes especially since land is in short supply around the old airport area. One may ponder what will become of the old Clairwood Racecourse site.


Not everyone is dancing for joy though, business owners in the path of the expansion for one. There may be a need for some PR damage control by Transnet with locals too.  The Independent interviewed several ratepayer organisations in the area and there seems to be a definite mistrust and disappointment at the lack of communication form Transnet. A point has been raised that some communities in the area were the product of forced removals during the apartheid era, a lack of transparency by Transnet and local government could result in some short to medium term instability in the area.


The municipality needs to inform residents that the area surrounding the old airport will be rezoned industrial to accommodate the expected demand for land once the port construction begins.


There is no doubt that one of the most important spinoffs from the dig-out port will be jobs. In addition to the 20 000 direct jobs claimed, an additional 27 000 ‘indirect’ jobs are asserted with 12 000 sustainable, operational jobs which will remain upon completion for the project.


There are naturally pros and cons, but there’s no doubt the Dig-Out Port is fait accompli and together with the new Dube Port and Richard’s bay port, the KZN coastline and its arterials are likely to be a very busy place for some time to come.  Edward Gibbon wrote “The winds and the waves are always on the side of the ablest navigators.” Let’s hope Transnet has done its homework.

Cycling and the Construction Indaba in Durban

Good news from Durban as it talks shop and continues to extend its facilities for recreation. Cycling and construction are on the agenda.


The big Construction Indaba was not as dull as it sounds. With all the construction going on around the city of Durban, infrastructure projects, commercial and retail space and housing development it makes sense to see who’s who in the greater scheme of things. The purpose of hosting this event was for the Municipality to address the issues that were revealed by the Construction Research that the Municipality had conducted in 2008.


The research indicated skills shortages, inadequate access to capital and poor availability to information as the most pertinent matters affecting the accomplishments of emerging businesses in the City’s construction industry.


The Construction Indaba was aimed at empowering emerging and established contractors to become self-sustainable and as well as help them through the industry’s most common difficulties impacting negatively on business growth and sustainability.


The result was much Indaba about access to funding, BBBEE, Training Facilities, Supply Chain Management as well as legal matters. The difficulties noted in the Indaba revolved principally around access to finance and the accessibility of business opportunities. There seems to be a satisfaction all around that voices are being heard and expression was healthy and constructive.


The municipality plans to host workshops on the raised issues in partnership with financial institutions in an attempt to bring resolution. Furthermore the Municipality is planning to host more training sessions to assist delegates with skills development. The Indaba will be an annual event at the request of the participants.


And just when you thought it was unsafe …. Enter the City’s “non-motorised transport plans”, which will eventually link Durban to areas such as Umlazi, Kwamashu and Umhlanga.


But there’s a bump in the road. A cycle lane across the Ellis Brown Viaduct of the M4 Northern Freeway bridge has been under construction for several months, resulting in a nasty traffic snarl up with various lanes, and at one stage the entire highway, being shut at times whilst the new cycle lane was under construction.


Alas the wheels of bureaucracy grind slowly. The City is still waiting for a “final record of decision from the provincial department of environmental affairs for the construction of the ramps that will lead on to and off the bridge.” Huh? This means that the bridge section of the cycle route may not be opened until ramps are created at each end. Apparently we have to wait for May before permission is granted.


The whole route ranges from the Blue Lagoon to Riverside Road. Cyclist are currently stopping at the lane, which has been cordoned off by a concrete post, and tentatively cycling on the road past traffic to get to the other side. Not an ideal situation.


On a positive note, Greg Albert, chairman and secretary of the Cyclesphere Cycling Club in Morningside, said that the bridge looks amazing. “We have seen that it has been completed and it’s looking great; we can’t wait for it to open,” said Albert to the Independent on Sunday. He said once the bridge was opened to cyclists, it would encourage more social cyclists and families.


Ultimately the cycle lane should end at the Bird Park at this stage. Other cycle lanes include those extending along the beachfront and around other important city attractions. Most of these tracks had been established in time for the Cop17 conference and had cost the city upward of R6 million. Interestingly enough the City contributed about 30% to the budget of the tracks with the rest coming from international donors: the German government and the UN Industrial Development Organisation

Other possible cycling routes under discussion include a 2km pathway to allow pupils to cycle from Albert Park to schools in the Addington area. Looking into the future, the city intends  to make option to commuters  to cycle or walk to work in the CBD by offering “park and pedal” districts. Similarly the new rapid bus and train points will be a focus for future “park and pedal” facilities.

There’s always something positive and constructive going on in the City of Durban.


The Port is Alive with the Sound of Investment

In one month President Jacob Zuma has opened Kwazulu Natal’s Dube Trade Port and the Eastern Cape’s Ngqura Port. But some of the biggest investment in South African ports is happening at the Durban Port.


National government has declared that it will spend R21billion on the infrastructure of the Durban port over the next seven years. This allocation is part of the R300bn of transport and logistics projects that President Jacob Zuma mentioned in his state of the nation address.


Even though Transnet has spent the last 12 years building the deepest container terminal in sub-Saharan Africa at Ngqura near the Coege Industrial Development Zone outside Port Elizabeth, this does not diminish the need to raise Durban port’s capacity to 5-million 20-foot-equivalent containers a year, from 2,71-million last year. Durban, Africa’s biggest container harbour, handled 61,7% of all containers that moved through SA’s commercial ports last year.  Shipping firms among other transport operators have been grumbling for some time about the inefficiency at the port.


The dug-out port project, south of the port, adjacent to the Durban’s industrial heart, was proposed nearly two years ago when options were being mulled over regarding the site of the old airport. It involves spending about R50bn in the first of four phases and was deemed necessary because economic forecasts showed the existing facilities would be inadequate.


Durban Chamber of Commerce and Industry CEO Andrew Layman said: “With a project of this magnitude, the sooner we get going the better. The issue of uncertainty bedevils investment.”


One project at the port which hasn’t been delayed is the R256m project to provide two more truck staging areas capable of facilitating 136 trucks, and a new four-lane dual carriageway, among other facilities, is 68% complete and is expected to be finished by July this year. This bound to bring relief to customers and truckers alike.


Also progress has been made deepening the berths on Maydon Wharf to facilitate large ships to use the berths for the first time and improve ease of navigation. This project, the estimated cost of which stands at R1,6bn when complete, is expected to be completed by year end 2014. Plans to deepen several container berths at the Durban Container Terminal on Pier 2 were well underway. The Island View oil and chemical product berths were undergoing an upgrade too.


It goes without saying what the knock-on effect is on other industrial and commercial property adjacent to the port or in the city in general as these developments progress.


Of course that’s not all that’s going on down at the port: Ranking as one of Durban’s largest leasing deals of its kind in the Durban port area, Growthpoint Properties Limited, the guys who bought the V&A Waterfront, has concluded a transaction with Bidvest Panalpina Logistics (BPL) for 20,767sqm of prime light-industrial space in Rossborough, near the Durban Port, in a deal valued at over R52 million.


Bidvest is a large consumer of Growthpoint’s commercial accommodation across the office, retail and industrial sectors. Similarly, Growthpoint is a major client of Bidvest’s services. It’s reported that the biggest challenge of the project was the timeframe. Construction of the redevelopment began in March this year for BPL to be fully operation by November 2011. Growthpoint’s industrial properties in KwaZulu-Natal are valued at nearly R1.3 billion with its entire portfolio in the province totalling some R4.2 billion in value.


Coming on the heals of the news that Mombasa and eThekwini are to be sister cities it’s encouraging to see the private sector, local and national government work as a team to keep Durban’s port and environs current. Looking into the future is going to secure the port’s role in the present as it play’s it’s role in the economy of the city and country as a whole.

Durban’s shouting: “Look at me, look at me, look at me.”

Look at me, look at me, look at me.


After the successful holiday season, Durban isn’t letting the limelight fade any time soon.


Durban had ‘a bumper festive season’ where tourists spent an estimated R1.2Billion offset against the R500 million spent by the city improving infrastructure. Since before the 2010 world cup Durban has been as industrious as an ant farm digging things up here, laying paths down there. New and renovated concourses. A flurry of new restaurants. Sprucing up the informal trading areas. Laying on the recreational facilities.


It seems like yesterday that the Durban streets were awash with green fingered types taking a break from the, what turned out to be, highly successful Cop17 conference – well, from an organisational point of view anyway, ahem.


But just when residents thought it was safe, the City eThekwini plans to host a R31million Top Gear festival in June.  It materialised early this year that the ANC-run municipality and the provincial government had signed a 3 year contract for the festival that is to arrive in Durban in June, with municipality and the provincial government expected to carry the financial burden. Oops Durbs is beginning to look like seriously high maintenance.


This comes in the wake of Auditor-General Terence Nombembe’s report for 2010-11, which showed that 364 tenders worth R126m were illegally awarded. Democratic Alliance councillor Tex Collins said the provincial government had signed the Top Gear contract without consulting the municipality. Apparently the event does not submit to the goals of eThekwini’s  integrated development plan. Alas there is simply no provision for the festival in the city’s budget.


Opposition parties are hardly shouting yippee at the thought of fast cars and all manner of techno-wizardry gracing the Durban shore. The DA’s Ronnie Veeran said councillors battled to find money for infrastructure in their wards, and asked how the municipality had found the funding for the event so readily. He also said that the tickets of R250-R500 were too expensive for the average Durbanite. The minority front suggested building a permanent race track.


At the end of the day ANC councillors played the familiar tune that the Top Gear festival was similar to the 2010 Soccer World cup or Cop 17 in that such events brought extraordinary revenue to the city, hotel industry and allied tourism industry. The event is expected to generate an estimated income of R35 000 000 in the City’s hospitality industry. R26 000 000 will be spent on local suppliers and legacy programme. How those figures are arrived at is little mysterious though.


Apparently the deal was struck in December last year and the city is bound by the contract – so all the debate is academic. It’s a bit like dad spending all the grocery money on booze – you might as well enjoy the party.


On a more constructive note though Durban’s place in the sun is keeping it in the public eye for a very green reason.   Pioneering the way for cleaner energy in South Africa, three partners have come together in a cutting-edge energy-saving pilot project. Durban is the city chosen in this project aimed at harnessing  the power of solar energy.


It’s called The Lincoln on Lake Rooftop Solar Project. The three main players are: Growthpoint, South Africa’s largest JSE listed property company; Hudu, a pioneer in the world of Solar Power and the world’s largest solar panel manufacturers Suntech Power.  Eskom naturally has a huge role to play to.


Growthpoint‘s Lincoln on lake on Umhlanga Ridge provided the location whilst Suntech and Hudu provided the solar panels and the installation. Eskom shared in the costs. The project is the largest photovoltaic installation to an office building in the province and represents a potential saving of 44kWs, which equates to some 87,000kWhs per annum.


The carbon saving is estimated at being around 89 610kg CO2 annually or 240 trees saved a year. “The latest innovations in the solar energy sector provide increased applications and effectiveness, as well as financial viability,” I-NetBridge quoted  Martin Viljoen, Managing Director of Hudu. “We are excited to be part of this resourceful project and to be a participant in the solar energy revolution that that is taking hold in SA.”


The pilot project has serious potential for application in buildings across South Africa. Durban has another reason to say “look at me.”


Durban’s more than just a pretty face

Looking past Durban’s ‘pretty face’ of the Moses Mabhida Stadium, uShaka, the new beachfront and golden mile, the proximity to world class game reserves and the Berg, not to mention the many attractions of the Seaside life style, one is still compelled to take Durban seriously as South Africa’s third largest, and often forgotten, commercial hub.
It seems Durban is experiencing a flurry of commercial and industrial property and infrastructure investment at micro and macro levels. But the publicity the city has received has been mixed of late.


It was one of those “do you want to hear the good news or the bad news” scenarios at the beginning of the year.

The Good news was that Durban had ‘a bumper festive season’ where tourists spent an estimated R1.2Billion offset against the R500 million spent by the city improving infrastructure. The bad news was the findings of the research study conducted by development economists Urban Econ on behalf of SAPOA that Durban is the most expensive South African city to live in compared with Johannesburg and Cape Town.


The study was based on tariffs applicable to new residential, retail, office and industrial property developments, from zoning and subdivisional fees to building plan fees, connection charges, consumption charges and rates. It turns out eThekwini is on average 30% more expensive than other cities. The major difference in eThekwini is the existence of a ‘development surcharge’ which some are challenging as unlawful.  Some say this is causing development to flee the city boundaries. Time will tell.


A point in case may be Ballito, since it’s outside of the grip of eThekweni.  Ballito has recently launched a major business services park. Some say the development promises to reposition the North Coast as a serious industrial property contender.  The move brings online 9 light industrial zoned serviced platforms totalling 18.5 hectares offering multi-use options from warehousing and factories to show-rooms, offices and mini units.


Given the lack of similar space available between Durban and King Shaka the future looks bright for the business service park.


Back to eThekwini though. Bridge City, in Durban’s Kwamashu/Phoenix intersection has been trading since Oct 2009. But phases of this urban renewal project continue to be built which includes, among other things, residential apartments, a 500 bed state hospital, a regional magistrates court and government offices.


Last October saw the completion of Bridge City’s underground railway station situated beneath the mall. The development which is being linked to a bus and taxi hub will be an intermodal transportation facility easing road congestion and providing convenient transportation for about 613,000 residents in the surrounding areas of lnanda, KwaMashu, Ntuzuma and Phoenix.


A retail warehousing Business Park is the next phase of the 60ha Bridge City development and its launch will bring 12 hectares to the market. The Business Park is ideally suited to retail warehousing, construction related activities and training facilities. The Bridge City Town Centre is priced from R950/m2 for commercial/retailbulk and R300/m2 for residential bulk. The remaining permitted bulk in Bridge City Town Centre is 490 000m2 which will include approximately  4500 residential units, with the balance of 290 000m2 of bulk being for prime business space. Bridge City has been earmarked by eThekwini Municipality as “a catalyst for economic growth in KZN”.


But it’s not all about big developments.  Chantal Williams, leasing and sales broker for JHI Properties in KwaZulu-Natal has drawn a lot of attention having concluded in excess of 85 transactions for the lease and sale of commercial property in the region, receiving an award for achieving the highest individual sales turnover for any JHI Properties broker nationally.


“Standalone homes converted to commercial use and situated in good locations in Durban’s Morningside area, as well as prime office accommodation in La Lucia Office Park continue to solicit a high level of interest and enquiries,” says Williams. “The nodes which are most in demand are predominantly Morningside, Durban North and Umhlanga, with the size range mainly from 80-500sqm most sought after, and occasionally slightly larger premises.


In Durban’s CBD Williams recently concluded a transaction for 1036sqm of office accommodation for a call centre, LikeMinds, which has relocated to Durban Bay House – a building which has been upgraded to AAA grade.


Craig Ireland, director of LikeMinds, says the decision to make a home for the firm in the CBD was because all their staff use public transport. “Being in the city centre makes it very easy for staff to commute from a number of different locations, coupled with the fact that the concentration of retail in the CBD is a positive factor for our staff. A further attraction is the rejuvenation of the building, which will enable it to attract a good calibre of tenant as well as additional business,” says Ireland.


Finally though not exhaustively, land developer Tongaat Hulett is developing the Umhlanga Ridgeside quicker than you can shout economic slowdown. The four-phased Ridgeside development consists of 140 ha of land creating a triangle bordered by Umhlanga Rocks Drive, the M4 and M41, that links Gateway, La Lucia Ridge Office Estate, The Manors, Lower La Lucia and Umhlanga Rocks Drive. It is ideally positioned along the busy North Coast corridor, just 15 km north of the Durban CBD and harbour and only 10 km south of King Shaka International Airport.


The development, which offers residential, retail and leisure opportunities, and has included major improvements to the road infrastructure in the area, is expected to create 125 000 jobs over the 10 year development period. Investec, Vodacom and BDO have made Ridgeside their KZN home, and in the development sector, Zenprop, JT Ross Construction, Maponya, ERIS and a consortium headed up by FWJK Quantity Surveyors are making their presence felt.


There’s much commercial and infrastructural activity in the city of surf and turf. It’s a healthy mixture of private sector, local and national government input. How the city is run is going to require hard-core engagement from locals and business to see to it that the cream isn’t skimmed off the top for the fat cats that can smell investment from a long distance.

Seven Workable Solutions to Needless Printing

Given that the Global Economic Slowdown continues and the prospects of a tight-fitting aftermath lingers, austerity measures are not just a Greek phenomenon. Companies across the world are having to look at lowering costs and streamlining operations. Furthermore, on-going research indicates a steady upward trend in favour of environmental responsibility in the workplace.

With a plethora of Document Management Solutions offered by companies like Equitrac and Xerox there is clearly a market for what in another time would simply be called ‘pulling in the belt’.

There are several document management practices that can help companies reach both their environmental and cost-reduction goals. From the sustainability perspective, these practices can significantly reduce the use of paper, thereby saving trees, fuel in shipping the paper, physical space to store it, and halting the eventual destruction of many files that end up in a landfill. It goes without saying that such measures need to go hand in hand with a serious commitment to recycling toner and ink cartridges.

According to the Environmental Paper Network, “If, for example, the USA reduces its office paper use by approximately 10 per cent, or 540,000 tons, greenhouse gases would fall by 1.6 million tons. This is the equivalent of taking 280,000 cars off the road for a year.”

Here are some practices that in themselves are a Document Management Solution to reducing costs and carbon footprint.

1. Making use of Technology:  Companies need to make use of the technology they. Multi-Functional Printers have so called “smart” technologies such as Scan-to-Email/File Folder, Personal Mail Box, Document Routing and Fax-from-Desktop in order to decrease paper and ink/toner used in printing.  A recent study came up with three per cent in the reduction of paper used.

2. Getting the most out of a page: Building a habit of reducing the size of the font; setting the margins for a wider fit; checking ‘widows and orphans’ all with the intention of adding more text to a page can reduce needless printing and paper use by a significant percentage.

3. Ban banner pages: A banner page, the page that prints prior to a user’s file prints with username and machine name information. Research in the industry estimates that organizations can reduce their consumables cost by up to 20 per cent by abolishing banner pages from office print jobs. According to “Cost Cutting Initiatives for Office Printing”, Sharon McNee and Ken Weilerstein, Feb. 2008, a 1,000 person organization could cut up 1.6 million pages and save R268 000 per year by eliminating banner page printing.

4. PIN authentication: Cartridge Save reports that one in ten documents sent to the printer are not collected or end up being resent. What companies could do to reduce extemporized print costs by up to 10 per cent is to implement a PIN authentication system.

5. Duplex by default: Decrease paper use by up to 50 per cent. Largely multiple-page documents don’t necessitate the text to be printed on one side of the page. With the necessary policy decisions in place and the technical staff on board it’s quite feasible to alter office protocols and make duplex printing of multi-page documents the norm.

6. Workgroups work: To varying degrees, trading personal desktop printers with workgroup MFPs shared by departments can make a powerful impact. A high end financial services company replaced 1,100 copiers and printers and 1,000 fax machines with 400 MFPs. The move jettisoned 1,700 machines that now no longer consume resources based on their operation, maintenance, and ultimate disposal.

7. Scanning should be the norm: Instead of copying and storing physical documents, organizations can scan and store electronically. Employees can retain digital copies that they can distribute electronically, and at the same time avoid accumulating files filled with paper. In a recent industry survey, senior executives involved in document management indicated that document scanning has a high impact across the greatest range of business goals that include “reducing costs, increasing competitive advantage, enhancing regulatory compliance, and improving customer service.”

8. Recycling Toner and Ink Cartridges: The reduction of carbon footprint due to recycling of cartridges cannot be overestimated. We can take all the necessary common sense precautions above and undo it all by not recycling our cartridges. Used cartridges can be remanufactured many times over and keep plastic, steel, aluminium and rubber out of landfills. If you buy remanufactured cartridges, you save oil and 7kgs of waste.

In the final analysis, each company is like an individual with its own needs and priorities. Before you rush out and purchase expensive Document Management software perhaps two or three of the above practices could be enough to make a significant and sustainable change to your budget and your green conscience.

Haemorrhaging Printers in the Work Place and What to do About Them.

Unnecessary printing could be what’s putting your business over budget and causing productivity to stumble.  An exaggeration? Not according to a cursory glance at the burgeoning industry aimed at “Document Management Solutions.”

If you know anything about working in an office environment, you’ll know that if you wander about peeking into the out trays of printers at the end of the day, unfailingly you’ll observe papers overflowing from every orifice of every machine. These are either uncollected or unwanted jobs, extra copies of work that weren’t needed and so on.  “Document Management Solution” companies claim they have the answer, but first what is the question?

Cartridge Save is a UK supplier with a reputation for being more than just a cartridge supply company. A recent study conducted by Cartridge Save polled 1917 people in businesses with a minimum of 100 employees.  It was discovered that a business of this capacity would squander the equivalent of R57 000.00 annually on preventable printing.

A further breakdown reveals that each participant unnecessarily printed two sheets of paper a day. That’s 800 pages per company per working day. Cartridge Save posited that if that business used say, an HP Apollo printer, printing 795 pages per cartridge, that business would go through five cartridges a week on redundant printing. At a minimum of R220.00 per cartridge, that’s around R1100.00 a week or R57 000.00 a year wasted on needless printing.

Looking at in terms of ink,  each business would be wasting 20.2 litres of ink a decade on pointless print jobs, as each standard Apollo P-1200 ink cartridge contains eight millilitres of black ink, with 1000 millilitres in a litre.

Ian Cowley, Managing Director of Cartridge Save is reported to have said: “We wanted to conduct this research to emphasise to large businesses how much money they are wasting each year on needless printing. These figures only equate to value wasted on ink and ink cartridges; paper and toner have not even been factored in, so the true cost to a business would be much more, all factors considered. I cannot stress enough the importance of cost management when it comes to printing.  I strongly recommend that businesses look into the costs of its printing services.”

Enter “Document Management Solutions.”  Equitrac is one of a few companies offering software aimed at plugging the hole created by, end-users print splurges every day. Equitrac claims that on average, 10 to 15 per cent of volume prints remain uncollected daily. Meanwhile, Green printing solutions GreenPrint cites research that the average user waste R680.00 on paper and ink for unnecessary prints.

Upon the installation of Equitrac on a company network, administrators can use the suite to set and enforce policies that ensure that users only print what they need using the least expensive approach possible. Equitrac is compatible with Windows, NetWare, UNIX, and Linux print servers.

A principle feature of Equitrac’s solution is the “Follow-You Printing unction.” No that’s not an anti-stalking device. Using Follow-You, a user must go to the machine and key in a password or swipe an ID card before the machine will complete the job. Any jobs that don’t end up collected are deleted after a preset period of time.

An example of a benefit of this would be; consider placing a document in queue upstairs that is needed for a conference on the ground floor. Being absent minded you forgot to collect it before going to the conference. Instead of having to arduously wander upstairs again, you could find a printer on the ground floor, type in your code, and retrieve it there. The security benefit to Follow-You is noteworthy since documents with delicate information won’t get nabbed from the printer before they’re collected by the correct owner.

Other features include administrators being able to limit the number of colour prints a user can make, or what the user can print in colour.  An example would be the creation of a policy that any document printed from a browser would have to use black ink. Similarly a policy could be set prompting users to print internal documents as double sided documents. High volume jobs could be redirected to larger capacity machines.

On top of the functionality aimed at reducing waste, Equitrac provides reporting that can let administrators know, down to a device level, how printing resources are being used. Of course Equitrac is just one Document Management Solution out there. Others include:

– A.N.D. Pcounter Comprehensive printer accounting and management suite.
– Pharos Uniprint, Blueprint, and Omega Document Accounting, Cost Management, Output/Print Management.
– Print Audit 6 Comprehensive print management solution to analyze, reduce and recover printing costs.
– Xerox Page Accountant™Easily control access to color output while keeping its cost manageable.
– Xerox Secure Access Unified ID System™ Card security enabling users to authenticate at MFP& securely retrieve print jobs.
– YSoft® SafeQ® Integrated printing solution for accurate MFP accounting, security, and access control and follow-me.

Although reducing energy consumption remains a prime priority on companies’ sustainability agendas, there are plenty of rands and trees to be saved via better management of MFPs, printers, copiers, and the like. Find a solution that suits you.

Colouring Confusion or Confused by Colour

Perusing show-houses on a Sunday afternoon I came across an exquisitely restored Orange Grove house in Johannesburg’s North Eastern suburbs: Steel pressed ceilings, Oregon Pine floors and trims pedantically purged of paint and blemishes, with doors varnished to perfection.

As I admiringly examined the paintwork’s faultless lines and perfect finish I couldn’t help imagining what an annoyingly fussy and fastidious person must have been responsible for this. Yet the choice of paint colour suggested otherwise. I was told by the eager estate agent: “he did all the restoration himself you know.” I didn’t.

The children’s room was delightfully colourful. Not in that proverbial chameleon-on-a- Smarty-box way. The light of the room was wonderfully swept up into the four colours that made up the walls and splashed out a joy that kitsch can’t produce. Funny how too much colour or ‘wrong’ colour is like a fine perfume mixed with cigarette smoke.

But this use of colour was captivating. The children’s toys and bedding were convincingly persuasive of the presence of children, all thanks to four completely different coloured walls. I was converted at once and decided that I too would embrace the pedantic little man who perhaps, resided somewhere  deep within me and apply the same vivid and extravagant formula.

I voiced my plan to my ever-tolerant wife about how I was to apply my new conversion to the world of colour to my two daughters rooms. I have seldom seen my wife’s eyebrow raised so close to her hairline. All credit to her forbearance as I was unleashed. Alas, unlike Mister Perfection-Restoration of Orange Grove, I found that painting four walls different colours, plus the ceiling, infuriatingly, maddeningly and unbearably finicky.

Some say it was my actual choice of colours that was causing the nausea, others that it was the peculiar meshing of colours between the walls, but the effect when walking into the room of the four colours was not unlike entering a cabin on board a ship on a rough sea, where the portholes are just hovering above surface level.

Although my girls’ dreams of rainbows, clowns and female members of parliaments’ hats subsided, they never did quite get over their early years subjection to Joseph’s Technicolor Dreamcoat on their walls. When we eventually moved home and they reached their teens, I was tentatively offered the task of painting their rooms. This time there was a very firm condition: “Daddy, please, only white, paint only white!”

Whether it’s painting or printing, colour is probably having more of an influence on your life than you think. Whether you call it ambience, atmosphere, mood or vibe you can’t live without colour. But you’d better get the best advice on how to use it.

The City of Johannesburg in the News for all the Wrong Reasons

The City of Johannesburg seems to be in the news for all the wrong reasons, again. While the Property Owners’ and Managers’ Association (Poma) and The Johannesburg Development Agency (JDA) continue to do selfless and sterling work for the city, the council continues to dance about on thin ice.


Last year saw, among other things, the wrangling over The South African Property Owners Association (SAPOA) taking the City to court to set aside its budget following the city’s increase of the rate ratio applicable to commercial properties from 1:3 to 1:3.5. The additional 18% increase imposed by the City of Jo’burg burdened the commercial properties owners, and in many cases tenants, with an estimated annual over payment of R300 million according to Neil Gopal, CEO of SAPOA.


But the court case came to a sticky end for SAPOA in the South Gauteng High Court as the court ruled that there had been “plainly adequate publication and notification” relating to the raising of the rates in question.  Regardless, this has left a foul taste in the mouth of commercial property owners and tenants as they have to cough up the heavy increase.


Many developers and investors are also looking at the City of Johannesburg with a long face. Whilst pouring millions into the inner city, developers face countless red tape issues in getting plans and procedures rubber-stamped. Some developers are now holding back what they estimate that they owe in taxes, rates and services and have taken the council to court where they have cut off for non-payment. In the cases that have gone to court so far, they have not only forced the council to reconnect them but have also been awarded costs against the council. Alas, not all is well in the state of Jo’burg.


The Johannesburg Development Agency works like a Trojan in its visions to rejuvenate the CBD and inspire financiers to not give up on the city. “Yet their efforts are completely undermined by the [Jo’burg] council’s revenue department, which disconnects services to buildings even though accounts are paid and the courts have upheld this position.” Writes Property24’s Paddy Hartdegen.


The City of Johannesburg also found itself in The Constitutional Court which declared the City of Johannesburg’s housing policy unconstitutional and ordered the City to provide temporary, or ‘emergency’, accommodation to the 86 poverty stricken people living in Berea, Johannesburg.


The Court held that the City of Johannesburg was obligated to provide temporary accommodation to desperately poor people facing homelessness as a result of eviction. The Court also criticised the City’s failure to plan and budget for housing crises and labelled its argument that it was not legally entitled to do so “unconvincing”.


It seems the City feels that it is only obliged to provide temporary shelter for people it evicts from its own buildings or those deemed unsafe, not those who are left on the street as a result of legitimate private evictions. The Court declared this unreasonable and unconstitutional.


But on Jo’burg’s billing front a much more protracted tale of woes is playing out.  Right on the tail of Treasury and rating agencies raising concerns about The City’s financial stability, particularly regarding the low collection rates and The City’s operating margins, it was up before the National Consumer Tribunal.


However The City, in a bid to avoid a possible R45m in penalties, argued before the National Consumer Tribunal that complaints about inaccurate billing for water and electricity did not fall within the mandate of the National Consumer Commission.


The Auditor-general Terence Nombembe stirred the waters by raising concerns about the accuracy of the city’s finances in its 2010-11 audit report, based on billing discrepancies picked up during the audit.


Advocate Michelle le Roux, on behalf of the City of Johannesburg, said that the commission did not have valid and legal grounds to issue the city with compliance notices for 45 consumer complaints. She went on to declare that the provisions the commission relied on did not give results in prohibitive conduct as stipulated in the act. “However, if the commission had jurisdiction, then it failed to follow the required procedure before issuing the compliance notices.”


The point raised by the commission though was that residents were on the wrong end of rough deal and that The City has not responded in reasonable time to the resident’s queries. Delaying the issuing of transfer certificates, the point in case, has had a negative effect on the sale of property. The City admits that up to last month 109 000 enquiries remained unsettled and 56 000 of those were billing related.


The greatest concern in the minds of the City it seems is the criminalising of the municipality which would be referred to the National Prosecuting Authority.


A loud bureaucratic sounding voice came out of Advocate Ms Michelle le Roux, on behalf of the City of Johannesburg, that the service the city provided to residents ended before the invoice was issued, therefore the invoice was only a consequence of the service and could not be covered under the part of the act that deals with prohibitive conduct and the delivery of quality services. Urg, could it taste any worse: the taste of ‘pass-the-buck’ soup. The flavour of ‘not-my-responsibility’ pie. Could The City and its legal voice sound more bureaucratic, less helpful, less service orientated.


Ms Mohlala for the Commission summed up the attitude of The City stating that this interpretation of the act, by the city was, “superficial” and “not based on the actual reading and spirit of the act.”


There are 220 complaints outstanding against the City of Johannesburg, unprecedented in the history of the commission.


What’s next? It’s only March, it’s not a good start to the year.  Johannesburg has a long way to go before the City of Johannesburg matches the excellence and innovation of its private sector, which continues to lead the way with a disproportionately low level of help or incentive from the Metro, which has the symptoms of Apartheid era bureaucracy and Third World incompetence.


Jo’burg’s Housing Policy Under Scrutiny

By April this year, 86 otherwise evicted, people who live well below the breadline, should be accommodated at the behest of the Constitutional Court by the City of Johannesburg.  At the centre of this legal tussle is the matter of the constitutionality of the City of Johannesburg’s housing policy, which has been found wanting.

The Constitutional Court today declared the City of Johannesburg’s housing policy unconstitutional and ordered the City to provide temporary, or ‘emergency’, accommodation to the 86 poverty stricken people living in Berea, Johannesburg. The Constitutional Court’s unanimous judgment, written by Justice Van der Westhuizen was regarding the application of Blue Moonlight Properties to evict the occupiers from its property.

This comes at a time where Maphango and 17 others verse Aengus Lifestyle Properties comes up before the constitutional court. Those with property investments, landlords in poorer residential communities in particular, have their eyes cocked toward the outcome. The difference between the two cases though is that Maphango and the 17 are paid up lease holding flat dwellers having their leases terminated. The Berea 86 are poverty stricken families that have sought shelter in what are squalid conditions but who don’t want to move because they would be homeless and away from their sources of income.

The Court held that the City of Johannesburg was obligated to provide temporary accommodation to desperately poor people facing homelessness as a result of eviction. The Court also criticised the City’s failure to plan and budget for housing crises and labelled its argument that it was not legally entitled to do so “unconvincing”. It seems the City feels that it is only obliged to provide temporary shelter for people it evicts from its own buildings or those deemed unsafe, not those who are left on the street as a result of legitimate private evictions. The Court declared this unreasonable and unconstitutional.

Similarly prospective landlords who purchase property aware that it is occupied “may have to be somewhat patient and accept that the [owner’s] right to occupation may be temporarily restricted” in the event that the eviction lead to homelessness.

Therefore the Constitutional Court has ordered that alternative accommodation be made available in a location as near as possible to the Berea property. Having done so the occupants are expected to vacate and move to that accommodation.

Executive director of the Socio-Economic Rights Institute of South Africa (SERI) Jackie Dugard said “the City has been in a state of denial about the needs of poor and desperate people under threat of eviction by private landlords within its jurisdiction. That must now end. The Court has recognised that the state has obligations towards poor people regardless of whether a state or private entity evicts. The City must begin to engage actively with its obligations and budget to give effect to them.”

Morgan Courtenay, the occupiers’ attorney at the Centre for Applied Legal Studies (CALS) said “this is a huge victory for the poor generally and for the occupiers in particular. We call on the City of Johannesburg to immediately take steps to implement the Court’s order and to carefully consult with the occupiers and their representatives to this end”.


Although quite a different case, the similarities of which leaves one curious as to which way the Constitutional Court will swing with the Maphango and 17 Others v Aengus Lifestyle Properties. The consequences for landlords in particular and South African property in general would be sweeping in the event of a favourable decision for the tenants. Whatever the outcome South Africa’s Constitutional guarantee that everyone has the right to housing is being challenged on all levels.


Confidence in a Province that has Confidence in itself

A Cape Peninsula estate agency MD Lanice Steward of Anne Porter Knight Frank is quoted as saying recently that “there is a growing confidence that the Western Cape will be efficiently run, that it will not only spend the money allocated to its various departments but will do so with wisdom and insight into the needs of the communities it serves.”  Does the Western Cape deserve the positivity expressed by Steward?

Without concerning ourselves with party politics or getting caught up in comparisons a perusal of some of the vital signs of the province do indicate health. It may be that there is a proactive air about the Western Cape. Getting beyond some of the more obvious signs like the provinces’ record of intent with regard to fighting crime and corruption, there is, it seems, to be a genuine striving toward service delivery. But there are other tell-tale indicators of a culture of intent.

Investment indicates a positivity and confidence within one’s own market.  The Western Cape Investment and Trade Promotion Agency reports cautious optimism for investment projections for 2012. “The growth in global projects over the past five years was an indicator of appetite for investment and was likely to have a positive impact on Western Cape foreign direct investment (FDI) projects going forward”, said Wesgro IQ head Jacyntha Maclennan. The Western Cape’s FDI into Africa grew by 73.3% year-on-year, with the province accounting for the lion’s share (74%) of South African investments into Africa, revealing a distinctly outward focus.

Wesgro’s CEO Nils Flaatten says that The Western Cape’s strong investment into Africa was largely due to property development projects and financial services.

In addition to this Cape Town was found to be most popular city in South Africa for FDI between 2007 and 2011. The Western Cape was noted as the second most popular provincial FDI destination. The Western Cape took two of the leading 15 FDIs into South Africa in 2011. They were both capital investments going for more than R350-million in the field of communications.

Engineering News reports that the top three sectors in the Western Cape for FDI from 2007 to 2011 were software and IT services, with 17% of all; business services, holding 12% of projects; and communications, capturing 9.4%; renewable energy attracted only 2% of projects.

So much for FDI, is the Western Cape investing in itself? As it turns out Helen Zille announced directly after the President’s state of the nation speech, what she calls “game-changing” infrastructure plans.

“The most powerful economic lever in the hands of a provincial government is the ability to build growth-creating infrastructure,” Zille told the opening of the provincial legislature in Cape Town.

Four regeneration projects have been announced: the Founders’ Garden/Artscape precinct, the development of a government precinct and the further development of the Somerset Hospital precinct. The Cape Town International Convention Centre is to be doubled in capacity.

Zille said the province would launch a road network improvement project to support the Saldanha Industrial Development Zone initiative.

She also announced plans for a project to provide broadband internet access to every citizen, school and government facility in the province. The goal was to connect 70% of government facilities and every school by 2014. Within the next two years, Khayelitsha, Mitchell’s Plain and Saldanha Bay would ideally all be connected, Zille said.

Rightly stated, Zille points out that no government can achieve economic development on its own, hence the creation of the Economic Development Partnership (EDP). The intention is for all stakeholders in the economy to meet and work on a shared agenda for development and economic growth. The steering committee would consist of members from business and government.

Viewing from the property side is the Western Cape Property Development Forum which was established to interact with the City “to address existing processes, practices and policies to ensure that systems are streamlined and effectively integrated to deal with issues that might impede development “they announced.

Having been formally established in 2008, the WCPDF has been operational since 2007. An example of one of its events was the hosting and facilitating of World Planning Day – with the theme Planning for a Low Carbon City. The event brought together architects, town planners, developers, economists and environmentalists with the view to improving interaction between these vital role players.

The Western Cape has had its fair share of dereliction challenges but Cape Town has led the way in coming to terms with this common urban phenomena. When it became clear that a blanket approach was necessary a Problematic Buildings Unit was created to end the rot.

The unit was formed to focus on and deal with derelict properties, which were contravening regulations, including those relating to fire and health.  This move is a partnership with the city’s Human Settlements Department, the unit has now come up to speed with the city’s most severely affected buildings.

A bylaw was passed last year initially identifying 280 problem buildings. By half way through the year there remained 160 buildings under investigation throughout Cape Town – in the city centre, Mitchells Plain, Durbanville, Salt River and Camps Bay.

Cape Town also has a dedicated Social Housing Police Unit that is focusing specifically on city council rental properties.  Swift action and intent among lawmakers has resulted in this effective multipronged approach.

Although intent has come from Western Cape Government a hand in hand approach with National Government is also required on some projects. It has been announced by Finance Minister Pravin Gordhan that the Clanwilliam Dam wall will be raised in order to provide an additional 10 000 000 cubic meters of water a year for downstream farmers. The dam is situated in the middle reaches of the Olifants River, near the Western Cape town of Clanwilliam.

One project which sums up the attitude of a local government wanting to be, or at least seen to be, user friendly, is the Red Carpet Call Centre. Small businesses in the Western Cape can now call a provincial hotline to lodge and request assistance for their red tape-related issues or for any general information on starting and growing a business.

The Call Centre, which arose out of the Department of Economic Development and Tourism’s Red Tape to Red Carpet Programme, reflects the Western Cape Government’s intention to create and maintain an enabling environment for business.

Time will prove whether the way things appear is how they actually are. But the Western Cape Government keeps appearing in the news for all the all right reasons, at least a good enough measure of the time to warrant a heads-up for property investors who are discerning that it’s more than just the Cape’s natural beauty and bounty that’s cause for the property market to blossom.

Letting Lanice Steward have the final say: “Our upcountry buyers see it (Western Cape) as likely to forge ahead economically and it has to be said that this perception is largely based on the feeling that the administration is more competent than that of other provinces.”

Financial Services Employment Around The Globe

There are no prizes for guessing how much pressure, employment in the financial services sector is under these days. Scrutinizing some statistics coming in from the world’s leading financial cities may lead one to some more thought provoking conclusions. Keeping in mind that the amount of office space required is directly proportional to the volume of jobs thereby creating a knock-on effect in the commercial property industry.

London: the Confederation of British Industry and PricewaterhouseCoopers reported that UK financial institutions plan to slash investment and reduce jobs in coming months, responding to increased competition, a more imposing regulatory atmosphere and a decelerating world economy.

New York: American Banks have been most prominent in the news when it comes to layoffs last year. Bank of America, Citigroup and Goldman Sachs made approximately 60 000 jobs redundant in 2011. RBS is dropping 3500 more jobs over the next three years in addition to the 1100 slashed last year.  It’s been reported that Morgan Stanley is to shed jobs this coming month.

Looking over the last decade there are some surprising trends. Some markets have experienced growth in the financial services industry.

Toronto: There was a marked increase in financial employment during the past decade, with the exception of a recession-related decline by 2010. But overall since 2000 where Toronto’s figures for the sector were at 223 100 the growth has been a steady 3.7%. Today, financial services jobs figures are at 319 500.

Zurich and Geneva: Financial sector job growth in Zurich has increased over the last ten years. From 70 000 to 92 400 Zurich has grown by 2.7% in financial services jobs. The lesser Swiss market of Geneva has experienced similar growth over the same period. Switzerland not being a member of the European Union is arguably better placed to weather the region’s turbulent economic situation.

The most optimistic figures are coming out of Asia. Although not entirely surprising given upward growth rates in that region over the past ten years.

Shanghai: This centre of financial service for the mighty Chinese boom has experienced the highest increase in financial services employment with the total number of people employed in the sector nearly tripling over the past decade moving from an estimated 85 000 jobs in the sector in 2000 to over 217 000 by 2010. That’s an increase of 11%!

Hong Kong: This city was recently rated the world’s top financial centre deposing previous number one New York City according to World Economic Forum. Like Shanghai, Hong Kong has also experienced a rapidly expanding financial job market. The economy and property markets of Hong Kong have climbed recently due to positive domestic and regional economic growth as well as increased investment into Asia Pacific, all of which has secured Hong Kong’s status as one of the top global financial centres with financial services jobs growing 2.1% from 171 000 in 2000 to over 210 000 in 2010.

Singapore: Jobs in the financial sector are greater here than Hong Kong.  Growing by 4.6% over ten years from 100 500 jobs to 157 100. In fact the jump was 25% between 2007 and 2010 and doubled between 1996 and 2010. One could suggest that Singapore has escaped the global financial crisis given there has not been any annual decline in employment figures.

But New York City is the world’s largest market for financial services employees. Not having recovered fully from the 2001 recession, by 2008’s global financial crisis further job cuts were a certainty. The so called recovery beginning in 2009 has been decidedly feeble and has not been able to hold back the flow of cut backs. Measuring over the same ten period as above New York City’s financial services jobs shrank from 600 000 in 2000 to 531 000 in 2010.

Chicago: That other great bastion of the US financial industry dropped by 0.9% from 310 000 to 284 000 jobs over ten years.  Boston figures have also declined.

London: Across the pond, London’s recovery has been stronger than any of the main U.S. financial centres, and there’s even been a little growth of 0.1% between 2000 and 2010. London employs 300 900 in the financial service industry as opposed to 297 300 eleven years ago. As the largest financial centre in Europe, London has been confronted head-first with the Eurozone crises, while the so-called Tobin tax on financial transactions, along with a number of other upcoming national and regional regulatory changes, loom on the horizon as well.

The European Commission, the executive body of the European Union (EU), has proposed implementing a tax, starting in 2014, on all transactions involving stocks, bonds and derivatives that are conducted between financial institutions. It would apply to banks, insurance companies, investment funds, stockbrokers and hedge funds, among other financial firms. In spite of all these obstacles, however, it’s worth noting that London is still in better shape than New York—at least when it comes to the recovery in financial services employment.

One may well enquire as to what the share of financial employment is, as a per cent of the total labour force? Are some financial centres more specialized in financial services employment, versus other industries?

It’s Asia again: Studies show that Singapore, Hong Kong, and Shanghai have not only created more financial jobs over the past decade, they are becoming more specialized. Also gaining market share are the Swiss markets of Zurich and Geneva, both financial centres have become relatively more concentrated in financial services employment, though this growth has stalled since the global financial crisis of 2008.

Similar research reports that, for the most part, the more established financial centres such as New York and London have actually become less specialized in financial services employment.

Politics and regulation are likely to be very influential on the future of global financial centres and consequently the financial services employment rate. The potential financial regulation, the global economic slowdown and the EU crisis are all creating great uncertainty for financial centres.

The UK for example is resisting the EU’s proposed Tobin Tax on financial transactions especially in the light of Ernst & Young, warning that the EU could face up to a €116 billion shortfall in EU finances as a result of the loss in economic activity associated with the imposition of the tax. London is also resisting the EU’s proposed Tobin Tax on financial transactions. On London’s upside: the offshore Yuan market is gaining increased interest, with British and Hong Kong government leaders announcing plans this week to enhance cooperation in establishing London as a new hub for the offshore Yuan market, as a complement to Hong Kong.

In Asia, financial centres like Hong Kong, are displaying a far more positive outlook and higher growth rates than their American and European counterparts. In Europe there is some variance across markets; Swiss banks for example are expected to continue outperforming their European Union equivalents, thanks to favourable tax treaties and a less arduous regulatory environment.

Gulf and Asian markets are also jockeying for the growing Islamic finance market. Cities such as Dubai, Seoul, and Moscow are all competing to emerge as more prominent players in the financial market.

Pressure on employment in the financial services is real and continues to be influenced by the great undercurrents of politics, regulation and growth.  Could those in the financial services sector end up following the money, relocating from city to city as each financial centre prospers or declines? Or is it possible for growth to continue ad infinitum in each financial centre without shedding the ‘deadwood’ accumulated over a prolonged stretch of growth? Office space in global financial cities dries up or opens up in direct proportion to financial services jobs. It will pay landlords to pat the goose that lays the golden egg.

The Rode Report, “property is 25% over valued”

The Rode report just threw a cat among the pigeons.  Erwin Rode and Associates, property economists and produces of what has popularly become known as ‘the Rode report’ have ruffled some real estate feathers with their latest missive. Rode says that although house prices will increase marginally in nominal terms, they are in real terms still overvalued by 25 per cent. Seeff, Rawson and FNB all weigh in on the response.


Seeff Property Services chairman Samuel Seeff believes the report to be ‘one-dimensional’ and sends the wrong message to the ordinary buyer. This on the heels of an upbeat press release, earlier in January, stating that “this is probably one of the best buyers’ markets in decades. First time buyers and those looking for a second property can now find value in the market not seen for years. Buying in a down market can be one of the smartest moves, the bargain deals won’t last. “


Rode on the other hand says that ‘Correction’ will take time and he therefore recommends renting for the next five years  as there is likely to be no significant capital growth over this period.


Seeff though is sticking to its guns. “In contrast to the commercial market, the residential market is driven by emotional needs”, says Seeff. “About 95 per cent of buyers are not looking for investment returns or rental income, but want a foundation upon which to build a life.” Seeff makes the point that regular buyers are aiming at acquiring a home either for the first time or to grow , or move closer to school or work.  “No value can be put on owning a roof over your head’s” says Seeff emphasising the investment in ones future and stability.


Other realtors have similar comments. Tony Clarke of Rawson’s property remarked that: “My prediction is no growth in real terms over the next year, two years, and thereafter slow growth starting at between 2 and 4% per annum. There is going to be a slow uptake in new development property entering the market, which from a first time buyer’s perspective will retain its value.”


Clarke points out that if one purchases property, rental on top of return needs to be factored in.  Clarke also questions Rode’s position that first time buyers would do better to rent for the next five years or so and invest the difference saved on a bond. The question Clarke asks is “Invest in what? What he (Rode) is not taking into consideration is the fact that a lot of properties are being sold at a distressed level which is rightsizing property values anyway because those properties are in competition with normal properties.”  Clearly it’s going to take time before distressed properties cease being dumped into the marketplace and bringing real growth prices down.


Historically, house prices have escalated around 15 to 20 per cent per annum between 2000 and 2007. According to the ABSA House Price Index, this peaked in 2004 at an average of 32.2 per cent. In the two years leading up to the global housing market crisis of 2007, average house prices rose by 14.95 per cent. Following the crisis, there has naturally been a significant adjustment with average prices now at levels last seen about four years ago according to Seeff’s earlier press release in January.


FNB’s House Price Index Report provides a more measured response by initially putting forward that its House Price Index showed a slight acceleration at the beginning of January, climbing from revised year-on-year growth rate of 4.7% in December to 5.6% in January. This is the highest year-on-year growth since August 2010.


However in real terms, the report points out that “the recent growth rates imply that real house price decline continues. Consumer price inflation for December (January not yet available) was around 6.1%, and a 4.7%. House price growth rate in that month translates into about -1.4% real decline.  This means that in real terms, the latest revised figures put the average house price in real terms (adjusted for consumer price inflation) at -15.5% lower than the peak of February 2008.”


And yet the report reveals that: “ our own FNB Estate Agent Survey had also pointed to a surprising slight improvement in residential demand in the 3rd quarter of 2011, and this is believed to have been feeding through into house prices with a mild lag.”


But what of Rode’s 25% overvalued statement? “This, we interpret to mean that it would require a very significant decline in house prices in real terms in order to get back to what Rode deems to be an ‘appropriately priced market’ that would be in ‘balance’ or ‘equilibrium.’” The report responds.


The FNB report posits that there may have been a little overreaction to it since Rode is not predicting a sudden price correction but rather a gradual decline over a few years.  The report goes on to debate the finer points of Rode’s methodology and technical analysis, tentatively discussing alternative criteria.


One can’t help feeling the conclusion is somewhat uncomfortable for the sombre bankers as they are left sitting squarely on the fence. The report concludes: “ So are house prices overvalued by 25%? We can’t contradict the statement. All we can say is that we believe that it is not possible to say.”  Isn’t that a little like the teacher saying “everyone’s special”?


But they do squeeze this in: “ while we have stated the belief that urbanization in SA should bring about significant long term increases in real property values,” you can hear all the realtors say ‘yay!’ “…we must distinguish between the long term, and the ‘shorter” term. The long term move to higher real property values doesn’t happen in a straight line, but rather in big cycles driven by shorter term fluctuations between supply and demand. And indeed, in the near term we are also of the opinion that real house prices will decline further.” You can hear the realtors say ‘ahhh!’


In the end, as has been suggested, the market is simply unrealistically priced. Rode’s report has challenged what might be wishful unrealistic optimism on the part of realtors as they try and boost the image of a depressed market, but they and others like FNB haven’t taken it lying down either, challenging the methodology of Rode’s otherwise respected report. The healthy debate keeps the industry honest and perhaps positively realistic in the outcome.


Old Mutual Corporate Social Investment

Old Mutual like any business, is in business to make profits. To what degree any business should express some sort of social conscience may be indicated by the community it does business in. In South Africa every company is under pressure to have (CSI) Corporate Social Investment programmes indicating a social conscience and a willingness to be part of social change.

Old Mutual Property, owners of Gateway Shopping Centre, announced on the 31st January “continues to look for innovative ways in which to make valuable contributions to sustainable community development and township upliftment.” This is referring, in particular, to the redevelopment of the Kagiso Mall in Mogale City.

This isn’t the first time Old Mutual Properties have done successful revamps of late. A few years back they were awarded the Golden Arrow Award for the revamp of the Riverside Mall in Nelspruit and awards were also won for the revamp of The Bluff Shopping Centre.

Kagiso is a township falling under the Mogale City municipality. The mall was an old 1980’s white elephant with poor occupancy rates. The shopping centre had become irrelevant to the community. Although the anchor tenant, Shoprite remained, a further 9200sqm of retail has been created, about 50 shops including late-night fast-food outlets.

Old Mutual Property’s Hein Smit believes this is “a sustainable contribution to the environment and township communities, which enables wider socio-economic upliftment.”     He insists that the sustainability is all in the design which includes “utilising local skills and expertise in the development phase, re-usable building materials (which are donated to the local community if not used in the new development), rainwater harvesting, low energy lighting and improved insulation specifications.”

If one is looking for Old Mutual Property’s track record there is always the Phanghami Mall which took advantage of a more decentralised retail development area servicing 8 townships and various surrounding villages.  Close to the Punda Maria gate of Kruger National Park it has a tourism component to the project.  Aspects of community upliftment in the construction and management of the centre were considered vital to the scheme.  R75 Million was invested.

Similarly Phumlani Mall in Tembisa on the East Rand was bought for R175 Million and revamped with the purpose of uplifting the community. With a reported tenant mix of 75% National chains one hopes there is something still in for local retail.

As commendable as these projects may be one has to consider them in the light of other projects on the go elsewhere. For example Old Mutual Properties has announced that it plans to invest a whopping R20 Billion in a “Town Centre” project focused on the Gautrain station in Midrand comprising 350 hectares of land.  Old Mutual Property also has Rosebank’s The Zone in its quiver. This year the plan is to add an office tower in Rosebank to the budgeted tune of R340 Million.

Throw in R2 Billion rand to be spent on revitalising Menlyn this year  it’s interesting to note that  Old Mutual Property’s  property portfolio is bordering on R35Billion 70% weighed on retail, 10% around offices with the balance in industrial premises.  One doesn’t want to detract from the good work done in the name of Corporate Social Investment but we may to keep a little perspective before feeling all warm and fuzzy.


Prime Properties still a Safe Haven for Wealthy Investors

Ever wondered how those super wealthy properties perform against each other on a global market? Well the Knight Frank Prime Cities Index claims to be a definitive global guide. The only South African city to feature is Cape Town which appears at about halfway down on the property price change list.


Prime property corresponds to the top 5% of the mainstream housing market in each city. Knight Frank examined the value of prime property in key global cities and reports a 0.2% rise in the final quarter of 2011. However the index saw 3% growth for the year over all. Alas the unpleasant drop in the second half of the year was the second time since the 2008/9 global financial crisis.


Despite European woes, since late 2010 it has been the Asian cities which have slowed price inflation. In Q2 2010 prices in Asian cities were rising at an average rate of 23.6% each year, the comparable figure now stands at -1%. The worst hit being Mumbai where prime property dropping by -18%. (Singapore losing -7% and Kuala Lumpur at -6%.)


But a more cautionary climate prevails. Possibly due to anti-inflationary price cooling measures implemented by Asian governments, combine this with jitters about the European sovereign debt crisis.


Looking at five primary world regions year on year: Africa has grown by 13.7% – that’s Nairobi at a whopping 25% and Cape Town at 2.4%; then North America has seen growth of 8.3%, top performers being Miami at 19.1%, Manhattan 3.1% and Los Angeles at 2.5%; The Middle East did not fare as well at 2.5% overall and Europe sitting at 1.6% not reflective of some of the better performing cities like London 12.1%, Moscow 9.8%, Kiev 7.5%, St Petersburg 4% and Zurich at 3%. Europe’s overall figure is dragged down by some notable underperformers like Paris -3%, Madrid -5.5%, Geneva -5% and a staggering -10% for Monaco.


An interesting cameo performance has Nairobi, Miami and Jakarta displaying the most impressive growth in Q3 of 2011. Strong economic growth in Kenya’s Nairobi and Jakarta in Indonesia while Knight Franks reports foreign demand from Brazil and other Latin countries seemed to push up prices in Miami. Knight says nothing about Cape Town except placing it squarely in the middle at 2.4% growth, which one may argue is pretty impressive given the circumstances.


The strongest message coming through the figures seems to be that so called ‘old-world’ cities, as Kate Everett-Allen  from International Residential Research puts it, such as London, New York and Moscow are outperforming the overall index. With the exception of Paris, London and Moscow have ranked highly for several quarters and Manhattan’s recovery is picking up speed. Overseas exigency for New York’s luxury apartments is not only growing, but is also starting to diversify with Chinese nationals increasingly evident, particularly in the $1-$3m range.


Although the luxury end of the market has suffered some sluggishness heading into the second half of 2011, the world’s prime markets continue to outperform their mainstream housing markets, making a salient point for investing in what has come to be accepted as safe-havens. Despite the European debt crisis and its consequences on markets and property, cities like London, Moscow and even St Petersburg and Ukraine’s Kiev are attracting capital away from the east. This in the midst of the on-going events stemming from the Arab Spring in the middle East and North Africa.


Residential Research believes that it’s most likely that prime property will continue to be a safe-haven in 2012. International Business Times examination of the Knight Frank reports, predicts prices falling in 44% of the cities monitored during 2012, with a similar amount likely to experience price rises. Values are expected to remain unchanged in 12% of the cities.


International Business Times also comments that the slowdown in prime price performance is increasingly visible in the Far East, with 60% of cities anticipated to see a drop in worth. Growth has been curtailed by government fiscal policy measures designed to reduce the risk of spiralling inflation and over-heating in property markets. Although, in Hong Kong and Shanghai prime residential real estate has increased in value by 7.8% and 3.8% respectively over the past 12 months, that’s down from 19.7% and 29.7% a year earlier.


Knight Frank predicts that growth in the price index will continue in an upward trend as it is underwritten by a flight of capital from less stable regions about the globe. In conjunction with this is the drive among wealthy investors to focus on property and other real assets as opposed to financial products.



PIE, Prevention of Illegal Eviction from an Unlawful Occupation of Land Act – Challenged

“If you wish to make an apple pie from scratch, you must first invent the universe.” Carl Sagan. Up until now, and some hope it continues, PIE was all you needed in dealing with an unscrupulous landlord. Similarly PIE protects landlords from unlawful occupation.


PIE, the Prevention of Illegal Eviction from an Unlawful Occupation of Land Act. Itis an act of Parliament which came into effect on June 5, 1998, and which sets out to prevent, among other things, arbitrary evictions.


This may all change if the complainants of the Maphango and 17 Others v Aengus Lifestyle Properties case before the constitutional court have their way. There are currently 11 constitutional court judges contemplating this case. Those with property investments, landlords in poorer residential communities in particular, have their eyes cocked toward the outcome.


PIE governed landlords rights could be permanently altered. Trudie Broekmann, commercial director for Gunstons Attorneys’, has been quoted as saying: “But community and human rights organisations representing indigent tenants are hoping that the judgement will provide extended security of tenure for the urban poor, who often “fall between the cracks” because housing law does not protect them.”


Aengus Lifestyle properties bought a rundown block of flats in Braamfontein with the view to renovatingit; this isn’t a slumlord at work here but a legitimate developer. In the process, Aengus has chosen not to renew tenants’ leases as they expire.  This way the building would empty in time, renovating the units as they became empty. It also means that Aengus can charge higher rentals in line with other renovated buildings in the area. This has been a common practice in the renewal movement of inner city Johannesburg and around the world.


However tenants are people and people have lives. As it turns out Loliebenhof, the building in question, has some very fine occupants. Firstly they are tenants of long-standing, some as long as 18 years. Secondly they are on record as being regular, prompt rent payers.  These aren’t squatters or criminals but law abiding citizens. Their argument is that they are not in a position to occupy similar accommodation elsewhere.


As it turns out the leases, which were fixed term, ceased to be current upon Aengus’ purchase of Lowliebenhof. The result was that the tenants were continuing to be tenants subject to either party’s right to terminate on reasonable notice. Notice was given with the offer of a new lease at rental increase of up to 150%. Under the South African law of contracts, landlords do not have to renew a lease upon expiration, although reasonable notice of termination must be given.


The case was then brought before Justice A.J. Van Der Riet of the South Gauteng High Court, and to quote the Southern African Legal Institute:  “First, that the respondent’s purported termination of the leases was invalid. Second, that, even if the leases were validly terminated, it would not be just and equitable to evict them from the flats. For the second ground they relied on the provisions of s 4(6) of the Prevention of Illegal Eviction from, and Unlawful Occupation of, Land, Act 19 of 1998, that generally became known as PIE.” A.J. Van Der Riet dismissed the case.


The Lowliebenhof tenants’ leases were validly terminated and eviction has been permitted.Currently the tenants are relying on section 26 of the Constitution, which guarantees each person’s right to have access to adequate housing.


The case went before the Supreme Court of appeal and was heard on the 11th of May 2011. By the 1st of June Justice JA Brand dismissed the appeal.  Justice Brand ended his judgement with:”The court held that, since the appellants raised important constitutional issues, they should not be burdened with costs. It therefore makes no order as to costs. “


Clearly Justice Brand sees the matter in a more serious light than just another case, but rather a case “that raised important constitutional issues” and needs to be tested before the constitution.

So the Constitutional Court will be aiming at balancing the interests of landlords and tenants. The exact nature of ones constitutional rights to adequate housing, or education and healthcare for that matter, are still being processed before South African courts. The United Nations has prescribed that ‘irrespective of the type of tenure, all persons should possess a degree of security which guarantees legal protection against forced eviction, harassment and other threats’.


Trudie Broekmann commercial director for Gunstons Attorneys’ has been quoted as saying: “If the Constitutional Court comes to the conclusion that it will advance access to adequate housing to grant tenants housing rights that extend even after their leases have elapsed, this case will certainly set a precedent and make landlords’ obligations more onerous.”


The consequences for landlords in particular and South African property in general would be sweepingin the event of a favourable decision for the tenants. Some would argue that human rights and championing the cause of the vulnerable would have won. On the other hand urban decay may be seen as having won the day with the renovation of buildings becoming more difficult and less financially viable due to deeply rooted occupants.


PIE may have become a redundant meal in the world of property law.


Cape Town Office Vacancies- Today and Tomorrow

Some would say that we build for tomorrow not for today. For some time now Cape Town CBD has seen few new construction projects and given the latest office vacancy, figures that may be just as well.

Looking at the latest SA Property Owners Association (SAPOA) office vacancy survey for 2011 Capet Town’s six out of seven nodes face a trend of growing vacancies for the previous quarter. The survey shows the amount of vacant space is also rising in most decentralised office markets.

For combined Premier A and B grade offices:
Cape Town CBD is at 10.5% up from 9.7%.
In the Southern Suburbs: Claremont is at 13.7%; Rondebosch & Newlands 7.3%.
In Tygerberg, the Bellville vacancy average is 9.4% whereas a year ago it was 6%.
Office vacancy around the broader V&A Waterfront precinct is at 6.9 per cent.
Pinelands is at around 3.4%. Century City however has dropped over the previous year to 8.8% from 10.5%.
Here development activity has increased dramatically, with works on the Estuaries 2, Park Lane and the Bridgeways Precinct currently in progress.

There is some evidence that tenants have attempted to reduce their rental bill by securing cheaper space. This may have played a role in underpinning the demand for affordable CBD space.

Looking at smaller business owners, it may be that many people have gone back home to set up office in the garage – back to cottage-work environments away from the big city.

The point that vacancy rates are growing in Cape Town should not come as a shock. While weakening economic circumstances reduce the demand for space and increase vacancy rates, it is equally important to consider the effect that lagging development activity has on the market. Vacancy rates rise and fall because development activity is often poorly co-ordinated with demand.

Of course an obvious down side for property owners is that a rise in vacancy rates also has the potential to increase operating costs. In an environment of rising vacancy rates, property owners have little choice but to absorb operating costs that would normally be passed on to tenants. This issue has become particularly pertinent to South African property owners in general who have experienced a significant rise in electricity costs which would normally be passed on to tenants.

But the are some people that are looking ahead at the future of space in Cape Town with a steady confidence in the long term office market. In the Clock Tower precinct for example, Allan Gray is making its presence felt with a confidence inspiring project.

The new Allan Gray building is a R1 billion mixed use complex and claims to be one of Cape Town’s first Green buildings. The development is the biggest at the V&A Waterfront since the state-owned Public Investment Corporation (PIC) and Growthpoint Properties bought the iconic landmark for R9.7bn earlier in 2011.

Another office development worth mentioning is the new Portside building which will be the provincial headquarters of FirstRand’s three principle divisions: FNB, Wesbank and RMB. There will also be  an additional 25 000m² of prime space up for grabs for leasing to corporate and retail tenants. The project on the corner of Buitengracht Street and Hans Strijdom Avenue is a partnership between First Rand and Old Mutual, it should see completion by 2014. This bodes well for the precinct buoying up confidence in the area.

Other projects in Cape Town in the near future would include the new 20 storey building on Bree Street that will host legal offices and present more office space to fill. Currently underway is the 18 storey The Mirage hotel and mixed use development that should be complete by 2013.  Cape Town International Convention Centre, which includes new convention space, office space, apartments, as well as a hospital is also on the cards. By the time these projects mature the hope is that the world will be a friendlier place for landlords.

Worth noting is that there are also some up sides to the economic downturn effects. The vacancy trend has created some opportunities for tenants. Some companies have felt the confidence to shelve elaborate expansion plans and others who were facing relocation now have negotiating space. Landlords are far more willing to exercise a little creativity, offering concessions and making opportunities available that would not otherwise have been available in a low vacancy market.

So as long as Cape Town keeps its head down building for tomorrow’s prospective tenants and looking after the one’s it currently has, it should be able to weather this storm.

Randburg CBD’s slow but steady journey back to respectability.

By the early 2000’s Randburg CBD was being treated like Sandton’s ugly sister. Low occupancies, derelict buildings, squatters and an infrastructure desperately in need of renewal. Between 2000 and 2003, Randburg CBD posted the fastest growing vacancy rates compared to areas like Jo’burg CBD, Sandton and Rosebank.

After government restructuring in 2000 incorporated Randburg into greater Johannesburg, the Northern Metropolitan Local Council moved out of the civic centre and squatters invaded the building. The well-located CBD, once a model, went into steep decline.

A path of restoration emerged when Randburg CBD was declared a city improvement district in 2004. The intention was to deal with the district’s manifold problems and win back business confidence. Kagiso Urban Management was appointed to manage the area.

Following this was the official launch of the Randburg Management District (RBMD) in April 2005, a joint effort by the City and the local business community to give Randburg CBD a make-over. The RBMD borders Selkirk Road in the south, Dover Street in the north, Kent Avenue in the west and Hendrik Verwoerd Drive in the east.

Patrolling by public safety ambassadors from 7am to 7pm was introduced. Subcontractors were brought in to remove illegal posters as well as litter, to clean tree wells and dispose of refuse bags.

In 2005, two phases of a four phase plan were underway commissioned by the Johannesburg Development Agency; traffic flow into Pretoria Avenue was improved by opening up the intersection of Philips and Burke streets. New street lighting was installed, roads were resurfaced and pavements greened.

The intersections of Hill Street and Pretoria Avenue and of Hendrik Verwoerd Drive and Pretoria Avenue were upgraded. The informal traders’ market near the taxi rank was also being overhauled. Roads were widened, paving restored and street lights installed or restored. The Market was extended into the parking area of the civic centre where additional trading stalls were set up.

By 2006 the SA Property Owners’ Association confirmed that the Randburg CBD was showing a reversal of fortunes.  A and B grade office vacancies nearly halved, from 13% to 7%, in the two years to end-December 2006. Well into 2006 there were plans for a six-storey development on Hilltop Street expected to help restore Randburg CBD and boost its reputation. Randburg Chamber of Commerce and Industry newsletter announced plans to introduce the conversion of two commercial buildings into residential accommodation. Flats in the old Metro building were sold out in one weekend and Dover Towers on the corner of Dover and Hendrik Verwoerd began selling flats for between R380 000 and R680 000. It became clear to movers and shakers that those who could not afford to live in Sandton but still wanted to be close to its business hub were investing in residential property in Randburg.

But the renewal of Randburg, though steady, has been slow. By 2007, listed property fund Vukile reported a strong uptake of space in its landmark Randburg Square shopping centre and office tower (the old high-rise Sanlam Centre). Vukile reported that at the beginning of the year more than 70% of Randburg Square’s office space stood empty. By end-2007, vacancies had dropped to below 10%.

Still in 2007 African Capital Property Portfolio, a fund chaired by Zwelakhe Sisulu bought four commercial properties for close to R80m in the Randburg area: three office blocks and an industrial property. The four Randburg buildings are African Capital’s first acquisitions. JSE-listed CBS Property Portfolio has a 45% equity interest in African Capital.

A trend seemed to emerge where investors began buying and upgrading older office blocks in the Randburg area, possibly due to the growing scarcity of space in Sandton.

2010 saw projects emerge like the conversion of the old Nedbank building, which had become known as little Hillbrow due to its notorious reputation for crime and prostitution. Restoration began with the view to providing stable homes for underprivileged people. It was bought by Rembrandt Papers with the intention of converting the structure to a residential block of flats. Ward Councillor at the time Alison van der Molen said “This building can now be an asset to Randburg instead of an eyesore.”

But it seems there’s a long way to go. Currently underway Johannesburg City Council is engaged in a PPP (Public, Private, Partnership.) with the JDA to rejuvenate a whole triangle of land, between Selkirk, Bram Fischer and Jan Smuts Avenues. Dividing the triangle into a northern portion of land of 6.4Ha and a southern portion of 2.27Ha.

The Southern Portion will be developed for social housing (735units) by Johannesburg Social Housing Company (Joshco) and the Northern portion will be made up of a mixed-use property development that will be able to house municipal and social services, including the taxi rank, the Bus Rapid Transit facility, the library, the licensing department and more affordable housing.

Phase one is well underway with the demolition of the old, and recreating the new, roads and infrastructure. Phase two should commence in June. Further plans include a phased public environment upgrade by 2013, with plans to upgrade the Hill Street Mall, followed by making some of the streets in the office environment more pedestrian friendly, so that Randburg can be more of a transit hub.

It hasn’t been easy and it hasn’t been quick. Randburg still looks very much like the neglected city compared to Sandton, its glamorous sister on the next hill. But it’s clear that there is definitely steady movement from Council and plenty of intention from investors. You can do it Randburg, you can do it.

Sandton Builds a Park

It may seem hard to believe but amongst all that high priced real estate in Sandton’s CBD someone made room for a park. But it’s taken the involvement of no small amount of players for green to shine out of that grey concrete jungle.

The Sandton Central Management District (SCMD) has had the intention of creating and maximising use out of the area’s public spaces for some time now.  Johannesburg City Parks handed over a tract of land on the corner of Grayston and Sandton Drives last year and nearly forty indigenous trees were planted to seal the deal as it were.

The current name of the park is deceptive: Sandton Central Park is actually on the very edge of the CBD on the border with Parkmore. Depending on your level of fitness and the length of your lunch break, the park is within walking distance of quite a few Sandton office blocks (SA Brewries for example) and hotels. It may seem a little out of the way to some given that it’s at the bottom of quite a steep hill.

Much is being made of Sandton CBD’s carbon foot print and how much the park will bring some relief in that regard. SCMD city improvement district manager Paul Van Rooyen has been quoted as saying: “We adopted an eco-friendly approach and developed a recreational area that will not only serve as an addition to Sandton Central, but something that will also mitigate Sandton Central’s carbon footprint,”

Carbonworx CEO Mark Smith says that the initiative will put the Sandton precinct on the international map because of its providing a platform for climate change, the community and biodiversity in general.  (Carbonworx, which has its hand all matters green, is choosing indigenous trees for the project.) Ambassadors for Carbonworx, top South African rock band The Parlotones, also attended the tree planting ceremony to promote the CarbonWorx drive, which invites people to calculate their carbon footprint and buy trees to offset their impact.

Urban Genesis which claims to be a pioneer in urban management renewal,  manages  the SCMD. Its core business being the establishment and management of improved city districts.

The first phase of the development of the park will involve the important and strategic placement of trees and shrubbery. From there a very specialised sculpting of the landscape will be put in motion as well as the equipping of seating areas and a children’s recreation zone. Further to this, well paved paths and a jogging trail are planned.  For those who won’t be walking to the park from nearby offices or the adjacent residential area of Parkmore, secure parking is to be arranged.

The project is sponsored by Standard Bank and a partnership exists between Johannesburg City Parks, SCMD and marketing company Smile Media, which arranged the park’s hosting of income generating  advertisement signs. The earnings of the advertising will cover a three-year maintenance management agreement.

Johannesburg City Parks senior manager Oscar Oliphant has been quoted as saying that this open space has been due for a facelift for some time. It’s clear that the park will have a significant greening effect and be a way for business in the area to give back in attempting to reduce the carbon footprint of the CBD. The spin off for the local residential community is also a plus.

The Sunny Side of the Street

One Irish saying goes: May the most you wish for be the least you get.

One is reminded of the late great David Frost’s remark: “With our backs to the wall we can only go forward”, when reading Seeff’s latest press release titled: “Best Property Buyers’ market in decades.”

The press release makes the basic premise that since the outlook for the property market is flat, it is an ideal buyers’ market.  Of course buying in such a down market may be very wise depending on ones circumstances. What may be unwise according to Seeff is waiting for prices and interest rates to drop further since one could get caught in a market upswing.

Seeff examines the current world economic crisis and concludes, looking on the bright side of life, that because “buyers and especially investors took a cautious approach” last year, this has “led into one of the most favourable buyers’ markets.” Of course, given that interest rates are at a 31 year low, mortgages are more affordable than ever.  Seeff also points out that properties are taking between four and six months to sell. One can optimistically assume that sellers are motivated to negotiate.

Understandably, the classic argument comes up that home ownership is a “comparably safe way of investing money”. Walking on the sunny side of the street, Seeff intones that if you “hold on to it long enough, history has shown that it will generally appreciate in value over time.” It’s hard to argue with that. Since, as is pointed out that stock market investments may yield high returns, they also carry the high risk of capital loss.  One can’t argue about the broad stability of property. Of course many investors balance their property and stock market portfolios.

Seeff sobers us up a little with some telling stats. The point is made that average prices are currently at levels similar to four years ago. The ABSA House Price Index indicates a peak in house prices in 2004. Apparently house prices rose by 14.95% in the two years leading up to the global housing crisis of 2007.  So from a seller’s perspective a conservative approach is recommended by Seeff.

In fact those sellers not in a hurry to sell are encouraged to wait another year to eighteen months when presumably, Seeff believes, there will be an improvement.  A note is made regarding those willing to pay a premium:  “There are always exceptions to the rule as buying a primary home especially is an emotional decision and buyers are still prepared to pay a premium in some of the primary housing markets in the major metropolitan areas.”

Clearly estate agents encourage a positive outlook in order to keep movement and flow in a market. There seems to be wisdom in a forward moving outlook and an optimistic approach since stagnation and immobility is all that comes from cynicism and negativity about the market. If one is on the wrong pole of the buyer/seller sphere it is just a matter of time before things cycle there way round. So the glass is half full, right? Right.

Urban Decay in Pretoria

Urban Decay in Pretoria

JHI Properties leasing and sales broker Jan Oelofse penned a thought provoking piece on the subject of urban decay in Pretoria recently. But urban decay is of course not unique to Pretoria, people have gone down this road before.

The regeneration of the inner city has been one of the City of Johannesburg’s most successful ventures. The public sector and the private sector have come together to help the inner city get back on its feet. Major investments have been made, including the businesses that have chosen to return to the CBD. Is there something for Pretoria to learn?

It’s common knowledge that Johannesburg has had to fight this battle for some time. Initially the Better Building Programme was set up to restore derelict buildings and take back parts of the city in severe decay but the process proved laborious, taking as long as two years to get one building through litigation and judgment. Now transitional housing, BBP’s biggest stumbling block, will be provided to current residents of buildings that will be refurbished by the specially formed Transitional Housing Trust (THT) which will manage the process.

Now BBP has evolved into the Inner City Property Scheme (ICPS).  The City of Johannesburg has created a restoration solution, though driven by the private sector. A large portion of the City’s property portfolio will be transferred to the ICPS through a series of structured sale transactions. Participants in the Broad Based Black Economic Empowerment (BBBEE) transactions were selected through a Request for Proposal process, and are required to provide a minimum equity contribution of R 5 million. The city would ensure that the option to buy was exercised only once the dilapidated property had been refurbished. Time will tell of course how effective this is.

So what about Pretoria? Oelofse doesn’t really get as far as dealing with derelict buildings but draws attention to the lack of development in the CBD over the past 20 years with the exception of the new national library and the basic education department buildings, the revamp of the central government offices in Church Street, the upgrade of the old Home Affairs and South African Agricultural Union buildings and central government offices on the corner of Church and Bosman streets. However council buildings have not been repaired.

Who could forget the Munitoria fire of 1987 where 50% of council’s operating space was lost? In April 2011, it was announced that development of the new head office would commence before the end of the year, however to date this has not been implemented.

Oelofse says that “the absence of new developments has resulted in the stagnation of this very important national landmark, with a gradual migration away from the precinct resulting in vacant buildings with little demand for the space. In an effort to prevent buildings from going to ruin and to protect their investments, property owners have converted a number of office buildings into residential units, to cater for the demand for such accommodation. Although this has reduced the over-supply of office space to some extent, it has not created any new developments.”

However there is no shortage of demand for retail space so spending on maintenance of buildings is neglected and as a result the deterioration of buildings continues. Oelofse challenges the SAPOA office vacancy survey for the third quarter of 2010 that revealed that A, B and C grade office space was at 5.1% vacancy. Oelofse cites another survey done of 34 major buildings comprising B and C grade space having a 20.8% vacancy. That’s 110 794sqm of 532 604sqm!

Oelofse goes on to point out that: ”Significant amounts of money will need to be spent on these B and C grade buildings in order to bring them into an acceptable state for letting. Of note is that what is considered B grade space in the CBD is materially different from B grade buildings in the decentralised nodes, where the quality and economic use of space is of a higher standard, due to the age difference of the buildings.”

In fact the contrast is marked between the decentralised nodes and the CBD with 185 000sqm of growth over the past five years, not including Menlyn. Oelofse asks the question: “why is there a reluctance to redevelop the buildings in the CBD to create a capital city worthy of South Africa and a leader in Africa?”  The answer to that is uncertain since one may argue that the nature of modern cities is as much decentralisation as it is to maintain and even restore CBDs. Since Tax concessions have been approved for development in the CBD one may suggest that there is some will.

In fact Oelofse himself points out that Tshwane town planning officials published an “excellent document”, ‘The Inner City Development Strategy’, as a development guideline for the CBD, which was adopted for implementation by the council around 2005. He does make the point though that all the planning has been done, strategic studies were done in 2000 by the Department of Public Works determining future office space requirements for the next 20 years. It launched the Re Kgabisa initiative in 2005 involving 40 government departments, 1,2 million sqm of office space with an estimated 10-14 years to implement.

But Oelofse’s beef seems to be with the use old buildings and the lack of new ones.  His concern is focused specifically on old government /municipal buildings. ”The efficiency of the old buildings is to be questioned.” He says. “Old buildings are simply becoming older and more inefficient, just postponing the inevitable move, while new buildings will extend the usefulness and efficiencies of the CBD for a further 20-40 years.”

Which brings us back to contemplating Jo’burg’s BBB programme mentioned above or to consider the Cape’s response to derelict buildings. Cape Town faces having to create what’s being termed a “Problematic Building’s Unit.” The unit was formed last December to focus on and to deal with, derelict buildings, which were contravening regulations, including those relating to fire and health.  This move is a partnership with the city’s Human Settlements Department. A bylaw was passed last year initially identifying 280 problem buildings. By half way through the year there remained 160 buildings under investigation throughout Cape Town – in the city centre, Mitchells Plain, Durbanville, Salt River and Camps Bay.

That’s just by-the-way since Oelofse doesn’t really touch on the seedier end of the old buildings scale in Pretoria CBD. This despite the Tshwane Metro Council passing of a by-law to deal with derelict building last year. DA councillor Professor Duncan Baker said in October that the by-law was overdue. Baker was exposing the unscrupulous habit of some developers to be buying up property in anticipation of development, leaving it to fall into disrepair in the interim.

Oelofse believes that a useful exercise would be to ascertain the cost of current fragmentation of the municipal council functions and government departments, located in various buildings across Pretoria and compare that to the cost of consolidating those functions/departments by location.

“Rentals are the most obvious costs, however the costs related to fragmented departments are about duplication of services, functions, rental charges, security and inefficiencies in systems, as opposed to new, well-planned accommodation providing efficient, modern working conditions.” Say Oelofse.

We have to take Oelofse’s point about decentralisation of departments. But many cities around the world and in South Africa – Johannesburg and Cape Town for example are seeing fruit in the restoration of old buildings. Oelofse implies that shiny new buildings should be built and that government departments and the Tshwane municipality be centralised.

It sounds neat and orderly but it may not be sustainable, post the completion of new buildings, since not every eventuality can be catered for, government departments grow, split, change and even multiply.  On the other hand perhaps it is the duty of government to ensure that the  Pretoria CBD remains alive to the sound of rubberstamps whilst leaving the private sector to continue to explore the decentralised nodes of Tshwane.

Urban Decay in the Mother City

In this day and age of rapid urbanisation no city is immune to urban decay; one might suggest that it is part of the lifecycle of all urban environments. Cape Town is no exception as it faces having to create what’s being termed “a Problematic Building’s Unit.”

The unit was formed last December to focus on and deal with derelict properties, which were contravening regulations, including those relating to fire and health.  This move is a partnership with the city’s Human Settlements Department .The unit has now come up to speed with the city’s most severely affected buildings.

A bylaw was passed last year initially identifying 280 problem buildings. By half way through the year there remained 160 buildings under investigation throughout Cape Town – in the city centre, Mitchells Plain, Durbanville, Salt River and Camps Bay.

Cape Town also has a dedicated Social Housing Police Unit that is focusing specifically on city council rental properties.  There are approximately 49 000 council-owned units.

Problem buildings can generally be defined as properties that contravene national building regulations; are overcrowded or in an unacceptable state; are the subject of numerous complaints from the public; invaded by squatters; or pose a serious health or safety risk. The city council has advised owners to repair, demolish or sell these buildings so that action will not have to be taken.

Further action includes the City of Cape Town’s intention to publicly name and shame those owners, landlord and tenants who fail to comply with the Problem Building by-law. In addition the intention is to amend the by-law so as to make it illegal to even enter these premises. One can’t help but wonder what level of embarrassment exists for slum-lords and drug-lords.

It’s common knowledge that Johannesburg has had to fight this battle for some time. Initially the Better Building Programme was set up to restore derelict buildings and take back parts of the city in severe decay but the process proved laborious, taking as long as two years to get one building through litigation and judgment. Now transitional housing, BBP’s biggest stumbling block, will be provided to current residents of buildings that will be refurbished by the specially formed Transitional Housing Trust (THT) which will manage the process.

Now BBP has evolved into the Inner City Property Scheme (ICPS).  The City of Johannesburg has created a restoration solution, though driven by the private sector. A large portion of the City’s property portfolio will be transferred to the ICPS through a series of structured sale transactions. Participants in the Broad Based Black Economic Empowerment (BBBEE) transactions were selected through a Request for Proposal process, and are required to provide a minimum equity contribution of R 5 million. The city would ensure that the option to buy was exercised only once the dilapidated property had been refurbished. Time will tell of course how effective this is.

One can hope that the Cape Town City council will proactively approach the inevitable struggle of urban decay with BBBEE in mind, dealing with urban decay issues simultaneously, by learning from the hard painful process Jo’burg has ploughed through.  The key word that has emerged in Jo’burg has been ownership. This will be hard to impress upon the separate set of problems that come with those derelict building that are council owned. Admittedly the dynamics involved with council owned buildings is slightly different to the privately owned buildings.

Some examples of action taken by the Problematic Building’s Unit thus far:

Vrystaat Street, Paarden Eiland:  14, Fourth Street, Heathfield: The city served compliance notices on the owners, who then started demolishing and clearing the property. 17, Coleridge Road, Salt River: The city bricked and boarded up this derelict building.

The San Remo building in Camp Street, Gardens: This run-down residential block posed a problem for years and a number of drug raids were conducted on it. An inspection of the building with the city’s fire and health departments was held in March. The building is set to go on auction this month.

The Langa hostels: In an attempt to improve the building, the city instituted court action against the owners. This action is currently pending.  Number 13, Torrens Road, Ottery: The city served compliance notices on the owners, who have since sold the building.

Another characteristic of urban decay is the visual, psychological, and physical effects of living among empty lots, buildings and condemned houses. Such desolate properties are socially dangerous to the community because they attract criminals and street gangs, contributing to the volume of crime.

The world best urban restorations have occurred in cities where people take the streets through: firstly ownership – investment, shopping in ones own neighbourhood; secondly civic action- neighbourhood watch and thirdly social up-liftment- engagement with local rec centre programmes etc.

But big business and local government are the players that have to plan ahead to construct a future and not sit back and respond with a knee-jerk laws that ultimately only puts a Band-Aid on a more severe wound. Let’s hope that the Problematic Building’s Unit is not just a Band Aid but one of many steps in the right direction. Watch this space.

The Milpark Triangle – Where Good Investments Appear.

The Milpark Triangle – Where Good Investments Appear.

It’s a node sufficiently outside of the Jo’burg CBD to make suburban, yet close enough to make it city. It’s the almost fictional triangle of Milpark.  But instead of things disappearing in this triangle new property opportunities are appearing.

Surrounded by Melville and Parktown in the north and Cottesloe and Auckland Park in the west Milpark officially barely exists. On the map it’s Braamfontein Werf with miniscule Sunnyside in the middle.

As one of Johannesburg’s almost forgotten yet  strategic spots it’s no surprise that some enterprising people and businesses have been taking advantage of the location in recent years with some serious development on the horizon.

Milpark, it seems, is more than borders on maps. Milpark hospital is in Parktown West, Milpark Business School’s in Melville, Milpark Garden Court registers its address as being in Auckland Park.  Yet they are all within half a kilometre of each other.

The fact that two of Johannesburg’s busiest roads bisect here is significant. Then there’s the fact of who’s in the neighbourhood.  Firstly: Students, lot of them. The University of Johannesburg is down the road to the west.  Wits is next door and there are three schools in the vicinity: McCauley House Convent, the German School and John Orr Tech. Next are those in show business and the arts: Melville and Auckland Park to the west and the SABC monolith down the road.

Developers have discovered the joy and remuneration of restoring old urban precincts instead of building new ones such as Melrose Arch and Illovo Boulevard.  It began some time ago and has been gradual and steady. Early in the 2000’s The Refinery was established by Ricci Polack’s Lifestyle Lofts in various stages. Then came Milpark Mews with 324 apartments in the mid 2000’s, aimed at the ever-present student market.

44 Stanley Avenue has become an integral landmark in Milpark’s organic collective of developments. Eight, otherwise utilitarian office buildings, were converted into a 4500sqm of swanky shopping and office spaces.  With historic stinkwood trees planted alongside the complex without and Leopard and Olive trees planted within, there is an earthy feel to the complex.

Adding to the vibe and student cum artistic feel of the area is the South African School of Motion Picture and Live Performance, or Afda.  An institution with internationally recognised courses in acting, directing and production, television, make-up and styling, editing, animation, scriptwriting and cinematography and which has alumnus nominated for Emmy Awards. Ninety per cent of honours graduates are in leadership roles in their field. Afda campus is directly behind the Atlas Studios.

Atlas Studios contributes to the showbiz feel of Milpark.  The studios are accommodated in the old Coca-Cola bottling plant.  It was later taken over by Atlas Bakery. When the bakery closed the building lay derelict until  Jo’burg architect and property developer Jonathan Gimpel bought it. The original plan was to turn it into stylish offices and shops but soon the need for studios overruled those plans. Gimpel similarly developed the Media Mill, the former Blue Ribbon bakery across the road which houses a newspaper and other media organizations.

The Institute for Marketing Management (IMM) is based at Atlas studios and adds to the student mix of the area.

Across the way are the Frost Avenue Flats. Over thirty unique flats that mix work and living space. Film production company Curious Pictures is based here as well as Ross Douglas, managing director of Artlogic, the company responsible for the Jo’burg Art Fairs and the Food-Wine-Design Fairs. He lives in and works from, his apartment.

But what of the future? Enter Egoli Gas. Anyone who knows Milpark has images of those giant black gas tanks. The plan is for one of those to be demolished and two will remain in operation. A building that perfectly matches the tank’s size and height will replace it, with an open internal core, to be constructed either as loft apartments or offices. More office blocks are planned along Annet Road. The 14.5ha Egoli Gas site, dating back to 1939, is said to be in line for a makeover that will make it the city’s latest hot-spot. Lifestyle shopping boutiques, trendy restaurants, loft apartments, an international hotel and slick offices are all lined up.

Approximately 35 000msq of residential space will be built, with 700 middle to high-end apartments, and over seven hundred student studios. Some 40 000sqm will be set aside as office space.  There is 10000sqm of shopping space to be rolled out and a 100 room boutique hotel. The 252 room Milpark Holiday Inn is in for little competition.

Although heritage approval is still pending, applications have been made to the City for the necessary rezoning. Approval in the new year is highly anticipated, a developer still needs to be selected. Construction should start towards the latter half of 2012. It is anticipated that over R1-billion will be invested

From a green point of view some effort is being made to restore the area along-side the stream that runs into the Braamfontein Spruit. A parkland will be landscaped toward the eastern side of the land; a grassed amphitheatre is also planned, as well as a pond. The park will be open to the public.

Milpark has shown that it has steadily provided a return on developers’ investments consistently over the last 10 years. Wait and see as great things continue to appear in the Milpark Triangle.

South African Shopping Malls: Economic Slowdown, what Economic Slowdown

While most of the world has been tightening belts, trimming off fat and slashing budgets, in shopping mall land it seems to be full steam ahead, regardless of the current economic climate.

In November 2011 Sandton City expanded by 30 000sqm to 215 000sqm, 144 000sqm being retail space.  Its Edgars store was upgraded as the flag ship store for Edcon to 12 000sqm.  Throw in another 58 new retailers and by year end Sandton City had mushroomed like never before. Reinventing itself again, keeping its image fresh and exciting attracting names like  Lacoste, Paul & Shark, Guess, Lacroix and Nina Ricci  as well as Hugo Boss and a host of other glittering international brands.

Sandton city continues to be a catalyst for retail growth for the whole of Sandton CBD which itself is in the middle of a mini construction boom. However one may spare a thought for the Village Mall, which is scheduled for demolition next year. This is to make way for the first of a four phase redevelopment on the site scheduled to begin in 2012.

The Liberty Promenade Shopping Centre in Mitchell’s Plain, Cape Town was formally launched by Liberty Properties this year, following a refurbishment investment of over R500 million, adding 24000sqm, an increase of close to 30% in the complex’s retail real estate.

Middelburg Mall saw an increase in GLA (gross leasable area) from 34 000sqm to 43 000sqm this year. It now stands at 95% let ahead of its 2012 opening, so no white elephant here. The mall will open with a mix of 94 stores including Checkers, Woolworths, Edgars, Pick n’ Pay and Game. Expansion potential has been built into the mall in anticipation of a GLA increase to as much as 50 000sqm. So more expansion is on the way.

Bryanston/Sandton gets yet another shopping centre in the new Nicolway Shopping Centre, which opens for trade in Sandton in April 2012. It will be home to three supermarkets and a range of handpicked restaurants and coffee shops, with an emphasis on quality and personal service. With direct access from William Nicol Drive, the 23 000sqm centre will offer South Africa’s first new-concept Woolworths supermarket, a Food Lovers Market and a Checkers.

On the other side of Sandton, in response to demand from both retailers and shoppers, the successful Pan Africa Shopping Centre in Alexandra will expand by 2 500sqm. The expansion began in December and is scheduled for completion by early 2012. Pedestrian and vehicle counts show that more than 10 000 people use the area daily, along with some 1500 taxis. The expansion will bring new retailers – including Mr Price, Truworths and Clicks – into the mall, to join the other 60 stores already trading.

Right on the doorstep of a recently completed R50 million sectional title residential development, the R360 million Protea Glen Shopping Centre is described as the only retail destination in this area of mushrooming residential developments. Retailers are moving quickly to secure space in the 30 000sqm development. The centre will have a selection of 90 stores when it opens for trade on 27 September 2012. A second phase is already planned. A 3500sqm Shoprite and a 3500sqm Pick ‘n Pay will anchor the new centre.

Resilient Property Income Fund, one of the largest retail property investors in the Mpumalanga and Limpopo provinces, started development in October this year, on the new Burgersfort Mall regional shopping centre, scheduled to open in April 2013. The mall is situated on the main intersection of the R37, which runs between Polokwane and Burgersfort and the R555, which links Steelport to Burgersfort. The first phase of the centre will comprise of some 40 000sqm, with expansion potential of up to 75 000 sqm. It is to be anchored by Edgars, Game and Shoprite. The company’s investments include, amongst others, shopping centres in Mussina, Tzaneen, Thohoyandou, Mokopane, Nelspruit and Polokwane. It is also the major owner and co-developer of the recently opened Mall of the North shopping centre, which is currently the largest centre in the far northern part of the country.

The Mall@Carnival has recently turned the East Rand upside down with the opening of Phase 2, which moved Mall@Carnival into a Super Regional Shopping Centre with a GLA of approximately 72 000sqm. The Phase 2 was opened on 22 September and is already trading well above expectations.

Bay City West Mall is a new regional mall concept for Port Elizabeth. The mall will encompass a retail mall, office parks, residential nodes, private schools with associated sporting facilities, hotels, a hospital complex, motor city, a light industrial precinct and a lifestyle centre. The first phase is the retail mall, construction has begun with completion expected to be in March 2013.

Bridge City, in Durban’s Kwamashu/Phoenix intersection has been trading since Oct 2009. But phases of this urban renewal project continue to be built which includes, among other things, residential apartments, a hospital, a magistrates court and government offices.  This October saw the completion of Bridge City’s underground railway station situated beneath the mall. The development which is being linked to a bus and taxi hub will be an intermodal transportation facility easing road congestion and providing convenient transportation for about 613,000 residents in the surrounding areas of lnanda, KwaMashu, Ntuzuma and Phoenix.

Other high profile refurbishments/extensions include:  Elim in Limpopo gets a 50 store centre next year, Tokai’s Blue Route mall is being redeveloped to create 56 000sqm of retail and entertainment space by next year including a Checkers/Hyper. The Grayston Mall in Sandton is having a multimillion rand facelift. The grand opening of The Greater Edendale Mall was on the 29th September this year, it has hit an astonishing foot count of 1.2 million people. Then there’s Diepkloof Square Community Centre, a project set in the heart of one of Soweto’s most affluent arears, Diepkloof Ext3. It includes 39 shops with Pick n’ Pay as anchor.  Overport City in Berea, Durban is to get a R100million upgrade. The Ballito Bay mall seems to be rising above its bitter wrangling with competitors and community and is finally reaching its completion.

This year also saw the landmark purchase of Cape Town’s V&A waterfront. SA’s largest listed property fund, Growthpoint Properties and Public Investment Corporation announced in February this year, that they had bought, in equal proportions, 100% of Lexshell 44 General Trading for R9.717 billion. A hard act to follow. On a much smaller scale Fountainhead Property bought a 25% stake in Centurion Mall for more than R751million. Investec Property Fund, which listed on the JSE in April, said to be on an acquisition trail, announced on 25 October this year, that it had bought retail complex Great North Road Plaza in Musina for R145m. The 86 shop South Coast Mall also went on auction later in the year for an undisclosed amount.

Space prohibits further tabulation of the many other developments on the shopping centre front. Sufficient to say that although Shopping Mall development both new and upgraded is a long term strategy, it’s clear that there is a great deal of confidence in the future of retail in South Africa. Record prices for large malls and high occupancy rates in many centres reveals optimism about where to invest in the future.  One may be tempted to say: “Economic Slow-down, What Economic Slow-down?”

Golf Estates: “Swing hard in case you hit it!”

As a social phenomenon it’s not surprising that golf estates would do well in South Africa, given the priority of security on the one hand and sharing the outdoors within one’s community on the other

“If you think it’s hard to meet new people, try picking up the wrong golf ball.”  Jack Lemmon

As a social phenomenon it’s not surprising that golf estates would do well in South Africa, given the priority of security on the one hand and sharing the outdoors within one’s community on the other.

It’s hardly unusual that people will take whatever measures possible to ensure the safety of their family and the lifestyle that they have become accustomed to. So it may come as a bombshell to find a slump being reported by some in the golf estate property market.

We know that property world-wide is depressed and so it stands to reason that the golfing estate market would not be immune to such pressure. Golf estates like those along the Cape’s Garden Route that were lauded as a major economic driver during the last ten years are currently struggling.

“These greens are so fast I have to hold my putter over the ball and hit it with the shadow” Sam Snead.

Not so for these golfing estates:

  • Pinnacle Point had as many as 15 properties for sale a couple of weeks ago, including a R14m luxury house.
  • 46 properties were on sale at Kingswood in George.
  • 53 properties were listed at Pezula in Knysna.
  • 26 properties for sale at the Oubaai golf estate outside George.

That’s a lot of stock!

In Plettenberg Bay, two massive golf estate developments, Hangklip and Roodefontein, have been put on hold despite winning approval from the provincial government and Bitou municipality as early as 2009.

Environmentalists in general and in the Cape in particular, are not big fans of golf estates, due to the high volume of water required to maintain these emerald isles and the reputation – fair or not – of the ecological destruction caused by the landscaping.

In the late 90’s investigations were made in the Western Cape, when local environmentalists made enough noise about the potential threat of golf estates to local ecology. By the time local government had produced a report in the mid 2000’s, twenty two golf courses were already fully functioning with more on the way. The report declared the golf courses unsustainable but no one had the political will to declare a moratorium.

The Cape Times quotes Tasneem Essop, Western Cape Environmental Affairs and Development Planning MEC, as saying the negative impact on natural resources, especially limited water supplies, might well outweigh the benefits of golf resorts. However the claims of tourism and job creation benefits needed to be properly assessed, she said.

Elsewhere in the country it’s the newer developments that are the most at risk, with banks withdrawing their funding for some of these projects as enough buyers can’t be found to warrant financial backing. This is due in part to the slump in the market in general and, as Alliance Group’s Rael Levitt believes, that the South African golf estate market has been overdeveloped in the last five years and that a number of estates will, unfortunately, go into liquidation in the near future.

“The ball retriever is not long enough to get my putter out of the tree.”  Brian Weis

Perhaps the golf estate market is more resilient than we think. Take the Ernie Els’s Copperleaf Golf Estate in the centre of Gauteng. Previously known as Gardener Ross, the name changed when developer Investec Property took over the development in 2010. Yes it’s true, the developer’s well ran dry and the land owners put their stands on the market.Since Investec Property took over and redesigned the development, land owners have taken their land off the market and want to build homes. This is an estate where a three bedroom, two bathroom home with a double garage has the entry level priced at R1.9 million.

There is also something for environmentalist to consider: the development has its own water treatment works, which recycles grey and sewerage water for the irrigation of the golf course and 2700 trees are currently being planted to add to the existing park, wetlands and grasslands.

One of the big criticisms of such estates is the high levy. One really needs to take this into account in any sectional title community but just for the record the levy at Copperleaf is being quoted to the public at R1500 monthly. One would figure this to be affordable if being in the market for a R2 million bond.

The big advertising pull is that of family living rather than just golf. The press releasefor Copperleaf tells us that:” Investec Property wanted to create a child friendly environment, family entertainment destination that all family members living at the estate or visiting the estate can enjoy.” Sam Hackner of Investec Property says that the recession has helped to separate the reputable developers from the suspect ones and right now, Hackner believes, the industry is left with reputable ones with integrity. Time will tell.

Like any investment, you want something for your trouble. The perception that golfing estates are a rich man’s refuge is not without foundation. To build a golf course of any quality costs in the region of R50m plus and once you’ve added the cost of the land, club house facilities, spa and other amenities, you have a business scenario not for those easily overwhelmed, with the sale of residential stands being the only means of reclaiming the investment.

In the early days the investment attraction was the weekend or holiday properties. But now a decade later there are hundreds of established residential golf estates offering more than thousands of properties, this has become a very different market. Golfing estates are now viable primary residential options.

Andrew Golding of Pam Golding Estates believes what is also likely to contribute to the success of golf estate living, is the virtual office scenario employed by so many entrepreneurs, as well as small to medium size business owners, whereby this sector can be based anywhere and enjoy a lifestyle perhaps originally intended only for the leisure consumer.

This leads one to consider the importance of golf. With little more than 125 000 registered golfers in South Africa – the target market is small.  Developers have had to shuffle their cards a little and make their appeal more broadly inclusive. Health and wellness, equestrianism, angling, walking and other sporting pursuits come into the mix. One may be forgiven for imagining scenes of people and friends galloping down the fairway or retirees fishing in the water features. Heaven forbid! But in earnest, options are opening up, broadening the scope of what golf estates can offer.

Continued research proves that there are two consistent and specific reasons for investment in real estate around a golf course – security and community. While those are creatively on offer, Golf estates will continue to be an attractive investment for retirement, rentals and lifestyle. Not being too reliant on the Golf aspect may preserve the future of Golf estates.

Or in the words of Dan Marino “Swing hard in case you hit it.”

iPad2 – a tool for commercial estate agents.

Is the iPad 2 an indispensable tool in the future of commercial property?

 Could the iPad 2 be changing the way commercial real estate agents and their clients conduct business? The property industry has had time to exhibit the effects of the Apple’s iPad 2’s arrival earlier this year.

Commercial real estate agents can take business lists and construct .kml files in Windows and Google Earth and literally drive into a designated area and have ones clients plotted on the map.  From there one can, for example call up colour-coded maps breaking down a given area’s commercial space into office, retail, industrial. Other helpful apps included are PDF Expert, DropBox and SiteMap.

DropBox is a cloud storage facility where you can ‘drop’ files, photos and documents so as not to take up storage space on the device. Those same files are then available at any time to edit access and manage.

The bonus is that the any file saved to DropBox is also automatically saved to all the user’s computers, iPhone, iPad and the DropBox website!

Commercial real estate companies and their clients are also able to make use of the QR (quick response) code reader function. (You may have seen those 2d barcodes that are shaped like a square and look like a chessboard designed by someone on the morning after the night before.) The codes are becoming all the rage for marketing and advertising in industry publications. By scanning the barcode with the mobile device, the user is taken directly to a website for more information and an extension of the marketing experience with media clips and other free downloads.

Property specialist on the road have expressed how they feel completely mobile and delight in being able to access their computer from anywhere in the world. Apps like Keynote, Numbers and Bloomberg have been described as useful business tools when preparing for a meeting with a client.

Now with cloud printing (the ability to print to any device from the Cloud.) property agents can print out maps, contract forms and other information while mobile.

Another plus with the iPad 2 is that it starts up instantly, while a laptop takes several minutes.

One broker heading up a large commercial property group started using the iPad 2 for business purposes this year. His group, which specializes in retail space, recently launched its own application.

The app allows brokers and clients to search all ‘for lease’ or ‘for sale’ properties listed by the company. There are over 1, 2 million square meters of commercial property listed out of one East Coast UScity’s office. One can view, print or email all detailed information on a specific property with ease. For agents out in the field, information can be provided immediately with one touch.

There is also a GeoMeasure app that provides simple measurements and distances between sites. Invaluable when in the field doing site work for clients.

DocuSign is an electronic signature service that helps manage document needs from one’s iPad2. An agent can get proposals, contracts and any other documents signed directly from the device.

Also available is the Penultimate, a handwriting app that allows one to take notes, sketch and organize right on the iPad. Notes can also be emailed; actually you email the whole notebook! It has been described by users as very user-friendly and provides accurate penmanship with or without a stylus.

Having had time to see its application to the workplace, commercial property industry users definitely see the iPad and other tablets being the future of all businesses and particularly in commercial real estate, where the speed of gathering information and making well-informed, intelligent decisions can make or break a deal.

Senior Citizen Accomodation- Evergreen is Everfresh.

 ….some latest thoughts on the Retirment accomodation market.

Despite worldwide recessionary trends, the movement in senior citizen accommodation is on an upward inclination.

In theUSfor example, the seniors housing market showed recovery in the third quarter of 2011, even while overall construction activity continued to decline. Occupancy rates were higher at 88.1%. The third quarter data tells us that it is clear we have moved past the low end of the cycle of 2010. Year-over-year rent growth for seniors housing increased by1.6 percent. The nursing care occupancy rate remains stable at 88.3 percent.

InSouth Africait is believed that the over-50 age group, making up to just short of 33% ofSouth Africa’s population, should increase to up to 40% by 2021. Currently a significant number of retirement villages have disproportionately long waiting lists – those for the more sought-after developments often extend to 15 or 20 years – and people with their ears to the ground are catching on that  they need to take action at a much earlier age to ensure they acquire the retirement accommodation and lifestyle that they desire, rather than wait until it’s out of reach.

Although many of those aged 55 to 60 feel they are not yet ready to join a retirement community, an emerging trend that may further impact on the demand, is that South Africans are starting to move into retirement communities at a younger age while enjoying an active lifestyle.

In Kwazulu Natal there seems to be a growing demand for accommodation among retirees who are more concerned with being cared for than proximity to cities or airports. Many senior citizens have no family left in the country and need to ensure that their needs will be catered for by professionals. Taking the little retirement town ofHowickas an example: it has excellent retirement facilities, with well-run villages with frail care, nursing and meals provided, a good hospital and medical facilities. On the other hand Pietermaritzburg and Hilton are short of stock as development costs are reported to have inhibited new developments in recent years due to the economic slowdown.

This brings us to SA’s first national retirement brand. Evergreen Lifestyle seems unaware of the economic downturn much of the world finds itself in. Created by host company Amdec, one ofSouth Africa’s largest private property developers Evergreen seems here to stay.

Evergreen’s ongoing augmentation and impressive reputation for being able to read the market, works contrary to the recessionary market trends.  Evergreen’s vision for a national retirement lifestyle brand has been realized within three years of them putting plans on the table. The Evergreen footprint has expanded to include  ongoing development at Muizenberg Phase 2,LakeMichelleand Bergvliet – all in theWestern   Cape. Evergreen plans villages for Noordhoek as well as Serengeti.

A village at Broadacres has been successfully launched and will be a feather in Amdec’sGautengportfolio. (Amdec recently acquired the entire Melrose Arch dynamic mixed-use precinct.)

Further financial security lies in the fact that homes within the Evergreen portfolio are offered on a Life Right basis, one of the most widely practiced and requested retirement purchase schemes worldwide. Life Rights offers the lowest purchase price relative to product. The fact that there is neither transfer duty nor tax payable is an attractive boon. An additional benefit of entering into a life right scheme is that accommodation costs remain fairly stable, especially if the development offers a fixed for life levy.

So it’s a mixed bag on the senior citizen retirement accommodation front. The smart money is on the exclusive high-end Evergreen. Small developments around the country may still be able to have their hands in where not hampered by development costs.  Regardless, the on-going demand for retirement accommodation continues to rise and buck the recessionary trends.

Airport Retail – Flying into the Sunrise

In the old Westerns, people galloped off into the west as the sun set to get away from all their troubles. Well if current stats are correct, people may want to fly off into the east into the rising sun instead. Since shopping and traveling are human ways of escaping cold hard reality, it may explain why emerging market countries’ airports are doing a roaring retail trade in the face of the world financial crisis.

But let’s not get ahead of ourselves, airport retail seems up everywhere. The world’s airport retail sector is set to emerge as one of the best performing in retail, and is likely to grow by as much as 60% by 2015, worth approximately R322.8 billion. A Financial Times article cites spending by passengers atLondon’s Heathrow increased 16.4% year on year in the first half of 2011. Clearly someone did their homework since Kurt Greiger, Reiss, Burberry and ‘handbag company’ Mulberry have all recently popped up at Heathrow. Throw in a new Harrods mega store and you’ve practically got a shopping renaissance at the airport.

Looking at the international airport market as a whole for 2010, it’s estimated worth is approximately R220billion. Having grown as much as up to 40% in the last five years, emerging markets have led the way. By way of example:Europeheld 46% of market share and theUS23%, in 2005. That’s down to 40% and 20% respectively. Big winners here are Asia-Pacific up to 29% andMiddle Eastat 10%. Top of the class is Dubai Duty Free, the world’s largest airport retailer, recently reported 13% growth in sales and is due for a record year.

What is it about emerging markets that’s causing all the flutter? A symptom here would be an increase in airport traffic. Asia-Pacific, Latin America, and the Middle Easthave experienced double-digit percent growth in the number of airport passengers. Meanwhile the mature destinations of Europeand North Americaare not only experiencing weak growth, they are struggling to reach pre-doubledip levels of airport traffic.
From here we notice a two pronged effect on airport traffic. Firstly: stronger economic growth in emerging markets and secondly the drastic lowering of airline ticket prices. Going back a decade air-travel in the east was horribly expensive but now there’s Malaysia’s affordable AirAsia, India’s SpiceJet and Singapore Airlines’ new Scoot service among other budget airlines capitalizing on the increased demand. Thai budget airlines expects to launch in mid-2012, so the competition is hotting up.
And there’s more… despite a faltering global economy, luxury retailers have reported stronger than expected earnings, with demand from emerging economies boosting their success. Many high-end retailers announced unusually high profits. Louis Vuitton Moet Hennessy (LVMH) reported profits of over R123 billion through the third quarter—a 15% increase over the previous year, with strongest demand from Asian markets. According to a recent consulting firm Bain & Co. Mainland China is likely to push Japan out this year as the second-largest market for luxury goods after the U.S., increasing market share to R257.5 billion. Chinese consumers spend an additional R132-165 billion on luxury goods outside of China in order to avoid the high luxury tariffs in their own country.

This year saw LVMH opening at South Korea’s Incheon airport, the store is expected to bring in approximately R533 million in annual sales, thanks to the growing numbers of Chinese passing through.

Within retail, it is beauty sales which are the fastest growing. Over the next five years this segment of airport retail is predicted to grow by as much as 80%, while growth in liquor and tobacco is expected to ease. Fashion and electronics are also areas which show growth potential over the same period.

Retailers are also modifying their product lines to appeal to Asian consumers. The French luxury fashion house Hermès intends tapping into the growing luxury market in Indiawith its new limited edition range of saris based on that label’s celebrated scarves.

There is also an increased significance of direct-owned stores at Airports. According to the same Bain study mentioned above, the physical distribution of luxury sales has undergone a significant shift, with direct-owned stores experiencing 14% growth, which is more than 50% higher than the growth rate of wholesale and department stores. Direct-owned retail now accounts for nearly 30% of luxury sales worldwide. Finally, currency volatility is a big player too. Travelers from different countries will seek the best bargain relative to the exchange rate.

Examining South African Airports, one may note that Cape Town International, OR Tambo and Durban’s King Shaka came first, second and third, respectively, for Africain the World Airport Awards a while back. ORT shuffles 13 million passengers every year, the most in Africa, yet we are remaining an emerging market
South reports that South   Africa rates as one of the world’s best airport shopping destinations. Of course local may not be lekker for some locals but curios have come a long way since the artillery shell ash trays and dung pots. This OT airport curio shop was voted the ‘best destination’ retail outlet in the world in 2006 by well respected duty free retail commentators in the Moodie Report.

Interestingly the International Travel Blog enthused that: “at The Out of Africa store, almost all the handcrafts you’ve been eyeing on your trip, from 6-foot wood giraffes to Ndebele beaded dolls, are on offer here at better-than-retail prices.”

Yes it’s a long way from Prada but travelers want what they can’t get on their own turf and everyone is doing the booze and smoke. Having said thatSouth Africahas much more to offer than mere curios and duty free jewelers, as important as those stores may be. This is surely an untapped market for South African retailers. It’s time we encouraged the geese to fly down South for the winter.

The Battle of the Beachfronts

Let’s face it there has to be some resentment, so much of the glamour of ye olde Durban shifted to Umhlanga in the 1980s through to the ‘90s. But lots of cleaning up was done and then there was uShaka and some notable inner-city reclamation projects and Durban stopped looking so tarty.

On the other hand what used to be little scenic Umhlanga, has it’s own industrial area now, plus Hillbrow-type blocks of flats around Gateway and all those tarty mansions on the ridge in what used to be gently swaying sugarcane. Throw in some perennial storms exposing those very rocky beaches and things don’t look so rosy for the once cheeky upstart.

In anticipation of the, try not to yawn, 2010 Soccer World Cup, Durban embarked on a serious facelift to it’s dodgy beachfront. Following demolition and refurbishment, rearrangement of facilities and an impressive walkway, hotels have expressed how it was worth the wait. Hoteliers say Durban’s beachfront occupancy rates are exceeding those of Umhlanga and Ballito by as much as 10%. Deputy President of the Durban Chamber of Commerce, Mike Jackson, said there had been a “complete turnabout” by locals and tourists in regard to the beachfront and that the corporate trade was now balanced with holidaymakers.

There is renewed interest in spending time at the Durban beachfront, with big companies looking to buy land and existing hotels spending millions on upgrades. Hoteliers report an increase in locals coming down to the city beaches, especially at weekends. Cycle and pedestrian paths have also helped in attracting Durbanites back to the beachfront.

Enter a very motivated Umhlanga Rocks: not used to being upstaged by the tired old city, plans have been carried out to perk up some of the urban sag in Umhlanga’s infrastructure. R70million has been spent on the 2.8km promenade which stretches from the Breakers Resort in the north to Durban View Road in the south, with the paving similar to that at the Durban central beachfront. However, one little detail the Durban promenade averages at 15m in width, the Umhlanga promenade is about 5m wide. This presents a scenario that will depend on your taste.

On the Umhlanga promenade, wheels are banned. Except prams. No skateboards, rollerblades or bicycles. If you are walking with a stick, that’s good news. If you are in town for the annual student rage parties, it’s off to Gateway with you. In Durban you can bring your twelve wheeler circus cycle to the promenade and juggle wombats on your head if you like, you won’t be in the way. But no official matric rage parties are scheduled for Durban. Gateway has no competition.

Umhlanga has also upgraded roads previously unfriendly to tourist and pedestrian traffic. Roads such as Lagoon Drive and the roads leading from the Ruth First Freeway into central Umhlanga are also being upgraded.

Durban View Park is an important through way to the beach it has been the site of some important changes: The toilet and shower facilities have been upgraded, the park itself will be properly fenced and the walkway has been re-laid with bricks. The car park area has been greatly increased in size and should be completed any day now.

Due to a reputation for accidents, Lagoon Drive has been fitted with a number of speed-calming measures like traffic round-abouts and speed bumps. For example there is a round-about at the intersection with Durban View Road. Pedestrian tables, similar to brick speed bumps have also been added to allow people to walk across, for increased safety.

With the combination of the Matric parties, the usual holiday traffic during the festive season and the much anticipated COP 17 conference in the city, Umhlanga hoteliers are expecting 90% occupancy. Peter Rose, head of Umhlanga Tourism, believes that if holidaymakers haven’t yet booked a room, it may well be too late.

Down in Durban those in the hotel industry are equally upbeat in anticipation of the 25000 UN guests arriving. But the city has its sites set even further ahead. The second phase of the upgrade that began before World Cup 2010 is expected to actually transform the city’s shoreline from the Country Club beach to Blue Lagoon and will show off Durban’s wide open spaces. It will include restaurants and exciting new shops. It will also involve extending the pedestrian and cycling promenades, and relocating the Laguna Beach paddling pools to Blue Lagoon.

In the final analysis, what’s good for Umhlanga is good for Durban as they spill into each other turf. Many tourists stay in one locality and travel to the other for a change of scenery or simply to take in the attractions unique to that location. So all this bodes well for commercial property in both locations as businesses that have waited it out through the beeping of earth moving equipment, can now reap rewards through the tourism industry’s attraction of conference attendees, party animals and holiday makers. Iron sharpens iron goes the saying. Nothing like a little healthy competition to bring out the best in both cities.

Sandton – Hard Sweet work or Sweet Hard work?

The Greek philosopher Aristotle wrote that change in all things is sweet. Scottish comedian Billy Chrystal said that change is just a lot of hard work! Witnessing the changes to the SandtonCBDskyline you may see something sweet here and there, but it’s mostly the result of a lot of hard work.


Much has been publicised about SandtonCity’s big R1.77bn first phase expansion. One can’t help draw attention to Sandton City’s retail space expansion to a total of 143 690m² upon completion of the first phase this month, taking the complex, which includes the Sandton hotel and office component, to 215 000sqm. But there is more happening in Sandton besideSandtonCity.


Part of what was once referred to as the wealthiest square mile inAfrica, the Village Walk,  these days only attracts a steady stream of JSE visitors’ vehicles seeking a parking space. Management of the once thriving collection of eateries and fashionable boutiques seemed to lose any sense of vision in the early 2000s. The once fashionable in-spot of the 90’s, sadly, has discount posters in its windows and wispy tumble-weeds of litter blowing about its courseways.


Having started as a rumour earlier in the year, it’s now conventional wisdom that the Village Walk will be demolished and even that 60 year old Grand Dame the Balalaika Hotel will be torn down and resurrected on the corner ofMaude StreetandRivonia Road. Of course it was never a matter of competing with its two sistersSandtonCityandNelson Mandela Square, rather it will be a matter of complementing and supplementing those enormously successful retail and entertainment venues. The current Village Walk basement will be retained and two floors of retail and some office space will be layered above. The whole development will be in four phases over eight years. Only a couple of blocks from the Gautrain station the venue has exciting potential. An international hotel is also on the cards making up the rest of the 180 000sqm of the project’s space.


Investors are showing enthusiasm for the acquisition of land or buildings for redevelopment close to the Gautrain station and it is envisaged that the area surrounding the station will be the centre of sustainable growth in the value of commercial property. There are even plans afoot to build above the station itself!


115 West Street, right opposite the station, is the future site of the Alexander Forbes head office for its approximately 2200Johannesburgstaff. The refurbished, eight storey 36 950m² office building will be embracing some green building codes with all natural light and energy efficient lighting. Throw in super fast lifts and state-of-the-art auditoriums  stuffed with all the latest technology, a gym, snazzy coffee shop and staff restaurant and you have a self contained little urban island. Nebank is putting up the R840 million funding for the development. This will become Zenprop’s Properties’ flagship of South African commercial properties. Alexander Forbes is expected to take occupation of the building on1 October 2012.


Characterised by a large number of owner occupied developments and with the majority of international banks, the JSE Securities Exchange, legal and management consultancies, Sandton, is widely acknowledged as the premier financial district inSouth Africa. There are currently over thirty development applications for the SandtonCBD, which includes  zoning changes  and renovations.


One such revamp is Southern Sun’s landmark Grayston Hotel. It’s closing its doors next month with a proposal having been lodged for the redevelopment of the building.


Other developments on the boil are 20 000sqm of sectional title office space on the corner of Katherine and West Streets – for occupation in 2013; 6 Sandown Valley Crescent, with a gross lettable area of 18 000sqm and a projected completion date of mid-2011; 16 000sqm at 1 Protea Place, with Cliffe Dekker Hofmeyr Attorneys as a tenant plus other smaller tenants; and Sandhurst Office Park, where 26 000sqm of office space becomes available in 2013.


Much of the demand for development seems to revolve around the financial sector. Developments planned over the next five years include: 9 000sqm at140 West Street; 35 000sqm for Standard Bank at11 Alice Lane; 150 000sqm on the site of the old Sandton municipal offices; and atFNBTowers, 25 000sqm of additional space.


One of the biggest changes to the Sandton skyline will be on the corner of West, Stella and Rivonia Roads. Insurance giant, Old Mutual, wants new headquarters inSouth Africa. Its answer is to build a multi-storey office precinct next to the Gautrain station. Old Mutual is to move their head office fromPresident Streetin Jo’burg’sCBDto where theChadrien Placebuilding stands, at the corner ofRivonia RoadandWest Street. The first 50 000 square meters will be ready for occupation by 2013, and the final product will be a 35 storey building.Chadrien Placeis currently an ageing Tudor-style block of 33 flats. On average units were valued at about R1,5m a couple of years ago. That all changed thanks to the Gautrain. Old Mutual is believed to have paid R400 million to a development consortium for theChadrien Placesite.


Finally on the auction front, one gets an idea of the demand in theCBD. During Auction Alliance’s September multiple auction event, two A-Grade office blocks in the heart of the SandtonCBD, offering a first rate development opportunity, were sold for R48.5 million. With A Gross Lettable Area of 2530sqm, this represents a bulk value of over R19,000/sqm.


There may be an economic down turn, but the future for Sandton looks set to change. For some it’s going to be sweet, for others, a lot of hard work.

Learn More about Sandton visit

Going Potty in Jo’burg.

Do you remember all those promises about potholes in our roads being fixed at the beginning of the previous financial year: the homeless bathing in them; cars disappearing into them? Well Jo’burg’s been getting the good end of the deal thanks to the Dial Direct Pothole Brigade that made a start in August last year.


Yes, the name sounds like something out of Monty Python, but there’s been no slap-stick here. Thanks to a partnership between Johannesburg Road Agency (JRA) and the said Brigade, 35 000 potholes have been repaired on Jo’burg’s roads. That’s a lot of empty space to fill!


To fix potholes, the Dial Direct Pothole Brigade has used an innovative Jetpatcher, which is a large articulated vehicle that carries aggregate and hot asphalt for patching up or repairing potholes.


 A high-tech machine mounted on the chassis of a truck, it uses a high pressure compressor to blow out debris and water from the pothole. The airflow cleans out fissures in the hole to ensure that complete waterproofing is achieved. Then the aggregate and asphalt are blasted in.


Now that this successful pilot project has come to an end, the JRA will have to formalise procedures and incorporate the repair of potholes into a tender process.


The JRA is a Jo’burg City-owned entity responsible for the construction and resurfacing of municipal roads, construction of bridges, building and managing culverts and storm water drains, maintenance of road infrastructure, traffic lights, road markings and signage.


During the course of the project the following roads that have been patched: the M16 – Linksfield Road, M90 – CR Swart Road, M57 – Pretoria Road, R512 – Malibongwe Drive, M6 – Cedar Road, R511 – William Nicol Drive, M26 – Main Road and R562 – Olifantsfontein Road, to mention just a few.


The Dial Direct Pothole Brigade, is a special task force comprising provincial and local government departments and two private companies. The original intention was to deal with Jo’burg’s ever-increasing potholes. Its work was never supposed to be a permanent arrangement but rather to supplement the maintenance work already done by the Johannesburg Road Agency and theGautengprovincial government.


Hopefully this will render redundant the guidelines on how to repair and prevent potholes, published by the Council for Scientific and Industrial Research (CSIR) on its website. Surprised by the huge interest, the CSIR released its annual results in Pretoria this week revealing that  800 downloads for the guidelines had been made since they were first published in December last year.


The training courses on the causes of potholes and various repair methods for different types of potholes, held by the CSIR since February 2011, had also proved very popular. You have to hand it to the South African public for being proactive and enterprising.


But the merry hole-filling brigade has other fish to fry now and is moving on to the outer reaches ofGauteng. The specific areas are yet to be announced. But it’s going to be good news for somebody.


Sam Swaine, the media director of Heart PR, publicists for Dial Direct says motorists should now report potholes in JRA areas directly to the agency on


However the brigade urges motorists who identify potholes onGautengroads to report them either online or by dialling *120*1551# from a cellphone and following the onscreen instructions or via the mobile site,


The JRA will now have to resume its responsibility for dealing with eradicating potholes alone. The additional capacity through public and private partnerships has enabled the City to do so much more than it normally has the capacity to manage.


A mayoral committee member for transport was quoted as saying: “Believing in the importance of government working together with the private sector and civil society, we think that this partnership has enabled us to do even more in the interests of the citizens ofJohannesburg.”


Clearly there is some light at the end of tunnel for road maintenance in Jo’burg and lets hope the momentum doesn’t stop now as the initiative continues into the rest of the province.

 Learn more about Joburg: visit

“What is my place in this world?” – Is it too late to ask?

“What is my place in this world?” –  Is it too late to ask?

Teenagers face the question, perhaps more than those of us who are not: what’s my place in this world? It’s a healthy question methinks.

Some of us may have forgotten that struggle – either content with the path we’re on or accepting of our lot in life. Then there are those of us who’ve never really come to terms with the stage of life we’re in. I’m not just talking about the unrequited: “If only”; “I shouldn’t have”; “I could have” and the like. Sometimes we wake up with that sense of purposeless. We look back at the field we spent so much time ploughing and ask: “for what.” We come up with a suitably parental response to keep going like: “come on put on the uniform and go to work.”  Perhaps we are reminded of what we believe the purpose to be and take courage and move on, motivated and cheerful, brushing off that devilish little intrusion into our contentment. Or you don’t and it lingers like a hangover from too much of something that seemed good enough to indulge in the night before.


Indulgence often does that, brings up that question, the one you asked when you were a teenager. “Is this what it’s all about?” Getting here where I have the freedom to indulge in the thing that I want. The thing that’s not only not there the next morning but couldn’t face another bite of, sip of, moment of, if it was. After all, this morning I have to face reality, none of which was washed away by my television binge, escapist novel, vice or even sleep. Today is a new day.

A ‘New Day’ now there’s a thought: Jeremiah a prophet who contributed to the Old Testament, someone who contemplated these questions not only for himself but for his entire nation:Israel, on a regular basis through times of crisis wrote:

The thought of my pain, my homelessness, is bitter poison. I think of it constantly, and my spirit is depressed. Yet hope returns when I remember this one thing:

The LORD’s unfailing love and mercy still continue, Fresh as the morning, as sure as the sunrise.

The LORD is all I have, and so in him I put my hope. The LORD is good to everyone who trusts in him, So it is best for us to wait in patience—to wait for him to save us—“ Lamentations 3: 20-26

Simon Peter’s response was remarkably similar when faced with the very unpopular choice of following Jesus after he had said something particularly offensive to His people.

John 6:68 records: “ Simon Peter answered him, “Lord, to whom would we go? You have the words that give eternal life.”

Where else can we go? The Lord is IT.  We don’t know what the future holds but we can know who holds the future.

We live in a subculture where we want nanny voices to say “there there” and make it all better. Or perhaps we look for stirring words of motivation from inspiring people. Often we feel, as the eminent Austrian psychoanalyst Victor Frankel believed, that you will be content as soon as you discover your sense of ‘meaning’ – your purpose. Well that sounds like a handy thing to discover – but when such questions plague us let’s face the One who holds the keys to life, who claims to have a future and a hope for us. Obvious?

Jeremiah assures us that God’s love is unfailing and new toward us each morning – it’s an unconditional thing. We would do well to reflect on that – His Love is new every morning, it’s all about today! So you’ve lost your way, or maybe taking a moment to contemplate the manufacturer’s built-in re-alignment questions. Jesus didn’t necessarily give Peter an answer right there and then about where to go, what he was for, where did he fit into the grand scheme of things. He just gave him a choice and Jesus gives you a choice each new day: “come.” The invitation to come is an invitation of hope and I suppose hope is like a waking dream.

Peter sounds almost exasperated when he ‘comes’ “Where else can we go.” But at the end of the same book this man sat down and ate fish and bread with the resurrected Jesus discussing the way ahead even his death, his place in this world.

What I really want to draw attention to is not that we should ask the question with the view to getting an answer. Rather that we should ask the right Someone with the intention of listening to whatever it is He chooses to say. It’s another excuse to cleave to, confide in and covet Jesus.

There’s just no substitute to coming to Jesus in quietness and trust – your place in this world.

Sandton City the Queen Bee for Fashionistas

Like it or not Christmas is around the corner.

In anticipation of Christmas 2011 Sandton city is flirting, no, building, long term relationships with some of the world’s most glittering names in world fashion. So someone’s had to make some room.

SandtonCity’s much anticipated R1.77 billion first phase redevelopment is being undertaken by Liberty Properties on behalf of owners Liberty Group (75%) and Pareto Ltd (25%). There has been a shortage of retail space in the centre; despite being one ofSouth Africa’s largest. They’re hoping the 30 000sqm extension will be sufficient retail space in expectation of the flurry of high fashion tenants wanting visibility at the centre.

The development will see an additional 69 stores toSandtonCity, the resultant total will come to 360.SandtonCity’s total retail space, with the extension, will now be an extraordinary 143,700sqm upon completion of phase one. The whole complex, including offices space and the hotel, will now come to 220,000sqm!

So who’s coming to the party!

Where to begin? Let’s name drop with: Zui, Okaidi, Nespresso, Lecoqsportif, Steve Madden, Tag Heuer, Bellagio, Pandora, Democratic Republic, Ben Sherman, Hackett, Jack Friedman. That’s just a start.

Lacoste and Lacoste Live

The Surtee Group, being a cutting edge luxury clothing retailer, will be opening a breathtaking Lacoste flagship store. This concept store has only been seen on the Champs de Elysees in Paris andNew York’sFifth Avenue, as well as inHamburg. The store is expected to be a 300sqm store presenting the complete Lacoste world of products including footwear, fashion, handbags and sunglasses as well as fragrances and an entire children’s range. The store will introduce to South African Youth the dynamic Lacoste Live products and ranges.

Paul & Shark

The Surtee Group will also be showcasing Italian luxury fashion brand Paul & Shark in its own 120sqm store. Previously the brand was available at Surtee Group’s Levinson’s. The shop itself has been created inNaples,Italyand will be shipped intoSouth Africain time for the November opening. This is a replica of the Paul & Shark’s store inMilan, arguably the fashion centre ofItaly.

Guess Accessory Store

The Busby Group, which currently has 13 shops in the centre, will be adding to its repertoire a whole new exciting Guess accessory store. The Guess Accessory store will tantalisingly display an assortment of high-fashion Guess jewellery, handbags, eyewear, fragrances, watches and footwear. There is much anticipation of the designer-chic interior.

Lacroix and Nina Ricci 

The Levison’s retail group will be introducing new lines to their already chic store.  These include the highly sort after Nina Ricci and Lacroix labels.


Said to be the avant-garde face of Hugo Boss – Hugo will open its first South African store with product lines particularly focused on men although there is a range of women’s products.

…and there’s more

Throw in Lulu Belle, Thomas Sabo, Lorna Jane, Drifters, Ordning and Reda, G-Star, Crossover, Shesha, Kitchen Passion , Kingsley Heath, Superdri, Sack’s, Maska, Fossil, Aeronautica, Addidas, Superga, Canterbury, Simply Manas, le Creuset as well as Tiger of Sweden and one is left gasping.

SandtonCity seems to have become the queen bee and all the worlds’ brands want a spot in the hive.  “The expansion ofSandtonCity adds an increased breadth of range for shoppers. The new variety and sheer size of the shopping centre will serve to draw more feet to the centre and grow overall revenue,” said one retailer.

With the introduction of the Gautrain and the proximity of the new Sandton Gautrain stationSandtonCity’s scope has broadened even further than before. Also the work done by the centre’s management, listening carefully to shoppers, on creating a customer friendly environment, adds charm to the bling of a glittering new crown of world-class status brands.

Christmas atSandtonCityis going to quite the glittering affair.

Keeping The Green Lungs Open

Johannesburgis an urban forest and arguably the largest of its kind in the world. Reports vary, but it is estimated that there are between 6-10 million trees in the city and over 2 000 parks.  Jo’burg’s City Parks (JCP) is responsible for keeping these green lungs breathing. Last month saw (JCP) win not only the Green Collar Training Award but the Agricultural Sector Education and Training Authority (AgriSETA) National Excellence Award.

Urban forests play a pivotal role in ecology of human settlements, provide shelter to birds and recreational areas for people, filtering air, water and providing protection from sunlight. Of course green is also good for the soul.Johannesburg’s forest in the city is moderating the local climate, slowing wind and storm-water, and shading homes and businesses to conserve energy. Large shade trees can reduce local ambient temperatures by 3 to 5 °C. Cars parked in parking lots with 50% canopy cover emit 8% less through evaporative emissions than cars parked in parking lots with only 8% canopy cover.

 A study done in Chicago; USA, determined that trees removed approximately 17 tonnes of carbon monoxide (CO), 93 tonnes of sulphur dioxide (SO2), 98 tonnes of nitrogen dioxide (NO2), and 210 tonnes of ozone (O3) in 1991.

JCPhas an enormous responsibility. Consider this,JCPmanages 1,6 million trees on its streets; 6 603 hectares of developed parks and arterials; 7 500 hectares of pavements; 2 343 parks; 174 hectares of water surfaces; 1 587 hectares of trails; 35 cemeteries consisting of 1 088 hectares of land; 22 nature reserves consisting of 1203 hectares; 15 bird sanctuaries consisting of 366 hectares; 7 hiking trails; 4 environmental and education centres.

The Green Collar Training Award was presented to City Parks at theBHPBilliton Achiever Awards. Falling under the Environmental Education category,JCPwas acknowledged for its programme that successfully provided 105 unemployed youth with skills development and employment.

Geoffrey Cooke, acting managing director of City Parks, said: “The project is aimed at creating decent, permanent employment in a sector that is labour intensive, and we are hopeful that this is the beginning of a programme that will be rolled out on a larger scale with support from business.” Young unemployed people were picked from the City’s Job Pathways database.

The second award picked up last month was the AgriSETA Award, recognisingJCPfor providing employment, putting people to work on maintaining the city’s green lungs.  It took the gold in the “project employed 50 percent and more learners” category. This specifically acknowledged the training of unemployed youth in ornamental horticulture as part of level one of the National Qualifications Framework (NQF). These same employees were assimilated into Johannesburg City Parks, giving them permanent employment.

This isn’t just a flash in the pan either. Earlier this year theinstituteofLandscape Architecturein South Africa (ILASA) honouredJCPwith a special award for excellence for its outstanding contribution to landscape architecture through open space development at community level. The award was presented inDurbanin May at the prestigious Corobrik-ILASA Awards for Excellence.

JCPwon the award for its contribution to ongoing development of green open spaces and parks in greaterSoweto. The award was specifically based on the development of theVlakfonteinMedicinalPark, Dhlamini Eco-Park and theOrlandoWestPark.  Further acknowledgement for theJCPwas for theirAlbertsFarmEcoParkproject, which won in the Planning and Design Project Proposals category. The adjudicators said City Parks’ achievement was all the more remarkable becauseJohannesburgdoes not have any striking natural features.  “Johannesburg City Parks does not have the luxury of a coastline, a river or any other breathtaking natural feature in which play and city life easily blend,” they said.

Other notable projects completed so far this year have been in areas such asZakariyyaPark, Vlakfontein, Orange Farm and Lenasia. (Parks were also opened in Njongo and Nxumalo in May.)

These areas were earmarked as the focus of the City’s capital projects in the south. Work on a park opened inCloveParkfor example, created 40 jobs and also ensured that there was a transfer of skills to the community during the construction phase. These rejuvenated areas form part of the City’s strategy to address the greening imbalances between north and south. Over 200 000 trees have been planted and over 23 new parks have been developed in the south of Joburg as a step in addressing these imbalances.

This positive trend began in January when JCP extended its environmental credentials by gaining its ISO 14001 certification, only the second municipality to do so. The ISO 14001 is an international standard that provides a framework for developing, implementing and continually improving environmental programmes. City Parks received its certification on 20 January, following a series of comprehensive audits by NQA  (an assessment, verification and certification body.) “It was important for us to gain ISO 14001 certification in order to demonstrate that we are fully aware of our environmental responsibilities and that we are trying our best to incorporate our environmental duties into our day-to-day business operations,” said Alter Mavunda, City Parks environmental specialist.

Johannesburg’s City Parks has proven that it is part of the solution. Revealing intent with regard to city renewal and reducing the city’s carbon foot print. Other cities must be green with envy.

Just When You Thought it was Safe: All about Printer Emissions.

Have you ever seen reruns of those cigarette advertisements from the fifties and sixties where the doctor comes on recommending smoking as good for a healthy body and mind? You have got to laugh. Just like everyone laughed at those who first put forward ideas that smoking may be harmful to our health. It may seem a little unfair to make the comparison to emissions from laser printers but it’s a line worth pursuing if the Queensland University of Technology insists on updating its research on this subject.

When research was released in 2007 by theQueenslandUniversity that too much quality time spent with your laser printer may be harmful to your health there was a bit of scare. The Australian Federal Government launched an inquiry.  According to Professor Morawska, who headed up the study, printers emit ultra fine particles (UFPs) that are believed to be a catalyst and even a cause of respiratory diseases. Alas Hewlett-Packard printers have been fingered as being among the worst emitters, followed up by Toshiba. A cursory glance through the list of printer though, shows a disproportionate amount of HP printers were used in the study.

In an updated version for the paper (Aug 2011)( This statement is made in the preamble: “We present experimental evidence that indicates that intense bursts of particles are associated with temperature fluctuations and suggest that the difference between high and low emitters lies in the speed and sophistication of the temperature control.”  Morawska’s study determines that when the printer toner and paper pass over the hot printer roller, chemicals known as volatile organic compounds are released into the air. These compounds then react with ozone in the air and condense to make UFPs.

The temperature of the printer is crucial. The hotter the temperature, the more particles are produced. In the Sept 2011 ( update this statement is made: “However, fundamental gaps in knowledge still remain, for example, it is not clear what makes a printer a high emitter or why some models alternate between being low and high emitters.” It’s apparent that different models made by the same manufacturer can produce very different levels of particles. Two machines of the same model type can also differ in their emissions, if one has recently done a lot more printing, it’s likely to create more particles.

Morawska believes the study gives manufacturers all the evidence they need to produce safer laser printers. “We’ve shown why certain printers are high emitters and this information should be used by the manufacturers to design printers that are not high emitters, high emitting printers should not be allowed on the market.” She said.

Hewlett-Packard’s (HP) response is: problem? What problem? The public relations department released this statement to the press with regards to UFPs: “The results confirm previous research that such UFPs are predominantly not toner particles, and suggest that they might consist of volatile substances and water vapour. These results substantiate HP’s position that such UFPs are not specific to laser printing technology. UFPs also form under conditions where no paper and toners are present in the printer.” It should be pointed out that other sources of ultra fine particles include vehicle exhausts, burning wood, candles, and cooking.

Researchers from the Fraunhofer Wilhelm Klauditz Institute inGermanybluntly say that they found no evidence to support theQueenslandUniversity’s claims, after examining the makeup of chemicals released from laser printers. “One essential property of these ultra-fine particles is their volatility, which indicates that we are not looking at toner dust,” said Tunga Salthammer, a professor who worked on the study. They determined that such airborne materials include paraffins and silicon oils that evaporate when a printer’s fixing unit, which attaches dry toner ink to paper, reaches temperatures as high as 220 degrees Celsius. The study did not describe how breathing in those ultra-fine chemicals could affect human health. Printer makers belonging to the German Association for Information Technology partly funded the research.

Rather than focusing on the chemical composition of emitted particles, Morawska’s study focuses on their concentration and volume (a technique that is also used to rate the effects of second hand smoke). We may need to consider whether the particles referred to in the study toner particles? Do they have carbon black (a Class 2B carcinogen) or some otherIARC(INTERNATIONAL AGENCY FOR RESEARCH ON CANCER) -rated carcinogen in them? This remains unclear. HP has argued in its public statements that its printers meet all accepted standards in terms of particle emission. HP public relations released a statement saying. “Testing of ultra fine particles is a very new scientific discipline. There are no indications that ultra fine particle (UFP) emissions from laser printing systems are associated with special health risks. Currently, the nature and chemical composition of such particles whether from a laser printer or from a toaster cannot be accurately characterized by analytical technology. However, many experts believe that many of the UFPs found in common household and office products are not discrete solid particles, but may be condensation products or small droplets created during thermal processes.”

One thing for certain is that we ought to watch this space for new information as it would seems that it may be an over reaction to have health warnings on our printers just yet. In the meantime, it may be advisable to follow some of  Professor Morawska precautions: Avoid standing over the printer when printing; If you work beside a high volume printer, consider requesting either your or the printer’s removal; Make certain your office is sufficiently ventilated with air from outside; Those with asthma or other chronic conditions should be advised to position themselves at a suitable distance from busy printers; Locate heavily-used printers in well-ventilated areas, away from people. Okay, now take a deep breath and print this out to read outside.

Cloud Printing

On the first day of Autumn 2011 in Tokyo, Japan (Spring day in South Africa) Epson, that name synonymous with printers and printing, announced that it was expanding its cloud printing services for mobile devices such as smart phones and tablets. Epson’s growing portfolio of cloud services stamps a claim on providing customers with greater freedom allowing the printing of documents and photos directly to Epson printers from a mobile device.

Tablets and even commercially used smart phones have no embedded printing system, although many printers now offer the option to directly print images by enabling the printer to convert images to print data. This form of printing cannot, however, be used for documents.

How can the user print from a device not designed to print? The solution is cloud printing.

Smart phones, as well as tablets are rapidly replacing notebooks’ function as constant companions in everyday business life inSouth Africa. Alas, one vital utility is missing: the ability to print. Although we live in a digital age we face many circumstances where printing is still required, many times on the spot. Hardcopy is required for contracts to be signed or simply to read long documents in paper format more easily. This is where cloud printing is finding its niche.

Enter Epson Connect which we can divide into Email Print and Epson iPrint solutions.

Email Print is a service that allows customers to print out email and attachments by simply sending an e-mail from their mobile device to an enabled Epson printer. By using this service, people on the move print out essential e-mails and attachments such as documents, presentations and tickets on Epson printers in their home, office, and other locations.

Epson iPrint is a print application for the latest iOS- and Android-based devices. You can now download the Epson iPrint application and connect to a WiFi enabled printer. This way the user can print out a wide range of contents ranging from photos and documents to recipes, coupons, and web pages.

Epson has also declared its commitment to supporting mobile solutions provided by other companies. Currently though Epson’s applications are aimed at iPad, iPhone and iPod touch (iOS-based) terminals and Android terminals.

But there are others putting their hands up and reaching into the cloud. Cortado, formerly ThinPrint, is a founding member of what has become known this year as the Printing Alliance. Cortado claims to offer the leading cloud printing solution for mobile printing. Documents can be stored in the cloud and then printed using Cortado Workspace from smart phones and tablets to any Wi-Fi or Bluetooth connected printer, regardless of device, printer or file type!

The printing alliance is made up of OKI, Kyocera, Konica Minolta, Lexmark, Brother, Dell, Develop, Funkwerk, Kodak and Toshiba. All available here inSouth Africa.

Cloud printing with Cortado Workspace is direct printing, without turning on a PC, taking place on the printer connected to the mobile device. This can either be a printer within the same Wi-Fi network as the device currently located, or via a Bluetooth printer, or to a network printer in the organization. Cortado Workplace is currently available for iPad, iPhone and iPod touch, BlackBerry, Android and Symbian devices. All you have to do is 1) Download and install Cortado workplace on your mobile device. The app is free from App Store, Nokia’s OVI store, Black Berry App World and Android Market. From there you are prompted to do the usual registration process and then you are ready to work.

But the options for South African’s don’t end there. The long awaited Google Cloud Print arrived in September. It allows you to print to your local printer through Google Cloud Print-enabled apps on any computer or smart phone. If you want to connect your printer to Google Cloud Print, you need to have Google Chrome installed on a Windows XP,Vista, or Windows 7 computer with an attached printer. Enabling the Google Cloud Print connector in Google Chrome makes your printer work with Google Cloud Print-enabled apps like Gmail for iPad, iPhone, and Android. It really is as simple as that.

With the growth of cloud-based computing, it is becoming more relevant for businesses to facilitate printing in the office through a cloud-based printing system.

The uniqueness of what is being offered by Epson, Cortado’s Cloud Printing Alliance and Google is that they are all non-destination specific. Users print to the cloud, not to a specific print device. “Users can find enabled locations using Google Maps, approach a device, login, and choose their document, print and go.” says Glenn Moore of Core Print Solutions.

This could certainly make the lives of professionals and others working in the field a great deal more productive. They won’t have to stop their critical activity as output is now available. Owners of print devices also enjoy the timeliness of information communication. The list goes on.

So if your head is in the clouds and someone asks you “a penny for your thoughts” you can cheerfully reply that you can just give them a printout.

QR Codes: Practically Speaking

Practically Speaking

(See : QR Codes expanding you experience  for and introduction to QR Codes)

So how do QR codes work?

A QT code is a type of matrix barcode (or two-dimensional code) A matrix code, also termed a 2D barcode or simply a 2D code, is a two-dimensional way to represent information. It is similar to a linear (1-dimensional) barcode (that we are used to seeing on our products at the shops already), but can represent more data per unit area.

How QR Codes work is by embedding links or text inside a series of black squares and then users can use their cellphone camera with a barcode reader application to translate the barcode and show them either the webpage, text or contact information embeded in the barcode which either gives users more details about the product, object or place or even connect to a wireless network. This act of linking from physical world objects is termed hardlinking or object hyperlinking.

For example tourist in London can now scan in the QR code found on a well known landmark, like the Big Ben and have displayed, as a result, on their phone everything from the history of that famous building to a virtual tour.

Currently in South Africa Woolworths is having a sale; if you scan the QR code in your local Woolies window you will see details of the sale and links to all manor of items up for grabs including online shopping.

The impact has been so great inJapanthat McDonalds inJapanis using QR codes on its packaging to direct customers to a webpage displaying nutritional information about the different products.

If you buy Johnson & Johnson products you will notice that they have started implementing these codes globally on thier products, they can be scanned with a 2D barcode scanner, which contains vital information, about the product, like Manufactured date, lot number, expiry date etc.

Most smartphones now come with preinstalled QR code readers; for those that don’t, downloading them is a very easy process. Once the QR code is installed, you just have to point the camera to the code and the phone scans and links you directly to the desired information provided by the generator of the code.

CellC’s PhotoCode reader is available by following these steps:

1)SMS your name to 32357; 2)Receive an sms with a download link; 3) Click on the link to download

Others may  download a reader at: for most  phones including a Java Reader.


QR Codes can be used using:

Apple iOS: no QR code reader is included, however there are nearly 60 apps that are either free or for a small fee that have the ability to scan and perform hard-linking to URI.

Nokia’s Symbian operating system includes a barcode scanner which reads QR codes,[6]

BlackBerry’s come with an App World application that can scan QR codes.

Google’s mobile Android operating system can be used to read QR codes using their own Google Goggles application or 3rd party barcode scanners like ZXing or Kaywa.

Windows Phone 7 is promising an update that will be able to scan QR codes via the Bing search application. However Microsoft have brought out there own Code, the Microsoft Tag. Visit the site below and there you can learn follow very easy steps to download the software to make use of it.

Quite simply anyone with a computer can generate a QR code. All you have to do is search the Internet for “QR code generators”. There are several sites that will illustrate how you can easily link information to the code.  is one very good example that opens with a simple wizard into which your desired information in entered and then your QR Code is generated. Have Fun.

QR Codes expanding you experiance

Introducing Quick Response(QR) Codes Quick

A QR code (or Quick Response code) is a kind of barcode popular due to its large storage capacity and quick readability. QR Codes make it easy for a person to perform a certain action by scanning a code on their smart phone. QR as opposed to the old bar codes, are very flexible in that it can hold a large amount of data and in any form. Specifically, a QR code can hold a maximum of 7,089 characters in numerical form. If the characters come in alphanumeric, it can hold 4,200. It can support nearly 3,000 bytes.

The code looks like a chessboard designed by someone with his contact lenses inside out or a very fuzzy crossword puzzle. It’s basically a square made up of black and white squares, although new funky coloured ones are out, some even include a company logo. Although QR codes were designed for high speed scanning of components inToyotafactories inJapanback in the mid ‘90s, these days they can be used in every imaginable facet of our world. Some are to be found on the pages of magazines, other on labels of dog food tins.

Apart from the obvious use by retailers to market products to consumers, QR codes have caught on in the entertainment industry, downloading tunes or scanning a code on screen at the movies.  Every Smart-phone user is a potential user. The user can receive text, acquire geo-coordinates, add a vCard contact, connect to an URL, send an SMS or email message after scanning QR codes. Making sure you have downloaded the right apps for your phone can enable you to generate and print your own QR codes for others to scan and use.  Reported in theUSthus far this year by a ComScore study: 15 million mobile users scanned a QR Code, 58% of those users scanned a QR code from home, 39% scanned from retail outlets.

Everyone from Vineyards, Estate Agents, theBBC, the US Army and Google are using QR codes. In the town ofMontgomeryin theUSeven the parking meters have a QR option. In South Africa Woolworths is promoting its biggest sale using giant QR codes in its windows. Even aWitsUniversitynewspaper is providing an ‘enlarged’ experience with QR codes. From a retail point of view, with some software, you can keep tabs on who is looking at your codes and what demographic they fall into.

Cell C has introduced PhotoCode readers to the public in conjunction with media partners, YOU, Huisgenoot, People, Sunday Times, The Times, 5FM, MultiChoice and Oppikoppi and is being rolled out via retailers and restaurants.

“ Making inanimate matter come alive, for example, a newspaper can provide access to a video clip, a shopping window provide information about items exhibited, a t-shirt can carry an electronic business card and a billboard can provide access to a concert or provide a link to a website,” enthused Lars P Reichelt  CEO of CellC at the launch of PhotoCode, powered by BeeTagg Pro. talking to My Broadband.  CellC is among the leaders in South Africa of QR reading software with the arrival of Swiss based market partner BeeTagg.

The youth ofSouth Africaare street smart, technically speaking, and although they may not be ‘over’ what they can do with Facebook and Twitter they are eager to explore what new experiences their smart phones can provide for them. The number of smart phone users is growing and web-mobility and web-access is now considered essential. This is fertile ground for the acceptance of QR codes in SA.  Add to this the ease at which one may download QR code readers, suddenly the opportunity exists for marketers to engage with current and potential consumers.

There are now rivals to the QR code, the Snap Tag – an interrupted circle with you logo in the middle, and Microsoft have come out with the Microsoft Tag which looks similar to the QR Code but uses more diagonal lines. The principle is the same. They are 2d barcodes that connect people with information, entertainment, and interactive experiences in the digital world. You only need to download the relevant apps to use them.

 At the center of QR Codes is the experience. Taking your customer on a journey of opportunities, free-stuff, competitions, information, access and value-added services. The QR code is like the key into the matrix taking you deeper, louder and more.

(See QR Codes: Practically Speaking for how you can make QR codes work for you.)

Contemplating Inner City Land Reclamation

Where there’s talk of land reclamation one thinks of dykes and soggy fields and tulips perhaps. But in the centre of Johannesburg, what could anyone possibly want to reclaim. Next time you look at a map of Jo’burg notice the huge chasm between Braamfontein and the city filled with parallel black lines.

City Council and the Johannesburg Business Forum have been examining that space and similar ones around the city occupied by marshalling yards, railway lines and the big gaps between them, and they are scheming. Recently mayoral committee member for economic development Sello Lemao announced a land reclamation project that would involve the decking of the railways and environs with the view to bridging the gaps in the cityscape like the one between Braamfontein and the CBD, at the same time making use of land that currently does not generate any income for the city.

The intention is to create specific precincts that would continue the city’s ongoing regeneration projects. Offices and residential (low cost and upmarket) buildings are planned, as well as hotels and open green lungs so vital for cities. The idea of decking the railways is not a new one. In Chicago the 99 000 sqm Millennium Park was built over its rail network providing it with its second largest tourist attraction. It took seven years to build, four years longer than projected. It ended up 60% over budget which had to be picked up by business and the good taxpayers of Chicago. In Johannesburg’s case we’re looking at an estimated R2Billion for phase one of the project. Ninety percent of the bill will be picked up by private enterprise. The city will have to come to the party in terms of infrastructural development.

There is some ambiguity with regards to land rights and ownership. Head of the city’s special catalytic projects, Bokaba Maluleke, says that the land is owned by the city but “the Passenger Rail Agency of South Africa and Transnet have servitudes over the lines, so it will have to be decided who it belongs to.” This brings us to ‘air rights’. Legally the concept is quaintly wrapped up in the Latin phrase Cuius est solum, eius est usque ad caelum et ad inferos meaning “For whoever owns the soil, it is theirs up to Heaven and down to Hell.”. Originating in medieval Roman law it was notably popularized in common law in Commentaries on the Laws of England. World wide it underpins the notion that owning or renting land or a building gives one the right to use and develop the air rights to further that building above. There could be difficulties adjudicating who financially benefits from such air rights. Bokaba Maluleke brushes this ambiguity aside saying: “But either way, the land above the lines will be leased by either us, or the railway servitude owners, to the developers. “ Time will tell.

In New York, for example, building on platforms over railway lines is considered very profitable for the rail service. Recently the New York Metropolitan Transportation Authority attempted to sell air rights to the New York Jets Football team so that they could build the West Side Stadium over the West Side Rail Yard near Penn Station as part of the Hudson Yards Redevelopment Project, a project similar to the Jo’burg’s Decking of the Railways. The MTA has even proposed building a platform themselves to encourage development. In Brooklyn, the Barclays Centre is proposed to be constructed over the Atlantic Yards.

Sello Lemao a spokesman for Jo’burg’s mayoral committee for economic development said the project planned to creatively use the space above the railway lines to “develop a balanced district” improving public transport and the road network in the area advance accessibility to the inner city. Public amenities, open green spaces and resultant sustainable jobs. Proposes of the project claim an estimated 19 000 jobs would be generated initially with a possible 40 000 jobs over the longer term. Given that the project is likely to span thirty years, job sustainability seems a realistic outcome.

3000 jobs were created by the Federation Square built in Melbourne Australia. Constructed on decking over the Flinders Street railway yards. It was opened in 2002 and cost a$450 million to build. The decking on which the building and its surrounding piazza stands is supported by over 3,000 tonnes of steel beams, 1.4 km of concrete ‘crash walls’ and over 4,000 vibration-absorbing spring coils and rubber pads. Federation Square joins the Melbourne CBD to the Yarra river. The complex is home to the art and design institutes like the Australian Centre for Moving Image, The Design Institute, the Victorian Visitor Information Centre, and features concert areas, restaurants and bars.

Jo’burg council’s plan is ambitious. Initially the intention is to develop non-decked areas on the periphery of the intended decking area first, this is due to start by the end of 2011. The under-used land between Joburg’s inner city and Braamfontein will support the intended investment and automatic regeneration in the inner city.

Over the next 30 years five precincts will be targeted: the eGoli Design Centre, to the west of the M2 highway beside Fordsburg; the Newtown precinct adjacent to the Mandela Bridge. This is the location for WITS University’s science centre, which is to be surrounded by a ‘green area’ or park. Then there is the Park station transit-orientated development serving daily commuters as well as intending to be a node for tourist activity where the Gautrain gives access to OR Tambo International Airport and the Northern Suburbs. The Joubert Park precinct will be focused on the current museum which will be upgraded. Finally there is the Doornfontein transit-orientated development which will revolve around the University of Johannesburg and the Coca-Cola Park sports precinct.

Given that the city can only really move upward the plan to reclaim the space above the rail network and land pinched between marshalling yards and other development would certainly be a creative and efficient use of space and has huge potential to earn through rates and taxes.

There is no doubt that the vision for the regeneration of Jo’burg’s CBD would be given further energy and initiative through the decking project. Feasibility studies have been received by council and the project is being studied by what has been called the Decking Working Group, finalizing the first draft business plan. Council has promised a further round of consultations later this year.

Keep Your Friend’s Close…

Keep your friends close, and your enemies closer. Sun-tzu Art of War. (~400 BC)

If certain commercial property consultants are to be believed this may be the way to go for Aggrieved Residents of Dunkeld, who penned an angry public letter last month.

The letter is a reaction to the proposed plans by Intaprop to make an Illovo Boulevard type incision through Dunkeld joining up with Rosebank. Reminiscent of the 2005 Dunkeld Village Association (DVA) objections to the Gautrain’s route beneath houses built in the early part of the 20th centuary. The DVA didn’t manage to bend the line of the Gautrain but they certainly intend to bend the line of Intaprop’s boulevard which some speculate will most probably carry on through to Cradock Avenue in Rosebank. There are of course other possibilities: at one end of the spectrum evolving the Bompas Road spine and, on the other, to mischievously speculate of a much grander scheme involving the area between Melrose Arch, Illovo and Rosebank.

As it turns out Intaprop have said that they had approached the DVA as far back as 2006. Their stated intention was to create a community scheme to ensure that the development is handled responsibly, but also to ensure that everyone benefits equally. Interestingly the DVA website at the time of writing is completely silent.

In VBGD Town Planners report Oct’2010 it is taken for granted that the Illovo Boulevard precinct plan will proceed straight through Dunkeld. In section 2.1 of the report it reads ”Initial indications are that the extension ofFricker Road southwardsinto Dunkeld is a likely eventuality.”  Intprop have admitted that “additional traffic that development would bring to the area was considered and the extension of Fricker Road was a logical solution.” The DVA was an active participant in the public participation process of Council to formulate the RUDF (Rosebank Urban Development Framework) and was also in support of the Fricker road link.”

In the Aggrieved Residents of Dunkeld letter the claim is made that: “Intaprop apparently tried to influence Joburg Council Planners to adopt a new Dunkeld Precinct Plan that would link the commercial areas of Illovo with that of Rosebank through a new boulevard.” No wonder some of the residents are hopping mad though perhaps some stand to gain quite handsomely.  Intaprop has pointed out though that “pressure was already mounting on the area in 2006 and many of the properties were already being used informally for business purposes. Many of the properties were being neglected and the area was deteriorating. We saw the need to create a plan and rules to ensure that development in the area is undertaken responsibly and in a similar way to what created the Illovo Boulevard node. The residents association (strong and powerful as it is) allowed the deterioration of the properties, the general decline of the public space and the business trading from many of these properties. It was clear to all that redevelopment was on the cards to revive and improve the area.” Explained Andre Gouws of Intaprop.

One area broker believes that it would be better for residents to “get into bed with the developers” like the Illovo residents who kept their ‘enemies’ close. This way they can “manage the process” as a broker suggests. Commentators also believe Illovo Blvd is a success and that it is that way because residents are very much involved.

The Aggrieved Residents of Dunkeld have compared Dunkeld to Upper Houghton which was declared a national heritage area, as it is a similar age to that of Upper Houghton. One can’t help wondering if one were to apply similar reasoning to say, Melville or Yeoville, what sort of public sympathy would there be?

What is uncertain is the intentions of council. One ought to consider that when developments of this nature take place, the developers are required to grow the infrastructure in the forms of roads, sewerage etc. If any of the development revolves around Bompas road, and it seems it will,  one would think that this can only be for best given the traffic congestion in that area.

There is also some debate as to Rosebank’s development. Some believe the area to be overdeveloped. The Aggrieved Residents of Dunkeld would concur, claiming that,  “The Rosebank Box and for that matter Sandton and the Illovo Point area have many hundreds of thousands of square meters of spare bulk capacity.” Rendering redundant the need to look further to Dunkeld for expansion. They do have a point given some of the massive development projects and future opportunities within Greater Johannesburg overall….not to mention the fact that with the onset of Gautrain and the BRT system requiring supportive commuter densities, additional bulk has effectively been granted to the node and along the spine that underpins its route. By this town panning logic though, it would equally perhaps seem reasonable to conceive of a parallel boulevard linking Illovo with Rosebank with scaled- down rights. The feasibility of such a land parcelling exercise is of course critical and under most circumstances probably out of range for the short-term, perhaps more suited to a 10-20 year time horizon. Ultimately the onus of any proposal is for the developer to be able to prove demand and feasibility.

Some positive spin-offs cited by one broker were the presence of 24hour security that usually comes with office buildings and the beneficial prices that owners can demand for their properties.

Looking back at similar situations in Johannesburg, the residents are possibly going to have to come up with a better strategy than “Heritage” to preserve their suburb in the face of development. It is also more than just about the age of structures; and motivating such status takes a lot of time effort and resources. Thinking back to Parktown and Melrose leaves one a little discouraged; and upper Houghton has the environmental advantages of being on a ridge, not to mention Herbert Baker designs, other famous architects of the time and legendary residents.

Developers wield great power and have favour and influence in municipal circles. They know where the red tape is and who’s who in the bureaucratic machinery.

As Trinculo from Shakespear’s Tempest famously puts it, “misery acquaints a man with strange bedfellows,” This may be the time for the Aggrieved Dunkeld Residents and the proposed developers to consider working out together what seems inevitable.

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Jo’burg Fights the Monster of Inner-city Decay

Defeating the monster of urban decay.

By 2000 the last psychological blow fell. One could argue that most businesses that were going to leave inner city Joburg had left by the mid 1990s. But when the JSE (Johannesburg Stock Exchange) picked up its skirts and strutted off to glitzy Sandton that was the symbolic blow that brought home the reality that the Joburg inner city was defeated. Something else had risen up in the inner-city, a monster fuelled by crime, public filth, building vacancy, taxi violence, car hijacking, municipal mismanagement and maladministration. A visionlessness and hopelessness pervaded the city. It would take more than one heroic blow to bring down such a monster. So what was once the commercial hub ofSouthern Africa, reaching its pinnacle, in the 1980s, the inner-city was hit by the flight of business to the northern suburbs.


Ownership has been among the blows to send the inner-city decay ‘monster’ into decline. By the time the JSE left, the mining houses and three banks (FNB, Standard and ABSA) had already resolved to stay and rejuvenate the city, this is where ownership really took root.  The Johannesburg Development Agency would be another blow to the doom and gloom providing initiative and vision. Throw in Business Against Crime and other civil initiatives and people began to believe.

By the time the Better Buildings Programme began the ownership was tangible. Alas BBP, an attempt by the city to take bad buildings and turn them into better buildings only achieved moderate success.  The process proved laborious, taking as long as two years to get one building through litigation and judgment.  Former Mayor Amos Masondo said: “It (the BBP) was hamstrung by factors such as the lengthy expropriation process, the screening of participants and the requirements to provide transitional housing to people who have been evicted,”. He said the BBP had been only moderately successful because of the lengthy expropriation process.

Now transitional housing, BBP’s biggest stumbling block, will be provided to current residents of buildings that will be refurbished by the specially formed Transitional Housing Trust (THT) which will manage the process.

The BBP has evolved into the Inner City Property Scheme (ICPS). In April this year Amos Masondo announced a new, arguably improved, scheme to deal with one of urban decay’s biggest symptoms: distressed buildings. The City ofJohannesburghas thus created a restoration solution, though driven by the private sector. A large portion of the City’s property portfolio will be transferred to the ICPS through a series of structured sale transactions. Unfortunately during the BBP years, since 2004, out of 130 rejuvenation projects in the inner city only 2% have come from black economic empowerment (BEE) investors.

ICPS plans to put this right. Again ownership is the dynamic since the ICPS plans to empower historically disadvantaged people by creating the biggest black owned inner-city property scheme inSouth Africa. The City retains ownership of properties until it is satisfied with the regeneration of those properties.  Participants in the Broad Based Black Economic Empowerment (BBBEE) transactions were selected through a Request for Proposal process, and are required to provide a minimum equity contribution of R 5 million. The city would ensure that the option to buy was exercised only once the dilapidated property had been refurbished. Watch this space.

Residential Real Estate Restoration

Another blow to the monster has been on the residential front. In a R41 million finance deal, Nedbank has backed the redevelopment of the existing nine-storey building at16 Frederick StreetinMarshalltowninto a modern residential apartment building!  Last year Nedbank provided finance for the R100 million redevelopment of an office building situated at29 Kerk Streetfor sale to Diluculo Investments on completion of the refurbishment. Although there have been swings and roundabouts.UrbanOceanfounders Alfonso Botha and Duan Coetzee had very lofty plans in 2004 buying up old office buildings with the view to turning the inner city into a stylish space to work, reside and recreate. But by early 2008, some ofUrbanOcean’s renewal efforts had stagnated, and upmarket housing diminished. But two years down the line in 2010 Aengus Property Management was administering more than 2000 trendy apartments in the city, many of these units were snapped up for the world cup last year. Most of APM’s buildings in the Braamfontein area are now being let out to young professionals working in the city and student tenants attending university at nearby campuses.

In June Jawitz Properties sold an apartment of 147m² in the historic headquarters of Barclays Bank at87 Commissioner Streetfor a cool R1,15m! CBD loft-style developments are comparatively more reasonable than the competition from the northern suburbs tempting the trendy set back to the city.

Then there is the Maboneng Precinct: opened with Arts onMain. What was originally a complex of five out-of-commission warehouses is now home to 28 sectional title studios and offices. Even the traditionally industrial south eastern node of the city is rejuvenating. Led by Jonathan Liebmann’s ‘Propertuity’ who is turning Fox Street, bordered by Main, Berea and Kruger, into a pulsating hub to live, work and play for artists, designers and other creative professionals.

And so there’s Main Street Life, a five-storey apartment building of 194 residential units, restaurants, a cinema, a theatre, a hotel and more. All very trendy and pulsing with life and activity. Liebmann is also redeveloping three other buildings in the precinct bringing the redevelopment value up to R100 million!

Investor Confidence

More recent news is the sale on auction of Entire city block (New Doornfontein) in the JohannesburgCBDfor R18.7 million. Thud, another blow bringing down the monster, investor confidence.  ABSA’s sprawling head office expansion of 50 000m² has boosted interest in the eastern side of town. This has had infrastructural improvement spin-offs for the whole area.

Infrastructure Renewal

Bringing the monster of decay to its knees has to have infrastructural initiatives: Previous sales type pitches for the city citing the proximity of rail links and the highways and buses has been met with indifference until now. The Urban Development Zone, (UDZ) covering an 18km² area east-west from Fordsburg to Jeppestown and north-south fromBellevueto the M2, has reportedly contributed R8 billion toJohannesburg’sCBDwith its proximity to transport hubs. Throw in the refurbished and new taxi ranks, Rea Vaya bus service, the Gautrain and both ends of the transport market are covered.

Of course the UDZ tax incentive is part of a national scheme to encourage inner-city renewal acrossSouth Africa, so Government must be thanked for that blow. The incentive offers tax allowances covering 100% of the total cost of property refurbishments over a period of five years, while new property developments can claim the allowance over 17 years.

Enter the Johannesburg Development Agency (JDA) and Central Johannesburg Partnership’s City Improvement Districts. CIDs are designed to improve services. Specifically geographical areas where property owners agree to pay additional levies for enhanced services, including security, cleaning and maintenance. The results are visible and office workers are remarking that they feel safer, with the new CCTV cameras and visible policing. Ellis Park,JoubertPark,Gandhi Squareand the Braamfontein Corporate Precinct have all seen impressive changes.

Fox street, from the Carton Centre toEloff Streethas undergone a stunning beautification project. Investments of this nature have got the ball rolling for further improvements and increased confidence in the inner city. Retail has picked up remarkably inKerk Streetafter its refurbishment. TheJohannesburgCity Halland theOppenheimerParkhave been appealingly upgraded reversing the wind of dereliction that had blown their way in the last decade.

It has been reported that infrastructural plans have been made for a mixed-use development to be known asStimela Squareat the corner of Sauer and Hall Streets, the historic old mining camp also known as Ferreira’s Camp. The plan is for it to be an attractive garden square with retail and residential buildings surrounding.

TheNewtowncultural precinct continues to grow asGauteng’s cultural hub. Johannesburg Metro Council has been a huge player here.  A further 35 000m² of retail space, called the Potato Sheds, as well as the 7 800m² Majestic office complex, of which The Majestic Hotel will be the last phase, are being developed in the area too. The development of Anglo Gold’s head office andAshantiare a notable presence inspiring investor and consumer confidence in the area.

Looking up toward Braamfontein, infrastructure improvements have revolved around 20 buildings in particular being converted into student accommodation for Wits university students. There has also been a spill over into Parktown where a nine block commercial development, The Hill Office Park, is currently underway. The expansion of Empire Road and the construction of the BRT station is already taking place.

So when you hear that a beautiful oldJohannesburgbuilding on the corners of Biccard and Stiemans Streets will be auctioned on the 28th of September you should expect to hear the sound of investors feet. Another is the old Stuttafords building on the corner of Pritchard and Rissik. Property is moving in the JohannesburgCBD.

On the 19th of August on the Joburg website the new Mayor of Johannesburg Parks Tau pledged to continue on the path of his predecessor and recommitted himself to the ICPS.  Time will tell if the Mayor and his co-workers have the political will to keep the momentum going, facilitating the demise of what was the monster looming over the city.

It’s clear that it’s taken many blows to send the monster packing. Now the mopping up is being done it’s clear it takes a team to get a city on its feet. Council can’t afford to sit back now. Infrastructure must never be allowed to fall into the state of disrepair of the 1990s. Maintenance with vision for even greater things is required.  With a Civil society prepared to go the extra mile and the residents of the inner city prepared to take ownership of their city, there will be investor confidence enough for Business to invest in and see buildings restored, maintained or even replaced.

JSE it’s safe now, all is forgiven, come home.

The Online Retail Redherring

A Red Herring is a fallacy in which an irrelevant topic is presented in order to divert attention from the original issue.  The saying arguably originates from the practice of escaped convicts using that nasty little fish to throw the pursuing bloodhounds off their scent. There are many other legends in this regard but what matters here is that the growing belief that online shopping is sapping shopping centre numbers is perhaps a red herring.

What we are faced with are some cold hard facts, turning to the IPD Retail Trends Report for the first quarter of 2011: Although there has been a decrease in shopping centre foot traffic over the last few years, individual spending has actually increased in nominal terms; although “in real terms people are spending less with each visit than they were five years ago.”

In essence despite consumer confidence renewal off the back of a confidence boosted December 2010 trading quarter, the first quarter of this year remains, in IPD’s words: “unexceptional”. The reasons are diverse.  Comparing the consumer confidence of South Africans prior to the world cup in 2010 to the present is certainly unhelpful at best and deceptive at worst.

South Africa’s economy expanded an annualized 1.3 percent in the second quarter, its slowest pace in almost two years.GDPgrowth eased from a revised 4.5 percent in the first quarter.  Now that hurts. But IPD reports that retail sales remained positive with a 5.1% year on year increase.  Could it be that the economic context has more to do with the drop in shopping centre feet, why then are some retailers pointing at online shopping?

The boss of Harvey Norman, Australia’s premier electronics retailer, Gerry Harvey, says local retailers are under threat from online stores “They don’t pay any taxes, they haven’t got any overheads, there’s incremental sales and that’s where they make their money. In the end they (retailers) just put up their hands and say I can’t stay in business,” he told ABC news.

But one needs to note thatAustraliahas a strong currency which is a major factor driving online overseas shopping, in that country.

Just out, the Price Waterhouse Coopers (PWC)Australiaonline shopping report says there has been a 13 per cent increase in the amount spent online last year, and predicts it will rise to $21.7 billion by 2015. PWC partner Stuart Harker expects growth in online shopping to outstrip the ‘bricks n’ mortar’ retail sector.  “Growth of mobile smart phones and the iPad where consumers are continuing to shop anytime or anywhere.” he said. “It is faster and more convenient shipping, you can now buy something and have it delivered within a week from anywhere in the world.” But Harker remained upbeat saying that local retailers can compete against online competitors. “It’s not all doom and gloom, if they embrace the challenge of a fully integrated channel they can really capture and retain current customers,” he said. So is there hope?

ECommerce inSouth Africahas been slow to get going compared to theUK,USAandAustralia.  World Wide Worx, a South African research company, indicates South Africans with Internet access grew by 15% from 2009 to 2010. A recent MasterCard survey regarding online shopping trends inSouth Africaindicated that 51% of the respondents did online shopping. One may argue that e-commerce is definitely still in the infancy phase inSouth Africa, but it’s growing. The same survey indicated that the number of users who make use of mobile phone access and thus using their phones to do online shopping inSouth Africahas increased considerably. This can be due to advances in cell phone technology and faster browsing systems.

Ignoring ecommerce is no longer an option and may present a threat to the retailer who does not keep up with trends. Consider the terms Complimentary and Supplementary. Rather than being merely threatened by eCommerce, retailers are under obligation to have an online presence to compliment their brick n’ mortar stores.  Online stores are open 24 hours a day, 7 days a week extending hours to supplement the sales process.  Many studies have shown that shoppers do their research in physical stores and then do their buying online, possibly skewing survey figures.  It’s probably happened to you.  If ‘brick ‘n mortar retailers don’t have an online offering, they may not be an option for many shoppers.

Questions crop up here as to whether it is better to add a company’s products to an online shopping facility, create an eCommerce facility or simply allow for ordering of products at its own website? With the amount of users of online shopping mall type facilities increasing, retailers can only benefit from such a move to complement and supplement their physical stores. Although at this stage, surveys indicate that South Africans still use the online shopping facilities mostly for consumer items such as DVDs and books.  Look n’ Listen and Kalahari being among the leaders.

According to Kevin Meltzer, co-founder of a self-service solutions provider Consology, SA’s biggest brands have yet to catch up with the expectations and needs of their consumers in the online space.

An example of the complementary/supplementary practice is Wal-Mart, a proactive e-commerce player, who may look to overhaul Massmart’s online presence. Wal-Mart, currently purchasing a 51% stake in Massmart for R16.5bn, will be providing the required global expertise as it ventures into areas outside its traditional trading formats. Other local traditional shopping centre tenants like Woolworths and Pick n’ Pay have already seen the need to compliment and supplement their business with online shopping sites, making their presence felt on the net.

An area that shopping centres can manipulate the online environment to their advantage has to be the issue of community. Consumers are far more prone to researching than in years past. Especially mobile consumers. By being present online instead of shunning it, puts retailers in the homes, cars and taxis of consumers. Most people still want that human contact and an over the counter experience that they trust.  The abovementioned IPD reports points out that larger centres in particular can transform themselves into entertainment destinations with restaurants and cinemas rather than maintain a pure shopping focus.

With every new trend there is resistance, but every new wave offers the opportunity for a great ride.
It seems that to see online shopping as a threat to shopping centres, could be a red herring throwing us off the scent of a foxy catch. What the trends show us is that online shopping can complement and supplement the whole shopping experience and still bring feet into South African shopping centres.

SandtonCity– in the news for all the right reasons.

When you’re getting it right the heads are up and it’s not just about size, and yes folks sometimes size does matter!

 Expanding the family

In November this yearSandtonCitywill expand by 30 000 square meters to 215 000 square meters, 144 000 being retail space.  Edgars is being upgraded as the flag ship store for Edcon to 12 000 square meters.  Edcon’s Jet Store is being reintroduced to the centre as well.

Truworths, the Foschini Group and Mr Price have acknowledged thatSandtonCity’s extension will be vital to their own growth plans. The Foshini group is doubling its trading area to 1,900 square metres. It will also be expanding American Swiss Jewellers, Markhams and adding a Donna Claire store to the line-up.

Throw in another 58 retailers and by year endSandtonCitywill have mushroomed like never before. Reinventing itself again, keeping its image fresh and exciting. The Bread Basket, Billabong, Nicci, Cameraland, Hydraulics, Marion & Lindie and Chefs n’ Icers are all recently revealing slick and sexy new store concepts and designs.

 Attracting the Glitterati.

Then just when you thought it couldn’t get better, adding to the already nearly 300 local brands represented, Sharon Swain, Centre Manager, announced that there would be an influx of international names too: Polish makeup house Inglot; Brazilian footwear brand Dumond, Italian clothing designer Carlo Pignatelli, Portuguese menswear designer Miguel Vieira and Kurt Geiger from New York. “Each of these retailers boasts a unique premium offering and their arrival brings the best of international trends to our local market.” Declared Swain.


You may well ask who’s behind all this. “The expansion ofSandtonCityis strongly retailer-driven. We’ve worked closely with our national tenants to bring the very latest and best retail concepts and designs to shoppers,” said Julie Hillary, general manager Sandton region, for Liberty Properties.  The redevelopment is being undertaken by Liberty Properties on behalf of owners The Liberty Group, which owns 75% and Pareto Ltd, which owns 25%.

 Going Green

The headlines continued in August with the announcement thatSandtonCity’s landmark expansion is being capped with a South African first: an environmentally-friendly climate envelope roof. Yes it’s true,SandtonCityis going Green. TheProtea Courtroof has been created with a product called Texlon.

Texlon is an innovative Green technology used worldwide and is being used for the first time inSouth AfricaatSandtonCity. The reason for its selection as a roofing material is its lightweight and environmentally-friendly climatic envelope. It is highly energy efficient, comprises of environmentally-friendly technology.

 Showing some love

But it’s not just about glitz, glamour and Green. Showing its intentions back in March when Earth Hour was celebrated,SandtonCityrevealed its warmer side when in conjunction with Mr Price Home 150 quality fleece blankets were donated to the children ofAlexandraTownshipas part of the Corporate Social Initiative programme.

The recipients were the Banakekeleni and Abangani E Nkosini homes caring for orphans and the elderly. In addition as part of the annual Sandton City CSI programme, a pledge was made to supply these homes with essential hampers during the course of the year to assist with the meeting of basic daily needs.

The future looks bright for a shopping centre that’s puts its money where its mouth is as a national retail icon, mindful of the environment and the greater good of the surrounding community. The world is  watching you SandtonCity.

Is there a pony in the room?

So you’ve  heard the story about the twins with opposite dispositions to a room full of manure? No? Well the pessimist looks at the manure gloomily and can only see a pile of dung. The optimist on the other hand casts the manure gaily into the air and intones: “with all this manure there must be pony here somewhere!”

So when we are faced with the prospect of  a specialist residential fund listing on the JSE our response  may have more to do with how we observe the manure in the room than anything else. And yes folks there is manure in the room.

TPNhave announced troubling stats indicating that “tenant payment behaviour has deteriorated for the first time in 24 months” Rental Payment Monitor Q2 2011.

To be precise they cite that “higher unemployment, high household debt and a substantial increase in the cost of electricity, fuel and food, all of which affect monthly expenses and hence the ability to pay rent.”  And yet there is a pony since they also point out that rental stock is lacking for the below R3000 and R3000-R7000 per month, brackets.

There’s more: International Housing Solutions (IHS) South African managing partner Rob Wesselo commented: “it has to happen sooner rather than later (a listing of a housing fund.), given that housing is the only sector of the broader SA real estate market where demand outstrips supply, particularly in the R200 000 – R600 000 market.”

(Wesselo) “Blames a lack of performance data from which analysts and fund managers can base profit and earnings forecasts” Financial Mail.  Again the ‘good news’ is that we haveTPNdoing just that, for example:

Tenants in the below R3 000 rental bracket are now the worst performing, with just 72% in good standing, (only 58% are in the Paid on Time category, while 18% are in the Did not Pay category). Unfortunately, tenants in the above R12 000 category are not faring much better with 74% in good standing (57% Paid on Time and 16% in Did not Pay). Tenants in the R3 000 – R7 000 category remain the best performing, where 83% are in good standing (70% Paid on Time and only 8% Did not Pay).

Yet the potential remains for enormous growth, since 68% of South Africa’s total population can afford housing priced between R250 000 and R700 000 according to the Affordable Land & Housing Data Centre. Yet only 14% of all new home registrations in 2010 fell into this category.

Wesslo does admit that rental defaulting and arrears in the affordable housing market are cause for concern among potential investors. “However, if you build the right product and manage your portfolio well, arrears and vacancies can be kept to a minimum” he told the Financial Mail.

But just when you thought it was safe, enter the Consumer Protection Act. Among other things the CPA allows the tenant to terminate a lease, at will, with only 20 business days notice, despite an appropriate penalty.  This leaves the landlord with a cash flow impact as levies and mortgages are owed. Throw in the Municipal Act , – though not done deal, and investors feel weak at the knees.

But Jeffery Wapnick from Premium Properties sees a Pony. Premium Properties owns some 2000 units in inner cityPretoriaandJohannesburg. Wapnick reckons that there are few risks involved with Residential and Retail, and other sectors.  Premium Properties experience has been that the eviction and replacement of Defaulting residential tenants is simpler that corporate ones.

So how far are we to realising a housing focused fund on the JSE? Well that brings us back to Jeff Wapnicks Premium Properties where only 40% of the fund covers residential market. There was the Kwami Residential Fund in late 2010, which Gerald Leissner (CEO of ApexHi Properties) said at the time that he was unable to put together a portfolio of sufficient capacity and liquidity to attract institutional investors.

Are we are just not ripe for such investment.  Or is there a lesson to learn from theUShousing funds. TheUStoo has a market for affordable residential rentals. And despite the economic down turn, Housing Fund Equity Residential, aChicagobased Standard and &Poor 500 member has a market cap of R125bn.  That’s almost the size of  the whole of the SA listed property sector in total.

Regardless, squinting back at some detail:  according to theTPN’s Rental Payment Monitor Q2 2011: the best performing Tenants in Good Standing are in theEastern Capeat 87% (71% Paid On Time, 16% Paid Late) whereasGautengis the worst performing province with only 75% of Tenant in Good Standing.  That could help you see where the manure is. On the other hand (IHS’s) nearly R2Billion SA Workforce Housing Fund has all the potential of listing with it’s offshore private equity investors partnering to develop 35 000 residential units by December 2011. There must be Pony here somewhere.

Weeding in Waterfall

Having lived in Johannesburg for 30 years, moving to the thriving metropolis of Waterfall was quite a change of scenery. I loved the fact that I lived in an area named after physical features that actually existed in the area, (Apparently there are 7 waterfalls in Waterfall.) as opposed to Parkhurst where there are no parks and certainly no hurst.

Our garden borders a little gorge created by the Nkutu River. There are three waterfalls at the bottom of our garden. My two small daughters and decided we wanted to find the source of that beautiful sound of rushing water. Thus began the required process of clearing the vegetation between us and river. At my previous residence in Johannesburg I had been used to extracting weeds with a small polished fork (with a quaintly mounded orange handle for comfort) and depositing the said weeds with gentle rhythm and small sighs into a black bag which was inoffensively sent out with the garbage each week. Imagine my horror when I opened my back door on a fateful Saturday morning to the roar of half an acre of Waterfall’s six foot high Lantana, Triffid and Mexican Sunflowers. My small fork fell from my hand with a whimper, prongs disfigured like lukewarm spaghetti as I examined my bleeding hands, this after my first failed attempt at removing a spikey Lantana stem.

I have learnt many things about weeding in Waterfall since those virginal days, I became equipped with a most formidable device which became a faithful companion as I cleared my way to the Waterfalls over those many adventurous months: a mighty Cane Cutter. So I tell you all this oh gentle reader for one reason. Alas my cane cutter has expired after years of good service. But do you think I can find a single cane cutter in a hardware store in the Upper Highway area. No, only those bendy long blades for veld or tiny little pangas. If anyone can tell me where to find a decent size cane cutter I’ll gladly send you my old weeding fork with the quaintly moulded handle.

Course Excerpt: introducing the difference between Greek and Hebrew thinking.

Appendix 2

Hebrew and Greek language reflects their respective worldviews…

 Since our contemplations in this course come largely out of what some may refer to as an Hebraic (Hebrew) worldview as opposed to an Helenistic (Greek) one it may be worth considering the about-turn in this part of the course where we are examining a scripture more analytically.

Some simple examples concerning language may help us understand why we consider these to be different paradigms. In the Biblical world, past and present, two major cultures emerge and hence have influenced our thinking and methodology: the Hebrew and Greek. Both of these cultures view their surroundings, lives, and purpose in ways which would seem foreign to the other. With the exception of a few Bedouin nomadic tribes living in the Near East today, the ancient Hebrew culture has largely disappeared.

What happened to this ancient Hebrew thought and culture?

Around 800 BCE,  new worldviews arose to the north of Israel. These paradigms began to view the world quite differently to that of the Hebrews.  Around 200 BCE the Greeks began to move south causing a coming together of the Greek and Hebrew culture. This was a very tumultuous time as the two vastly different paradigms collided. For over 400 years conflict of cultures finally led to Hellenistic (Greek) domination, virtually eliminating all trace of the ancient Hebrew worldview. Greek thought then in turn became the greatest influence in the Roman Empire and thence European cultures to emerge and similarly in European Colonial empires even the modern Hebrew culture in Israel today.

As 21st Century South African Christians we may be tempted to read the Hebrew Bible as if a 21st Century South African had written it. In order to understand the ancient Hebrew culture in which the Tanakh[1]  was written, we must examine some of the differences between Hebrew and Greek thought.

“Abstract vs. Concrete” thought

Greek thought views the world through the mind (abstract thought). Ancient Hebrew thought views the world through the senses (concrete thought).

Concrete thought is the expression of concepts and ideas in ways that can be seen, touched, smelled, tasted and/or heard. All five of the senses are used when speaking and hearing and writing and reading the Hebrew language. An example of this can be found in Psalms 1:3; “He is like a tree planted by streams of water, which yields its fruit in season, and whose leaf does not wither”. In this passage we have concrete words expressing abstract thoughts, such as a tree (one who is upright, righteous), streams of water (grace), fruit (good character) and a unwithered leaf (prosperity).

Abstract thought is the expression of concepts and ideas in ways that can not be seen, touched, smelled, tasted or heard. Hebrew never uses abstract thought as English does. Examples of Abstract thought can be found in Psalms 103:8; “The LORD is compassionate and gracious, Slow to anger, abounding in love”. As you noticed I said that Hebrew uses concrete and not abstract thoughts, but here we have such abstract concepts as compassionate, gracious, anger, and love in a Hebrew passage. Actually these are abstract English words translating the original Hebrew concrete words. The translators often translate this way because the original Hebrew makes no sense when literally translated into English.

Let us take one of the abstract words above to demonstrate how this works. Anger, an abstract word, is actually the Hebrew word   (awph) which literally means “nose”, a concrete word. When one is very angry, he begins to breath hard and the nostrils begin to flare. A Hebrew sees anger as “the flaring of the nose (nostrils)”. If the translator literally translated the above passage “slow to nose”, it would make no sense to the English reader, so ” awph “, a nose, is translated to “anger” in this passage.

Appearance vs. Functional Description

Greek thought describes objects in relation to their appearance. Hebrew thought describes objects in relation to their function.

A deer and an oak are two very different objects and we would never describe them in the same way with our Greek form of descriptions. The Hebrew word for both of these objects is    (ayil) because the functional description of these two objects are identical to the ancient Hebrews, therefore, the same Hebrew word is used for both. The Hebraic definition of    is “a strong leader”.

A deer stag is one of the most powerful animals of the forest and is seen as “a strong leader” among the other animals of the forest. Also the oak tree’s wood is very hard compared to other trees such as the pine which is soft and is seen as a “strong leader” among the trees of the forest.

Notice the two different translations of the Hebrew word    in Psalms 29.9. The NASB and KJV translates it as “The voice of the LORD makes the deer to calve” while the NIV translates it as “The voice of the LORD twists the oaks”. The literal translation of this verse in Hebrew thought would be; “The voice of the LORD makes the strong leaders turn”.

The Message makes full use of this license with: GOD’s thunder sets the oak trees dancing A wild dance, whirling; the pelting rain strips their branches. We fall to our knees–we call out, “Glory!”

When translating the Hebrew into English, the translator must give a Greek description to this word which is why we have two different ways of translating this verse. This same word is also translated as a “ruler” in 2 Kings 24.15, who is a man who is a strong leader.

Another example of Greek thought would be the following description of a common pencil: “it is yellow and about 8 inches long”. A Hebrew description of the pencil would be related to its function such as “I write words with it”. Notice that the Hebrew description uses the verb “write” while the Greek description uses the adjectives “yellow” and “long”. Because of Hebrew’s form of functional descriptions, verbs are used much more frequently then adjectives.

Impersonal vs. Personal Description

The Greek culture describes objects in relation to the object itself. The Hebrew culture describes objects in relation to the Hebrew himself.

As in the example above of the pencil, the Greek description portrays the pencil’s relationship to itself by using the word “is”. The Hebrew describes the pencil in relation to himself by saying “I write”. Because Hebrew does not describe objects in relation to itself, the Hebrew vocabulary does not have the word “is”.

A Greek description of God would be “God is love” which describes God in relation to God. A Hebrew description would be “God loves me” describing God in relationship to myself.

Passive vs. Active Nouns

Greek nouns are words which refer to a person, place or thing. Hebrew nouns refer to the action of a person place or thing.

The Hebrews are active people and their vocabulary reflects this lifestyle. The Greek culture recognizes the words such as a knee and a gift as nouns which by themselves impart no action. But in the Hebrew vocabulary the nouns come from the same root word, because they are related, not in appearance, but in action. The Hebrew word for knee is (berak) and literally means “the part of the body that bends”. The Hebrew word for a gift is (berakah), meaning “what is brought with a bent knee”. The verb from the root word is (barak), meaning “to bend the knee”. As you can see, both Hebrew verbs and nouns have action associated with them where the Greek nouns do not.

Even the Hebrew nouns for father and mother are descriptive of action. The Hebrew word for father is   (av) and literally means “the one who gives strength to the family” and mother   (em) means “the one that binds the family together”.

The Old Testament needs to be studied with this language and culture in mind. In the New Testament we need to apply ourselves differently keeping in mind that  it was largely written by Hebrews, though in Greek. The Analytical Greek mindset is not misplaced in digging out the hidden nuggets of New Testament in my opinion.

{For more information please feel free to contact me. I would be happy to expand on the subject of the influence of Greek and Hebrew and related topics.}

[1] Tanakh (Hebrew: תנ״ך) (also Tanakh, or Tenak, is an acronym that identifies the Hebrew Bible. The acronym is based on the initial Hebrew letters of each of the text’s three parts:

1. Torah תורה meaning “Instruction”. Also called the Chumash חומש meaning: “The five”; “The five books of Moses.” Also called the “Pentateuch.” The Torah is often referred to as the law of the Jewish people.

2. Nevi’im נביאים meaning “Prophets.” This term is associated with anything to do with the prophets.

3. Ketuvim כתובים meaning “Writings” or “Hagiographa.”

Golf: who needs a ball anyway?

I’ve never understood why people watch golf, especially on television. I do understand why people play golf. In South Africa I can categorically state that our most manicured stretches of landscape are our golf courses. For those elsewhere in the world I would imagine to some degree that is true for you to too. This on it’s own is reason enough to, at least pretend to play the game and simply enjoy the walks and scenery.

I recall the comedian Jasper Carrot referring to all the camera crew covering golf tournaments as being ex World War II search light operators. “Hours and hours of televised sky!!” He said. I agree, what a bore, all that fuss about a little ball going into a little hole instead of into strategically placed sand pits and ponds. Then in a desperate appeal to people drawn to that other exhilarating sport, bird spotting, they have chosen to use the names of the creatures that represent the only genuine action camera crews ever actually see. I suppose we should be grateful that instead of terms like birdie, albatross and pigeon, or whatever it is, someone didn’t end up calling shots cumulonimbus, cirrocumulus and cirrostratus.

There was once a man, who wishes to remain anonymous, who by reason of circumstance acquired a lone golf club. He lived near to a municipal golf course, not one of those “stuff-the-poor” places, outside which are parked cars that might as well have “stuff-the-poor” bumper stickers on them. This golf course was small and not as well kept as those other more ostentatious institutions reserved for a handful of elite martini sippers who speak and say nothing for so long it just sounds like; “stuff-the-poor darling”, “stuff-the-poor my brother” or “my good man, stuff-the-poor.” Well anyway it wasn’t one of those courses.

It was a lovely day and lets give anonymous a name, how about Garth? Well Garth is very fond of wide-open spaces and enjoys hugging trees and talking loudly to himself. At last he had the excuse to prance about a golf course. Just one snag Garth though, large and gormlos, has never been very sporty. Garth can not play the game required for him to partake in a beautiful day in the wide-open green grass and trees. Ag shame. (If you’re English; oh tut. If you’re American; oh that’s too bad. If you’re an Aussie; aaaaa.)

However Garth is not as dim as he looks, he decided that it was not necessary for him to know how to play since he would not make use of a ball. Golfers, he had observed acquired great rage as a result of this ball and caused many people to get fibersitus in their necks from spending too much time looking at the sky. Garth decided he would pretend to play and walk about with great authority and pleasure like one of those golfers on television. Garth imagined what those golfers must have been saying to themselves when striding about looking concerned as to the whereabouts of the ball they’d hit so hard that it was rendered invisible. “Ho ho” Garth imagined their chuckles as they contemplated all those silly people giving them so much money to hit a ball around a big park.

Garth stirred great curiosity that day among the amateur golfers at the humble course. He donned his finest braces and floral hat that he usual kept for weeding the garden. In leau of plus fours he tucked his trousers into his odd socks and beamed at his new found fellow sports men. Garth has a portly frame and requires regular provender so as not to get giddy. He decided to bring some meat pies to celebrate his virgin golfing experience. What a grand moment as he put down his pies and swung at the imaginary ball. Taking a handsome bite of pie he notice a quizzical face at his elbow. “What’s a good score?” he enquired of the face. It gave a figure. “Would you mind writing that down for me?” Garth said baptising the face with flaky pastry, “I am with pie.” He explained. The face graciously obliged though not without concern.

At the end of the morning Garth had had enough and deposited his impressive golf card at the humble golf club building and trundling home kicking an orphaned white ball down the street. He was seemingly oblivious to the bewildered faces of those he had left behind.



The Kingdom Of God was, is, is delayed and not yet.

Dear Bob,

You really are a silly sausage going off like that at the end of the service. I appreciate the dilemma you are in given your theology but lets try and unpack some of what happened and why. I’ll be the first to admit that Agatha Murgatroid leaping out the window like that was most irregular but sometimes people have an eccentric reaction to the movement of the Holy Spirit. I do so want to share with you the theology underpinning what you witnessed. As for the ‘Holy Spirit Prayer’ I’m really excited about showing you how we come to the place of praying like that. It’s all rather boringly orthodox when it’s laid out though – it’s not at all like saying abracadabra or something. Remember how Basil used to say how “you’re smoking your socks” when we got into those debates with the guys from theFirstChurchof the Wealthy and Prosperous.  So let’s be civil, old sausage and try and work our way through some of the Kingdom Theology that is the foundation of our churches practices best we can. Sorry if this all seems rushed but I’m boiling an egg and I do prefer a soft one.

Rather than getting bogged down in cessationism and signs and wimbers (good one hey!) and all that how about looking at some of the Old Testament roots of the Kingdom. That’s what we’re talking about here, an expectation that theKingdomofGodcan be manifest in our time. It’s out of that place that we announce- ‘Come Holy Spirit’ which is essentially rooted in the Lords prayer. Bob before you read on look at Luke 11: 13 “If you then, though you are evil, know how to give good gifts to your children, how much more will your Father in heaven give the Holy Spirit to those who ask him!” If you lay all this before the Lord right now what’s the worst that could happen?

Lets consider for a moment what Jesus himself believed about theKingdomofGod. Jesus didn’t just teach or share anecdotes about the Kingdom but was demonstrative. Some people like to use the phrase: “the words and the works of Jesus.” I think this is helpful since Jesus seemed to announce or proclaim the Kingdom and then respond to people’s faith oftentimes – an expectation if you will, performing works – demonstrating theKingdomofGodas a present reality.

In Luke 4:16-21 Jesus unscrolled Isaiah[1] (not him the scroll) declaring that the prophesy was fulfilled. This quote from Isaiah is part of the promise that God Will Reign, God himself, the King would come. He would break through into Israel’s history as He had done before.

Bob, have you noticed how much ‘royal language’ there is in scripture: dominion, throne, crowns and so on? Well we could get into all of that before Exodus but the Exodus gives us such a clear picture of what sort of God we serve. He’s a God of confrontation. He’s sovereign. He interrupts the course of history to fulfill His promises and liberates us from the mess we get ourselves in or others put us in. The model for us is in the ‘Exodus event.’

In Exodus 3 God appears to Moses in a burning bush. God reminds Moses of His covenant with the Israelites by referring to Himself as the God of Abraham, Isaac and Jacob. He explains that He has heard the Israelite cry for help. Remember these were a people gravely oppressed. So we are let in on the character of God a little here: God is a god who intervenes in the world of men to fulfill His purposes. In this case to fulfill His covenant to Abraham. God commission’s Moses to be His representative to Pharaoh and  insists that God’s people be set free. God is announced by the use of His name, I AM.

Now pay attention here Bob because this is a vital key to this whole soap opera. Bob you know how important names are in the Bible – they encapsulate so much and certainly among the Hebrew people they are like calling cards. Well God’s name teased out means more than I AM as in Exodus 3:14. If you look at your footnote in your Bible, I know you use the NIV it says I WILL BE WHO I WILL BE[2]. You can take this further using G. R. Beasley Murray’s help from the first chapter of his Jesus and the Kingdom of God. The name of God reveals an astounding characteristic of God Himself. He intervenes in the lives and doings of men and women. He makes Himself present. His name could be cited as “the I was, I am and I will be, from generation to generation, the becoming present one, coming down into the situation of man to deliver and transform from bondage to liberty. “ If you spend some time processing Ex 3:7-15 and 6: 2-8 the Divine Name of God is revealed this way.  I just love that way of reflecting on God’s name.[3] Think of all the songs with the word Hallelujah in it, yes like the one in the Mr. Bean sketch. Hail to the Becoming Present One. It’s like what you always refer to as the Our Father: “Our Father, Who is in Heaven Hallowed be Thy Name.”

This announcement revealing the nature of God to the Israelites, has the supernatural consequence of expectation. Doesn’t faith come by hearing the Word of God? Romans 10: 17. Imagine the message of hope this must have been to these oppressed people. God had not forgotten His covenant with their Forefathers. This is part of the invisible or spiritual battle. Bob we live in a materialistic culture where we’ve got it all the wrong way around. Eugene Pietersen quote’s G.K. Chesterton as saying: …there are two kinds of people in the world: When trees are waving wildly in the wind, one group of people thinks that it is the wind that moves the trees; the other group thinks that the motion of the trees creates the wind.”[4] EP goes on to point out how Chesterton observed that a new breed of people had emerged who blandly hold that is the movement of trees that creates the wind. “ The consensus had always been that the invisible is behind and gives energy to the visible; Chesterton noticed how in his time (turn of the 19th to 20th centuries) the majority had begun to assume that the visible accounts for the invisible. This is common paradigm among those in the church who shun the presence of supernatural phenomena in their midst. In Exodus the model we see how ‘the wind moves the trees.’ So the political and military power that oppressedIsrael had to be defeated in the invisible world – spiritual if you will. Hence God’s judgment on the gods ofEgypt by use of plagues. One example would be how the Egyptians worshiped theNile god H’pi:  the ‘god of fertility’ turned to death (blood). Finally the historic worship of  Pharos as divine was judged by the death of his first born son. God’s reign in the invisible precipitated event in the visible.

The consequence of the victory in the invisible translates into the visible. The military that enforced the political power of Pharaoh was defeated. To quote Miriam’s song: “the horse and rider he has hurled into the sea.” Ex15:1bIsraelwas finally delivered from bondage. God the King had revealed himself in name, announced by Moses, building an expectation and a hope. God sovereignly confronted, judged and defeated the invisible forces that heldIsraelin bondage and the result is the defeat of the visible – God demonstrates that He is King and He brings His Kingdom here on Earth as it is in heaven. (This model remains consistent throughout scripture.)

This is confirmed in how the people ofIsraelrespond to God. Miriam’s song uses God’s divine name eleven times. The song is not only a song of celebration but of liberation by  the I Am of Israel – the ‘ever becoming present one’, as revealed by his name, announced by Moses and demonstrated by signs and wonders and the resultant victory and liberation. The people confess that “The Lord Will Reign forever and ever” Ex15:18. That is to say: “Our Lord is King.” For after all, it is a King who reigns and His Kingdom brings liberation.

Similarly Jesus is the fulfillment of theKingdomofGodas he spoke with an authority greater than that of Moses. Matthew 21:23-27  God again would intervene in history for all people: Jew and Gentile alike. There would confrontation with Satan himself as Jesus would demonstrate His authority over demons, sickness, sin and death and the elements –  finally defeating the Devil and liberating mankind from the bondage of sin and death.

There are other ‘pictures of the Kingdom’ in the Old testament: the Sinai covenant, the invasion of Canaanand the rule and reign of David and Solomon. In these circumstances the people of Israelconfessed that their God reigns. However as consistently more sinful generations of Kings led to the judgment of God through the oppression of heathen empires, that refrain changed to The Lord Will Reign, Our Lord Will be King. Isaiah and Daniel in particular reveal the growing expectation through the centuries of exile. This expectation continued through the intertestamental period resulting in some desperate imagery.

It would be to our benefit to consider what those expectations were since this reflects what Jesus taught and demonstrated here on Earth.  At this point let me introduce a term you would be familiar with I’m sure: Eschatology. Since Eschatology is the study of last things, in the context of the Kingdom it’s the study of the intervention of God’s kingdom at the end of the world as we know it – the end of the age or end of history. The eschatological nature of books like Daniel and Isaiah have a distinct ‘Kingdom’ flavour. Apart from their partial fulfillment in the time of Ezra and Nehemiah these prophetic words teem with words about how God will fulfill His promises of the Kingdom to come just as He had fulfilled the promises in their own time. However this New Age to come would be like none other before it: God won’t just send someone He would come Himself Is35:4; He would save his people 45:22; He would comfort His people Is 40:1; He would reveal His glory Is 4: 5-6; Is 60:19-20; The King would come  Is 4:2; 32:1 and  rule with justice Is 32: 16-17; 33:5 and establish his covenant 42:6; 55:3;  ministering as God’s servant 42:1-9. The Spirit would come Is 32:15 and 41: 16-17. Salvation Is12:2-3, forgiveness and healing 33: 24, 43: 25 liberty for the prisoners 29:17-19, peace 32:15-16, resurrection of the dead 25: 8, joy and praise 12:3-6; 42: 10-13 would all come.  A new nation from all the world’s peoples both Jew and Gentile in a new Jerusalem would be formed Is 2:2-4; 33:20-21;11:11-12; 60:3-4. There would be a New Order: a day of Judgment 2:12-18; 24:1-13;23: 17-22; 66: 24. A New heaven and new earth 65:17, 66:22-23. All this would come at the end: in the ‘latter days’ or the ‘Day of the Lord.’

In the Exodus event discussed earlier God acquired a people for himself and established his covenant with them. The promised land and all its benefits were only achieved during the time of David and Solomon a golden age revealing and fleshing out, if will of the concept of Shalom: the all encompassing peace and prosperity. Isaiah’s view of the Kingdom to come came via this perspective. His expectation was extravagantly more utopian than had been experienced during that Golden era.

When Jesus came he did so announcing the Kingdom in the context of the expectation of the promises of the Kingdom. He used the language of the book of Isaiah. Jesus introduces his ministry with the previously mentioned quote from Isaiah, recorded in Luke 4:16-19 (Is 61:1,2). Jesus particularly intimates the concept of the year of Jubilee found in the Mosaic law – herein communicating the arrival of an age of liberation – in him. Matthew 11: 2-9 renders this account: “the blind receive their sight, the lame walk, those who have leprosy are cured, the deaf hear, the dead are raised and the good news is preached to the poor.”

In John6:35Jesus quotes Is 54.13 “They will all be taught by God.” Jesus saved people Luke 7:50; pronounced the shalom of God: Luke 24:36; Glory began to be revealed: John1:14and in Luke 2:9; Jesus said that theKingdomofGodis among you Luke17: 20-21.

Further to this Jesus spoke of himself as the Son of Man. Herman Ridderbos puts it like this: “It may be said, therefore that the messianic character of the Kingdom of heaven preached by Jesus is determined by the central place occupied by the Son of Man in the coming of the kingdom.” [5] (Sounds awfully stern about it but he’s quite pithy old Ridderbos.) Going back to the promises of the Kingdom in the prophets we look now at Daniel. In Daniel 2 we see emerging a kingdom not of this world that will obliterate all other kingdoms. In Ezekiel 1:26 we see a divine figure emerge and Daniel 7 reveals this in full as both a corporate and individual figure. So when Jesus announced himself as the Son of Man the Hebrew expectation was aroused, this is the individual who will bring the Kingdom of God. Paul uses similar logic in his discourse to the Corinthians in 1Cor 15:45-48 referring to Adam the first man and Adam corporately, that is mankind[6]. The key here is expectation, the Hebrew people had put their hope in the promises of Kingdom to come, a King, the Son of Man would come and reign. The Lord will be King!

The Kingdom that Jesus announced outstripped what even the prophets expected. John reveals Jesus as the first and last 2:8 using the word eschatos referring to the end of of the world and final judgment of God. Since the Day of the Lord is the end, and Jesus is ‘the end’ or eschatos –  when we come to Jesus we meet our destiny our final Judge. Wherever Jesus went he brought the end into the present. Bob when you gave your life to Jesus all those years ago back at the sardine filleting factory – you met your end, your final judgment! (Now tell me that sardines will ever look the same to you – those were sardine you were filleting weren’t they Bob?)

The end contains all those elements of the Kingdom to come promised in Isaiah. But this is a mystery for us to fathom.[7]  One could say that Jesus’ worldview was one of two ages. A present and a future age. We must go back to our word Eschatological. If the Kingdom promised is of the end, the Kingdom is eschatological. In His Olivet discourse (Matthew 21-25) Jesus tells his disciple that the Kingdom will come as some future cataclysmic event. Paul chose this theme in the epistles in 1 Thess 4:13-5:11; Revelations 6:15-17;19:11-16. In the endRev 11:15 we see the classic phrase sung in many a songs: “the kingdoms of the world have become the kingdom of our Lord and of His Christ and he will reign forever and ever.” (I know you love playing the bag pipes to that one.) Jesus taught his apostles that there would one day be a final fulfillment in a final intervention by God. We too are expecting that the Kingdom is yet to come.

However with equal emphasis Jesus taught that the Kingdom had indeed come! (No wonder the disciples had some awkward moments.) Luke 17: 20-21 “The Kingdom of God is among you.” Jesus brought Daniel 2’s Stone forcefully into the present in what seemed ahead of time. Matthew 11:12. Demons were cast out and seemed surprised that Messiah had come so soon. In Matt 8:29. It seemed that this intervention by God, this King ignored the political tyrants of the day and had bigger fish to fry – the invisible was under attack. The visible manifestations overflowed the vessel of that which was prophesied by Isaiah. Matthew 11:11—15 reveals the passing of the baton of the history to Jesus. Luke 7: 21-28 reveals the punctuation of the period. Malachi’s prophesy of the coming of Elijah to announce the expected Messiah was fulfilled. So between the birth, ministry, death and ascension of Christ with the outpouring of the Spirit at Pentecost we see the Kingdom has come.[8]

So where does this leave us: Jesus taught with ‘razim’: mysterious sayings. In parables like the parable of the virgins who were foolish in the absence of the delayed bridegroom. The parable of the talents too speaks of the Kingdom being delayed. In Matthew 24: 30-37 the Son of Man comes after the tribulation a future event. In fact in the Luke 19: 11-27 rendering of the parable of the talents Luke says this was taught for the very reason that people believed that the Kingdom had already come in its entirety.

Finally Jesus used enigmatic language in Mark 1: 15. When He says that theKingdomofGodis at hand. It was near and some would suggest in the sprit of Mark’s pithy busy gospel that the phrase suggest the immediacy of the Kingdom. This may help us with Matt10:23 and Luke 21:32 referring to the disciples generation not passing away until the Kingdom had come.

So one may feel legitimately befuddled by such a conundrum without some Holy Spirit assistance. [9] I rather like Augustine of Hippos comment speculating the motive of God in this.[10]

This mysteriousness should not surprise us since the prophetic works this way. How else do we explain the fulfillment of prophecy both within the times of the Old Testament prophets and in the coming of Messiah. The immediacy and future nature of this scenario did not seem to trouble the prophets. Clearly God breaks though successively throughout the Old Testament and then promises to do so in the future. Jesus continues in this vein, be it unexpected in it’s extent. GE Ladd refers to this as the presence of the future in his book by the same name.  “Inaugurated Eschatology” and “living between times” are also phrases intended to help us with grasping this.

This leads us to Pentecost. Hadn’t Isaiah and in particular Joel announced the expectation of an outpouring of the Spirit? “When Peter interpreting the Pentecost outpouring on the basis of the citation from Joel Act2:16, characterises what is occurring as that which happens “in the last days” this likewise means that the present days are already “the last days” and that they are preliminary signs of the end.” Page 156 OC. The eschatological phenomena prophesied by Joel in2:28-32 speak of the end events. Jesus’ Olivet discourse comes to mind and Revelations 14:14-20. Peter stands up confidently on the day of Pentecost and announces that Joel’s prophesy is fulfilled (Acts2:16). Again the future age penetrates the present age. When we experience the phenomena that comes with the manifestation of the Holy Sprit we receive {Message translation of Ephesians1: 13-14} Since we have not received our resurrected bodies yet – the powers of the future age are a shock to these mortal frames. (This may explain poor Agatha’s behavior.)

Jesus commissioned the seventy in Luke 10: 1-9. In Matthew 28:16-20; Luke 24:45-49 coupled with Acts 1:1-11 and John 20: 19-23 Jesus recommisioned the disciples post resurrection. This commission is passed down through all generations of the church until Christ comes. We are to expect God’s intervention in history, into human lives similar to the day of Pentecost and successive breakings in of the future age into the present.

Jesus Christ Messiah and King (Mk12:35-37); Matt12:42) Luke19:28-44) announced the Kingdom – these announcement were events. When He spoke events occurred as he proclaimed that which was promised culminating of the future in the present. The sick were healed, lame walked, deaf heard, sinners forgiven, demons driven out, dead raised and so on. All the elements of Isaiah’s promises of a future Kingdom demonstrated in the present. Jesus announced and proclaimed the Kingdom. Often referred to as ‘the words of Jesus’. Then the Kingdom came manifesting a form of life yet to come – demonstrated, ‘the works of Jesus’.

Bob you may ask how we should do these ‘works of Jesus’? Jesus taught us how to pray: Matt 6. “Our father in heaven, hallowed be your name, your kingdom come your will be done on earth as it is in heaven.” In order to pray this prayer with the expectation that the announcement of it proclaims requires Biblical revelation confirmed by eyewitness testimony – experience.

As we contemplate the pictures and promises of the Kingdom and allow the Holy Sprit to bring revelation of the heart and the intentions of Our Lord we begin to be able to grow in out expectation of the Kingdom in the here and now. So when you hear someone pray ‘Come Holy Spirit’ or the Holy Spirit Prayer we are praying nothing other than: let your Kingdom come” empowered in the context of Pentecost. The process springs from a life of private prayer and study of the scriptures manifesting briefly in this public prayer/announcement.  From there we rely on the sovereign will of God to manifest His presence, manifesting the future age here in the present. The Kingdom come.

So Bob my egg is ready and must have breakfast before the Kingdom comes (a little Kingdom Humour there.) so let’s conclude: Jesus came fulfilling the promises of the prophets permeating this age with the age to come. Jesus demonstrated this by fulfilling the promises that God, the King would come and serve, forgive, heal, cast out, take authority and save. He did this as the Son of Man promised in Daniel; as the suffering servant promised by Isaiah as God confronting the evil forces that bind up God’s people – intervening and setting them free. Whilst not completely fulfilling what had been promised all element of promise were wrapped up in Jesus the end, the Eschaton bring the Judgment of man upon himself and defeating death by resurrecting as the first fruits redeeming all mankind that will believe on him. Jesus fulfilled the expectation of the prophets and ascending into heaven His Holy Spirit came upon the Church at Pentecost empowering them for service. His commission to them is the same for us to day – to preach the Kingdom to all people until He returns. The church lives in the tension of being empowered by the age to come whilst dwelling in this age. So dear Bob: “Seek first thekingdomofGod.” And you too may see old ladies flying through windows.


Oscar Cullmann, Christ and Time,London: SCM, 1952.

George E. Ladd, The Presence of the Future: The Eschatology of Biblical Realism,Grand Rapids: Eerdmans, 1996, ISBN: 0802815316.

Herman N. Ridderbos, The Coming of the Kingdom,Philadelphia: Presbyterian and Reformed, 1962, ISBN: 0875524087, or Grand Rapids: Baker, 1962.

Eugene H. Peterson, Christ Plays in Ten Thousand Places; a conversation in spiritual theology.Grand Rapids: Eerdmans 2005 ISBN 0-8028-2875-2

St. Augustine, City of God; against the Pagans (Translated by Henry Betterson) Penguin Classics 1972 (First published 1467)

[1] St Augustine City of God Penguin Classic 1972  I rather like Augustine’s comment about Isaiah being one of the Evangelists: “Now Isaiah in the course of his arraignment of wrong and his teaching …..made many more predictions about Christ and the church, that is about the King and the City which he founded, so much so that by some commentators Isaiah was called an evangelist rather than a prophet. Bob the key to much revelation about the Kingdom lies in a book of Isaiah – he is indeed an evangelist.”

[2] Oscar Cullmann Christ an Time Page 63 Primitive Christianity knows nothing of a timeless God. The “eternal God is he who was in the beginning, is now, and will be in all the future, “who is, who was and who will be” Rev1:4)” Pithy – I like Oscar but can’t remember where the D-day analogy starts – I’m SO FRUSTRATED! I desperately wanted to start where he starts – but ran out of time.(excuse pun) Bob fear not I will lend you the pirate copy mi-hearty!

[3] G.R.Beasley-Murray.Jesus and theKingdom ofGod. Eerdmans: Paternoster, 1986, p. 3-10.I’ve taken this out of the notes simply because in this context in makes sense to do so. I haven’t read Beasley-Murray for many years but have read sufficiently to grasp DMs comments in the Kingdom 1 Course Material Page 14.

[4] E.H. Peterson Christ Plays in ten thousand places. Eerdmans 2005 Page 20

[5] Herman Ridderbos The coming Kingdom The Presbyterian and Reformed Publishing Company pg31

[6] Oscar Cullmann Christ and Time Page 91 The same Christ  who is to redeem the world from sin into which it will fall is the mediator of its creation. Therefore Adam is mentioned as a first Adam, Whom Christ follows as the second (Rom 5: 12ff.; I Cor.15 : 45 ff.)

[7] Herman Ridderbos The Coming of the Kingdom Page 128: Jesus’ word was bound to remain enigmatic in many respects; and neither about himself nor an indirect, veiled answer which therefore remained enigmatical in the light of their continuing unbelief. Herman thrashes out for me the point of why didn’t Jesus just teach a little less ambiguously. Then the Kingdom would be so much easier to understand. It’s all about the heart Bob. The rest of Page 128 is very helpful but space does not allow.

[8]  Herman Ridderbos The Coming of the Kingdom Page 466 Here Ridderbos is also referring to Cullaman centering of time. “But in central importance of Jesus’ suffering and death for the preaching of the gospel, and in the gathering together of the New Testament church; it is clearly implied that the time of fulfillment is not at an end with the death of Christ, but has its starting point and presuppositions in this event. Cullman therefore rightly argues that in the synoptic gospels the center of time no longer lies in the future…as it does in Judaism but in the past, viz in Christ’s coming and action.”

[9] Oscar Cullmann Christ and Time Page 93 In conclusion, it must further be emphasized that according to the New Testament the new division of time, with Christ as the midpoint, can only be believed .To this fact in the last analysis refers the revelation of the “mystery” of the divine redemptive plan, concerning which it is said that it is “now” revealed (Eph 3:5; Col. 1:26).” Uncle Oscar’s trying to point out that even though he’s a bright bloke and has time to write 300 pages about Christ and Time at some stage he appreciated that this is a mystery and had to believe. I must say I’m rather fond of Uncle Oscar but I wish he had a used an acronym for Primitive Christianity. It must appear thousands of times in his book.

[10] St Augustine City of God Penguin 1972 Pg 807 We observe the partial fulfillment of this prophecy {Hag 2:6} we await its completion at the end of history….For head had first to be loved by those who believe, so that he might be longed for by those who look for his appearance. He then quotes Zech 9: 9. with great joy.

Columbia Neurosurgery

Article Written for Content Current January 2011

“Columbia Neurosurgery”

Everyone has heard the quip: “You don’t have to be a brain surgeon to…”

Neurosurgeons certainly have a reputation for being up there with the brightest and most skilled professionals. But when you’re faced with the day that you need one – how do you know where to go to get the best service? How can you be sure that your local Neurosurgeon is the person for your needs?

Columbia University Medical Center’s Department of Neurosurgery at the New York Presbyterian Hospital, New York is ranked in the top 5 in the USA by the US News and World Report, making the Honor Role for 2010/11. Over 5000 hospitals were considered, 152 made the list and Columbia is ranked 4th in the nation for Neurology and Neurosurgery. This is a comforting thought when entrusting your life or that of a loved one to professionals.

Of course at Columbia’s Department of Neurological Surgery the physicians aren’t just professional doing a job, they are real men and women with real names like Steven Isaacson, Dorothea Altschul and Sean Lavine. They love their work and take pride in their doctor/patient relations. A rudimentary introduction to the hospital gives one an immediate sense that there is a desire for individual patient outcomes.

This brings us to the Neurosurgery Intensive Care unit at New York Presbyterian Hospital. Like the name suggests, it specializes in the aftercare of Neurosurgery patients. There is also specialist care for Pediatric Neurology patients.

If you are among those who find some security in high tech equipment and cutting edge procedures, look no further. At the Columbia University Center for Neurosurgery, a multidisciplinary team of 18 surgical specialists and sub specialists cover just about every imaginable neurological condition. Being a University Hospital, the commitment to research is very high. This means access to cutting edge techniques that are less invasive than many older procedures and thus lowering risks that have existed previously.

Fees always play a significant role in ones choices. The Department of Neurosurgery has its own insurance specialist on staff to help you liaise with your insurance company. They also communicate with your surgeon to secure any required preauthorizations. Payment plans are also available where necessary.

For out of town patients there is comfortable guest accommodation with a shuttle service to the hospital. Facilities include the McKeen Pavilion and the Crowne Plaza Englewood for friends and family of patients that want to be near loved ones for the duration their stay. The guest Facility at the Helmsley Medical Tower offers a “home away from home.”

The Columbia University Medical Center Department of Neurological Surgery specialties centers attract patients from all over the world. There is a Brain Tumor Center, a Pediatric Neurosurgery Center as well as centers for Pain and Epilepsy to name a few. The Columbia’s reputation for experience, skill and patient Care are world renown. When healthcare researchers Castle Connolly America’s Top Doctors asked 250, 000 doctors “to whom you would send members of your family” in 2009, more doctors from New York Presbyterian were mentioned than any other American hospital.

Welcome to Matt’s Writing Blog…

Welcome to Matt’s blog. I’m a full time copy writer. I have written for periodicals and websites, composed speeches and sermons and prepared copy for web advertisements and research papers. I can tailor my work according to your needs. I love a challenge and enjoy building work relationships. I hope to hear from you.