SHEPPERSON'S FIRST LAW

EAAB's intern monitoring system almost 'unworkable'

noreply@blogger.com (Gareth Shepperson) — Thu, 16 May 2013 05:17:41 PDT

Although I am not an Estate Agent by profession, I do deal with Estate Agents on a daily basis and would be interested to know if Estate Agents share the opinion of Tony Clarke, Managing Director of the Rawson Property Group???

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EAAB's intern monitoring system almost 'unworkable'

The latest figures from South Africa's Estate Agency Affairs Board show that currently only 32,718 estate agents are still working in the formal recognized sector of the industry.

Of these, 10,373 are now fully qualified agency principals, 12,162 are full status (i.e. fully qualified) estate agents and 10,183 are interns learning to become fully fledged agents. Another 47 are attorneys who have chosen to acquire Fidelity Fund Certificates.

Tony Clarke, Managing Director of the Rawson Property Group, stated that it is now law that all new entrants to the estate agency profession, regardless of whatever qualifications they may have, have to be registered with the EAAB as interns and have to be monitored by their principals or by a full status estate agent (one who is fully qualified and has had a Fidelity Fund Certificate for at least three consecutive years) for a period of at least 12 months.

Interns are not allowed to perform any action which could affect the outcome of the sale unless they do so in the presence of and under the supervision of a mentor. All documentation, for example, has to be completed under the mentor's surveillance and any valuation of a property can only be accepted if the mentor has also inspected it. Similarly, any negotiation regarding price and conditions has to be done under the guidance of their mentor.

These rules, said Clarke, are exceptionally difficult to apply because, as the EAAB employment figures above show, there are so few fully qualified estate agents in South Africa and most of them are working long hours to maintain their own turnovers and meet their budgets.

To give an intern the full monitoring required by the EAAB, said Clarke, could mean that the mentor would have to devote as much as half his working time to this task - which only a few qualified estate agents are prepared to do.

"Inevitably, therefore," said Clarke, "estate agents and principals are reluctant to be involved and this will mean that they hold back on taking on interns. These rulings have, therefore, created a barrier to entry into the profession and, along with certain factors, have held back the transformation of our sector."

The rulings, added Clarke, could now result in dishonesty because the busy qualified estate agent, unwilling to hold back the progress of his intern, might sign the required forms testifying that the intern had received his full supervision, when in fact this had been done inadequately in terms of the EAAB rulings.

"The intern rulings, in my view, show that the EAAB is out of touch with how agencies and estate agents work," said Clarke. "I fear that they will encourage mentoring estate agents to act in a way that, although helpful to their protégées, is not strictly in line with the rules."

Another intern stipulation which has proved to be difficult to apply, said Clarke, is that which lays down that the intern has to inform any person who he is involved with in a property matter - especially his clients - that in fact he or she is still an intern.

"Although there will always be exceptions, the majority of clients, we have found, object to this and prefer to deal with a qualified estate agent, thereby denying the intern the opportunity to get the necessary experience. It has to be said that while no one wishes to deceive the client, the ruling about disclosing the intern's status is, in our view unnecessary, and, it can be added, the chances of a previously disadvantaged intern being fully accepted by clients will always be fairly low."

Another 'issue' that most estate agents find irksome, said Clarke, is the fact that the intern is expected to keep an onerous logbook of all his work activities and this again has to be approved and signed off by the mentor.

"The plain truth is that the EAAB board will never have the staff or the time to assess the interns' logbooks adequately and if such log books have been manipulated, with the consent of the mentor, they are very unlikely to have any way of discovering that."

"The real test of the intern should, we believe, be the exams that he writes at the end of his training period. These will show what he has learnt or what he has failed to learn. A logbook is, therefore, superfluous and nothing more than a nuisance."

Asked what he recommends as solutions to the current difficulties, Clarke said that the best plan would be to revert to the old system adopted by the EAAB, under which the estate agent was supervised on an on-going basis but to a far less stringent degree than currently is expected to happen. Everything he did - and particularly any documentation on which he worked - had to be checked, verified and approved by the mentor. Under the old system, said Clarke, the intern was allowed a far freer hand and greater scope to take the initiative and grow. The new system is a barrier to the Industry's transformation initiatives.

Rawson Property Group Press Release

New electric fence regulation set to be implemented

noreply@blogger.com (Gareth Shepperson) — Wed, 15 May 2013 03:09:16 PDT

In my humble opinion, this is yet another example of an over-regulated "nanny state", where the "man in the street" is being drowned in red tape.

As an attorney, I guess that I should be happy if government puts so much legislation in place that the individual can't possibly keep track of it all and at any given time may be breaking a hundred laws without even knowing it ... the only beneficiaries being the attorneys dealing with the fall out.

HOWEVER, at the same time it restricts free economic activity and thereby harms the economy ... which is bad for property attorneys (except maybe insolvency practitioners and those representing bank robbers).

Gareth Shepperson

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New electric fence regulation set to be implemented

Property owners are going to have to be more careful about who they contract to install electric fences so as to comply with a new regulation.

A new regulation stipulates that electric fences should be certified before a property can be sold.

This regulation stipulates that all electric fences be certified and come with an electric fence system certificate of compliance, as reflected in Regulation 12 of the Electric Machinery Regulations of 2011.

This applies only to systems that came into existence after October 1 last year.

However, it also will apply in cases where the system is

Paltered or added to, or where the premises changes ownership after October 1 this year. Any property transfer after that date, therefore, carries with it the obligation to provide a certificate if there is an electric fence in place.

All properties - including residential, commercial and sectional titles within complexes - must comply.

A number of people have complained about the regulation on social networks, with many saying the it was meant to protect burglars.

"Next they will tell me to remove my burglar proofing because a burglar might get stuck in it and hurt himself... This is total insanity. I'll remove my fence when they remove the criminals," said one.

SA Electric Fences Association founder member Etien van der Merwe said the regulation actually protected innocent people within the property. He added that electrical output from fences had always been regulated.

"Energisers are controlled: the electrical machinery regulations stipulate a certain output. Adjusting fences to be more lethal is actually illegal."

The regulation would ensure installers were held accountable and minimise flyby-night installers.

Failure to have a compliance certificate could cost one a great deal, said John Graham, the chief executive of HouseCheck Home Inspection Services.

"If you don't have the certificate, you can't sell your house, and if somebody gets hurt by a non-compliant fence, you could get sued."

He said electrical fence installers had to write an examination and be registered with the Department of Labour by October 1 this year.

What makes an electric fence compliant?

•It must be installed by a registered electric fence installer, not a non-specialist company.

•Owner must have an electric fence system certificate of compliance.

•Output should not be adjusted to make it more lethal.

•There should be proper warning signs about the existence of an electric fence visible from driveway and pavement.

•It should not over-hang into a neighbour's yard or pavement.

Penalties for non-compliance

•You cannot sell your house without the certificate.

•If someone gets hurt on your property, you have a legal obligation, you could get sued.

•One might have to upgrade to be compliant or be forced to remove the fence.

The Star

Tshwane boasts of property and tourism at travel show

noreply@blogger.com (Gareth Shepperson) — Tue, 14 May 2013 06:26:37 PDT

Tshwane boasts of property and tourism at travel show

Tshwane hopes to woo tourists to the Jacaranda City with its exhibition at the annual travel show, Indaba, being held in Durban. The exhibition showcases all the capital has to offer, from ambitious property developments to sporting events and even wildlife.

Among the developments being promoted is the 110-storey Symbio City, planned to tower over Centurion and include residential, hotel and shopping facilities.

On the tourism front, the city is offering a range of options, including monuments and attractions for nature lovers, including the Groenkloof and Rietvlei nature reserve, the National Zoological Gardens and the Dinokeng Game Reserve, where one can see the Big 5 on the city's doorstep.

Executive mayor of Tshwane Kgosientso Ramokgopa said that as part of the city's Inner City Regeneration Project, work will start on the Tshwane International Conference Centre (TICC) and supporting mixed-use developments.

The TICC site will include three hotels, retail space, offices, residential apartments and a public transport facility.

The project, worth several billions of rand, will create at least 15 000 jobs.

Another massive development is the Symbio City development, a reflection of the range of economic opportunities, cultural experiences and physical environments Tshwane offers.

Ramokgopa said the City of Tshwane was already well on its way to staking its claim as a leading African sports capital, and was promoting the Tshwane Open Golf - the first edition of which was held today.

But what may most surprise visitors to Indaba is Dinokeng. It combines private land to create a 90 000ha reserve with a range of activities including game drives, horse riding, hiking, quad biking, balloon rides and cultural tours.

Pretoria News

Julius Malema's property auctioned for R5.9 million

noreply@blogger.com (Gareth Shepperson) — Fri, 10 May 2013 00:49:56 PDT

Julius Malema's property auctioned for R5.9 million

Expelled ANC Youth League (ANCYL) president Julius Malema's half-built mansion in Sandown, Joburg, was sold for R5.9 million on auction yesterday.

The half-completed property in Sandown, Johannesburg.

The buyer was Norman Tloubatla, chief executive of the company Magnified Designs. He left in a hurry, in a white Porsche, after clinching the purchase. He refused to speak to reporters.

Auctioneer Pieter Geldenhuys said the auction for the three-storey property had gone exceptionally well.

"It actually exceeded my expectations."

He said he expected the property to sell for between R4m and R4.5m.

Much more needed to be spent to complete the house, which would be the best in the neighbourhood, he said.

Asked if the fact that the house previously belonged to Malema had played a role in the interest shown, Geldenhuys said: "Without a doubt. I must say this specific property drew a lot of interest, even internationally."

The house was sold in less than a hour.

Geldenhuys started the bidding at R5m, but no one was interested.

He joked about the bidders all looking down, saying: "It doesn't matter where we start, it's where we end."

The price was then dropped to R2m before the first bidder raised a hand. The home was attached by the court to help cover Malema's tax bill. He owes Sars R16m. Malema bought the property in 2009 for R3.6m.

He had the existing structure torn down and began building his own mansion. The plans provide for a private cinema room, a cigar lounge, a pool and a spa bath, a wine cellar, a coffee bar, and a lift. There is also a "song room". However, the home has no fittings, flooring, plumbing or windows yet.

On March 19, the former ANCYL leader had his Limpopo farm, worth approximately R4m, seized by the Asset Forfeiture Unit.

National Prosecuting Authority (NPA) spokesman Medupe Simasiku said at the time, that the property had allegedly been acquired with the proceeds of fraud, corruption, theft, and money laundering. The alleged crimes were perpetrated against the Limpopo department of roads and transport, Simasiku said. Alternatively, the property had been used to launder money.

In January, sheriffs seized Malema's Sandown and Polokwane homes. Sars rejected a R4m settlement offer on the houses in February.

Malema also faces charges of fraud and racketeering related to the irregular awarding of a R52m tender to OnPoint Engineering in Limpopo.

Sapa

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R2bn new council building to arise in Pretoria

noreply@blogger.com (Gareth Shepperson) — Fri, 10 May 2013 00:49:17 PDT

R2bn new council building to arise in Pretoria

Today, Munitoria's south block is a far cry from the showpiece it was when it opened its doors as headquarters of the then Pretoria City Council.

On July 7 the block will be imploded and 44 years of history will be reduced to a pile of rubble.

The south wing under construction in the 1960s.

Built in the 1960s, the official inauguration of Munitoria took place on February 28, 1969 and the first council meeting in the new council chamber took place that afternoon.

At the time, 17 high-speed lifts served Munitoria, making it the largest lift installation in the city, and one of the largest in the country.

The south wing was completed first in 1965 at a cost of R3 million.

Stocks & Stocks built the upper structure of the south block and Engel And Ruyter constructed the south block basement.

However, Munitoria's proud history came to an end on Monday, March 3, 1997 when the west wing, completed in 1968 at a cost of R9m, was gutted by fire.

More than 170 firefighters from the city and Swartkops AFB battled the blaze which raged throughout the night.

The fire started late in the afternoon in the licensing department, but the extent of the devastation was only visible at sunrise the next morning. The south wing was also shut down for days as authorities waited for the smoke to clear.

The west wing was imploded a year later, leaving a gaping hole on the site at the corner of Johannes Ramokhoase and Lilian Ngoyi streets.

The implosion of the west wing, as seen from the Union Buildings.

For years there was debate and lawsuits over the future of the site.

Tshwane Metro Council decided to demolish the south block and build new headquarters, to be known as Tshwane House, on the site.

The intention is to have headquarters which will house all council departments which have been accommodated in buildings throughout the city since the fire, and to have buildings which meet the demand placed on the municipality in the 21st century.

Council staff moved from the south block of Munitoria to nearby Isivuno Building at the corner of Madiba and Lilian Ngoyi streets earlier this year to allow contractors to "strip" the building before its implosion planned to take place later this month.

What the south wing looks like today.

Tshwane spokesman Blessing Manale said the implosion had been delayed mainly because of an assessment which established that the building contained asbestos.

"The country, in implementing a ban on asbestos use, also promulgated regulation for the dismantling, storage, disposal and transportation of material containing active, potential airborne, asbestos.

"The current Munitoria project has to comply with the ban and regulations on asbestos use," he said.

Manale said the implosion had been rescheduled for July 7.

"This will however not delay the completion of the new Munitoria House which is expected to take at least 18 months and be occupied by the first quarter of 2015."

The rubble from the implosion will be stored off site for use as landfill.

Tshwane House construction is estimated to cost R2 billion.

The contractor, Tsela Tshweu Investments, a consortium made up of Standard Bank, Nedbank, Group Five and smaller ventures, was handed the site in February.

Manale said the bridge over Madiba Street would not be removed.

"The design includes the retention of a strengthened and fortified crossover adjoining Sammy Marks and the council offices."

Pretoria News

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Details of half of government property leases can't be traced

noreply@blogger.com (Gareth Shepperson) — Fri, 10 May 2013 00:46:28 PDT

Unfortunate and unforeseen consequences often result ... even from actions that have the best intentions behind them. South Africa has one of the very best land registration systems in the world and security of title is guaranteed. As a result, South Africa is one of the very few countries in the world where Title Insurance is not required and is, in fact, therefore unknown here.

However, over the decades, the government (and all its organs of state) has seemingly failed to keep its records updated and it eventually reached a stage where the government could not state with any certainty what land it owned. It would therefore seem to be logical to do a reconciliation.

However, the unintended consequence is that several senior examiners from the Pretoria Deeds Office have been seconded to this task. The knock-on effect (together with some other factors) has meant that staff shortages have resulted in a backlog in registrations at the Pretoria Deeds Office of over 4,000 deeds.

To put this in perspective, this only amounts to a couple of days lodgments in the Pretoria Deeds Office (the biggest deeds office in SA) but has pushed back registration times by several days.

Gareth Shepperson

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Details of half of government property leases can't be traced

Fewer than half of the floor plans and contact details of tenants of the Public Works Department's almost 3 000 property leases, worth R3.86 billion last year, are on file.

The rest have been either lost or not collected - meaning that officials are working in the dark when trying to verify that the government is getting what it pays for, or is using it for its intended purpose.

This was one of the challenges outlined by Public Works Minister Thulas Nxesi during a preview of his speech for his department's budget vote, which was debated in Parliament yesterday.

In a wry aside, the minister revealed that the runway at Waterkloof air force base, famously used by the Gupta family to land a plane of wedding guests last week, had been upgraded by the department, one of 214 capital infrastructure projects completed in the past financial year. "That's very significant," a deadpan Nxesi added.

He said that investigations by the Special Investigating Unit into irregular leases and projects and findings of the Competition Commission "tell the same story" of overpricing and collusion between some officials and sections of the construction industry.

This was a "reminder that it takes two to tango, that corruption and greed in the private and public sectors are mutually reinforcing".

Of the 40 investigations, 23 had been completed, resulting in the dismissal of six officials - including a deputy directorgeneral - and court action to recover money wrongly paid.

The disciplinary hearings of another deputy directorgeneral and a chief director were continuing.

Nxesi said that the department's "prestige projects" - accommodation for members of the executive - were major areas of "collusion and irregular expenditure".

The SIU had completed the Pretoria leg of its investigation into those projects and was switching its focus to Cape Town, where R100 million had been spent on renovating 11 ministerial houses.

The department was developing guidelines for the projects to ensure that improvements were not at the discretion of the ministers.

In a previous written reply to a parliamentary question, Nxesi had said that the renovations included the enclosing of an outdoor braai, the converting of a room into a gym, and a kitchen revamp.

Yesterday, he said that the completion of a register of government fixed property, expected to be done by March 2015, would be a "gamechanger" because it would allow the state to leverage for economic development its estimated R300bn property portfolio, which was about seven times the value of the largest private portfolio.

Reconciliation of state land with Deeds Office records had been "substantially completed" and physical verification would begin in July.

A project that had taken years to complete and overshot many deadlines, it had involved checking the records of about 180 000 land parcels, ascribing custodianship to the relevant department or sphere of government, and vesting the property, he said.

Daily News

Properties deliver real price growth for the first time in nine quarters

noreply@blogger.com (Gareth Shepperson) — Wed, 08 May 2013 03:03:05 PDT

Properties deliver real price growth for the first time in nine quarters

Property prices, after adjustment to take into account the impact of inflation, increased in the first quarter of this year after deflating for nine consecutive quarters from the fourth quarter of 2010 until the end of last year.

Absa's latest quarterly housing review revealed that the growth in real house prices was driven only by the three middle segments of the housing market. Affordable housing achieved virtually no real yearon-year price growth in the first quarter, while the real price of luxury housing declined by 9.2 percent in the first three months of the year, following a 7.2 percent decline in the fourth quarter of last year.

The review revealed that the price of small houses, defined as those with an area between 80m2 and 140m2, increased in real terms by 9.5 percent year on year in the first quarter, medium-sized houses (141m2 to 220m2) increased by 4.4 percent and large houses (221m2 to 400m2) by 2.2 percent.

Jacques du Toit, a property analyst at Absa Home Loans, said nominal year-on-year price growth in the middle segment of the market, which consists of houses between 80m2 and 400m2 and priced up to R3.8 million this year, accelerated to above the 10 percent level in the first quarter of this year.

However, Du Toit said early indications of a moderation in price growth later this year emerged in the first quarter.

The review also revealed that it was 35.5 percent cheaper to have bought an existing house in the first quarter than to build a new one. This translated to an average R610 600 saving for an existing house.

The cost of building a new house increased by 5.4 percent year on year in the first quarter and the average price of a new house rose by 8.6 percent year on year to about R1 720 000.

However, the average price of an existing house rose by 10.8 percent year on year to R1 109 500 in the first quarter, which was a real year-on-year increase of 4.8 percent.

Meanwhile, Lightstone said yesterday it expected less home repossession this year.

It said the number of homeowners who received sale in execution notices decreased to about 17 000 last year from the 33 000 during the subprime mortgage crash in 2009 and decreased from 29 percent in 2000 to 5 percent last year; while the proportion of homeowners who received sale in execution notices whose properties were sold at auctions increased from 12 percent in 2000 to 19 percent last year.

Lightstone believed these trends might be an indication that loan providers had been making more arrangements with defaulting homeowners as opposed to repossessing their properties.

Lightstone said it was reassuring to see that more people had recently been able to hold onto their homes because this was encouraging for the greater economic well-being of South Africa.

"It seems that even though the recession has placed strain on homeowners, the proportion of homeowners who end up having to sell their properties is now lower than what it was in 2000, providing some light at the end of the tunnel for the homeowners expected to receive sale in execution notices in 2013," it said.

Business Report

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More bonds being granted, but banks still strict!

noreply@blogger.com (Gareth Shepperson) — Tue, 07 May 2013 00:13:06 PDT

More bonds being granted, but banks still strict

The average home price showed a year-on-year gain of 9% in April to R893 000, according to the latest statistics from BetterBond, South Africa's biggest mortgage originator.

"This reflects the continued upward trend of prices over the past year, despite monthly fluctuations," says BetterBond CEO Rudi Botha, who notes that this growth has largely been driven by an increase in demand, as evidenced by the steady climb in the number of home loan applications being submitted each month. This number is now 9,6% higher, on average, than it was 12 months ago.

"In addition, the monthly home loan approval rate now stands at 69% of those applications, compared with 61% 12 months ago, and what this means, given the higher number of applications, is that the banks are approving more bonds than they were at this time last year," he says.

"Indeed, this tallies with the latest available Reserve Bank statistics, which show a 1,6% year-on-year growth in mortgage advances in February, mostly as a result of higher demand in the residential property sector."

However, the BetterBond statistics, which represent 25% of all residential mortgage bonds being registered in the Deeds Office and include applications to, and bond grants from, all the major lending banks in SA, also show that the pattern of lending has remained much the same since August last year, with 30% to 35% of loans granted each month being for the full home purchase price (100% loans) and the remainder being spread fairly consistently over the other loan-to-value categories.

"This indicates," says Botha, "that while banks are now slowly expanding their home loan 'books' again, there has been no significant change in their lending criteria since the last interest rate drop in July 2012. The great majority of homebuyers are required to pay a deposit in order to secure a home loan, with the average deposit being 17% of purchase price - the same as it was 12 months ago."

The statistics also show a consistent pattern of higher percentage deposits being required for higher priced homes. For example, the average deposit required for homes costing between R500 000 and R1m, which is where the bulk of purchasing activity (42%) is taking place, has remained within a narrow range of 12% to14,5% of purchase price for the past 12 months.

By contrast, buyers in the R250 000 to R500 000 price category are usually only required to pay a deposit of around 7,5%, while those purchasing for more than R2,5m generally need to find around 35% of the price in cash.

Botha also says that no major changes to this scenario are expected at least until the end of this year, barring any sudden change in interest rates. "Despite the current low rates, the increase in demand for property - and in home loan lending - is likely to remain muted in the coming months as consumers struggle to cope with significant cost-of-living increases and the banks worry about very high household debt levels that limit the ability of borrowers to make bond repayments."

BetterBond Press Release

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Massive property development taking shape in Joburg's Newtown

noreply@blogger.com (Gareth Shepperson) — Mon, 06 May 2013 03:42:19 PDT

Massive property development taking shape in Joburg's Newtown

Massive property development taking shape in Joburg's Newtown

The big hole being dug in Newtown, and which has raised the curiosity of many motorists using the M1, is the start of a R1.2 billion retail and office development, incorporating some of Joburg's most historic buildings.

Newtown Junction takes shape, at the back of the Market Theatre and Museum Africa.

This massive project, which is coinciding with the revamp and extension of the Market Theatre precinct, is set to change the face of the inner city as it is expected to draw in an additional 5 000 people and 2 500 cars to the central business district.

The hole which is being dug for the underground parking is the biggest one dug in the inner city since the construction of the Carlton Centre.

The new retail and commercial development, to be known as Newtown Junction, totals about 30 000m - the size of the Killarney Mall - and is under construction around, among other heritage buildings, the historic potato sheds site.

The new centre will be linked to the upgraded theatre precinct, so that theatregoers will be able to walk over the railways lines, on refurbished original pedestrian bridges, to dine and shop after shows.

Two major retailers, Pick n Pay and Shoprite, will be taking up space, as well as many fashion boutiques and restaurants. Nedbank will establish offices there as well.

An artist's impression of the new development

Architect Jeremy Rose, of Mashabane Rose Architects, working in collaboration with DHK Architects and LPA, said: "Newtown has the crown jewels of Joburg with its history and old buildings, many of which have been sadly neglected.

"Through this new development, we want to combine the old with the new, but (while) still holding on to the city's memories.

"The new buildings will be adding to the progress of the city. These historic sites are lying vacant and disused, and our history is going to be lost forever if something is not done," he said.

A major heritage study was conducted, and all the necessary permits have been obtained.

The old potato sheds will form the core of the new shopping centre and will be enclosed in glass boxes so that the original structure and trusses, which date back to the Victorian era, can be preserved.

"There will be an enormous impact on the city and bring life back, especially on weekends. We expect many shoppers will come from the Braamfontein area to shop here," Rose said.

"There are several residential developments going up around Newtown, including the conversion of the old grain silos into student accommodation."

Rose added that all the historical aspects would not only be preserved, but highlighted and shown with strategic lighting to maintain the sense of history.

Christine McDonald, of the Market Theatre, said the theatre itself was being refurbished with new seating, giving more leg room.

The balcony is being extended, the foyer will be improved and the toilet facilities upgraded.

The Department of Arts and Culture will be funding this at a cost of R12 million.

The theatre will be reopened in August.

Kippies will be used as a comedy club. The New Laager Theatre is also being revamped.

In addition, buildings on the eastern side of Mary Fitzgerald Square are being taken over by the theatre and will be converted into development theatre rooms, laboratories, training and rehearsal rooms, a library, gallery and warehouses for props.

The development site occupies a city block which is bounded by Bree Street in the north, Miriam Makeba Street in the east, Jeppe Street in the south and Margaret Mcingana Street in the west.

In a report, heritage consultant Herbert Prins said "the neglect of a site (Newtown) that, for many years, has been without productive use must have a detrimental effect - economic and social - on the area, and when the surrounding buildings are heritage resources, the impact is even greater.

"What is favourable about this development is the benefits it holds for the heritage resources of Newtown."

The Star

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Moneyweb - Listed property companies reach 52-week highs

noreply@blogger.com (Gareth Shepperson) — Thu, 02 May 2013 07:45:04 PDT

Moneyweb - Listed property companies reach 52-week highs

New listings expected; Enormous demand for Atterbury shares

JOHANNESBURG – Quite a few listed property companies have reached 52-week highs today.
Fortress Income Fund (FFA), Hyprop Investments (HYP), Arrowhead Properties (AWA), Acucap Properties (ACP), Redefine Properties (RDF), Growthpoint Properties (GRT) and capital Property Fund (CPL) all reached 52-week highs, according to Moneyweb data.

Moneyweb previously reported how the listed property sector has surprised analysts during the first few months of this year and outperformed the local equity and bond markets and why the sector continued its strong performance.

The sector is expected to see a number of new listings during the year since the new South African Real Estate Investment Trust (REIT) will offer significant tax benefits. One such company, The Atterbury Group, recently announced that it plans to list its property fund on the Johannesburg stock exchange (JSE (JSE:JSE)) during the latter part of this year.

Demand for Atterbury shares

The demand for over-the-counter shares in The Atterbury Group’s property fund – Atterbury Investment Holdings Limited – has increased significantly since it decided to list the fund on the JSE in the latter part of this year.

Louis van der Watt, The Atterbury Group’s chief executive officer, says over the past six years, around R3bn worth of over-the-counter shares have been traded. Since the beginning of the year this number was between R100 million and R200 million.

Van der Watt says the board took a decision to list the company around four months ago.

This step could potentially create more liquidity for the group’s shareholders and would allow it to raise money for its development pipeline, which includes the R3bn Mall of Africa in Waterfall.
Van der Watt says the company will potentially raise around R750 million which will give investors the opportunity to invest in this tightly held Fund. The group indicated earlier, that the market cap of the fund could be around R6bn during its initial listing, depending on the gearing. Its gross assets are valued at around R12bn.

The performance of the fund

According to Morné Wilken, chief executive officer of Atterbury Investment Holdings, the net asset value per share experienced compound growth of just over 20% over the last eight years. It reached R10.75 at the end of last year.

While the listed property sector performed slightly better during the same period, the sector was also subject to more volatility, Wilken says. The listed sector is currently also trading at an extremely high premium to net asset value, he notes. Wilken says because there is such a substantial demand for listed property shares, investors are willing to pay significant premiums.

Should you invest now?

Van der Watt says investors could benefit if they can currently get their hands on shares, but he believes they might struggle to buy in the absence of large sellers. The procedure for buying over-the-counter shares are available on the company’s website.

Van der Watt says although there is a large number of private investors who are currently interested in buying shares, there are only around 400 shareholders. Very few of them are currently looking to sell their shares, he says.

An analyst comments

Anton de Goede, property analyst at Coronation Fund Managers (JSE:CML), echoes Van der Watt’s sentiments. He says in the run-up to the listing, sellers will probably hold on to their shares and only sell it after the listing.

De Goede says growth of more than 20% in the net asset value of the company “is very good”. Although the listed property sector performed slightly better since 2005, achieving a total return of 21% per annum, one should keep in mind than the listed property sector uses income yield to determine performance – not net asset value, he notes.

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Attractiveness of local property vs. global property (Moneyweb Article)

noreply@blogger.com (Gareth Shepperson) — Thu, 02 May 2013 03:35:13 PDT

I found the following Article from Moneyweb really interesting. We often operate within our own little bubble without looking at the Macro picture.

Our market does appear to be quite robust and the conclusion that is reached at the end of the Article appears to be quite sound, namely:

"At the end of the day no one knows if global property will be able to produce the stellar returns that investors have become accustomed to over the past couple of years. One thing we do know is that exposure to global property should not be overlooked when constructing a well-diversified portfolio for the long term."

Gareth Shepperson

Attractiveness of local property vs. global property

Benefits of investing in global property from a local investor’s perspective.

Global property has been a hot topic over the past couple of months. Interest in the asset class has not only been driven by stellar returns, but also by the attractiveness of global valuations relative to that of its local counterpart.

In this article we will firstly look at the returns that the sector has produced over the past couple of years. Secondly, we will look at the attractiveness of local property vs. global property by looking at some valuations. And finally, we will look at some of the benefits of investing in global property.

Returns

We all know that the local listed property sector has had a phenomenal run over the past couple of years, but what about its global counterpart?

In the graph below we compare the returns of the SA Listed Property Index (in ZAR) to some of its global counterparts. I think you would agree with the fact that some of these global property indices have produced quite remarkable returns over the past few years. All of these global indices, with the exception of the MSCI World/Real Estate Index, have produced double digit returns over most of the investment periods shown below.

Source: Morningstar

From looking at the performance numbers above, it is important to note that past performance is NOT an indication of future performance. It’s also important not to make investment decisions by “looking in the rearview mirror”.

That being said, when constructing a long-term, well-diversified portfolio - the benefits of global property as an asset class should not be overlooked.

Attractiveness of local listed property vs. global listed property

Looking at the two asset classes from a relative point of view, some asset managers are seeing more value in global listed property than in its local counterpart. Let us now explore some of the reasons why.

In the graph below we compare the index returns of the GPR 250 REIT World Index (USD) to the SA Listed Property Index (ZAR) since 2005. Local listed property prices declined 35% from the end of October 2007 to the end of June 2008. Currently, local listed property prices are 41% higher than their October 2007 peak.

On the global side, listed property prices declined a massive 66% from their highest point in mid-2007 to their lowest point in March 2009. Currently, global listed property prices are 2% above their previous all-time high.

**GPR 250 REIT World Index (USD) was used as a proxy for global listed property

Having said this, it is important to note the following. Some of the global property companies went into the financial crisis with about 50% gearing. So what is gearing? Well, gearing is defined as a company’s long-term debt vs. its equity capital.

During the financial crisis share prices dropped dramatically which resulted in the assets on the balance sheets of these companies following suit. As a result gearing ratios increased as their asset base became smaller. These higher gearing ratios caused problems with banks and other financial institutions where these companies had loans. Some of these loans were structured with very strict lending agreements and limits with regards to gearing ratios.

During the financial crisis it not only became increasingly difficult for these property companies to roll-over their debt, but it also became extremely difficult for them to get access to new loans/capital.

As a result many of these companies had the following two options: One, they could either try to sell their assets, which would have been detrimental to their balance sheets, especially during the financial crisis. Or, two, they could try and raise capital on the equity market.

In reality, most of these property companies did not have much of a choice and were forced to issue equity at the bottom of the market. So, what does this mean? Well, this basically means that these listed property companies effectively sold their assets to their investors at all-time lows, resulting in them locking in a portion of this weakness.

The second component that we are going to look at is FAD (Funds Available for Distribution) yields relative to long bond yields.

If you compare the forward FAD yields of the different countries, and the globe as a whole, to their respective 10-year government bond yields, you can clearly see a bigger yield differential (difference between FAD yields and long bond yields) in the global property market relative to our local property market.

Simplistically, the bigger yield differential in the global property market means that an investor is being compensated more for the additional risk that is taken by investing in property rather than bonds.

Source: Catalyst Fund Managers

Please note that global long bond yields are trading at record low levels which is resulting in artificially high yield differentials. If, and when, global bond yields revert back to more “normalised” levels, we will start seeing more spread compression.

If you look at the graph above you will see that the local property sector is the only sector that is trading at a negative yield differential. That being said, it is important to note that the local property sector can at times trade at a yield lower than that of long bond yields. This is mainly driven by our higher income growth rates which are underpinned by average escalation rates of 8% pa.

As a result of our higher income growth rates, investors are at times willing to accept a lower income yield. So in SA you will typically find that at times of high income growth, yields will trade at or even below long bond yields and when income growth rates are low, yields will trade at or above long bond yields.

Benefits for local investors

Now that we have looked at some of the returns of global property as well as the attractiveness of global property vs. its local counterpart, let’s now turn our attention to the benefits of investing in global property from a local investor’s perspective.

Firstly, investing in global property can provide a hedge against rand depreciation. Since the start of 2011 the Rand has depreciated by a whopping 37%. From the beginning of 2011 to the first week in April 2013 the USD return on the GPR 250 REIT World Index has been 40%. Over the same period this index (in Rands) produced a stellar return of 91%.

Secondly, by investing in global property you can diversify your portfolio’s currency risk. If you’re a local investor and you invest in a global property fund, you’ll get exposure to quite a diverse range of global currencies. This means that your returns are not only a function of the Rand’s movements relative to one currency, but rather a spread of global currencies. If you look at some of the rand denominated global property funds, you’ll find underlying exposure to currencies such as the Australian Dollar, Canadian Dollar, Swiss Franc and Euro to mention a few.

Thirdly, you get access to additional property sectors and stocks: Traditionally, local property investors only had access to the retail, industrial, and office sectors. Global property investors not only have access to these sectors but they also have access to sectors such as healthcare, self-storage, apartments, forestry, student accommodation and data centers.

And finally, diversification: Global property can add additional correlation benefits to your investment portfolio. Please see correlation matrices below.

Click image to enlarge Source: Morningstar

From the three correlation matrices above you can see that over the last 10 years (first table) global property’s correlation to other global and local asset classes has been relatively low. This is even more evident when compared to the local asset classes, where global property has at times even registered a negative correlation.

As a result of the low positive, and in some cases, low negative correlation relative to other asset classes - global property can add significant correlation benefits and as a result, diversification benefits, when constructing a well-diversified portfolio.

At the end of the day no one knows if global property will be able to produce the stellar returns that investors have become accustomed to over the past couple of years. One thing we do know is that exposure to global property should not be overlooked when constructing a well-diversified portfolio for the long term.

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noreply@blogger.com (Gareth Shepperson) — Tue, 30 Apr 2013 03:30:23 PDT

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Atterbury to list its property fund in Q4
Could sell five regional shopping centres to Vukile.

JOHANNESBURG – The Atterbury Group plans to list its property fund on the JSE in the fourth quarter of this year. According to Morné Wilken, chief executive officer of the fund – currently called Atterbury Investment Holdings – the reasons for the proposed listing is twofold. “It potentially will create more liquidity for our shareholders, because in an unlisted company – although it is public – it is more difficult to trade,” he says. It will also make it easier for the company to raise money for its huge development pipeline, such as the R3bn Mall of Africa in Waterfall, in future.

Louis van der Watt (pictured), chief executive officer of the Atterbury Group, says the fund’s gross assets is valued at around R12bn. Depending on the gearing, the market cap of the fund could be around R6bn during its initial listing.

Atterbury is still contemplating whether or not it will list on the new REIT board of the JSE.

Atterbury’s comments follow a recent announcement by the Vukile Property Fund (JSE:VKE) that it has entered into negotiations for the acquisition of the Wingspan property portfolio comprising of five regional shopping centres. According to Laurence Rapp, chief executive of Vukile, the acquisitions could push the Vukile Property Fund’s asset base “comfortably above the R10bn level.” The Wingspan property portfolio, comprises of Irene Mall, Hartebeespoort Mall, Weskus Mall, Westwood Mall as well as a shopping centre in Jeffreys Bay.

Atterbury, currently owns just over 30% of the Wingspan portfolio, according to Van der Watt. The rest of the portfolio belongs to a consortium of investors including Retail Africa, Corovest, Absa and Leafcapital, he says. Van der Watt says Atterbury decided to sell its stake in Wingspan, since the group is currently investing in large retail centres and the Wingspan portfolio does not fit its investment criteria anymore. The Wingspan portfolio’s biggest property is only around 30 000 square metres while the Mall of Africa is 120 000 square metres, he notes. The value of the proposed transaction between Atterbury, the consortium and Vukile is under wraps for now, although a detailed cautionary could be published before the company’s results are released on May 27, 2013. Van der Watt indicated that the current market value of the Wingspan portfolio is around R2.5bn although the value of the transaction would not necessarily be the same.

Rapp says Vukile’s bid for the Wingspan portfolio is part of its stated strategy to grow the size of the fund by buying good quality regional shopping centres and to bulk up on its retail exposure. “We are also keen on having an overweight exposure to retail in our portfolio, so we would like to have approximately 60% of our asset base in retail centres,” he says. Although recent data indicate that certain regional shopping centres might be under pressure, Rapp says Vukile does not currently experience such a trend. “As with all property, retail is going to go through different cycles, but if you look historically, retail has always been the most defensive asset class,” he notes. “We think that retail is (still) the most desired asset class and the most defensive asset class, and that is why we have made a call in our fund to go overweight in the retail sector. But having said that, we also like to have a balance in our fund, so it should be 60% retail and then the balance split between office and industrial,” he says.

The implications for investors

Rapp says the key question that everybody is asking at the moment, is what the proposed transaction’s iMpact (JSE:MPT) will be on earnings. “That I can’t answer at the moment because we haven’t yet published those figures, but we have a very good idea what that answer will be,” he says.

Rapp says the East Rand Mall acquisition moved Vukile’s asset base to approximately R8.7bn. “We’ve recently also announced the Encha transaction, our empowerment deal, where we’re going to be buying a portfolio of five buildings, largely government-tenanted, for about R1.4bn. That would put our asset base around R10bn,” he says.

“Assuming we buy the whole of Wingspan, it will push the portfolio very comfortably above the R10bn level, which means that Vukile is then starting to play in sort of the bigger section of the listed property sector which does start attracting more index tracking money,” he says. Rapp says the company has been working hard to improve the quality of the portfolio – also selling assets from the fund – which is a positive development for shareholders in the short and longer term.

Van der Watt says Atterbury will invest the proceeds from the sale of the Wingspan portfolio in its larger developments, which should be positive for investors.

An analyst comments

Anton de Goede, property analyst at Coronation Fund Managers (JSE:CML), says through this proposed acquisition Vukile will increase its retail exposure, which it has been aiming to do in the recent past.

“However what is important is the yield at which this asset will be acquired since it has had its letting challenges in the past.”

Protector probes R85m housing mess in Tshwane

noreply@blogger.com (Gareth Shepperson) — Tue, 30 Apr 2013 02:57:14 PDT

Protector probes R85m housing mess in Tshwane

The office of Public Protector Thuli Madonsela has confirmed that she is probing the multimillion rand housing development in Saulsville, where millions were paid for housing units that have failed to meet building standards.

The Pretoria News reported yesterday how a budget of R85 million was spent to construct 104 units as part of efforts to eradicate hostels in the area, but they still remain unoccupied as a certificate of occupation has not been issued because of the poor condition of the housing units.

Allegations of corruption involving local councillors have also been made by residents in relation to the list of people to live in the units when they are finally ready for occupation.

According to residents, people who had not lived in the hostels before were poised to move in when the units were completed, posing a potentially volatile situation at the hostels.

Political parties have also called for the Gauteng local government and housing MEC to institute an investigation into why the units do not meet the required building standards despite such a hefty price tag.

The IFP lodged the complaint with Madonsela, particularly on the issue of the prioritisation of the current hostel dwellers as beneficiaries when the units are ready for occupation.

The protector's spokesman, Oupa Segalwe, confirmed yesterday that Madonsela had already been in contact with the municipality over the matter and was expecting more information from the complainants - the IFP.

The DA in Gauteng said it would request an official investigation into the matter. "This staggering price tag for one unit could have bought at least 12 of the 40m² free standing two-bedroomed houses being rolled out by the DA-led Midvaal municipality. Some 1 300 houses could be built with the Midvaal model from the R85m allocation, said DA spokeswoman on housing Janet Semple.

"This brazen waste of public money and disregard for the serious housing needs of the people of Tshwane must not go unpunished. Gauteng Local Government and Housing MEC Ntombi Mekgwe must investigate the inflated cost price for these houses and the failure to complete the contract to the requirements.The MEC must ensure that the contractors are not just blacklisted but also prosecuted," Semple said.

The SACP in Gauteng also slammed the non-completion of the housing units and the failure to relocate the residents currently living in the old hostels.

Pretoria News

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Ratepayers can't pick and choose parts of bill to settle, says judge

noreply@blogger.com (Gareth Shepperson) — Mon, 29 Apr 2013 01:58:21 PDT

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Ratepayers can't pick and choose parts of bill to settle, says judge

Ratepayers may not withhold payment of their rates because they feel they are not receiving a satisfactory service, but they may refuse to pay when they are not receiving a service at all.

In a complex judgment on Friday, the Constitutional Court dismissed an application by a group of ratepayers who withheld payment because they were dissatisfied with the services.

Olga Rademan, a member of the Moqhaka Ratepayers and Residents' Association in Kroonstad, declared a dispute with the Moqhaka municipality in June 2008. She and other members withheld payment of their rates and taxes in protest against poor service, but paid for electricity, water, and other services. The municipality disconnected her electricity in August 2009.

After her electricity was disconnected, Rademan brought an application in the Kroonstad Magistrate's Court, which ruled that the municipality was not entitled to cut the electricity supply to her property.

The high court overturned the lower court's decision.

Rademan appealed to the Supreme Court of Appeal, which dismissed the case and said that a municipality had the option of consolidating the accounts for various services. This was to prevent residents from electing for which municipal accounts they wished to pay.

She then took the matter to the Constitutional Court.

Yesterday Judge Raymond Zondo denied the Kroonstad resident's appeal to stop the municipality cutting off her power after she stopped paying rates. "A resident cannot pick and choose which components of their rates bill to pay," the judge said.

The court held that there was no conflict between the Electricity Regulation Act (ERA), the Municipality Systems Act, and by-laws. Judge Zondo said however, that in this matter, it was not Rademan's case that the municipality claimed payment for services that it had not rendered.

"However, where a municipality claims from a resident, customer or ratepayer payment for services, the resident, customer or ratepayer is only obliged to pay for services that have been rendered.

"There is no oblication on a resident, customer or ratepayer to pay the municipality for a service that has not been rendered," the judge said.

Judge Zondo said that ratepayers may lodge a complaint or query concerning the accuracy of an amount due and payable in respect of a specific municipal service a reflected on the account rendered.

Such a query of complaint must be accompanied by the payment of the disputed amount. The customer did not have to pay the disputed portion of the account pending the outcome of his or her appeal to an appeals committee provided for in the by-laws.

Lee Cahill, a founding member of the Joburg Advocacy Group, said he was not surprised by the judgement.

"It is a sad day for ratepayers, who now effectively have no recourse when local government levies rates and taxes but fails to deliver the services it is supposed to," said Cahill.

National Taxpayers Union chairman Jaap Kelder called the judgment "party political."

"We will now send out advice to members to specify to their municipalities which services were not rendered and dispute them," he said. "This is a miscarriage of justice."

Saturday Star

'Housing inertia hobbling economy'

noreply@blogger.com (Gareth Shepperson) — Thu, 25 Apr 2013 08:56:54 PDT

A number of Articles came out today about the state of lending in SA.

The Article below emphasizes the importance of the housing market to the overall health of the economy. However, there are also two Articles on Moneyweb detailing the problems experienced by banks in lending and, in particular, the impact of Basel III on their ability to lend.

The first article entitled South African banks tighten lending can be found HERE:

The second article, which relates more to unsecured lending and is entitled How big of a problem is unsecured lending for banks? ... can be found HERE.

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'Housing inertia hobbling economy'

The South African economy would not recover unless there was a recovery in the housing market because building was an engine for growth and wealth creation, BMI-Building Research Strategy Consulting principal consultant Llewellyn Lewis said yesterday.

However, mortgage advances in current values dropped 57 percent from R440 billion to R218bn between 2007 and 2009 and it could take a decade or more for mortgage advances in current values to reach the same level as the peak in 2007, Lewis said at a building, construction and property industry forum in Johannesburg.

Nonetheless, mortgage advances had increased by 314 percent between 2000 and last year, he said.

Lewis referred to the structural shift in finance, with banks growing unsecured lending ahead of home loans and asset finance. This, he said, was because unsecured lending was more profitable, while new regulations discouraged banks from taking on long-term loans.

He expressed concern about the declining prominence of mortgage lending, which would make home ownership difficult and hurt fixed investment spending. He asked what the leadership of the industry was doing about this.

Standard Bank's head of home loans, Steven Barker, said yesterday that the capital and liquidity requirements on banks under the Basel 3 regulatory requirements meant there was more uncertainty about the consequences of long-term lending. This was constraining the appetite for mortgage lending, he said.

Barker said Standard Bank understood those risks. Providing mortgage finance to its client base was important, and it could not "stop-start" it.

The bank grew its home loan book by about 4 percent to R299bn in December last year from a year earlier and made grants totalling R34.5bn last year to raise its home loan market share to 29 percent from 28.8 percent, Barker said.

Absa has 26.6 percent of the market, Nedbank 20.7 percent and FNB 15.9 percent.

However, property analyst Lightstone said last year that the number of mortgage bonds issued fell to record low of about 9 000 a month in the third quarter from a peak of more than 50 000 a month in 2007.

Barker said mortgage bond foreclosures remained at historically high levels despite declining substantially since 2007. Overall mortgage defaults, which were regarded as being more than three months in arrears, were between 7.5 percent and 8 percent.

Lewis stressed the importance to the economy of investment in affordable housing.

He said investment in affordable housing was large at 40 million square metres of building a year, but the industry was tracking along at about 200 000 units a year.

The backlog would rise to 3 million units by 2020 at this pace of delivery, and the objective as a country should be to raise delivery to about 500 000 units a year. This would reduce the backlog to 1.3 million units by 2020, Lewis added.

"We are losing momentum and sight of what we should be doing and there is all kind of talk about upgrading squatter camps. The target must be the eradication of all slums or informal settlements by 2025."

Lewis said it was most likely that South Africa would follow a low road rather than an upper middle road scenario in affordable housing. "The difference between the high road and lower middle road could be R560bn and 940 000 jobs over the eight years to 2020. There is an incentive to do this if we had the guts," Lewis said.

Construction was growing at 9 percent year on year in constant values, he said.

Business Report

SHAREMAX: NOVA PROPERTY GROUP HOLDINGS

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 06:37:16 PDT

Here is the latest Article on Moneyweb relating to the long-running saga of Sharemax.

All you need to know is contained in the following paragraphs from the Article:

Nova Property Group has been in existence for over a year but there has been no word on when its financial statements might be published. These financial statements should provide investors with an idea of Nova’s financial health and thus the likelihood of eventual repayment of their debentures, or, if they selected shares, what these shares might be worth.

Because it is a public company, Nova’s financial statements should be available, on request, from the Companies and Intellectual Property Commission (CIPC). Earlier this year, Moneyweb made a request to the CIPC’s disclosure division for copies of Nova’s financial statements. On February 26, 2013, CIPC informed Moneyweb that no financial statements were on record for Nova.

Sherlock Holmes famously said "when you have eliminated the impossible, whatever remains, however improbable, must be the truth"

In the absence of any evidence to contrary, one must assume that the failure by a Public Company to meet its statutory reporting requirements is an indication that they have something to hide.

Surely, the company (or Dominique Haese on its behalf) could either make the financial statements available as they are required to do or, alternatively, to simply state that the financial statements are not available for "XYZ reasons". Simple really ... or should I say: "Elementary, my dear Watson!"

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Wanted: Financial statements for multibillion rand property group

Share and debenture holders deserve to know how this public company is performing.

JOHANNESBURG – Nova Property Group Holdings, a public company with a large property portfolio, has given no guidance on when share and debenture holders might expect to receive financial statements. Nova is the company that owns all the properties that used to form part of the Sharemax portfolio. It was formed as a result of a ‘Section 311’ rescue scheme which received court sanction in January last year.

Nova Property Group and its subsidiary have issued shares and debentures to some 34 000 investors who previously held instruments issued by the various Sharemax syndication companies. The total amount invested was about R4.5bn. The Sharemax investors could choose whether they wanted to received shares or debentures. The shares are issued by the public company Nova Property Group Holdings. The debentures are issued by Nova Property Group Investments, a private company which is a wholly-owned subsidiary of Nova Property Group Holdings

Nova Property Group has been in existence for over a year but there has been no word on when its financial statements might be published. These financial statements should provide investors with an idea of Nova’s financial health and thus the likelihood of eventual repayment of their debentures, or, if they selected shares, what these shares might be worth.

If Nova Property Group has a February year end, this would mean that financial statements to February 2012 are long overdue. Moneyweb contacted Nova director Dominique Haese on Monday to ask about the financial statements. Haese said “no comment” before disconnecting the call. Similarly, a debenture holder who asked about financial statements was informed on April 18 that he would receive feedback “in time”. He has heard nothing since. Likewise, other investors and financial advisers polled by Moneyweb say they have not received financial statements.

Because it is a public company, Nova’s financial statements should be available, on request, from the Companies and Intellectual Property Commission (CIPC). Earlier this year, Moneyweb made a request to the CIPC’s disclosure division for copies of Nova’s financial statements. On February 26, 2013, CIPC informed Moneyweb that no financial statements were on record for Nova.

Moneyweb also contacted Nova’s auditors, BDO. Partner Japie Schoeman replied: “I can confirm that we are the auditors of the Nova Property group of companies. In terms of internal policies and client confidentiality rules that we are bound to, I can however not give you any other information. I hope you will understand.” Schoeman would not even confirm whether BDO has been supplied with the information necessary to perform an audit. This type of confirmation has previously been given to Moneyweb by auditors of other companies, and would not appear to breach client confidentiality. According to CIPC records, Nova’s directors are: Dominique Haese and Dirk Koekemoer, both of whom were involved with Sharemax prior to its collapse, accountant Rudi Badenhorst, and corporate lawyer Connie Myburgh. Prior to publication a draft copy of this article was sent to Haese with the invitation to correct possible factual errors and offer additional comments.

Haese’s response follows:

Dear Mr. Cobbett,

Your email and ‘draft article’ of yesterday refers.

At the outset, please note that the Nova Group insists that you publish the content of this email, together with whatever Moneyweb intends to publish, if at all.

Should Moneyweb choose to publish the “draft article”, the Nova Group insists that such “draft article” be published exactly, word for word, as such “draft article” was submitted to us for comment.

The Nova Groups’ only comment, at this time, is that the Nova Groups’ Financial Statements have been and are available to those persons who are entitled thereto.

Due to the persistent negative and destructive nature of “reporting” experienced from Moneyweb, the Nova Group is not prepared to share any information with Moneyweb, nor to further comment on any communication from Moneyweb.

Hence the comment from myself (Ms Haese) to you referred to in your “draft article”.

Moneyweb’s behaviour in attempting to consistently force communication, linked with the arrogance to attempt to enforce “cut-off timelines for comment”, unilaterally imposed by Moneyweb, is deplorable and rejected.

History has shown that Moneyweb will, in any event, publish what it sets out to publish, whether or not comments are provided, and this under the ever present threat that failing comment, Moneyweb will publish what is put forward in the form of a “draft for comment”, notwithstanding how factually incorrect, bias and detrimental to third parties the proposed “draft for comment” may be.

All the rights of the Nova Group are reserved pertaining to the persistent factually incorrect reporting by Moneyweb and the intentional dissemination of factually incorrect, bias and detrimental information.

Regards
Dominique Haese

'Need to inject new life' into Pretoria inner city

noreply@blogger.com (Gareth Shepperson) — Tue, 23 Apr 2013 23:56:56 PDT

I really like Mayor Kgosientso Ramokgopa because (at least from an outsider's perspective) he appears to be trying to do things for my City. In addition, he is articulate and can therefore generally clearly express the intended outcome of his Council's plans.

HOWEVER, in this case I think that this is a hare-brained scheme and probably a waste of money.

Virtually every day I go to the Deeds Office in the City Centre. I used to have a monthly parking in a parking arcade but for the last year or so, I rely mostly on finding something on the streets surrounding the Deeds Office. It is noticeable that for some inexplicable reason, the Council has already converted a fair percentage of their metered street parking into "no-stopping zones"! CRAZY!

Now, they are building the BRT Route and Skinner Street is down to one or two lanes and we can see the effect of road closures on traffic flow. This is temporary but gives a clear indication of what the effect will be of the proposed permanent closures.

Government (national/provincial/local) seems to lose a lot of court cases against NGO's and other interested parties. In my estimation, the sole reason for government's poor success rate in Court, is its failure to create proper public participation forums IN THE BEGINNING! They then try and patch it up after the fact with hastily convened and poorly conceived public participation hearings. This appears to be the case again in the process described in the Pretoria News Article below.

I have my own ideas about the Pretoria City Centre but I'll save those for another Blog Post.

Gareth Shepperson

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'Need to inject new life' into Pretoria inner city

Concerns have been raised about the practical implementation of the Tshwane Metro Council's Operation Reclaim which includes the partial closure of some streets in Pretoria's inner city.

Several stakeholders have expressed concern that this will be bad for their operations and have come up with "an alternative plan" for operations in the inner city.

The stakeholders, which include the State Theatre, the Reserve Bank, property letting company City Property and the Tshwane Chamber of Commerce and Industries (TCCI), are of the opinion that instead of partly closing some streets, the municipality should look at ways of rejuvenating the inner city.

The metro council has agreed to the partial closure of certain streets as part of Operation Reclaim.

Consultant Guy Briggs said at an Operation Reclaim workshop at the Pretoria City Hall yesterday there were no clear indications of the impact the project would have on public transport in the inner city.

Briggs said his clients - which include the State Theatre, City Property and the TCCI - supported, in principle, the metro council's ambitions to make the city workable.

"But there are issues that include the bus service (municipal and the Gautrain), which need to be answered. There is no clear indication on public transport and no room has been provided for new developments," he said.

Briggs said they believed the metro council should not partly close Sisulu (Prinsloo) and Lilian Ngoyi (Van der Walt) as this would impact negatively on Sammy Marks and the State Theatre.

According to Briggs, the State Theatre has an underground parking area with the entrance and exit in Sisulu (Prinsloo) Street.

Briggs said the metro council needed to inject new life into the inner city.

"There should be activity day and night; events and festivals should be organised; restaurants, coffee shops and bars should be provided. There should also be performance spaces, markets and artists' studios," he said.

Briggs said his clients supported what the municipality was doing, "but we want you to involve us... we have a significant role to play".

Another consultant, Peter Purchase, said a number of on-street parking bays would be lost as part of Operation Reclaim.

It is expected that there will not be any on-street parking in Sisulu (Prinsloo); Church Square and Lilian Ngoyi (Van der Walt) streets.

Purchase said they were looking at the possibility of turning Du Toit Street into a northbound one-way.

He added that there were a number of issues which needed attention, including the effect the project would have on parking and public transport. He said a study and policy were required on parking and public transport.

The TCCI president, advocate Salim Yousuf, said there were a number of questions which needed answers.

Yousuf said studies should have been done and approved before the matter was approved by the council.

Yousuf said it was worrying that the member of the mayoral committee responsible for economic development and planning, Subesh Pillay, was not at the workshop.

"He initiated the workshop but failed to attend. There was no political direction on some of the issues raised," said Yousuf, adding that they would approach executive mayor Kgosientso Ramokgopa to have the council's decision reversed.

The strategic executive director, economic development and planning, Thembeka Mhlengwa, said Pillay could not go to the workshop because of last-minute commitments.

Mhlengwa gave the assurance that the workshop was not the last and that the master plan for Operation Reclaim had not been finalised.

Pretoria News

Basel III rule changes will prove positive for property buyers

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:01:58 PDT

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Basel III rule changes will prove positive for property buyers

For many months, interest rate concessions on home loans have been virtually unheard of, and many borrowers have been able to secure loans only at one or two percentage points above prime.

But now things are set to ease somewhat, says Rudi Botha, chief executive of mortgage originator BetterBond. This is thanks to a decision by the Basel Committee on Banking Supervision ( BCBS) to change some of the new capital reserve requirements for banks that were due to be implemented in 2015.

These liquidity rules, proposed in 2010 as part of the Basel III plan to help banks survive financial crises, were widely felt to be too stringent for banks in emerging or developing economies like South Africa. Nonetheless, financial institutions in those countries had begun preparing for their implementation by raising their lending rates, says Botha.

"However, earlier this year the BCBS widened the definition of the type of assets that banks will need to hold in reserve as a buffer against financial stress, and also extended the deadline for the full implementation of the tal reserve requirements should mean banks have more money to lend and can afford to be a little more lenient when it comes to home loan interest rates.

"And even a small rate concession can make a huge difference to the total price paid for a home over the 20-year life of a loan. At 8.5 percent, for example, the total interest paid on a R1m loan over 20 years would be R1.08m, and at 9 percent, the total interest paid on the same loan would be R1.16m."

As things stand, he says, the banks already appear to be moving back into home loan lending and away from higher interest rate personal loans, and BetterBond has seen the average home loan approval rate increase from 61 percent to 67 percent in the past 12 months.

"In addition, the banks have been reporting some better results from their home loan divisions, and as the returns on this type of lending continue to improve, we believe the capital allocations by their treasury departments for home loans will become more favourable and enable more rate concessions, especially with the Basel III rules having been changed." A RECENT survey indicates that about 65 000 people are employed directly and indirectly on secure gated estates and sectional title residential developments.

Of the total, 9 864 are employed directly by home owners' associations (HOAs), and other estate bodies such as clubs and schools account for 23 376. The remaining 31 680 people are employed in outsourced services like security and landscaping.

"On a conservative earnings estimate of R5 000 a job a month, the organised and managed community sector accounts for an annual payment in salaries and wages of at least R3.9 billion," says Jeff Gilmour, president of the Association of Residential Communities (ARC), which conducted the nationwide survey.

"If the front-end costs of construction and development are taken out of the equation, as well as direct employment by individual households, the biggest ongoing generator of formal employment in the residential property sector in South Africa is the management and maintenance of community estates and complexes."

The survey was conducted by ARC across 80 of its membership of 130 estates countrywide, which represents about 45 percent of the market in terms of number of homes.

"The data supplied by the participating ARC members were then extrapolated across the rest of our membership, as well as non-ARC-affiliated estates, to provide a national picture," says Gilmour.

"Organised communities account for 8.3 percent of South Africa's developed land and are home to around 5 million people. HOAs in gated estates have assets of R800bn under their management."

Call Jeff at 0861 462 463 or e-mail jeff-AT-hoasupport.co-DOT-za

Weekend Argus (Saturday Edition)

Betterbond figures show improvement in home loan approval rate

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:02:29 PDT

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Betterbond figures show improvement in home loan approval rate

The extent of the improvement in the residential property market over the past two years is clearly indicated in the latest statistics from mortgage originator BetterBond, which show that home loan approval rate has risen from 61 percent in March 2011 to 69 percent last month.

During the same period, the average home purchase price paid by BetterBond clients has fluctuated, hitting a low of R780 000 last January and spiking at R960 000 last August.

But it has generally also shown an upward trend, to reach R905 000 last month, compared with R786 000 in March 2011 (a 15 percent increase).

However, BetterBond chief executive Rudi Botha notes that the average deposit percentage required by lenders has varied little over the past two years, with the result that the average home loan amount approved has risen from R700 000 in March 2011 to R738 000 last month.

"Obviously the banks are feeling increasingly comfortable about lending to the residential market again as the balance of supply and demand improves.

"In addition, most prospective borrowers now have much better financial profiles than was the case two and three years ago."

The BetterBond statistics represent a quarter of all residential mortgage bonds being registered in the Deeds Office and include applications to, and bond grants from, all the major lending banks in South Africa, he says.

These statistics show that though first-time buyers continue to account for a large percentage of home loan applications, that percentage has declined from 48 percent in March 2011 to 39 percent in March last year and 36 percent last month.

"It's clearly getting more difficult for first-time buyers to enter the market.

"Although the average purchase price in this sector has risen some 7.5 percent in the past two years, the average home loan amount approved has only increased by about 6 percent, indicating that firsttime buyers need bigger cash deposits to secure loans," Botha says.

"And because salaries have not been rising as fast as the cost of major budget items like food, transport and utilities, it is becoming more difficult for prospective buyers to save these amounts.

"In addition, because they are often either still living with their parents or renting, firsttime buyers have more flexibility when it comes to deciding when to buy, and they will often back off from the market when economic growth drops - as it has in the past year - and business confidence and employment prospects start to look shaky," Botha says.

On the other hand, the steady if slow increase in middle-bracket home prices in the past two years has meant that repeat buyers have now often built up considerable equity in their existing homes, which could go a long way towards covering the deposit required to buy their next property.

"Such buyers are the ones best placed at the moment to make the most of the historically low interest rates.

"Indeed, if they have sound credit records and sufficient income as well as substantial deposits, they can now often upgrade to better properties for not much more a month than they are paying for their current homes," Botha says.

Weekend Argus (Sunday Edition)

Chance to air Pretoria CBD road closure gripes

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:03:00 PDT

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Chance to air Pretoria CBD road closure gripes

Businesses and other stakeholders opposed to the partial closure of a number of streets in Pretoria's inner city will this week be given an opportunity to have a say on the matter.

Member of the mayoral committee responsible for economic development and planning, Subesh Pillay, will host a workshop at the Pretoria City Hall on Thursday.

The workshop is aimed at providing further details in connection with the Tshwane Metro Council's Operation Reclaim. The project entails the closure of several streets and the relocation of a number of taxi ranks in the inner city.

The streets which are to be partially closed are Lilian Ngoyi (Van der Walt) between Pretorius and Madiba (Vermeulen); Sisulu (Prinsloo) between Madiba and Pretorius; and Helen Joseph (Church) between Du Toit and Thabo Sehume (Andries).

Final approval for the partial closure of the streets has been granted by the municipality.

Objections have been received from a number of businesses operating in the inner city.

The Tshwane Chamber of Commerce has also objected to the partial closure of the streets.

The chamber stated that the municipality needed to undertake jointly with business, an economic study and an impact assessment in order to determine all risks "that may actually and potentially impact both positively and negatively on the retail sector and other defined business in the inner city and affected precincts".

"A plan needs to be provided explaining and detailing all risks and mitigation of such risks and associated costs and time frames, including, but not limited to widening of alternative streets, alternate parking facilities and parkades, informal trade markets, taxi pick-up and drop-off points, upgrading and renovation of ageing infrastructure," said the chamber's president advocate Salim Yousuf.

DA councillor Siobhan Muller said the closure of the streets would cause "a ripple effect of gridlocking the rest of the city, forcing more traffic onto the already overloaded Skinner Street (Nana Sita)".

"This west to east transport route (Nana Sita) has been identified for the TRT (Tshwane Rapid Transit) route, hoping to remove motor vehicles from it. Instead, this ill-advised plan to close other major routes will push more traffic onto a TRT route.

"Paul Kruger Street is at capacity but will be required to still take more traffic," she said.

Muller said the closures or partial closures will impact on motor vehicles, TRT, goods transportation from west to east, "the limited transport we currently have".

Muller's colleague, Francois Bekker, said the street closures would have a far-reaching impact on the flow of traffic in a western direction via Pretorius Street, as well as traffic flow in an eastern direction via Madiba Street (Vermeulen).

"There will, of course, be other traffic flow problems as well. Yes, non-motorised transport in the inner city is a good idea. This can, however, only be a realistic idea if other supportive transport systems and facilities are in place," he said.

Bekker said "the notorious Tshwane Bus Service", for example, offered no alternative to private motorist transport in the Tshwane metro area. "The major disruption these closures will surely have on accessibility and routes linking different parts of the city with each other must be considered. My prediction is that we will only shift the problem of traffic congestion in the inner city to other parts resulting in worse traffic problems," he said.

Pretoria News

Affordable property is key to wealth creation, says study

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:03:29 PDT

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Affordable property is key to wealth creation, says study

The provision of affordable housing in the so-called gap market in South Africa not only resulted in improved welfare and social cohesion, but was also an important facilitator of opportunities and wealth creation, according to a new study.

The research, conducted by a team led by UCT associate professor Francois Viruly, found that those who obtained homes in this sector moved beyond viewing them as a mere shelter but saw them as an asset, and the appreciation in the value of these assets stimulated entrepreneurship, job creation and access to higher levels of education.

Soula Proxenos, the managing partner of International Housing Solutions (IHS), a global private equity investor that pioneered the financing of affordable housing projects in South Africa with a total value of almost R8 billion to date and commissioned the research, said housing in the affordable sector enabled a broadened role and became an asset that appreciated, stimulated economic activity and created wealth.

"In the US it is the singlebiggest source of funding for new business creation. The units play a role as a financial asset and a majority of those interviewed during the research believed the value of their assets had indeed increased," she said.

Viruly said increasing entrepreneurship in South Africa through affordable housing would also lead to increased employment as entrepreneurship had been shown to be a key contributor to job growth globally and had been the primary source of job growth in the US for the past 30 years.

Viruly's research also supported government findings that massive urbanisation was adding to the housing backlog, which includes the gap market.

Affordable housing or the gap market refers to households with an income between R3 500 and R18 000 a month, who earn too much to qualify for the government's low-cost subsidised housing and too little to afford the cheapest standard private sector houses or to qualify for bonds.

Soula Proxenos and Francois Viruly at Aurora Village in Belhar, Asrin Property Developers' project with International Housing Solutions

Among the major reasons listed by respondents for moving to an IHS-funded development was a desire for better access to their places of work, an improved and safer environment, proximity to schools and financial considerations.

In addition, 72 percent of respondents said their quality of life had improved while only 3 percent believed their life had worsened to some degree.

Proxenos said housing was like a ladder and if there were rungs missing, the ladder was broken.

"Creating housing stock in the gap market gives previous RDP households housing to move up to," he said.

Proxenos stressed that the government could not fix the whole housing ladder and the gap market was ripe for private sector development.

Business Report

Tshwane switches to prepaid electricity for all properties

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:03:58 PDT

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Tshwane switches to prepaid electricity for all properties

The City of Tshwane is doing away with meter readers as it intends to shift all electricity users in the city to pre-paid meters within the next two years.

Not only will consumers have more accurate consumption figures and no more electricity bills, the city will save more than R5 billion in billing, administration and debt collection fees.

Yesterday, the city launched the R7bn Security of Revenue Project which will see the installation of 800 000 pre-paid smart meters in every household, business and public building at no cost to the consumer.

Jason Ngobeni, city manager, said the smart meters would give the power back to the people. "People will be able to control their own electricity consumption," he said.

Consumers can control the amount of money spent on electricity each month because they can choose how many electricity units to upload.

There will be no increase in electricity fees when switching from the current system to the smart metering system.

Service fees for electricity on the current system range between 27 and 30c a rand. On the smart meter system, this fee is expected to decrease to 19.5c a rand.

The City of Tshwane will collect revenue upfront, with the aim of improving the city's liquidity.

Andile Dyakala, chief financial officer of the City of Tshwane, said the city, on average, received bill payments 131 days after issuing them. "We have to pay Eskom 15 days after buying the electricity but we wait much longer to receive the money from the consumers," he said.

Executive mayor Kgosientso Ramokgopa said the new metering system would improve the flow of money to the city. "We can bank on money received upfront from consumers and use it to improve social infrastructure," he said.

Ramokgopa said the new system would increase job opportunities in the city. The factory producing the meters will have to be within Tshwane to benefit the city's job seekers, he said.

Electricity tariffs, on the new system, will differ depending on the time of day - during peak periods electricity will cost more than offpeak periods.

"Hopefully this will encourage people to restructure their electricity usage times and reduce the impact on power grids during peak times," said Dyakala.

"This might change people's behaviour if they realise they cannot just consume, consume, consume.

"They will have to manage their consumption," said Ramokgopa.

The smart metering system will be implemented from October 1 and Ramokgopa will be the first to have a meter installed in his home.

"This system will benefit the totality of residents in the city," said Ramokgopa.

Pretoria News

Pretoria court to receive a facelift after fire

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:04:31 PDT

I have posted this because it has long been a source of irritation for me. Although I virtually never stride the passages of the Magistrates Court anymore, on the rare occassions that I find myself there, the prefab offices squeazed into the "new building" to accomodate the activities that used to be housed in the "old building" are an eyesore and inadequate for the efficient dispensing of justice.

Three years later and they are nearly in a position to issue the construction tender. You must be kidding!?!

I understand that it is a heritage site BUT ... three years later and they have not even issued the tender yet (let alone granted the tender and commenced/completed construction).

Anyway, let's hope that the delay results in a beautifully restored building much like they achieved with the Palace of Justice (on Church Square) about 10 years ago.

Gareth Shepperson

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Pretoria court to receive a facelift after fire

The historic old Pretoria Magistrate's Court, which was destroyed by a fire in 2010, will soon receive a facelift to restore it to its former glory.

An aerial view of the old historic building of the Pretoria Magistrate's court that was destroyed by a fire in October 2010.

Restoration, due to have started in January, was delayed due to a procurement process, and consultants, specialising in the restorations of historic buildings, were appointed in November, the Department of Public Works has said.

Departmental spokesman Thami Mchunu said the project design process is expected to be complete at the end of next month.

"Once the design process has been completed, a tender for the construction work will be issued," he said.

The restoration, estimated to cost about R100 million, will have the building restored to its original state as it was earlier declared a national heritage site. This means that the building, by law, must be restored to its original form unless compelling reasons or circumstances state otherwise.

Mchunu explained due to the nature of the restorations, specialised contractors including technical professionals such as architects specialising in heritage buildings will be working on the building. The renovation is expected to take about 18 months.

A fire - caused by an electrical fault in one of the ceilings in October 2010 - destroyed the building, except for the two lower levels and the building's outer marble-clad structure. Fortunately firefighters prevented the fire from spreading to the adjacent "modern" building.

Pretoria News earlier reported that although the building belongs to the Department of Justice and the repairs are the responsibility of that department, the funds were allocated by the public works department.

Professor Albrecht Herholdt, a member of the National Cultural Heritage committee said restoring buildings of national heritage is not an easy task but the end result is always worth the effort. He explained than in many instances where old historic buildings were completely destroyed, photographs had to be used for purposes of reconstructing the building as before.

Several plans to accommodate staff housed in the old building had to be made after the fire. Four criminal courts were relocated to the Centurion Municipal Court building, the Municipal Court in Visagie Street and Court 62 at Pretoria Central Prison.

Because of a lack of space and facilities, the entire domestic violence section was relocated to the Municipal Court, in Visagie Street, and the rest of the family law services to the first floor in the unburned part of the building.

A number of criminal courts were combined and several magistrates' offices were converted into courts to deal with family and private law matters.

These "office courts" are primarily used in matters dealt with in camera. A further 44 dry-wall offices and 22 dry-wall storage areas had been erected in the passages next to and in front of all courts for administrative support staff.

Pretoria News

Pretoria court to receive a facelift after fire

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:04:57 PDT

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Pretoria court to receive a facelift after fire

The historic old Pretoria Magistrate's Court, which was destroyed by a fire in 2010, will soon receive a facelift to restore it to its former glory.

An aerial view of the old historic building of the Pretoria Magistrate's court that was destroyed by a fire in October 2010.

What to do if tenants do not pay their rent

noreply@blogger.com (Gareth Shepperson) — Wed, 24 Apr 2013 00:05:20 PDT

Don't hesitate - Call us if you have any landlord/tenant problems.

Before it's too late.

Gareth Shepperson

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What to do if tenants do not pay their rent

If a landlord finds himself in a situation where a tenant is not paying his rent, then it is best to initiate legal action as soon as possible to avoid months of lost income in rent, says Michael Bauer, general manager of IHFM, the property management company.

This, however, does have its pitfalls and can take a long time to process, but there are few things that have to be remembered so as to follow the correct procedures and "do things by the book".

A summons will have to be issued, stating the claim for the rent that is outstanding and it is issued via the court by a sheriff. There are, however, two types of summons that the landlord could have served on the tenant: an ordinary summons or a rent interdict.

If the landlord finds that the tenant ignores the summons, he can within ten days of it being delivered apply for a default judgement against the tenant, followed by an Ejectment Order to evict the tenant.

This might be defended by the tenant, so it is best to be sure that the summons is justified. If the landlord owes money to the tenant (perhaps he had paid for repairs that the landlord did not carry out and is waiting for the landlord to refund him) or if a complaint has been lodged with the Rental Housing Tribunal and the complaint relates to repairs that have been requested but not done - in which case the complaint is unfair practice on the landlord's part.

"Tenants cannot just withhold their rent without going through the necessary steps to get the action they need from their landlord," said Bauer.

Once the Rental Housing Tribunal is engaged both landlords and tenants must remember that a subpoena to a hearing from them is as important as a summons from the court and must be acted on. If this is ignored it can be at the risk of a default judgement or contempt of court charge.

Another thing to remember is that a ruling from the Tribunal is equal to a magistrate's court ruling and that prosecution can follow if the subpoena is ignored.

IFHM Press Release