REI Offshore Sicily Beckons With Low Do You Qualify For Looking Towards The Gulf Prices Exemption? States? Mr Leavy is part of a growing band – a few Expats in France can breathe a sigh of relief after Gulf States such as Qatar and Ras al Khaimah hundred pioneers, mainly from Britain – who the French government backed down on its tax are becoming increasingly popular with expat have quietly discovered a very cheap corner of grab on second homes. investors and professionals relocating from paradise in Cianciana, a hidden town of 3 500 overseas. tucked up against Sicily’s Sicani mountains. I From September 1, those owning a second home thought Italy would be too expensive,” said in the country for more than 22 years will have The expat powerhouse of Dubai has seen its the YMCA housing manager from Southend. complete exemption from capital gains tax (CGT). recovery hampered by a ‘build now, pay later’ “But prices haven’t gone up, and people are so approach, with an estimated US $150 billion- friendly, it reminds me of how Britain once The previous French government doubled the plus in new development projects since changes was.” Here, town houses boast roof terraces amount of time before second home owners could to legislation in 2002 allowed foreigners to with sea views, and old men chat idly in the claim exemption, raising the bar from 15 to 30 years purchase property on a freehold basis. piazza while their wives dry tomatoes under the in February 2012. Mediterranean sun, and it is downright difcult Meanwhile, slower-burn rival Gulf economies to spend more than €40 000 (about £34 000) However, amid concerns that the policy slowed - underpinned by rising employment levels and for a bolt-hole. Tey are part of a wave of buyers down the property market, current French increased state funding - are forging their way discovering that Europe’s economic crisis is President François Hollande said extending the into the real estate market. pushing house prices down and making this an time frame had been a mistake. It has now been ideal moment to shop around. reduced to 22 years from September onwards. Offshore Views Scott Picken, Mike Smuts, Jenny Ellinas, Dr Andrew Golding, Alexandra Burger CEO, MD, MD, CE, Director, IPS Invest Smuts & Taylor Cypriot Realty Pam Golding Group Amicorp “Having just spent the “Figures show that “In Cyprus a property “London has an “Tere are a myriad weekend with George the UK service sector, investment of only extraordinary track of international Ross, Donald Trump’s manufacturing and €300 000 gives you record of rental and property investments righthand man, I am construction all permanent residency in capital growth which available and the the more confdent than ever improved in June. Tis Europe for life, without makes it an ideal long- requirements of the that the US recovery is improved confdence, you ever having to live term investment - and investor are paramount.” sustainable and based combined with a there!” infation hedge, not to on the fundamentals of shortage of properties mention potentially a the economy and the available for sale, currency hedge.” property market.” continues to push UK property prices higher.” www.reimag.co.za August 2013 SA Real Estate Investor 49
USA BY SCOTT PICKEN Opportunities in the USA Don’t miss out n our recent trip the sentiment has Atlanta continues to deliver the best overall Rand. We find this so frustrating. We only changed so fast and the market is returns, Orlando has the best capital growth work with the best partners and in March we Onow in a full recovery. Even though and Memphis is the best income market for organised the biggest American event ever many of the economic problems remain, the returns. Our partners in these markets are in South Africa. We had all our partners out American’s are a lot more positive that the world class and continue to impress our clients from the USA and also the best from South economy was recovering. Te job numbers have with their professionalism. Africa. James Paynter, our expert on the recovered (best since 2008), the Dow Jones has Rand and someone who has had an accuracy gone above 15 000 and most importantly the The interesting thing is that we have of more than 80% of where the Rand is going economy is growing. It is certainly the leading researched over 14 markets including Las since 2005, explained to all our clients what developed economy at the moment and is leading Vegas, New York, Phoenix, San Diego, was going to happen to the Rand. He told the optimism in the markets at the moment. Chicago, Detroit, Orlando, Miami and people in March that the Rand would be Boston, to name a few. We have spent over between R9.38 to R9.90 in the next few weeks, According to the Wall Street Journal more R1.5 million on travelling to all these markets, R9.50 to R10.50 in next few months and than 50% of Americans believe that property but the greatest thing is that along with our R14 to R21 to the dollar in the next few years. prices will now rise and that the worst is behind partners, our research has stood up as the At the event it was below R9 to the dollar and them. The Case Shiller Index is up over 10% markets we are investing in are getting the best now it is R9.83. Those that took action are across the whole country for the last 12 months. returns in USA, and continue to be the best really smiling, but unfortunately as most often performing markets in the whole country. Tis happens, most procrastinate and have many However, the most important thing, which is the advantage of working with the company reasons why not to do something and they have has changed the market, is that Wall Street who has helped more people in South Africa lost out massively! has moved onto Main Street. Te hedge funds invest internationally than any other company from Wall Street have now moved into buying (over 2000 international investments to a value Bottom line is the USA is the best opportunity US property in a big way and are really driving of over R1.6 billion) and also working with the in the frst world, there is a massive opportunity the demand,driving prices up and yields down. best partners in the USA. in the USA, but it is fast disappearing. Funds like Colony Capital and Blackstone have deployed billions of dollars into residential Unfortunately many people have been caught RESOURCES property in the USA. by surprise by the quick weakening of the IPS Invest 50 August 2013 SA Real Estate Investor www.reimag.co.za IPS print_ad_A4.indd 1 2013/07/18 12:10 PM
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AFRICA LISTED BY JULIE ETHERIDGE Beat The Invest in funds in Africa frica features prominently on asset a market typically reserved for institutions and South Africa). Initial investments have managers’ radars for its emerging ultra-high net worth individuals. been made in Ghana and Tanzania with Amarket growth and return prospects. transactions being evaluated in Nigeria, Tere are myriad investment opportunities in The fund is similar in nature to locally Kenya and Mozambique. the continent’s 50-plus country markets that listed property companies and operates ofer yields way in excess of those on ofer in the as an income fund, better understood by “There is a massive supply and demand developed world. international investors as a Retail Estate imbalance for quality real estate across the Investment Trust (REIT). REITs invest in subcontinent,” says Johan van der Merwe, Property is one of the asset classes singled and own properties and generate revenues CEO of Sanlam Investments.Growing out by Sanlam Investments with potential to from rentals on these properties. populations and rapid urbanisation combined deliver double-digit dollar returns. Te group’s with improved per capita income has ignited Africa Core Real Estate Fund – launched in The fund allows local and international an Africa-wide retail property boom. The February 2013 and listed on the Mauritian investors to invest in high quality retail and demand for quality ofce space is also on the stock exchange in May – is paving the way for commercial real estate assets across select rise as large multinationals chase oil, gas and retail investors to potentially gain a foothold in sub-Saharan African countries (excluding commodity opportunities across the region. 52 August 2013 SA Real Estate Investor www.reimag.co.za www.reimag.co.za
OFFSHORE Investing in Africa property does not come to deliver double-digit dollar-based yields to “The secret to success in Africa is to be cheap. Large institutional investors – the guys investors. High returns often go hand in hand thorough with regard to your level of diligence who manage your pension and provident funds – with high risks and an investment in the fund concerning land and property rights,” says have already committed nearly US$ 100 million must be considered against the backdrop of the Reilly. “We spend a great deal of time getting to the fund and high net worth individuals who unique challenges Africa property investors face. the necessary comfort that our investments are participated in the frst round of capital-raising safe – and further mitigate risk by applying ‘core would have parted with lump sums of US$ 5 Te property rights issue is held up as one reason fund’ principles of only investing in established million or more. why even high net worth individuals should properties rather than new developments.” Tis not attempt to “go it alone” when investing in ensures an ‘edge’ over so-called ‘greenfield’ From an institutional perspective the investment commercial property in Africa. “Property rights developers in that most issues have typically case is strengthened by the fact that the fund is is often considered as one of the biggest risks to been resolved by the time the Africa Core Real structured to international standards and that the portfolio we are building,” says Reilly. “We Estate Fund makes its purchase. it provides the first acceptable platform for address this risk by being very specifc about the investors to tap the growth potential of the sub- due diligence elements surrounding both the “Te Africa Core Real Estate Fund compares Saharan African real estate market with minimal assets and regions we’ll consider investing in.” favourably with the private equity development development risk. funds on a risk return basis,” concludes Reilly. There are some countries that have “We are very confident that we will hit and You can participate in Africa’s property dream comparatively poor property and land rights track hopefully even exceed our return targets.” by investing in an appropriate private equity fund records and Sanlam will not consider investing in or, for example, by purchasing shares in the Africa them. Others have land registries and title deed RESOURCES Core Real Estate Fund directly on the Mauritian offices that are arguably on par with those in Sanlam stock exchange. South African residents will South Africa. have to obtain the necessary SARS approvals to take their funds ofshore. Sanlam decided to list the fund in Mauritius because many of the fund targeted assets and leases concluded on these assets are denominated in US dollars. It also expects a large percentage of future inward investment to the fund to come from international investors. “South Africa’s exchange control regulations mean that it is impossible to list a dollar denominated fund locally,” says Thomas Reilly, CEO of the Fund’s advisor. Retail investors who purchase shares in the first pan sub-Saharan Africa real estate fund must do so with due consideration for liquidity constraints. Liquidity is a measure of the supply and demand for a listed entity or, in layperson’s terms, the ability to fnd a buyer for your shares when you wish to sell your investment. “At the moment we are a relatively small listing but as we grow liquidity should improve and we will become a feasible option for the lay investor,” says Reilly. Sanlam will manage the fund with low levels of gearing and high levels of income distributions and hopes www.reimag.co.za www.reimag.co.za August 2013 SA Real Estate Investor 53
AFRICA BY ALEXANDRA BURGER Getting To Grips With Investing In Africa 54 August 2013 SA Real Estate Investor www.reimag.co.za www.reimag.co.za
OFFSHORE nvesting in property in Africa, a continent the Convention on the Recognition and varying, for example in Ghana they are low with 54 sovereign states, is a topic more Enforcement of Foreign Arbitral Awards while in Zimbabwe rental income is taxed at Isuited to an encyclopedia and a constantly (“New York Convention”). progressive rates up to 35%. updating one at that. With recent articles on Right to own land Exchange control Africa’s growth surge in Time, Te Economist and the “Lions on the Move” report from In many countries there are absolute and Exchange control is still a feature in certain McKinsey Global Institute that the “rate limited restrictions on the rights of foreigners countrie, for example, exchange control of return in Africa is higher than any other to own land. For example, foreigners cannot approval is required to own property in developing region”, investment interest has acquire farmland in Zimbabwe and Namibia. Zimbabwe and Namibia and endorsement of piqued. Many states in Nigeria only permit foreign the title deeds as “non resident” are required to ownership on approval by the Governor allow the foreign owner to freely transfer the African countries have such widely diverse with certain conditions and the payment of property proceeds. political, economic and social systems that prescribed fees. The Kenyan constitution Land registration investments in each country require a fair and the Kenya Land Act 2012 has restricted amount of research and taking local advice is investors to holding only leasehold land for a W hile some African countries have paramount. Accordingly, this article seeks to period not exceeding 99 years. sophisticated title deed systems, in others highlight a few interesting factors which could (eg Kenya), not all land is registered thus a play a role in deciding whether to make an Swaziland, as one of the last remaining thorough title deed search is essential. investment in a country, the process required monarchies, is an interesting case in point. Te Transfer process to acquire the property and the ongoing King, on behalf of his subjects, holds all the management issues. land in the Kingdom in trust. Male citizens Certain countries such as Zimbabwe and can acquire a lease over land by pledging Namibia have similar transfer processes to Some countries, eg Nigeria and Ghana, are allegiance to one of the 350 chiefs. Women South Africa while Ghana has a very long enjoying a rapid expansion and increase in can only apply to hold land if married in process involving seven procedures, which can property values and rental yields. Ironically community of property. Foreigners may, with take around a year to completion. these increases may be driven by other factors government approval, apply for a lease through Landlord rights such as increased cost of doing business, goods land holding corporations controlled by Swazi and services. Lack of infrastructure, including directors. Some countries have enacted a fair amount poor roads, transport systems, power and of legislation regulating the relationships Investment protection basic amenities, is still a signifcant barrier to between landlords and tenants. Landlords in growth in many countries but foreign investors Tere have been over 400 bilateral investment Kenya and Ghana are aforded strong rights in such as China and India and international protection treaties signed between African relation to their tenants. In Ghana the landlords corporations have been actively developing countries and developed countries. Nigeria has can charge six months’ rental in advance but, some regions. Political factors remains to entered into over 20 treaties with countries such in practice they charge one to three years in many the primary concern when considering as the UK, France, Germany, the Netherlands, advance. Te Distress for Rent Act in Kenya investments in the continent. Italy, Russia, Turkey and China. Some treaties allows landlords to auction the possessions of have similar provisions but the scope of each defaulting tenants for compensation. Legal system treaty should be considered as some have only African countries’ legal systems generally limited application. Evictions can be a lengthy process in certain emulate their colonial history, for example, countries, for example The Rent Act in Kenya the former British colonies are common law Certain countries have enacted local protects tenants by giving them at least three legal systems while the former French and legislation (for example the Nigerian months to fnd a suitable alternative for relocation. Portuguese colonies’ legal systems are civil law constitution) protecting people’s right to (ie based on the Napoleonic Code). In East own property and forbidding compulsory Whichever country you choose to invest in, there Africa the countries have a combination of acquisition. In Zimbabwe, foreign investments is no denying that Africa has seen an upsurge in Islamic and civil law. In fact, many countries are not really encouraged with current laws foreign investment and this is only set to increase combine elements of both and there is a notable mandating that businesses cede 51% of as more countries invest in better infrastructure movement to include common law aspects, shareholding to Zimbabweans. and both political and economic stability increases which are considered as more favourable to throughout Africa. Te best piece of advice you Financing and taxation foreign investors. can heed is to do your homework, every country Finance for properties in African countries has diferent and changing legal laws and the best In addition, African governments are can be difcult to obtain or severely limited. way to ensure your African investment is a success increasingly accepting and encouraging As with all property investments, the is to know the ins and outs of investing in that arbitration as an alternative to court process. 16 applicable acquisition costs, rental income particular country. RESOURCES African countries including Nigeria, Botswana, tax, estate duties, capital gains tax should be Zambia and Zimbabwe are signatories to considered. Taxes of rental income are widely Amicorp www.reimag.co.za www.reimag.co.za August 2013 SA Real Estate Investor 55
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REI Lifestyle WORLD GREEN BUILDING COUNCIL CONFERENCE RODE EVENTS 2013 Cape Town International Convention Centre Cape Town 16 – 18 October 2013 Tis is no ordinary year for the green building industry in South Africa – as this year heralds the once-of occasion of rallying the largest international network infuencing the green building marketplace, comprising of 92 global councils, under one roof. Te World Green Building Congress will be hosted as part of the Green Building Council South Africa’s premier annual Convention. Retirement Expo SACSC CONGRESS Coca-Cola Dome Johannesburg Cape Town (Conference): 25 – 26 October 2013 Tuesday, 20 August 09:00 – 17:00 daily Spier Wine Estate, Stellenbosch 27 October 2013 09:00 – 15:00 Port Elizabeth (Breakfast): Sandton Convention Centre Thursday, 22 August Your life right now is multi-faceted, rich and Johannesburg Protea Hotel Marine, Port colourful, and so too should your retirement 11 - 13 September 2013 Elizabeth be. Te Retirement Expo embodies this Aptly themed “Un-Cover”, this year’s 17th three-dimensional quality of life; representing Annual Congress of the SA Council of Johannesburg (Conference): all the facets of a well-planned and inspired Shopping Centres (SACSC) brings together Friday, 23 August retirement, characterised by “Healthy Aging, retail masterminds from across SA and the Emperors Palace, Kempton Park Perfect Planning and Positive Living.” globe in September to delve into the latest sector trends and research. Tickets are R25.00 per person for seniors and R50.00 per person for non- seniors. Rode & Associates (Pty) Ltd. is a 25-year- One such global retail mastermind is Mark Discounted parking for pensioners available old frm specialising in real estate economics, Faithfull. As editor, co-founder and joint @ R10.00 in parking Block D property research and property consultancy. It owner of the UK’s Retail Property Analyst, a is also one of the largest independent property weekly online newsletter for the global retail valuation (real estate appraisal) frms in South property community, Faithfull is uniquely Africa. placed to speak on worldwide trends. www.reimag.co.za August 2013 SA Real Estate Investor 57
REVIEWS READ THIS Successful Property Letting: How to The Principles of the Law of Property in Make Money in Buy-to-Let South Africa: Oxford University Press By David Lawrenson Te Principles of the Law of Property Whether you are a new or experienced in South Africa provides a rich landlord, this best selling and fully source of expertise and a lively and up-to-date book by private rented approachable introduction to the sector expert and consultant David principles of property law. Lawrenson will show you how to buy the right property in the right location Integrating the common law, statutory (including abroad) for high rents and law, constitutional perspectives, and capital growth, whatever the state of the related customary law principles, the market. Get great property deals the text provides all of the essential from developers and private sellers. material within a comprehensive Decide whether to use a letting agent source. or fnd and manage tenants yourself. WATCH THIS WATCH THIS Now You See Me Jimmy In Pienke Now You See Me pits an elite FBI Jimmy Bester is a rugged seventh squad in a game of cat and mouse generation mielie farmer who can give against “The Four Horsemen”, a an accurate fve-day weather forecast super-team of the world’s greatest by simply snifng the wind. He lives illusionists. “The Four Horsemen” out his creative impulses by shearing pull off a series of daring heists sheep on the neighbouring farms, against corrupt business leaders something he has to hide from his during their performances, father who believes that men are not showering the stolen profts on their creative. When his father suddenly audiences while staying one step dies, Jimmy must save the farm and ahead of the law. A cat and mouse quirky comedy ensues. thriller, not to be missed. WATCH THIS GO TO THIS Master Investor video Wealth Masterclass Sisa Ngebulana is the Founder and Don’t miss the Wealth Masterclass with guest speaker Donald Trump Executive Chairman of the Billion JNR. The seminar will show you Group Limited and the CEO of how you can benefit from wealth Rebosis Property Fund. creation strategies and property investment strategies that guarentee success. Cape Town - 5th September, Crystal Towers, Century City. Johannesburg - 10th September, Convention Centre, Sandton. http://www.youtube.com/watch?v=jjCfYuIIl9c 58 August 2013 SA Real Estate Investor www.reimag.co.za www.reimag.co.za
Win A Weekend Away Worth R4690 One Lucky reader stands the chance of winning a two-night stay for two people in a deluxe poolside room at the Arabella Hotel & Spa. Included in your stay is bufet breakfast & access to the Arabella Spa facilities. Answer this simple question: Where is the Arabella Hotel & Spa situated? Log onto the Arabella Country Estate site to fnd the answer: www.arabellacountryestate.co.za <http://www.arabellacountryestate.co.za> Correct answers will go into the prize draw for the two-night stay. Send all your answers to [email protected] with your name, surname & contact details. Please note the closing date is the 31st of August, winners will be announced via our Facebook & twitter pages, so if you haven’t liked our Facebook page, please do. The prize is non-transferrable & validity to be subject to availability, and not valid between 20 December to 4 January. Central Reservations Ofce: Tel: 0861 50 50 50 or +27 21 430 5302 Email: [email protected] www.reimag.co.za www.reimag.co.za August 2013 SA Real Estate Investor 59
AREA REVIEW BY ANGELIQUE REDMOND Welcome To Arabella You may not want to leave ocated just 110 km from Cape Town lies natural surroundings and the delicate balance Another worrying factor you will not fnd here the Arabella Country Estate, a tranquil of man-made property and nature has ensured is crime, 24/7 security and a fully fenced and Land breathtaking lifestyle estate. Driving that the estate is in harmony with the plants a guarded environment ensure your peace of into the Estate, the friendly and smiling staff and trees. Steve explained that although some mind. As with every estate there are rules and greeted me and directed me to the Arabella houses are ready built in a very organic style of you must abide by the homeowner’s association hotel, where I was to be taken on a guided tour of architecture, you can choose to build your own, rules, but they are far from draconian and the Estate. My tour guide was one of the estates but the Homeowners Association responsible instead simply enforce that the estate retains its residents, Steve, who after visiting the hotel for for the overall look and concept of Arabella integrity and you don’t end up with a pink house a conference when he was working for Cadbury must approve the plans to ensure that the natural next to your home. If you are a golfer, welcome fell in love with the peaceful and opulent estate. look and feel of the estate is not compromised. to heaven, outside your door lies the fourth best A short while later, Steve had his hands full, Surprisingly this plays out rather well golf course in South Africa, and an interesting renting a house on the estate while supervising aesthetically, as individual characteristics of the thing to note is that the golf course came frst the building of his own on one of the vacant houses emerge, but the overall style of the houses followed by the estate and hotel. This goes a plots. Today Steve was showing me what life on with natural materials, slate roofs and subdued long way towards explaining how the homes the estate was like. earth colours retains the integrity of the estate as and the golf course work so well together, with a whole. Inside the houses, the eye is teased with homes nestled into the natural beauty and the The very first thing that struck me while stunning views of the estate, the golf course and golf course stretching the length of the estate. whizzing around on the golf cart (a much the lagoon, there are no bad views at Arabella. Should you not be a rabid golfer, (and I certainly more economical and faster way to get around Natural lighting foods the houses, large glass am not) you can still enjoy the views, benches the estate) was the sounds of nature. Without windows, skylights and walls of glass create a are tucked away on each tee, so you can sit a background of traffic or sounds of the city look that is modern, light and airy. Each home and simply enjoy nature. At certain times of hustle and bustle, the birds were creating a song has its own individual style, some very modern the year you can use the benches to spot the that spoke to the heritage of Arabella. Te area with large open plan space and diferent levels, celebrity, with esteemed players such as Ernie is home to more than 1600 fynbos species and and some more traditional in look and feel. One Els, Gary Player and celebrities like Jodi Foster abundant bird and animal life and is set on 113 thing most have in common is that you or your and Samuel L. Jackson having graced the golf hectares of land with a 1.6km frontage of lagoon. guests need never share a bathroom again, with course. When looking out over the land, you could each room having its own en-suite bathroom. As almost forget that you are in fact looking at a a girl I highly approve of this, you can never have It’s easy to try and pigeonhole the estate as a housing estate. Te homes are nestled into the too many bathrooms. retirement resort, but that is not the case, an 60 August 2013 SA Real Estate Investor www.reimag.co.za www.reimag.co.za
LIFESTYLE eclectic mix of both working, retired and work- of Waterford Sauvignon Blanc, it’s one of those from-home families live on the estate, along moments you simply want to freeze, sipping with foreign holiday homeowners. And if you wine as the sun sets over the lagoon, I am truly happen to have some adorable ankle biters, humbled by the natural beauty and 5-star there are schools not far from the estate in the experience Arabella ofers. With the sun truly neighbouring town of Hermanus. Both public set, and a quick change of clothing I am of to and private, they have excellent reputations and dinner at Premier, and I have heard some great ofer schooling from nursery right through to things about this restaurant so I am eager to high school. try it out. Te menu is straight from the cordon bleu and fashion cookbooks and the food is After my tour of the estate, I am sold, the like a work of art. Te staf are truly happy and views alone make me want to sell some organs create an enchanting atmosphere to sip a glass and put down a deposit on a house. Steve of wine and sample the amazing cuisine. Never returns me to the hotel and after a quick cofee have I had a foie gras crème caramel, and the and exchange of numbers should I need any richness of the foie gras is cut by the sweetness guidance on places to visit, I am at the reception of the caramel, creating a heavenly dance of desk checking in to my room at the Arabella ingredients on my palette. Next up is a taste Hotel. Te 5-star treatment has me feeling quite of the peppercorn beef fillet and the meat is pampered and I head down to the spa, I have cooked to perfection, my knife simply sliding heard wonderful things about the indoor heated through the meat. Te rich favour of the pepper hydro pool and it certainly doesn’t disappoint. doesn’t overwhelm the taste of the fllet and the Body temperature water buffets my tense natural jus makes this dish a winner. Feeling muscles and I start to slowly relax, the stress of about 5 kg heavier and sated, it’s time to head the week before receding as I simply lie and let back to my room and the fairies have been hard the water do it’s magic. My next stop in search at work placing water and chocolate next to my of stress relief is a neck, back and shoulder bed and putting blackout lining behind the massage at the Spa. Ronald rubs and pounds curtains, ensuring that no matter what time I my stubborn knots into submission, after ten wake up, in my room it’s like midnight. minutes he tells me he doesn’t even have to ask if I have a stressful job, but lying on the massage It is with a heavy heart that I check out the next table with scents of jasmine and soothing music morning, my experience has left me relaxed and I in my ear, I am truly in heaven, and if I could feel like I could take on the world right now. Te steal Ronald and take him back to Cape Town Arabella Estate ofers something for everyone with me I would, his massage was that good! and ofers the highest quality of life and will give And what better way to end a massage than a you a truly unforgettable experience, as for me, I good steam and then sauna? Back in my room am of to play the lotto, more than a destination, I order a cheese board and sip a chilled glass I want to call Arabella home. www.reimag.co.za www.reimag.co.za August 2013 SA Real Estate Investor 61
TECH TALK BY RUSSELL BENNETT The Wintel Whirlwind Rises Intel is back f you thought that the tablet and smartphone Any application which the desktop version Te high resolution the Retina display of iPad wars may have been starting to settle, of the software will run, the tablet iteration 3 is capable of asked too much of the chipset it Iprepare to have your mind blown over the can handle too. The only drawback being was frst paired with, causing both performance last half of this year. Tis, ladies and gents, is that this version of Windows 8 runs best on problems and quite severe battery drain. Apple really where the battle gets started... Intel architecture, resulting in tablets which could counter the latter by squeezing in a larger are quite pricey even compared to the Apple cell, but the former was only fixed with an Apple may have arrived in the market frst, competitors. Trickily enough, Windows 8 also upgraded hardware architecture. and have been enormously successful too, make comes in an RT favour, which happens to be no mistake. But that didn’t stop the upstart OS the only version that supports the more popular Windows 8 with Bay Field SoCs will have made by none other than the gatekeeper of how ARM processors. So you could either have no such hurdles to overcome. What’s more, the world views the Internet today, Google, pricey but appealing, or cheaper but limited to a these latest parts are also built using the latest coming in and turning the market upside down level of functionality not all that superior to an fabrication techniques, a move to a 22nm die with sales volumes easily outstripping the Android-powered device. size means more power with even less power pioneer’s eforts. consumption, less heat to manage, and an Which is probably why Windows 8 tablets even more compact package to design around. Apple alone, after all, can only produce a haven’t really had the impact we might have Te huge network of partners this formidable fnite number of products in any given month. expected as yet, and is stuck struggling to alliance has built in the desktop space over the For real volume, spreading the platform around catch up. years are having a feld day with designs around over a variety of huge global electronics brands this architecture right now, and we’ll be able to will always win. Google is only now actually The old Wintel alliance is a force which buy the frst results very, very soon. releasing its own hardware design, but already cannot be counted out early though. In June Android is easily the strongest player. User this year, Intel demoed its own reference tablet Which brings me to the killer. Not only will experience debates aside. designs built on the brand-new Bay Field SoC these tablets be superb in terms of performance (System on Chip) architecture. In short, quad- and responsiveness, they’re going to be driving Te two biggest guns in technology for the last core Intel Atom CPUs running at 2.1 GHz the prices down too. Expect to be able to pick up two decades, however, have been conspicuous backed up by some major GPU firepower a Retina-matching display backed by this latest in their relative silence. With Microsoft only replacing the PowerVR SGX 544. Intel’s own Intel architecture and running a full version of officially releasing Windows 8 late in 2012, 7th-gen Ivy Bridge GPUs in fact, which deliver Windows 8 for Christmas 2013 in the R4000 and tablets sporting the new Microsoft fagship graphics horsepower of between 3 and 4 times price bracket. only hitting shelves early this year, one of these the performance of the older part. monoliths had showed its hand. However this, The Wintel alliance is rising again, in the too, was only the initial warning shot. Te really This means the new architecture has the mobile space this time. Tis pair of giants hasn’t large cannons had yet to even be loaded. juice to power screens with a much higher dominated the desktop PC environment for pixel density (PPI) than before, without any going on three decades now for no reason. Don’t Windows 8 tablets are lovely to use, but the performance concerns whatsoever. A hiccup think it beyond them now that they’ve teamed real trick of this environment is the ability which even the mighty Apple had to face up up once more to become just as dominant in to run not only the new breed of Windows to with the iPad 3, and the reason why this mobile, regardless of the success of the iOS and Store apps, but “legacy” software as well. generation was so quickly sidelined and updated. Android systems. 62 August 2013 SA Real Estate Investor www.reimag.co.za www.reimag.co.za
MOTOR TALK BY RUSSELL BENNETT The Downsizing Dilemma Does it work? n our next issue of REIM, we look at several That’s not to say these same manufacturing And how is this value passed down to the new cars which effectively embody the giants aren’t investing capital and going to some consumer? In higher prices for less desirable Imodern trend of downsizing to evaluate lengths to drive down their own carbon impact. products. Today, purchasing a car which is just when this approach works, and when it In recent years the major players have taken great greener and more environmentally efficient doesn’t. Like any new approach to minimising strides in reducing their output of pollution as than previous generations comes at a substantial costs while simultaneously reducing carbon well as increasing their utilisation of renewable- price premium, the most ludicrous example of footprint, the various considerations have to be energy alternatives compared to the dirty, which is the Ford Fiesta 1.0 Ecoboost which balanced in order to provide the customer with traditional sources. forms a part of this article series. a compelling reason to make the adjustment, as change is a state which most people around the However even these steps have not been taken Not only is it the most expensive Fiesta on world are only happy to deal with if forced to do in the interests of global philanthropy. No, sale today (bar the nicely spicy ST model now so or at least convinced by the positive aspects. despite the initial capital costs, these actions are added to the range), it’s comfortably the most justifed by increasing profts through reduction expensive Fiesta ever released. And it can’t A heavy-handed and dictatorial approach of costs. Manufacturing plants drawing the bulk justify this price tag by claiming to include a is not going to be accepted. In this scenario, a of their energy needs from their own supply raft of all-new efciency-boosting technology motoring manufacturer foisting a new product generated by vast solar banks might cost a lot to the development costs of which have to be which is in all the old quantitative metrics initially build, but over the years they represent a carried by the consumer, like for instance a inferior to more traditional products but does signifcant reduction in input cost which quickly hybrid vehicle can. All Ford has really done is provide superior fuel efficiency and produce amortises the initial expense and ultimately reduce the engine size by dropping a cylinder fewer emissions, won’t sell in huge numbers turns into an invaluable ongoing asset. and boost the power output of the result by purely on the strength of the argument that adding a turbo. Not rocket science at all in “everyone has to reduce their carbon footprint What’s more, these expenses yield carbon the feld of automotive engineering. if we’re to reverse the efects of human-induced credits for the corporation which they are able to climate change, therefore you must pay more proft from immediately by trading the long-term Any consumer putting an iota of thought for this new product even though it’s not as reduction in CO2 output on the global carbon into their new car purchase can recognise appealing a vehicle using the judgement criteria exchange. A mechanism which itself makes a the cognitive dissonance this reasoning of yesterday”. mockery of “reducing our carbon footprint for introduces to the purchasing decision, and the good of future generations” as the PR pieces isn’t likely to appreciate the sentiment. Tere Sure, the general public understands that will spin it. Driving down your own mega- are however several ways in which selling climate change is an issue, or at least is going corporation’s output of harmful greenhouse the concept of downsizing as a positive to be an issue at some unspecifed point in the gasses is itself an enormous business opportunity, does actually work, but trying to force the future. However this same general public is also as it enables other companies unwilling or unable customer to sacrifce the motoring pleasure perfectly aware that the companies at the top of to comply with the emissions output restrictions they’ve become accustomed to enjoying for a the economic food chain pay little more than prescribed to become compliant simply by higher price based purely on fear mongering lip-service to the problem while boosting their purchasing these carbon credits. So the capital is tantamount to simply not contributing to profts selling this so-called solution. expense generates immediate, real value. fnding a solution. www.reimag.co.za www.reimag.co.za August 2013 SA Real Estate Investor 63
LESSONS BY VANESSA CUSENS Selecting innovative leaders for Is a matter of consciousness hen Michael Jordaan announced that he would be leaving his position as WCEO of First National Bank (FNB) in May this year, he reminded the media that he was “stepping down”, not “retiring”. “Tere are 193 countries in the world and I haven’t seen all of them. I want to visit places where there are parks, the introduction of Disney-owned hotels, search tools only assess candidates’ functional great ideas around technology and innovation,” restaurants and merchandising saw the company competencies, but to identify innovators, he told a press conference. His choice of words proft rise from 20% to 75% of a family’s holiday candidates’ “consciousness” must also be assessed. is telling: under his tenure, FNB gained a spending. Consciousness is a concept backed by scientifc reputation for always being at the front-end of research. It refers to eight important behaviours banking innovation. In October 2012, FNB was General Electric (GE) has been a business – namely creativity, openness, trust, courage, named the most innovative bank in the world at giant for more than 50 years – Te Proft Zone self-awareness, confdence, intuition and instinct the BAI-Finacle Global Banking Innovation points out that this continued ascendancy is – shared by top leaders. Awards – recognition of the company’s ability to thanks largely to former CEO Jack Welch’s track and respond to customer needs and evolve foresight. When he saw a decline in profts from “The biggest shift business is undergoing continuously. the company’s core business – manufacturing at present is a move away from assessing aircraft engines and appliances – despite the fact performance purely in terms of the bottom “The importance of innovative leadership in that it commanded considerable market share, line,” says Barrick. “Instead, a more holistic business has become even more apparent in he reinvented the company to take advantage trend is emerging – with companies like Apple, the 21st Century environment,” says Georgina of new proft zones: in fnancing, servicing and Microsoft and Google realising that they have a Barrick, CEO of executive search frm Humanity maintaining these products. responsibility for the social and environmental Search & Select. “We’ve seen a radical change consequences of their actions – the so-called ‘triple from the 20th-century paradigm, which “Reinvention is central to innovative business, bottom line’. Tycoons like Bill Gates, Warren concentrated on market share and efciency as especially in the information age,” says Georgina Buffett and Patrice Motsepe also understand the drivers of proft. As Adrian Slywotzky, David Barrick. “Instead of market share, Slywotzky et that philanthropy is not merely an act of charity Morrison and Bob Andelman put it back in 1997, al talk about identifying ‘proft zones’ and ‘non- – it’s an investment in the future. Ambitious in their ground-breaking business book Te Proft proft zones’. Te key to sustained success is doing businesses need leaders who intuitively know that Zone, ‘market share is dead.’ In fact, under certain business in the proft zones and not committing they need to swell their ranks with innovators; conditions a company holding a majority market company time and resources to non-proft zones. they know that the triple bottom line is not a ‘tick share can be less proftable than businesses with Tey provide 22 diferent business designs; all of box’ exercise, but rather a focus that attracts a real smaller market share.” them showing how diferent criteria will identify return on the philanthropic or CSR investment. diferent proft zones, involving everything from It takes high-consciousness individuals to Successful leadership explores all niche marketing to brand reputation. But what implement this all-encompassing approach.” potential proft streams they all have in common is innovation: these In their analysis, Slywotzky, Morrison and businesses have leaders who have an intuitive The research is unequivocal – whether it’s a Andelman examined companies – and leaders understanding of evolving needs and desires multinational organisation or a small business, – that had moved beyond market share as a within the market. They also understand how the only way a company can stay successful yardstick, and seen increases in proft as a result. changes in society and technology can allow new in an ever-changing environment is constant Michael Eisner increased profitability at Walt interventions that multiply proft streams.” innovation; innovation that demands teams Disney by 3 000%, for example, by creating rich in CQ™. Humanity Search & Select has multiple profit channels spun off from the Innovation requires high-conscious developed the only tool to assess CQ™ as a 360° company’s core business: family movies. Films leadership application, and have verifed it on a sample of now generate a soundtrack album, a DVD, a If constant innovation is the secret of success, how more than 15 000 South Africans. Broadway show, a theme park ride and a range of does a business fnd the creative leaders it needs – souvenir merchandising. Around Disney theme at all levels – to drive that innovation? Traditional RESOURCES Humanity Search & Select 64 August 2013 SA Real Estate Investor www.reimag.co.za
RELOCATING The iconic WesbankFairland development Joburg Property Company turns 13 in 2013 RENOVATING As an agent of the City of Johannesburg (CoJ) Metropolitan Municipality, JPC is contributing to the objectives of the Growth and Development Strategy articu- lated by the Mayor and by utilising council-owned land assets to leverage private sector investment in public infrastructure. The City of Joburg Property Company (JPC) services an opportunity to participate in the economic include: development of the World Class African City. • Management of council property portfolio • Selling and buying of property JPC Background RE-FINANCING • Facilities management The Joburg Property Company was established in • Property planning and advise 2000 and as the only mandated agency of the City • Property management of Johannesburg to manage and develop land and • Property development and facilitation property on behalf of the City. It currently manages • Property maintenance a property portfolio worth over R8, 8 billion with 64 • Property register maintenance 000 properties covering at least 39 000 hectares. • Letting/leasing of council property portfolio, Since the 1st of November 2012, JPC has merged including with the Facilities Management Unit and Metro • Outdoor advertising Trading Company, in effort to consolidate key • Servitudes, encroachments and access rights functionalities in providing excellent service delivery control to our stakeholders JPC Objectives Achievements COMMERCIAL PROPERTY FINANCE FROM BIDVEST BANK The JPC objectives are to harness the City’s property Since its inception JPC has been responsible portfolio transactions to increase economic growth for iconic developments such as the Orlando Whatever you have in the pipeline, get the specialist financial solution for commercial and Broad-Based Black Economic Empowerment Towers in Soweto, Soweto Theatre, the Newtown properties up to R50 million. And take your business where it needs to be. (BBBEE), while creating jobs and economic development, Huddle Park Golf Course in Linksfeld opportunities for the disadvantaged communities and most recently the Jabulani Precinct in the Email [email protected] and your personal consultant will contact you. and businesses. Jabulani CBD in Soweto. JPC does not use agents or brokers when leasing or Key projects selling property as legal requirements directs for an The Land Regularisation Programme is the frst of its www.bidvestbank.co.za open tender system that allows all interested parties kind in City history and unique to any major Bidvest Bank Limited (Reg No 2000/006478/06) is a licensed financial services and registered credit provider, NCRCP17. BlastBC 123414
Mega Trends In Commercial Property Shaping the future of investors SOUTH AFRICAN REAL ESTATE INVESTOR GET THE RIGHT FINANCE Jason Lee tells you how ENSURE YOUR RETURNS In a volatile economy COME OUT ON TOP With Africa investments www.reimag.co.za FREE OFFSHORE HANDBOOK August 2013 R50.00 (Incl. VAT) WINNER R43.86 Other Countries SAPOA AWARDS Best Printed Property Publication 2013 Z AUGUST 2013 www.reimag.co.za MASTER INVESTOR JT FOXX ad-v5.indd 1 11/28/12 3:18 PM
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