A new era in shopping is beginning for Lephalale in Limpopo and its surrounds, with the Lephalale Mall development.

Lephalale Mall will open its first phase with 14 800m2 of convenient retail shops on November 22, which will include anchor tenants Game, in a 4 200m2 store, and Checkers, in a 4 100m2 store.

Representing a vast investment that will boost the local economy, Lephalale Mall is a joint venture between Moolman Group and Uniqon (Pty) Ltd. Construction started in January.

Steph Beyers, development director of Moolman Group says that Lephalale Mall has the potential to grow to a regional mall of 42 000m2.

“The mall and surrounding node will ultimately consist of 70 000m2 of retail and other commercial space once fully developed,” says Beyers. “Lephalale Mall will be a dominant retail shopping centre serving the needs of this fast expanding town. Local residents will enjoy a new shopping experience with all the shops and products they want at a single modern location.”

Expanding coal mining and power generating activities are the driving forces behind Lephalale’s growing economy. The Waterberg Coal Field in Lephalale is one of the largest coal fields in South Africa, and Exxaro Grootegeluk Mine – already the biggest of its kind in the world – is now increasing in size.

Power generation is also fuelling the local economy with the construction of the new Medupi Power Station well on the way. It joins Matimba Power Station, the largest direct dry-cooled power station in the world. Further, widespread agriculture, game farming and tourism are elevating Lephalale’s status on South Africa’s economic map.

Lephalale Mall will play a significant part in the area’s economic development, as it grows with its market, creates opportunities, jobs, and attracts local spending, says Beyers.

Lephalale Mall is in the new town of Onverwacht, and will also serve the residents of the established towns of Ellisras, Maropong and the surrounding areas. Lephalale Mall is on the corner of main arterial Nelson Mandela Road, Apiesdoorn Avenue and Onverwacht Road, on the western edge of the Onverwacht CBD in a major residential growth node.

“Retail is important in any community. Lephalale Mall will serve local shopping needs in a quality, modern setting which is central for the town and its neighbours,” says Henry Bendeman of Uniqon.

In addition to Checkers and Game, retail outlets will include Jet, Edgars Active, Mr Price Home, Mr Price Sport, Spitz, Studio 88, Rage Shoes, King Pie, MTN, Torga Optical and many more.

Founded in Polokwane, Limpopo, Moolman Group has operated in the property industry for more than four decades. Its core business is the development and acquisition of property investment, and it has co-developed Mall of the North and Makro in Polokwane, among other projects in the province.

Uniqon has a track record of almost 30 years in investment, development and management across retail, commercial and residential property.

Call Sonke Moolman on 012 361 7970.

Social housing goes way beyond just providing a roof over people’s heads. It’s a means of improving and upgrading entire communities and creating opportunities for more efficient commerce and industry, said Communicare social housing and community development director, Joel Mkunqwana.

He was commenting on the company’s new R55 million social housing project at Bothasig Gardens where work is well advanced on 120 new apartments on a 2.5ha site in the suburb. The apartments are in six separate double-storey buildings, designed to provide high quality comfortable accommodation at monthly rentals from as low as R650. Tenants will be able to move in by November.

“Our objective was to build the apartments as an example of how large-scale, affordable rental accommodation could create a focus of excellence in a community,” said Mkunqwana.

“The new apartments will also enable people who previously had to travel huge distances to get to their workplaces quickly, ensuring greater efficiencies. And generally, communities come to life in the late afternoon and evening, and the sooner people reach home, the sooner they are able to socialise and help build community spirit. It makes for a safer environment,” he said.

Retail and other amenities are also within easy reach of the residents at Bothasig Gardens.

The new apartments will be integrated with the existing Kent Durr complex of retirement cottages, increasing the number of housing units to 285. Very strict criteria governing the conduct of tenants have been applied and Mkunqwana said a high level of social responsibility is expected from the people who will live there.

One of the most important considerations at Bothasig Gardens is that rentals are lower than those generally applied in Bothasig and Edgmead, but the apartments provide accommodation that is of a very high quality.

The concept of the new housing project is founded on high principles of professionalism, and the building site is run to a strict standard of safety and efficiency. Bonny Ambler-Smith, site manager for the main contractor, NMC, said that the construction of all the units at the same time, and to the same schedule, allows for efficiently co-ordinated delivery of materials and simultaneous completion of tasks.

The apartments are Communicare’s second new social housing development in the past two years, and follow the company’s mission that commits it to deliver affordable housing by building integrated, sustainable communities.

Bothasig Gardens is being developed as an infill project in a designated Restructuring Development zone.

Communicare is the largest accredited not for profit landlord in the Western Cape with 3 600 rental units – second only in size to the City of Cape Town. Because of its size, Communicare is able to offer the lowest rentals a square metre to households in the R2 500 to R7 500 income bracket.

Aside from the physical provision of social housing in line with the new mission, Communicare is also tackling diversity management, the promotion of social cohesion, and transformation, as part of its forward planning. This includes respect for cultural differences and the recognition that the company can create value, and in so doing, develop real communities.

The Bothasig Gardens apartments will be ready for occupation from November and applications for tenants are open. Visit http://www.communicare.co.za/.

Flat market conditions continued in the first quarter of 2012 in Cape Town’s office sector with vacancies in certain nodes increasing over the previous quarter’s figures.

Dave Russell, a director of Baker Street Properties, says there has been a steady increase in office vacancies since 2009 as confirmed in the quarterly SAPOA Office Vacancy Survey. However, with few new buildings completed in the short term there is every possibility that vacancies may be reaching their peak.

He says significant change has been recorded in the CBD, where combined vacancies are now reaching 12 percent, which last happened in 2003. Of greater concern is that in Claremont combined vacancies are heading towards 20 percent, which is up from 13.7 percent in the previous quarter.

“The Rondebosch/Newlands node has experienced a substantial increase from 7.3 percent last quarter to 13 percent now. Bellville and Century City have been more resilient and currently have similar vacancy levels of 8.6 percent and 8.4 percent respectively. The ever popular V&A Waterfront is one of the exceptions to the trend, as it is down to a combined vacancy of only 2.7 percent. On another positive note, office vacancies in the Pinelands node remain low and are presently at 3.6 percent,” says Russell.

“Until there is a significant decrease in vacancies rentals will remain flat and well off their peak in 2008, when the global economic recession set in. Good economic growth and a return of business confidence are required before any change can be expected. It’s difficult to predict when this will happen, so the current trend could continue for at least the next 12 months.”

Russell says current market conditions are good for tenants, who should take advantage of this soft market and the concessions now offered by landlords. He advises them to use this opportunity to take a long term position on favourable lease terms.

]]> http://www.sapropertynews.com/cape-town-office-vacancies-continue-to-increase/feed/ 0 http://www.sapropertynews.com/western-cape-commercial-property-opportunities/ http://www.sapropertynews.com/western-cape-commercial-property-opportunities/#comments Tue, 15 May 2012 08:44:56 +0000 admin http://www.sapropertynews.com/?p=10358 Liezel Conradie, regional executive for JHI Properties in the Western Cape flanked by Ryan McFarlane regional broker manager for JHI Properties Western Cape and Marius Basson, executive: corporate strategy and asset management.

Although South Africa still faces economic challenges, a variety of opportunities exist for growth in the commercial property management industry, says Johann Boshoff, director, property management for JHI Properties.

“Positive signs include increasing enquiries for the uptake of space, with corporate organisations indicating their willingness to make decisions about relocation – including moves to larger premises. We also see new development opportunities in the market,” says Boshoff.

“Given the tighter trading conditions and rising operating costs generally we have noticed that larger organisations are inclined to incorporate all their business units in one convenient location rather than spread across areas or even regions – a factor that can have a significant positive impact on cost effectiveness.

“As a strategic move, and to capitalise on these trends and opportunities, Marius Basson, formerly director for JHI in the Western Cape, has been appointed executive of corporate strategy and asset management. He will provide a national service to listed companies and corporates, identifying their property needs and giving advice on better workflow and space utilisation as well as investments and regearing of leases.

“From an asset management perspective he will highlight the latest international and national market trends, as well as new and planned developments. This dual role will enable us to provide a more focused analysis of the performance of clients’ portfolios, and will also provide valuable input for our action plans for the business,” says Boshoff.

Liezel Conradie, formerly of Colliers and more recently executive manager for Hermans & Roman Property Solutions, has been appointed regional executive for JHI Properties in the Western Cape, and her key focus will be capitalising on various growth opportunities.

She says: “As is evident from the number of new leases that have been concluded during the first part of 2012, the commercial property market in the Western Cape is showing positive growth. There has been a visible increase in the letting of space in the commercial, retail and industrial sectors in the region, and the number of enquiries for space continues to rise.”

She says although the office vacancy rate in the city still remains high, there is a significant increase in the letting of office space in areas such as Century City and also Durbanville.

“The uptick in interest in office accommodation is mainly due to landlords competitively aligning office rentals with market related rates. They are also more conscious of keeping the office grading of their assets in line with demand, so they are more inclined to invest in upgrading their buildings and keeping up with market trends to retain maximum market rentals.

“Following the major capital investment in the Western Cape region – with new infrastructure and an improved transport system, I believe there are numerous property management opportunities, and we have already highlighted several key areas for our concentrated inroads into the market which include the Montague Gardens, Airport Industrial and Durban Road areas.

“In addition, we will be expanding our existing management portfolio in mixed-use development schemes which include commercial, retail and residential in one building, neighbourhood and convenience shopping centres, and property management for listed funds.”

Conradie says there is far more to property management than maintenance and collecting rent, and this is a fast-paced, competitive environment which requires you to move quickly and adapt rapidly.

“With this in mind we will also be building our property management division, focusing on understanding the landlords’ assets and strategies, unlocking the value and operating closely with asset managers to achieve the maximum returns on investment and capital growth of the buildings under management,” she says.

The first residents – including several returning expatriates – have taken occupation at The Vines, a village situated within the Val de Vie estate in the Franschhoek Valley.

When complete, The Vines will consist of 20 free-standing homes in a private section of vineyards. The developers have recently expanded the range of homes on offer to include new single-storey options with a choice of five layouts. The original double-storey houses with three or four bedrooms are also still available.

Pam Golding Properties is marketing the full title properties, which are all named after different wine cultivars. Prices range from R1.695 million to R2.875m, depending on size, layout and the finishes selected.

PGP’s area manager for Franschhoek, Surina du Toit, says five of the homes have already been sold, three of them to returning expatriates.

“We recently sold a three-bedroomed double-storey home to a professional buyer who has been living overseas for some time, but intends returning to South Africa soon. She paid R2.55m and will make her home here on her return. Buyers are typically starting to build as soon as transfer goes through, and two of the homes are already completed and occupied, and a third is nearing completion. The options for finishes include air-conditioning and vacuflow systems, timber pergolas and wrought-iron balustrades, and branded products like caesarstone and hansgrohe. This allows buyers to customise their homes within the overriding design theme.”

Residents of The Vines have access to the full range of amenities on offer at Val De Vie, including the brand new pre-school, which opened this year with its first 30 pupils.

PGP’s managing director for the Boland and Overberg regions, Annien Borg, says the estate is particularly well-suited to horse riders.

“Val de Vie has world-class polo facilities that attract international matches and players, and riders can stable and exercise their horses on site, making use of the stables and paddocks, as well as a 10km network of bridle paths and an Equestrian Centre with exercise arenas, lunging rings and professional trainers. Other facilities include a sports and leisure centre with a gym, tennis- and squash courts and a 25m heated indoor pool, where Ryk Neethling runs a swimming school. There is also a fine-dining restaurant The Polo Lounge, and close to 2km of Berg River frontage to stroll along, with abundant birdlife and mountain views. There are also places for children to play in safety, including jungle gyms – making this an ideal home for families.”

Call Ronel Pienaar on 082 556 2433 or 021 871 1480.

South African buyers continue to show interest in residential property in Mauritius, a location that has sustained its desirability as a prime tourism destination as well as a stable economy and democracy, says Jonathan Tagg, director for Pam Golding Properties (PGP) in Mauritius.

“Since opening an office in Mauritius 10 years ago, we have virtually sold out six Integrated Resort Scheme (IRS) and Real Estate Scheme (RES) developments worth a total of about US$300 million. All of these developments have been completed and only four units are still for sale in one of these projects.”

He says most interest is in the US$400 000 to US$1 million price range, which achieves the highest capital growth.

“Many buyers want relocation properties for the future and some investors are taking a longer term view of relocation. Others want to buy leisure property in Mauritius. In addition, an investment of US$500 000 gives them Mauritian residency, a factor often critical to the transaction. We also have buyers looking in the over US$1m price range, but there is less stock available in this bracket.”

Tagg says at a recent PGP property exhibition held in Melrose Arch in Gauteng there was interest from people wanting to retire to Mauritius and those who will continue to work while basing their businesses from the island.

“Mauritius is already very popular with people who conduct business outside South Africa and want a different tax domicile, and is particularly suited to families as it’s very secure, has good schools and flights to most destinations. Add to this the appeal of an idyllic island lifestyle with year round sunshine and warm water, and the fact that the country has developed substantially, particularly over the past five years, and it’s not difficult to see why Mauritius is becoming increasingly sought after as a permanent residential location.

“The road network has been substantially upgraded, a new shopping mall has been completed, a cyber city built and a new airport is under construction to cater for twice as may tourists as before.

“Bear in mind that Mauritius has been popular for some time among South African home buyers, expatriates in Dubai, French speaking countries and the UK. The Mauritian property market was closed to foreign buyers until 2004, which created a pent-up demand for homes, especially leisure property. And until late 2008 the only available properties were in IRS schemes where prices were beyond the reach of most buyers at between US$1.2m and US$6.5m. In late 2008 the government introduced the RES projects and property was available for purchase from US$400 000. Most important, these new developments enable buyers to acquire property in the popular towns of Grand Baie and Tamarin, which created an additional wave of interest which has driven the market,” he says.

Now PGP is marketing three new residential developments in Mauritius, two of which are developed by SA developer, 2Tribes, which has a string of completed projects on the island. In the exclusive Pereybere quarter, a short walk from well known Merville beach and three minutes’ drive from Grand Baie, the new AO Luxury Resort consists of 32 residential units ranging in size from 195m2 two-bedroomed units to 446m2 three-bedroomed villas. Ecological design and building principles have been put into place wherever possible, and finishes include natural stone and timber. Prices start from US$ 600 000 and PGP has already sold 12 units.

At the 27-unit Element Bay Resort, another 2Tribes development which is also in the Grand Baie area, 14 of the one and two bedroomed apartments and penthouses have already been sold through PGP, priced from US$400 000. Watersport facilities are provided by the nearby Coin de Mire Hotel, and each apartment includes a parking bay as well as a private terrace or a balcony.

Tagg says these are the fourth and fifth developments PGP has marketed on behalf of 2Tribes, and construction on both projects should start in the last quarter of this year.

In the heart of Pereybere, only three units still available at La Residence, an exclusive development with 26 luxury townhouses priced from US$650 000. The design focus incorporates slate floors, plantation-style shutters and natural materials. Construction is now starting on this project.

At a fourth development in Tamarin on the west coast of Mauritius, only four units remain in the 40-unit La Tourelle development, and the project is scheduled to be completed in four months’ time. Priced from US$450 000, the homes are on an elevated 1.74 ha property, blending into the hillside of La Tourelle Mountain.

Call Jonathan Tagg on 083 680 6012 or Mauritius – 00230 498 3842 or email jonathan.tagg@pamgolding.co.za.

Stumbelbloc is fast becoming the DIY builder’s first choice in hollow core construction blocks, because the system is very economical, easy to use and the blocks are extremely durable, says Andre Esterhuizen, the Stumbelbloc developer and chief executive.

The blocks are made in plastic moulds that fit together and are filled with cement, sand and stone. They can be used in the construction of various buildings, from houses to warehouses and factories, and other structures such as septic tanks and French drains. Esterhuizen says an 85m² factory was recently built at a cost of R1 900/m². The R28 000 builder’s fee was included in this price and the blocks were delivered to the site at R12 each.

“Owner builders can reduce delivery costs by manufacturing their own blocks on site. You could also set up a mini-factory with as few as 34 moulds (or as many as you wished depending on the size of the project). To fill 34 moulds you would use one bag of cement, three wheelbarrows of sand and two wheelbarrows of stone. This mix ratio produces 5.5 MPA blocks, the standard required for single storey buildings up to 3.3 metres high with a gable height of 5.2m. The strength of the blocks can be changed to suit the type of building by changing the cement percentage.

“We have found that there is now a growing tendency for farmers to finance the purchase of moulds and train their workers to build their own houses,” says Esterhuizen. “This creates a sense of upliftment in the community and also creates employment.”

He says in the Marydale area in the Northern Cape, a local pastor, Hennie Mare, convinced the local farmers to invest in the upliftment of the people in this area, where about 80 percent of the population of 2 500 is unemployed.

The farmers bought the moulds through the church to start a brick factory as there was no construction block factory nearby. They then bought the blocks that were made by this factory, trained the workers to build, and paid the workers for their building work, creating employment and benefitting all involved.

“The demand for blocks in Marydale has been so good that we have had to change our status from a non-profit organisation to a NPC (a non-profit company) and the project is so successful that we plan to use the profits for further upliftment in the community. We are even turning away additional orders as we cannot meet the demand,” says Pastor Mare.

“Although this project was launched as a charity it has fast become a self-sustaining business benefitting the whole community and we are told that similar townspeople are investigating and observing this project closely to see if this can be replicated elsewhere,” he says.

For further information on how this product can be used in various construction projects visit www.stumbelbloc.com or call Andre Esterhuizen on 083 228 8036.

That’s the word from Rudi Botha, chief executive of bond originator BetterBond, who says: “In our business, we have already seen interest rate concessions on home loans decline over the past few years from an average of 1.5 percent below prime to the prime rate, with most borrowers now having to pay the prime rate of 9 percent or more.

“The average interest rate granted to customers by banks on the R2.4bn worth of home loans originated by BetterBond in March is now at prime, whereas the average four years ago was prime minus 1.5 percent. And with the implementation of the Basel III rules, we and many key industry people expect that the ‘standard’ home loan interest rate will have to be set one or possibly even two percentage points above prime, because the cost to the banks of funding these loans will rise by that much.”

In addition, he says, it is likely that the banks will be even less keen on long-term lending than they are now, and increasingly prefer to make short-term loans rather than 20-year home loans.

“In short, Basel III means it is going to get even tougher for homebuyers to qualify for home loans in terms of the income requirements and their credit records, and they are generally going to be able to afford lower prices than they thought.”

The likely effects of the changes are illustrated by the fact that on a R1 million loan amount at a rate of 10 percent, the monthly repayment would be R9 650, compared to R8 997 at a rate of 9 percent over 20 years. This increase in repayment of more than R650 a month will affect what buyers can afford and the total loan obtainable from a repayment-to-income (RTI) point of view. This means that buyers who would have qualified for R1m loans will probably only be granted loans of R950 000.

The same exercise on a R500 000 loan amount shows that at 9 percent interest over 20 years the monthly repayment would be R4 498 and at 10 percent, R4 825. The increase in repayment of R326 could mean the difference between being able to afford to buy a home and not. And, coupled with the impact it would have on the client’s RTI ratio, would only qualify the buyer for a loan amount of R470 000.

What is more, Botha says, this scenario does not even take into account the expectation that in response to rising inflation, the Reserve Bank will possibly start to raise interest rates again within the next 12 months.

“The combined effect of these possible increases, first by the banks and second by the Reserve Bank to 11 percent from the current rate of 9 percent would result in an increase in the monthly instalment on a R500 000 loan from R4 499 to R5 161, and that on a R1m loan from R8 997 to R10 322,” he says.

“And the increases may well not stop there, which is why we believe the time has come for borrowers to consider the possibility of fixing the interest rates on their home loans for a period. In addition, those who are thinking of buying shouldn’t delay too long, as qualifying for the home loans they want will become more difficult if Basel III is implemented in its current format.

“The implementation of Basel III rule will undoubtedly have a major impact on the consumer’s ability to afford property. In saying this, it’s imperative that these considerations be taken into account when the final decision is taken to implement Basel III,” says Botha.

By that time, says the review, the United States will have dropped to third position, although its average per capita income will still rank it very high, close on the heels of Singapore and Norway. China will by 2050 be ranked the number two economy in the world.

Discussing this recently, Lanice Steward, managing director of Knight Frank’s South African associate, Anne Porter Properties, drew attention to the comments in the report by two Indian entrepreneurs, Raj Kundra and his wife Shilpa Shetty.

“Obviously if you are keen to invest in property where markets are growing fastest India must now be one country on which you should keep a close watch. The two entrepreneurs mentioned in the Knight Frank Wealth Report have said that India has relatively few formal loan structures through which cash can be accessed. This insulates it to an extent from global economic fluctuations, but it also means that foreigners trying to buy property there will probably need substantial resources and will have to cope with widely varying sets of development laws and criteria. India has not yet made it easy even for its own citizens to invest in property.

“Raj Kundra does, however, predict that India’s central city office and retail cities, including those in the second tier such as Nagpur and Ludhana, will probably be among the best property investments it is possible to make in the foreseeable future. It could be added that as English is widely spoken throughout India and the British Common Law system still prevails in the Indian law courts, business dealings tend to be faster and less frustrating than in China and many other emerging countries.”

Raj Kundra is also reported as saying that India’s rapidly growing new cities are already some of the world’s biggest retailers of luxury goods, including expensive motor cars. Sports sponsors such as himself, he says, find that they are achieving excellent brand promotion and good returns on their investments in cricket and horse racing.

“The impression created by the Knight Frank Wealth Report,” said Steward, “is that Indian property, having lagged behind the rest of the world for many years, is now starting to take off, making this territory one which should be definitely considered by serious investors.”

Anyone who has kept track of the shifts in economic power and in the growth or decline of property values has for the last five years or more reported a steady increase in capital flows, including property investment, to the Far East, the main recipients at the moment being China, India, Singapore, Hong Kong, Taiwan and Malaysia.

Nevertheless, says Steward, the Knight Frank/Citibank Wealth Report makes it clear that Africa and other emerging economies are seen as places where property investors should now be looking for real growth in the next decade.

“The report says the International Monetary Fund predicts that the emerging economies will expand by 5.4 percent this year and 5.9 percent in 2013. This significantly outpaces the GDP growth of 1.2 percent this year and 1.9 percent forecast for the advanced economies. Citibank’s chief economist Willem Buiter has predicted that the North American and Western European share of global GDP will fall from its 2010 level of 41 percent to just 18 percent by 2050.  He also predicts that China will overtake the US as the world’s economy by 2020 and that by that 2050 India will be in the top spot.”

Other fast growers, says Buiter, will be Bangladesh, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam – in most cases the chief reason for this is that they have exportable natural resources.

Steward says it’s interesting to note that just on 80 percent of the 6 000 affluent people who participated in the Knight Frank survey are either satisfied with or optimistic about the future wealth creation prospects in Africa, and although 75 percent listed local political instability as a potential worry, 82 percent rated global economic problems as just as threatening.

“To the surprise of many,” says Steward, “residential property values in Africa on average rose by 8 percent in 2011. Coming off very low initial bases, African property has proved to be a star performer when many Asian countries dropped back in 2011 after phenomenal growth. It is for this reason that property companies like Knight Frank are expanding their footprints into Africa at a fairly rapid rate.”

But, according to Mike Greeff, chief executive of Greeff Properties, the local demographic is beginning to shift.

Until a few years ago, the strict, no liquor licence policy, rendered the seaside suburb a “dry area”. Alcohol is now sold in restaurants, but there are still no bottle stores in Fish Hoek.

Greeff says older folk are relinquishing the homes they have owned for the last 30 years or so, and are moving to lower maintenance homes or retirement villages. They’re leaving a host of older homes that are being snapped up by younger buyers, who are keen to raise their families in the valley.

“With three primary schools and a high school, numerous shops, restaurants, coffee shops, pubs and a popular beach, Fish Hoek is fast becoming the stomping grounds of an increasing population of professional young families,” says Greeff.

“Fish Hoek property ranges from apartments, townhouses and cluster homes, to family homes, villas, retirement complexes and vacant land. The area offers excellent value for money, particularly compared to other coastline areas on the Peninsula. This accounts for Fish Hoek’s steadily rising popularity among local and international investors. Interest in Fish Hoek property is constant, and prices are slowly but steadily moving up.”

Greeff’s Fish Hoek branch is marketing a number of homes, ranging from a two-bedroomed apartment, with two bathrooms, a lounge, a family room, a parking bay and a communal swimming pool for R750 000 to a four-bedroomed house priced at R4.9 million.

Greeff says his agency’s recent sales include a three-bedroomed Silverglade townhouse for R1.1m, and a three-bedroomed family home for R1.225m.

“Of the 402 units that were sold in the suburb during the past year, just over 50 percent were bought by younger families and singles. And in one road alone, Rhine Road, four homes were recently bought by younger buyers,” he says.

The redevelopment of the suburb over the past few years and the clean-up of the promenade area have greatly contributed to the renewed interest, say agents Craig Robinson and Debbie Koping.

“Consequently, sales numbers and average prices are increasing. In 2009, only 340 units were sold in Sea Point and this increased to 380 in 2010 and 402 last year. The average price of an apartment here is now just over R1.4 million and just over R2.7m for free standing houses.

“In addition to its seaside and central location, good schools including Redham are major drawcards for young families and singles are drawn to the trendy lifestyle. Properties in Sea Point and Green Point enable buyers to acquire Atlantic Seaboard homes at lower prices than the other suburbs here,” say the agents.

Rhine Road is one of the connecting streets between High Level and Main roads and has been particularly popular with younger buyers. The road is close to Sea Point Primary and High Schools as well as the local facilities. Two Rhine Road homes were sold to young, single buyers. The first is a renovated cottage that fetched R2.05m and the second is a house that was sold for R2.2m. A renovated three-bedroomed cottage at 16 Rhine Road was bought at R2.7m for two young brothers starting out in the city. The agents say this property was sold within a week of being listed.

“A single parent bought a home in Mount Nelson Road recently for R1.95m. Renovations are already underway here that include creating parking and a courtyard garden.

“Properties just below High Level Road are also in demand, especially with buyers who want to renovate and turn a quick profit. Here, offers have come in for around R3m. A good example is 7 Law Road that was sold in mid-2011 for R3.4m. It was renovated and resold in January this year for R5.3 million.”

Caption

This renovated double storey cottage at 24 Mount Nelson Road, Sea Point is for sale at R2.9 million.

The latest statistics from mortgage originator BetterBond also show that there has been a steady decrease in the percentage of loans granted to people over the age of 50 for the past year, despite the fact that from this age on, an increasing number of people are inclined to sell up their family homes and downsize to smaller properties or retirement villages.

The implication, says BetterBond chief executive, Rudi Botha, is that a significant number are now either using the equity built up in their large properties to pay cash for smaller homes, or perhaps delaying the move from their family homes until home prices are more favourable.

“An encouraging development in the past 12 months, however, is that the percentage of loans being granted to buyers between the ages of 20 and 30 – who are typically first-time buyers – has gone up substantially, from about 16.5 percent to almost 21 percent,” he says.

“Taking into account that the total number of loan applications has increased by 45 percent in the past 12 months, this indicates that there is a healthy amount of ‘new blood’ coming into the market that will, in due course, result in increased prices.”

Meanwhile, the BetterBond stats also show in which areas bonds have been granted, with 80 percent of grants pretty evenly divided between buyers in Greater Pretoria, the northern and western suburbs of Johannesburg, the Western Cape and KwaZulu-Natal.

And according to these figures, the average loan amount being granted in Johannesburg North and West is now around R837 000 compared to R840 000 a year ago. The average in Greater Pretoria is R719 000, down from R729 000, followed by the Western Cape at R700 000 – up from R656 000 – and KZN at R645 000, compared to R659 000 last year.

“These suburbs offer an easy commute to the Cape Town and Bellville business centres as well as to Paarl and Stellenbosch,” says Annien Borg PGP’s managing director for the Boland and Overberg regions and incorporating the Tygerberg suburbs.

“They also offer some of the best value for money to be found in the Tybergerg suburbs, making them particularly appealing to first-time buyers.”

She says the suburbs contain a broad mix of housing options, from apartments in secure complexes to free-standing townhouses, larger family homes and even a few luxury properties.

“Vredekloof is the older of the two, a well-established residential suburb, popular with families and including several mansions belonging to local business owners. The newer Klein Bron Estate and Klein Bron Park are secure estates. The suburbs are just a few kilometres from the Cape Gate Mall and new Cape Gate Medi-Clinic, as well as a Virgin Active gym, a Curro private school, and the dual medium Brackenfell Primary and High schools. A new Makro store is also nearing completion nearby, and sports-lovers have easy access to the Kuils River and Durbanville golf courses as well as the Brackenfell sports grounds. Many homes here enjoy views of Table Mountain or the Boland Mountains, or both.”

PGP’s area manager for the Tygerberg suburbs, Maureen Nel, says you buy obtain a two-bedroomed apartment in the suburbs from R540 000 to around R650 000, and mid-level family homes can be bought for R1.1 million to R1.5m. Larger and more luxurious properties are priced from R2m to around R4m.

“There is strong demand for freehold and sectional title properties at present,” she says, “especially in the R900 000 to R1.5m price category. Over 60 percent of our buyers are aged below 50, a strong indication of the growing popularity of this area with first-time buyers and younger families. Another key source of interest is from parents of students, or even postgraduate students themselves, wanting safe, decent homes with easy access to the Stellenbosch campus, just 17km away. The student market also helps drive the demand for rentals, which are in strong demand across all price ranges, from apartments at around R4 200 a month to luxury homes leasing for over R20 000 a month. The strength of this rental market also makes Vredekloof and Kleinbron very attractive options for buy-to-let investors.”

Nel says the suburbs have offered good returns on investment over the past decade.

“For example in Klein Bron Estate a plot bought in 2003 for R220 000 was sold in 2005 for R640 000. The new owner then built a 450m2 house on the property, which is now on the market at R3.6m. Another plot bought for R175 000 in 2002 was re-sold four years later for R950 000. It too was developed with a substantial house, and is now on the market at R3.5m. In Vredekloof, a large family house bought for R560 000 in 2004, was re-sold last year for R1.8m, and a substantial home bought in 2006 for R995 000 was re-sold earlier this year for R1.84m.”

Borg says the market in these suburbs is very active at present. In Vredekloof and Vredekloof Heights 68 properties changed hands last year, and in Kleinbron a further 39 were sold including freehold and sectional titles sales, across all agencies.

“Those are substantial figures for a relatively small area,” she says, “proving the importance of good value for money in the current economic climate.”

“In the suburbs of Bellville more sellers are putting their homes on the market for positive reasons such as upgrading to their dream homes. There are also many positive reasons to buy now, such as the interest rate being at a historic low and banks being more willing to provide mortgage finance. This year, a number of buyers who have been renting for the last few years finally want to buy their first homes and others want to upgrade to bigger family homes.

“Home ownership ranks high with South Africans, most of whom aspire to own their own homes compared to the UK and Europe where most people rent all their lives. Owning your own home is a secure foundation upon which to build a life. It creates wealth through forced saving and the fact that first time buyers can get home loans means that the barrier to entry is low.”

He says the suburb of Oak Glen offers some of the most affordable home options for middle income and first time buyers who have represented close to 60 percent of all buyers over the past year.

“The property market here has grown in strength over the past few years. More than 100 properties were sold here over the past year, up from 98 in the previous year. Average sectional title prices are also up to R437 000 from R390 000 the previous year and average house prices are up from R768 000 to R923 000. This notwithstanding, buyers can still get two-bedroomed apartments for less than R500,000 and a three bedroomed house with a double garage and swimming pool for under R1 million.

“The more expensive suburb of Welgemoed is not a high turnover area as many owners tend to hold onto their properties for more than 10 years, but demand is growing for homes here among younger families and professionals. There has been excellent year-on-year growth in the average price of homes in this suburb from just over R2m in 2007 to close to R3m now.

Nestled around the Bellville Golf Course in an elevated position, the homes in the suburb have large plots with established gardens and many have views of the Stellenbosch mountains. The homes are spacious, and many have features such as air conditioning, underfloor heating, braai rooms and swimming pools. There are excellent schools in the neighbourhood. Houses generally cost between R1.5m and R3m, but you can pay up to bout R5m for large architect-designed homes, says agent Andre du Toit.

These comments were sparked off by a recent sectional title court case (Cassim vs Property Management 2011), which was one of several reviewed by Professor Henk Delport in his recent update on property legislation given bi-annually to members of the institute.

In this case, two members of the body corporate objected to the fact that the trustees had not only borrowed a sum of money from Voyager Property Management but had apparently done so without consulting the members and had not disclosed the size of the loan.

At the body corporate’s 2004 annual general meeting the two owners proposed that the loan agreement be cancelled – but this was rejected by a large majority of the members.

The two aggrieved owners then got themselves elected as trustees – and in their individual capacities sued the body corporate, Voyager Property Management and the other trustees and the managing agent for the loan sum to be recovered. They claimed that the loan agreement was invalid as one of those involved in signing for it had not at that time been a trustee.

In August 2005, the High Court suspended all the trustees from office because the scheme was in financial difficulties. However, the two trustees persisted with their claim. When the case came to court the judgment was that the two owners, no longer being legal trustees, had no rights in this matter and the claim was dismissed.

The owners then appealed to the Supreme Court which also dismissed their claim, confirming that, as the owners had been suspended from their trustee positions, they had no legal standing. If, as unit owners, they wished to lodge a complaint against their body corporate they should do so in terms of Section 41 of the Sectional Title Act.

This section states that an owner has to serve notice on the body corporate calling on it to institute proceedings to recover losses or damages. If the body corporate fails to do this within one month, the plaintiffs can apply to the court to appoint a curator to investigate whether instituting proceedings is the wise course of action. If the curator recommends this course, the court will usually go ahead on this track.

Referring to Prof Delport’s comments on this case, Brock says that although sectional title remains the fastest growing sector in the property industry and the one giving the best returns, it has to be accepted that a percentage of South Africa’s schemes are badly managed and will require financial rescue of some kind as well as the replacement of the trustees. Furthermore, the resolution of disputes here is a cumbersome procedure under the act as it now stands, due to the democratic structure of sectional title management.

“Sectional title buyers should meticulously check their schemes’ latest AGM accounts – and estate agents selling such schemes can no longer hide behind ignorance. If they have sold a unit in a financially unstable sectional title scheme to a buyer without openly disclosing the dangers, they could be deemed culpable in terms of the Consumer Protection Act, which insists on 100 percent transparency and on consumers being made thoroughly acquainted with the product,” says Brock.

In these situations body corporate members and creditors are legally entitled to apply to have administrators appointed to run the schemes on their behalf.

To apply for an administration order and have an administrator take over the decision-making sufficient evidence needs to be presented and proven before this can happen, says Johann le Roux of Propell.

“Evidence of maladministration, wilful neglect or dishonesty of the trustees, and risk for owners of units who may suffer substantial prejudice are just a few of the points that need to be proven. Because the Sectional Titles Act is not defining and clear enough on the appointment of administrators, each case needs to be assessed before a court of law to make a decision about whether an administrator is needed.

“For the court to appoint an administrator to a scheme, the applicants need to prove that the problems they are experiencing with their current trustees are such that only an administrator could add value and possibly rehabilitate the scheme. Therefore inexperience on the part of the trustees or financial problems a scheme may be experiencing are not enough reason for a court to appoint an administrator. The applicants will need to prove that the inexperience or financial problems are coupled with maladministration, neglect or dishonesty on the part of the trustees. Only in these cases will the appointment of an administrator be able to add value to this scheme.”

Administrators can be appointed for fixed or indefinite periods, depending on the circumstances for each case. All remuneration and expenses of the administrators are regarded as administrative expenses to be covered by the body corporate.

“Although appointing an administrator may seem daunting, it is often the best way to restore a body corporate to a healthy status. The removal of individual trustees’ decisions and the appointment of one experienced administrator is often the change an unhealthy scheme needs,” says le Roux.

Call Johann le Roux on 0861 33 34 35 or visit www.propell.co.za.