After more than 100 years the historic old port captain’s office at the V&A Waterfront is again a source of communication.

In 1904, telephone lines ran from the port captain’s office to the post office in Darling Street and linked Cape Town’s community to the rest of the world. Now, it is once again a communication link between South Africa and the rest of the world through its participation in the Landmark Lighting event: an international collaboration among prominent landmarks in cities across the world to create awareness about the prevalence of polio in Africa, driven by the Rotary organisation.

The Wrigley building in Chicago, the Galacia Cathedral in Spain, the Egyptian Pyramids, the Obelisk in Buenos Aires, the Taipei Arena in Taiwan and the Old Port Captain’s Office are sending out a simultaneous lighting display on their facades with the message End Polio Now.

The Old Port Captain’s Office was chosen by Rotary International to be part of the campaign because of its prominent position at the V&A Waterfront.

The performance and resilience of South Africa’s hotel industry continues to surprise many despite the fact that in 2009 this sector as a whole experienced a decline in SA Rand Revpar (revenue per available room) of 9.8%, says Joop Demes, chief executive of Pam Golding Hospitality. These statistics are according to the STR Global Hotel Review.

“In December, Durban hotels reflected a notable Revpar performance for the month with an increase of 16.8% compared with December 2008. This placed Durban in the number one growth spot in South Africa – ahead of Johannesburg and Cape Town. During 2009 compared to 2008, Durban was also the city which experienced the smallest percentage decline, namely 7.2% in SA Rand Revpar. During this period the annual decline in Revpar for Cape Town was 9.3% and Johannesburg 10.7%,” says Demes.

From a regional perspective the Free State was the best performing province with a marginal decline of 2.9% in SA Rand Revpar in 2009 compared to 2008, followed by the Eastern Cape with a 4.6% decline, Mpumlanga with 8.9%, the Western Cape with 9.5%, KwaZulu-Natal with 10% and Gauteng with 10.8%.

Demes points out, however, that it is important to note that in 2009 the number of rooms increased right across South Africa, which he estimates to be in the region of 5.6%, which includes an increasing number of guesthouses and B&B’s as well as the conversion of residential blocks to apartment hotels. This increase directly dilutes the reported SA Revpar figures.

“It is also very relevant and interesting if Southern Africa as a region is compared to the rest of the world and when comparing global regions the STR Global Hotel Review uses a common currency of US dollars,” he says.

The region referred to as Africa and the Middle East produced the highest global annual US Dollar Revpar during 2009 – a figure which outperformed the Americas with a material margin of 72.1%, Asia Pacific by a considerable 31.2% and Europe by 18.4%.

“Of note is that the percentage decline for Southern Africa in US Dollar Revpar for 2009 compared to 2008 was approximately half that of Asia Pacific and Europe. And if you consider the areas that experienced the least decline in US Dollar Revpar in 2009 compared to 2008, Southern Africa and Northern Africa respectively hold positions one and two out of the 15 key areas in the world.

“These observations are extracted from an analysis of the STR Global Hotel Review for 2009, but if we consider the rand exchange rate to the dollar at December 31 2009 compared to the higher rate at December 31 2008, the result is even more profound as then South Africa as a whole shows no US Dollar Revpar decline in 2009 compared to 2008.”

Demes says against a backdrop of some negative comment recently published about the five star hotel market in Cape Town, it is important to consider the overall 2009 performance of this city.

“Pam Golding Hospitality’s recent survey among the larger, leading and well-branded five star hotels in Cape Town reflects a balanced and fairly stable trading environment, with SA Rand Revpar figures that during 2009 – for some – marginally increased compared to 2008, and for others considered in the survey did not materially decline. At this stage there are definitely no signs of financial distress or cause for alarm for the hotels we interviewed.

“There are of course, a number of five star hotels – often smaller, newer and perhaps not in the best location – which have experienced a tough 2009. According to the STR Global Hotel Review the average SA Rand Revpar decline for grade 5 hotels in Cape Town in 2009 was 12.8% compared to 2008. However, you must take into consideration the substantial increase in the number of five star hotel beds available in Cape Town – up by about 30% at the end of 2009 compared to 2008.”

But how did Cape Town and Johannesburg, for example, fare in 2009 when compared with the major cities in the region the STR refers to as the Middle East and Africa, a region which has been outperforming the Americas and Asia by substantial margins and Europe by a comfortable margin? If you compare the US Dollar Revpar percentage change in 2009 with 2008 within the Middle East and Africa, both these South African cities featured in the top five in the 2009 STR Global Hotel Review, says Demes.

“On a positive note, although we believe there is oversupply of rooms in some categories in certain nodes in South Africa, this is strongly balanced by a definite shortage of beds in certain other categories, nodes and locations. Without doubt more foreigners are interested in guesthouses and boutique hotels and there is increasing demand for our consultancy services, valuations and feasibility studies,” says Demes.

Durban Point Waterfront, at the entrance to the biggest port in Africa, will soon welcome two new world-class hotels to its mixed-use development.

The new additions will be primed to host local and foreign guests during the World Cup and beyond, says Alan Vels, managing director of Signature Life Hotels.

“Construction of the Docklands Hotel and the Anchorage Hotel began simultaneously last year, and the Docklands Hotel will open in May. The new additions will help transform a previously dilapidated Durban precinct into a multi-billion rand investment gem,” says Vels.

“It was a natural progression to have hospitality developments in this re-generation precinct, as a number of nearby attractions and the beaches lend themselves to drawing leisure and business tourists.

“The entire node has been developed to include a mix of business and residential complexes in the area. Also, with some inner city hotels downsizing and downgrading, there was a need for new business hotels on the Durban beachfront area.”

A major drawcard of the Durban Point Waterfront is its proximity to places of interest and its prime location, says Logi Naidoo, acting chairman of the Durban Point Development Company and deputy mayor of Ethekwini Municipality.

“Durban Point Waterfront is adjacent to the R735 million U’Shaka Marine Theme Park, which is a major tourist attraction. It has easy access to the beachfront and is within a 10km radius of the Moses Mabhida stadium,” says Naidoo.

The R110 million four-star Docklands Hotel will have 81 rooms, a restaurant and four conference rooms, seating a total of 400 people.

The R60 million Anchorage Hotel is part of the Life Hotels brand and has 63 rooms, a restaurant and a conference room, which also seats 400 people. This hotel is due to open later this year.

“The Durban Point Waterfront is one of South Africa’s most significant and exciting property development and investment projects, and the addition of these world-class hotels is evidence of this,” says Colin Sher, sales and marketing manager of Durban Point Development Company and managing director of the Broll Property Group KwaZulu-Natal.

More than R1.8 billion has already been spent on development at Durban Point Waterfront, and the final investment figure is estimated to be about R6 billion. The development will include a 44 000 m2 entertainment and lifestyle shopping centre, and different elements in phase one are in various stages of completion, planning and construction.

Call Colin Sher on 031 337 3460.

But, she says, there is still a long way to go.

“The recession took its toll on developments, especially off-plan buying, which constitutes most development sales,” says Wener. “One of the main advantages to buying off-plan is that, in a steadily growing market, you benefit from buying now and paying later, where buyers pay a 10 per cent deposit and the balance on transfer at completion – by which time the property would have already increased in value. But of course with the market in a negative phase, this benefit was lost, and with it a significant number of off-plan buyers.

“In addition to this, the National Credit Act made it much more difficult for buyers to get finance for off-plan purchases in particular, and existing properties offered better value than potential new builds.”

Many developers put projects on hold, but Wener says, some of them are again showing signs of interest in re-entering the market.

“It is still early days, but there are signs of activity in this market again, and we are talking to several developers who are keen to get moving on new projects.”

Wener says some developers continued to operate through the recession to complete projects, taking the risk despite the reduced number of buyers and relying on sales to end-users once the project was complete.

“This has to some extent succeeded,” she says, “and will continue to do so as mortgage finance becomes more readily available. There are steady sales and resales in completed developments, such as the Quadrant and MontClare Place in Claremont, The Orangerie in Gardens, and the Majestic Village in Kalk Bay.”

PGP’s director for developments in the southern suburbs and South Peninsula, Bev Bloch, says seven units worth R13 million were sold at the Quadrant in the past six months – five of them since December.

“The current phase is complete and ready for occupation,” says Bloch, “and there is only one two-bedroom unit still available, plus a few penthouses. The next phase is due for completion in the next few weeks.”

She says there were five sales at MontClare Place in the past six months, three of these in February alone, with a combined value of R9.63 million. A further four units worth R19.108 million have sold at the Majestic Village since October – one of them at R7.5 million, a record price for an apartment in the area.

There has also been an upswing in development activity in the Central City area. PGP’s area manager for the City Bowl and Atlantic Seaboard, Basil Moraitis, says the company has several developments for sale, including the newly-launched Six, which has just been completed on the edge of the Central City.

Studios are priced from R629 000, and two-bedroom apartments cost up to R1,239 million. There is also the luxury apartment complex the Orangerie in Gardens, where only a few units are still for sale at prices ranging from R1,95 million for one-bedroom apartments, and from R2.65 million for two-bedroom units.

Moraitis says Quarry Hill in Tamboerskloof is nearing completion, with occupation expected by mid-2010.

“There are still four units available for sale in this development,” he says, “priced from R7.5 million to R15 million.

Eden on the Bay on Blouberg’s Big Bay beachfront lifestyle and residential units, and PGP is marketing apartments priced from R1.39 million to R5.3 million.

Most apartments are bigger than 200 m2, and each has two parking bays included in the price.”

PGP is also marketing two developments along the Western Seaboard – Melkbosch Village in Melkbosstrand, and Eden on the Bay in Blouberg.

At Melkbosch Village buyers can choose between sectional title or plot and plan purchases, including two-bedroom apartments priced from R685 000 and two- or three-bedroom homes from R975 000.

Eden on the Bay is a mixed use development with two- and three-bedroom apartments as well as some penthouse units. Prices range from R1,39 million to R5,3 million.

Melrose Arch, Amdec Property Development’s mixed-use Johannesburg precinct, was recognised for its excellence in design at the annual South African Council of Shopping Centres (SACSC) 2009 Spectrum Awards.

The recently opened Melrose Arch Piazza was a finalist in the SACSC Retail Design and Development Awards for design of a shopping centre larger than 15 000 m2, and Melrose Arch’s Grand Central Restaurant scooped the Spectrum Award for best designed store or restaurant in South Africa.

Melrose Arch is owned by Cape-based Amdec and the Melrose Arch Piazza was designed by dhk Architects and Boogertman and Partners. Grand Central is co-owned by Nick Kiros, Claudio Costa and Nick Mousios. Claudio Costa and Ben Dos Reis, from Refined Existence in Space architectural firm, were involved in developing the space planning layouts and engineering drawings for the project, and dhkthinkspace worked closely with the owners of Grand Central on the interior design of the restaurant.

The Spectrum Awards honour innovation, creativity, vision and excellence, and the design category celebrates exceptional creative distinction and brilliance within the design and development industry.

Amdec chief executive, James Wilson, says the Piazza was inspired by some of the world’s most memorable piazzas and international high street shopping venues. Its architectural interpretation brings to life the vibrant tone which was intended in its design brief.

“Grand Central was based on the ‘Big Apple’ concept,” says Kiros. “The vision was to offer a subway-meets-New-York-brasserie theme – big, bold and the place to see and be seen. The interior design is the source from which the electric urban energy of the restaurant originates, and it is one of the special ingredients that has made Grand Central so popular with patrons.”

Derek Henstra, of dhkthinkspace and dhk architects, was behind both awards.

Millions have already been spent on the roads upgrade initiative.

The new R600 million regional shopping centre, owned by the Visagie Trust, Resilient Properties and Laeveldtrust and developed by MTB Development Company, is due to open next month.

“The development of I’langa Mall included the upgrade of various roads and intersections surrounding the centre,” says Luan Visagie of major stakeholder Visagie Trust. “It was crucial for us to identify areas of enhancement to the shopping experience, which led to the undertaking of extensive traffic studies.”

The studies identified key areas where improvements to various roads and intersections in the area were required, as well as the development of new roads and traffic networks.

One of the key focus points of the upgrade was the N4 intersection, which will be the main point of access to the centre. The completed work will consist of a 100m additional approach lane towards the N4 and the widening of the intersection.

Other roads in the centre’s vicinity will benefit from the installation, upgrading and re-phasing of intersection traffic lights, installation of overhead lights at intersections, road lane paintwork and more. Various one-way roads will also be upgraded into two-way roads.

“The external roads upgrade will ensure that the centre will be easily accessible from all entry points, including the N4 highway, and will allow for the easy flow of traffic and alleviation of congestion in the area,” says Tibo Terblanche of MTB Development Company.

The construction of a bus and taxi bay on one of the main roads in the area will also cater for the expected influx of public transport to the area. Reconstruction is also being carried out on surrounding roads that were extensively damaged by floods and heavy vehicles.

Construction is also well under way for the opening in April, with various internal finishes being completed. Electricity to the centre was connected in November last year, and the roof of the mall is in the final stages of completion.

I’Langa Mall is conveniently close to Nelspruit’s residential suburbs, and the centre has been designed to allow shoppers quick and easy entry, and will also offer free secure, undercover parking, says Johann Kriek of Resilient.

“The substantial and growing number of cross-border shoppers from Mozambique and tourists visiting the area are also expected to visit this regional shopping centre.

Call Richter van Niekerk Properties on 082 853 3455.

“The announcement will undoubtedly be inflationary. Clearly the so-called ‘soft’ interest rate cycle is about to change and home owners should plan their finances and examine their options accordingly,” he says.

“I agree with FNB economist John Loos that home buyers should build higher interest rates into their planning, allowing for further cost increases as water and other utility providers follow Eskom’s lead in demanding price hikes to fund infrastructure maintenance and roll-out costs.

“One option available to home owners in good standing with their lenders is to fix their home loan rates. Typically this would be at a slightly higher rate than the current rate, with the borrower effectively paying a premium for the privilege of a known cost in future.

“Home owners who choose this option, where their banks permit it, would therefore take the initial ‘pain’ of higher monthly payments upfront, but benefit later when interest rates ‘catch up’ and then exceed their fixed rate.”

The basic message, says Kotzé, is that the days of relatively cheap energy are over. The effects could include a demand for cheaper homes, an even stronger swing to smaller homes, energy saving provisions in new residential developments and en masse retrofitting of energy saving devices to existing homes.

“And it’s unfortunate that the tariff hike announcement was not accompanied by clarity on Eskom’s electricity supply connection policy on new residential developments. Given the lead times for such developments and uncertainty about electricity connections, this requires urgent attention.

“Numerous residential developments were put on hold or mothballed because of the uncertainty about electricity connections and though that may have suited circumstances last year when consumer demand was low, the picture could change drastically as the market continues to recover and could even lead to a shortage of housing stock,” says Kotzé.

“This is very gratifying, because when we launched in January 2009, we were really not sure what the response would be. The market then was dominated by two large players and even though we had the backing of Independent Newspapers, marketing spend is not a guarantee of success in this space,” says GM Grant Leigh.

The site logged 50 000 users in its first month and has grown quickly and consistently since. Last month 170 000 people visited the site.

“Marketing spend got us a good chunk of that initial 50 000, but beyond that, the philosophy for success in webworld is brutally simple and very measurable: if your visitors don’t like your site, they won’t return. However if they do, they will and hopefully bring a few of their friends with them. So we have stuck to a simple plan – to give potential buyers exactly what they need to find their ideal properties.

“I had been looking for a house myself for sometime, and had become more and more frustrated with monitoring up to 10 different websites every day, to find some of them down or the search facilities cumbersome and slow. It became almost a full time job just looking for somewhere to live,” says Leigh.

So what do buyers want? Most important is having the widest selection of properties available in one place. IOLProperty’s listings include the online listings from about 10 000 estate agents around the country, classified property ads from the newspapers and listings from major property print publications such as the Star Property Guide, the Sunday Tribune Property Guide and the Property Trader family of magazines.

“So a visit to IOLProperty means property buyers don’t have to jump from website to website or across different media – it’s all available in a single search.”

The second part of the plan was to make it as quick and easy as possible for visitors to find the listings they are interested in. There are a variety of search options to suit the different needs of visitors to the site. These include quick “smart searches” (which can also predict which other suburbs are of most interest to buyers in addition to the ones they select), and the recently launched “horizontal” search facility which allows buyers to search by specific interests such as new listings, price changes, affordable housing, guesthouses and farms, commercial property and so on.

And, says Leigh, the innovation won’t stop here.

“With a wonderful first year behind us, all the core systems and processes are now in place, and we have plans for a great second year of growth and further development.

Bruce Swain, managing director of the Leapfrog Property Group, says sales are increasing steadily and the number of buyers is definitely starting to outstrip supply in many areas throughout the group’s 50-plus franchise catchment areas.

“There has been a lot of doom and gloom about the fall in the property market, and yet South Africa is the best performing housing market in the world over the long term according to the latest figures from Britain’s The Economist. The magazine’s global house price index shows that SA house prices rose by a cumulative 418% over the past 12 years, far outstripping any of the other 20 housing markets tracked by the index. The next best performers were Australia (181%), Britain (175%) and Spain (167%) over the same time,” says Swain.

Latest data from FNB also shows that the price of the average SA house increased to R764 912 in January 2010, which is 1,2% higher than the average price of R755 390 recorded in 2008. The data also shows that average house prices are up 9,7% from the second quarter of 2009 when the SA housing market was at its lowest and prices reached an all time low of R696 755.

South Africa is one of a handful of countries where house prices are back to their 2008 peaks, says Swain.

“A number of factors are driving the positive market sentiment and confidence in property, including favourable interest rates, inflation rates, relaxed credit extension policies, loan-to-value (LTV) ratios, realistic property prices and an overall more positive consumer outlook.

“The length of time that a property is on the market before being sold has also reduced dramatically from a record high of 21 weeks and one day in the second quarter of 2009 to 16 weeks and four days in the third quarter, according to FNB data.

“A survey of Leapfrog franchisees in January shows that the time a house spends on the market is now an average of eight weeks, which is a huge improvement.”

Swain says although offers are coming through from potential buyers financing still remains one of the biggest challenges, with an average of 40% of bond applications being declined. Statistics from Betterbond show that in October 2009 just over 48% of applications were declined but in December 2009 this dropped to around 43%.

“There is still a big improvement though in the lending environment compared with the lowest point in 2009 when only around 30% of bond applications were being granted. However, buyers still have to be realistic about the fact that their indebtedness and credit history are deciding factors in the granting of bonds. Many buyers are not upfront with their agents about their true income, liabilities and credit history, resulting in declined applications after weeks searching for properties.

“Agents should be able to work out realistically what loans buyers will qualify for and save a lot of time and effort searching for properties within a price range that buyers would simply not qualify for. For now 100% bonds are still the exception and buyers still need to put down at least a 10% deposit,” says Swain.

“Geysers probably cause more problems in sectional title schemes than any other single item on the list,” says Bauer. “Regrettably, they do require maintenance and they seldom function efficiently after five years. If they burst they can cause huge water damage.”

The big question always asked, says Bauer, is who is responsible for the repair and maintenance of geysers.

“The relevant clause in the Sectional Title Act 95 of 1986 states that the common boundary of any two sections or a section and the common property is the median line of the dividing floor, wall, or ceiling. Geysers are often sited above the median line of the ceiling, which means they are in the common property, so, in theory. they should be part of the body corporate’s responsibility.

“However, this is not the case. The PMR (Prescribed Management Rules) make it absolutely clear that it is the owner’s duty to maintain any hot water installation serving his unit (and possibly other occupants) even if it is above the median line and on the common property.”

In practice, says Bauer, the insurance on the geyser will be carried by the body corporate as part of its general building insurance, but since November 2008 an owner has to pay the excess on any claim. If he does not do this the insurers are entitled to deduct the excess sum from the payout on any claim. In most cases, the insurance will waive or reduce the excess charge if the owner notifies its call centre immediately after the problem arises.

“Sectional title trustees should circulate details of the insurance policy to all members in clear, simple language, giving the call centre’s telephone number and insurance policy number for easy reference,” says Bauer.

Call Michael Bauer on 083 255 4442 or visit www.ihfm.co.za. IHFM has a free weekly online newsletter covering sectional title and property matters.

Rawson Properties recently opened a franchise office in Recreation Road, Fish Hoek. The new franchisees, Leon Bosman and Cathy Baker, will be serving Fish Hoek, Simon’s Town, Scarborough, Misty Cliffs, Kommetjie and Noordhoek – all areas that Rawson chairman, Bill Rawson, has described as “likely to surprise the property sector in the next decade”.

Bosman says the pair intend to initially concentrate on Fish Hoek and Simon’s Town and then expand their business by opening satellite offices in the surrounding areas. They will be recruiting four agents to serve Fish Hoek.

“Initially most of our agents will have to be experienced in property,” says Baker, “but before long we will be accepting rookies who will qualify by attending the group’s two week introduction to property course. They will also do the compulsory NQF level 4 qualification in real estate.”

Baker says the South Peninsula has homes in almost any price category, from R700 000 for a one-bedroom flat to R10 million plus for a mountainside mansion.

“The area appeals to young people, especially those who like such outdoor pursuits as surfing, lifesaving, kayaking, fishing and hiking; and schools in the area have consistently produced good results. Crime incidence figures are way below the national average; and it is closer to the Cape Town CBD than most people realise. The extra kilometres from Fish Hoek and Noordhoek add only another 10 to 15 minutes to the daily commute from the southern suburbs as this part of the journey seldom has heavy traffic.”

The other new agency in the valley is Greeff Properties, which recently opened an office just off Ou Kaapseweg, near the Longbeach Mall.

Chief executive, Mike Greeff, says the new branch employs six agents and covers a large territory including Simon’s Town, Glencairn, Fish Hoek, Noordhoek, Muizenberg, Noordsig and Capri.

“In all these areas there has recently been an upswing in sales and prices have started to stabilise,” says Greeff.

According to Henry Truter, a director at Rennie Property, this will have a significant impact on the tenants of commercial properties and, as a result, the owners too.

“It is now more important than ever before for owners, property managers and tenants to work together to reduce electrical expenditure. Ironically, with an upswing in the economy, increased activity is helping to drive electricity use this year.

“Although Nersa did not simultaneously introduce the controversial energy conservation scheme penalties for large electrical users, it is expected that this may still be launched later this year.

“We are still waiting for details of the price rise, and just how commercial property will be affected. However it seems likely, that similar to last year, commercial property and larger residential users will contribute towards subsidies for low-income domestic users through higher rates.”

Electricity continues to be the largest operational cost for commercial property, according to the August 2009 South African Property Owner’s Association (SAPOA) report. Expenditure on electricity rose to more than 27 per cent of total operating expenses, from 22.6 per cent in December 2008.

Truter says if the 2009 price hikes were a wake-up call to the property industry, these latest price hikes are a startling reminder that power consumption needs to be high on the agenda for property owners, managers and tenants.

“The expected increases over the next few years means the cost for electricity in a commercial building can go up to R30/m2 or more.

“Last year we advised stakeholders on how to set up energy management plans for their buildings, and this year we will continue to work with owners and tenants to help them reduce power consumption,” says Truter.

In the new-built property market, developers have become increasingly creative in the types of developments they design and build to attract buyers and investors.

The original idea behind cluster schemes was mainly to provide security estates, but over time this was seen as the minimum a development should offer and lifestyle estates have become the order of the day. These lifestyle estates vary in size and type, ranging from a few units on large plots to wine estates and multi-dimensional golf and equestrian estates with a few thousand units. A further aspect of these large developments is that unit prices cover a wide range to cater for different income levels.

Given the multi-dimensional aspects of these estates, the management and structures to support the management need to be carefully considered to ensure the development is a success and becomes an attractive option for future buyers.

However, some developments have failed to provide the correct management structures. Most disputes centre around the calculation of the levy, as little thought was given to this in the past. Often the prescribed management rules are determining factors in calculating levies, which give rise to these disputes. This is especially true in mixed use estates with commercial elements as home owners believe their levies are subsidising costs for another part of the estate, which they don’t use or may not have access to.

Another problem is the zoning of plots, with some consolidated erven or a number of erven in a particular township where a local authority requires the establishment of a home owners’ association. Some erven may form part of the home owners’ association and then, where possible, a sectional scheme may be developed on one or more of these erven. In these circumstances, there would be a home owners’ association structure and a body corporate being managed under the Sectional Titles Act.

The decision also needs to be made about whether the home owners’ association should be a Section 21 company or a common law association. Whatever the decision, the management aspects contained in the home owners’ association must complement the management and conduct rules that govern the sectional scheme within the home owners’ association, with specific emphasis on levy calculations.

VAT is applicable to home owners’ associations, so if the annual levy is in excess of a million rand a year, careful structuring of the levy calculation and budgets may well prevent the HOA needing to register as a VAT vendor. Consideration should also be given to the income tax part of the levy structuring, as here too, careful tax planning could prevent SARS determining that a particular income group be deemed taxable in terms of SARS’s Practice Note 8.

To prevent disputes about the levy calculation and liability, careful thought needs to be given to the accounting structures of the estate, which includes monthly and annual financial reporting. In some instances the management structures could be too elaborate or cumbersome, resulting in disputes, so a happy medium should be sought to ensure well run lifestyle estates.

Clint Riddin is a sectional title accountant and a presenter on the UCT Sectional Title Development Course, which will take place in Johannesburg on March 29, 30 and 31. Call Kate on 021 685 4775, email kate@paddocks.co.za, or visit www.paddocks.co.za.

As the year progressed, MDA witnessed a rapid slow-down in business activity, says fellow director Willem Potgieter.

“This affected business activity in southern Africa and the Middle East, where we have various software installations, and where capital expenditure was frozen almost overnight,” says Potgieter.

The directors realised they had little control over the global slowdown and needed to look for opportunities. Keet says the company had made good use of the slowdowns after the political turmoil leading to the 1994 elections and then the Y2K bubble and the 911 repercussions. So they knew this time around there would again be opportunities. The challenge was to identify them.

Potgieter says the business grew substantially during the boom period of the property industry, so they realised there had to be sizable sales and training opportunities among existing clients.

“We had the time to carefully plan and execute value added proposals to clients, to improve property management efficiencies. This was mostly done by implementing unused or underutilised features of our software. Important processes such as EFT payments, auto reconciliation of cash books, call centre and facilities management, had to be streamlined. Where third party accounting software was still in use, many clients could see the benefits of implementing the MDA integrated and real-time financials.”

Keet and Potgieter say the downturn has renewed focus on the advantages and disadvantages of outsourcing property management. The owners of smaller portfolios have tended to outsource management. Large portfolio owners, on other hand, have tended to bring the management in-house. There also appears to be a new trend by large-scale occupiers to outsource the function to professional property management companies. These changes create opportunities for MDA.

“Over the medium to long term MDA’s fledgling business in the Middle East is likely to benefit from the recent crisis in that region. Tenants cannot survive with the generally applied lease terms of paying rental annually in advance. The administrative burden of billing rentals and operating cost recoveries monthly will make MDA’s systems and know-how compelling.

“Whereas 2009 gave us the space for thinking, learning, consolidating and encapsulating our know-how, we are quietly confident of a prosperous year ahead,” says Keet.

Call 0861 0022 31 or visit www.mdapropsys.com.

“For 2010, the attitude of buyers is more positive – especially buyers from Gauteng who have always considered the Atlantic Seaboard to be very expensive. Gautengers are now buying luxury homes with the hope of retiring here,” they say.

Mauerberger and Truss claim that more buyers are visiting show houses and the number of viewings is increasing each week.

“The number of units sold has also increased, although slowly. However, even though buyers are more optimistic, they remain cautious. Sellers need to know that potential buyers are doing their research. Buyers are checking details on various property websites, blogs, and social networks and there is less emphasis on emotional buying. Buyers still want value for money and tend to buy to their maximum price range,” they say.

Recent sales include five apartments for more than R2,5 million each in Fresnaye, Sea Point and Bantry Bay. At the same time last year, four apartments were sold for over R2,5 million each in Fresnaye, Bantry Bay and Sea Point.

Truss says in Bantry Bay, two 103 m2 two-bedroom units were regarded as smallish but sold for R5,4 million, or R26 000/m2. Both units (in Portman Place) had been slightly renovated and the building had been sectionalised.

“In Sea Point, a 367m2 beachfront apartment with panoramic views along the promenade was sold for R7 million, or R19 000/m2.

“Two units in Twin Towers and one in Kingsgate were also sold for more than R2,5 million each (from R3,1 million to R6,1 million), at an average of 7,5 per cent less than the listed prices.”

Mauerberger says most of the beachfront properties are old, established buildings, where the owners have, over time, come to appreciate their investments.

“The older buildings are popular as they tend to have larger rooms and higher ceilings than the new developments. Bodies corporate are now spending large sums of money to improve and upgrade their communal areas and receptions. Improvements also include 24 hour security facilities, concierges and upgraded lifts.”

Beachfront buildings that were recently upgraded and painted include Lu Ruth, La Camargue, Costa Brava, Costa Del Sol, Twin Towers, Bonne Esperance, Sea Vista, The Atlantic, Curzon Place, Knightsbridge, Alphen House, Villa d’Este, The Pavillion, Mimosa and Clarensville.

Truss and Mauerberger say there is a similar trend in Bantry Bay with Lions Head Mansions, Camaras, the Ambassador suites, Bantry Rocks, Miramar, Bonne Nouvelle and Mareldette proving popular.

“You only have to drive along Victoria Road to see the transformation taking place at Cliffside. The new owners of the Ambassador hotel have also just opened the newly renovated SALT delicatessen,” says Truss.

SA Self Storage Investments (SASSI) and its management company, Stor-Age Self Storage, have launched a service for estate agents handling the letting of homes over the World Cup period to store valuable goods at a Stor-Age location, away from the attentions of tenants.

Steven Horton, a director of SASSI, says Stor-Age will reserve any number of units for agents requiring them and will pay agents commission on all bookings received.

“Our reading of the situation is that prospective landlords are optimistic about rental prospects offered for World Cup visitors – but are also afraid of what un-vetted, unknown tenants from overseas might do to their properties.

“For this reason, many prospective landlords are looking for temporary storage facilities for their more precious items such as plasma TV screens, sentimental items, expensive cutlery, paintings, valuable furniture and so on.

“As letting agents are often at the forefront of the entire operation, they are the right people to be contacting Stor-Age, said Horton. “This is a value-add service, so it makes the letting agent’s proposition more attractive.”

Stor-Age has five stores in Cape Town and Johannesburg, with a further seven to open over the next 12 months. The units vary in size from one cubic metre lockers to 30 m² lock-up spaces. In every case the renters hold the keys and they can gain access 24 hours a day, seven days a week under strict security provisions.

Stor-Age’s services include a free pick-up van for clients living near each of the stores and the provision, through in-store retail outlets, of packing materials such as locks, boxes, bubble wrap, tape, mattress covers and other additional ancillary items required for storage.

Horton says Stor-Age will soon mount a further campaign to publicise its services to all estate agents.

“We are increasingly aware that, although the World Cup has focused attention on the need for temporary storage of domestic goods, estate agents deal daily with people going through a life changing event, such as moving home, relocating, renovating, downsizing and the like. In these circumstances there is often a need for self storage – as there is when businesses undergo similar changes,” says Horton.

Call 082 852 8947 or visit www.saselfstorageinvestments.com.