President's message highlights SAIBPP activities

01
PRESIDENT’S MESSAGE
Tshepo Matlala
SAIBPP President
I
n the previous edition of SAIBPP, I made
mention of the ‘In Conversation Series’ which
is a conversation between SAIBPP and its
members, and also SAIBPP and the country.
The ‘Inconversation Series’ came about when
we realised that as a country we were talking
above and not with one another. This happened
over a protracted period on issues like land
redistribution, land reform, ownership of com-
mercial properties by black people and so on.
It was also in response to the negative publicity
black property practitioners suffered in the me-
dia. As a result, we will be inviting well known
speakers to engage on these and other topical
issues. These sessions will happen throughout
the year and we hope that you will find them
rewarding.
The first session was addressed by the Minister
of Public Works TW Nxesi. He informed mem-
bers of his current challenges at the depart-
ment and has asked us as a profession to assist
him in the turnaround in the department. SAIBPP will be meeting with the ministry with a view to
assist them and will come to you as members to be part of this restructuring process.
Black Business Council
In September 2011 SAIBPP, together with 16 other black organisations, held a summit to pave the
way forward for the re-establishment of the Black Business Council. In March 2012 the BBC was
launched and Ndaba Ntsele was elected as president. SAIBPP will be part of a committee dealing
with land and properties, and members are encouraged to participate.
KwaZulu-Natal
This is the year we are launching the KwaZulu-Natal Chapterof our Institute and our different com-
mittees are working hard in preparation for that. Please keep visiting our website for further informa-
tion.
We have stepped up our communications and over and above an improved website we now have
a twitter account (@saibpp) and a LinkedIn account (Saibpp). Connect with us on these platforms.
Together let us make this year a profitable one for black business and professionals.
Tshepo Matlala
SAIBPP President
Dear members and stakeholders

Marketing and communications committee:
Lionel Kisten
e: lionel@markland.co.za
Chief contributing editor:
Denise Mhlanga (She is an award winning writer and
journalist at Property24.com, South Africa’s leading
online property portal. She won the South African
Property Owners Association News Journalist of the
Year 2009.)
Advertising and sales:
Lerato Matlakala
t: 011 442 2260 / 1869 • f: 011 442 1852
c: 083 416 9450 • e: sales@pangram.co.za
Design:
e: alexia@ampleideas.co.za
Publisher:
Pangram Publishing (Pty) Ltd
PO Box 48219 Roosevelt Park 2129
t: 011 442 2260 / 1869 • f: 011 442 1852
Printers and mailing house:
Law Print
The editorial panel welcomes contributions (by way of letters
or articles) that are appropriate and that address a property
issue that is topical or of strategic concern to the sector as a
whole. These should be submitted to the editor at patrcia@
pangram.co.za for possible publication. Please use the
SAIBPP as your platform to promote property investors out
there whose activities are becoming both increasingly impor-
tant and valuable to the South African property industry as
a whole, over the long term. The information and data pre-
sented in the SAIBPP are recorded in good faith, relying on
sources believed to be reliable. The views and opinions ex-
pressed in the SAIBPP are not necessarily those of SAIBPP,
notwithstanding the fact the SAIBPP is the official publication
of SAIBPP. Neither are they representative of the opinions of
the publisher or the editor. Copyright applies to all material
contained in this issue and reproduction in whatever form is
not permitted without prior written permission.
www.saibpp.co.za
THE OFFICIAL JOURNAL OF THE SOUTH AFRICAN INSTITUTE OF BLACK PROPERTY PRACTITIONERS
Volume 2, issue 1
CONTENTS
President’s message 01
SAIBPP Board 04
SAIBPP Committees at a glance 04
SAIBPP Western Cape is going places 05
Communication Committee report 06
IN HOUSE GOVERNMENT MATTERS
P A N G R A M
P A N G R A M
P A N G R A M
Who are the real beneficiaries of the gov-
ernment’s social and infrastructure pro-
grammes? 09
Financing of government tenanted buildings via
a lease discounting method 11
Budget 2012 and the property sector 12
COVER STORY
The conversation has begun: challenges facing the property sector and the role of government 07
While transformation remains an important issue in South Africa, the property sector faces various
challenges which both the sector and the government need to work on.
CAREER FOCUS
A day in the life of a quantity surveyor 16
The art of practising law 18
LISTED PROPERTY
Dipula A units tipped as a JSE’s best buys 20
Redefine concludes two further retail aquisi-
tions 21
More than just bricks and mortar - Jabulani
Housing Development 13
If you thought complex living and upmarket
apartments with state-of-the-art security exists
only in the suburbs, think again, townships are
becoming trendy while remaining affordable.
Benefits of occupying affordable housing in
South Africa 15
More than 50% of households report an im-
provement in access to education and employ-
ment from the property that they presently
occupy.
HOUSING

KgaogeloMamabolo
LionelKisten
KulaniLebese
TshepoMatlala
NkuliBogopa
JohnKayula
ThaboMashologu
HatlaNtene
SAIBPPBOARD IN HOUSE
ChulumancaNomlomo
Finance and Risk Management Committee
• Solly Mboweni (Chair)
• Saul Gumede
• Hatla Ntene
• Tshepo Matlala
Learning and Growth Committee
• Andi Tondi
• Kgaogelo Mamabolo (interim member)
New members are in the process of being
appointed
Communication, Events and Marketing
Committee
• Lionel Kisten (Chair)
• Kgaogelo Mamabolo
• Thabo Ramushu
• Bonini Kusano
• Nkuli Bogopa
SAIBPP COMMITTEES AT A GLANCE
Membership Committee
• Nkuli Bogopa (Chair)
• Lionel Kisten
• Phila Bongo
• Chulu Nomlomo
Stakeholder Committee
• Kulani Lebese (Chair)
• Tshepo Matlala
• Solly Mboweni
• Hatla Ntene
• Zukiswa Ntlangula
• Saul Gumede
• Thabo Ramushu
• Chulu Nomlomo
• Tumelo Applegreen
• Andi Tondi
• Oarona Khama
• Molly Gallant
• Shadrack Mthethwa
• Tumi Mokhothu
• Kgaogelo Mamabolo
05
ThaboRamushu
PhilaBongo
SollyMboweni
B
ongani Ngcube was the chairman of that
committee and succeeded in getting the
AGM organised by March 2011. Since
then SAIBPP Western Cape has looked for the
defining factors that set it apart from other prop-
erty organisations, to be able to show prospec-
tive members what’s in it for them and why they
should join.
“Membership is growing,” says current chairman,
Thabo Mashologu, managing director of Msingi, a
project and development management firm.
The committee identified two streams of work
to concentrate on: the outward looking stream
includes identifying topics that are of interest to
property professionals; and the inward looking
stream - the blueprint series – is inspirational,
motivational and developmental and focuses on
training, access to information and networking
for members.
The outward looking series was called ‘shap-
ing the conversation’ and four related functions
were held last year. The main event centred on
the V&A Waterfront and was held around the
time of the sale of the Waterfront to Growthpoint
and the Public Investment Corporation (PIC).
The panel members included representatives
of the Cape Town Partnership, and the then-
head of the property investment division at PIC,
Wayne van der Vent, who gave delegates the
PIC perspective of the transaction.
Some of the issues raised were the link between
the Waterfront and the City of Cape Town, reinte-
gration, accessibility, and changing the perception
SAIBPP WESTERN CAPE
IS GOING PLACES
A lot of water has flowed under the bridge since the launch of SAIBPP Western
Cape in October/November 2010, when it was led by an interim committee whose
job was to mobilise membership and get to a point where the chapter could hold
an AGM and formally constitute the leadership.
IN HOUSE
by Sarah-Jane Bosch
of the Waterfront as an island of exclusivity to that
of an accessible area owned by all Capetonians.
Other issues included how the Waterfront could
do business differently, and make the product
offering relevant to everyone – for instance,
putting together a food court and retail outlets
that appeal to locals as well as foreign visitors.
“The B in SAIBPP stands for Black, and many
members are looking at how they can participate
more in the property industry so that they be-
come more significant players,” says Mashologu.
“We extended the programme to include the
CTICC plans for expansion, and CTICC chief
executive, Rashied Toefy, spoke about these
as well as the significant development on the
Culemborg site and the Founders Garden area.
He discussed the linking of these major devel-
opments and the impact they would have on
Cape Town a few years from now. Other speak-
ers included representatives of dhk, the archi-
tects working on the Culemborg site.”
For the blueprint series of events, the commit-
tee arranged more intimate conversations with
small groups of members.
“Many SAIBPP Western Cape members are
young, employed, corporate and aspirant, and
issues relevant to them include access to infor-
mation and networks, as it’s often difficult for
them to approach top executives.
“Our vision is to continue the developmental
work, answering the question of what’s in it for
members and ensuring that as people move up
through the ranks they can add value in their
own organisations because we provide them
with access to decisionmakers, and information
about what’s happening in the property world
in general.
“Also, not many members invest in property, al-
though many are service providers. But if you as-
pire to change the face of property you need to in-
vest in it. We thought some education was needed
on the various ways of doing this, and whether
you need substantial capital to get started.
“In property, as in transformation, we think we
should be building our own, not just transfer-
ring shares. We decided to bring in people who
have done well to talk to members, and one of
the inspirational role models was Sam Montsi,
who invited members to spend an evening at
his home in Bishopscourt.”
Mashologu says members are also encouraged
to profile themselves, and a number of them
have written articles that have appeared in the
SAIBPP publications.
SAIBPP Western Cape committee recently com-
pleted its strategic planning for the next three
years, and will soon be outlining its plans for this
year. Among the events members would like to
see taking place are discussions on the National
Development Plan, which materially affects the
entire property industry, and the economic de-
velopment plan for the country as a whole.
04

where they can tap into resources. Our job is to
facilitate. You can’t expect to change everything
all at once, but over a three year period you can
achieve quite a lot.
“South Africa is a place of remarkable opportuni-
ties, and as the democracy matures the models
of empowerment are changing. It used to be a
question of passive shareholding but it’s getting
to the point where black people must embrace
the notion of being the creators of wealth.
“That’s one of the reasons for establishing or-
ganisations like SAIBPP to share ideas, create
momentum, energy and a core that can draw
on resources to achieve these objectives.
“If we do it right, we won’t be standing on the
sidelines saying we are waiting to be empow-
ered.– The organisation will be empowering
and transformative - that’s the bottom line. In
a country of 50 million people we have to have
the 40 million driving, that’s the future of the
economy. The 40 million must be up on their
feet, energised and if we can do that right then
we will do a lot for this country.”
Thabo Mashologu, SAIBPP Western Cape chairman
“Access to funding is an issue, and it’s encour-
aging that the 2012 Budget placed strong em-
phasis on consolidating the sources of funding.
But we need to look at the ‘friendlier funding’
methods and see if they are actually friendly,
what they will fund and whether they imply
substantially higher interest rates to mitigate the
risk.
“Ultimately what makes property deals work is
information – about who is looking for space,
as well as local and provincial plans – like the
economic development plan for the Western
Cape. It makes sense for SAIBPP to be in on
the ground floor when the plans are being de-
cided on. It’s vital to know which key industries
are going to be supported, which corridors are
going to be developed and so on.
“Participation in the formation and development
of the EDP is important, at policy level. We are
looking at an exciting time ahead in the Western
Cape with the EDP being shaped. And what bet-
ter time to get involved than right now?”
There is a view that, at some point, the B in
SAIBPP needs to fall away and the organisation
needs to become the South African Institute of
Property Professionals. But to get there it needs
to equip members with the necessary tools and
information, look at issues of funding, the risk
environment, professionalism and delivery.
“We need to tackle issues of corruption because
they affect us. And we can’t do members’ work
for them, but we can create an environment
COVER STORYIN HOUSE
06 07
The ‘In Conversation Series’ was conceived in
November 2011 to create an awareness of the
SAIBPP brand by holding discussion forums.
These forums are a conduit to engage with our
stakeholders and also the country as a whole
on key issues affecting the property industry,
including land redistribution, land reform and
ownership of commercial property. The inaugu-
ral event, held at GIBBS Business School on 29
March 2012 had the Minister of Public Works,
Mr Thulas Nxesi, as guest speaker.
Should you wish to share any information re-
garding the property industry, or have any sug-
gestions on improving the image and function-
ing of SAIBPP, kindly send all information to
services@saibpp.co.za.
T
he communication committee has been
hard at work to promote the SAIBPP pres-
ence in the property industry.
SAIBPP launched its very first publication in
October 2010 and this is the fifth issue. This
would not be possible without the unwavering
support from property owners, property service
providers, property investors, Pangram Pub-
lishing, SAIBPP’s board of directors and other
stakeholders.
This magazine, our official voice, is becoming
synonymous within the property industry, its
contents focusing on transformation, legislation
and policies, education, the prevailing market
conditions, opportunities, challenges, success
stories and engagement with government.
You can follow us on Twitter and LinkedIn or visit
our website www.saibpp.co.za
We thank you for your valuable contribution and
continued support.
From the Chairman’s Desk - Communication
Committee
SAIBPP COMMUNICATION COMMITTEE
T
ransformation must be a systematic proc-
ess that will enable government to reach its
goals and not just a passing event.
This is according to the Minister of Public Works,
Thembelani ‘Thulas’ Nxesi, who addressed
SAIBPP’s first ‘In Conversation’ meeting in
March in Johannesburg.
In his letter to members and stakeholders in
the previous journal issue, SAIBPP President,
Tshepo Matlala, said one of the major initiatives
undertaken by SAIBPP was actively to involve
the Department of Public Works in talks and
develop ongoing working relationships on how
SAIBPP members and the property sector could
benefit and tap into the department’s resources.
Nxesi explained that the Department of Public
Works and the country’s biggest landlord with
assets valued at over billions of rands is in cha-
os, and therefore the country and the property
sector have lost confidence in it.
Although still fairly new in his position, he made
it very clear that he is on a listening campaign
that will enable him and his team to turn the de-
partment around, to restore law and order and
inspire confidence.
The Department of Public Work’s co-mandate
is to act as the state custodian of assets – land
and property. This includes managing property
facilities, new developments, lease manage-
ment and heritage site properties.
He pointed out that in the light of the publicised
SAPS property leases, the immediate challenge
THE CONVERSATION
HAS BEGUN:
CHALLENGES FACING THE PROPERTY
SECTOR AND THE ROLE OF GOVERNMENT
While transformation remains an important issue in South Africa, the property
sector faces various challenges which both the sector and the government need to
work on. By Denise Mhlanga
facing the department is the lack of financial
management when it comes to signing and man-
aging leases and tender processes. This has in-
evitably led to fraud and corruption and some of
this involves people in the property sector.
He warned against silence on fraud and corrup-
tion and called upon SAIBPP to speak out when
they see these things happen rather than be-
come a part of the corruption chain. Nxesi said
property professionals involved in dodgy deal-
ings with the department of public works want
a piece of the pie, the big tenders regardless of
the unethical signing of such deals.
Talking about the department’s turnaround
strategy, he said the property portfolio needs a
major revamp. He said transformation is all well
and good, but the time has come to further de-
fine transformation.
He posed a question on whether transformation
is about colour but still doing the same thing?
“Transformation should encourage, inspire, up-
lift and reflect change of consciousness.”
He emphasised the importance of transfer-
ring skills to emerging black professionals and
sees the process of transformation as a means
to change the form of the property industry,
its shape and appearance. Just because one
has put black people in their company doesn’t
make it right, transformation should be sustain-
able and stand for a good cause.
Nxesi pointed out that credibility and property
management are problems in property dealings
both in the public and private sector. Credibility
is about trust and the property sector needs that
more than anything else as does government
and this should be sustained always. “Collec-
tive silence in unravelling property transactions
is unacceptable because corruption will destroy
the property industry.”
He said this is a huge challenge facing property
professionals and they need ethics, codes of in-
dustry that will disown and shame professionals
involved in fraudulent property transactions.
Nxesi said property professionals ought to
discover themselves as professionals and the
value they add to society, appreciate the prop-
erty constitution that should be used to guard
against fraud and corruption, affirm shared
values (speak with one voice and have a com-
mon agenda), develop and instil good leaders
who speak out on corruption and have exem-
plary ethics. He said property is at the centre
of wealth creation and the property industry
should be seen actively being involved with gov-
ernment in talks on issues such as the Green
Paper on Land Reform, instead of getting in-
volved in dodgy property dealings.
Nxesi said the conversation has begun, for
property professionals to be actively involved
in property debates. With government having
announced big infrastructure spend projects,
property professionals should be asking them-
selves where they fit into these projects. He
added that that procurement processes in such
big projects are bound to happen and property
professionals have to be wary of those.

COVER STORY
08 09
Minister of Public Works, Thembelani ‘Thulas’ Nxesi
Saul Gumede
Solly Mboweni, Marius Muller, Zweli Mabaso
Kulani Lebese, Minister of Public Works, Thembelani ‘Thulas’ Nxesi, Lonwabo Sambudla
Tshepo Matlala, SAIBPP president addressing the gathering
I
n his previous speeches the President focused more on the creation of employment or ‘work op-
portunities’ as he called them. For instance in his 2009 address he mentioned that government
will ensure that the R787 billion infrastructure expenditure, as was provided for in the budget
earlier in the year, was properly planned for and executed. The question is, how and where would
this R787 billion be spent? Simply saying it would be infrastructure expenditure is too broad. In
this year’s speech he details how these ‘work opportunities’ will be created, which was encourag-
ing. As you might recall, previous State of the Nation Addresses lacked inspiration and direction to
many, on how the State President would get the economy working. The speeches were more about
promises and the creation of ‘work opportunities’; the implementation process was never explained
nor monitored.
In this year’s address, the President and his cabinet’s intention for the South African community was
clear: to grow the economy and to alleviate poverty and unemployment. The President’s speech, for
the first time in three attempts provided direction to the nation in terms of the cabinet’s intentions
and strategies of implementation and delivery. He was clear and concise on how they planned to
alleviate the problems of unemployment, poverty and inequality in the country.
His plans on social and infrastructure spending are indicative of his commitment to improve the
country’s infrastructure in ways that will also contribute towards job creation, poverty alleviation and
upliftment of lives. The infrastructure programme, in particular, will be the driving force in creating
jobs in different sectors to benefit different groups of people and families who are currently living in
poverty.
People should play an active role in building schools and hospitals in their communities. Support
structures have to be put in place for the successful implementation of the envisaged social plans.
Expertise from the relevant built environment disciplines is crucial. In other words, the social plans
give opportunity for the built environment industry to be actively involved in the execution of the
various social plans.
The entire Infrastructure Programme is to be overseen by the Presidential Infrastructure Co-ordinat-
ing Commission (PICC) for its effective implementation.
The President also mentioned that the massive infrastructure investment should be for more than
just dams, rail and power stations; it should industrialise the country, generate skills and create
jobs. I fully support this idea as the infrastructure spending has potential to stimulate the country’s
WHO ARE THE REAL
GOVERNMENT MATTERS
by Chulumanca Nomlomo
BENEFICIARIES OF THE GOVERNMENT’S
SOCIAL AND INFRASTRUCTURE PROGRAMMES?
On the 9th February 2012, President Jacob Zuma delivered his Fourth State of the
Nation address. Contrary to what we might have expected this time around, the
head of state delivered a speech that in my view had more substance than his previous
three speeches delivered in Parliament.

economy by benefiting other sectors in the economy. As indicated earlier, employment opportunities
will be generated through this programme, thus generating more taxes for the government which
translate to revenue for the state. In the long term this would be a great investment for the state in
terms of economic growth and stability.
As the President’s speech progressed, it became evident that the infrastructure spending focused
mainly on road and rail infrastructure, with no mention of the built environment industry. If road
and rail are the only targets for infrastructure development, they will unfortunately not have a direct
impact on the built environment sector in the short term as these links mentioned in the address
are between major cities. Only in the medium to long term when people start to settle between the
cities will the impact be felt. An example of this is the stretch of road between Potchefstroom and
Klerksdorp where the townships of Khuma and Ikageng mushroomed a couple of years ago with the
upgrade of that stretch of road.
This massive infrastructure spend will have a secondary benefit to the built environment industry.
This will be through the upgrading of bulk water supplies, electricity and the upgrade of roads. These
benefits may not be felt immediately but the gains may be realised in the long term as road and rail
linkages are what cities and public facilities are built around.
There is hope for the built environment as once these linkages are up and running, there will be
opportunities for visionary developers to capitalise on the new infrastructure. We have seen it hap-
pen before in the Middle East regions where cities have developed around new roads, creating new
communities and new opportunities. This can happen in South Africa too if we continue to engage
with the government in meaningful ways such as giving input on what we would like to see in the
areas of the built environment and how this industry can make a contribution.
The other positive aspect for the built environment industry is the President’s promise for housing
subsidies to be given to individuals earning between R3 500 and R15 000. Although this promise
has been made in previous speeches, I am hopeful that it will finally be implemented and that it
will boost activity in the low cost housing market, not only affording those who previously could not
afford houses a chance to enter the market but at the same time creating employment through
the construction projects. These projects could include sub-projects with different facilities such
as schools, shopping centres, etc. These sorts of projects will require a great deal of co-oporation
between government and the private sector.
Overall, the President’s speech is promising with regard to infrastructure development, but we would
have liked to hear how he commits to the built environment/construction sector in particular. The
real beneficiaries of this massive envisaged infrastructure investment are the disadvantaged and
marginalised people of South Africa. Through the infrastructure plans, jobs will be available for these
people and they will be able to support their families. Essential services will also be available and
importantly they will contribute towards the economic future of our beautiful country.
The built environment industry should be visible and ensure that government realises its objectives.
We should play an active role in the development of the infrastructure not only by utilising available
resources, but also by applying our knowledge, skills and expertise for effective implementation of
the state’s plans. Through this call, I believe our industry has a significant role to play in contributing
to the building of this country’s economy in the short, medium and long term.
GOVERNMENT MATTERS
10 11
‘The built environment industry should be visible and ensure that
government realises its objectives.’
T
he NDPW (National Department of Public
Works) has in the past confirmed its inten-
tion of using its muscle in the form of lease
agreements with landlords to transform the
property industry. That is, government would
endeavour to sign long-term leases with black
empowered firms; the black-owned company
could buy a property which has a government
department tenant and get a longer-term lease
than a non-black empowered entity.
The fundamentals of property finance revolve
around the so-called three Cs:
• Capital: the equity injection the investor must
put into a transaction. Normally financial insti-
tutions finance about 70% of the cost or pur-
chase price of the building/property. Therefore
for an investor to acquire a R100 million prop-
erty they will need to have about R30 million of
their own cash/equity. Clearly this will not be
achievable for start-up companies.
• Collateral: security in the form of bonds, cash,
leases.
• Character: the character of the investor, (often
referred to as the jokey) is important. Do they
have experience in running properties, can
they manage, do they have integrity.
In cases where some or one of the above do not
stack up, banks look for a way to structure the
transaction in order to mitigate the risks. Hence
the use of the discount model for financing
government-tenanted buildings even though
the lease is a gross- and not a triple- net lease.
FINANCING OF
GOVERNMENT TENANTED BUILDINGS VIA A
LEASE DISCOUNTING METHOD
The ongoing debate and over publicised issue around the long-term lease agree-
ment which the SA Police has entered into with Mr Roux Shabangu has drawn
some interest certainly in the media and property circles. The result of this matter
has affected a lot of stakeholders in and outside the property industry.
How does it work?
In order to raise the funding for buying a property,
the purchaser will present the lease agreement
together with a purchase agreement to a bank.
Most of the time, the purchaser will be looking
to the bank to advance the full purchase price,
ie 100% funding. The banks could take comfort
and rely on the fact that the NDPW has signed
a long-term lease (nine year eleven months). In
order to advance 100% of the purchase price,
the bank will establish the present value of the
future net income from the lease rental by ap-
plying an appropriate lending rate as a discount
factor and steeping the repayments of the loan
in line with the lease escalations. As security for
the loan, the bank will register a bond over the
property and also take session of the lease as
primary security.
It goes without saying that there are inherent
risks in this funding structure, such as
Commercial risks:
1. The NDPW lease is a gross lease; tactically
speaking such a lease cannot be discounted.
Only triple net leases are discountable, but
banks had to find a way to finance these trans-
actions in order to facilitate transfer of owner-
ship so the provision for operating expenses and
maintenance reserve on the discounting model
should be more conservative in order to allow for
higher that normal inflation increases.
2. Management of the property and mainte-
nance - technical expertise of the management
of the access is vital. Does the purchaser have
the capabilities and resources to manage and
maintain the building? Is there a sinking fund
or other resources for major capital expenditure
when needed, eg lift replacements and other
machinery? What will happen to the lease if the
building is not maintained properly?
3. In the event of the tenant cancelling the
lease, can the landlord secure a replacement
tenant on similar terms? Is the agreed rental,
market related?
Legal and procedural risks:
1. Is the lease water tight - can the lease run for
the full period without interruptions? The tenant
cannot cancel the lease or alter the agreed rent-
als in such a way that they negatively affect the
repayment profile. Has the process of procuring
the lease been followed and have the author-
ised personnel sign the lease?
2. Bank’s interest not protected under the lease
agreement (ie the lease only covers the NDPW’s
interest). The bank requires a mechanism to
protect its interest should it need to call up the
loan and foreclose on the bond.
3. Exit / escape clauses in the NDPW lease, eg
Clause 16 which allows the NDPW the right to
teminate the lease before it has run its term or
constraints from a BEE perspective in finding a
suitable purchaser.
GOVERNMENT MATTERS

GOVERNMENT MATTERS
4. Lack of clarity on NDPW’s internal processes
and procedures. There is generally no informa-
tion available to interested external parties such
as financial institutions on operational man-
dates, authorisations and sign-offs (whether or
not they are based on monetary values or ti-
tles, etc). For example, with the conclusion of
a lease agreement by the NDPW, what consti-
tutes a section 66 (PFMA) transaction vis-a-vis
a Regulation 13.2.4 (Treasury Regulations to
the PFMA) transaction and whether the bank
is entitled not to accept agreements not signed
by the Minister of Finance. The practice to date
has included relying on the due diligence report
(taking into account correspondences between
the borrower and the NDPW).
5. Lack of proper communication channels. It
is almost impossible to get hold of the NDPW
officials involved in any transaction in order to
confirm information and/or conditions con-
tained in the lease agreement and/or to arrange
for a meeting in order to address issues and
concerns that the bank may have.
6. Lack of consistency on the acceptable form
of agreement between the NDPW and the finan-
cial institutions. Banks require clarity on issues
eg the form of acknowledgement of the bank’s
interest. Each bank has been using its own ad-
denda to the standard lease agreement.
7. No agreed guidelines exist on the difference
between a negotiated tender process and an
open tender process (ie which processes are
to be followed in relation to the acquisition of
properties by borrowers of properties which are
already occupied by the government depart-
ments). In addition, clarity is needed on wheth-
er an open tender or negotiated tender process
must be followed or whether the lease agree-
ments be renewed without using either the ne-
gotiated or open tender process.
8. There are no guidelines on additional re-
furbishment costs, ie the costs incurred by the
borrower in order to accommodate the NDPW’s
occupying departments’ specific requirements
which are normally payable in addition to the
rental amount. Clarity is required on whether
the additional rental payments require sign-off
(and if so, who is authorised to sign-off on these
amounts).
Of all the above mentioned risks, the most
important one is the perceived contradiction
between Section 66 of the PFMA and Regula-
tion 13.2.4 (Treasury Regulations to the PFMA)
transaction and whether the bank is entitled not
to accept agreements not signed by the Minister
of Finance.
In the next issue of this journal we will attempt
to clarify this contradiction.
An expansion in infrastructure investment was noted as one of the central priorities of the 2012 Budget.
Denise Mhlanga finds out from Prof Francois Viruly how the budget will impact on the property sector.
In his budget speech, Finance Minister Pravin Gordhan said South Africa’s new story is about build-
ing modern infrastructure, a vibrant economy, a decent quality of life for all, reduce poverty and
create decent employment. Prof Francois Viruly from the Department of Construction Economics
and Management at the University of Cape Town says the macro economic climate presented in the
2012 budget suggests that the South African property market will in the next year, continue to trade
in an environment characterised by uncertain and subdued economic growth.
Viruly points to the possibility of a rising inflation rate while households and the property sector are
currently faced with increases in electricity and municipal related costs. He explains that the focus
of the 2012 budget on infrastructural expenditure offers opportunities for the property sector. “Infra-
structural expenditure not only underpins the performance of the built environment but also plays a
critical role in creating development and investment opportunities in cities and rural areas.”
Furthermore, he says the budgeted increase in expenditure on improving South Africa’s transporta-
tion infrastructure offers the potential to improve accessibility across cities and between the com-
mercial and residential property sectors. The challenge for government is to ensure that planned
expenditure is actually delivered and this will largely be a function of capabilities at local government
level, he says.
Viruly notes that the residential property sector continues to show considerable weakness and the
budget does little to promote household investment in the sector. “It is critical that government
should deliver a housing policy that not only delivers to the lowest tier of the housing market, but
also starts to address the financing and development bottlenecks that exist in the middle tiers of the
residential property sector.” He says the housing sector should be seen as a means for households
to save and create a strong asset base.
The South African commercial property sector continues to suffer from high vacancy rates, and rap-
idly rising operating costs. Apart from government’s commitment to focus on the creation of special
economic zones (SEZs), there is very little in the 2012 budget to promote the sector. If anything, he
says, the vigorous focus on infrastructural expenditure could result in escalation of building related
costs and possibly “crowd out” development activity in the private sector.
Impact of the budget on the property sector:
1. The focus on social grants will continue to play a critical role in underpinning consumption expenditure,
and particularly the retail sector in South African townships and smaller towns.
2. The budget places a renewed emphasis on special economic zones which could stimulate activity
in the industrial sector. The overall impact will ultimately be a function of the tax incentives offered.
3. A new cities’ support programme will be created in eight metropolitan authorities focused on
improved spatial planning, public transport and management of infrastructural utilities. This illus-
trates that government places importance on the role that cities play in South Africa.
4. The tax treatment of property loan stock entities will be aligned with present treatment of regulated
property unit trusts. This should possibly be seen as a further step towards creating a single REIT
structure in South Africa.
5. Tax relief is proposed for housing developers and employers who provide housing below R300 000.00
a unit. The focus of this budget remains on providing incentives to the suppliers of housing units.
There is a growing international trend rather to introduce subsidies targeted directly at households
which improve their access and affordability to the property market. While the budget proposes
to tax-exempt short- and medium-term savings products in future, consideration should also be
given to the tax–exemption on interest payments on residential mortgage bonds.
6. The capital gains tax inclusion rate for individuals and special trusts will be increased from 25%
to 33.3% and for companies and other trusts from 50% to 66.6%, resulting in a rise in the tax rate
associated with property ownership.
Viruly has an early tip for Budget 2013: Government should start looking at the affordable housing
market as this will allow for more South Africans a chance to own decent homes.
BUDGET 2012 AND THE
PROPERTY SECTOR
HOUSING
12 13
J
abulani in Soweto, has launched the devel-
opment of 4 141 new affordable homes, at a
cost of R114.6 million by International Hous-
ing Solutions (IHS) in partnership with Calgro M3.
IHS is a global private equity firm at the forefront
of affordable housing development in South Af-
rica since 2006.
Calgro M3 is a property development company
specialising in integrated developments includ-
ing RDP, rental and social housing. It listed on
the Johannesburg Stock Exchange Alt-X board
in November 2007.
Soweto is estimated to have a population of over
two million people and over the past decade,
the famous township has increasingly become
a sought-after property location.
Jabulani Housing Development
The new housing development is located close
to Jabulani Mall, one of the successful retail
centres in South Africa and is serviced by the
Rea Vaya (rapid bus service) and commuter rail
service to downtown Johannesburg.
In the same area where this development is tak-
ing place, other property developments include
government offices, light industrial space, a
hospital and additional space.
IHS South African Workforce Housing Fund’s
investment is only in the construction of resi-
dential units.
MORE THAN JUST
BRICKS AND MORTAR -
If you thought complex living and upmarket apartments with the state-of-the-art
security exists only in the suburbs, think again, townships are becoming trendy while
remaining affordable.
JABULANI HOUSING DEVELOPMENT
By Denise Mhlanga
According to IHS managing partner Soula Prox-
enos, 667 units are currently under construc-
tion and the first 180 have been transferred to
buyers. Some 290 residential units have been
sold in the open market and the balance will be
rental units for people who cannot afford to buy.
Proxenos notes that the new supply of housing
in Soweto is very low and there are few opportu-
nities to construct new housing to a significant
scale in Soweto. This opportunity was created
by the availability of city-owned land which was
sold to the development consortium in return for
construction of a community theatre, according
to IHS.
To own a property in this development, expect to
pay from R247 000 to R526 000. The two- and
three-storey buildings are a mix of studio, one,
two and three bedroom apartments ranging
from 21 m2
to 86 m2
.
The IHS fund has also acquired 243 sectional
title two bedrooms and one bathroom units
measuring 43 m2
for rentals. The completed
units command affordable rentals of R3 200
per month.
With the state-of-the-art security found in the north-
ern suburbs of Johannesburg, units are modern
with an open-plan kitchen and lounge area.
There is also plenty of parking and visitors’ park-
ing as well as green areas enhancing the overall
environment within the development.
Other developments in the precinct include a
600-bed hospital and there is already existing
infrastructure such as the shopping centre and
the police station that bodes well for the new
typical township townhouses.
Government housing finance initiatives
Proxenos points out that South Africa is moving
away from a singular focus on the provision of
free housing to other forms of subsidy that will
allow poorer households to join the formal hous-
ing ladder.
President Jacob Zuma’s State of the Nation Ad-
dress, the R83.5 billion in housing subsidies
announced by Finance Minister Pravin Gord-
han during his budget speech and pronounce-
ments by Mayor of Cape Town Patricia de Lille
and Planning Minister Trevor Manuel, have
collectively given a clear indication of how the
country’s housing backlog might be addressed
in coming years and decades, she says.
“The recent development in the approach to-
wards housing represents the biggest single
policy change on housing to date.”
She says initiatives announced by government
are going to provide significant support to work-
ing South Africans who could not previously af-
ford to buy a home.
Taken together, recent developments show an
interesting shift in how the country will be ap-
proaching the housing backlog in the months

HOUSING HOUSING
14 15
and years ahead, and a promising picture is
gained on how the landscape is set to change,
says Proxenos.
Meanwhile, property experts and estate agents
have welcomed government’s announcement of
the R1-billion housing fund to assist home buy-
ers falling above the RDP housing bracket but
who do not qualify for mortgage loans. The fund
will came into effect in April and will provide a
subsidy of up to R83 000 for buyers that earn
between R3 500 and R15 000 per month. The
main objective is to enable such buyers to ob-
tain housing finance from an accredited bank
and this is expected to instil confidence in the
affordable home market and assist the banks in
making more funding available to this sector of
the market.
According to Seeff chairman, Samuel Seeff, no
price can be put on owning the roof over one’s
head and home ownership is something that is
important for all South Africans. “Owning your
own home creates long-term security and sta-
bility and is a foundation upon which to build a
life and raise your children,” he says.
Seeff says investing in one’s own home is also
one of the most effective ways to build wealth.
Shopping at Jabulani Mall
Residents at the new Jabulani housing develop-
ment will not have to travel far to shop for every-
day basics and luxuries.
The Jabulani Mall located at the corner of Koma
and Bolani Roads opened its doors on 26 Octo-
ber 2006 with more than 100 stores catering to
the needs of the Jabulani community and sur-
rounding areas.
Information from the mall website reveals that the
location of Jabulani in Soweto has a densely pop-
ulated residential node with 68 000 households
in a 3 km radius/primary trade area and a further
170 000 households in the secondary trade area.
The mall is anchored by Shoprite, Game, Tru-
worths, Edgars and Woolworths with other retail-
ers including PEP, Ackermans, Jet, Legit, Iden-
tity and Mr Price Group. It boasts the only Game
store in Soweto, which occupies 6 000 m2
and
the mall is owned by Mike Nkuna.
Retail in South Africa’s rural areas or “emerging
economic areas” is growing and this success is
evident in the retail sales and trading densities
in these shopping centres.
This is according to Marc Edwards, managing
director of Spire Property Management, which
manages retail centres in both metropolitan
townships as well as more removed rural areas
across South Africa.
Edwards points out that statistics show that the
past decade has seen a significant increase in
the number of retail centres being developed in
townships and rural areas in South Africa.
He says 160 retail centres were developed na-
tionally in township and rural areas of South
Africa between 1962 and 2009, covering about
2 million m2
of retail floor space and generating
about R34 billion worth of business sales with
an added 54 300 permanent jobs since the
1980s.
“Townships and rural areas in South Africa have
emerged as a new market for national retail-
ers as we see an upward movement amongst
township communities in terms of expendable
income.”
He adds that this progressive movement has
resulted in a considerable increase in shopping
mall development in these previously untapped
areas.
October 2011
More than 50% of households report an im-
provement in access to education and employ-
ment from the property that they presently
occupy.
Over 75% of households interviewed felt that
their present accommodation has improved
conditions for their children and the overall
health of their family.
This is according to Professor Francois Viruly,
property economist and professor at the Uni-
versity of Cape Town Department of Construc-
tion Economics and Management. Viruly and
his team undertook a ten-month study to find
out what the social and economic impact of af-
fordable housing is on communities and the job
creation impact of such projects.
The research was funded by International
Housing Solutions (IHS), a global private equity
firm that has provided funding to more than
R7.8 billion worth of developments throughout
South Africa. Since the launch of its first fund,
the South African Workforce Housing Fund, IHS
has invested in the development of more than
27 000 affordable housing units countrywide.
Commenting on the report findings, Viruly says
housing in South Africa goes well beyond the
provision of shelter but that quality and well-
located housing can have a profound effect
on the access that households have to social
amenities and overall welfare.
The report shows the importance of providing
diversity in the housing sector and that the value
placed on a house varies from one household
to the next.
Of the households surveyed, emphasis was
placed on security, distance to place of employ-
ment, access to friends and family, access to
social and recreational facilities and profession-
al management of the units in which families
live.
Housing units either rented or for sale include
Fleurhof in Soweto, Gauteng, Greatman’s in the
Johannesburg CBD, Aengus in Johannesburg
Inner City, Stellendale in Stellendale Village in
the Western Cape, Jabulani and Protea Glen in
Soweto, Jukskei View in Midrand and Spring
Valley in Emalahleni Witbank.
A total of 66 % of households were renting; 34%
owned the homes they lived in; 52% were aged
between 20 and 29 years; 61% were single,
BENEFITS OF OCCUPYING AFFORDABLE
HOUSING IN SOUTH AFRICA By Denise Mhlanga
46% male, 32% were married and 56% have
children.
Viruly says 65% of the people interviewed were
employed, 6% unemployed, none retired and
23% fell under the ‘other’ category. Further-
more, the report revealed that 68% earned
more than R7 500 per month, 5% earned be-
tween R2 501 and R3 500 per month and 9%
earned less than R2 500.
When asked about their overall satisfaction
compared with where they used to reside, 35%
were more satisfied, 37% partially satisfied,
10% less satisfied, 11% most satisfied and 7%
were not satisfied.
Viruly says the findings revealed that house-
holds wanted to live in housing units closer to or
with easy access to public transport, secure, in
a good neighbourhood, close to work, technikon
or university, with quality and size of house, ac-
cess to schools and extended family.
The report also shows that the housing con-
struction sector boasts one of the highest em-
ployment multipliers in South Africa, and has
the potential to address unemployment signifi-
cantly.
The study found that it takes between 1 200
and 1 500 man-hours to build a 40 m2
house,
with the average being approximately 1 289
hours. This is made up of 541 hours of skilled
and 748.8 hours of unskilled work, translating
to 2.45 people employed continuously to com-
plete a typical house in 13 weeks.
It is estimated that IHS financing has created
some 50 000 direct and indirect employment
opportunities and 60% of these are for unskilled
workers and unskilled employment opportuni-
ties on an annual basis.
Viruly says developers and people living in these
units agree that the units have had a positive
impact on the neighbourhood safety and secu-
rity. He says overall, the developments surveyed
provide benefits that go well beyond the mere
provision of housing, but rather are playing an
important role in creating sustainable human
settlements.
These include providing numerous indirect
benefits, which include improvement to ac-
cessibility and employment, leisure and social
amenities, he adds.
Professor Francois Viruly

A DAY IN THE LIFE OF A
QUANTITY SURVEYOR
To succeed in a still male-dominated industry requires hard work tenacity and pas-
sion for what one chooses to do as Sandi Mbutuma, a quantity surveyor at Pentad
Quantity Surveyors (Pty) Ltd says. SAIBPP gets an insight of what quantity survey-
ing is all about.
CAREER FOCUS
W
hen other young girls her age were playing with dolls,
Sandi’s toys were of a different kind. She obsessed about
buildings and numbers and dreamt of one day becoming
part of the built environment industry.
Today, Sandi is not only a qualified quantity surveyor but she is an
executive director and shareholder at Pentad Quantity Surveyors.
In 2010, she was a national finalist in the Women Property Net-
work’s Rising Star, a recognition she says was humbling, bringing
with it a conscience and realisation that there are inspiring women
who have made great strides in the property sector.
“It also made me realise that there is a need to nurture and transfer
skills to women in the property industry.”
A career as a quantity surveyor
A quantity surveyor is responsible for figuring out what a building is
going to cost and in most cases for ensuring that construction costs
and production are managed efficiently.
This person also identifies and collates the costs involved in order
to develop an overall budget for any project, she explains.
For example, a quantity surveyor can undertake cost planning in a
project which aims to help all members of the design team arrive at
a pragmatic solution and stay within the project budget.
It is the final detailed estimate prepared by the quantity surveyor
in consultation with the project architect, which forms a basis on
which subsequent tenders can be evaluated.
Sandi says bills of quantities translate the drawings, plans and
specifications produced by the design team to enable the process
of putting out a tender to be priced fairly.
An aspirant quantity surveyor needs to be prac-
tical, have logic and a methodical approach to
problem solving.
“The ability to analyse, possess high levels of nu-
meracy skills, clear understanding of construc-
tion techniques and technology are essential.”
The nature of the job is such that there is a lot of
involvement in negotiating with a wide variety of
people within the project, so good communica-
tion skills are called for.
Education and training
Sandi completed a Bachelor of Technology de-
gree in Quantity Surveying at the University of
Johannesburg in 2002. She also has a qualifi-
cation in the Programme in Property Develop-
ment obtained at the University of Cape Town in
2010 and is completing a Programme in Man-
agement Development at the Gordon Institute of
Business Science.
Sandi began her career in quantity surveying as
a trainee at Bathuleng Wallace Raubenheimer
in Woodmead Johannesburg. Her big break
enabled her to gain valuable training in com-
mercial property projects and she was part of
the project team responsible for commercial
projects including the Woodlands Office Park
and Johannesburg Country Club in Gauteng.
Armed with experience and enthusiasm she
went on to join Bham Tayob Khan & Matunda
in Greenside as a junior quantity surveyor on
commercial building projects and also received
special training in empowerment auditing on
Meropa Entertainment World and Casino in Pi-
etersburg.
The world of quantity surveying was seemingly
endless and like a child with a new toy to show
off, Sandi joined TFMC where she gained a
wealth of experience in facilities management.
She was afforded the opportunity to conduct
technical audits countrywide with Telkom’s
team of auditors.
In 2005, Sandi went on to work for Brian
Heineberg and Associates. She worked on
prestigious projects of Maia Luxury Resort in
Seychelles and completed numerous commer-
cial projects within Gauteng. This gained her an
associate position at Brian Heineberg & Associ-
ates and partner at Brian Heineberg & Partners.
She also briefly acted as head of technical de-
partment at NNAQS in 2010 until she joined the
award winning Pentad Quantity Surveyors (Pty)
Ltd firm where she is an executive director and
shareholder.
Pentad a won the 2012 Diamond PMR Award in
the Medium Sized Quantity Surveying firm cat-
egory, making it the ninth consecutive year that
Pentad received the PMR Award.
She says part of the firm’s success is the re-
structuring process that has been adopted, ad-
dressing the imbalances of management and
employment equity issues.
Since restructuring, the company has achieved
an employment equity required level status.
Sandi has been involved in leisure and health-
care facilities projects and says experience and
specialisation in a particular sector enables one
to offer better service to clients.
Career highlights and challenges
From starting off as a trainee and the number of
exciting projects she worked on, Sandi says the
highlight of her career to date is her involvement
with the Meropa Casino where she worked as
an empowerment auditor.
She says the job involved assisting the client to
achieve the employment equity targeted pro-
curement of 30%. This was done through ad-
judication and verification of tender proposals
as well as monitoring progress until completion.
The Maia Luxury Resort in Seychelles is
another highlight as this is the first project
Sandi was exposed to working with three
currencies on one project. Also, she says
Seychelles has no natural resources and
so everything had to be imported for the
project.
When asked about what has changed since
entering the world of quantity surveying,
she says academically, institutions used
to be dominated by male students but this
has now changed. “A lot of women are now
studying towards qualifications in quantity
surveying and I hope more women will em-
brace this career going forward.” Sandi points
out that while this is encouraging, there are still
not enough women quantity surveyors in South
Africa
Because of the economic environment, the built
environment has shrunk and there are just not
many jobs around.
She feels that to stimulate interest from women
in the built environment sector, vigorous skills
development and training as well as adequate
structures to support entrepreneurs would be
ideal. “There are still opportunities in the indus-
try especially for women but the lack of infra-
structure and resources to mobilise remains an
obstacle.”
She says technology development, policy chang-
es and economic growth have all played a huge
role in commuting the trends in the industry.
Downtime
For 32 year old Sandi, life in the northern sub-
urbs of Johannesburg is just as fast-paced as
the rest of the City of Gold.
At the office, no day is ever the same, nor are
the projects she works on. She sits in manage-
ment, board, site, design and technical meet-
ings and still gets a chance to mentor, network
while keeping existing clients happy and trying
to lure new clients to the company.
When she gets home and kicks off her shoes,
she enjoys drinking a wide selection of eastern
and western herbal teas. A wine lover and con-
noisseur in training, Sandi loves entertaining her
family and friends at home and they too enjoy
some of her finest wine collection to date.
Sandi believes in buying wine in bulk too as this
is cost effective and allows the bottles to age
whereas buying aged wines can be expensive
at auctions or retail stores.
She enjoys reading books and is currently read-
ing Join the Club by Tina Rosenberg, Who said
Elephants can’t dance by Louis Gestner and just
finished reading the whole King James Version
of The Bible.
CAREER FOCUS
Sandi Mbutuma
16 17
Sandi’s top five tips on how to succeed in any-
thing in life:
1. Set clear and concise goals and continually
evaluate the progress until it’s done.
2. Seek mentorship/surround yourself with people
who possess the same qualities to inspire
your goals.
3. Always find a way to pick yourself up when
you’ve fallen, learn the lesson and try again
differently.
4. Be disciplined and consistent in what you do
5. Dare and act.

What does your job entail and what is your area of specialisation?
I am a litigation and dispute resolution attorney specialising in gen-
eral commercial litigation and dispute resolution, with a particular
focus on contractual disputes, insurance, construction and engi-
neering, recoveries and commercial property disputes.
I have provided advice on a wide spectrum of issues, including but
not limited to, tolling, construction, personal information legisla-
tion, short-term insurance, FIDIC, JBCC, and company law.
I also have general commercial experience in drafting, reviewing
and vetting various commercial agreements, namely lease (mov-
able and immovable property), service level, construction and en-
gineering. Recently I have provided advice to the contractor in the
Electronic Toll Collection Project.
What is it like to be an attorney?
If a township kid from Joza location in eRini in the Eastern Cape
can be an attorney – anyone can be one.
Being an attorney is a rewarding yet demanding profession. It re-
quires passion and love for the law - the demanding aspect quickly
becomes a fantastic and fulfilling knowledge exploration adven-
ture.
The profession offers such a wide array of specialisation that what-
ever you are passionate about or studying/studied, you will soon
find any one branch of the law where you can use your particular
expertise. Apart from specialisation within the different branches of
the law, there are also different career paths within the profession.
Upon qualifying, one can practise either as a lawyer (attorney or
advocate) or an in-house counsel/legal advisor (in the public or
private sector). For an example, my interest and speciality lies in
insurance and construction law.
THE ART OF PRACTISING
LAW
An attorney is described as a person appointed to act for another in legal matters;
attorneys specialise in various areas. In an exclusive interview with SAIBPP, Siya
Mbolekwa (30), an associate at Edward Nathan Sonnenbergs, chats about his career
as an attorney and involvement in the Tolling Project.
CAREER FOCUS
You started your career at Deneys Reitz Inc
now Norton Rose, and now you are an asso-
ciate at Edward Nathan Sonnenbergs. Briefly
take us through your career journey?
I hold an LLB qualification from the Nelson
Mandela Metropolitan University and complet-
ed my articles at Deneys Reitz Attorneys.
Articles at the best of times are a shock to the
system, as one has this glamorous picture of
practising law (made worse by the American
television law series) - a far cry from reality.
The only glamorous thing about articles is that
of the comparison of candidate attorneys to the
Lord Jesus Christ, because you are expected to
walk on water.
Secondly, while working on articles, a candidate
is constantly being mistaken for a chartered ac-
countant – a mistake I never corrected during
my time.
For the most part, the process of completing
articles is a character building experience that
tests one’s fortitude and resolve and a neces-
sary educative step into the profession.
I was fortunate that I was trained and interacted
with some of the best legal minds in the country
which undoubtedly benefited my development
as a lawyer.
Articles also enable most, not all clerks, to de-
termine whether the law is their profession of
choice or if they wish to pursue something else.
At the conclusion of my articles I was appointed
an associate in the litigation and dispute resolu-
tion department.
I then became involved in the Tolling Project – a
project that had not been done before, at least
on such a scale anywhere in the world. It was
also the first project in the world to use the new
Fidic Gold Book (a design, construct and oper-
ate construction contract) – it turned out to be
an insightful and exciting experience.
I was then presented with an opportunity which
I accepted to return to practise at Edward Nath-
an Sonnenbergs, which I think is one of the best
run law firms in the country.
What have been the highlights of your career
and challenges? How did you overcome the
challenges?
Doing what I am passionate about - which is
practising the law at prestigious law firms.
Being involved in the Tolling Project and in a few
rather large notable cases such as one which a
client brought against the Securities Regulation
Panel.
Having been involved in the legal profession
in the past six years, what has changed in the
South African legal landscape? Does the infor-
mation bill for example bother you?
The consumer legislation, namely the Consumer
Protection Act, National Credit Act, Protection of
Information Bill and Electronic Communications
and Transactions Act (particularly in relation to
the protection of personal information) has sig-
nificantly made the obligations of service provid-
ers more onerous and benefits the consumers.
Consumers still need to be educated on what
impact these relatively new pieces of legisla-
tion will have on their lives. Service providers,
especially those dealing with personal informa-
tion which effectively includes every business
that records and distributes personal informa-
tion (credit agency/bureau and those people
who report defaulting consumers to credit / bu-
reau) must educate themselves on the impact
of these pieces of legislation. In fact, it is good
business to do so.
Another piece of legislation is the new Compa-
nies Act. Many people are still coming to grips
with this law and naturally, there’s isn’t much
jurisprudence on it, especially the provisions
dealing with business rescue and the like.
CAREER FOCUS
Siya Mbolekwa
18 19
From a legal perspective, e-tolls are set
to kick off in Gauteng at the end of April,
what can you tell us about that and the
tolling system in South Africa in general?
The legal perspective pales in comparison
to the social impact that the e-tolls will have,
as illustrated by various media reports.
For those of us who worked in the project it
is obviously exciting that the e-tolls are set to
go live at the end of April.
The opposition to e-tolls is understandable in
the light of the impact this cost will have on the
motorists and their monthly household spend.
This has to be balanced against the cost that
the state has incurred in the improvement of our
highways. It is not an easy situation to be in but I
am certain that the stakeholders will reach com-
mon ground.
Briefly describe a typical day in your job?
Drafting of correspondence / letters to clients
providing advice (opinions, reporting and re-
searching the law), attending meetings, meeting
deadlines and managing the pressures of the
job effectively.
What is the secret to your success?
Treating everyone, regardless of their class or
whatever walk of life they come from, with de-
cency and respect, mastering the art of com-
‘Being an attorney is a rewarding yet demand-
ing profession.’
munication and working very hard. I also have
faith and belief in my own abilities.
How to spend your free time?
With family, watching and playing sport, movies,
reading and writing poetry.
Top secrets to succeed in life:
1. Have faith and pray ceaselessly.
2. Cherish and love your family and friends.
3. Work hard.
4. Have fun in whatever you do and my motto is
‘never die wondering’ – life waits for no man.
5. Luck – the harder you work the luckier you
get as Gary Player puts it.

LISTED PROPERTY NEWS
20
DIPULA A UNITS
Johannesburg Stock Exchange (JSE) listed property loan stock, Dipula Income
Fund’s A units are tipped as a top prospect in the seven new property sector listings
on the JSE since November 2010.
TIPPED AS A JSE’S BEST BUYS
A
ccording to Keillen Ndlovu, Stanlib head of property funds, Dipula A units offer investors look-
ing for secure, predictable income streams an attractive initial yield of 9.5%. Dipula Income
Fund listed on the JSE in August 2011 with a diversified property portfolio located throughout
South Africa. It enjoys a retail bias to low income households.
“Dipula A units also provide almost guaranteed income growth of 5% per annum,” says Ndlovu. He
explains that this is in line with the market, but is more certain than other single-unit property stocks
and the income protection that Dipula A units offer is similar to bonds.
Dipula Income Fund chief executive officer, Izak Petersen, says the company will continue to seek
portfolio and income strengthening opportunities for its investors. “It is important to acquire assets
that will show resilience in all market conditions” says Petersen. Petersen says the key is to ensure
that Dipula’s portfolio can stand the test of time in terms of capital and income growth, hence it is im-
portant to balance key considerations at all times. He points out that the B units are excellent value
at a forward yield of approximately 11.3% at the current trading levels. “Dipula’s value proposition is
solid and I believe that both units offer good value to investors.”
Dipula announced a R247.8 million purchase of three retail properties in late December 2011, sub-
ject to several approvals. Once final, they will grow Dipula’s portfolio to 178 properties, valued over
R2.3 billion and covering 463 000 m2
.
“We continue to build a portfolio that will deliver growth in distributions and capital for our investors;
increasing critical mass, asset quality and diversification will drive performance.” Ndlovu also identi-
fied Vividend Income Fund, Synergy A units and Rebosis as currently offering good buying opportu-
nities. “However, it is important to note that most of the new listings are not very liquid. Liquidity is
likely to improve over time as they do property acquisitions partially funded with equity.”
For the past twelve months South African Listed Property as an asset class recorded the highest total
return (21.75%), followed by South African Bonds (13.59%), Equities (9.63%) and South African
Cash (5.70%), according to Catalyst Fund Managers. In the March report, the managers reveal that
the current income yield plus prospect of income growth will drive the total return of listed property
over the long term. The outlook for distribution growth in 2012 remains reasonable and the listed
property sector is likely to deliver inflationary type growth in income distributions.
Catalyst Fund Managers point out that the risk to total returns in the short term is a weakening in
capital markets and/or deterioration in the income growth outlook. They say listed property is a long
term investment and over the long term the total return from this sector will be driven by the income
yield plus growth in that income.
LISTED PROPERTY NEWS
Redefine Properties has successfully conclud-
ed the acquisition of two further retail prop-
erties, Chris Hani Crossing in Vosloorus and
South Coast Mall on the Natal South Coast.
This is in line with Redefine’s stated acquisition
strategy of acquiring well-located retail proper-
ties that are at least 20 000 m2
, with a strong
presence of national retailers and located within
areas of sustainable growth. This strategy also
applies to any potential new retail develop-
ments. Both transactions are subject to Compe-
tition Commission approval.
Redefine has acquired a 50% undivided inter-
est in Chris Hani Crossing for R260 million. The
REDEFINE CONCLUDES TWO
FURTHER RETAIL ACQUISITIONS
development comprises 41 000 m2
of GLA and
is well located within the growing residential
area of Vosloorus.
Alex Phakathi, Acquisitions and Disposals Ex-
ecutive for Redefine Properties, says the centre
is well tenanted with a high percentage of na-
tional tenants and is therefore well positioned for
continued growth.
With regard to the South Coast Mall acquisition,
Redefine has increased its existing 50% stake
in the centre by electing to exercise its pre-
emptive right to buy Hyprop’s undivided share
in the centre for R108.5 million. “With 30 000
m2
of GLA, we believe the centre has good up-
side potential and we will be able to continue to
add value with a keener focus on management,
which ultimately will result in a better perform-
ing centre,” says Phakathi.
“We are looking to acquire good regional and
community-type developments in high growth
areas which suit our investment criteria. We
have a strong inhouse team of key personnel
which can manage everything from the leasing
through to the development and this places us
in a strong position to act quickly when oppor-
tunities present,” he concludes.
Izak Petersen
21

Located at the intersection of the N12 and
Jabulani Street in Jouberton, which adjoins
Klerksdorp, construction of the 15 000 m2
shopping centre begins in May.
Klerksdorp is the business and administrative
hub of a substantial and strategically positioned
region bordered by Botswana and the economic
powerhouse of Gauteng. It is a prosperous town
further boosted by the surrounding goldfields.
Goldfields Mall will be the first modern shopping
centre in Jouberton and will include 500 park-
ing bays as well as a fully-serviced rank for 30
taxis designed in collaboration with the South-
ern Taxi Council.
Currently the centre is approximately 85% pre-
let, with Shoprite as the anchor tenant trading
from a 3 500 m2
store, complemented by Hyper
Butchery and Nizams. Other retailers include
PEP, Jet, Cashbuild, KFC, OK Furniture, Lewis
and Fairprice.
The centre will have a post office branch and
because of its size and expansion potential, it
should remain the dominant retail offering in
the area for the foreseeable future.
22 23
CHIT CHAT CHIT CHAT
Shopping at Goldfields Mall in Jouberton
Rob Terry, development manager for Landmark
Real Estate, property developers of the new
shopping centre, says more and more retailers
with vision are offering their brands in South Af-
rica’s townships.
“Combined with the adjacent suburbs of Man-
zil Park and Alabama, the historically black
township of Jouberton has the highest density
of residents in the region. The reasons for this
trend toward township retail development are
self-evident, and revolve mainly around expedi-
ency and price.”
Terry says in recent months there have been a
number of major retail investment announce-
ments in such previously disadvantaged areas
by the likes of Old Mutual, Vukile, Advent Asset
Management, Dipula Income Fund and the PIC
(Public Investment Corporation), indicating in-
vestor confidence in this important retail sector.
“Retailers active in this arena are reporting
significantly higher growth compared with so-
called traditional retailing nodes,” he says.
House price reports by FNB in recent years add
further weight to the indication of increasing
stability and growth in these areas, with the
average urban township home now worth over
R250 000 and growing in excess of 10% per an-
num. This outperforms the just 3.8% average
growth in house prices in the six major metro
regions as a whole, says Terry.
Landmark’s executive director, Lionel Kisten,
applauds the commitment of national fash-
ion retailers who have recognised that fashion
should be offered at the brand conscious con-
sumers’ doorstep. PEP pioneered fashion retail
in black townships, a factor which contributed
to their success as South Africa’s largest fashion
outlet.
“In recent years Jet has followed a similar strat-
egy and is a serious player in this market. It’s
encouraging to now see other retailers recog-
nising the business potential offered in these
areas,” says Kisten.
Banking services in the new centre are to be
provided by FNB Easy-Bank and Standard
Bank and Landmark reports that negotiations
are ongoing with the other banks.
Shopping for the 200 000 residents of Jouberton in the North West Province’s mining hub of Klerksdorp will be taken to new heights when the
Goldfields Mall opens in the second quarter of 2013.
The recently launched Kgodisa Training Academy attracts interest from people in the
property industry and other industries as well.
According to Thea Bezuidenhout, director of Kgodisa, the academy is the first to provide
SETA accredited training for the new Facilities and Property Management Diploma – NQF
level 4 qualifications.
“This new NQF level 4 qualification will enable applicants to enter the property industry as a
portfolio manager or facilities manager. For those already employed in the property industry
the courses on offer provide the opportunity for career advancement and personal growth.”
Kgodisa is an independent company which forms part of Excellerate Property Services – a
holding company of which JHI Properties and Sterikleen are members.
Bezuidenhout says courses will focus on the needs of the property sector and the acad-
emy will also conduct short courses on other subjects such as negotiation skills and cus-
tomer care. It will also host breakfasts with industry experts – enabling delegates to obtain
firsthand information regarding the property sector.
Both Kgodisa and the academy’s Facilities and Property Management Diploma are accred-
ited by the Services SETA and as a result, businesses sending employees on the courses
will be able to utilise their skills training information for BEE ratings.
Although the academy is based in Sandton, Johannesburg, Kgodisa intends to offer cours-
es in Cape Town and Durban in 2013.
For further information contact Thea Bezuidenhout or Catherine Gitonga on 011 911 8000
visit www.kgodisa.co.za
Launch of new property training academy
Thea Bezuidenhout
An artist’s impression of Goldfields Mall, the new shopping
centre in Jouberton situated 13 km from Klerksdorp CBD.
Commercial banks are taking longer to ap-
prove commercial loans and issue bank guar-
antees. As a result, an increasing number of
local property investors are finding themselves
unable to finance an opportunistic investment
timeously.
This is according to Gary Palmer, CEO of Para-
gon Lending Solutions, who says the new leg-
islation forcing banks to look more carefully at
loan criteria has added a significant time bur-
den to the process of applying for a loan. “It
used to be realistic to expect a sale agreement
to be finalised from deposit to bank guarantee
within two weeks, or a month at the most. Now
banks are taking much more time to complete
the process, sometimes longer than six weeks,”
says Palmer.
According to Palmer, as a result of the banks’
conservative lending practices and their slow
turnaround times, many buyers of properties
are not meeting their deadlines to issue guar-
antees for the purchase of properties. The risk
for the purchaser is that they lose their deposit.
Should the deal fall through and the seller sells
the property for a reduced value then the de-
faulting purchaser may be liable for the shortfall.
Banks slow turnaround times hurting
property investors
Palmer explains that generally the sale of a
property is subject to a condition that the pur-
chaser obtains a loan to finance the transaction
within a certain timeframe. He says the sale will
only be legally binding and enforceable once
this condition has been met within the time al-
lowed. “A purchaser breaches the agreement
when the purchaser fails to fulfil conditions by,
for example, not issuing the required guarantee
from the banks to approve the loan. “What we
have seen happening more and more is that the
clients assume that the commercial bank will
approve the loan, only to find it declined within
a few days of the deadline to issue guarantees
to the seller,” he says.
Palmer says this situation has become particu-
larly prevalent in the property development in-
dustry over the past few months, as the banks
will no longer consider residential investment
property as sufficient backing for a loan. “There-
fore, property developers with a significant asset
base are finding themselves in a cash flow crisis
and unable to take advantage of opportunistic
purchases because banks will not approve the
loan in time.” He refers to an example of a high
profile property investor who had purchased an
industrial property in Durban and required a
bank guarantee to secure the property. “A week
before guarantees needed to be issued, his
commercial bank declined the loan because of
the perceived lack of serviceability as a result of
the upcoming expiration of the current leases.”
Palmer recommends that buyers who are ex-
periencing similar hurdles in securing finance,
look to an alternative lender who could issue
them with a formal bank guarantee within sev-
en days. “Our average turnaround time is seven
to ten days for a guarantee to be issued. Most
reputable lenders should have similar terms.
Once the transfer occurs then the lender can
work with the client to secure long-term bank
financing,” says Palmer.
Situated on the corner of Thlou Street and the
P16-2, a main arterial road that links Rusten-
burg to Sun City and Thabazimbi, the mall cur-
rently at 19 000 m2
, has great accessibility in an
area with good public transport infrastructure.
It will in future be extended to 40 000 m2
.
Apart from Boitekong Mall, no formal retail offering
exists around Boitekong, as the area is characterised
by mining activities and lower income housing; con-
sumers have to travel to the Rustenburg CBD to do
their shopping - an 8km travelling distance, requir-
ing the consumer to catch two taxis each way.
Boitekong Mall
Construction began dur-
ing August 2011 and the
modern centre will launch
on 26 April 2012. The
centre boasts state-of-the-
art security and modern
amenities taking the new-
est trends in ergonomics
into account.
With 49 stores, 800 park-
ing bays and parking for 18 taxis, the mall has
secured anchor Shoprite and a balance of retail,
services and entertainment, Boitekong Mall is
both a destination of choice and a place where
tradition meets modernity.
Boitekong Mall - a dynamic, vibrant and unique R180-million community shopping
destination is currently in the final stages of completion.

24
CHIT CHAT
The Rates and Monetary Amounts and Amend-
ment of Revenue Laws Bill 2012 was tabled
before parliament in March.
This bill initiates the tax legislative process stem-
ming from the Budget and it contains changes
to tax rates, thresholds, credits as well as the
latest excise levies on alcohol and tobacco.
Most notably, this bill contains upward adjust-
ments in personal income tax brackets that
provide R9.5 billion in relief. This relief amounts
to approximately R2 billion above inflation and
Rates and Monetary Revenue Laws Bill tabled
these adjustments contain upward adjustments
in the primary, secondary and tertiary rebates.
Relief from increased capital gains rates is being
made available for lower- and middle-income
groups so that their savings can be shielded
from this change.
The annual capital gains exclusion will increase
from R20 000 to R30 000, exclusion on death will
also increase from R200 000 to R300 000 and
the exclusion for gains from the sale of homes will
increase from R1.5 million to R2 million.
All of these exclusions should be more than suffi-
cient for most lower- and middle-income taxpay-
ers who seek to set aside and grow their savings,
according to Finance Minister, Pravin Gordhan.
The tax bill contains a carefully developed pack-
age which supports government’s objective to
maintaining fiscal revenues for government pri-
orities, provides for fiscal support for growth and
job creation and strives for fiscal consolidation
in the medium term, he adds.
Unlike in the past when the competition catego-
ries were product based, this year the emphasis
is on the core values and standards on which
precast concrete products and applications are
measured, and the new award categories reflect
this.
• Aesthetics
• Sustainability
• Community involvement
• Technical excellence
• Innovation
• Vintage
Besides the new categories, the number of
awards has been halved from 36 to 18. Moreo-
ver, the thee-tiered structure comprising region-
al awards and ceremonies, national awards and
five trophy awards has been dropped. It is being
replaced by a single streamlined ceremony in
which trophies are awarded to the overall winner
of each category; in addition three commenda-
tion awards per category will be made.
CMA director, Hamish Laing, says each cat-
egory is open to entries from any construction
project providing one or more precast concrete
product manufactured by a CMA member has
been used in its implementation.
“Entries will be judged on the contribution that
precast concrete elements make in one or more
of the competition’s categories. In other words
the same project could be entered for more
than one competition category. For example, a
township paving project could be entered into
several if not all six categories.”
Laing says the standards on which the award
entries will be judged this year will be as high if
CMA adopts fresh approach
to awards for excellence
not higher than they always were, and awards
will only be made if the quality of entries meets
competition criteria. In instances where stand-
ards are not sufficiently high, awards will be
withheld,” says Laing.
Commenting further, Laing says that an awards
entry book won’t be published this year. Instead
all entries will be posted on the CMA’s website
and on Facebook. As in previous years, a win-
ners’ book will be published and distributed im-
mediately after the Awards which will be staged
jointly with the Association’s 40th anniversary
celebrations, on November 3rd at the Indaba
Hotel in Johannesburg.
Concrete is, after water, the second most used
product on the planet. This building material
has established a reputation as the founda-
tion of economic development and is in high
demand by society for use in various infrastruc-
tural developments such as houses, schools,
roads, dams and many other essential facilities.
The production of cement, an ingredient of con-
crete, involves the emission of CO², which adds
to the global concern regarding climate change
and its implications for the future. This is the
reason why cement industry leader AfriSam is
leading the way in producing advanced com-
posite cements with a low carbon footprint and
partnering with initiatives like the AfriSam-SAIA
Award for Sustainable Architecture.
The AFRISAM-
SAIA Award for
Sustainable
Architecture
As a result of ongoing use of innovative technologies, AfriSam has reduced the CO² content per ton
of cement by more than 34 % over the last 20 years. The building materials producer has reached
a number of environmental milestones in this period, which include being the first in the industry to
measure the carbon footprint of all its operations and having developed a range of products with the
lowest carbon footprints in the industry. Not content with these impressive achievements, AfriSam
launched the biennial AfriSam-SAIA Award for Sustainable Architecture to promote sustainability
and environmental issues in architecture and construction.
Says SAIA’s President, Fanuel Motsepe: “Many people see design quality and sustainable design as
two separate issues. One tackles aesthetics, the other technical solutions. However, they can and
should be mutually reinforcing. It is not just how a building looks but how it functions and whether it
meets the social, cultural, economic and environmental needs of the people it serves.”
Entries for the AfriSam-SAIA Award for Sustainable Architecture were in two categories - one for built
work that has been beneficially occupied since 15 March, 2011 and the other for works of social
importance, including research.
The adjudication panel, chaired by Motsepe, is: academic Daniel Irurah; architects Rodney Choro-
manski and Eric Noir; businesswoman and National President of South African Women in Construc-
tion (SAWIC) Dr Thandi Ndlovu and AfriSam’s Mike McDonald. Award recipients will be announced
at a function to be held in Johannesburg in October, 2012. Qualifying projects will form part of an
exhibition to be held at the SAIA Biennial Convention, AZA2012 in Cape Town in September.

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