In the News
Property syndication rules coming soon - 13 February
Roy Cokayne
Pretoria - The trade and industry department will soon publish draft regulations to control the conduct of companies involved in public property syndication investments.
Ebrahim Mohamed, the chief director of the office of consumer protection in the department's consumer and corporate regulation division, said on Friday that the draft regulations would be published in the Government Gazette, allowing 30 days for public comment.
The department hoped to publish the final regulations by the end of March. Attempts to clean up conduct in the industry follow an investigation by the department's consumer affairs committee into property syndication scams in October 2004.
Mohamed said in 2004 that the syndicates were being accused of defrauding unsuspecting and inexperienced investors. He warned the public and small investors to be careful of public property syndication scams.
A public property syndication comprises a group of investors who pool their funds to invest in a company whose sole asset is a commercial, retail or industrial property.
These investors then share in the profits and losses, and enjoy the benefits of net rental growth through a share of income, together with any future capital growth that may be reflected by the increased value of shares.
But Mohamed said it was relatively easy to mislead consumers when marketing public property syndications.
"The property could ... be sold at an inflated price ... or investors could be left in the dark regarding the terms of the rental agreements."
Sharemax Investments is one of the largest companies to specialise in unlisted commercial property investments, despite receiving bad publicity in the past.
Willie Botha, Sharemax's managing director, said it had successfully launched 29 projects since 1999 and managed more than 15 000 property investors' assets worth more than R1.5 million.
Botha stressed that all of Sharemax's projects were properly registered with the registrar of companies before they were offered to the public.
He added that the revival of the property market had opened the door to excellent growth for Sharemax's investors. Botha said there was demand from certain listed and other companies to purchase several properties in Sharemax portfolio.
He said the first successful transaction of this kind was when an offer of R46.5 million was accepted for the Groenkloof Plaza shopping centre in Pretoria, which was registered in the name of its shareholders in May 2003 for R35.85 million.
The combined gross return for the investors in Groenkloof Plaza was 58.51 percent over two years and eight months.
Botha said offers on 19 other buildings in Sharemax's portfolio were being considered. They would provide additional capital growth of more than R200 million to its investment clients.
Business Report website
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Overpricing stifles property - 26 January
Superinflated asking prices flattened holiday home sales in Port Elizabeth, St Francis Bay and Jeffreys Bay this past season.
Local estate agents report the quietest festive trading in some years in spite of good viewing numbers and follow up interest, with many of the fewer than normal offers to purchase faltering on price agreement between the two parties, according to a market survey.
John Cooper, a franchise holder in the three areas, reports the only real interest surfacing in Jeffreys Bay vacant stands where the CEI local franchise recorded 19 stand sales, all to non residents, and only one existing home transaction. Average selling price of stands was around R350 000.
Activity in the normally equally popular, but pricier St Francis Bay, according to Cooper was "very quiet" also as a result of the shorter holiday season and possibly the crisis in the supply of petrol at that time.
One tendered offer of R1.5m to purchase a R1.6m home was not only rejected by the seller but its price in response to the interest was immediately bumped up to R1.7m.
An owner broker in Port Elizabeth also reports a slower than normal market. December sales for the agency of 24 units was about half of a normal month with a high portion being generated by company transfers.
Potgieter also sees good movement in the niche markets, such as the Walmer golfing estates, particularly from black and Asian buyers purchasing in the price range of R2.5m.
Cooper senses a market improvement by April when he expects sellers to come to terms that market bottlenecks are a result of their own making.
Given the recent and still to come industrial development in Port Elizabeth and Mossel Bay and the region's cost of living and lower crime rate, Cooper is forecasting strong emigration into the area during the next four years from inland regions further motivated by the region supporting some of the lowest coastal property prices in the country.
"It's big enough to be a city with good facilities and commensurate opportunity, but still small enough for people to feel comfortable."
Fin24 website
--------------------------------------------------------------------------------
Property syndication rules coming soon - 13 February
Roy Cokayne
Pretoria - The trade and industry department will soon publish draft regulations to control the conduct of companies involved in public property syndication investments.
Ebrahim Mohamed, the chief director of the office of consumer protection in the department's consumer and corporate regulation division, said on Friday that the draft regulations would be published in the Government Gazette, allowing 30 days for public comment.
The department hoped to publish the final regulations by the end of March. Attempts to clean up conduct in the industry follow an investigation by the department's consumer affairs committee into property syndication scams in October 2004.
Mohamed said in 2004 that the syndicates were being accused of defrauding unsuspecting and inexperienced investors. He warned the public and small investors to be careful of public property syndication scams.
A public property syndication comprises a group of investors who pool their funds to invest in a company whose sole asset is a commercial, retail or industrial property.
These investors then share in the profits and losses, and enjoy the benefits of net rental growth through a share of income, together with any future capital growth that may be reflected by the increased value of shares.
But Mohamed said it was relatively easy to mislead consumers when marketing public property syndications.
"The property could ... be sold at an inflated price ... or investors could be left in the dark regarding the terms of the rental agreements."
Sharemax Investments is one of the largest companies to specialise in unlisted commercial property investments, despite receiving bad publicity in the past.
Willie Botha, Sharemax's managing director, said it had successfully launched 29 projects since 1999 and managed more than 15 000 property investors' assets worth more than R1.5 million.
Botha stressed that all of Sharemax's projects were properly registered with the registrar of companies before they were offered to the public.
He added that the revival of the property market had opened the door to excellent growth for Sharemax's investors. Botha said there was demand from certain listed and other companies to purchase several properties in Sharemax portfolio.
He said the first successful transaction of this kind was when an offer of R46.5 million was accepted for the Groenkloof Plaza shopping centre in Pretoria, which was registered in the name of its shareholders in May 2003 for R35.85 million.
The combined gross return for the investors in Groenkloof Plaza was 58.51 percent over two years and eight months.
Botha said offers on 19 other buildings in Sharemax's portfolio were being considered. They would provide additional capital growth of more than R200 million to its investment clients.
Business Report website
--------------------------------------------------------------------------------
Overpricing stifles property - 26 January
Superinflated asking prices flattened holiday home sales in Port Elizabeth, St Francis Bay and Jeffreys Bay this past season.
Local estate agents report the quietest festive trading in some years in spite of good viewing numbers and follow up interest, with many of the fewer than normal offers to purchase faltering on price agreement between the two parties, according to a market survey.
John Cooper, a franchise holder in the three areas, reports the only real interest surfacing in Jeffreys Bay vacant stands where the CEI local franchise recorded 19 stand sales, all to non residents, and only one existing home transaction. Average selling price of stands was around R350 000.
Activity in the normally equally popular, but pricier St Francis Bay, according to Cooper was "very quiet" also as a result of the shorter holiday season and possibly the crisis in the supply of petrol at that time.
One tendered offer of R1.5m to purchase a R1.6m home was not only rejected by the seller but its price in response to the interest was immediately bumped up to R1.7m.
An owner broker in Port Elizabeth also reports a slower than normal market. December sales for the agency of 24 units was about half of a normal month with a high portion being generated by company transfers.
Potgieter also sees good movement in the niche markets, such as the Walmer golfing estates, particularly from black and Asian buyers purchasing in the price range of R2.5m.
Cooper senses a market improvement by April when he expects sellers to come to terms that market bottlenecks are a result of their own making.
Given the recent and still to come industrial development in Port Elizabeth and Mossel Bay and the region's cost of living and lower crime rate, Cooper is forecasting strong emigration into the area during the next four years from inland regions further motivated by the region supporting some of the lowest coastal property prices in the country.
"It's big enough to be a city with good facilities and commensurate opportunity, but still small enough for people to feel comfortable."
Fin24 website
--------------------------------------------------------------------------------
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