OpenUCT :: Browsing by Subject "Property Studies"

Browsing by Subject "Property Studies"

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Open Access
A Case Study on the Viability of Electricity Generated from a Solar PV Installation as an Alternative or Supplement to Traditional Electricity Supply in Existing Buildings
(2020) Jooste, Van Wyk; Le Jeune, Karen; Nurick, Saul
This research study emphasizes the global responsibility and the importance of employing alternative sources of energy that are climate-friendly. It argues against coal-based energy creation and explains why it is not a long-term sustainable solution to the global energy demand. Many countries have embraced green energy initiatives and are adopting progressive strategies to limit its carbon footprint. The research explores and compares various methods of generating renewable energy and motivates the identification of solar energy as a suitable candidate to contribute on a much larger scale to the energy demand for South Africa and abroad. The paper further researches the history of solar energy, barriers preventing large scale implementation and the solutions to bridge those barriers. The aim of this paper is to determine to what extent technology has developed for small scale property owners to generate its own electricity supply from solar energy resources in South Africa and whether the supply generated would be sufficient to warrant consistent and uninterrupted flow compared to traditional coal-based energy resources. The cost of installation and maintenance of solar PV technology together with its financial return is investigated as well as the possibility to generate excess electricity that can be fed back into the grid. The result of the research sheds light on whether it makes financial sense to small scale building owners or managers to install a rooftop solar PV system to either generate its own stream of electricity supply or to merely supplement the traditional electricity supply from Eskom, the national electricity supplier. The research study chose to analyse a single case study and conducted semi~structured interviews with a number of stakeholders. The case study comprised a solar PV system that has been mounted on a rooftop of a building tenanted by a private school. The financial data from the installation in addition to qualitative data arrived at the conclusion that it is financially viable for building owners or managers to install a suitably sized PV system to supplement traditional electricity supply in existing buildings.
Open Access
A Case Study to Determine if Micro-Unit Developments Create Another Step Along the Housing Ladder for Low-Income Homeowners in Soweto
(2022) van Eeden, Marile; Viruly, Francois
The South African government has been providing subsidised housing for decades, yet a large portion of the population live in inadequate housing. More recently, it has been found that many residents earn more than what is allowed to qualify for a housing subsidy; however, they earn too little to enter the formal market. These residents, therefore, turn to the informal market, where they obtain housing in informal settlements or housing in backyards. A new housing development trend is emerging in the form of backyard micro-unit developments. This research proposal examines the potential of backyard micro-unit development to address the low-income housing demand and how these developments can be used as a means to climb the housing ladder. An exploratory case study is undertaken to understand housing trends within Soweto, South Africa. A mixed research approach was used together with both quantitative and qualitative data. The COVID-19 pandemic, however, posed a significant limitation on fieldwork; therefore, the study relied on secondary data sources. The analysis indicates that the backyard micro-unit developments mimic the formal market, and the backyard micro-unit developments provide an adequate housing option for low-income earners. Furthermore, the demand for affordable accommodation results in the commercialisation of the informal rental market and presents the opportunity for homeowners to move up the housing ladder, and it addresses the mounting housing backlog in Soweto. Furthermore, the analysis indicates the significance of a title deed for residents in townships and its role in their ability to climb the housing ladder.
Open Access
A performance comparison of specialised (industrial) and non-specialised real estate investment trusts in South Africa
(2018) Makatsane, Ntseno P.; Nurick, Saul
There is a belief that anything that is specialised tends to outperform the diversified counterparts and this study investigates if this proposition applies in the property industry, specifically the REIT (Real Estate Investment Trust) market in South Africa (SA). The norm is to apply a quantitative methodology when assessing performance but this study follows a qualitative approach in comparing the overall performance between specialised and diversified REITs in SA using non-quantitative metrics. A mix of specialised and diversified REITs in SA were sampled and a multiple case study analysis was done after interviewing senior management in four REITs. A total of four interviews were done with five respondents across four cases. These cases were then analysed using thematic analysis. The respondents were asked questions relating to the REIT they are working for, industrial specialised and diversified REITs performance and the SA property market as a whole. The overall findings suggest that diversified REITs may outperform the specialised REITs in SA currently however, this conclusion depends on a lot of factors. These factors include the analysis time of reference, the economic status of the country (for example, recession), the size of the REIT, the company gearing level, how that specific sector is performing at that particular time relative to others and the management efficiency level. The growth of e-commerce plays a vital role as a factor as well because it is said to be replacing the brick and mortar retail industry therefore, its influence affects the specialised industrial sector performance. For further research, a similar study with a quantitative approach can be considered in order to add to the SA REIT body of knowledge. Furthermore, research on the performance of property companies before and after attaining REIT status could be investigated to determine the REIT status effect on the company. To add on to the SA REIT literature, performance between REITs in different sectors and provinces could be explored.
Open Access
Accounting for the differential gentrification outcomes of the Bo-Kaap and De Waterkant, Cape Town
(2015) Reitzema, Albert
In recent years, the Cape Town CBD has experienced urban renewal and regeneration. The Bo-Kaap and De Waterkant, two inner city neighbourhoods adjacent to one another, have reacted differently to this process. De Waterkant is completely gentrified, and the Bo-Kaap not. This research study aimed to demonstrate the contrasting potential and pace for gentrification and account for the differentiating gentrification outcomes of two neighbourhoods within the same city. Based on the literature reviewed and key informant interviews this study finds that gentrification does not develop as a single process. The pace and potential for gentrification is determined by the contextual particularities, investment opportunities and the nature and strength of the community. In the case of the Bo-Kaap and De Waterkant, the historical context directed the future potential for gentrification, while the respective communities currently determine the pace.
Open Access
An Investigation into Green Office Buildings' Occupants' Self-Assessed Productivity Levels
(2021) Smith, Sian; Nurick, Saul
Global warming is becoming a topic on everyone's mind as the world turns towards a sustainable way of living. In the property industry, people are looking for ways to encourage investors to move towards sustainable development. This requires some convincing as the increased costs of green buildings need to be justified, specifically looking at the financial returns for the investor. Green buildings are said to increase productivity of its occupants but the difficulty in quantitatively measuring productivity has proven to be a stumbling block in this process. Various green buildings were identified, and their occupants interviewed to provide some answers on the impact of green certification in office buildings, specifically in Cape Town. Semi-structured interviews were conducted with occupants who worked in a building both prior to, as well as during the implementation of green initiatives. Difficulties in this measurement were noted and discussed throughout. It was decided as a result of the available responses, and the guidance from the literature, that perceived productivity could be used as an acceptable form of productivity. It was therefore also necessary to include a section in the interview on personal stresses that the respondent may be experiencing that might also impact productivity. Findings showed that whilst respondents were positive about the green environment and had seen an increase in productivity, a few were unsure about whether these were linked, especially when other factors such as change in management had occurred. The overall feeling of respondents was better and healthier in the greener building, and all reported favourably on most green initiatives. Future research on measurement tools can be investigated with a larger sample being interviewed. It will also be helpful to have further information into the respondents' backgrounds, position in the company and general feeling within the organization that may have an effect on productivity. The more knowledge the respondents have on the office, the larger the collection of reliable data. A greater range of green-starred buildings should be included as well as more than one respondent per building, to increase the sample for comparison.
Open Access
An investigation into the adaptive re-use of commercial buildings in satisfying the demand for residential in the central business district of Cape Town, South Africa, an emerging market
(2018) Russell, Michael; Michell, Kathy
The built environment contributes 40% to total global greenhouse gas emissions and 87% of the buildings we will have in 2050 are already built (Wilkinson & Remoy, 2015). If predicted climate changes are correct we need to adapt existing stock sustainably. Reuse is an inherently sustainable option, which reduces the amount of waste going to landfill. Inevitably, settlements and areas undergo change, whereby land uses become obsolete and buildings vacant. At this stage, the options are either to demolish or to convert to another use. In central business districts (CBDs) outside of South Africa, there are many examples of office to residential conversion. It is expected that Cape Town CBD will take the learnings from this international market and the adaptive reuse of Cape Town’s existing buildings will be explored in greater depth. Globally there is a movement of people towards centralised living locations due to the increased congestion of transport networks to cities and the need for people to be close to the services that cities offer. This movement will only become exaggerated in time as the urbanisation of Africa continues at an increasing rate. The ability to sustainably reuse existing commercial structures thus becomes a pertinent topic in providing an efficient solution to satisfy the housing demand. Some 9000m2 of office space is currently earmarked for residential conversion in Cape Town as demand for central residential property grows and a low interest rate economic environment creates good financial conditions for developers. Coupled with this, is a stock of ageing offices and a population projected to increase by 15% by 2031 requiring approximately 30,000 new housing options across the Cape metropolitan area. With the low projected economic growth rate of South Africa, the Cape Town office market is expected to remain relatively stagnant in 2017, 2018 and 2019 - so the macro economic conditions for residential conversion are better than ever. Based on the above mentioned, this research aimed at answering the questions: (a) which drivers encourage residential conversions in Cape Town, and, (b) what are the barriers for successful reuse of existing commercial buildings. This research investigated the nature and extent of commercial conversions experienced in other global cities (London, Sydney and New York) so as to establish an understanding of how Cape Town can best adapt, as well as the drivers and barriers to successful conversion of existing structures in a CBD. Through an extensive literature study, the research identifies the key lessons from international residential conversion projects. Subsequently, interviews were held with local property experts in the Cape Town market. This research explored the potential of delivering sustainability to the Cape Town CBD through the reuse of commercial buildings. The mix of these various forms of research allowed key themes to emerge and for these themes to be exploded so as to establish a view on whether conversion projects are here to stay. The research indicates that conversion projects within the CBD area of cities are only going to become more frequent as the financial feasibility of these conversion projects improves. This, together with an ever growing wealth of knowledge amongst developers and investors about conversion projects encourages the provision of significantly more residential units in the central city. This increase in the central city population is expected to have many positive benefits for the city on a social, cultural and economic level. It is for these benefits that Public organisations are now slowly putting their weight behind supporting the adaptation of vacant and problem commercial buildings. This proactive focus on diminishing the number of obsolete buildings in prime locations has becoming a key trait of a successful CBD. This research has therefore highlighted the real role that CBDs should play and how the physical environment that forms the CBD plays such an integral role in the formulating the culture of a city. Cities should be exciting central places where people can interact safely, that supports the sharing of ideas, and nurtures the cultural fabric that gives a city its soul.
Open Access
An investigation into the implementation of green building features and initiatives among stakeholders in the Zambian property market
(2019) Katanekwa, Luse Namutowe; Nurick, Saul
There is a global challenge and demand in the current century to develop buildings that conserve and preserve the environment; implementing green building features and initiatives (GBFIs) is one way to achieve this. The success of implementing GBFIs requires inclusive participation of the stakeholders in the property market. A multiple case study analysis was conducted on the Zambian Property market, involving three buildings that had different GBFIs. A total of six interviews were conducted across the three cases with relevant stakeholders, namely Facilities managers, tenants, project architect and regulatory body representative. Interviewees were asked questions pertaining to their company’s participation in the development of green building, the benefits of GBFIs, the perception of GBFIs, the relationships among stakeholders as well as the impact of GBFIs in the property market. The findings revealed that there were different approaches to implementing GBFIs. However, a lack of knowledge by some stakeholders on green features and their benefits was noted. This lack of knowledge was a product of inadequate education and poor integration of stakeholders in implementing GBFIs in the Zambian property market. It is important to note that there are vigorous efforts by stakeholders including the government in contributing to conserving the environment in the Zambian property industry. This is evident in the formulation of green building guidelines and environmental impact assessment guidelines for the construction industry.
Open Access
An investigation of the effects of potential electrical load-shedding on facility manager's strategic and operational decisions in industrial buildings: A case study of Perseverance Industrial Township, Nelson Mandela Bay
(2022) Bailey, Anelle; Michell, Kathleen
Nelson Mandela Bay Municipality (NMBM) made the decision in 2008 to exempt industrial areas from load-shedding to avoid job losses. However, during 2019, when South Africa was experiencing prevalent periods of load-shedding, residents, and small business owners in other areas, protested this. On the 9th of December 2019, Eskom announced on Twitter, and implemented Stage 6 loadshedding for the first time (Eskom, 2019), and subsequently on the 11th of December 2019, NMBM posted new load-shedding schedules for Stages 5 to 8, which included the previously excluded industrial areas, including Perseverance, a suburb of Gqeberha (Port Elizabeth) in the district of Nelson Mandela Bay (NMB) with uninterrupted and preferential electricity supply since 2000. As Industries in Perseverance have not been subjected to load-shedding since load-shedding commenced, the enterprises in Perseverance have not been incentivized to make allowance and/or budget for, any interruption to their industrial activities. The nature of many of the industries that subsequently invested in Perseverance, were industries, that are dependent on uninterrupted electricity, to manufacture their products cost effectively, and without harm to their employees or the environment. This research aimed to investigate the effects of potential electrical load-shedding on facility manager's strategic and operational decisions in industrial buildings, with a case study focused on Perseverance. An overarching qualitative case study with an embedded convergent parallel mixed method design, consisting of 20 quantitative survey questionnaires from participants in Perseverance and 11 qualitative semi-structured interviews with facility managers, plant engineers and/or managing directors of enterprises in Perseverance. A further 14 quantitative survey questionnaires were received from enterprises in the remainder of NMB. The findings revealed the shock and concern from facility managers to the threat of potential electrical load-shedding and revealed the operational and strategic decisions that was considered, since December 2019 as well as their way forward to manage the threat of electrical load-shedding in Perseverance. It was also revealed that sustained transparent communication needs to be initiated between industrialists and NMBM.
Open Access
An investigation of the linkage between economic cycles and commercial property cycles, and their impact on the income approach of valuation: case of Windhoek
(2022) Katjihingua, Else; Mooya, Manya M
Studies conducted in other countries shows that economic cycles and commercial property cycles exist, and that a relationship exit between the two cycles. Few research points to the cyclicality of both cycles to have an impact on property valuations. The aim of this study was therefore to establish whether the Namibian economy and the Windhoek commercial property market are cyclical, and if a relationship exist between the two. The study further aimed at establishing whether the cyclicality of both the economy and the commercial property market have an impact on the valuation of commercial properties in the Namibian context. The three research objectives allowed the research to identify the variables required to establish both economic and commercial property cycles, and the possible challenges faced by valuers using the income approach to value commercial properties during peaks and troughs of these cycles. The mixed-use approach was employed using a literature review to identify the variables required to establish both cycles followed by a secondary analysis. The research made use a questionnaire to gather data on challenges faced by valuers when valuing commercial properties during the different economic and commercial property markets environments. The research found that both economic and commercial property cycles do exist and that they are procyclical and countercyclical under certain variables. A countercyclical relationship exists between GDP and the commercial property vacancy rates. A countercyclical relationship exists between inflation and retail vacancy rates and office cap-rates. A procyclical relationship exist between interest rates and the retail vacancy rates and office cap-rates. The results revealed that during or near a peak of both economic and commercial property cycles, data is easily available and accessible making it easier to value commercial properties using the income approach. However, data shows that during or near economic and commercial property cycle troughs, market data is rare and unreliable making it difficult to value commercial properties.
Open Access
An analysis of diversification by location in the South African property market
(2016) Shisana, Fumani; Viruly, Francois
The purpose of this dissertation is to investigate whether a property investor could diversify their portfolio by investing in the same property class and type throughout three different cities in South Africa. Furthermore, the study aimed to achieve this by providing an in-depth analysis of property cycle activity in South Africa and investigating how different South African cities react to the national property cycle. Cape Town, Durban and Johannesburg were chosen, as they are major cities in South Africa. The time frame used is the 2001 to 2009 property cycle with specific reference to office space. The timeframe does not cover the property cycle over an extended period where factors may be different from the ones concerned here. The outcome of the study will help to provide an understanding how the three different cities reacted to the national property cycle using variables such as but limited to gross rentals receivable, total return, income return and vacancies. The results of the study will help in making investment decisions, especially for investors who may want to diversify their portfolios across different cities within the same country. The methodology of this dissertation will be based on a comparative analysis using mainly Investment Property Databank (2013) data subsequent to a literature review. The findings are based on Investment Property Databank (2013) statistical industry performance data. The conclusion will be drawn from the results. The primary motivation for this research stems from investors' need for a greater understanding of diversification within the property cycle to improve investment decisions. The primary objective achieved was to contribute to the understanding of the predictability of the property cycle, which can assist in the decision making of a property investor looking to diversify by location in their property portfolio. Whilst this finding was not the primary objective, this dissertation revealed that there are synchronicities between the Central Business District and decentralised office markets of the three cities of Cape Town, Durban and Johannesburg.
Open Access
Analysis of locational factors affecting high increases in value of residential houses in the northern and southern suburbs of Cape Town
(2021) Meelun, Gaushal; Mcgaffin, Robert
Residential property prices in the Western Cape, South Africa, have experienced the highest increase, reaching close to 10% annual increase, in comparison to the rest of the country over the last decade (Lightstone, 2019). Lemanski (2007) further elaborates that residential property prices in Cape Town, in the Northern and Southern Suburbs, have increased by close to 30% from 1980s-late 2000s. This results from the interaction between supply and demand. The demand for property is a function of: need, preference, availability and affordability (Lancaster, 1966). The preference for a particular residential property is in turn determined by internal factors, at a property level, and external factors, at the neighbourhood level. The influence of internal factors such as: land extent, building area, location, number of bedrooms, kitchen and bathroom amongst others, on property prices is well-known. However, the influence of external-locational factors, on residential property prices in the context of South Africa, has been subject of little research. It is argued that, for those who can afford, there is a preference for residential houses which are close to areas that are: well-established, high quality, well controlled, modern hubs for economic activities and central to amenities (Scatigna, Szemere, & Tsatsaronis, 2014; Turok, 2001; Lemanski, 2007; Kotze & Donaldson, 1998; Can 1998). These well-established neighbourhoods are the outcome of past public and private investment, and such neighbourhoods are found in the Northern and Southern Suburbs (Turok, 2001; Lemanski, 2007). Features associated with location, such as the number of offices/business properties, shopping centres, educational institutions, places of worship, medical institutions and residential vacant land, are considered to have an influence on residential house prices and hence contribute to high increases in value in the Northern and Southern Suburbs (Scatigna, Szemere, & Tsatsaronis, 2014; Turok, 2001; Lemanski, 2007; Kotze & Donaldson, 1998; Bardhan, Sarkar, & Kumar, 2016). The findings indicate that the highest concentration of the above-mentioned factors, with the exception of the number of residential vacant land, are found in the Northern and Southern Suburbs. For the Northern suburb, the external factors, the number of: places of worship, business/offices properties and residential vacant land, are recorded to have an influence on the value of residential properties. For the Southern Suburb, the external factors, the number of: places of worship, business/offices properties, shopping centres and medical institutions, are recorded to have an in fluence on the value of residential properties. It is inferred that external factors have an impact on residential property prices and hence have contributed to high increases in value in the Northern and Southern Suburbs. Lastly, it was observed that the Northern and Southern Suburbs are influenced by different combinations of external factors.
Open Access
An analysis of the structure and maturity of the Doha property market
(2017) Makanya, Rufaro; Viruly, Francois
This research is primarily focussed on the dynamics that determine the maturity of property markets. It considers the evolving institutional environment in which markets function and highlights the characteristics of property markets in both developed and developing countries in order to analyse the characteristics required to determine their maturity. The primary research targets the city of Doha located in Qatar. This is compared to other property markets around the world, using the available literature and the knowledge of Doha's expatriate property professionals. The purpose of this research is to contribute to the research and knowledge of property markets by assessing the players, institutions and characteristics of the property market in Doha to assess whether it is driven by the same maturity forces as those that drive typical markets elsewhere. The research concludes that property market outcomes could be improved in Doha by improving and developing the property market maturity factors. Considering all the factors. The property market in Doha was identified as fairly immature in comparison to international best practice. It has improved significantly recently and is on a path to compete with the more mature markets in future. Recommendations proposed in the research findings focused particularly around the strengthening of property market institutions to allow for further improvements to market maturity and cautioned against verbatim copying of successful market practices from elsewhere.
Open Access
Are universities supplying learning spaces that suit the technology available for teaching?
(2014) Glendinning, Janet
Purpose: The report investigates the manner in which spaces are currently designed and provided for learning in the context of higher education institutions, and whether these designs take into account the technology available for use in an educational environment. It therefore looks at the impact that these spaces have on the learning process and the related ability of planners to provide the necessary spaces for teaching, in relation to the context of a technologically enhanced teaching environment. Design/methodology/approach: A review of current literature is used to establish what types of spaces should be provided for teaching with technology in line with what is being done in universities abroad. Case studies of three universities will be used to gather data on the current trend in terms of the actual provision of space in universities. Interviews will be conducted with the participants of the case studies. Findings: Once the case studies are complete, data will be analysed to assess how well the selected universities are doing in terms of providing space that is suitable for the latest technology that is used in the field of education. Practical implications: In evaluating the spaces provided and the technology available, it will become apparent if the spaces provided are indeed relevant in terms of the technological world we live in. Originality/value: Most of the current research documented in the literature examines technology and how it influences learning space design. As such, this report compares these concepts with the reality of space provision in universities today and questions the relevance of Space Norms in the age of E-learning. Limitations: The report is limited to an investigation into Gauteng HEIs. Technology investigated is limited to types that are useful to teaching and is not an exhaustive range of technology available in the world. Spaces referred to are education spaces only. Institutions investigated are limited to face-to-face HEIs which are public institutions.
Open Access
Assessing the risk and relative value of commercial mortgage-backed securities issued in South Africa
(2007) Thomson, Stuart; Evans, Kathy; Root, Dave
The aim of the research is to assess the risks and current pricing of single-borrower/multi-property and multi-borrower/multi-property commercial mortgage-backed securities in South Africa and make investors aware of the potential pitfalls of investing in these new bond instruments.
Open Access
Challenges faced by small real estate entrepreneurs in the Johannesburg Central Business District
(2018) Kgaka, Lesedi; Viruly, Francois
The challenges which entrepreneurs in general face have been well documented over the years, however, challenges specific to real estate entrepreneurs have not adequately been identified. In a developing country like South Africa, the impact of entrepreneurs in the growth of the economy and in its transformation objective, cannot be underestimated. The challenges in the real estate sector in which developers provide affordable housing, are of crucial importance to identify as doing so will promote further development which will aid in reducing the high unemployment and poverty rate. These challenges have not yet been adequately identified. The aim of this research paper is to identify them, to rank them in order of importance and to provide in depth analysis as to how they affect real estate entrepreneurs in completing their developments. The focus will be on small medium and micro-enterprise (SMME) developers as entrepreneurs in an urban context, namely in the Johannesburg central business district. The impact of these developments is higher; thus, the challenges experienced by these developers are of significance. Literature on entrepreneurship was reviewed to ascertain the definition of an entrepreneur, their mindsets and what drives them. This was used to define a real estate entrepreneur which in the context of this research paper is someone who purchases land or buildings to develop them into residential housing for the purpose of a return (both social and economic). In the research methodology a phenomenographic approach was used, appropriate for a qualitative research approach, as it sought to identify challenges through the developers’ experiences. The developers selected, all had prior experience in the field. The researcher interviewed them in person. Their responses were recorded, transcribed and evaluated. Seven challenges in order of importance were identified namely: 1) Apartheid 2) Education, Experience, Competencies and Mentorship 3) Land 4) Municipalities 5) Equity 6) Time Delays 7) Professional Team The legacy of apartheid has a negative effect on the real estate development industry as it is largely and experience-based profession of which many previously disadvantaged people were previously denied access to. The result of this is that many highly educated, first time developers enter the market with the support of funders but the lack of experience in development thus making many costly mistakes which could have been avoided had they had the right mentors and experience within the field. This has proven to be difficult to receive as those with the skills and experience are often reluctant to pass it on to those whom they may be unfamiliar with. It was found that SMME entrepreneurs lack the basic competencies to complete developments due to their lack of experience, which they in turn rely heavily on a professional team which is either too costly for the feasibility of the development or has limited experience, due to similar reasons pertaining to apartheid. The concern of gaining access to the best prime land at reasonable prices was great as it was found that this land, mostly government owned, was often sold to established private developers who had access to quick funding due to their track record and experience. This left the less desirable land to SMME developers who would in turn reap lower returns. Challenges related to the inefficient municipalities in the approval of development plans, the lack of access to affordable finance and equity, and the time delays from the approval of financing and building plans to those due to the contractors and professional teams, were identified as the three largest challenges. This is because they have cascading adverse effects on the rising cost of the developments, possibly rendering them unprofitable on completion, if they eventually reach this point. Solutions proposed include intervention by the government, private institutions and experienced mentors to guide first time developers in gaining the required skills to become successful and to pass on to other developers. Such interventions include incubation programs for entrepreneurs with a mentoring aspect from industry veterans who wish to share their networks and experience in paying it forward. Once these entrepreneurs have completed successful developments they would be mandated to become a mentor to other entrepreneurs as a way to continue closing the experiential gap for SMME real estate entrepreneurs.
Open Access
Client influence on valuer behaviour in South Africa - nature, prevalence and consequences
(2015) Wilkens, Lyle Jan
The primary purpose of this study is to investigate the presence of client's influences on property valuer behaviour in South Africa. The study aims to investigate the existence of these influences, the variables of these influences and the possible consequences for the valuation industry. International literature reveals that this phenomenon is prevalent in a number of countries. This study aims to uncover this phenomenon in South Africa. Registered South African valuers are targeted by survey questionnaires to extract the relevant data necessary to support this claim. The response rate is a broad representation and sufficient data is gathered for the research purposes. Furthermore, prominent valuation companies and valuers are interviewed in order to elaborate and support the data extracted from the survey questionnaire. The study indicates that client influence on valuers exists in South Africa and that a majority (54%) of practising valuers have adjusted their valuations after client interaction. The concern is that this prevalence of influence will be detrimental to the valuation industry in South Africa. This study aims to promote awareness of these influences, and recommendations are made to curb this phenomenon.
Open Access
Critical Analysis of Station Area Development on PRASA owned land: The case of the Northern Corridor Railway Line Cape Town
(2022) Jonathan, Lesley-Anne Maria; Mooya, Manya
The presence of well-located vacant land parcels within a city plays a contributing factor towards undermining the urban form and purpose of a well-run city. Property developers who seek out land for development in South Africa are limited to options of well-located small vacant land parcels or land parcels with existing developments that do not quite meet the demands within the property market. The presence of vacant rail station land parcels within South African cities provide an opportunity for improved urban form through the development of these prime locations. In the past the Passenger Rail Agency of South AFRICA (PRASA) have undergone the development of a restricted number of these land parcels, however given the total number of stations in South Africa the number of developed station area land parcels has been limited. The Northern Corridor railway line in Cape Town includes twenty-six rail stations, twenty of which are owned by PRASA, and the other six are owned by Transnet. The twenty PRASA owned rail stations include a total of 72 hectares of vacant station land parcels along the line with only two stations, with a total of 16 hectares between them, having seen progress towards development to date. This research has identified a gap in South African academic research that critically analysis the lack of development at vacant station land parcels in South Africa, and thus focus' in on the Northern Corridor as a case study, with particular attention on PRASA owned land parcels. This research seeks to answer the question of, why have real estate developments not been enabled and located at stations along the Northern Corridor railway line in Cape Town? Which is done through a literature review that unpacks theory on property development processes, Transit Oriented Development (TOD) and the Transport land use feedback cycles. Furthermore, the paper has made use of international precedent studies and empirical research to inform the research, and seeks to critically analysis legislative and policy pieces that govern and influence how station area land parcels are developed and managed in South Africa, and Cape Town in particular. These reviews provided valuable input into the design of the semi-structured interview questionnaires that were used as the basis of my research interviews. Through the completion of twelve semi structured interviews the primary data had been collected for this research, which informed the findings chapter for this paper and predominantly was used to provide direct insights to answering the research question put forward in this paper. Using these insights, proposals are made that PRASA together with the City of Cape Town and the Western Cape Provincial Government could apply towards improving the development of station area land parcels along the Northern Corridor.
Open Access
A critical review of the approaches and attitudes of South African property valuers towards the valuation of hotels under a contemporary management agreement
(2017) Godwin, Wayne; Mooya, Manya
This paper looks at the attitudes and approaches of South African property valuers to the valuation of hotels as an asset class. The paper focuses on the impact in a shift towards management agreements in the sector. Management agreements are a relatively new tenure agreement in South Africa's hotel sector, and although these grew in popularity globally in the 1970's and 1980's, the sanctions which prevented multinational companies wanting to do business in South Africa, allowed local hotel groups to grow in the absence of the world's leading lodging companies. South African property valuers were less exposed to the evolving valuation frameworks and best practice approaches, in the absence of these global companies. This study establishes a framework for optimal hotel valuations under a management agreement, with a review of literature discussing the correct approach to valuing a hotel under such an agreement as well as the the current state of the valuation industry in South Africa; as well as areas of weakness that South African valuers have with certain techniques and approaches that are established as important for hotel valuation. The empirical study that was undertaken surveyed members of the South African Institute of Valuers. The findings present the first comprehensive look at valuation of hotels as an asset class in South Africa; and show that almost half of property valuers in South Africa perceive themselves to be competent in valuation hotels under a management agreement whilst perceiving there to not be a significant difference required for the approach to valuing a hotel under a management agreement. The results of a hypothetical case study within the survey presented a divergent view of competency, with low levels of full competency demonstrated. The study brings much needed perspective on the sector at a time where management agreements are becoming more prevalent and investors are looking to valuers for strategic insight and assurance around the asset class.
Open Access
The determinants and predictability of South African listed property returns
(2017) Ramjee, Anil; Evans, Kathleen
This study investigates the determinants and predictability of listed property returns in South Africa based on the framework developed by Eugene Fama and Kenneth French. The study tests four asset pricing models, including the Capital Asset Pricing Model (CAPM) developed by Sharpe (1964) and Lintner (1965), the Fama and French (1993) 3-Factor model, a model which adds the South African Bond Index to the CAPM and finally a model which includes macroeconomic, market and firm specific factors. The empirical analysis makes use of macro-economic data and returns data of various portfolios of South African listed property stocks created based on a ranking of specific style factors. The style variables are size, momentum, liquidity, dividend yield, price to NAV, earnings yield, dividend growth, average cost of debt, loan to value ratio and the interest coverage ratio. The data was extracted from INET and the Muller and Ward (2015) data base which was subsequently updated by Shapiro (2016). The data sample extends over a 20-year period from January 1996 to December 2015. Ordinary least squares regression is used to determine the appropriateness of each of the four models. Furthermore, because these relationships change over time, a 5-year rolling regression analysis is used to understand the relationships over time. The results suggest that the Capital Asset Pricing Model, the Fama and French (1993) 3-Factor model and the CAPM plus Bond Factor model do not fully explain the patterns of expected return of the South African listed property index. However, the All Factor model is able to fully capture the pattern of expected return of the South African listed property index. Furthermore, the results suggest that the South African listed property sector is less volatile and therefore relatively less risky than the overall stock market. Furthermore, the evidence suggests that that listed property behaves more like bonds than equity over the sample period. The research provides empirical evidence of a positive relationship between South African listed property returns and size, dividend yield and momentum is found. In addition, it is found that South African listed property returns are negatively related to the price to net asset value ratio. This suggests that South African listed property tends to revert to a long term mean net asset value. The analysis of the performance of active trading strategies shows that once transactions costs are included none of the strategies are able to outperform a passive investment strategy. In addition, the study finds that there is no statistically significant difference between active and passive returns. Therefore, it is concluded that the South African listed property sector is efficient and profitable arbitrage opportunities should not exist.
Open Access
Direct operating and portfolio management expenses: a case study of self storage facilities in South Africa within a global context
(2017) Van Der Linde, Adriaan Nicolaas; Evans, Kathleen
Self storage has become a globally recognised and specialised property investment. Valuation guidelines and annual Industry surveys are available for mature self storage markets worldwide, but currently there is no published South African guideline for self storage expense ratios in terms of total expenses, direct facility operating expenses and portfolio management expenses. These expenses, which are necessary for valuation, are difficult to obtain in the market compared to rental rates, which are publicly advertised to potential tenants. A case study approach was shown to be the applicable research methodology. It was then explained that the methodology consisted of four stages: The first stage describes the method of data collection from the valuation literature and international annual industry surveys. The second stage describes the method of data collection from the international self storage industry by analysing financial statements of international publicly listed self storage portfolios. The third stage describes the method of data collection from South African self storage portfolio case studies. The fourth stage describes how the data is to be analysed to arrive at an expense ratio guideline for South African self storage portfolios. The methodology was then carried out to answer the four research questions.