Rentals cheap in global terms
THE industrial property sector is seen to offer growth potential, given that prime industrial rentals in SA are cheap compared with those in other world economies.
(©www.bday.co.za)

Major players upbeat about prospects for investment
DESPITE the volatility of the rand and interest rate hikes in the first quarter of the year, property market conditions are stabilising, reestablishing the platform for continuing interest in property as an asset class for the rest of 2002. This is the positive picture emerging from some of the major property players. The JHI Real Estate South African Property Report for 2002 says the market is still characterised by oversupply, despite positive market conditions.
(©www.bday.co.za)

Many factors driving oversupply of space
Trend can be reversed if there is a marked slowdown in speculative building.
THE oversupply in commercial space is the result of a combination of factors, of which overdevelopment has been but one, says Hugh Basel, marketing director of RMB Properties, one of SA's largest commercial property companies. In the light of interest rate reductions and the movement of companies from the CBD in the past couple of years, there had been a significant increase in aggressive speculative development. This had been fuelled by the relatively free availability of loan facilities from financial institutions.
(©www.bday.co.za)

Modernist design holds sway
AN IMPORTANT trend in SA office use, overlooked by many developers, is the growing preference by corporate tenants for modernist design rather than neo-traditional architecture. Mike Deacon, development director of Colliers RMS, says the trend to modern buildings is partly a reaction to the neo-classical Georgian and Tuscan-style developments that dominate the suburban office landscape. He says one of the principal factors that led to unhappiness in the institutional market was the unfounded assumption that all acquisitions would have similar rates of increase in rental levels, the same vacancy factors, equal maintenance costs and the same residual values.
(©www.bday.co.za)

Construction of Paarl Mall to start in August
CONSTRUCTION of the of the Paarl Mall regional shopping centre will begin in August
(©www.bday.co.za)

DaimlerChrysler's presence is a vote of confidence
Future development in Eastern Cape will depend on how well the risks and challenges of free trade are understood. For one multinational, doing business in Eastern Cape for the past 54 years has been rewarding.
(©www.bday.co.za)

IST group wins top projects
Industrial Reporter IST Industrial, a division of the IST group, has won a R50m turnkey contract to upgrade and expand the compressed air system at BHP Billiton's Hillside aluminium smelter in Richards Bay
(©www.bday.co.za)

Pechiney wants IDC-Eskom as a 50% partner
FRENCH aluminium giant Pechiney, which is planning a $1,6bn investment at the Coega industrial development zone, is seeking participation of up to 50% of the investment from the Industrial Development Corporation (IDC) and Eskom, Pechiney's executive chairman Jean-Pierre Rodier announced last night.
(©www.bday.co.za)

Dealing with sharks and other hazards
SHARKS, volcanoes, chasms, trawlers and ships' anchors are just some of the challenges that faced the submarine cable project in the course of laying more than 26448km of cable.
(©www.bday.co.za)

Centre extended for Indaba bid
CONSTRUCTION on the first phase of the International Convention Centre (ICC) extension that began last month will be fast-tracked ahead of the African Union Summit scheduled for Durban in the first two weeks of July
(©www.bday.co.za)

Water's edge development
DEMOLITION work is well under way and construction imminent on the fast-tracked R21,5m harbour waterfront project, known as Wilson's Wharf. Earlier this year, Ithala, the provincial development finance agency, and local Durban businessman John Wilson, began a joint venture to kickstart the waterfront scheme.
(©www.bday.co.za)

Cape peninsula a world haven
MUIZENBERG is regaining popularity as a commercial and residential node in the Cape's south peninsula, with hi-tech industrial development a feature of the area. Steve Kruger, marketing manager of Capricorn Business and Technology Park, says a major newcomer to the park is LBH Concrete, whose building is nearing completion. Avitronics, a naval electronic systems manufacturer, has made a R14,5m investment in a 6000m² site consisting of offices, laboratories and a testing facility.
(©www.bday.co.za)

New slant on valuations
TRADITIONAL valuation techniques tend to focus on comparable transactions in the property marketplace, using these for benchmarking prevailing rental levels and capitalisation rates. Changing market dynamics affect property indicators and need to be considered when assessing an application for property finance, says Chris van Rensburg, valuations head of Nedbank Property Finance.
(©www.bday.co.za)

Derivatives aim to mitigate risk
LYONS Financial Solutions has launched two property derivatives products Index Swap and Mortgage Swap intended to mitigate the risk of property ownership. "These products are designed to diversify property risk or completely hedge it," says Lyons spokesman Ian Visser.
(©www.bday.co.za)

Fund managers unimpressed by changes to JSE's indices
A PROCESS that may have created a new asset class for investors has been disrupted by the reorganisation of sectors on the JSE Securities Exchange SA. A new income-based asset class was in the making as the property unit trust and property loan stock sectors of the JSE developed and captured investor attention.
(©www.bday.co.za)

Property fund managers up in arms
Reorganisation of JSE sectors might put gains under threat
(©www.bday.co.za)

Interest rate increase has an upside
Investors prepared to show patience and sit out the situation can score THE latest interest rate increase has put paid to many new listings of property loan stock and has generated investor jitters.
(©www.bday.co.za)

SARS to act against fraudulent property buyers
THE SA Revenue Service (SARS) plans to take action against the buyers of property who fraudulently cancelled or substituted contracts of sale concluded before March 1 to take advantage of the reduced transfer fee. SARS spokesman Fani Zulu confirmed the SARS was aware that certain property buyers had sought to cancel sale agreements concluded before March 1. He said the SARS would prosecute buyers who fraudulently altered such contracts. The tax laws were recently amended to bring relief to individual taxpayers who bought immovable property after March 1.
(©www.bday.co.za)

Steep hike in rates for the wealthy
CAPE TOWN The city council approved the revenue side of its R9,3bn budget for 2002-03 yesterday, which included a new rates and tariffs policy that would see the rates bill increased 8%. Commercial property rates have been set at 1,4c for every rand of the property's value, and residential rates at 0,98c.
(©www.bday.co.za)

A kick-start from the public sector
GROWING public sector investment is adding a new dimension to the property market, with major initiatives taking place in a number of provinces. Property analysts says the remainder of 2002 is expected to be a period of significant public sector investment, with positive spinoffs for the property market. Russell Inggs, head of Nedbank Property Finance, says Johannesburg inner city regeneration includes the 90000m² Constitution Hill project in Braamfontein and the Nelson Mandela bridge, from Braamfontein to Newtown.
(©www.bday.co.za)

Spoornet widens net in probe of property deal
CHAIN Vilakazi, head of property management at Spoornet, has been suspended as an investigation into allegations of wrongdoing in a property deal at the rail utility gathers momentum. Vilakazi's suspension follows that of Spoornet CEO Zandile Jakavula earlier this month after he was accused of acting inappropriately when buying a former Spoornet house in Port Alfred. Both men have now received charge sheets from Transnet.
(©www.bday.co.za)

Office vacancies worsen in major centres
THE office property market is a long way from solving the problem of high vacancy levels, says JHI Real Estate head researcher Marc Schneider. High vacancy levels persist in major SA centres, worsening everywhere during the past quarter except in Cape Town, according to the latest SA Property Owners' Association (Sapoa) figures.
(©www.bday.co.za)

Paper giant to issue $500m in bonds
South African pulp and paper group Sappi said that its European subsidiary Sappi Papier Holding (SPH) planned to launch at least $500-million in bonds with a minimum maturity of ten years.
(©www.engineeringnews.co.za)

Tenders for La Mercy only next year
Although tenders for the recently-approved relocation of Durban International Airport (DIA) to La Mercy will only be issued in about a year, the project’s promoters insist that construction will start next year, with the airport becoming operational by 2006.
(©www.engineeringnews.co.za)

Four new toll-roads by 2006
South Africa will have four new toll-roads by 2006, following an invitation by government to the private sector last year to submit road-development proposals.
(©www.engineeringnews.co.za)

Gauteng firm to make rail-profilers for world
Gauteng-based Lennings Rail Services (LRS), which in April became the first South African company to commission rail profiling machines, reports that it could make more of the multimillion-rand units for export customers.
(©www.engineeringnews.co.za)

Showcase for stainless excellence
Engineers have the opportunity of raising the level of awareness of their companies and services, locally and internationally, through the Stainless Steel Awards programme.
(©www.engineeringnews.co.za)

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Dark Satanic Malls
Regional shopping centres have plucked the hearts out of Somerset West and Nelspruit. Now it is Paarl's turn. And George is after that. But don't blame the developers. Do-nothing town-centre property owners are just as culpable, as are local authorities who combine greed and naiveté, and retailers who expand at any cost.
(©www.fm.co.za)

Saving money by retaining tenants
TENANT retention is a key factor in achieving maximum returns on a landlord's investment. Lease renewals are a vital service carried out by property management companies. Rental renewals are negotiated well before the renewal date to protect the owners from a possible loss of tenants who may be enticed into relocating.
(©www.bday.co.za)

LEASE LANGUAGE: Secrets to managing your lawyer
Legal experts write about the ins and outs of lease negotiations.
(©www.industryclick.com)

STOREFRONTS: Art with an attitude
Offering everything from Medusa floor lamps to Mutant vases, funky home accessories retailer Chiasso shows consumers how to celebrate style.
(©www.industryclick.com)

Playing With Fire
PROPERTY OWNERS AND MANAGERS MAY NOT REALIZE IT, but regular maintenance of a building's electrical systems is among their most important duties. Electrical failures are the second leading cause of fires in commercial buildings in the United States behind incendiary sources, according to the National Fire Protection Association.(
©www.industryclick.com)

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Land reform policy changing because of AIDS
GOVERNMENT is refining land reform policies to deal with the effects of HIV/AIDS. This follows warnings by delegates at a conference organised by a division of the Human Sciences Research Council and the Southern African Regional Poverty Network last year that many beneficiaries of land reform would not live to enjoy their newly acquired properties as the scourge claimed many lives.
(©www.bday.co.za)

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Namibia awards contract for 220 kV power line
A R130-million tender for the construction of a 294 km 220 kV twin Pelican conductor power line has been awarded to ABB Namibia by NamPower.
(©www.engineeringnews.co.za)

North African countries in refinery, helium investments
One of South Korea’s top builders, LG Construction, said it had won a $280-million order to build and refurbish refineries in Libya.
(©www.engineeringnews.co.za)

Southern Africa drives six trans frontier conservation areas
It all began when local business leader Anton Rupert met with Mozambican president Joaquim Chissano in 1990 to discuss the possibility of creating the world’s greatest animal kingdom between Mozambique and South Africa.
(©www.engineeringnews.co.za)

World Bank, Zambia discuss mines funding
Zambia’s president told World Bank officials his country was doing all it could to meet donor requirements as it tries to cope with mining group Anglo American’s withdrawal from its lifeblood copper industry.
(©www.miningweekly.co.za)

Mining in Africa's renaissance plan
The question whether the exploitation of Africa’s mineral riches benefit Africans has been asked for decades.
(©www.miningweekly.co.za)

Unicef airlifts aid to Liberia
Monrovia - The UN Children's Fund on Friday airlifted more than forty metric tonnes of emergency relief supplies for use by internally displaced persons (IDPs) in Liberia, where rebels are fighting President Charles Taylor's regime.
(©www.news24.com)

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The state of State diamonds
Ailing State diamond-mining company Alexkor does not conjure up the image of a jewel, but this is how Department of Public Enterprises chief director: restructuring of state owned enterprises Andile Nkuhlu describes the mine, which is situated below the mouth of the Orange river, in the Northern Cape.
(©www.miningweekly.co.za)

Billion-rand benefit for mines from renewal project
More than a billion rands worth of direct benefit has accrued to Sasol Mining from its Renewal programme introduced four years ago, MD Jannie van der Westhuizen tells Mining Weekly.
(©www.miningweekly.co.za)

Motsepe on gold industry consolidation
International investors in Europe and North America have been suggesting that African Rainbow Minerals Gold should consider merging with Harmony Gold.
(©www.miningweekly.co.za)

Investor interest in gold surges, despite general demand slump
World gold demand for the first quarter of this year has been characterised by a 15% decrease in jewellery sales, to some 623,9 t, as opposed to this time last year.
(©www.miningweekly.co.za)

Mining drives growth at LPG firm
Specialist liquefied petroleum gas (LPG) supply company, Easigas says it has experienced more than 300% growth by volume in the mining and metals sector in the past five years, indicating the increased use of this fuel on South African mines.
(©www.miningweekly.co.za)

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Outsourcing pays off for Absa
Absa's PiP division has recovered an additional R800 000 a month in rentals for the past 15 months - thanks to its decision to outsource the administration of the repossessed properties it is unable to sell.
(©www.property24.co.za)

Spotlight on: Centurion
Home buyers in the upmarket areas of Centurion have become so choosy that they're now not only picking out which suburbs they want to live in, but which streets.
(©www.property24.co.za)

Breaking down old barriers
It has taken almost 20 years, but the grip of the old Group Areas Act on Johannesburg's middle and upper-income suburbs is at last really weakening.
(©www.property24.co.za)

Don't let tenants spike your sale
Interest rate rises may prompt private landlords to sell if they cannot raise rents to help cover the increased mortgage repayments on their investment properties.
(©www.property24.co.za)

How to stand out in a crowd
In any area where housing demand exceeds supply, there's a good chance that home sellers will receive more than one offer to purchase.
(©www.property24.co.za)

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Flat is what it's not
When professionals join the residential property buy-to-let fad, it may be time to look at it yourself. The market has been growing for six years and is showing no signs of running out of steam, despite investment returns dropping from over 15% to around 10% as price rises in Johannesburg outstrip rents.
(©www.fm.co.za)

Modular motorways
The Dutch are pragmatic innovators. In 1798 Napoleon Bonaparte established the Dutch Ministry of Transport, Public Works and Water Management with his customary comprehensive military style. Two hundred years later the private sector was invited to design, build and exhaustively test a ‘Road to the Future’. Safety, low maintenance and an improved life cycle were the design parameters.
(©www.industryclick.com)

Book Review -
Professional Services Automation: Optimizing Project & Service Oriented Organizations
For the past decade, Enterprise Resource Planning (ERP) systems have been utilised in large enterprises worldwide. Intended to streamline and manage manufacturing and distribution business processes in areas of products and parts planning and purchasing, inventory, order tracking, HR, accounting, and supplier interaction, ERP systems have been found to be costly to implement, have high learning curves, and serious scalability issues.
(©www.projectmagazine.com)

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Closing prices:
BUILDING, CONSTRUCTION AND ENGINEERING

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Petrol price expected to drop
Economists expect the price of petrol to drop by about 16c/l from next week thanks to the stronger rand and lower oil prices.
(©www.news24.com)

US productivity up 8.4%
US business productivity rose by 8.4% in the first quarter of 2002, below an initial estimate of 8.6%, the Labour Department says. The revision still shows strong gains in the output of the non-farm US business sector.
(©www.news24.com)

Special downloads (in pdf format):

Owning or leasing commercial property
International research and local experience suggest that there are many aspects to the debate regarding how property, as an asset class, should be considered

An Overview of Demand and Supply of Commercial Office Space in South Africa's Major Centres Issue3 2001
This report is filled with graphs and tables and may take a while to download. If you experience problems download it from this page.

Both downloads are from JHI's site, are extremely well presented and are ideal for printing out and keeping for future reference.

(©www.jhi.co.za)

Quick indicators
...."Building supply trends indicating that planning activity has shown a downward trend since the beginning of 2001, support this view. From January to October last year the value of non-residential plans passed was R3,05bn, a 22% decrease compared with the same period in 2000. The only province to buck the trend was KwaZulu-Natal, where the total value of just over R500m represented a 54% increase on the previous year, due to substantial development in the north of the province in the Umhlanga and La Lucia Ridge nodes, as well as casino development, according to the report. In terms of sectoral investment activity, offices have seen an average annual growth rate of about 32% through 2001, compared with 2000. For the same period, retail grew by 4% while industrial activity growth was negative at 8%, the report says." From Business Day
(©www.bday.co.za)

Spotted on the ASAQS website:
On the ASAQS Calendar:

June 18, 2002
Event: ProjectFlow Intermediate
Time: 8:15 AM - 4:30 PM
Information: This course will be held at the Centurion Lake Hotel, Centurion on the 18-21 June 2002. For more info contact Terry Deacon at 0825573119

July 27, 2002
Event: Advance Cost Eng
Time: 8:30 AM - 4:00 PM
Information: Only four Certified Cost Eng left in Africa. This seminar prepares you to write the exam. If you have a degree and four years exp. or eight years relevant experience this is for you!

Remember: Visit the ASAQS website for new updates!

New members to the CUG
A warm word of welcome to the following members who have joined us in the CUG during the past week:

Names to be announced next week - the computers at Midrand were down most of the week due to renovations at the ASAQS offices

Please note that your registration to the CUG will remain in force as long as you remain a member of ASAQS and there is no need to register every year. If you have not received an e-mail confirming your registration contact ASAQS.

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