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| Century City Property Developments Short-Listed at SAPOA Awards |
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No less than four recent developments at Century City were selected as finalists in the 2008 SAPOA Awards for Innovative Excellence in Property Development continuing a proud tradition of previous years
The new finalists include the Liberty Life Regional Offices which were completed last year. The 20 000 square metre building, which includes 440 basement parking bays, 140 external bays, a medical suite, in-house canteen, training facilities, meeting rooms, executive boardrooms, dining rooms and pause areas on each floor, enjoys spectacular views of Intaka Island nature reserve and Table Mountain. The contemporary building was designed by Louis Karol Architects.
The three other Century City developments to be shortlisted all fell within the same “other” category which includes hotels and leisure, residential and mixed use developments.
Two residential developments, The Oasis Luxury Retirement Resort and KnightsBridge also made it to the shortlist with Oasis winning a merit award at the 2008 Sapoa Convention at the Cape Town Convention Centre last week.
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| Pace of House Price Growth Slowed Further in May |
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Property Trends - House Price Index
Based on the latest Absa House Price Index, house price growth dropped further to a
nominal 4,3% year-on-year (y/y) in the middle segment of the market (see explanatory
notes) in May this year, down from a revised 5,5% in April. It was the lowest nominal
year-on-year price growth recorded since October 1999, when it was also 4,3%, and
brought the average price of a middle-segment house to about R960 700 in May.
In real terms, house prices in the middle segment of the market dropped by 5,0% y/y in
April 2008, compared with a decline of 3,4% y/y recorded in March, based on headline
CPI inflation. This was the biggest real year-on-year drop recorded in house prices since
March 1997, when it was at a level of -5,2% y/y, based on nominal price growth of 3,9%
y/y, and a headline CPI inflation rate of 9,6% at the time.
| Absa Group Economic Research, 05-06-2008 |
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| South African Investors Urged to Create Opportunities Elsewhere in Africa |
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South African property investors have to start investing in the rest of the continent because there are major opportunities that are being overlooked
“At the moment we, South Africa, are an island of prosperity in a sea of decay.” He says the xenophobia that is raging in SA will not “go away until we start investing in the economies around us”. “People come to SA because they are looking for opportunities. We must create those opportunities in their own countries.” Van der Vent says South African property companies should start developing infrastructure and focus on developments such as shopping centres, offices and private hospitals in neighbouring countries such as Mozambique. He says while there are risks attached to developments in other parts of Africa, there is also money to be made.
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| Property Investing Differs Globally |
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There has been a lot of recent focus on South African property investors looking beyond their own borders because of home markets being too small and too competitive
This could also be because, to use the words of Leon Allison, an analyst at Macquarie First South, "investors don't only want to be exposed to the rand and the South African economy".
"There are yield opportunities around the world and in South Africa the national sport is hedging. This has effectively led to investors wanting to diversify – to go offshore and global," says Patrick Sumner, head of Property Equities at Henderson Global Investors.
He advises though investors should keep in mind that global real estate is a patchwork of a variety of real estate around the world. "There is no global real estate market per se," he says.
"Real estate is a difficult and complex game, and each country has its own set of rules and legal tax.
"It's a case of 'I am a genius in Johannesburg but will I be a genius in New York?'. This is not always the case. Success at home doesn't mean success in a foreign market."
| Global Trends and Development Prospects Group, 02-06-2008 |
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| Housing Review 2nd Quarter 2008 |
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Property Trends - Housing Review
South Africa’s economic performance remained strong towards the end of 2007, to a large extent driven by high levels of activity in the building and construction sector. The household sector remained under pressure on the back of rising inflation, higher interest rates and the effect of the National Credit Act.
The cost of servicing household debt increased to 11% of disposable income, real disposable income growth slowed significantly, and real household consumption expenditure growth tapered off further. Nominal and real house price growth slowed down further in the first
quarter of 2008, largely as a result of the tightening of monetary policy, stricter requirements for credit extension, and housing having
become less affordable.
| Absa Group Economic Research, 02-06-2008 |
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| Building Stocks on the Blocks |
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South Africa's construction boom is expected to continue for at least the next 10 years thanks to government investment and private-sector spend
Given the positive growth and earnings outlook and recent fall in prices, say analysts, construction stocks could be ripe for the picking, despite them trading at a premium to the overall market.
The average price-earnings multiple for the construction and materials index was 21.7 at the beginning of the year, and is now 17.1 times earnings; this compares with the all-share's average multiple of 16.7 times earnings.
For the year to date, the construction and materials index has fallen 6.2% while the all-share index is up 11%. The series of all-time highs reach in May mask the market corrections seen February and March.
Analysts say construction companies do not look expensive for investors who are taking a bullish view of growth in the industry.
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| Cape Town Continues to Reap Benefit of Urban Regeneration |
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How much investment has the Cape Town Partnership (CTP) indirectly or directly been able to able to attract to city?
Urban decay and the resultant disinvestment by landlords who choose to move to decentralised areas is a problem in many countries around the world. South African cities have not been exempt from this degeneration however a number of organisations in various areas are working to reverse this trend. Karen Kühlcke spoke to Andrew Boraine, chief executive of the Cape Town Partnership, to find out how urban regeneration in the Cape Town CBD has resulted in increased investment in the City. The work of the Cape Town Partnership (a multi-stakeholder forum) and the Central City Improvement District (CCID) has been instrumental in tackling the crime and grime and turning the tide in Cape Town.
| TradeInvest South Africa, 23-05-2008 |
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| Building Industry Should Not Bear Brunt of Energy Crisis |
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Property economist Erwin Rode of Rode & Associates has strongly condemned Eskom’s decision earlier this year to impose a six-month moratorium on all new medium- to large-scale construction projects across both the residential and non-residential markets
While existing long-term projects have yet to feel the full impact of the energy crisis, Eskom’s recent decision is already having an effect on professionals throughout the building industry, says Rode, escalating a situation which began two years ago when interest rates began their steep and sustained rise, construction input costs rose and consumer demand fell. By February this year – well before the full impact of the energy crisis began to take its toll – year-on-year growth in overall building plans passed had already declined sharply by 22,9%. Cement sales, a good proxy for building activity, are for the first few months of this year already showing a decline of about 1%.
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| Cape Town Wins Oscar at World Travel Awards |
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Cape Town has been announced as Africa’s leading destination by the prestigious World Travel Awards in Durban
The World Travel Awards were established in 1993 to acknowledge, reward and celebrate the enormous achievements in all sectors of the global travel industry. Travel professionals and their clients regard the awards as the best endorsement that any travel product could receive. Globally, it is considered the Oscars of the travel industry. The spectacular awards ceremony was held at the Inkosi Albert Luthuli Convention Centre (ICC) in Durban.
Councillor Simon Grindrod, Cape Town’s Mayoral Committee member for Economic, Social Development and Tourism said: “This award further consolidates the position of Cape Town as a world-class tourist destination. Credit must go to our local hospitality industry for working so hard to provide an excellent tourist offering in terms of product and service.”
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| House Price Growth at an 8-Year Low |
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Property Trends - House Price Index
According to the latest Absa House Price Index, house price growth slowed to a nominal
6,8% year-on-year (y/y) in the middle segment of the market (see explanatory notes) in
April 2008, down from a revised 7,8% in March. It was the fourth consecutive month of
single-digit growth in nominal house prices since a growth rate of 11,2% was recorded in
December last year. The latest price rise of 6,8% y/y was the lowest since November
1999, when it was 6,5%, and brought the average price of a middle-segment house to
about R974 000 in April this year.
In real terms, house prices in the middle segment of the market dropped by 2,5% y/y in
March 2008, compared with a decline of 0,9% y/y recorded in February, based on
headline CPI inflation. This was the biggest negative real year-on-year growth rate
recorded in house prices since May 1997, when it was at a level of -3,4% y/y, based on
nominal price growth of 5,7% y/y, and a headline CPI inflation rate of 9,5% at the time.
| Absa Group Economic Research, 08-05-2008 |
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