Residential building inflation up

Residential building inflation up
2008/05/23

South African residential building costs inflation measured 10,9% in the first quarter, up from a revised 6,8% in the previous quarter, the FNB Commercial Property Finance Residential Building Cost Index showed on Thursday.
The index reflects the average building cost per square metre, as charged by building contractors when winning tenders in the formal residential property sector. It excludes affordable and so-called "RDP" housing.
The average building cost per square metre was measured at R5,864 for the first quarter.
"However, this mild rise from the previous quarter comes at a time when residential market conditions are extremely weak, and contractor pricing power must be low, leading to the belief that input cost pressures are beginning to drive building cost inflation higher," said John Loos, FNB property strategist.
He added that if the uptick was the start of a longer trend, it would add to the woes of an industry already under pressure.
"Rising building cost inflation would probably slow the supply of new stock further," said Loos. - Tiisetso Motsoeneng, I-Net Bridge

Residential building inflation up

Eskom to build R2,9bn power station

Eskom to build R2,9bn power station
2008/05/23

Eskom has announced that it has awarded a R2,9bn contract to a consortium of South African companies to construct the main civil works at Lephalale in Limpopo.
The contract was awarded to the Medupi Power Station joint venture, a consortium made up of Murray and Roberts, Grinaker-LTA Civil Engineering and Concor.
"Medupi is one of the key installations in Eskom's New Build Programme geared towards closing the current supply-demand gap.
"We are pleased with each milestone reached in the project," said Eskom's chief officer for generation Brian Dames.
The Medupi Power Station will be South Africa's first green field coal-fired station to be built in more than 20 years.
It is expected to cost an estimated R80bn to build.
The first unit is scheduled for completion in 2012 with the entire station completed by 2015.
"It will be the biggest dry-cooled power station in the world and will have an installed capacity of approximately 4,800 Megawatts," Dames said.
The contract covers all civil engineering work and construction of roads, drains, foundations, column supports, floor slabs and basements.
Also included a utility spine and connectors beneath an auxiliary bay, the boiler house and turbine hall.
The awarding of the contract followed a thorough tender evaluation and adjudication process.
A number of preliminary steps have already been taken to prepare the ground for the construction of the Medupi Power Station, including the placement of the boiler and turbine contracts. – Luyanda Makapela, BuaNews

Eskom to build R2,9bn power station

Homebuyers baulk at poor security

Homebuyers baulk at poor security
2008/05/23

Inadequate security measures are a definite turn-off for prospective homebuyers.
This, says Martin Schultheiss, CEO of the Homenet estate agency group, is becoming more evident as suburban homes have to compete with secure complexes and gated estates in an increasingly softer property market.
"Good security has become one of the prime criteria among homebuyers and homes with inadequate security measures are being punished by the market," he says.
Most buyers prefer a home with security in place and are not keen to buy property where they would need to install alarms, burglar bars and other deterrents.
"Apart from the additional costs they would incur to install protection, most are not willing to move into an unprotected home, even for a short while," Schultheiss says.
"And buyers who are prepared to install their own security are increasingly driving a hard bargain when it comes to making an offer to buy. They are calculating the likely costs of top-of-the-range measures and insist that sellers subtract the total from their asking prices."
Buyers are also no longer convinced by arguments that certain residential areas are relatively "safe" or "crime-free" and any owner contemplating selling his home would be well advised to update security.
"It is also important for security measures to be clearly visible. At a minimum this includes burglar bars, security gates, security lights and preferably an alarm system."
For more information contact Martin Schultheiss on 031 266 9850 or click here to visit the website.

Homebuyers baulk at poor security

Land claims to miss target

Land claims to miss target
2008/05/23

The department of land affairs is going to miss its target of finalising all outstanding land claims by the end of this year.
Minister Lulama Xingwana admitted this in Parliament on Wednesday when she spoke in an extended committee of the National Assembly in the debate on her departmental budgets.
She said the commission for the restitution of land claims had settled more than 95% of total claims lodged, and was left with 4,998 very complex rural claims.
"A number of challenges are still confronting us in the finalisation of the outstanding land claims," she told MPs "As a result of these challenges, between 2% to 3% of these claims may not be finalised in this financial year."
The challenges she said included cases in the land claims court, and others disputed with landowners around land prices and the validity of the claims. There are other claims held up because of disputes around traditional leadership and boundaries, and because of community and family disputes.
The commission, she said remains committed to ensuring that all land claims are eventually settled, and to that end, a memorandum and an action plan for the finalisation of the outstanding claims had been submitted to Cabinet.
"The economic models for settling forestry claims and claims with mineral rights (for example Anglo American, Sappi, and Mondi) are in the final stages and should also assist in addressing some of the more challenging claims. We are working closely with the department of environmental affairs and tourism, SANParks and other agencies towards the finalisation of co-management agreements for the claims on protected areas." - Michael Hamlyn, I-Net Bridge

Land claims to miss target

Consumers defining fractions market

Consumers defining fractions market
2008/05/22

The fractional ownership market in South Africa is being driven by consumer demands, not by the promoters, and the projects that will emerge victorious will be those that cater for what consumers are looking for. So says co-founder of fractionalownership.co.za and member of the South African Association of Fractional Intermediaries (SAAFI) Working Committee, Dirk Wilson.
"It really boils down to what service levels the South African consumer expects from a luxury lifestyle investment such as fractional. When they arrive at their fractional holiday home at Pinnacle Point or Zimbali they expect a hotel-style check-in, cleaning services and check-out facilities. Everything must be of a very high standard in terms of value-added on-site services - for example, being able to phone down to reception and book a round of golf or organize fresh towels for the morning. They can't just arrive at a game farm, be pointed 2 km down the road, given their keys, and told 'There's your bush lodge, see you in a week!'."
Wilson explains this trend of consumer control further: "There are many resort developers who are looking to do mixed-use developments, and they want fractional to be a component. Undoubtedly the on-site hospitality provider is the most intricate part of making a successful project – those who do not have a specialized hospitality or hotel operator on the resort and don't have the standard of say a Three Cities or Legacy, have to provide an equivalent standard - because this is what the market expects. Many developments just don't have the infrastructure to be able to provide this standard.
"Many leading fractional promoters now are only taking on properties where there is a leading hotel operator at that resort, since the market demands it. Feedback from the recent World Fractional Ownership Conference in San Francisco, USA, is also that by far the most successful fractional ownership resorts in the USA are those serviced by the likes of Marriott, Hyatt Hilton and Fairmont, and the South African market is following suit. It is mirroring what is happening in the USA – where they have 8 years' more experience in this arena than us - and we see it as a good sign that our market is aspiring to live up to that same standard of shareholder hospitality and exchange."
He says that feedback from consumers that have bought fractional indicates is that their experience of top-notch services is the defining factor that really makes their purchase worthwhile. "Fractional ownership should equal shareholder hospitality and comfort – and this is a reality that developers have to face. We endorse this and aim to educate potential players in our regular workshops of what logistics they need to provide in order to roll out a successful fractional ownership resort."
fractionalownership.co.za holds workshops every 2 months – one each in Cape Town and Johannesburg, the next scheduled for mid-June. Says Wilson: "We are happy to assist the developers and service providers. We see many at our workshops that would like to do fractional because it adds value to their entire development, but they have to be able to live up to what the consumer expects from their purchase." He adds that he is now seeing many players from the financial sector attending the workshops – since their clients want to know whether they should buy shares in fractional, a trend once again driven by the consumer.
To book for the workshop or for any enquiries contact Dirk Wilson on 072 591 0582 or 021 556 5064, email www.fractionalownership.co.za or click here to visit the website.
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Consumers defining fractions market

Nelspruit gets virtual office park

Nelspruit gets virtual office park
2008/05/21

A new virtual office park was established in Nelspruit for businesspeople and entrepreneurs in need of temporary office space.
Central Park has offices that are available for a few hours, a few days or on a regular weekly or monthly basis and the tariffs ranges from R200 per day.
John Powell from JD & Associates, the developers, says the business park is affordable to all types of businesses.
"Clients can rent a desk, a conference room or a hall, with broadband internet access, telephones, printers and reception facilities," he says. – Sake24
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Nelspruit gets virtual office park

March build plans passed drop 18,5%

March build plans passed drop 18,5%
2008/05/22

The value of South African recorded building plans passed at constant 2000 prices in March decreased by a telling 18,5% year-on-year (y/y) from a revised down 1% in February (previously down 11,1%), Statistics South Africa (Stats SA) data on Wednesday showed.
Residential building was the culprit as it recorded a 23% fall, while non-residential building was up 2,6%, but additions and alterations fell 20,7%.
That is the biggest fall in residential building since the –19,1% recorded in November 2007 and comes after an 8% increase noted in February.
The value of recorded building plans passed by larger municipalities at current prices during the first quarter of 2008 rose by 7,3% y/y compared with the first quarter of 2007. Two of the main categories of buildings contributed positively to this figure - non-residential buildings (18,7%) and additions and alterations (16,4%), Stats SA noted.
Building activity has come under a significant amount of pressure due to slowing housing demand and electricity shortages and delays in plans passed, and this is expected to continue. – I-Net Bridge
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March build plans passed drop 18,5%