FrancoisViruly

Slide1: 

Welcome to the UDZ TAX INCENTIVE CONFERENCE Day 2 19 Aug 05

Slide2: 

THE UDZ Conference 2005

Slide3: 

The SA property market Lifestyle – ‘Home, work and play’ Mixed-use developments Neighbourhood developments Specialised retailing Estates Transport - Pressure with Higher Economic Growth Traffic Congestion Macro economy – Low Inflation environment Interest rates stable Economic growth Business confidence Social & Political - Urban regeneration Investment incentives Residential Property Market Property Charter

Real GDP(Seasonally Adjusted @ Constant 1995 Prices): 

Real GDP (Seasonally Adjusted @ Constant 1995 Prices) Source:

CPI Inflation (% change) – but what about oil prices: 

CPI Inflation (% change) – but what about oil prices Source: STATS SA

The Market shifts into equilibrium….Decentralized (A & B) - Vacancies: 

The Market shifts into equilibrium…. Decentralized (A & B) - Vacancies Source: SAPOA

Total Building Plans Passed: 

Total Building Plans Passed Source: STATS SA

The Decentralised Nodes are of importance : 

The Decentralised Nodes are of importance Oversupplied scenario causes rentals to stagnate in both decentralised and CBD nodes. Difficult for the CBD to compete in this environment. As Decentralised becomes more expensive, the CBD becomes an alternative.

Institutional Exposure to the CBDGauteng : 

Institutional Exposure to the CBD Gauteng

CBD Offices - Vacancy Rate: 

CBD Offices - Vacancy Rate Source: SAPOA

Total Returns – CBD : 

Total Returns – CBD

Net Income Growth : 

Net Income Growth

Capital Values CBD vs Decentralised Nodes – Office : 

Capital Values CBD vs Decentralised Nodes – Office

Office Capitalization Rate: 

Office Capitalization Rate Source: RODE

Affordability of Housing : 

Affordability of Housing

Focus on Residential Sector : 

Focus on Residential Sector High Income Group “Bricksfield” How about Hillbrow Needs Urban regeneration Renovation of Existing Stock Need to craete the social environment for the residential sector to be successful

What is required : 

What is required HOME PLAY WORK

Type of Development: 

Type of Development

Slide20: 

The Distribution of Shopping Malls (10,000m2 +)

New shopping centres planned in former townships: 

New shopping centres planned in former townships

IMPLICATIONS FOR CBD : 

IMPLICATIONS FOR CBD Will National retailers still consider the CBD What Happens to smaller retailers in the Township Market Will existing malls lose Black Shoppers Maybe the township market becomes more attractive than the CBD.

The SA Sectoral Property Cycle: 

The SA Sectoral Property Cycle Equilibrium CR NR PC SA PROPERTY MARKET RSC SC “TIGHT MARKET” WH LGI HRO HTI OP LRO OVERSUPPLY CR-Community Retail NR-Neighbourhood Retail PC-Power Centre LRO-Low Rise Office OP-Office Park HTI-High-tech Industrial HRO-High Rise Office LGI-Low Grade Industrial WH-Warehousing SC-Specialty Centre RSC-Regional Shopping Centre OPPORTUNISTIC VALUE ADDED INCOME

Mega Trends : 

Mega Trends New Types of investors entering the market. The focus is on capital growth rather than yield. The UDZ incentive is important In the residential sector watch out for the PIE Act. Success in high income residential will be undermined by the oversupply in decentralised nodes. Municipality must be able to apply by laws and set standards which slum lords cannot meet. Social Investment is required in terms of amenities. Residential must go beyond bricks and mortar. Focus on Industrial sector as well

Slide25: 

Tel : (011) 728-0751 Fax : (011) 728-2341 fviruly@viruly.co.za