Portion 157 of the farm De Onderstepoort 300-JR ... - SAHRIS

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Fauna and Flora Specialists 638 Turf Street

Wingate Park, 0181

Tel: 012-345 4891

Fax: 086 675 6136

Email: [email protected]

Herpetofaunal

Habitat Scan

Portion 157 of the farm De Onderstepoort 300-JR and Portion 238 of the farm Wonderboom 302-JR

September 2011

Report Compiled and edited by: Ms. Vanessa Marais of Galago Environmental Report author: Mr. W.D. Haacke (Pri. Sci. Nat: M.Sc)

Herpetofauna Report: De Onderstepoort & Wonderboom September 2011 1 of 8 pages

TABLE OF CONTENTS

1. INTRODUCTION ........................................................................................3 2. OBJECTIVES OF THE HABITAT STUDY ..................................................3 3. SCOPE OF STUDY ....................................................................................3 4. STUDY AREA .............................................................................................3 5. METHOD ....................................................................................................5 6. RESULTS ...................................................................................................7 7. FINDINGS AND POTENTIAL IMPLICATIONS ...........................................7 8. LIMITATIONS, ASSUMPTIONS AND GAPS IN KNOWLEDGE .................7 9. RECOMMENDED MITIGATION MEASURES ............................................7 10. CONCLUSION............................................................................................7 11. LITERATURE SOURCES...........................................................................8

FIGURES:

FIGURE 1: LOCALITY MAP OF THE STUDY AREA ...........................................................4

FIGURE 2: VIEW NORTHWESTWARDS TO THE R101 ACROSS THE OPEN AREA ................4

FIGURE 3: VIEW SOUTHWESTWARDS FROM LINTVELT AVENUE.....................................5


1. INTRODUCTION ‘Galago Environmental CC’ was appointed to undertake a scan of reptile and amphibian habitats on Portion 157 of the farm De Onderstepoort 300 JR and Portion 238 of the farm Wonderboom 302 JR (elsewhere referred to as the study sites), proposed for commercial development. The objective was to determine which species might still occur on the site. Special attention had to be given to the habitat requirements of all the Red Data species which may occur in the area. This survey focuses on the current status of threatened herpetofaunal species occurring, or which are likely to occur, on the proposed development site and a description of the available and sensitive habitats on the site.

2. OBJECTIVES OF THE HABITAT STUDY • To assess the current status of the habitat component and current general

conservation status of the property;

• To highlight potential impacts of the development on the herpetofauna of the study site.

3. SCOPE OF STUDY

This report:

• Is a reptile and amphibian survey based on sightings and literature, with comments on preferred habitats;

• Comments on ecologically sensitive areas;

• Evaluates the conservation importance and significance of the site with special emphasis on the current status of resident threatened species.

4. STUDY AREA These two sites are part of Wonderboom Agricultural Holdings, adjacent to and on the eastern side of the R101 and on either side of Lintvelt Avenue, which leads to Wonderboom airport. This was originally Marikana Thornveld, with Portion 157 of 2.56 ha north of and Portion 238 of 2.10 ha south of Lintvelt Avenue in the quarter degree grid cell 2528Ca. Both portions are extremely disturbed and mainly used as second hand car lots, a scrapyard, garage, service station and other aspects of the second-hand car trade.


Figure 1: Locality map of the study area

Figure 2: View northwestwards to the R101 across the open area of Portion 157

of De Onderstepoort. The foreground consists of a compacted gravel floor, which has been taken over by grass and weeds.


Figure 3: View southwestwards from Lintvelt Avenue onto the northern edge of Portion 238 of Wonderboom. The site is extremely disturbed and no natural habitat was noticed.

5. METHOD A site visit was conducted on 27 April 2011 in the company of the mammal specialist of the ‘Galago Environmental CC’ team. During this visit the observed habitat types of the study site were recorded. This was done with due regard to the known distributions of Southern African herpetofauna. The 500 meters of adjoining properties were scanned for important faunal habitats. 5.1.1 Field Surveys The site was approached via the R101 and the northern section, Portion 157, was visited first. A fenced parking area to the north of the corner service station was entered (25°39’07.9” S, 28°11’31.5” E. 1215m). The ground area was covered by crushed stone with no vegetation. The entire southern section of this site is occupied by various buildings. Adjacent to the parking area is an open area of about 50 x 50 m bordered by a palisade fence along the R101. The other borders are predominantly lined by walls with a tall storage building to the north. The surface of this former secondhand car lot had been covered by compacted, crushed stone. However, grass and weeds grew over this layer. The southern section, Portion 238 of Wonderboom, was inspected.subsequently. As no access was available, the inspection was carried out by viewing the site through the mesh fences of the northern and western borders. Car wrecks are being stored in the northern section of this site. A central block is empty at present. The southwestern section of the site is used for displaying second hand cars. The southeastern corner is occupied by a residence surrounded by garden. While viewing the southern section from the west, a GPS reading was taken (25°39’16 S, 28°11’29” E.).


During the site visit it was attempted to identify reptiles and amphibians visually. Although car wrecks theoretically could provide a choice of retreats, no specimens were seen. The 500m surrounding area was viewed. Across the busy road R101 to the west of the sites lie the Apies River, railway line and the complex of the Onderstepoort Veterinary Institute. To the east are smallholdings, with some open Marikana Thornveld in the northeast. 5.1.2 Desktop Surveys As the majority of reptiles and amphibians are secretive, nocturnal and/or poikilothermic or seasonal, distributional ranges and the presence of suitable habitats were used to deduce the presence or absence of these species based on authoritative tomes (Minter et al, 2006. SARCA Reptile Survey, 2006 – 90). This can be done irrespective of season. 5.1.3 Specific Requirements During the visit the site was surveyed and assessed for the potential occurrence of Red Data species such as:

• Giant Bullfrogs (Pyxicephalus adspersus). This frog has been recorded from this

quarter degree grid cell. The flat surroundings, especially towards the east where

no developments have taken place, appear to be suitable for the formation of

shallow breeding ponds and the area in general appears suitable as dispersal

area. The area to the west where the Apies River runs northwards between the

R101 and the railway line do not appear suitable because of these serious

hazards. Of the two sites, the northern appears to be unsuitable for this frog,

while on the southern portion isolated vagrants from the east may appear

occasionally during the mid-summer season.

• Striped Harlequin Snake (Homoroselaps dorsalis). This snake has been recorded

from this quarter degree grid cell. No termitaria, in moribund state (their preferred

habitat), were seen on the two sites but they are likely to occur further to the east

in less disturbed thornveld.

• Southern African Python (Python natalensis). This snake has been recorded in

this and some surrounding quarter degree grid cells. It may occur in the riverine

bush along the Apies River. Its survival chance, as it grows and becomes more

visible, decreases. None are expected to occur on the two study sites.


6. RESULTS Amphibians The two sites in their present form may have some dry-land species, such as toads and sandfrogs, but in limited numbers from adjacent areas. The possibility of the formation of breeding ponds for bullfrogs on the sites appears unlikely because of the small surface area and intense human activity. Occasional specimens may visit the Wonderboom site but it is not viewed as suitable for dispersal area. Reptiles Reptiles, unlike the bullfrogs, do not have specific foraging and aestivation areas, as they tend to be opportunistic in their choices. The Striped Harlequin Snake is known from the general area, but has not been verified from the study site. Pythons have been recorded from the general area although not known from the study sites. They are not expected to occur in this area of heavy traffic and human activity. The reptiles still likely to occur on the sites would be small grassland generalists in low population densities or commensals, such as the Speckled Skink. No reptiles were encountered during the inspection...

7. FINDINGS AND POTENTIAL IMPLICATIONS The two small study sites are extremely disturbed without remaining natural habitat. The substrate which has not been built upon has been covered with compacted gravel. Due to these conditions, these sites have minimal survival possibilities for amphibians and reptiles. Future development will only have a minor effect on any remaining remnants of the local herpetofauna.

8. LIMITATIONS, ASSUMPTIONS AND GAPS IN KNOWLEDGE

The current impressions are based on an inspection late in the season. Although no specimens were encountered, it is unlikely that this site will have a noticeable herpetofaunal presence.

9. RECOMMENDED MITIGATION MEASURES Due to the fact that only low densities of common grassland species would possibly occur here, no special mitigating measures are suggested.

10. CONCLUSION Development of these sites will cause some damage to any remaining herpetofauna but, as the species diversity and population densities would be nearly non-existent, the effect would be minimal.


11. LITERATURE SOURCES Branch, W.R. 1998. ’Field Guide to the Snakes and other Reptiles of Southern Africa’.

3rd edition. Struik Publishers, Cape Town. 399 pp., maps, 112 plates.

Branch, W.R. 2002. ‘The Conservation Status of South Africa’s threatened Reptiles’: 89 – 103. In:- G.H.Verdoorn & J. le Roux (editors), ‘The State of Southern Africa’s Species’, Proceedings of a conference held at the Rosebank Hotel, 4 – 7 September 2001. World Wildlife Fund.

Directorate of Nature Conservation, GDACE. 2008 and revised on February 2009. GDACE Requirements for Biodiversity Assessments, Version 2. Gauteng Provincial Government.

Jacobsen, N.H.G. 1995. ‘The Herpetology of the Gauteng Province, - localities and distribution maps’. Pages not numbered. Internal Report, Chief Directorate of Nature and Environmental Conservation, Gauteng Province.

Minter, L.R., M.Burger, J.A.Harrison, H.H.Braack, P.J.Bishop and D.Kloepfer, eds. 2004. ‘Atlas and Red Data Book of the Frogs of South Africa, Lesotho and Swaziland’. SI/MAB Series #9. Smithsonian Institution, Washington, DC.

Mucina, L. & Rutherford, M.C. 2006. ‘The vegetation of South Africa, Lesotho and Swaziland.’ Strelitzia 19. South African National Biodiversity Institute, Pretoria.

‘SARCA Reptile Survey (2006 – 2009)’. Animal Demography Unit 2009 Department of Zoology - University of Cape Town.


Fauna and Flora Specialists 638 Turf St

Wingate Park, 0181

Tel: 012-345 4891

Fax: 086 675 6136


Flora and Fauna

Habitat Scan

of

Portion 157 of the farm De Onderstepoort 300-JR and Portion 238 of the farm Wonderboom 302-JR

September 2011

GDARD reference number: Report Compiled and edited by: Ms. Vanessa Marais of Galago Environmental Report authors: Dr. I.L. Rautenbach (Pri. Sci. Nat: Ph.D, T.H.E.D.),

Mr. W. Haacke (Pri. Sci. Nat: M.Sc), Mrs. P. Lemmer (Cert. Sci. Nat: B.Sc.) Mr. R.F. Geyser,

Avifauna Report verified by: Dr. Alan C. Kemp (Pri.Sci. Nat.) Botany Report verified by: Dr L.A. Coetzer (D.Sc., Pri. Sci. Nat.),

Flora & Fauna Report: Wonderboom De Onderstepoort September2011 1 of 10 pages

TABLE OF CONTENTS

1. Introduction: ................................................................................................3 2. Location of the study site: ...........................................................................3 3. Participating Specialists ..............................................................................3 5. Vegetation assessment:..............................................................................4 6. Fauna assessment:.....................................................................................4 7. Mitigation:....................................................................................................5 8. Environmental sensitivity:............................................................................5 9. Conclusion: .................................................................................................5 10. GDARD biodiversity requirements ...........................................................6

APPENDIX A: FLORA REPORT ..........................................................................7 APPENDIX B: MAMMAL REPORT.......................................................................8 APPENDIX C: AVIFAUNA REPORT ....................................................................9 APPENDIX D: HERPETOFAUNA REPORT.......................................................10

FIGURES: Figure 1: Locality map of the study area ...............................................................3

Figure 2: Combined environmental sensitivity map...............................................5


1. Introduction: Galago Environmental CC was appointed to conduct a mammal, bird, reptile, amphibian and plant scan on Portion 157 of the farm De Onderstepoort 300-JR and Portion 238 of the farm Wonderboom 302-JR, scheduled for commercial development.

2. Location of the study site: The two study sites lie east of, and abuts Road R101 with the access road to the Wonderboom Aerodrome running from west to east between the two sites. Portion 157 of the farm De Onderstepoort 300-JR lies north of the Wonderboom Aerodrome access road and Portion 238 of the farm Wonderboom 302-JR lies south of the access road.

Figure 1: Locality map of the study area

3. Participating Specialists This investigation was conducted by the following specialists:

Specialists Aspect Investigated

Qualifications Prof. Registration

Date of Field Survey

Rautenbach, I.L. Mammalogy Ph.D., T.H.E.D. Pr. Nat. Sci. 26 April 2011 Haacke, W. Herpetology M.Sc. (Zoology) Pr. Nat. Sci. 26 April 2011 Geyser, R. Avifauna Pending 26 April 2011 Lemmer, P. Botany B.Sc. Cert. Sci.

Nat. 12 April 2011

Kemp, A.C. Avifauna review Ph.D. Pr. Nat. Sci. Coetzer, L.A. Botany review D.Sc. Pr. Nat. Sci. Marais, V. Environmental

Impacts and maps BL Landscape Architecture

26 April 2011


5. Vegetation assessment: The two study sites lie in the quarter degree grid square 2528CA (Pretoria). Mucina & Rutherford (2006) classified the area as Marikana Thornveld, with open Acacia karroo

woodland occurring in valleys and slightly undulating plains and lowland hills. Two vegetation study units were identified:

o Built-up and paved area; and o Mixed alien and indigenous vegetation.

The vegetation on the two study sites was very degraded with no connectivity with natural vegetation on adjacent properties. No habitat for Red List plants existed on the two study sites or on any of the surrounding properties to a distance of 200 m around the two study sites. No recommendations are made with regard to exclusion of land. Mature indigenous trees such as the Acacia karroo trees present on the Wonderboom site, should preferably be included in the landscaping of the study sites. See Appendix A for the Flora report.

6. Fauna assessment: The mammal study found that the site is small and severely disturbed. No indigenous mammals can be expected on the two Portions other than the occasional bat overflying the area while hawking, or bat colonies roosting in some of the roofs of the commercial buildings on Portion 157. No sensitive mammal species can be expected on the study site. See Appendix B for the Mammal report. The avifauna study found that the habitat systems on site will not favour any of the mentioned Red Data avifaunal species due to a lack of suitable breeding, roosting and/or foraging habitat on and surrounding the study site. The bird species observed on or that are likely to occur on the study site are species that are able to adapt to areas transformed by man. The entire site is disturbed and has been transformed. There is no natural vegetation on the study site and the total area of the site is relatively small. Only the more common garden bird species that are able to adapt to areas transformed by man are likely to make use of the disturbed state of the study site. See Appendix C for the Avifauna report. The herpetological study found that the two small study sites are extremely disturbed without remaining natural habitat. The substrate which has not been built upon has been covered with compacted gravel. Due to these conditions, these sites have minimal survival possibilities for amphibians and reptiles. Future development will only have a minor effect on any remaining remnants of the local herpetofauna. See Appendix D for the herpetological report.


7. Mitigation: Mitigation proposed is that: • Only indigenous plant species, preferably species that are indigenous to the

natural vegetation of the area, should be used for landscaping in communal areas. • Mature indigenous trees such as the Acacia karroo trees present on the Wonderboom site, should preferably be included in the landscaping of the study sites.

8. Environmental sensitivity:

Figure 2: Combined environmental sensitivity map

Sensitivity mapping rules:

BIODIVERSITY ELEMENT SENSITIVITY MAPPING RULE Flora communities Sensitive flora communities Fauna habitat Sensitive fauna habitat

9. Conclusion: The study found that the site is small and severely disturbed. The vegetation / habitat on the two study sites were very degraded with no connectivity with natural vegetation on adjacent properties. No habitat for Red List plants or fauna species existed on the two study sites or on any of the surrounding properties.


10. GDARD biodiversity requirements From: GDARD Biodiversity Information (GDARD) [[email protected]] Sent: 14 April 2011 02:54 PM To: Madeleen van Schalkwyk Subject: RE: Biodiversity request for Wonderboom Portion 238

Dear Madeleen

With regard to the above project, specialist biodiversity studies are required to investigate the following aspects:

* Vegetation.

The absence of wetlands on site should be verified. Should a wetland be located, a wetland specialist study will be required.

Should a wetland be located, a wetland specialist study will be required.


APPENDIX A: FLORA REPORT


APPENDIX B: MAMMAL REPORT


APPENDIX C: AVIFAUNA REPORT


APPENDIX D: HERPETOFAUNA REPORT


Onderstepoort Business Site Development - September, 2011

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Onderstepoort Business Site

Development

MARKET RESEARCH FINDINGS

&

RECOMMENDATIONS

September 2011

DEMACON Market Studies PO BOX 95530 WATERKLOOF

0145 Tel: +27 12 460 7009

Fax: +27 12 346 5883 Cell: +27 82 898 8667

E-mail: [email protected] Website: www.demacon.co.za


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Demacon is a member of

SOUTH AFRICAN PROPERTY OWNERS ASSOCIATION (SAPOA)

SOUTH AFRICAN COUNCIL OF SHOPPING CENTRES (SACSC)

Enquiries:

Hein du Toit

+27 12 460 7009 (t)

+27 12 346 5883 (f)

+27 82 8988 667

[email protected]

www.demacon.co.za

The information contained in this report has been compiled with the

utmost care and accuracy within the parameters specified in this document. Any decision based on the contents of this report is,

however, the sole responsibility of the decision maker.

mailto:[email protected]


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TABLE OF CONTENTS

EXECUTIVE SUMMARY........................................................................................................... 1

CHAPTER 1: INTRODUCTION ............................................................................................... 9

1.1 BACKGROUND ................................................................................................................ 9

1.2 PROJECT BRIEF ............................................................................................................. 9

1.3 STUDY AREA / SITE DELINEATION ............................................................................. 10

1.4 REPORT OUTLINE ........................................................................................................ 10

CHAPTER 2: LOCATION ANALYSIS .................................................................................. 12

2.1 INTRODUCTION ............................................................................................................ 12 2.2 SPATIAL DEVELOPMENT FRAMEWORK OF NORTH EASTERN REGION ................. 12 2.3 DEVELOPMENTS IN THE NORTH ................................................................................ 25 2.4 BUILDING PLANS COMPLETED ................................................................................... 37 2.5 LOCAL RESIDENTIAL GROWTH AREAS ..................................................................... 43 2.6 DEVELOPMENT SITE ASSESSMENT........................................................................... 45 2.7 SYNTHESIS ................................................................................................................... 47 CHAPTER 3 ECONOMIC PROFILE ..................................................................................... 48

3.1 INTRODUCTION ............................................................................................................ 48 3.2 REFERENCE FRAMEWORK ......................................................................................... 48 3.3 MACROECONOMIC OVERVIEW ................................................................................... 49 3.4 PROPERTY MARKET PERFORMANCE ........................................................................ 58 3.5 FUTURE EXPECTATIONS ............................................................................................. 63 3.6 LOCAL ECONOMIC TRENDS ........................................................................................ 64 3.7 SYNTHESIS ................................................................................................................... 71 CHAPTER 4: DEMOGRAPHIC MARKET OVERVIEW ......................................................... 72

4.1 INTRODUCTION ............................................................................................................ 72 4.2 MARKET AREA DELINEATION AND POPULATION SIZE ............................................ 72 4.3 AGE PROFILE ................................................................................................................ 76 4.4 HIGHEST LEVEL OF EDUCATION ................................................................................ 77 4.5 EMPLOYMENT STATUS ............................................................................................... 78 4.6 OCCUPATION PROFILE ............................................................................................... 79 4.7 DWELLING TYPES ........................................................................................................ 80 4.8 TENURE STATUS .......................................................................................................... 80 4.9 ANNUAL HOUSEHOLD INCOME .................................................................................. 81 4.10 LIVING STANDARD MEASUREMENT ........................................................................... 82 4.11 SYNTHESIS ................................................................................................................... 84 CHAPTER 5: INDUSTRIAL MARKET ANALYSIS ............................................................... 86

5.1 INTRODUCTION ............................................................................................................ 86 5.2 GENERAL INDUSTRIAL MARKET TRENDS ................................................................. 86 5.3 LOCAL MARKET INDICATORS ..................................................................................... 90 5.4 INDUSTRIAL NET SPACE DEMAND MODELING ......................................................... 93 5.5 SYNTHESIS ................................................................................................................... 97


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CHAPTER 6: TRADE MARKET ANALYSIS ......................................................................... 98

6.1 INTRODUCTION ............................................................................................................ 98 6.2 DEFINING OF SECTOR AND SUBSECTOR ................................................................. 98 6.3 QUARTERLY REVIEW OF BUSINESS CONDITIONS (New Vehicle Manufacturing

Industry) ......................................................................................................................... 99 6.4 MARKET POTENTIAL ASSESSMENT ..........................................................................112 6.5 SYNTHESIS ..................................................................................................................118 CHAPTER 7: RETAIL MARKET ANALYSIS .......................................................................119

7.1 INTRODUCTION ...........................................................................................................119 7.2 LOCAL DEVELOPMENT PERSPECTIVE .....................................................................119 7.3 STATE OF THE RETAIL PROPERTY MARKET ...........................................................120 7.4 MARKET POTENTIAL ASSESSMENT ..........................................................................123 7.5 SYNTHESIS ..................................................................................................................129 CHAPTER 8: DEVELOPMENT RECOMMENDATIONS .....................................................130

8.1 INTRODUCTION ...........................................................................................................130 8.2 RETAIL MARKET RECOMMENDATIONS ....................................................................132 8.3 TRADE SECTOR (AUTOMOTIVE MARKET) RECOMMENDATIONS ..........................131 8.4 INDUSTRIAL MARKET RECOMMENDATIONS ............................................................130 8.5 LAND APPORTIONMENT .............................................................................................133


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EXECUTIVE SUMMARY

PROJECT BRIEF

Demacon Market Studies were commissioned by Tony De Sousa to compile a comprehensive, specialist site-specific market study to establish the capacity of the local market to sustain a retail and office development situated in Pretoria North, Gauteng Province. It is our understanding that comprehensive mixed use market study is required with regard to Portion 157 of the farm Onderstepoort 300 JR (on which the use rights referred to as an “existing use”, have expired) and Portion 238 of the farm Wonderboom 302 JR. The optimum combination of potential Highest and Best land uses should therefore be ascertained, maintaining adequate flexibility pertaining to future expansions / developments, whilst minimising potential business objections that could be elicited from the market at large. In this context, it is understood that a township application needs to be lodged in order to re-establish the legality of existing uses, and cater to potential future expansions. A mixed use market study is therefore required to inform strategic planning and investment decisions, regarding the existing and potential Highest and Best mix of land uses, including a filling station (viability to be determined by Techworld Consulting Engineers), as well as commercial, business (shops) and ancillary light industrial land uses. The study was completed under the following chapters: Location Analysis Economic Market Overview Demographic Market Overview Industrial Market Overview Trade Market Overview Retail Market Overview Development Recommendations Subsequent paragraphs provide insight to recent global national economic trends, followed by local economic indicators of Pretoria Local Municipality. ECONOMIC OVERVIEW

The demand for business space and related land uses are influenced by the business cycle. Hence a concise overview of macro and local economic conditions and prospects serves to contextualise the assessment.

GLOBAL & NATIONAL ECONOMIC TRENDS The combination of low interest rates (prime lending interest rate currently lowest since 1976), increased fiscal stimulus, on-going infrastructural activity and a sound banking system should provide the basis for a solid, but ultimately below potential, economic recovery in South Africa during the next 18 months. The latest Leading Indicator (a good indicator of near term moves in both the economy as well as the residential mortgage market) data point to appear, that of May 2011, indicated a further acceleration, on a year-on-year basis, to a current value of 131.5.


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Furthermore, the improving economic climate, is emphasised by the following criteria: Economic growth forecast of 3.4% for 2011 Stabilising inflation - average of 4.3% expected for 2011 Economy had grown by 2.8% in 2010 - strong commodity prices, low interest rates and

faster global growth had been the main forces behind the economic recovery All consumer indicators are pointing higher in 2011, household expenditure should have

every chance to push stronger Recovery in house price inflation and house price values expected Car sales up 21.1% Commercial / industrial boom anticipated towards 2013 / 2014.

An improving economy has positive implications for disposable income growth and thus residential purchasing power in the near term. Global expectations for 2011 show signs of economic recovery which would have beneficial advantages for South Africa and major metropolitan regions. LOCAL ECONOMIC INDICATORS (PRETORIA LOCAL MUNICIPALITY) As far as economic growth is concerned, Pretoria local economy reached an average growth rate of approximately 2.5% over the long term period (1995 – 2010). The short to medium term recorded an average growth rate of approximately 3.7% (2005 – 2010). City of Tshwane Metropolitan Municipality reached an average growth rate of approximately 3.4% over the long term period (1995 – 2010). The short to medium term recorded an average growth rate of approximately 4.3%. Pretoria local economy contributed approximately 50.7% towards The City of Tshwane Metropolitan economy. The four dominant contributors to the Pretoria local economy include:

General government Finance, insurance, real estate and business services Transport, storage and communication Manufacturing

The trade sector comprises establishments engaged in retailing merchandise, generally without transformation, and rendering of services incidental to the sale of merchandise. Trade thus involves the selling or arranging the purchase or sale of goods from resale, and selling durable, semi-durable and non-durable consumer goods. The wholesale and retail sector recorded an average of 2.7% over the long term (1995 – 2010) and 2.4% over the short to medium term (2005 – 2010). Catering & accommodation sector recorded average growth of 0.4% over the long term (1995 – 2010) and -0.8% over the short to medium term (2005 – 2010). Table 1 summarises the key economic indicators of Pretoria Local Municipality (excluding Centurion, Hammanskraal, Mabopane, Soshanguve, Mamelodi, Nellmapies, Akasia): Table 1: Key Economic Indicators of the Market Area

Variable Market Characteristics

City of Tshwane Economic Growth Performance Pretoria Economic Growth Performance

3.4% per annum (over long-term 1995 - 2010), 4.3% (over short to medium term (2005 – 2010))

2.5% per annum (over long-term 1995 – 2010) 3.7% (over short to medium term 2005 - 2010)

Pretoria Dominant Economic Contributions General government – 31.0% Finance, insurance, real estate and business


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services – 29.8% Transport, storage and communication – 9.9% Manufacturing – 9.6% Wholesale and retail trade, catering and

accommodation – 9.0%

Note: The latest local area economic data is only available up to 2010. The local business cycle follows the national cycle closely, albeit that local data lags by approximately 12 - 18 months, and a similar upward trend in the local economy, compared with the national trend, which is already noticeable. The following section provides a demographic overview with regard to the market area concerned. DEMOGRAPHIC MARKET OVERVIEW

Table 2 summarises the key socio-economic indicators of the primary source market, informed by general SACSC criteria, as well as the following: Consumer market behaviour and expenditure trends Regional and sub-regional levels of accessibility Geographic barriers General consumer mobility patterns and drive times. The proposed retail component will attract a very specific geographic market area. It should be understood that certain areas within this trade radius reflect distinct socio-economic profiles and behavioural characteristics and hence will continue to support centres that would be more conveniently located with respect to their needs and specific preferences. The primary trade area of 2.5km radius is applied and would therefore be used as indicator during the modelling applications in the remainder of the market research report. Table 2: Key socio-economic indicators of the market area (2011)


Population size 6,693 people 2,715 households

Household size 2.5 people/ household

Age profile

13.4% - between 10 and 19 years 37.6% - between 20 and 40 years 25.1% - between 40 and 60 years 14.2% - 60 years +

Highest level of education

36.1% - Std 10 / Grd 12 31.5% - Some secondary 19.5% - Higher education 7.1% - Some primary 3.6% - No schooling 2.2 - Complete secondary

Level of employment 68.9% Economically active of which 10.4% is unemployed and 89.6% is employed

Occupation profile

21.6% - Elementary occupations 15.7% - Clerks 11.8% - Technicians and associate professionals 11.2% - Professionals 10.0% - Service workers; shop and market sales workers 9.9% - Undetermined


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9.3% - Craft and related trade workers

Dwelling types

60.3% - House or brick structure on a separate stand or yard 18.3% - Flat in block of flats 10.0% - House / flat / room in back yard 5.1% - Town / cluster / semi detached house (simplex, duplex, triplex

Tenure status

27.8% - Owned and fully paid off 26.7% - Owned but not yet paid off 26.5% - Rented 19.0% - Occupied rent-free

Average household income (2011)

All LSM’s: R240,348 per annum (2011 values) R20,029 per month (2011 values) LSM 4 – 10+ households: R322,845 per annum (2011 values) R26,904 per month (2011 values)

LSM Profile 67.4% LSM 4 to 10+ 30.0% LSM 7 to 9 15.9% LSM 10 - 10+

Approximately 6,693 people and 2,715 households reside within the market area. The average household size within the market amounts to approximately 2.5 people per household. Of the total market population (68.9%) are within the economically active market segment of which 89.6% is formally employed - largely within occupations varying from elementary occupations, clerks, professionals to technicians and associate professionals. Furthermore it is also evident that the largest proportion (60.3%) of the market area occupies a house or brick structure on a separate stand or yard followed by 18.3% a flat in block of flats. The market area is characterised as a middle income area. The target market, (LSM 4 – 10+) households earns R26,904 monthly and R332,845 annually and represents 67.4% of the market.

LOCATION ANALYSIS

The proposed development is situated on Portion 157 of the farm Onderstepoort 300 JR and Portion 238 of the farm Wonderboom 302 JR Portion 28. Preceding paragraphs analyzed the site in terms of its retail / trade and industrial potential. The development poses unique investment benefits and challenges. Findings of the location assessment can be summarised as follows: Table 3: Summary of Site Evaluation Results:

Proposed Land Use Percentage

Retail Development 69.7%

Industrial Development 70.3%

* Note: 80%+ indicates an exceptional site rating; a site rating of 70 – 80% is high and indicates that most important fundamentals for a successful mixed use development are in place; a rating of 60 – 70% indicates some critical factors may be lacking but could possibly be addressed; projects with a sub 60% rating are not recommended for consideration.

The above summarised the Demographic findings and local assessment. Subsequent chapters conclude modelling results of the industrial, trade (automotive) and retail components.


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INDUSTRIAL ANALYSIS GAP ANALYSIS

Table 4: Synthesis of Space Demand Modelling results, 2016 – 2026

Cumulative Additional Land Demand Up to 2016 2016 - 2021 2021 - 2026

Total Manufacturing (Hectares) 4.02 9.89 17.85

Total Warehousing (Hectares) 6.00 15.58 29.33

Pretoria & Akasia Total Hectares 10.02 25.47 47.18

Minimum share 0.50 1.27 2.36

Maximum share 1.00 2.55 4.72

Development Potential (Ha) 0.75 1.91 3.54

Developable Bulk (square metres) 3,758 9,552 17,693 Table 5: Recommended space demand - cumulative

Forecast Hectares

Up to 2016 0.5 hectares – 1 hectares

2016 – 2021 1 hectares – 2 hectares

2021 - 2026 3 hectares – 4 hectares

Table 6: Recommended space options (2011) Variables Rand per annum / m

2 GLA

Capital Investment (2011 constant values) R 42,982,344

Optimum size (up to 2021) 1.92 hectares (9,552m2)

Employment (on-site) 273

Parking bays 191

Parking infrastructure & landscaping cost (2011 constant values) R17,651,416

The following is evident from Table 4, Table 5 and Table 6: The total industrial potential of Pretoria & Akasia areas up to 2016 amounts to

approximately 10.02 hectares increasing cumulatively to 25.47 hectares in 2016 – 2021 and 47.18 hectares in 2021 – 2026.

The total market potential for the project over the medium to long term amounts to approximately 3.54 hectares of land.

Recommended size of industrial development (2016 – 2021): 1.91 hectares (9,552m2) The recommended type of development: Light industrial / warehousing / distribution

Effective Market Gap

Development Prospects

Light Industrial, warehousing & distribution

Yes

Medium

Development Type


6

TRADE SECTOR (AUTOMOTIVE MARKET) GAP ANALYSIS

Demacon’s Demand Modelling results illustrate that the consumer market can sustain an automotive / motor related / fitment centres / ancillary services of approximately 3,500m2 in the market area with the optimum point of market entry in 2011 / 2012. SUMMARY OF MAIN FINDINGS

The following tables indicate the space demand modelling result of the trade sector. Table 7: Synthesis of Space Demand Modelling Results (nodal potential) – m

2 GLA (constant

values)

Cumulative Additional Space Demand Up to 2016 2021 2026

Wholesale & Retail Trade (sqm GLA) 48,098 85,041 114,768

Catering & Accommodation (sqm GLA) 8,233 10,851 12,199

TOTAL: Pretoria & Akasia 56,331 95,892 126,967

At 28.58% automotive 16,099 27,406 36,287

Project Share (minimum) 1,610 2,741 3,629

Project Share (maximum) 2,415 4,111 5,443

Average 2,012 3,426 4,536 Table 8: Project Space Demand Results - m

2 GLA (cumulative)

Forecast Square metre (m2)

Up to 2016 2,000m2 – 2,500m

2

2016 – 2021 3,000m2 – 3,500m

2

2026+ 4,000m2 – 4,500m

2

Table 9: Recommended Sizes Recommended Sizes Rand per annum / m

2

Size of development (sqm) (up to 2021) 3,426m2

Capital investment (2011 constant values) R30,146,462

Employment opportunities 114

Parking 171


Point of market entry 2011 / 2012



Automotive / motor related / fitment centres

Yes

Medium - High

Development Type


7

The following is evident from Table 7, Table 8 and Table 9: The total trade demand for Pretoria & Akasia areas up to 2016 amounts to approximately

56,331m2 GLA increasing to 95,892m2 GLA of developable bulk by 2021. The total developable trade potential over the entire forecast period (2011 – 2026)

amounts to approximately 126,967m2 GLA. Recommended development size over the next 5 to 10 years: approximately 3,500m2

GLA Recommended development type: automotive / motor related / fitment centres / ancillary

services Optimum point of market entry: 2011 / 2012 RETAIL ANALYSIS MARKET GAP ANALYSIS

In terms of the above, it is clear that there is an opportunity for a retail component as part of a mixed use development. The following section provides the demand estimations for the project. DEMAND ESTIMATIONS

Table 10: Recommended centre options Retail component

(Rand / sqm)

Market size (2011) – annual consumer retail spend R 226,083,577 Optimum retail size (m

2 GLA) – including banking & services 3,474m

2

Annual sales potential R 73,124,282 Employment opportunities (on site) 116 Capital investment R26,404,911 Parking bays required 208 Parking infrastructure & landscaping cost R 5,528,104

Given the economic and demographic outlook for the market, the 5 to 10 year forecast recommends a retail component totalling ±3,474m2 GLA. An annual sales potential of R73 million per annum is expected for the retail component for the forecast. The retail component will create ±116 permanent on-site jobs.

Retail

Yes

Medium



Development Type


8

LAND APPORTIONMENT

The following table provides the recommended land uses of the project and land apportionments. Table 11: Land apportionment

Recommended Land Use Size (sqm)

Retail 3,500m2

Trade & commercial (automotive / motor related / fitment centres / ancillary services

9,500m2

Industrial 3,500m2

Total (m2 GLA) 16,500m

2

Total (m2 GBA) 19,000m

2


9

CHAPTER 1: INTRODUCTION

1.1 BACKGROUND

Chapter one provides an introduction and concise roadmap of the Onderstepoort Business Development. The chapter also provides concise background to the project, a site description as well as a report outline.

1.2 PROJECT BRIEF

Demacon Market Studies were commissioned by Tony De Sousa to compile a comprehensive, specialist site-specific market study to establish the capacity of the local market to sustain a retail and office development situated in Pretoria North, Gauteng Province. It is our understanding that comprehensive mixed use market study is required with regard to Portion 157 of the farm Onderstepoort 300 JR (on which the use rights referred to as an “existing use”, have expired) and Portion 238 of the farm Wonderboom 302 JR. The optimum combination of potential Highest and Best land uses should therefore be ascertained, maintaining adequate flexibility pertaining to future expansions / developments, whilst minimising potential business objections that could be elicited from the market at large. In this context, it is understood that a township application needs to be lodged in order to re-establish the legality of existing uses, and cater to potential future expansions. A mixed use market study is therefore required to inform strategic planning and investment decisions, regarding the existing and potential Highest and Best mix of land uses, including a filling station (viability to be determined by Techworld Consulting Engineers), as well as commercial, business (shops) and ancillary light industrial land uses. In the context of the above, a comprehensive mixed use market study is required to assess the viability and optimum composition of a potential development concept in terms of, inter alia: Identify the optimum combination of highest and best uses (HBU’s) for the site (taking

due cognisance of development trends in the sub-region) Refine the above to a short list of potential activities / real estate markets to be analysed Demographic status quo and trends of the anticipated target market, including point of

origin, affordability levels, perceptions and preferences, etc. Local and sub-regional economic status quo and trends, including main economic

drivers in the region. Location analysis, including proximity of amenities SDF / Urban Design Framework Alignment Catalytic effect of new and / or comparable projects in the market Market activity and growth, including residential activity, sales and pricing analysis

(current values i.e. most recent market activity – primary research based data) Main competitors in the market, i.e. comparable projects aimed at similar target market Forecast take-up rates. Extrapolated market profile, i.e. future resident population (and demand implications for

ancillary facilities) Corresponding product offer and type Timing / phased implementation and optimum point of market entry Future demand thresholds and target markets Market potential assessment (including 5 and 10 year growth forecast)


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Recommendations, including land use mix and project size (including optimum size, quantified for each respective project component, product and pricing profiles, tenanting options, future growth and expansion potential, etc.

Demacon’s approach is purely market based and we will apply our extensive involvement and recent research and market intelligence on the subject matter to complement the market study.

1.3 STUDY AREA / SITE DELINEATION

The proposed development is situated on Portion 157 of the farm Onderstepoort 300 JR and Portion 238 of the farm Wonderboom 302 JR Portion 28. The total size of the land is approximately 8.5646 hectare. The site has been evaluated in terms of its retail and office potential according to a number of criteria as set out in Chapter 2. Map 1.1 provides the location of the Onderstepoort / Wonderboom in context of City of Tswhane Municipality.

1.4 REPORT OUTLINE

The remainder of the report is structured in terms of the following main headings: Chapter 2: Location Analysis Chapter 3: Economic Market Overview Chapter 4: Demographic Market Overview Chapter 5: Industrial Market Overview Chapter 6: Trade Market Overview Chapter 7: Retail Market Overview Chapter 8: Development Recommendations


11

Map 1.1: Location of Onderstepoort / Wonderboom in context of City of Tswhane Municipality

The following Chapter provides the location analysis.

Onderstepoort / Wonderboom Site


12

CHAPTER 2: LOCATION ANALYSIS

2.1 INTRODUCTION

Market potential is influenced by; inter alia, the characteristics of the various sites to be developed. Certain types of developments each have specific location requirements and should subsequently be assessed in terms of selected location criteria. To this effect, the site evaluation model is utilized. Subsequent paragraphs provide information in terms of the following heading:

Spatial Development Framework of North Eastern Region Developments in the North Building Plans Completed Development Site Assessment Synthesis

2.2 SPATIAL DEVELOPMENT FRAMEWORK OF NORTH EASTERN REGION

2.2.1 LOCALITY

The NER is situated northeast of the Tshwane CBD, to the north of the Magaliesberg and to the east of Akasia and Pretoria North (north western) It is accessible via:

The N1 freeway which runs north south along its eastern boundary and links the City of Tshwane with the Limpopo Province in the north and Johannesburg, Bloemfontein and Cape Town towards the south.

The Platinum Highway (PWV2), which links the region with the North West Province and Rustenburg in the west. This road forms part of the Maputo/ Walvis Bay Corridor.

The region is therefore accessible from a regional point of view as it is served by both north-south and east-west first order roads linking it to the rest of Gauteng and the broader region.

2.2.2 REGIONAL CHARACTERISTICS

The main regional characteristics of North Eastern Region are: That it consists of three major sections:

- The southern part, which is a low density formally, developed suburban area; - The middle section which is primarily undeveloped with an agricultural character; - The northern section accommodating low-income persons on relatively small individual erven.

The region has a rural character and low population density. The northern section, although urban in character, is not integrated with the larger urban

environment of the metropolitan area. However, there is still pressure for further development from the communities.

Very limited economic activities occur in this region, and it is not well integrated into the urban fabric. This is due to prevailing disadvantages to the north and limited accessibility.

The Apies River connects this area to the city and certain environmental linkages could be established with the adjacent Dinokeng area.

Limited intensive agriculture occurs along the Apies River.


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The restriction of north-south linkages in the region supports the significance of east-west movement systems.

The southern section has well developed nodes and economic areas. The area around the Kolonnade shopping centre has emerged as an area of economic

opportunity together with the strong linear development along Zambesi Drive. The Wonderboom Airport site has severe constraints in terms of expansion and the

location thereof is not optimal from a regional and long term perspective. The southern area of this region is identified as the Zone of Choice in the City

Development Strategy, implying that the area should enjoy focus for public-led investment opportunities.

2.2.3 FOCUS AREAS IN THE NORTH EASTERN REGION ITO SDF

The Strategic Development Framework is structured around eleven focus areas of intervention in specific areas linked to specific catalytic projects that should (re)direct the role of the Zone of Choice. The concepts are bold and some of the interventions drastic. To set the stage for sound economic, social, environmental and transport development, eleven key focus areas have been identified for the purpose of defining strategies and programs, namely:

Focus Area 1: Improve Access to the Zone of Choice Focus Area 2: Platinum Corridor (Development Zone) Focus Area 3: Bon Accord Dam (Development Zone) Focus Area 4: Rainbow Junction (Development Zone) Focus Area 5: Maximise Airport (Development Zone) Focus Area 6: Urban Cores (Development Zone) Focus Area 7: Activity Corridors (Development Zone) Focus Area 8: Encourage Higher Density Residential Development Focus Area 9: Enhancing the Natural Beauty of the Zone of Choice

Focus Area I: Improve Access to the Zone Of Choice The City can trigger a more equitable and integrated Tshwane through a series of high impact transport interventions affecting the development of the North. Transport and mobility play such a pivotal role in both opening up the North for development that it is raised as a strategic intervention in itself. The extension of the PWV9 southwards can open up a North-South axis for the flow of people and goods. Such an activity road will draw investors who want to capitalise on the mostly untapped development potential of the western reaches of the City. This attractive location is close to the capital core, and linked to its southern decentralised nodes and the Zone of Choice. This area will be built up progressively offering commercial opportunities and new housing options. Toll fees on the N1, from the N4 junction to Babelegi, presently hinder business development all along this corridor. The toll should be removed to allow free access between the Eastern Capital and the North. Industry in Babelegi will be revitalised and will profit from close functional connections to the Zone of Choice. The construction of a freight (and passenger) airport in the North (north of the N4, Hall’s Hill and the Doornpoort koppie, south of the railway line and directly west of the N1) would be a catalyst for wide ranging commercial/light industrial development. Such an investment will put the Zone of Choice prominently onto the provincial map as an asset for the region. The Zone of Choice is Tshwane’s meeting place for the North and the South. It is a developing gem of investment diversity which also provides an attractive living environment. In this role it can have a significant positive impact on the Gauteng economy as


14

a whole. The creation of a link between the Zone of Choice and the rest of Gauteng is important. Efficient public transport is an absolutely central element in the development of the North. This calls for the early establishment of a well-resourced Transport Authority. It proposes a direction for public transport users to improve their access and mobility: Conversion of freight lines to passenger rail (especially the line to Hammanskraal); New rail connections (deriving maximum potential from the construction of the PWV9 extension and the airport); Links to the route of the Gautrain New railway stations; New multi-nodal interchanges PWV9 road extension; and investment in bus transport and interchanges. Focus area 2: Platinum Corridor (Development Zone) The new Platinum Highway (N4) currently does little for economic development in the sense that the high visibility and accessibility is not utilised to its full potential. It moves trucks through the area with speed and efficiency, but it acts as a barrier to local flows of people and commerce. The Platinum Highway has the potential to become the backbone of the development in the Zone of Choice. Access to the areas on both sides of the N4 between the current on/off-ramps must be made more accessible. Businesses will gain an advantage by being close to and visible from the highway and its cross-roads. Over time, clusters of investment will bring new life along the road transforming it into a corridor of opportunity to support the local economy of Tshwane. The Area between the Rosslyn and Onderstepoort on/off-ramp has the highest development potential as large strips of land are visible between these two off ramps. Another area with high potential for commercial/light industrial development is the strip to the north of and adjacent to the Platinum corridor in close proximity to the “new” airport. Large areas along the Platinum Highway have limited development potential due to the fact that berms were erected to control the influence of noise along the highway. Focus area 3: Bon Accord Dam (Development Zone ) The City of Tshwane has many fine cultural, historical and natural assets. One such asset is the Bon Accord Dam, which is the closest large body of water to the city centre. Unfortunately, it has, to a large extent, been neglected over the years and has not reached its full potential. However, there are currently a series of initiatives underway aimed at shifting the focus of development towards the north and in this respect, the dam and its immediate surroundings can and should play a vital role. The dam itself covers an area of approximately 150ha. “Natural resources such as the koppies west of Bon Accord Dam, the dam itself and the Apies River floodplain will be protected through sensitive and regulated use in order to preserve their natural balance and to add value to the urban environment”. The dam itself as well as a portion around it belongs to the Bon Accord Irrigation Board. The rest of the area around the dam is privately owned. If the problem of provision of services can be overcome the area around the dam can be developed for mixed uses like medium to high residential, offices, restaurants etc. with a portion of the eastern shoreline reserved for picnic/water sport. Due to the high cost of the provision of services the target market will be the middle to high income groups. At present no bulk water is available and due to the fact that the dam lies in a basin, sewerage will have to be pumped, which is an expensive and ongoing exercise.


15

Focus area 4: Rainbow Junction (Development Zone) The proposed development will comprise an area of about 140 ha along the west bank of the Apies River just to the north of the Wonderboom Poort. The proposed development is seen as one of the flagship developments in the Zone of Choice. The development will be one of the largest developments in the north for the next few years. It can be expected that the development will result in a substantial economic investment in and around the sub region. The development will consist of a mixed uses such as motor related uses, office parks and higher density residential developments along the Apies River. Other uses within the development include retail, commercial, uses and hotel conference facilities. Focus area 5: Maximise Airport Spin-offs (Development Zone) The Wonderboom Airport is an important landmark in the Zone of Choice that can be a catalyst for commercial and light industrial development. It has the potential to become Tshwane’s and Gauteng’s (and even South Africa’s) gateway to Africa. It can be a boost for the automotive cluster’s export drive and at the same time save costs on the imports of the motor manufacturers. Hundreds and hundreds of jobs could be created at a new freight airport. Apart from a new freight airport, passenger flights to our neighbours (Botswana, Zambia, Zimbabwe, Mozambique etc and further north) will make Africa more accessible. The airport can also play an important role in the 2010 World Cup Soccer Tournament. In order for the above to happen, however, there are a few prerequisites: The proposed airport must gain international status, ie custom facilities. The airport must be upgraded. At the present position expanding opportunities for a freight airport are limited and even with the proposed 500m extension of the main runway, it will only be sufficient for the short to medium term. Such an upgraded airport will be neither fish nor flesh nor good herring. Noise pollution and strong public opposition to the proposed extension of the runway at the present position of the Wonderboom Airport must be taken into account when such a decision is made. It was suggested that Wonderboom Airport be retained at it’s present position as a small aircraft airport for inland traffic. An excellent position for a new airport with direct access to the N4 and visibility from the N1 is situated north of the N4, Hall’s Hill and the Doornpoort Koppies, directly west of the N1 and south of the railway line. This proposed location has new advantages over the present position of the existing Wonderboom Airport, namely: A proper new airport can be planned, Two main runways in excess of 4 kms can easily be accommodated in comparison to the

existing main runway of 1,8 km, at Wonderboom. The hills to the south of the locality can act as a barrier that will limit noise pollution to the

minimum, Rail facilities are available if required, The airport is more visible and accessible for passengers and freight, Travel time to Rosslyn and the automotive park is less, A highly visible and accessible strip of commercial/light industry can be created along the

N4 corridor, A small feasibility study for an airport at the proposed position has already been done, Approach and departure flight paths would not be over densely populated areas and last

but not least, Almost the whole property belongs to a single land owner

A detailed study would be necessary but the land must be reserved now and finance options must be investigated. The whole area north of Hall’s Hill koppies, the N1 and the railway line in


16

the north up to Lavender in the west should be set aside for the new freight airport. Freight airports usually attract a host of other related uses like an inland port, warehouses. Import/export businesses etc. The spin-offs for the Zone of Choice, the City and the region, can be enormous. In order to attract international interest and finance a bold decision should be taken by Council to support such an effort. (not necessary financial, most of the development costs will be borne by the private sector) Without certainty that the airport is supported by the City of Tshwane the private sector would not commit themselves financially. Focus area 6: Urban Cores (Development Zone) Urban Cores are activity nodes of metropolitan significance aimed at providing economic, social and residential opportunities in an integrated, vibrant, high-intensity, mixed-use and pedestrian friendly environment linked to public transport facilities and the highest level of accessibility. Three urban cores have been identified within the Zone of Choice in terms of the Metropolitan Spatial Development Framework. The three are namely the area around the Kolonnade centre, the Pretoria North/ Rainbow Junction area and the Akasia nodal area. The three urban core’s role in the future is to be the focus and highest concentration of residential, commercial, social, cultural and other urban activities. Higher density residential development should be encouraged specifically in and around the Urban Cores. All three urban nodes as mentioned above have been developed to a certain extent. In the future, precinct plans must be completed for the three urban cores which must include: the boundaries of each core, a development framework, streetscape design, plans to promote public transport and public open Space systems.

Focus area 7: Activity Corridors (Development Zone) Activity Corridors are seen as an important element in the functioning of the: Zone of Choice”. Activity Spines takes on a linear form and must be seen as an extension of the Urban Cores. Higher concentration of activities must be encouraged along these routes. Special emphasis should be placed on the provision of higher density residential development along these corridors. The linear development may be single or mixed land use in nature. One of the main functions of the corridor is to join the three urban cores. The major activity corridors in the Zone of Choice can be defined as: The Zambesi, K14, Ragel de Beer/ Brits Road connecting the three urban cores with one

another. In future more work will have to be done regarding access management along these

corridors. Focus area 8: Encourage Higher Density Residential Development The Zone of Choice is one of the best locations for residential opportunities as part of the process to restructure the City spatially. The areas along the Platinum Corridor and Metropolitan Corridors are specifically suitable for development of higher density housing. There are large tracts of derelict land or land underutilised. The area has a lot of development potential, because of the availability of land elsewhere and the new accessibility created by the N 4. Development pressures will become more significant in the Zone of Choice, the reasons therefore are that the south and eastern areas of Tshwane is nearly at capacity, and the available developable land has been acquired developers. Another reason for these pressures


17

is the availability of land on the “Holding scale” become scarce in the southern Tshwane area. Because of the location the holdings are serviceable, and most of the bulk infrastructure such as sewerage is available. The high density areas will not only be used for a network of active or passive recreational areas, but also community facilities such as clinics, day care facilities and nursery schools. Focus area 9: Enhancing the Natural Beauty of the Zone of Choice The strong natural setting provided by the koppies and mountains at the entrances from the north and south into the Zone of Choice must be enhanced by making them more accessible to the public while at the same time protecting them against development. The open space system must be linked and integrated – not only through urban forestry, but also functionally. The Pyramid koppies at the northern side of the Zone of Choice should be directly linked to the Magaliesberg by means of the Apies River, either over or under the existing road network. Some linkages already exist, but are poorly defined. The Magaliesberg west of the “poort” should be linked to the Wonderboom Nature Reserve via a bridge or underpass, at the same time creating another gateway into the city. The total open space area should be managed as one area, with different themes along the route and marketed as a major tourism attraction. The world renowned Onderstepoort Veterinary Research Institute should be consolidated and enhanced as a significant international asset of Tshwane’s within the Zone of Choice. This area should be protected from developments not related to the research function of the Institute.

2.2.4 PHYSICAL ENVIRONMENT NATURAL STRUCTURING ELEMENTS

The environmental features of The NER are major form giving elements that determine the surrounding urban structure. The Region is characterised by the following aspects: Significant ridge systems in the southern parts, notably the Magaliesberg, Halls Hills and

further north the Pyramid Hill system; Significant watercourse systems throughout, most notably the Apies River and Boepens

Spruit that flows into the Bon Accord dam and of lesser significance the Montana Spruit, Wonderboom Spruit and Kaalplaasspruit.

Several dams, that being the Bon Accord, Stinkwater, Temba Beach dams and wetlands at watercourse confluences of the Stinkwater Spruit and Apies River.

Protected Areas at the Wallmanstahl, Onderstepoort- and Wonderboom Nature Reserves. Ecologically sensitive areas associated with ridge and watercourse systems; Very little information on ecological sensitivities within the (previously) North-West Province

areas; Very little or no CoT maintenance actions around ridge and watercourse systems in

region’s northern parts; Very little CoT maintenance data on all types of open space resources; Very low ratio of developed open space, especially in the northern most extent of the

region; The absence of any significant regional recreational open space facility; Potential Place making opportunities around the Mabopane Highway, N1 and at the

proposed Urban and Metropolitan Cores for Kolonnade and Temba/Hammanskraal Station.


18

STRATEGIC LAND USES The region includes a few prominent land uses of strategic significance to the local as well as the broader urban environment of Tshwane and even on an international; level. These include: The Wonderboom Airport and Onderstepoort Veterinary Research Institute. Zone of Choice

NODES The region accommodates a number of retail nodes, mostly at community level, with the exception of the Kolonnade Shopping Centre. No major office nodes occur in the region and industrial uses are limited to a small area to the east of the N1 Highway, and Lavender Road to the north where a number of extensive industrial uses occur. LINEAR ACTIVITY AREAS Zambesi Drive in the southern part of the region connects a number of nodes. Linear development takes place along specific sections. Zambesi is a mobility as well as activity spine and it is of utmost importance that direct access to adjacent erven be limited as far as possible to maintain the mobility function. This is even more important in view of the phase 1B status of Zambesi as a BRT route RESIDENTIAL In terms of a city wide perspective the region has the following residential characteristics. (Source: Tshwane Metropolitan Profile and 2001 Census data). The region accommodates 17 % of the population of the metropolitan area in mostly single

residential units. The region has the lowest number of single dwelling houses. It also has a relatively small

number of group housing complexes and apartments. Housing in the Hamanskraal/Temba area is mostly subsidised or informal. Approximately 12 000 houses are located in the southern part of the region. There are 18 000 informal units in the region located in the Temba/Hammanskraal area. A large part of the southern and central areas of the region is undeveloped, with very low

development densities. Currently there are numerous applications for township establishment in the southern part

of the region (approximately 110) and the region is under pressure for development. Population densities throughout the region vary between:

10 persons per hectare around the Kolonnade. 5,2 persons per hectare in the remainder of the southern part of the region. 14,2 persons per hectare at the Hamanskraal/Temba area.

2.2.5 KEY ISSUES AND S.W.O.T. ANALYSIS

In order to determine the key issues and development opportunities for the area, a S.W.O.T. analysis for the region was done.


19

STRENGTHS The region has access to good man- made resources including:

The N1 and the PWV2 motor ways. The railway line to the north of the PWV2 (N4) and to the west. The Wonderboom Airport High quality residential opportunities with supporting infrastructure.

The region has ample space for development of residential facilities close to the built-up areas around good infrastructure.

It also has ample space to accommodate planned development of job opportunities, close to good regional access routes and rail infrastructure. WEAKNESSES

Poor internal linkages, especially east/west linkages, and access via the PWV 2 and N1 is

limited. Limited access through the Magaliesberg. Limited job opportunities.

OPPORTUNITIES Proposed new freight airport. Proposed Rainbow Junction. Bon Accord Dam. Residential expansion opportunities Upgrading opportunities of the railway line. The N4 presents opportunities for export related activities and possible job creation

THREATS Uncertainty regarding development initiatives, such as the proposed new freight airport and

Rainbow Junction. Tolling of the N1 and PWV 2.

ROLE AND FUNCTION The metropolitan role and function of the region is to: It provides residential opportunities for the total spectrum of the population. The area has been defined in the CDS as the Zone of Choice, which is the focus for public-

led investment opportunities. The Wonderboom Airport and proposed future freight airport could fulfil the need of the city

for an international airport. The region could fulfil the role of food producer within the metro. It accommodates large regional open spaces and therefore could play an important

conservation and recreational role. As a resource it holds large undeveloped areas, which could in future accommodate

growth.


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2.2.6 REGIONAL NODES

The RSDF indicates a number of nodes which are important on a regional and local level. The Tshwane Retail Strategy is applicable to these nodal developments. To ensure that prospective applicants who intend developing retail facilities sufficiently address all aspects in their applications for retail rights and are thoroughly briefed on all the requirements of the Municipality with regard to such developments, a pre-application consultation should be followed, where the following aspects will be addressed: Locational Requirements: Urban Design Parking requirements and layout Taxi ranks and public transport facilities Informal Trade Site development plans Studies.

A feasibility study will also be required for retail developments greater than 4000 square metres. The following tables provide a better overview of the retail aspects of the nodal developments. Table 2.1: Nodal development Variables Description:

Suburbs included in The NER Annlin, Babelegi, Bon Accord Dam, Doornpoort, Hammanskraal, Montana, Magalieskruin, Montana Tuine, Onderstepoort, Pyramid, Sinnoville, Stinkwater, Temba

Location This area forms part of the north-eastern sector of Greater Tshwane. The area also forms a secluded residential environment with the Wonderboom area to the west, the Magaliesberg forming a barrier to the south, the N1 freeway also forms a physical barrier at the moment to the east, and to the north the area will grow into the vacant land up to the N4 freeway.

Number of centres Total GLA of shopping centre space % of Total % of Total Expenditure

The area currently has 7 shopping centres, representing 8.4% of the retail space and 6.1% of the total available spending power. There is currently an inflow into the area mainly as a result of the dominance of the Kolonnade Shopping Centre.

Major Shopping Centres/Areas Kolonnade, Sinnoville Pick and Pay, Montana Crossing, Montana Traders, Builders Warehouse Node, Node around Makro, CTM, Wonderboom, Hammanskraal, Babelegi. Temba City

Dominant LSM classification LSM 9 Major retail classification A regional centre, Kolonnade cater for a wider

catchment area including areas north of the Magaliesberg as well as south of the Magaliesberg. The centre has a strong market, offering a very wide tenant mix as well as attractive entertainment facilities. (122 600m²)

Centre dominance: • Outflow • Inflow

The centre dominates in the north-western and north-eastern as well as in the Moot area. The primary catchment area shows outflows (although limited, ±10%) to mainly Menlyn Park Shopping


21

Variables Description:

Centre. Inflows occur from the entire area as indicated as well as from towns to the north of Kolonnade.

Dynamics of the area: • Residential growth • Other growth

The area shows very strong residential and retail growth, especially Zambesi Road. The residential growth in this area will continue at a faster rate than in the past. Applications submitted for 4000 residential units. The establishment of offices in this area has been very slow. A secondary office node/commercial node should be established, either in the vicinity of Kolonnade or as part of the proposed Rainbow Junction. The former forms a better destination for the secondary node. Rainbow Junction is not necessarily the best location at the moment but could develop over time.

Profile of the Region:

High growth rapid development area. Middle and High Income population Applications submitted for 4000 residential units Development concentrated south of the Platinum (N4) Highway. Rapid expansion of this

area. The development of the area north of the Platinum (N4) Highway is very slow. The future of

Wonderboom Airport and the proposed International Airport will have significant influence on this area.

Cognisance must be taken of existing developments in the Nokeng area – shopping centre located at the intersection of the Moloto Road and Zambesi Drive - 25 000 m² approved, first phase developed.

High Income developments near Roodeplaat dam Area

2.2.7 MAJOR EMPLOYMENT OPPORTUNITY AREAS

The introduction of land uses that will create job opportunities in the NER was one of the primary development objectives of the CDS and Zone of Choice and is confirmed in this framework. Job creation in this region is entrenched in the CDS in which the “Zone of Choice” was demarcated including the entire area to south of the PWV2. (N4) The development directives of the Zone of Choice are accepted for this framework and should be read together with the strategic documents. Over and above the nodes discussed in the preceding paragraphs, the following job opportunity focus areas are recognised:

INDUSTRIAL / MIXED USE AREAS New Proposed Tshwane Freight Airport (TIFA) The development of a new proposed freight airport to this area will be a major catalyst in achieving this objective. Major supporting transport infrastructure including the PWV 2, N1 and railway line are in place and only internal transport and service infrastructure will be required in support of the development.


22

A detail development framework should be prepared for the new airport area, incorporating the airport, industrial area, the associated node, highdensity residential areas and any other supporting land uses, including an inland port. A section of the PWV 2 metropolitan development corridor is included in this area and appropriate land uses should be identified in the compilation of a precinct plan for the strategic area. Bon Accord Area The locality of a dam is unique in this area and presents opportunities for urban development. The development around the dam can include mixed uses linking it through to the Rainbow Junction area. Onderstepoort The Onderstepoort Institute is already an area of job opportunities and should be supported and encouraged through the provision of proper supporting services. The area south of the PWV2 and north of the railway line is proposed as a mixed use area including light industrial, high tech industrial, warehouses and residential infill development. This area should link Bon Accord Dam to Rainbow Junction. Lavender Road The existing light industrial ribbon that has developed along Lavender Road is recognised in the framework as an area with job opportunities, but should be restricted to the area located along Lavender Road up to the proposed K97. Derdepoort Area The area located at the intersection of the N1 Highway with Zambesi Drive has responded to the good locational advantages of the area and numerous light industrial uses have developed in this area. It is proposed that light industrial uses be permitted in this area to the south of Dewar Avenue and east of Breed Street up to the Old Molotto Road and R 573 (Moloto Road). The industrial uses should be permitted in this area subject to site development plans illustrating measures to mitigate possible negative impact on surrounding land uses. The area to the north of the mid-block line between Sakabuka and Dewar Avenue should be earmarked for Future Urban Development.


23

Map 2.1: Tshwane Densification Plan: North East Region


24

Map 2.2: Tshwane Spatial Development Framework


25

2.3 DEVELOPMENTS IN THE NORTH

Subsequent paragraphs indicate new residential developments in and around the area. GREATER MONTANA AREA The following table indicates the residential estates in the Montana Gardens area: Table 2.2: Residential developments

Residential Estate Number of stands / units /

21 Zambesi 300 stack units

Twee Riviere 840 houses

Bougainvillea Estate 164 stands

Montana Tuine 400 houses

Green Acres 200 houses

Rose Acres 240 houses

Doornpoort Ext 40 400 low density units

Flam and Grimson Manor 110 stack units

Montana Ext 50, 53 600 stack units

Prime Manor 530 houses

Zambesi Retirement Village 134 houses

Montana Retirement Village 320 houses

The following table provides more detail of selected developments from the above table. Table 2.3: Developments

NAME OF DEVELOPMENT DESCRIPTION

21 ZAMBEZI ESTATE

Location: Zambezi Drive, Montana Ext 19 & Ext 21

Description:

Number of units: 300 stack units

Size of units: 58m2 – 117m

2

Prices: (2 bed, 1 bath): R595,000 (2 bed, 2 bath): R665,000 (3 bed, 2 bath): R750,000


26


TWO RIVERS (PHASE 1)

TWO RIVERS RETIREMENT VILLAGE

Location: Bougainvillea Street, Montana Ext 50 Location map:

Description:

Types: Duplex & Simplex Bedrooms: 2 & 3 Bathrooms: 2

Phase 1: 156 units

Total Number of Units: 590 low density

Size of units: 90m

2 - 170m

2

Prizes: R600,000 - R900,000

Location: Breedt Street, Montana Description:

Type: Stack simplexes 2 Bedrooms / 1 bathroom 2 Bedrooms / 2 bathrooms

Phase 1: 250 units

Later phases: addition 200 units

Sizes:58m2 - 84m

2

Prizes from R400,000 (not definite yet) Summary of Selling Prices: Assisted Living Apartment (bachelor unit) selling sectional title units from R425 000

One bedroom apartment selling from R485 000

One bedroom apartment (covered patio) selling from R565 000

Two bedroom apartment selling from R599 000

One bedroom simplex selling from R675 000

Two bedroom simplex selling from R739 000

Three bedroom simplex selling from R960 000


27


BOUGAINVILLA ESTATE

Location: Bougainvillae Street Description:

1st phase 3-5 November 2006

Bedrooms: 3

Dubble entertainment

Braai and patio

MONTANA SECURITY DEVELOPMENT

Location: Bougainvillae Street

Description: Prime Manor

Type: Duplex Unit

Bedrooms: 3

Bathrooms: 2

Garages: Double garage,

Prize: R930,000 Ninas Manor

Type: Double & single storey

Bedrooms: 2

Bathrooms: 2 Genoa Manor

Type: Simplex Unit

Bedrooms: 2

Bathrooms: 1

Garages: Double covered parking

Prize: R728,150 Flame Manor

Type: Lofts apartments

Bedrooms: 2

Bathrooms: 1

Prize: R495,000 Crimson Manor

Type: Duplex units

Bedrooms: 2

Bathrooms: 1


28


Prime Manor

Type: Double storey

3 bedroom units

2 bathrooms

In total 164 stands

Dubble entertainment

Braai and patio

LACTARIUS RESIDENTIAL DEVELOPMENT

Location: Corner of Breedt & Bougainvilla Street, Portion 1690, Montana Tuine X53

Description:

Types of units: Duplex and Simplex

Bedrooms: 2 and 3 bedroom units

Sectional title units

Prizes: From R779,000

Securing deposit: R5,000

Number of units: 31

Size of units: 120m2 - 170m

2

ZAMBEZI COUNTRY ESTATE

Location: Zambezi Road, Montana

Description:

Stand sizes: 500m2 – 2 000m

2

Average stand prices: R425,000 (±900m2)

Full title stands

Size: The average stand size ranges between 700m

2 and 2000m

2.


29


NUMANTI RESIDENTIAL DEVELOPMENT

Location: Breedt & Bougainville Road, Montana Tuine

Description:

37 Sectional Title Units

Up market Development in Zambezi Country Estate

Phase 4

Loose Standing Units with Garden

Various Plans to Choose From

Quality Finishes

Excellent Security

R5,000 To Secure your Investment

Price: From R665,000

NAVARINO

Location: Breedt & Bougainville Road, Portion 1695, Montana Tuine X53 Description:

Security Complex in Zambezi Country Estate, Phase 4

45 Sectional Title Units

Upmarket Development

Loose Standing Units with Own Private Garden

Various Plans and Quality Finishes to Choose From

R5,000 To Secure your Investment

Average size of units: 96m2 – 148m

2

HALALI RESIDENTIAL DEVELOPMENT

Location: Situated in Montana Description:

Bedroom units: 2 Bedroom Duplex with1 Garage or 3 Bedroom Simplex with 2 Garages

Units priced from R695,000


30


Sectional Title Security Complex

RESIDENTIAL DEVELOPMENT Location: Montana Extension 133 Description:

Number of units:± 50 units

To be completed 2010

MONTANA TUINE CLUSTER DEVELOPMENT Location: Montana Tuine Description:

Cluster units planned

Number of units: 1,400 units One-third to be completed by 2010

STRELITZIA RESIDENTIAL DEVELOPMENT Location: East of the N1 between the Molotto Road and Kameeldrif Road Description:

332 full title erven

Ranging between R650,000 and R1,200,000

701 sectional title units Ranging between R400,000 and R750,000

The following tables indicate developments in the Wonderboom area. GREATER WONDERBOOM AREA

Table 2.4: Developments in the greater Wonderboom area


HEATHERVIEW ESTATE

Location: Situated north of Pretoria


31


Description:

24 Hour Security Complex

Number of units: 106 full title stands

Average unit prize R270 000 each (all costs included)

Average stands size from 425m²

PARKWOOD ESTATE

Location: Situated north of Pretoria Description:

Unit Types: 1 Bedroom units, 1 bathroom, covered parking. 2 Bedroom units, 2 bathroom, covered parking. 2 bedrooms, 1 bathroom, 1 carport

3 bedroom units, 2 bathrooms, covered parking.

Starting Unit Prize: R329,900

MOOIPLAAS COUNTRY ESTATE

Location: Mooiplaas Country Estate is situated in Montana in 3rd Street close to Dr. Swanepoel road. Description:

Phase 1: i) Bachelors units (6 units available) Unit sizes: 49m

2

Unit price: R445,000 ii) One bedroom units (6 units available)

Unit sizes: 55m2

Unit prices: R510,000 iii) Two bedroom units (1

st 9 investors)

Unit size: 77m2

Unit prices: R595,000 iv) Two bedroom units (remaining) Unit pricing: R615,000

Phase 2: i) One bedroom units (34 units available)

Unit sizes: 55m2

Unit prices: R530,000 ii) Two bedroom units (1st 9 investors) Unit size: 77m

2

Unit prices: R615,000 – R640,000

SOSHANGUVE Ext 6 (THORNTREE VIEW)

Location: Located north of the Rosslyn industrial area Description:

Affordable housing project funded by Nedbank for the top structure construction of 775 homes.

Forms part of 850 hectares of land.

31,000 housing units along with social and economic amenities


32


775 plots will be fully services and range in size from 250m

2 – 380m

2

Stand prices for 1st phase fixed at R114,000

and package prices ranging from R250,000+.

MAGALIESBERG COUNTRY ESTATE

Location:

Description:

Full title stands from R365,000

Duet houses from R1,350,000

Houses from R1,425,000

Townhouses from R559,000

Stand sizes from 600m2 to 3000m

2

Communal entertainment area and clubhouse

EDEN VILLAGE

Location: Pretoria North

Description:

Uniquely designed bachelors, 1 or 2 bedroom units

From R319 500

HINDON HOUSE

Location: Pretoria North Description:

27 Walk-up units with 2 bedrooms

ORCHARDS EXT 48

Location: Corner of Longmore street and Deetlefs avenue. (Orchards, Akasia). Description:

Building package on full title stands – 300m2

House sizes from 50m2 to 85m

2

Development is in its 5 phase with 3 more to follow.

Each phase consists of about 350 stands.

Its target is the Affordable market.

Packages start from R370 000 for 2Bed, 1Bath, and R410 000 for 3 Bed, 1 Bath.

http://www.proteameast.co.za/magalies_dev/directions_mag.aspx


33


YELLOW WOOD

Location: Theresa Park (next to Wild Olive)

Description:

Now selling phase 2

2 bedrooms, 1 bathroom

3 bedrooms, 2 bathrooms

Unit prices: R475,000

Luxury 3 bedroom units from R691,950

THERESAPARK ESTATE

Location: Theresapark Estate is situated in Pretoria North across from the Gerrit Martiz High School. Description:

The units available are sectional title units ranging from one and two bedrooms and sizes varying from 37m² to 55m².

The estate is close to all amenities such as the N4 highway and Wonder Park shopping mall, which only adds convenience.

With prices starting from R380 000.00

PEBBLE ROCK

Location: Wonderboom, close to Roodeplaat Dam and Sable Hills Description:

R500 million under construction

Golf course over 6000 metres.

Consists of approximately 300 stands ranging from +- 900 sq metre to 1400 sq metres

404 units

R450,000 – R1 million per erf.


34


WONDERPARK ESTATE

Location: Pretoria North - Wonderpark Estate

Description:

Phase 10 now available

Total site: 1,480 units

Starting price R449,900

Unit types: stack simplex

Studio apartments: 1 bedroom, 1 bathroom

2 Bedroom units incl: 2bed, 1 bath, 1 carport 2 bed, 2 bath, 2 carports

3 Bedroom units incl: 3 bed, 2 bath, 2 carports

FAIRWAY GARDENS

Description: Complexes within Fairview Gardens Estate are Parkwood, Parkmeadow and Park Crescent as indicated below. Location:


35


PARKWOOD

Location: Pretoria North - Fairway Gardens Estate

Description:

M&T Development introduce to you the first development in this sectional-title lifestyle complex. Parkwood offers a great variety of units from the entry level bachelors to 3 bedroom units.

1 Bedroom Units Inc: 1 Bedroom / 1 Bathroom, Covered Parking

2 Bedroom Units Inc: 2 Bedrooms / 2 Bathrooms, Covered Parking

3 Bedroom Units Inc: 3 Bedrooms / 2 Bathrooms, Covered Parking

PARK CRESCENT

Location: Pretoria North, The Orchards - Fairway Gardens Estate

Description:

Phase 2 now launching

The second complex of its kind in the Orchards area.


36


PARK MEADOW

Location:

Pretoria North - Fairway Gardens Estate

Description:

Starting Price: ZAR 469

Unit Types: Stack Simplex

2 Bedroom Units Inc: 2 Bedrooms / 1 Bathroom / 1 Garage

AVANTE COUNTRY ESTATE

Location:

Description

Starting Price: ZAR 315,000

Full title stands

Estate Features: Close to all amenities Swimming pool Creche Club house Entertainment Area

LAVENDER ESTATE

Location:


37


Description

Starting Price: ZAR 326,000

Full title stands

Residential 1 (option to build 2 units)

Residential 2 (30 unit / ha)

Estate Features: Close to all amenities Swimming pool Creche Club house Entertainment Area

ONDERSTEPOORT AREA

Onderstepoort X9, Bon Accord Dam First phase on western side of the Bon Accord Dam and consists of 300 residential units

2.4 BUILDING PLANS COMPLETED

2.4.1 KEY FINDINGS REGARDING BUILDINGS COMPLETED FOR GAUTENG FOR 2010 The total value of buildings completed during 2010 for Gauteng amounted to R17 807,9 million, of which 33,9% or R6 030,4 million was recorded as completed for City of Tshwane, 31,9% or R5 675,5 million for City of Johannesburg and 26,4% or R4 709,8 million for Ekurhuleni Metropolitan Municipality. Figure 2.1 – Value of buildings completed for Gauteng for 2010 by municipality

Source: Demacon ex Statssa

City of Tswhane, 6,030.4

City of Johannesburg, 5,675.5

Ekurhuleni, 4,709.8

Kungwini, 374.0

Emfuleni, 363.4

Midvaal, 334.0 Mogale City, 96.6

Randfontein, 88.2

Lesedi, 72.7

Merafong City, 63.3

Gauteng Building Plans Completed ('million)


38

Figure 2.2 – Percentage contribution by type of building to the total value of buildings completed during 2010 for Gauteng

Source: Demacon ex Statssa The value of dwelling-houses and flats and townhouses completed in Gauteng during 2010 contributed 35,3% or R6 284,4 million and 13,2% or R2 353,2 million respectively to the total value of buildings completed. The highest value for dwelling-houses completed was reported for City of Johannesburg (R2 094,2 million), followed by City of Tshwane (R1 874,1 million) and Ekurhuleni Metropolitan Municipality (R1 435,0 million). Regarding flats and townhouses, Ekurhuleni Metropolitan Municipality took the lead recording the completion of R960,3 million, followed by City of Tshwane (R659,0 million) and City of Johannesburg (R562,5 million). The main categories of non-residential buildings which made noteworthy contributions to the total value of buildings completed for Gauteng were office and banking space (12,3% or R2 197,8 million), industrial and warehouse space (9,3% or R1 663,6 million) and shopping space (5,8% or R1 031,2 million). 2.4.2 BUILDING PLANS COMPLETED FOR CITY OF TSHWANE MUNICIPALITY 2010 The following table indicate the buildings reported as completed within City of Tshwane Municipal area, in terms of residential buildings, non-residential buildings as well as additions and alterations. Table 2.5: Buildings completed – City of Tshwane Municipality

Residential buildings

Non-residential buildings

Additions and alterations Buildings

reported as completed

Year Total square

metres

No of

buildings

Total square metres

No of plans

Total square metres

Total square metres

2004 810,911 79 202,637 899 122,294 1,135,842

2005 939,332 74 165,287 835 94,468 1,199,087

2006 1,202,223 107 220,952 884 96,295 1,519,470

2007 1,005,471 103 317,809 777 101,917 1,425,197

2008 1,094,686 138 383,190 1,199 107,302 1,585,178

Dwelling houses, 35.3% Additions and

alterations, 19.7%

Flats and townhouses, 13.2%

Office and banking space, 12.3%

Industrial and warehouse space, 9.3%

Shopping space, 5.8%

Other residential buildings, 2.2%

Other non-residential buildings, 2.0%

Percentage Contribution


39



Additions and alterations Buildings

reported as completed

Year Total square

metres

No of

buildings

Total square metres

No of plans

Total square metres

Total square metres

2009 687,977 100 504,145 990 120,946 1,313,088

2010 484,051 158 430,325 701 78,785 993,161 Source: Demacon ex StatsSA

The following table provide more detail on City of Tshwane regions 2010. Table 2.6: Buildings completed – City of Tshwane Municipality Regions 2010



Additions and alterations

Buildings reported as completed


REGIONS Total

square metres

No of buildings

Total square metres

No of plans Total

square metres

Total square metres

Central Western Region

76,869 32 57,743 226 30,702 165,314

Eastern Region 88,650 36 145,472 188 19,323 253,445

North Eastern Region

53,407 16 28,070 49 6,150 87,627

North Western Region

81,026 24 12,012 56 5,195 98,233

Southern Region

184,099 50 187,028 182 17,415 388,542

City of Tshwane

484,051 158 430,325 701 78,785 993,161

The following figures indicate the residential buildings and non-residential building reported as completed in the City of Tshwane Municipal area. Residential buildings completed (City of Tshwane Municipality)

Figure 2.3: Residential Buildings Completed (total sqm)

Source: Demacon ex StatsSa

810,911

939,332

1,202,223

1,005,471

1,094,686

687,977

484,051

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2004 2005 2006 2007 2008 2009 2010

Sq

ua

re m

etr

es

Year

Residential buildings reported as completed (City of Tshwane Municipality)


40

Non-Residential buildings completed (City of Tshwane Municipality) Figure 2.4: Non-Residential Buildings Completed (total sqm)

Source: Demacon ex StatsSA Dwelling Houses & Flats and Townhouses Completed

Figure 2.5: Dwelling Houses, Flats and Townhouses Completed

Source: Demacon ex StatsSA

202,637 165,287

220,952

317,809

383,190

504,145

430,325

0

100,000

200,000

300,000

400,000

500,000

600,000

2004 2005 2006 2007 2008 2009 2010

Sq

ua

re m

etr

es

Year

Non-Residential buildings reported as completed (City of Tshwane Municipality)

2,244

4,626

6,619

5,571

3,599

2,578 2,510

2,185

3,332

3,913 3,920

5,469

2,427

1,117

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2004 2005 2006 2007 2008 2009 2010

Nu

mb

er

of

dw

ell

ing

un

its

Dwelling houses, flats and townhouses


41

The following table provide City of Tshwane regions in terms of the 2010 dwelling houses and flats and townhouses reported as completed. Table 2.7: City of Tshwane regions (2010)

Regions Dwelling houses Flats & Townhouses

Central Western Region 245 431

Eastern Region 511 174

North Eastern Region 136 109

North Western Region 978 56

Southern Region 640 347

City of Tshwane total 2,510 1,117 Source: Demacon ex StatsSA

Residential building completed by size of dwelling

The following table indicates residential buildings completed by size of dwelling. Table 2.8: Residential buildings completed by size of dwelling house (City of Tshwane)

Year Smaller than 80sqm Equal to or larger than 80sqm Total dwelling houses

2004 443 1,801 2,244 2005 3,036 1,590 4,626 2006 4,453 2,166 6,619 2007 3,392 1,979 5,571 2008 1,609 1,990 3,599 2009 1,328 1,250 2,578 2010 1,449 1060 2,510


Figure 2.6: Number dwelling houses completed by size (City of Tshwane regions 2010)


100

354

11

774

210

1,449

145 157 125 203

430

1,060

245

511

136

978

640

2,510

0

500

1000

1500

2000

2500

3000

CentralWestern Region

Eastern Region North EasternRegion

North WesternRegion

SouthernRegion

City of TshwaneTotal

Nu

mb

er

of

dw

ellin

g h

ou

se

s

Number of dwelling houses completed by size

Larger than 30 sqm and smaller than 80 sqm Equal or larger than 80sqm

Dwelling houses reported as completed


42

Table 2.9: Residential buildings completed by size of dwelling house (City of Tshwane regions)

Larger than 30 sqm and smaller than 80

sqm Equal or larger than

80sqm

Dwelling houses reported as completed

Central Western Region 100 145 245

Eastern Region 354 157 511

North Eastern Region 11 125 136

North Western Region 774 203 978

Southern Region 210 430 640

City of Tshwane Total 1,449 1,060 2,510 Source: Demacon ex StatsSA Non-residential buildings Completed Table 2.10: Non-Residential buildings completed

Office and banking space Shopping space

Industrial and warehouse space

Year Number of buildings

Total square metres

Number of buildings

Total square metres

Number of buildings

Total square metres

2004 18 37,424 12 28,677 43 124,626 2005 13 62,242 23 43,327 32 57,906 2006 19 39,929 53 121,748 30 55,939 2007 29 81,184 31 114,423 37 118,910 2008 34 131,033 54 134,691 33 94,064 2009 23 169,026 40 232,818 28 67,157 2010 23 163,103 55 128,022 65 94,545 Source: Demacon ex StatsSA

Figure 2.7: Non-residential space


2004 2005 2006 2007 2008 2009 2010

Office and banking space 37,424 62,242 39,929 81,184 131,033 169,026 169,026

Shopping space 28,677 43,327 121,748 114,423 134,691 232,818 232,818

Industrial and warehousespace

124,626 57,906 55,939 118,910 94,064 67,157 67,157

-

50,000

100,000

150,000

200,000

250,000

Sq

ua

re m

etr

es

(s

qm

)

Non-residential space reported as completed (City of Tshwane Municipality)


43

Table 2.11: Non-Residential buildings completed (City of Tshwane regions (2010)

Office and banking space

Shopping space Industrial and warehouse

space

Number of buildings

Total square metres

Number of

buildings

Total square metres

Number of buildings

Total square metres

Central Western Region

7 18,019 12 16,003 7 12,262

Eastern Region 9 62,796 11 45,012 11 19,051

North Eastern Region

5 8,206 9 16,698 2 3,166

North Western Region

- - 20 7,431 4 4,581

Southern Region 2 74,082 3 42,878 41 55,485 Source: Demacon ex StatsSA Figure 2.8: Non-residential space (City of Tshwane regions 2010)


2.5 LOCAL RESIDENTIAL GROWTH AREAS

The following map indicates all the new and existing residential growth areas for 2001, 2005, and 2009. The formal residential units in 2009 are indicated in red – this is where new development took place. As seen within the trade area, a small percentage of new development was in a northern direction.

CentralWesternRegion

EasternRegion

NorthEasternRegion

NorthWesternRegion

SouthernRegion

Office and banking space 18,019 62,796 8,206 - 74,082

Shopping space 16,003 45,012 16,698 7,431 42,878

Industrial and warehousespace

12,262 19,051 3,166 4,581 55,485

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Sq

ua

re m

etr

es

(s

qm

)

Non-residential space reported as completed (City of Tshwane Municipality)


44

Map 2.3: Growth areas


45

2.6 DEVELOPMENT SITE ASSESSMENT

The Demacon model is pragmatic and is based on the assignment of values to various location factors. Firstly, the site is evaluated on a ten-point scale, with ten being the highest. Secondly, weights are attached to these factors, in order of importance (1 to 5, with 5 being the most important). In the context of preceding citywide and local analyses, Demacon was requested to rate a number of potential sites for future investment purposes. The preceding economic analysis, coupled to knowledge of local City of Tshwane Metropolitan Municipality and surrounding urban markets will enable an in-depth analysis. The following maps indicate the delineation of Onderstepoort Site and the proposed Township Site Portions. The proposed development is situated on Portion 157 of the farm Onderstepoort 300 JR and Portion 238 of the farm Wonderboom 302 JR Portion 28. The total size of the land is approximately 8.5646 hectare. Map 2.4: Delineation of Onderstepoort Development Site


46

INDUSTRIAL ASSESSMENT Table 2.12: Industrial Assessment Location Factors Grade 1-10 Weight 1-5 Points

Address Value 7 3 21

Accessibility 8 5 40

Visibility 8 4 32

Proximity to Key Transport Infrastructure - Airport, Port, Railway 8 5 40

Proximity to freeways 7 5 35

Centrality to Market Area 7 5 35

New / Emerging Industrial Node / Corridor 6 4 24

Functional and Complimentary Uses 7 4 28

Abscence of Competitive Products - Market Gap 6 4 24

Proximity to Labour Force - unskilled, semi-skilled and skilld 6 4 24

Available Infrastructure 7 4 28

Availability of Land 7 3 21

Future Expansion Potential 7 4 28

Perceived Level of Security 7 4 28

Located in Direct Line of Growth 7 4 28 Total Points 436 SCORE 70.3% Source: Demacon, 2011

* Note: 80%+ indicates an exceptional site rating; a site rating of 70 – 80% is high and indicates that most important fundamentals for a successful industrial development are in place; a rating of 60 – 70% indicates some critical factors may be lacking but could possibly be addressed; projects with a sub 60% rating are not recommended for consideration. RETAIL / TRADE ASSESSMENT

Table 2.13: Retail / trade assessment Location Factors Grade 1-10 Weight 1-5 Points

Consumer Volumes 7 5 35

Income / LSM profile 7 5 35

Population Growth 6 4 24

Visibility 8 4 32

Accessibility 8 4 32

Functional & Complimentary Uses 7 3 21

Effective Market Gap 7 4 28

Proximity to Intermodal Facilities, e.g. BRT Route, Gautrain, Rail/Taxi/Bus terminus

5 3 15

Address Value 7 4 28

Availability of Land 7 4 28

Future Expansion Potential 7 4 28

Diectional Growth of Area 7 4 28

Proximity to Labour 7 3 21

Proximity to Suppliers 7 3 21

Perceived Level of Security 7 4 28

Total Points 404

SCORE 69.7% Source: Demacon, 2011

* Note: 80%+ indicates an exceptional site rating; a site rating of 70 – 80% is high and indicates that most important fundamentals for a successful retail / trade development are in place; a rating of 60 – 70% indicates some critical factors may be lacking but could possibly be addressed; projects with a sub 60% rating are not recommended for consideration.


47

2.7 SYNTHESIS

Preceding paragraphs analyzed the site in terms of its retail / trade and industrial potential. The development poses unique investment benefits and challenges. Findings of the location assessment can be summarised as follows: Table 2.14: Summary of Site Evaluation Results:

Proposed Land Use Percentage

Retail Development 69.7%

Industrial Development 70.3%

* Note: 80%+ indicates an exceptional site rating; a site rating of 70 – 80% is high and indicates that most important fundamentals for successful business / retail development are in place; a rating of 60 – 70% indicates some critical factors may be lacking but could possibly be addressed; projects with a sub 60% rating are not recommended for consideration.


48

CHAPTER 3 ECONOMIC PROFILE

3.1 INTRODUCTION

An intricate, though well defined relationship exists between the economy and urban real estate markets. The performance of specific economic sectors serves as proxy for the performance of these real estate markets. The purpose of this chapter is to outline the salient features of the market area economy (comprised of Pretoria local economy) in terms of selected time series economic indicators; most notably the economic profile and growth trends within the local economy. As such, this chapter provides insight into the composition and stability of the local economies and hence, provides a more comprehensive assessment of medium- to long-term investment prospects than the conventional demographic analysis. Subsequent sub-sections provide a concise overview of the local economy in terms of the following aspects: Reference Framework Macroeconomic Fundamentals Local Economic Trends Synthesis

3.2 REFERENCE FRAMEWORK

The causal relationship between economic sector performance and property market performance is illustrated in Diagram 3.1. Diagram 3.1: Causal Relationship between Economic Performance and Property Sectors

© 2010 H du Toit, MSc,PhD


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Indicators such as production, inflation, interest rates and exchange rates influence Personal Consumption Expenditure (PCE). PCE is a major demand driver for a broad spectrum of economic goods and services, including retail and accommodation. Gross Geographic Product (GGP), in turn, serves as leading indicator for property market performance.

3.3 MACROECONOMIC OVERVIEW

In terms of broad macroeconomic trends, the following are some of the dominant trends regarding the national economy and the impact of macroeconomic indicators on the property sector. Table 3.1: Macroeconomic Indicators

Trend Short to medium term implications

Economic growth forecast of 3.4% for 2011

Rand appreciated significantly from 2008 (R/$ R8.22, R/£ R15.06), however forecasts for 2010 reveal a weaker rand for 2011: (R/$ R7.46, R/£ R11.22, €/R R9.56)

Stabilising inflation (lowest since 1960s, between 3% - 6% range) – average of 4.3% expected for 2011

Current prime interest rates (9.0%) Economy had grown by 2.8% in 2010.

Strong commodity prices, low interest rates and faster global growth had been the main forces behind the economic recovery

Interest Rate expected to rise end 2011

Strong growth predicted in lower end of property sector, with a recovery expected in 2010

Decreasing growth in house price index Strong demand from growing black middle

class Foreign demand for South African property

remain buoyant

After rising markedly in the first half of the 2010, nominal and real house price growth slowed down in the third quarter of the year, driven by base effects as well as recent economic developments.

Nominal house price growth of about 7% was recorded for 2010, with 2011 price growth to remain low. Real house price growth in the rest of 2010 and in 2011 will depend on nominal price trends as well as consumer price inflation.

The affordability of housing improved in the first half of 2010 as a result of developments with regard to interest rates, household income and house prices during this period. This is according to the latest trends in the ratios of house prices and mortgage repayments to household disposable income.

The ratio of net household saving to disposable income was at a level of -0.2% in the second quarter of 2010. As a result of this situation with regard to saving, the household sector has technically no surplus funds available to access in times of financial difficulty.

Stabilisation in house prices reflect positive increase in residential demand, inducing increased fixed capital formation in residential property

Annual reductions in transfer duties on property as from 1 March 2006 – no transfer duty payable on property valued at R500 000 and less

Abolition of stamp duty on mortgage bonds from 1 March 2004

Higher real disposable income Increase in household expenditure, with

emphasis on middle and lower income groups

Household disposable income increased by a real annualised rate of 4,8% q/q in the second quarter of the year, which was somewhat lower than the 5,1% q/q

Initial market sentiment is that property affordability will not improve significantly under present conditions

Although house price growth is tapering off,


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Trend Short to medium term implications

registered in the first quarter.

prices are set to remain at high levels Growth will remain strong in selected

locations During 2010 the MPC used the space

provided by lower inflation forecasts to cut interest rates by a further 150bp. There will be little room for further cuts in 2011, but at the same time little compelling need to begin to hike rates before early 2012.

The government’s New Growth Path puts job creation at the centre of policymaking, though finding agreement from all stakeholders on the policy specifics could remain elusive.

The ratio of household debt to disposable income was only marginally lower at 78.2% in the second quarter 2010 from 78.7% in the first quarter. The slightly lower second-quarter debt ratio was the net result of household debt increasing by 1.4% q/q, whereas nominal household disposable income increased by 2% q/q in the quarter.

3.3.1 Q 3 2011 SA QUARTERLY PERSPECTIVES – ABSA CAPITAL1

The Inflation Versus Growth Debate GDP kicked off the year at a robust 4.8% q/q (Q1 11) and while the composition of growth

still remains somewhat uneven in 2011, it is expected that the investment-side of the economy will likely contribute more meaningfully to economic growth in 2012.

Together with sustained consumption and rising inflation, this means that before long, policy rates are likely to ‘normalise’. Q3 11 will bring about an even more robust debate about the timing of the first rate hike.

The momentum of GDP growth is forecasted to slow somewhat in H2 11 for not only is a strong and consistent pace of 4.5% q/q and 4.8% q/q (in Q4 10 and Q4 11 respectively) difficult to maintain, but also as a result of projected slowdown for Q2 11 global economic growth.

Vis-à-vis the magnitude for the coming rate cycle, Absa Capital forecast that the repo rate will ultimately be hiked by around 200bp as the SA Reserve Bank searches for a level of normalisation.

Critically, we have pencilled in an uninterrupted pace of 50bp rate hikes at each meeting between January and July 2012 but, there is a clear risk that alongside the belief that economies have moved to a ‘new normal’ the SARB may pause between meetings to assess economic conditions carefully.

Table 3.2: Key South African Forecasts

.

1 Source: Absa Capital, July 2011: 2011 Q3 South Africa Quarterly Perspective


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3.3.2 RECENT DEVELOPMENTS IN SOUTH AFRICA2 Real GDP Growth The South African economy reported yet another solid performance in the first quarter of the

year, as real GDP expanded at a brisk 4.8% rate, on a quarterly and annualised basis. Although growth became more broad-based across various economic sectors during the

course of last year, it is clear that most of the impetus in the past six months has emanated from manufacturing.

Accounting for 15.1% of national GDP, the contribution made by the manufacturing sector to overall economic growth measured 2.2 percentage points in the first quarter of 2011.

The recent growth trend illustrates the resilience of the South African economy amidst increased concerns over the health of the world’s most advanced economies.

Growth in manufacturing volume of production Only a few manufacturing sub-sectors are contributing meaningfully to such high rates of

growth. In terms of volume of production, the

manufacturing sector expanded by 4% (not annualised) in the three months to March 2011, compared to 1.2 % in the preceding three months.

Growth in manufacturing output was largely underpinned by the sterling performance of the basic iron and steel sector, which expanded by 16.7% on a quarterly basis (not annualised), whilst the petroleum industry reported a 14.4% expansion.

These two sectors accounted for almost half of the growth in manufacturing output in the first quarter of the year.

Domestic Vehicle sales and exports The local automotive and components

industry, with a 10% contribution to manufacturing output, has also seen a significant increase in output volumes as domestic and foreign demand for vehicles rebounded sharply.

The low interest rate environment, rising disposable incomes and less stringent bank lending all contributed to the substantial revival in demand for new motor vehicles.

Moreover, the number of new vehicles shipped overseas rose by 37% in 2010. Output growth in the motor vehicle sector measured 5.2%

2 Source: IDC: Recent Developments in Global and South African Economies, June 2011


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in the first quarter of this year (on the back of a 36.4% expansion in the preceding quarter), whilst the rate of increase in the parts and accessories segment amounted to 3.1% (from 25.9% in the fourth quarter of 2010).

Certain segments of the electrical machinery sector, along with the leather, rubber and furniture industries also reported positive growth. However, a number of manufacturing sectors are still in difficulty, with contractions having been reported by: food and beverages; clothing, textiles and footwear; wood and paper; glass and other non-metallic mineral products; as well as machinery and equipment (other than electrical machinery).

Activity in the mining sector, construction sector and finance and business sector Activity in the mining sector slowed to 1.8% in the first quarter, after having reported growth of

33.7% and 17.1%, respectively, during the third and fourth quarters of 2010. Increased demand for electricity, as the domestic economy gained momentum, saw real growth in its value added expanding over the two most recent quarters, after having contracted in the preceding six months.

The construction sector is, however, still in crisis. Low levels of fixed investment by the public and private sectors are weighing quite heavily on this labour intensive industry, whilst demand for housing remains weak. Furthermore, business confidence in the building and civil construction sectors is at multi-year lows and prospects remain unsatisfactory.

Both the finance and business services sector, as well as the transport and communication sector have benefitted from generally improved domestic economic conditions, whilst the revival in the trade sector can be attributed to higher consumer spending since the beginning of 2010. Household consumption expenditure remained robust despite the persistence of high unemployment and consumer indebtedness.

Labour Market Characteristics With the exception of government, all other economic sectors reported job losses over the

aforementioned period. Most affected by the downturn were the trade sector (202 000 job losses), agriculture (-161 000), construction (-160 000), manufacturing (-141 000) and the household sector (-180 000).

Manufacturing managed to report 100 000 new jobs since the second quarter of last year, but current employment levels are still well below those prevailing in 2008. As far as remuneration is concerned (refer to the accompanying graph), the average salary per worker increased in real terms over the two-year period, with workers in the electricity sector having benefitted the most.

Real wages in the agricultural and trade sectors remained almost unchanged.

Despite continued job shedding, the overall wage bill is still rising at a pace well in excess of current inflation. For example, on a year-on-year basis, total salaries and wages increased by 10% in the first quarter of 2011, following an 8.7% rise in the preceding quarter.

Excessive wage increases, if not accompanied by rising productivity levels, could add to inflationary pressures in the months ahead and lead to competitiveness losses by local producers.


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Prime Overdraft Rate The Monetary Policy Committee

of the Reserve Bank could start hiking interest rates during the final quarter of 2011, with further rate hikes anticipated during the first half of next year so as to anchor inflation expectations.

In total, a 150 basis points rise in the repo rate is forecast, which should then bring the prime overdraft rate to 10.5% by the third quarter of 2012. At this level, the prime rate will still be relatively low from an historical perspective.

3.3.3 GDP – EARLY SIGNS OF MORE EVENNESS COMPOSITE BUSINESS CYCLE

INDICATORS – SARB, JULY 20113

GDP kicked off the year strongly, but the composition remains uneven GDP kicked off the year at a robust 4.8% q/q (Q1 11) and while the composition of growth still

remains somewhat uneven in 2011. Early signs that the investment-side

of the economy will likely contribute more meaningfully to economic growth in 2012.

Together with sustained consumption and rising inflation, this means that before long, policy rates are likely to ‘normalise’.

GDP to push on in 2011 and 2012 All-in-all for 2011 Absa forecast

household consumption to grow at 5.0% (from 4.4% in 2010) and for fixed investment spending to improve to 2.5% (-3.7% in 2010) which should put overall GDP growth at 3.9% - a welcomed improvement from 2.8% in 2010 though well-below the mid-5% growth rates measured in 2005-07.

Further ahead, it is expected that fixed investment spending to contribute more meaningfully in 2012 (at 5.9%) which should place economic growth at a slightly higher 4.1%.

3 Source: South African Reserve Bank, 2011: Composite Business Cycle


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3.3.4 HOUSEHOLD CONSUMPTION Consumption to sustain but watch for vulnerabilities As the backbone of economic growth

in South Africa, household consumption (making up about 60% of GDP) remains the central impetus to domestic demand. This is uneven trend that has persisted since the economy rose out of recession.

So far in this cycle, rising real income levels (owing to low inflation and high wage settlements) and low policy rates (easing debt-servicing costs in the consumer pocket book) have been the primary drivers of consumption.

Household consumption managed to grow by 5.2% q/q saar in Q1 11, and continues to be helpful to demand-led sectors such as retail trade, financial services and personal services which, as the graph shows are pulling along overall GDP growth.

High frequency data in Q2 provides evidence of this: retail sales growth remains steady (proving particularly strong in April at 9.8% y/y) amidst still modest household credit growth (though at unremarkable levels).

Where is the consumer ‘safety net’? Less upbeat, employment remains below pre-crisis level and credit deleveraging has thus far

been marginal at best. To this point, while the ratio of household indebtedness may ‘look’ lower (dropping to 76.8% in Q1 11) this was only because disposable incomes continues to rise strongly while in level terms, household debt continues to climb higher (by 6.8% y/y in Q1 11) and is now R100bn higher than at the time of the first rate cut (in December 2008).

What’s more, the percentage of credit accounts 3 months or more in arrears now sits at 16.9% (from 12.4% in Q4 08). The clear lack of a consumer ‘safety net’ (made up of employment and deleveraging) leaves consumers even more vulnerable to an upward move in inflation and policy rates this cycle which is important when considering the pace and magnitude of the looming hiking cycle.

With debt levels still rising, rate hikes are likely to have a larger impact than before. Consumer vulnerability also appears to be playing on the minds of companies in demand-led

sectors. The Q2 BER business confidence survey showed that the majority of retailers are now pessimistic about future business conditions (47pts versus 65pts previously) while automotive industry players are less optimistic than in Q1 (76pts compared to 84pts).

What’s more, Q2 consumer confidence may have edged up by 1 point (to 11) but the detail shows consumers to be well-aware that a hiking cycle is on its way as their willingness to spend on durable goods has declined constantly since the start of the year.

Overall, the current economic backdrop therefore suggests a degree of consumer vulnerability that is critical for the current hiking cycle debate.


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Consumption to sustain as fundamentals remain relatively favourable Despite vulnerable consumer metrics, the factors that enable consumers to spend justifies

why current household consumption should sustain (at just below the 5% growth through 2011 and 2012).

Inflation is set to rise, food and fuel prices will increase further, but at a slower rate than the 2006-08 cycle while domestic conditions (though improving) are still not strong enough to create a strong impetus for underlying inflation.

Disposable incomes should continue to grow around the 5% mark in 2011 and 2012.

Policy rates are indeed forecasted to rise it is said that the SARB will be looking for a level of normalisation (taking real rates to a ‘neutral level’ which is neither too restrictive nor too accommodative) this should limit the magnitude of rate hikes, leaving household consumption sustained and supportive to the medium-term economic growth trajectory.

Absa Capital expect consumption to remain supportive to GDP, its momentum is likely to slow in the second half of the year as real income growth tapers off and awareness builds that a rate hiking cycle is looming.

For this reason it is critical that consumption ‘hands off’ its current growth momentum to the supply side of the economy.

3.3.5 CPI INFLATION – ABSA CAPITAL4

Recent developments in inflation After a cyclical trough of 3.2% last September 2010, headline CPI has turned higher in 2011,

reaching 4.6% y/y in May. Critically thus far, the rise in inflation comes down mostly to exogenous pressures (food and fuel mostly) while underlying inflation remains muted (core inflation is at 3.2% y/y currently).

Food inflation has built gradually from 0% y/y growth at its June 2010 through to 6.3% currently, and we look for 8.5% at the turn of the year (and a peak of 10% in early 2012) as higher wheat prices and non-food input costs in the food value chain filter through.

4 Source: Absa Capital, July 2011: 2011Q3 South Africa Quarterly Perspective


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We look for food inflation to peak at 10% in early-2012. Critically, forecasts imply a far more modest food price cycle than in 2006-08, and are informed by favourable conditions in the domestic maize market (offsetting some of the climb in wheat prices) and recent comments from the major food retailers at investor presentations that shelf price food prices are still not yet increasing rapidly.

A lower weight for food in the CPI basket this time around (14% from 23% previously) also helps the outlook for headline inflation as any food price rise will have a smaller contribution to overall CPI inflation.

For fuel, the baseline view is for global oil prices to remain in the 110 range for the remainder of 2011 which leaves fuel prices contributing 0.9pp to our expected year-end inflation rate of 6.1%.

Food inflation contributes something similar (1.1pp). As such, there is only moderate risk for food and fuel price pressures to spread more broadly in the system given the slack which remains evident in the economy.

All in all we look for headline inflation to rise to 6.0% in Q4 11 peaking at just above-target at 6.2% in Q1 12.

Current GDP growth is a full 2 percentage points below its 2006 growth rate, fixed investment spending is largely absent when compared to the 2006 cycle, credit extension remains in low single-digit growth, consumers are highly indebted, the housing market is moving sideways, and even the signal from the current account is that there is little interest rate- driven excess on the horizon. Filtering through to sentiment, both business and consumer confidence levels show plainly an economy far more uncertain now than in the past.

On top of this, there is mounting evidence that the National Credit Act (introduced in mid-2007) and the response of banks to the coming Basel 3 regulations both mean that the transmission from policy rates into consumer lending is far less aggressive than previously.

The outlook for inflation At the November MPC, the Reserve Bank cut significantly its inflation forecasts for 2011 and

2012, and there is very little difference between their set and Absa Capital’s forecasts currently.

The central bank now expects inflation to average 4.3% in 2011, 4.8% in 2012 and to end their forecast exercise in Q4 2012 at 5.1% and we believe that these new inflation forecasts matter in two ways.

The first comes from an observation about the three rate cuts that were delivered piecemeal in the period following the August 2009 rate cut and including the November 2010 50bp cut. What differentiates these three meetings (March, September and November) from the six meetings at which policy rates were left on hold during this period was the ability of the Bank to announce a cut in its medium-term inflation profile.


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Even as data on growth and employment and current inflation was processed by policymakers, and the rand moved throughout the period, meaningful changes to the inflation profile were only announced during the three meetings at which rate cuts were also decided upon.

With that logic in mind, we believe that a further rate cut this cycle is unlikely as the room for further downside surprise against the forecast looks, in our view, unlikely.

Furthermore, with clearer signs emerging that credit extension is becoming firmer and plenty of evidence that consumer spending has become more confident, the perceived “need” to push rates lower has also diminished.

This is in line with the pricing in financial markets, which currently ascribes a negligible chance to a further rate cut in 2011.

The second takeaway from the SARB’s inflation forecasts is about the timing of the next rate hiking cycle.

On the basis that inflation remains comfortably within the target through end-2012, it is clear that the “low for longer” language being used to describe monetary policy in many advanced economies may well suit South Africa as well.

Barring an unforeseen shock, we look for the first rate hike from the MPC to arrive only in early 2012, and for this to be delivered as the start of a policy normalisation rather than as the same sort of active attack on inflation that was suffered during 2006 through 2008.

This looks in line with the pace of economic recovery thus far as compared many estimates of the output gap, and also will help ensure that South Africa enjoys a monetary policy cushion should the global economy exhibit some weakness in 2011.

The new Economic Growth Path: Focus on Employment Everyone agrees on the need to generate many more jobs, but finding common policy ground remains elusive Economic Development Minister Patel unveiled the government’s New Growth Path (NGP) blueprint for South Africa recently. Unlike earlier strategic plans such as the Growth, Employment and Redistribution (GEAR) strategy and Accelerated and Shared Growth Initiative (Asgisa), which focussed on lifting economic growth, the NGP puts job creation at the centre of government policy making. Through a combination of coordinated macro- and microeconomic policies, supported by a social pact between the main role players in the economy, the government hopes to create around five million jobs by 2020 and reduce the unemployment rate from 25% currently to about 15%. Though much detail is yet to be released, the NGP targets six main areas for job creation. Infrastructure is given a prominent position, both in its ability to directly create jobs through construction (particularly housing), the provision of equipment, through operation and maintenance, but also by helping to reduce bottlenecks that have restrained growth and employment elsewhere in the economy. Agriculture, both in terms of smallholder schemes for those working the land in terms of agro processing are highlighted as important ways of creating employment in rural areas. The promotion of mining is sought, with a particular focus on increased beneficiation as a way of encouraging fabrication and not just smelting, through the introduction of targeted export taxes, and through the setting up of a state-owned mining company to co-exist with the private sector. The manufacturing sector too is discussed, as is tourism and, of course, public sector employment. Just as critical as the actual ideas and policies are for the success of the NGP, any successful implementation will require generating the necessary buy-in within the various factions within the ANC, between the ANC’s political partners, and from business and from civil society. Once the discussion moves from the overview of where jobs might be created, to the micro and macro framework that would support the NGP, things become much more difficult. Already in the micro policy in the NGP that calls for a national consensus on wages, prices and savings to help ensure greater employment and less inflation. For the labour movement, any discussion of constraining workers wages is a no go areas, as made very clear by Cosatu, whilst any move to constrain the wages of executives is seen as generating a threat of further brain drain by BUSA. Similar conflicts have already emerged with regard the NGP call for a more activist monetary policy designed not only to maintain low inflation but to also ensure a low cost of capital (i.e. low interest rates) and a more interventionist policy against rand strength – all of which is popular - with the space for this easier monetary policy provided by a tighter fiscal policy – which is not.


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3.3.6 COMPOSITE BUSINESS CYCLE INDICATORS – SARB, July 20115 The composite leading business cycle indicator decreased by 1.6% in May 2011 compared with the preceding month. Ten of the eleven component time series that were available for May 2011 decreased, while one increased. The major negative contributors to the movement in the leading indicator in May were the number of residential building plans passed and the six-month smoothed growth rate in the real M1 money supply. The only positive contribution came from the twelve-month percentage change in the composite leading business cycle indicator of South Africa’s major trading-partner countries. The composite coincident business cycle indicator increased by 0.1% in April 2011 compared with the preceding month – its eighth consecutive monthly increase. The composite lagging business cycle indicator decreased by 0.2% in April 2011 compared with the preceding month. Table 3.3: Composite Business Cycle Indicators

Description Aug 2010

Sept 2010

Oct 2010

Nov 2010

Dec 2010

Jan 2011

Feb 2011

March 2011

April 2011

May 2011

Leading indicator (2000=100)

130.1 130.6 130.1 129.7 132.6 134.6 136.2 134.4 133.7 131.5

Coincident indicator (2000=100)

142.5 142.2 144.2 145.9 148.8 149.1 150.3 150.7 152.0

Lagging indicator (2000=100)

100.5 99.4 00.9 99.0 97.9 97.8 98.9 99.7 98.9

Source: SARB, July 2011

The latest Leading Indicator (a good indicator of near term moves in both the economy as well as the residential mortgage market) data point to appear, that of May 2011, indicated a further acceleration, on a month-on-month basis - the value going to a current value of 131.5. Composite leading business cycle indicator The following 12 components are included in the composite leading business cycle: Job advertisement space in the Sunday Times newspaper: Percentage change over twelve months Number of residential building plans passed for flats, townhouses and houses larger than 80m

2 Interest rate spread: 10-year government bonds less 91-day Treasury bills Index of prices of all classes of shares traded on the JSE Real M1 money supply (deflated with CPI): Six month smoothed growth rate Index of commodity prices in US dollar for a basket of South Africa’s export commodities Composite leading business cycle indicator of South Africa’s major trading-partner countries:

percentage change over twelve months Gross operating surplus as a percentage of gross domestic product Opinion survey of business confidence: Manufacturing, construction and trade Net balance of manufacturers observing an increase in the average number of hours worked per factory worker (half weight) Net balance of manufacturers observing an increase in the volume of orders received (half weight) Number of new passenger vehicles sold: Percentage change over 12 months.

3.4 PROPERTY MARKET PERFORMANCE

Research has shown that there is a time delay of some 6 – 18 months: i.e. response from the property market to, for example, a decrease in interest rates (a macroeconomic variable that stimulates production) becomes evident in the level of activity in the property market some 6 to 18 months after the announced interest rate decrease (Refer to Figure 3.1).

5 Source: South African Reserve Bank, 2011: Composite Business Cycle


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Figure 3.1: Relation between the Business Cycle and Property Markets

This section aims to provide an overview of general trends pertaining to the commercial property market.

3.4.1 RESIDENTIAL MARKET DEVELOPMENT TRENDS6

Economic indicators released in July point to increased pressure on the residential market in the near term, despite some improvement in house price growth recently The mild acceleration in the year-on-year growth rate in house prices in July is believed to be

largely the lagged impact of slightly stronger demand times back in the summer quarters, due in part to late-2010 interest rate cuts.

Looking forward, economic indicators released in July would suggest a possible increase in pressure on the market, and with it a possible slowing in house price growth later in the year once more.

The South African Economy, and thus to a large degree its housing market, is very much in sync with trends in the global economy, which at present looks to be showing signs of weakening.

Year-on-year house price growth accelerated further in July The FNB House Price Index has

experienced a mild acceleration in its year-on-year growth rate in recent months. From a June revised rate of 3.1%, the July growth rate moved to 4.6%, the highest rate of growth since August 2010.

6 Source: FNB Property Barometer, August 2011


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In real terms, however, when adjusted for consumer price inflation the year-on-year growth rate for June still remained in negative territory to the tune of -1.8%. This was in part due to rising consumer price inflation, which reached 5% in that month (the most recent month’s figure available).

On a month-on-month basis, average price growth was virtually unchanged at 0.73%, while the average price of properties transacted in the index was R815,511.

The acceleration in the year-on-year rate of house price inflation is believed to still be the lagged impact of a mild uptick in residential demand during the summer, which was reflected in our FNB Estate Agent Survey, and was partly the result of two further 50 basis point interest rate cuts late in 2010 (with the other driver being seasonal factors back in the summer.

Real Interest Rate Levels Prime overdraft rate has remained steady at 9% since November 2010, and looks set to do

so for some time. However, also important are the levels of real interest rates. The difference between consumer price inflation and interest rates can determine whether a general “buy-now-and-pay-later” culture is established or not (possible if interest rates are below consumer price inflation levels), or whether a short term speculative culture is created in the home buying market or not, which is also a possibility should capital growth on homes outstrip interest rates.

“Healthy” levels of real interest rates continue, and as a result no apparent possibility of such reckless borrowing/spending events seem likely on any significant scale at the moment despite some decline in real interest rates.

Adjusted for consumer price changes, real prime rate declined from +4.4% in May to 4% in June. Using house price growth to adjust prime to an alternative real measure, the rate also declined from +5.9% in June to +4.4% in July.

Speculative buying would thus by-and-large still seem an unattractive prospect, unlike the 2004/5 period where this measure of real prime reached a lowly negative rate of -25.3% in February 2005.

3.4.2 STATE OF THE PROPERTY MARKET – RODE’S REPORT, 2011:Q2

Capitalisation Rates At the moment, the biggest factor set to benefit capitalisation rates would be the current revival in market rentals. This is so because market-rental growth brings with it better prospects for capital returns. However, vacancy rates are still stubbornly refusing to drop. This might persuade property investors not to be too hasty to buy property at lower expected income returns (capitalization rates). Nonetheless, capitalization rates for prime office, industrial and retail property managed to strengthen – albeit very slightly – in the first quarter of 2011. Office Rentals Office rentals started the year off with a bang, with rentals on a national basis up by an impressive 9% in the first quarter of 2011. But given that vacancy rates are still stubbornly


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refusing to drop and that growth might be distorted by base effects, a moderation in growth remains a possibility. Nonetheless, strong growth in rentals was also recorded at the regional level, with rental in Johannesburg and Pretoria decentralised up by as much as 15% and 12% respectively. In Cape Town decentralised less impressive growth of 4% was achieved while in Durban decentralised (-2%) market rentals were actually lower than they were a year ago. These variances can be ascribed to variations in vacancy levels and trends. Industrial market Industrial property is showing signs of a recovery, with vacancy rates seemingly levelling off and rentals once again showing growth. In the first quarter of 2011, the growth in market rentals (on a national basis) accelerated to nearly 4%. This comes after a sharp cooling in growth and even, in recent quarters, a contraction in rentals. A closer look at the major industrial conurbations reveals that in the reporting quarter the motor city of Port Elizabeth (+6%) was able to show the strongest growth. The Cape Peninsula followed with growth of 4%, while in Durban rentals were up by 1%. On the Central Witwatersrand, market rentals managed to stay at roughly the same level they were a year ago. Flat rentals Despite showing mediocre growth – below consumer inflation – flat rentals are at least outperforming house and townhouse rentals. On a national basis, in the first quarter of 2011 flat rentals were up by a yearly rate of about 2%. Rentals for houses could only muster growth of roughly 1%, while, in contrast, rentals for townhouses were down (-1%) when compared to a year ago. Given consumer inflation (excluding housing) of 3% over the same period, these dismal figures imply contracting real rent types. Considering the heavy weight (16.4%) of residential rentals in the calculation of headline CPI (the sum of actual rentals and owners’ equivalent rent), residential market-rental growth is quite important. However, the very low growth at present has an almost negligible effect on the overall metric of consumer prices. The House Market House prices remain stuck in a rut as evidenced by the continued poor performance of indices of house prices. In May 2011, the Absa national house-price index showed no growth with prices remaining roughly at the same level they were a year ago. A turnaround in fortunes magnitude of key drivers of demand changes significantly. One such driver is, of course, interest rates. But, for now, no help can be expected from falling interest rates; this as the Reserve Bank has to consider the possible second-round effects of rising food and fuel prices on overall consumer prices.

3.4.3 SECTORAL POSITIONING OF SOUTH AFRICAN REAL ESTATE

The following figure (Figure 3.2) illustrates the sectoral position that each market (offices; industrial; retail and residential) occupies in the real estate cycle in South Africa, in terms of level of activity versus time.


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Figure 3.2: Sectoral Positioning of the South African Real Estate Cycle

Retail: The effects of repeated interest rate hikes since 2006 have become visible in the latest retail sales data, and slowed down the prolific growth rates that were last seen in the 1970’s. A modest retail sales recovery is expected from 2010, strengthening towards 2011 and fears of a double-dip recession have been laid to rest. In spite of the slowdown (reflected in national averages), numerous private sector clients disclosed to Demacon that retail sales in their mall portfolios were up between 15% and 20% in the time period from December 2007 to December 2008, and December 2008 to December 2009. Offices: In recent years, databases, as well as brokers and real estate professionals, have noted the lack of stock in South African commercial markets, in particular the office and industrial market. Composite rental and vacancy indicators point towards notably rising stock volumes (development proposals and approved rights) and gradually rising vacancy rates in selected nodes. Many nodes with substantial amounts of proposed office rights are poised for phased take-up over the short to medium term. Gautrain Station precincts in particular, can be expected to reveal expanding commercial stock profiles. Industrial: Similar to the office market, the industrial market has seen dramatic increases in approved rights in selected nodes and corridors. A number of new industrial and distribution parks have come on stream in major metropolitan areas and many of these developments will be poised for phased take-up over the medium to longer term. Industrial parks and hybrid business parks in well located nodes / corridors with good regionally accessible can be expected to perform well and outperform less central / off-centre industrial parks. Independent DEMACON market studies, coupled with extensive network of leading real estate companies, indicate that in spite of turbulent global economic times, the domestic real estate long cycle is currently in an upswing phase and will remain at buoyant levels, despite selected sub-sectors coming under pressure due to short term cyclical trends. Market indicators suggest that the long cycle will only taper off towards 2015, which implies positive market growth conditions for most real estate sub-sectors over the medium to long term.


63

3.5 FUTURE EXPECTATIONS

Real economic growth of around 3% is forecast for 2011, and is expected to rise to just below 4% in 2011.

South Africa’s Economic performance in 2011 will to a large extent depend on global economic developments

Inflation is forecast to reach a lower turning point in the near future and to increase gradually during the course of 2011.

It is expected that interest rates will be cut once more over the short term, based on rand exchange rate movements and prospects for the economic cycle and inflation, but rates are forecast to remain unchanged for most of the year

The domestic growth outlook remains subdued and below-trend growth is expected to persist. The forecast of the Bank is relatively unchanged since the previous meeting of the MPC, with GDP growth remaining at 2.8% for 2010 and expected to average 3.3% and 3.6% in 2011 and 2012 respectively

The lower-than-expected inflation outcomes contributed to a further downward adjustment in the inflation forecast period to the end of 2012. Targeted CPI inflation averaged 3.5% in the third quarter of 2010.

A similar average outcome is expected during the fourth quarter, resulting in an expected average inflation rate of 4.3% for 2010. Inflation is then expected to remain at an average of 4.3% in 2011 and to increase to 4.8% in 2012.

The main risk to the inflation outlook continues to emanate from cost-push factors. These include wage trends and administered prices. Food and petrol prices are also identified as potential longer-term risks.

The MPC has accordingly decided to reduce the repurchase rate by 50 basis points to 5.5 per cent per annum with effect from 19 November 2010. This action is viewed to be consistent with the continued attainment of the inflation target. The scope for further downward movement, however, I seen to be limited given the signs of recovery in household consumption expenditure and credit extension Our own research furthermore indicates that barring short term cyclical fluctuations which are bound to occur, most SA metropolitan areas are, in terms of a typical S-shaped growth curve, poised for positive; long term growth over the forthcoming 30-40 years – boding well for most metropolitan economies and real estate markets. The flip side is that many rural areas will continue to experience decelerating population growth rates and selected commercial investments in some of these markets may come under severe pressure. Investors in these areas will have to play close attention to planning their project viabilities and payback periods accordingly. The South African consumer market is also characterised by an increasingly large segment of socially upward mobile consumers (with the LSM 6 – 10+ segment growing at approximately 1.3% annually) – the rising black middle class with a set of very strong aspirational values. This trend holds direct beneficial implications for especially the domestic retail en residential sectors. The following section provides an overview of local economic trends in the market area.


64

3.6 LOCAL ECONOMIC TRENDS

3.6.1 SIZE OF ECONOMY

Figure 3.3 indicates the size of the Pretoria (excluding Centurion, Hammanskraal, Mabopane, Soshanguve, Mamelodi, Nellmapies, Akasia) local economy in relation to the City of Tshwane metropolitan economy. Figure 3.3: Size of the economy, 2010 (at basic prices) - GVA

Source: Demacon, 2011

Findings: (Figure 3.3) Figure 3.3 indicates that the Pretoria local economy contributed 50.7% towards City of

Tshwane Metropolitan economy in 2010 – reflecting the importance of the local economy in a regional context.

3.6.2 ECONOMIC PROFILE

Subsequent economic indicators provide insight to the performance of the Pretoria local economy. The data indicate the dominant economic sectors, growth sectors as well as the comparative advantages of all the local economies. Figure 3.4 indicates the contribution of the nine major economic sectors to the total economic production of Pretoria local economy for the time period 2005 to 2010. These ten sectors are: General government services Community, social and other personal services Finance and business services Transport and communication Trade sector (Wholesale and retail; catering and accommodation) Construction

Pretoria 50.7%

Remainder of City of Tswhane

Metropolitan Municipality

49.3%

Size of economy


65

Electricity and water Manufacturing Mining Agriculture, forestry and fishing Figure 3.4: Economic Profile of Pretoria, 2006 – 2010 (GVA)


Findings: (Figure 3.4) The four dominant contributors to the Pretoria local economy in 2010 are the following:

General government – 31.0% Finance, insurance, real estate and business services -29.8% Transport, storage and communication – 9.9% Manufacturing – 9.6% Wholesale and retail trade, catering and accommodation – 9.0%

Subsequent economic indicator provides insight to the economic growth performance of the Pretoria local economy.

3.6.3 ECONOMIC GROWTH

Figure 3.5 provides detail on the growth performance of Pretoria local economy since 1995 and the degree of correlation in economic up- and downturns between the regional and national business cycle.

0.2

0.7

9.6

1.4

3.6

9.0

9.9

29.8

4.8

31.0

- 10.0 20.0 30.0 40.0

Agriculture, forestry and fishing

Mining and quarrying

Manufacturing

Electricity, gas and water

Construction

Wholesale and retail trade, catering andaccommodation

Transport, storage and communication

Finance, insurance, real estate and business services

Community, social and personal services

General government

Pretoria Economic Profile

2010 2008 2006


66

Figure 3.5: Economic Growth Performance, 1995 – 2010 (constant 2005 prices) - GVA


Findings: (Figure 3.5) The Pretoria local economy reached an average growth rate of approximately 2.5% over

the long term period (1995 – 2010). The short to medium term recorded an average growth rate of approximately 3.7%.

City of Tshwane Metropolitan Municipality reached an average growth rate of approximately 3.4% over the long term period (1995 – 2010). The short to medium term recorded an average growth rate of approximately 4.3%.

Gauteng Province reached an average growth rate of 3.6% of the long term as well as for the short to medium term.

Note: The latest local area economic data is only available up to 2010. The local business cycle follows the national cycle closely, albeit that local data lags by approximately 18 months, and a similar upward trend in the local economy, compared with the national trend, which is already noticeable.

Development Implications

Economic growth in the local and regional economy reflects a similar cyclical trend that correlates with growth trends experienced in the SA domestic economy over the same period of time. Most notable negative impacts that had a lagged effect on domestic demand and consumer expenditure include the 1997/1998 Asian Crisis (more commonly referred to as the Asian Flu), followed by record high prime lending rates of 25.5% in August 1998 and all time high exchange rates in January 2002 (R16.64:1£ and R11.61:1$). The global financial crisis that erupted in 2007 and progressively spread to the real economy resulted in world output growth slowing to 3% in 2008, from 5.2% the previous year. Economic conditions continued deteriorating well into 2009, with output estimated by the International Monetary Fund (IMF) to have declined by 0.6%. As global demand waned and production levels were curtailed, world trade registered a staggering 12% contraction in 2009,

95-'96

96-'97

97-'98

98-'99

99-'00

00-'01

01-'02

02-'03

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08-'09

09-'10

Gauteng Province 2.9 2.7 1.2 2.5 6.0 2.5 4.9 3.0 5.0 5.5 6.4 6.1 4.2 -1.6 2.9

City of Tshwane MetropolitanMunicipality

0.9 1.0 -0.2 1.3 4.2 1.9 6.2 3.6 5.2 6.0 7.0 6.6 2.5 2.6 2.8

Pretoria Local Municipality 0.1 0.1 -0.9 0.3 2.7 0.7 5.2 2.8 4.1 4.6 6.0 5.6 5.3 -1.0 2.7

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Economic Growth


67

according to the World Trade Organisation (WTO). This followed a dismal 2% growth in the volume of world trade in 2008. The global economy emerged from recession in 2010, although the pace of recovery has varied substantially across regions, and particularly at country level. Certain emerging and developing economies, especially those that managed to side-step a recession quite effectively, such as China and India, have seen a visible improvement in their growth momentum. Nevertheless, a number of emerging economies continue experiencing difficulties in resuming and sustaining higher growth trajectories. In South Africa, signs of recovery from the economy’s first recession in 17 years gradually emerged during the last six months of 2009. Gross domestic product (GDP) expanded in real terms by 3.1% (on a quarter-on-quarter basis) in the fourth quarter of 2009, accelerating to 4.6% in the first quarter of 2010. However, economic growth slowed to 2.8% and 2.6% in the subsequent two quarters of 2010 respectively. Although the global economic recovery has been swifter than initially anticipated, its multi-speed characteristics have become more pronounced and the momentum has lost some steam in several advanced economies. Fiscal austerity measures in several countries, particularly in Europe, high unemployment rates and yet excessive household indebtedness underpin expectations of a slowdown, particularly in the industrialised nations, and rising concerns over the sustainability of the global economic recovery. Recently announced by the United States authorities, the second round of quantitative easing (known as QE2 and amounting to a massive US$600 billion) reflects this uneasiness. The South African economy continued to report growth in economic activity during the opening six months of 2010, although there have been signs of the momentum being weaker than initially anticipated. The recovery in demand has been slow, especially from the household segment, as well as externally. After reducing inventory levels during the recession, companies eventually started rebuilding them, resulting in an upturn in production, albeit still at levels below those reached in 2008 for most economic sectors. The local business cycle reflects a negative trend with reference to 2007 to 2009. The local business cycle follows the national cycle closely. In the context of the national recovery - including economic growth and retail sales - local economic growth and growth in disposable income is expected to reveal a similar recovery trend since 2009. The domestic growth outlook remains subdued and below-trend growth is expected to persist. The forecast of the National Reserve Bank pertaining to GDP growth remained at 2.8 per cent for 2010, a slight recovery is however expected towards 2011 and 2012 with average estimated growth rates of 3.3 per cent and 3.6 per cent respectively. This bodes well towards the metropolitan regions of the national economy, which in general leads the economic recovery curve and in general reflects economic growth rates exceeding that of the national average.

3.6.4 FINANCIAL AND BUSINESS SERVICES SECTOR PERFORMANCE

The business and finance sector serves as proxy for the office market. This sector comprises establishments engaged in professional services, financial institutions (e.g. banks and insurance companies) as well as real estate services. CLASSIFICATION OF FINANCE AND BUSINESS SECTOR According to the SIC (Standard Industrial Classification of all Economic Activities) the following are included in the Finance and Business Services Sector: Financial intermediation Insurance and pension funding Real estate activities Computer and related activities Other business activities

Legal Accounting


68

Book-keeping Auditing activities Tax consultancy Market research Public opinion research Business and management consultancy

Figure 3.6 indicates the growth performance of the business and finance sector from 1995 to 2010 for Pretoria local economy. Figure 3.6: Financial and Business Services Sector Growth Performance (constant 2005 prices)


3.6.5 GROWTH IN FINAL CONSUMPTION EXPENDITURE AND DISPOSABLE INCOME

Figures in subsequent paragraphs illustrate the rate of growth of final consumptions expenditure (on all goods and services) in relation to growth in disposable household income. The graph reveals a high degree of positive correlation between the two variables, which in turn reveals similar up- and downturns to the business cycle as a whole. Figure 3.10 illustrates the rate of growth in final consumption expenditure in relation to annual growth in disposable household income in Pretoria local economy. Findings: (Figure 3.7) The cyclical trend observed in the above figure correlates with the business cycle trend,

i.e. a follow through on the 2000 / 2001 weakening of the Rand and subsequent growth to record high levels in 2004 (continuing into 2005 and the first quarter of 2006)

Final consumption expenditure cycle of Pretoria achieved economic growth of 4.7% and disposable income achieved economic growth of 4.8% over the entire time period.

8.7

5.6

3.2

11.1 10.7 10.1

5.1 5.9

10.2

4.4

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-5.0

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5.0

10.0

15.0

20.0

Pretoria Business Growth Performance

Finance and insurance Business services


69

There is a positive correlation between economic growth and disposable income growth which bodes well for the study area. The fact that both economic growth and growth in disposable income exceed the retail sector growth, suggests that households experience real income growth in the local retail infrastructure.

Figure 3.7: Growth in final consumption expenditure and disposable income (constant 2005

prices)


3.6.6 TRADE AREA SECTOR PERFORMANCE

The trade sector comprises establishments engaged in retailing merchandise, generally without transformation, and rendering of services incidental to the sale of merchandise. Trade thus involves the selling or arranging the purchase or sale of goods from resale, and selling durable, semi-durable and non-durable consumer goods. The trade sector is sensitive to business cycle fluctuations, which in turn are extremely sensitive to global economic fluctuations. The state of this sector is therefore an ultimate and direct reflection of consumer demand. The impact of macro and micro economic forces on the trade sector therefore extends to both supply and demand side dynamics of the product value chain. The trade sector is the all-important interface between producer, wholesaler and consumer. Figure 3.11 illustrates trade sector growth in the market area since 1995.

2.8

0.4

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-1.2

2.7 3.3

3.7

4.4

8.0 8.2

9.9

6.2

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-2.5

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4.9

8.1 8.1

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7.4

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-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Final consumption expenditure & disposable income

Final consumption expenditure Disposable income


70

Figure 3.8: Trade Sector Growth Performance, 1995 - 2010 (constant 2005 prices)


3.6.7 HOUSEHOLD EXPENDITURE PER RETAIL CATEGORY

The trade sector is accounted for by a spectrum of consumer types, including private households, other businesses, government and exports. The household sector is by far the largest of these consumer markets, especially in the retail sub-sector. Retail sales refer to the amount of money spent on a variety of consumer goods. This includes for example non-perishable products, footwear, jewellery and hardware. Retail sales serve as an indication of the expenditure in certain categories. Retail sales figures provide an indication of current demand for specific categories of consumer goods, which can be divided into three broad groupings, namely:

Findings: (Figure 3.9) A general urban South African trend indicates that the increase in expenditure directed

towards non-durable groceries is increasing year-on-year with a similar rise in consumption expenditure on semi durables including clothes and foot ware. These trends can be ascribed to, inter alia, the high rate of inflation on non-durables (especially meat) and unabated clothing and footwear deflation (mainly fuelled by imports from China). Bear in mind that the above reflects relative values. Under present market conditions, which

1.3

-2.2

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6.8 6.5

0.2

2.3

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Trade sector performance

Wholesale & retail trade Catering and accommodation

1. Durable goods Durable goods include goods such as furniture, household appliances and personal transport equipment.

2. Semi-durable goods Semi-durable goods include products such as footwear, clothing and household textiles.

3. Non-durable goods Non-durable goods include food, beverages, and tobacco, and household consumer goods, medical and pharmaceutical products.


71

include low interest rates and inflation, households are prone to spend relatively more on non-durables. Figure 3.9 discloses that food, beverages and tobacco is the largest sector of the retail sections at both economies, with growth of 40.6% in 2008 for Pretoria local municipality. The second largest sector within Pretoria is personal transport equipment, with growth of 11.2% in 2008, followed by 8.1%. clothing and footwear sector The smallest sector per retail category is other durable goods with growth of 1.5%.

Figure 3.9: Household expenditure per retail category (constant 2005 prices)


3.7 SYNTHESIS

This module provided an overview of the macro-economic trends underlining the local economy, supported by an overview on the performance of the performance of the South African property market. Macroeconomic indicators indicate that despite the recent recession that the South African

economy is recovering positively. This improving economic climate is expected to prevail over the short to medium term – although economic growth has slowed down

The SARB Monetary Policy Committee (MPC) took the decision to reduce its repo rate to 6.0% during their meeting in September 2010. Interest rates are forecast to remain stable at current levels up to the first quarter of 2011. From the interest rate-sensitive property market’s point of view it provides some welcome relief.

Despite high levels of debt, the household sector is expected to reap the benefits of the recovery in the economy, which is forecast to lead to higher levels of employment and household income growth this year.

Market potential is not influenced by economic and demographic trends alone, but also by macro and micro area dynamics. In the context of the above, Chapter Four provides a demographic profile of the study area under consideration.

2.8

11.2

5.8

1.5

8.1

2.1

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2.1

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- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

Furniture, household appliances

Personal transport equipment

Recreational and entertainment goods (durable)

Other durable goods

Clothing and footwear

Household textiles, furnishings, glassware, etc

Motor car tyres, parts and accessories

Recreational and entertainment goods (semi durable)

Miscellaneous goods

Food, beverages and tobacco

Household fuel and power

Household consumer goods

Medical and pharmaceutical products

Petroleum products

Expenditure per retail category

2008 2006 2004


72

CHAPTER 4: DEMOGRAPHIC MARKET OVERVIEW

4.1 INTRODUCTION

The demand for commercial activities is a derived demand. Hence, the current level and depth, as well as anticipated future growth in demand are a function of the local consumer market profile. The purpose of this chapter is to delineate the trade area and to provide a concise overview of the local consumer market, its income and expenditure patterns. The consumer market profile is outlined in terms of the following headings: Market area delineation and population size Age profile Highest level of education Employment status Occupation profile Dwelling types Type of tenure Average annual household income Living standard measurement Synthesis The following section provides an overview of the delineation of the market area as well as the population size of certain the sub-places in the market area.

4.2 MARKET AREA DELINEATION AND POPULATION SIZE

Table 4.1 summarises the key socio-economic indicators of the primary source market, informed by general SACSC criteria, as well as the following: Consumer market behaviour and expenditure trends Regional and sub-regional levels of accessibility Geographic barriers General consumer mobility patterns and drive times. The proposed centre will attract a very specific geographic market area. It should be understood that certain areas within this trade radius reflect distinct socio-economic profiles and behavioural characteristics and hence will continue to support centres that would be more conveniently located with respect to their needs and specific preferences. The primary trade area of 2.5km radius is applied and would therefore be used as indicator during the modelling applications in the remainder of the market research report. Table 4.1: Population size of the market area (2011)

Sub-places Number of people

in sub-place

Number of household in sub-

place Household size

Annlin 770 315 2.4 Annlin West Ext 3 241 140 1.7 Bon Accord 51 22 2.4 Bon Accord AH 1,218 599 2.0 Onderstepoort 260 107 2.4 Onderstepoort Nature Reserve 50 18 2.7 Pretoria North 3,071 1,065 2.9


73

Sub-places Number of people

in sub-place

Number of household in sub-

place Household size

Wonderboom Aerodrome 72 14 5.3 Wonderboom AH 123 93 1.3 Wonderboom AH 204 85 2.4 TOTAL 2001 6,059 2,458 2.5 TOTAL 2011 6,693 2,715 2.5 Source: Demacon, 2011

Findings: (Table 4.1) As seen in Table 4.1 the market area consists of approximately 6,059 people and 2,715

households within the 2.5km radius. The average household size of the market amounts 2.5 persons per household. The population growth rate in the market is 1% per annum. Refer to Map 4.1 for the location of the site and trade area


74

Map 4.1: Indication of the market area

Site


75

Map 4.2: Drive time


76

Map 4.2 indicates drive times from the project site. As seen from the map, a 5 minute drive time to and from the site is indicated in red and the 10 minute drive time in yellow. It is expected that households within the 5 minute drive time area will be the primary market of the project. A secondary inflow would be from the 10 minute drive time polygon. Subsequent paragraphs provide a demographic profile of the market area.

4.3 AGE PROFILE

The age distribution of a specific area also serves as an important indicator, with reference to consumer demand behaviour and preferences - in particular the dominant age groups. Figure 4.1 illustrates the consumer market age profile. Figure 4.1: Age profile of market


Findings: (Figure 4.1) The market area is characterised by a maturing population supported by a large segment

of younger consumers aged 20 to 40 years (37.6%). It is evident that the largest percentage (10.2%) of the population falls within the age group

20 to 24 years, followed by the age group 30 to 34 years (10.1%). 25.1% of the population is between the ages 40 and 60 years, with an older component of

14.2%. National norm / statistics: Age structure: 0-14 years: 28.9% (male 7,093,328 / female 7,061,579) 15-64 years: 65.8% (male 16,275,424/female 15,984,181) 65 years and over: 5.4% (male 1,075,117/female 1,562,860) (2010 est.)

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Ages: 00-04

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Ages: 20-24

Ages: 25-29

Ages: 30-34

Ages: 35-39

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Ages: 60-64

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Ages: 75-79

Ages: 80-84

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Percentage

Ageprofile


77

Definition: This entry provides the distribution of the population according to age. Information is included by sex and age group (0-14 years, 15-64 years, 65 years and over). The age structure of a population affects a nation's key socio-economic issues. Countries with young populations (high percentage under age 15) need to invest more in schools, while countries with older populations (high percentage ages 65 and over) need to invest more in the health sector. The age structure can also be used to help predict potential political issues. For example, the rapid growth of a young adult population unable to find employment can lead to unrest.

4.4 HIGHEST LEVEL OF EDUCATION

The highest level of education serves as proxy for human development within the consumer market. The level of employment is also an important indicator, impacting on the level of human development as well as on the level of disposable community income. Figure 4.2 indicates the highest level of education of the population in the market. Figure 4.2: Highest level of education

Source: Demacon, 2011 Findings: (Figure 4.2) Figure 4.2 indicates that the market area population (96.4%) has some form of education. The majority of the market population (36.1%) has Std 10 / Grade 12 followed by 31.5%

which has some secondary education. There are 19.5% of the market population which obtained higher educational

qualifications. 7.1% of the market has some primary education, whereas only 2.2% of the population

has completed their primary education. 3.6% of the population has no form of education.

3.6

7.1

2.2

31.5

36.1

19.5

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5.0

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15.0

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25.0

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No schooling Some primary Completeprimary

Somesecondary

Std 10/Grade12

Higher

Pe

rce

nta

ge

Education Profile


78

Development Implications A number of factors contribute to the general property development climate in a specific geographical area. Of the socio-economic factors that provide an initial indication of market potential are levels of education and standards of living. A moderate segment of the adult market population is educated and it is anticipated that this will be reflected in the employment and overall living standard profile of the market. In the market, the higher education segment is 19.5%. The national figure for higher education is calculated as 8.5% - this implies that the market is well above the national norm. This will have an impact on the type of commercial and residential products and services demanded within the market area.

4.5 EMPLOYMENT STATUS

The level of employment reflects employment and unemployment levels in the consumer market, which impacts on disposable income patterns. Level of employment, coupled to household size is also indicative of dependency ratios (refer to Figure 4.3). Figure 4.3: Employment of the market area


Findings: (Figure 4.3) A relatively small segment of the population is not economically active due to the fact that

they are either younger than 15 years of age; older than 65 years; or has physical disabilities.

Of the 68.9% of the population that are economically active – 89.6% are employed and 10.4% are unemployed.

Employed 89.6%

Unemployed 10.4%

Employment Status

Economically active population: 68.9%


79

Development Implications The market is characterised by a relatively large economically active market segment of which the majority is employed, reflecting low dependency ratios. The moderate levels of employment in conjunction with the moderate level of education reflect a market with a demand focused towards middle range residential products and services. The unemployment rate of primary market (10.4%) is much lower than the national figure of 24.0%.

4.6 OCCUPATION PROFILE

The occupation profile is an important indicator of anticipated community income, serving as proxy for the level of community wealth and stability. The presence of white and blue collar occupations serves as indication of a higher income profile or middle income profile consumer market. Figure 4.4 indicates the occupation profile of the consumer market. Figure 4.4: Occupation profile

Source: Demacon, 2011 Findings: (Figure 4.4) The largest proportion of the population is employed as elementary occupations (21.6%) The dominant occupation group is supported by: Clerks (15.7%) Technicians and associate professionals (11.8%) Professionals (11.2%) Service workers, shop and market sales workers (10.0%) Smaller percentages of craft & related trade workers (9.3%), legislators, senior officials

and managers (6.9%) and plant & machine operators & assemblers (2.6%) are present in the market.

6.9

11.2

11.8

15.7

10.0

1.0

9.3

2.6

21.6

9.9

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Legislators; senior officials and managers

Professionals

Technicians and associate professionals

Clerks

Service workers; shop and market sales workers

Skilled agricultural and fishery workers

Craft and related trade workers

Plant and machine operators and assemblers

Elementary occupations

Undetermined

Percentage (%)

Occupation Profile

45.6%


80

9.9% of the market population are undetermined to work. In total, 45.6% of the local labour force is involved in professional and related occupations.

The above is consistent with the notion that the suburbs in the trade area are predominantly middle income suburbs. Development implications The occupation profile reflects two dominant market segments – one segment representing white collar occupations, serving as proxy for higher incomes and overall wealth, with the other representing blue collar occupations serving as proxy for middle income earners. These findings correlate with the findings of preceding paragraphs pertaining to aspects such as level of education and employment.

4.7 DWELLING TYPES

The following table indicates the different dwelling types of the population in the market area. Table 4.3: Dwelling Type Dwelling Type Percentage

House or brick structure on a separate stand or yard 60.3

Flat in block of flats 18.3

House/flat/room in back yard 10.0

Town/cluster/semi=detached house (simplex; duplex; triplex) 5.1

Informal dwelling/shack in back yard 1.7

Room/flatlet not in back yard but on shared property 1.7

Informal dwelling/shack NOT in back yard 1.2

Traditional dwelling/hut/structure made of traditional materials 1.1

Caravan or tent 0.6 Source: Demacon, 2011

Findings: (Table 4.3) The majority of the population (60.3%) in the market area is occupying a house or brick

structure on a separate stand or yard. The second largest group (18.3%) is occupying a flat in a block of flats. 10.0% of the market is occupying a house / flat / room in back yard and 5.1% of the market

is occupying a town / cluster / semi detached house (simplex, duplex, triplex).

4.8 TENURE STATUS

The following figure indicates the type of tenure of the population in the market area in terms of a residence that is owned and fully paid off, a residence owned but not yet paid off, rented and occupied rent free.


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Figure 4.5: Type of tenure


Findings: (Figure 4.5) The majority of the population (27.8%) in the market area owns a house that is fully paid

off in relation to 26.7% of the houses owned but not fully paid off. 26.5% of the population in the market is renting a house whereas 19.0% of the market

population is occupying a house rent free.

4.9 ANNUAL HOUSEHOLD INCOME

Average household income is a direct indicator of consumer demand for a broad spectrum of economic goods and services and the quantity of additional floor space that could be sustained by a given consumer market. Average household income, to an extent, also reflects the living standard of a household, and influences aspects such as asset ownership. Figure 4.6 illustrates the annual household income profile of the primary market. This indicates that the market area is located in predominately middle income community, representing pockets of wealth and poverty.

Owned and fully paid off

27.8%

Owned but not yet paid off

26.7%

Rented 26.5%

Occupied rent-free 19.0%

Tenure Status


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Figure 4.6: Average annual household income


Note: The income profile presents the income defined segment of the market i.e. excluding households within the undetermined income category.

Findings: (Figure 4.6) The dominant segment (16.7%) of households in the market area earns between

R159,768 – R319,532. The second largest group (15.1%) of the market earns an annual household income

between R39,944 and R79,883 followed by 14.8% of the households earns an annual income between R79,885 – R159,766.

15.9% of households in the market area earns incomes exceeding R319,534+. The weighted average annual household income in the market area amounts to R240,348 per annum, which translates into R20,029 per month (2011 values).

The weighted average annual household income in the LSM 4 – 10+ households in the market area amounts to R322,845 per annum, which translates into R26,904 per month (2011 values).

Development Implications This indicates that the market area is predominantly characterised by a middle income earning consumer market. Overall these income trends correlate with the findings of the preceding sections and impact directly on the overall living standard measurement of the market. Subsequent paragraphs indicate the living standard measurement of the market.

4.10 LIVING STANDARD MEASUREMENT

The LSM index is an internationally recognised instrument designed to profile a market in terms of a continuum of progressively more developed and sophisticated market segments. The LSM system is based on a set of marketing differentiators, which group consumers

7.7

5.3

12.1

12.4

15.1

14.8

16.7

11.5

2.6

0.9

0.5

0.4

0.0 5.0 10.0 15.0 20.0

No income

R2 - R9,985

R9,987 - R19,971

R19,973 - R39,941

R39,944 - R79,883

R79,885 - R159,766

R159,768 - R319,532

R319,534 - R639,063

R639,063 - R1,278,127

R1,278,129 - R2,556,253

R2,556,256 - R5,112,507

R5,112,509+

%

Income Profile


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according to their standard of living, using criteria such as degree of urbanisation and ownership of assets (predominantly luxury goods). Essentially, the LSM system is a wealth measure based on standard of living, rather than income alone. The market segmentation continuum is divided into ten LSM segments, where LSM 1 signifies the lowest living standard and LSM 10+ signifies the highest living standard. The LSM categories are defined and weighted in terms of the following 29 variables (refer to Table 4.4). It is important to note that the LSM system is widely applied internationally for marketing and branding purposes, and that it is therefore not an instrument developed locally to label or stereotype certain market segments. Table 4.4: Living Standard Measurement (LSM) Variables

1 Hot running water 16 Less than 2 radio sets/household 2 Fridge/freezer 17 Hi-Fi/music centre 3 Microwave oven 18 Rural outside 4 Flush toilet in/outside house 19 Built-in kitchen sink 5 No domestic in household 20 Home security service 6 VCR 21 Deep freezer 7 Vacuum cleaner/floor polisher 22 Water in home/plot 8 No cell phone in household 23 M-net/DSTV subscription 9 Traditional hut 24 Dishwasher

10 Washing machine 25 Electricity 11 PC in home 26 Sewing machine 12 Electric stove 27 DVD player 13 TV set 28 1 cell phone per household 14 Tumble dryer 29 Motor vehicle in household 15 Home telephone

Table 4.5 summarises the current status of the consumer market in terms of the LSM index. Essentially, the LSM index summarises the net result of market indicators discussed in preceding paragraphs. The target market segments utilised for net effective demand modelling are LSM 6 to 10+. This does not preclude LSM 1 - 5 market segments from supporting the mixed use development. The objective is to assess whether minimum demand thresholds can be met by households within the market area sustaining the market potential, taking due cognisance of demand potential and effective competitive supply of commercial and residential activities. Demand modelling therefore only focuses on LSM 6 - 10+ segments of the market. Table 4.5: Living Standard Measurement Indicator

Source: Demacon calculations

Note: The LSM profile presents the income defined segment of the market i.e. excluding households within the undetermined income category.

Income category (R/month) LSM Status Market Area

(% of households)

Super A income LSM 10+ 9.0

A Income LSM 10 6.9

B Income ( LSM 9 11.7

C Income high LSM 8 5.0 C Income low LSM 7 13.3

D Income LSM 6 10.5 D Lower top LSM 4 to 5 11.0 D lower end LSM < 3 32.6


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Findings: (Table 4.5) As seen in Table 4.5 15.9% of the market population fall within the LSM 10 and higher

category. 30.0% of the households in the market fall within the LSM grouping 7 and 9 category. 67.4% of households in the market fall within the LSM 4 and higher category. The largest segment of the households 54.1% in the market area fall within the lower

LSM groups (LSM <3) categories.

4.11 SYNTHESIS

This section provides an overview of the socio-economic indicators of the market area. The following summarise the main characteristics of the market area. Table 4.6: Key socio-economic indicators of the market area


Population size 6,693 people 2,715 households

Household Size 2.5 people/ household

Age profile

13.4% - between 10 and 19 years 37.6% - between 20 and 40 years 25.1% - between 40 and 60 years 14.2% - 60 years +

Highest level of education

36.1% - Std 10 / Grd 12 31.5% - Some secondary 19.5% - Higher education 7.1% - Some primary 3.6% - No schooling 2.2 - Complete secondary

Level of employment 68.9% Economically active of which 10.4% is unemployed and 89.6% is employed

Occupation profile

21.6% - Elementary occupations 15.7% - Clerks 11.8% - Technicians and associate professionals 11.2% - Professionals 10.0% - Service workers; shop and market sales workers 9.9% - Undetermined 9.3% - Craft and related trade workers

Dwelling types

60.3% - House or brick structure on a separate stand or yard 18.3% - Flat in block of flats 10.0% - House / flat / room in back yard 5.1% - Town / cluster / semi detached house (simplex, duplex, triplex

Tenure status

27.8% - Owned and fully paid off 26.7% - Owned but not yet paid off 26.5% - Rented 19.0% - Occupied rent-free

Average household income (2011)

All LSM’s: R240,348 per annum (2011 values) R20,029 per month (2011 values) LSM 4 – 10+ households: R322,845 per annum (2011 values) R26,904 per month (2011 values)

LSM Profile 67.4% LSM 4 to 10+ 30.0% LSM 7 to 9 15.9% LSM 10 - 10+


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Approximately 6,693 people and 2,715 households reside within the market area. The average household size within the market amounts to approximately 2.5 people per household. Of the total market population (68.9%) are within the economically active market segment of which 89.6% is formally employed - largely within occupations varying from elementary occupations, clerks, professionals to technicians and associate professionals. Furthermore it is also evident that the largest proportion (60.3%) of the market area occupies a house or brick structure on a separate stand or yard followed by 18.3% a flat in block of flats. The market area is characterised as a middle income area. The target market, (LSM 4 – 10+) households earns R26,904 monthly and R332,845 annually and represents 67.4% of the market. The following Chapter provides a discussion and precise overview of the retail market and demand modelling.


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CHAPTER 5: INDUSTRIAL MARKET ANALYSIS

5.1 INTRODUCTION

This section of the report focuses on the light industrial / commercial market, with the objective of estimating the development potential within the designated area. In order to reach this objective, the demand for development within the market area should be identified and assessed in light of current trends. Subsequent sections provide a concise overview of the light industrial / commercial market in terms of the following aspects: General Industrial Market Trends Industrial & Commercial Park Case Studies Local Market Indicators Industrial Net Space Demand Modelling Synthesis

5.2 GENERAL INDUSTRIAL MARKET TRENDS

5.2.1 MOST IMPORTANT CHARACTERISTICS OF INDUSTRIAL PARKS

It should be developed according to a predetermined master plan Management is governed by a single management body, whether the owner or an

association of occupiers Control is exercised over the uses and activities, by means of zoning, title conditions and

mutual agreements The compatibility of uses is protected to the advantage of the occupiers and the owner as

well as the community in which the industrial park is located. Roads (in many cases also railway facilities), parking, services, as well as eating and

recreation facilities and related services are provided.

5.2.2 ADVANTAGES AND LIMITATIONS OF INDUSTRIAL PARKS Advantages and limitations for the developer:

The development of an industrial site increases the value of adjacent sites. In an industrial

park the developer owns the adjacent sites and therefore enjoys the advantage of appreciation in value.

The developer hopes for greater returns from the development of an industrial park than from sales of the underdeveloped land.

The industrial park offers the possibility of scale advantages from a planning and cost viewpoint.

Sites and buildings in an industrial park are usually easier to market than individual sites or buildings.

Financing an industrial park may be easier and better terms may possibly be obtained. The developer can determine the pace of development by phasing. The development

success of an earlier phase also affects the success of later phases-he therefore controls his own future to a great extent.

The developer of an industrial park requires exceptional skill and high capital cost. Capital often has to be invested for long periods before a return is obtained.

The cost of improvements may be higher than in the case of individual sites, which are

often served by existing roads and services.


87

Requirements set by local authorities may be more restrictive than in the individual sites. If certain services (like access roads) must be provided by the local authorities it may

happen that they are not provided according to schedule with the accompanying embarrassments and costs to the developer.

The sustained enforcement of park standards and control measures is time-consuming and expensive. The developer is not involved in the short-term, but remains involved until the whole industrial park is completed and often afterwards as well.

The developer cannot adjust easily to changing market circumstances.

Advantages and limitations for the industrialist/occupier:

Immediate availability of a variety of full-equipped spaces Possible scale benefits of development costs, as well as operating costs A choice of different site sizes, shapes and locations is usually possible in the industrial

park. A wide variety of services (e.g. security, landscaping) is usually available. Pleasant working conditions and usually nearby-situated eating and recreation facilities for

employees. Stability of environment and character Sites and buildings in an industrial park are usually easier to market, lease or sublet in the

future, than individual sites or buildings. High cost. In spite of possible scale benefits, a specific industrialist may not always need

all the services supplied in the industrial park. Control measures which were initially acceptable, may later prove to be unnecessarily

restrictive. Industrial parks are not suitable or acceptable for all industries (e.g. large chemical, steel

or cement factories) Possible loss identity, especially in the case of large, nationally known enterprises. Traffic problems may arise if access roads prove to be insufficient. Advantages and limitations for the community:

Increased job opportunities, income and taxes. Orderly industrial development, with the least negative effort on the community. Diversification of the local economy. More economic utilization of municipal infrastructure. Insufficient planning of access roads may cause traffic problems Future growth of the industrial park may cause an overloading of municipal services

5.2.3 TYPES OF INDUSTRIAL PARKS

General or composite uses

The least specialised type of industrial park in which non-industrial uses are permitted and often encouraged. In some cases some of the occupiers of the industrial park, like filling stations, retailers and catering facilities. However, if other uses are allowed unchecked, the unique character in the area park may be lost. Exclusive industrial parks Industrial parks exclusively occupied by industries are the most common and also a rule the most attractive developer. They do not compete with commercial developments in the area, for instance, and offer the greatest possible basis for industrial development.


88

Single use industrial parks The accommodation of only one type of manufacturing or distributive operation offers the potential of greater possible returns as a result of specialisation. On the other hand, they are exposed to greater risks, since changes in the specific industry’s operation, standards or even preferences may take the whole park obsolete. A specialised variant of the single use industrial park is the single industry park, which accommodates only one industrial enterprise. Since it does not house a community of industries, it is not strictly definable as an industrial park. However, it does not illustrate the importance of aesthetics and compatibility with the environment for modern industries. Office / Mixed use parks Office parks are based on the same principles of developments as industrial parks, with the difference that office uses only are allowed (e.g. at Barlow Park in Sandton).As a result of the need for office accommodation in the immediate vicinity of industries, an office park may be developed directly next to an industrial park (e.g. at City Deep, Johannesburg). Office accommodation may of course also be developed in an industrial park, if the rights allow for this. Besides limited offices inside the factory building or warehouse, office buildings as such may be placed inside the industrial park (e.g. the Isando Industrial Park in Kempton Park or Kya Sands Business Park, Randburg). Research / Technology parks A research park or technology park is an industrial park closely connected with local universities or other research bodies, so far that technology, and especially high level technology, can be conveyed and commercially applied. The first and probably the best known example is the Stanford Research, sometimes also known as Science parks, are also found in Britain, France, Israel, Australia and Taiwan. An extensive bibliography is provided in AURPP (1997). Because Research Park has to be located in an area where there is a considerable concentration of higher education institutions, there are only a few locations in South Africa which are suitable for purpose. Examples include Perserquor Techno Park in Pretoria (Techno forum 1992-exhibit 21.1), the Techno Park in Stellenbosch (Malan 1988) and the Capricorn industrial and technology park in Muizenberg (exhibit 21.2) Airport industrial parks The facilities offered by airports for transport, as well as international and national travelers, create attractive possibilities for industrial parks in the immediate vicinity of an airport (especially for industrial exhibition space).Fisher (1962,1966) offers information on the development of this type of industrial park.

5.2.4 SELECTION OF THE SITE

Location considerations A desirable location for an industrial park is of course where a concentration of exists or can develop-probably a metropolitan location. It should be close to and accessible to labour markets, sources of materials (in terms of type, quantity and delivery costs) and product markets. The location requirements for an industrial park are therefore the same as the location requirements for industries. The site must be immediately accessibility of product from


89

the main transport routes (savings on transport, increased labour market, accessibility of product and visibility), while a location near rail facilities, an airport and harbour, would be an asset. Site requirements

The site under construction must be carefully analyzed to ascertain whether it complies with

the requirements for the development of an industrial park, It is useful to investigate the site by

means of a checklist for site features (Site selection checklist), during the analysis process.

Ideally, the site will have the following features:

a) It should be an event, well-drained pierce of land, more or less rectangular in shape and of

good soil structure.

b) It should be accessible for private as well as public transport.

c) It should be easily offer space for expansion.

d) It must be fully serviced (water, electricity, telephone, grainage, etc.)

e) It should be zoned for industries or a rezoning should be possible (consult Guide Plans

and Town Planning Schemes)

The following section provides images of industrial parks.

STORM HILL EXTENSIONS – West Rand

GROWTH POINT INDUSTRIAL ESTATE – Meadowdale, Germiston, Gauteng


90

MONTAGUE PARK (mixed commercial and industrial) – Milnerton, Cape Town

GIBA BUSINESS ESTATE (mixed commercial and industrial) – Hill Crest, KZN

5.3 LOCAL MARKET INDICATORS

5.3.1 INDUSTRIAL RENTALS AND VACANCIES

Industrial property is showing signs of a recovery, with vacancy rates seemingly levelling off and rentals once again showing growth. Industrial-property space is one of the factors of production in the manufacturing process. As such, improvements in capacity utilization – on the back of a recovering economy – naturally bode well for the demand for industrial space. The levelling-off of vacancies, in turn, augurs well for market rentals. In fact, in the first quarter of 2011, the growth in market rentals (on a national basis) accelerated to nearly 4%. This comes after a sharp cooling in growth and even, in recent quarters, a contraction in rentals. Nonetheless, a closer look at the major industrial conurbation reveals that in the first quarter of 2011 the motor city of Port Elizabeth (+6%) was able to show the strongest growth. The Cape Peninsula followed with growth of 4%, while in Durban rentals were up by 1%. On the Central


91

Witwatersrand, market rentals managed to stay at roughly the same level they were a year ago. In the reporting quarter building-cost inflation as measured by the BER BCI – is expected to have contracted by almost 2%, thereby implying real rental growth in all of these industrial areas. The following table examines pioneer industrial rentals, which provide a prognosis of the short-term direction of industrial rentals. These rentals suggest that there is still upside potential for industrial rental growth. Table 5.1: Industrial rental rates for new state of art developments

Pioneer Normal Prime Difference (%)

Central Witwatersrand 51.67 32.92 57%

West Rand 45.00 30.00 50%

East Rand 60.00 32.81 83%

Far East Rand 40.00 24.00 67%

Pretoria 45.00 28.06 60%

Durban 68.00 34.65 96%

Cape Peninsula 59.56 32.70 82%

Port Elizabeth 41.00 24.57 67%

Bloemfontein 45.00 26.79 68% Source: Demacon ex, Rode Q2:2011

Figure 5.1: Industrial rental rates

Source: Demacon ex, Rode Q2:2011 The following table provides mean prime industrial market rentals which is available for only four specified areas in Pretoria.

CentralWitwatersrand

West Rand East Rand Far East Rand Pretoria

Pioneer 51.67 45.00 60.00 40.00 45.00

Normal Prime 32.92 30.00 32.81 24.00 28.06

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Ran

ds

pe

r re

nta

ble

sq

m (

R / s

qm

) e

xc

l V

AT

Pioneer rental rates for new state-of-art industrial developments

Pioneer Normal Prime


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Table 5.2: Mean Prime Industrial Market Rentals

R/m2 p.m. gross lease; excl VAT

Vacancy 250m 500m 1,000m 2,500m 5,000m

Hermanstad 25.00 25.00 25.00 22.00 22.00 2.00

Kirkney 25.00 25.00 20.00 20.00 20.00 2.00

Pretoria North 27.00 25.00 22.00 22.00 18.00 2.00

Klerksoord 25.00 25.00 25.00 20.00 20.00 2.00

Rosslyn 25.00 25.00 25.00 25.00 20.00 2.00 Source: Demacon ex, Rode Q2:2011

Figure 5.2: Mean Prime Industrial Market Rentals

Source: Demacon ex, Rode Q2:2011

5.3.2 INDUSTRIAL STAND VALUES

The market values of industrial stands are lifting head again, mirroring the current recovery in industrial market rentals. It is found that stand values are highly leveraged by rentals. For example, a 10% increase in market rent might result in an increase of up to 20% in land value. The reason for this, of course, is that land is a residual item in the so-called residual land-valuation model used by valuers and developers alike. Stand values accelerated much faster than industrial rentals. However since 2008, when economic uncertainty and weak economic activity reared their ugly heads, stand values started to decelerate faster than industrial rentals. Stand values are evidently more volatile than rentals. In the first quarter of 2011, the market values of industrial stand on the Central Witwatersrand (+3%) and the Cape Peninsula (+2%) also showed growth in nominal terms. In Port Elizabeth nominal stand values were roughly at the same level they were a year earlier. Over the same period, building-cost inflation as measured by the BER Building Cost Index, contracted by about 2%, translating into positive real stand-value growth in all of these industrial areas.

-

5.00

10.00

15.00

20.00

25.00

30.00

Hermanstad Kirkney Pretoria North Klerksoord Rosslyn

Ran

ds

pe

r re

nta

ble

sq

m (

R / s

qm

) e

xc

l V

AT

Pioneer rental rates for new state-of-art industrial developments

250m 500m 1,000m 2,500m 5,000m


93

A sustained recovery in stand values will only come on the back of a sustained improvement in industrial rentals. This is so, as mentioned previously, because of the strong tendency for these two variables to move together. The following table provides stand values for selected Pretoria areas. Table 5.3: Stand values

Area size in sqm Vacancy

1.000m 500m 1,000m 2,500m

Hermanstad 450 450 450 400 1.0

Kirkney 350 350 300 300 2.0

Pretoria North 600 600 600 600 1.0

Klerksoord 400 400 400 400 3.0

Rosslyn 400 400 400 400 3.0 Source: Demacon ex, Rode Q2:2011

Figure 5.3: Stand values

Source: Demacon ex, Rode Q2:2011

Subsequent section provides the industrial net space demand for the area.

5.4 INDUSTRIAL NET SPACE DEMAND MODELING

The following paragraphs provide definitions of respectively demand and supply for the industrial and commercial market. Definition Wholesale and distribution refers to storage and wholesale facilities from where products (usually in large quantities) are distributed. This does not necessarily include an industrial or manufacturing function.

0

100

200

300

400

500

600

700

Hermanstad Kirkney Pretoria North Klerksoord RosslynRa

nd

s p

er

ren

tab

le s

qm

(R

/ s

qm

) e

xc

l V

AT

Stand values - mean values for services and level industrial stands

1.000m 500m 1,000m 2,500m


94

Wholesalers do have a buying and selling function – products are usually sold in large quantities. An example is such as wholesale trade in agricultural materials and livestock.

Defining Demand The demand in the industrial and commercial market is dependent on the following aspects:

Dwhol = f {Po , P% , Qw , R, Tx, Y; Rs; Rs%}

Where: Po = Population size P% = Population growth Qw = Quality of existing facilities R = Rental levels Tx = Property rates and taxes Y = Household income Rs = Retail sales

Rs% = Retail sales growth Defining Supply

The supply of industrial and commercial land users can be described as being the following:

Swhol = f {Dwhole, Cw, Vw, Lu, Ia, GLAw, Cc}

Where:

Dwhole = Demand Cw = Competition Vw = Vacancies Lu = Surrounding land uses Ia = Infrastructure availability GLAw = Current usable / rentable area Cc = Construction cost

SPACE DEMAND MODELLING

It is known that the demand for industrial / commercial space depends on the production of goods within a specified area. The following figure illustrates cumulative additional land demand for the specified area. Subsequent demand modelling indicators provide insight to the performance of current and future demand of the industrial market of Pretoria & Akasia Local Municipal areas.


95

Figure 5.4: Cumulative Additional Land Demand

Source: Demacon Space Demand Model, 2011

The following figure illustrates forecast land take-up. It is evident that the greater percentage of take-up will be by warehousing, which indicates that this sector is the dominant sector in the market area. Figure 5.5: Forecast Land Take-Up


-

5.00

10.00

15.00

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30.00

35.00

40.00

45.00

50.00

201

1

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3

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9

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0

202

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202

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202

6

He

cta

re

Year

Cumulative Land Demand

4.02

9.89

17.85

6.00

15.58

29.33

- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00

Up to 2016

2021

2026

Hectare (ha)

Ye

ar

Forecast Land Take-Up

Manufacturing Warehousing

Cumulative Demand Frontier


96

Figure 5.6 indicates that the greatest percentage of take-up in warehousing will be up to 2024. Figure 5.6: Proportional Land Take-Up


Figure 5.7 illustrates the respective share of manufacturing and warehousing for the specified areas. Figure 5.7: Share - Manufacturing & Warehousing


4.02

6.00

9.89

15.58

17.85

29.33

- 10.00 20.00 30.00 40.00 50.00 60.00

Manufacturing

Warehousing

Hectare (ha)

Se

cto

r

Proportional Take-Up

Up to 2016 2021 2026

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Up to 2016 2021 2026

Perc

en

tag

e

Year

Share

Warehousing Manufacturing


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5.5 SYNTHESIS

This chapter outlined the industrial market including the latest trends, local indicators and the industrial space demand modelling. The modelling can be summarised as follows:

GAP ANALYSIS

Table 5.4: Synthesis of Space Demand Modelling results, 2016 - 2026








Developable Bulk (square metres) 3,758 9,552 17,693 Table 5.5: Recommended space demand - cumulative

Forecast Hectares




Table 5.6: Recommended space options (2011) Variables Rand per annum / m

2 GLA


Optimum size (up to 2021) 1.92 hectares


Parking bays 191


The following is evident from the tables above: The total industrial potential of Pretoria & Akasia areas up to 2016 amounts to







Yes

Medium - High

Development Type


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CHAPTER 6: TRADE MARKET ANALYSIS

6.1 INTRODUCTION

This section of the report focuses on the trade market, to determine automotive demand, potential of fitment centres and workshops etc. In order to reach this objective, the supply and demand for trade development within the market area should be identified and assessed in light of current trends. Subsequent sub-sections provide a concise overview of the market in terms of the following aspects: Defining of Sector and Sub-Sectors Quarterly Review of Business Conditions: Motor Vehicle Manufacturing Market Potential Assessment

Market Supply Space Demand Modelling

Synthesis

6.2 DEFINING OF SECTOR AND SUBSECTOR

The formal definition of the wholesale and retail trade sector according to the Stats SA SIC (Standard Industrial Classification and all Economic Activities (SIC)) is: MAJOR DIVISION 6: Wholesale and retail trade, repair of motor vehicles, motor cycles and personal and household goods, hotels and restaurants. The formal definitions of the sub-sectors according to the Stats SIC are: SIC 61 - Wholesale and commission trade, except of motor vehicles and motor cycles This sector (61) includes the following activities:

611 wholesale trade on a fee or contract basis 612 wholesale trade in agricultural raw materials, livestock, food, beverages and

tobacco 613 wholesale trade in household goods 614 wholesale trade in non-agricultural intermediate products, waste and scrap 615 wholesale trade in machinery, equipment and supplies 616 other wholesale trade

SIC 62 - Retail trade, except of motor vehicle and motor cycles; repair of personal household goods This sector (62) includes the following activities:

621 non-specialised retail trade in stores 622 retail trade in food, beverages and tobacco in specialised stores 623 other retail trade in new goods in specialised stores 624 retail trade in second-hand goods in stores 625 retail trade not in stores 626 retail trade of personal and household goods


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SIC 63 - Sale, maintenance and repair of motor vehicles and motorcycle; retail trade in automotive fuel This sector (63) includes the following activities:

631 sale of motor vehicles 632 maintenance and repair of motor vehicles 633 sale of motor vehicle parts and accessories 634 sale, maintenance and repair of motorcycles and related parts and accessories 635 retail sale of automotive fuel

SIC 64 - Hotels and restaurants This sector (64) includes the following activities:

641 hotels, camping sites and other provision of short-stay accommodation 642 restaurants, bars and canteens

6.3 QUARTERLY REVIEW OF BUSINESS CONDITIONS (New Vehicle Manufacturing

Industry)

Subsequent sub-sections provide a concise overview of the business conditions of NAAMSA

in the South African new motor vehicle manufacturing industry during the first quarter of 2011

under the following headings: Employment Levels And Trends Number of shits Availability and price trends of components and raw materials Utilisation of production capacity New investment / investment proposals: 2008 actual and 2009 projection Business Conditions and Performance Indicators

Key features: Increase in projected industry capital expenditure for 2011. Aggregate industry employment levels were stable and registered a marginal

improvement. Industry capacity utilisation levels in all sectors continued to improve further. New vehicle sales, in all segments, continued to show good growth. Export sales continue to reflect strong growth momentum. Short to medium terms outlook remains positive with 2011 - 2013 new vehicle sales,

exports and production projections reflecting expectations of further growth. The industry’s contribution to South Africa’s GDP during 2010 increased to 6.2% from

5,9% in 2009. During 2010, South Africa’s share of global production remained at 0,61%.

6.3.1 EMPLOYMENT LEVELS AND TRENDS

The number of persons employed by the South African new vehicle manufacturing industry – comprising the major new vehicle manufacturers and specialist commercial vehicle and bus manufacturers – during the first quarter of 2011 may be set out as follows:


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Table 6.1: Employment Industry Total

Last pay week January, 2011 28 050 Last pay week February, 2011 28 090 Last pay week March, 2011 28 179 Source: Demacon, ex NAAMSA

Industry employment levels and trends reflect employees on the payroll of vehicle manufacturers. Compared to the 28 128 positions at the end of 2010, aggregate industry employment improved by 51 jobs during the first quarter of 2011 to 28 179 jobs – a marginal improvement of 0,2%. Employment levels at all the manufacturing plants remained stable during the quarter.

6.3.2 NUMBER OF SHITS

Most manufacturers operate on a single production shift basis, an increasing number of manufacturers operate double shifts in selected areas such as machining, press shops, paint shop operations and body shop.

6.3.3 AVAILABILITY AND PRICE TRENDS OF COMPONENTS AND RAW MATERIALS COMPONENTS

Imported Components The availability and supply of imported original equipment components, during the first quarter of 2011, remained satisfactory. During the quarter, the landed cost of imported components remained relatively stable benefitting from the strength of the Rand against major currencies. The impact of the Japanese earthquake disaster is being assessed, on a daily basis, by automotive companies sourcing from Japan. Over the medium term, component and vehicle shortages could have a negative, but hopefully temporary impact on local Japanese product producers and importers. Local Components During the first quarter of 2011 the availability and supply of locally produced components remained satisfactory. Ongoing relentless focus on global cost competitiveness and general cost reduction targets continues to pressurise suppliers. Local component pricing will be affected by electricity and other administered price increases as well as recent above inflation wage settlements. RAW MATERIALS

Imported materials The availability of imported raw materials, where applicable, remained satisfactory. Pricing trends remain a function of exchange rate movements and commodity prices which showed a tendency to increase during the quarter. As a result of the Japanese crisis, imported raw materials are being monitored. Currently, however, there are no indications of shortages.


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Local materials Local raw material price movements continue to mirror international pricing trends. Double digit price increases in local automotive steel grades were noted.

6.3.4 UTILISATION OF PRODUCTION CAPACITY

Average motor vehicle assembly industry capacity utilisation levels, by sector and for the years/quarters indicated, may be illustrated as follows: Table 6.2: Capacity utilisation levels

Year 2005

Year 2006

Year 2007

Year 2008

Year 2009

Year 2010

1st

Qtr 2011

1st Qtr 2011 Range

High Low

Cars 81,1% 80,1% 67,7% 68,3% 59,4% 77,1% 74,5% 100,0% 17,3%

Light Commercials 79,9% 87,8% 82,7% 73,9% 56,5% 68,4% 79,5% 100,0% 37,7%

Medium Commercials

84,4% 97,9% 91,7% 89,9% 64,6% 77,2% 92,0% 100,0% 81,0%

Heavy Commercials

95,9% 95,1% 95,3% 87,6% 66,1% 77,5% 95,7% 105,0% 78,0%

Source: Demacon, ex NAAMSA

Industry average capacity utilisation levels, during the first quarter of 2011, improved further in all sectors and are currently nearing the historic highs achieved in 2006. Inventory replenishment, higher production for export markets and the domestic market were the main contributing factors.

6.3.5 NEW INVESTMENT/INVESTMENT APPROVALS: 2010 ACTUAL AND 2011

PROJECTION

NAAMSA reports the industry’s aggregate capital expenditure on an annual basis. The aggregated data is based on Capital Expenditure details supplied by the seven major vehicle manufacturers. Details of actual industry capex for 2000 through 2010, in Rand millions, as well as the projection for 2011 – are as follows: Table 6.3: Industry capex

R Millions

Capital Expenditure

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Projected

Product/Local/Content/Export Investment/ Production Facilities

1 311 1 800 2 311 1 989 1 816 2 805 5 058 2 460 2 808 2 216 4 068 3 752

Land and Buildings 110 33 152 142 130 512 758 382 329 179 381 460

Support Infrastructure (I.T., R&D, Technical, etc.)

141 245 262 194 274 259 399 254 153 74 176 242

Total 1 562 2 078 2 726 2 325 2 220 3 576 6 215 3 096 3 290 2 469 4 624 4 455



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The decline in industry capital expenditure by vehicle manufacturers during 2009 was mainly due to the impact of the global financial and economic crisis and the deferral of various investment projects. The increase in capital expenditure during 2010 and 2011 may be attributed in large part to Investment Projects by manufacturers to gear up for the impending Automotive Production and Development Programme (APDP). According to the recent budget vote statement by the Minister of Trade & Industry, Dr R Davies, the Automotive Investment Scheme, which forms part of the Automotive Production and Development Programme, has resulted in planned investments by automotive assemblers and component supplier companies of R13 billion – R9 billion by assemblers and R4 billion by component companies. Together these investments will support 24 000 jobs. A feature of these investments will be a significant expansion in local component sourcing by vehicle manufacturers.

6.3.6 BUSINESS CONDITIONS AND PERFORMANCE INDICATORS Business Conditions: First Quarter, 2011 2011 first quarter aggregate industry new car sales at 102 185 units recorded an improvement of 20 738 units or 25,5% compared to the 81 447 new cars sold during the corresponding quarter of 2010. Aggregate industry commercial vehicle sales during the first quarter of 2011 at 45 533 units recorded an improvement of 6 084 units or 15,4% compared to 39 449 units sold during the corresponding quarter of 2010. Table 6.4: Industry domestic sales growth

Industry Domestic Sales Growth : Direction and Extent of Change

(Previous quarter’s percentage changes are reflected in brackets)

Qtr ended 31 March 2011 compared with previous Qtr ended 31 December 2010

Qtr ended 31 March 2011 compared with corresponding

Qtr ended 31 March 2010

Passenger Cars +17.6% (-6,3%) +25,5% (+30,3%)

Light Commercial Vehicles +11.3% (+13,9%) +14,2% (+20,2%)

Medium Commercial Vehicles +22,7% (+6,2%) +31,7% (+13,0%)

Heavy Commercial Vehicles / Buses +4,6% (-0,5%) +19,6% (+39,5%)


On a quarterly basis, year on year sales of new vehicles in all segments recorded strong gains compared to the corresponding quarter in 2010.

Brief Comment on the Outlook for 2011 Expectations of higher growth in the global economy as well as for the South African economy in 2011 should lend support to domestic and export sales of new motor vehicles. Continued growth in consumer expenditure and public sector infrastructural investment should support domestic new vehicle sales. However, the inflation outlook has deteriorated, amongst other things, as a result of administered price and taxation increases. This will put upward pressure on interest rates towards the end of 2011 and into 2012. Further growth in export sales will depend on continued recovery in the global economy. At this stage, 2011 domestic new car sales are anticipated to grow by up to 15% in volume terms, whilst export sales by the industry


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during 2011 are projected to rise by about 61 500 vehicles or some 26% over the 2010 figures – please refer to attached schedule.

6.3.7 NEW VEHICLE SALES PERFORMANCE (NAAMSA) – JULY 2011

Figure 6.1: Passenger Car Market Actual


Figure 6.2: Passenger Car Market Actual vs Trend – NAAMSA



104

Figure 6.3: Passenger Dealer Market Actual vs Trend


Figure 6.4: New Car Trend Cycle Monthly % change



105

Figure 6.5: New Passenger Car Sales Cycle including AIV Hand and AAD


Figure 6.6: % change in the total New Car Sales Cycle



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Table 6.5: Summary of sales figures SEGMENT VOLUME

Small Cars (Cubic Capacity 1400cc or less) 2 613

Medium Cars (Cubic Capacity 1400cc - 2500cc) 2 350

Large Cars (Cubic Capacity 2500cc or greater) 153

4X4 Recreational/SUV 334

Light Commercial Vehicles 737

Medium Commercial Vehicles 47

TOTAL 6 231 BRIEF COMMENT ON THE OUTLOOK FOR 2011

Expectations of higher growth in the global economy as well as for the South African economy in 2011 should lend support to domestic and export sales of new motor vehicles. Continued growth in consumer expenditure and public sector infrastructural investment should support domestic new vehicle sales. However, the inflation outlook has deteriorated, amongst other things, as a result of administered price and taxation increases. This will put upward pressure on interest rates towards the end of 2011 and into 2012. Further growth in export sales will depend on continued recovery in the global economy. At this stage, 2011 domestic new car sales are anticipated to grow by up to 15% in volume terms, whilst export sales by the industry during 2011 are projected to rise by about 61 500 vehicles or some 26% over the 2010 figures – please refer to attached schedule. COMMENT ON JUNE 2011 SALES:

In amplification of the new vehicle sales statistics for the month of June, 2011 – released today by the National Association of Automobile Manufacturers of South Africa (NAAMSA) – the Association commented that the June new vehicle sales reflected a mixed performance with new car sales and new truck sales showing relatively strong growth but light and medium commercial vehicle sales reflecting weakness. June, 2011 aggregate industry domestic sales had improved by 5006 units or 12,6% to 44880 vehicles from 39874 vehicles sold during June last year. Total domestic sales for the first half of calendar 2011 remained 15,7% ahead of the corresponding six months in 2010. This was down from the 16,4% year on year growth for the first five months of the year. June, 2011 export sales at 25295 vehicles had registered good growth rising by 4848 units or 23,7%. Overall, out of total June, 2011 industry reported sales of 44880 vehicles, 85,7% or 38462 units represented dealer sales, 7,8% represented sales to the car rental industry, 3,6% represented industry corporate fleet sales and 2,9% sales to government. Total new car sales during June, 2011 had exceeded expectations and at 31440 units showed an improvement of 4646 new cars or 17,3% compared to the 26794 new cars sold during June, 2010. The new car market had to date benefitted from the relatively low interest rate environment, increased lending by financial institutions and pent up replacement demand. Declining new car prices, in real terms, had also supported demand. Sales of industry new light commercial vehicles, bakkies and minibuses at 10998 units during June, 2011 reflected a reduction of 202 units or a fall of 1,8% compared to the 11200 units


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sold in the corresponding month last year. For the first six months of 2011, new light commercial vehicle sales were ahead by only 5,1% on the corresponding period last year. Sales of vehicles in the medium and heavy truck segments of the industry reflected a mixed performance and at 734 units and 1708 units, respectively, had recorded a marginal decline in the case of medium commercials vehicle compared to a gain of 563 units or 49,2%, in the case of heavy trucks and buses – compared to the corresponding month last year. At the half way mark in 2011, total aggregate sales of medium, heavy commercials and buses remained 22,1% ahead of the corresponding six months of last year. The latest figures suggested positive fixed investment associated with major infrastructural projects. Exports of South African produced motor vehicles during June, 2011 at 25295 units reflected an increase of 4848 vehicles or 23,7% compared to the 20447 vehicles exported during June last year. The momentum of new vehicle exports remained positive. Whilst the South African economy was expected to achieve a modestly higher growth rate of around 3,8% in 2011, there were indications that the macro environment going forward was likely to become less supportive. The decline in the purchasing managers index, for the third successive month, as well as recent declines in the Reserve Bank’s leading indicator, suggested a slower pace of expansion over the medium term. Significantly higher than inflation administered price increases, rising energy costs and the impending introduction of freeway toll charges in Gauteng would impact negatively on consumer disposable income at the expense of demand for durable goods. Together with expectations of rising interest rates from the beginning of 2012, consumer demand generally was likely to come under pressure. These developments were expected to affect domestic new vehicle sales over the medium term. Export sales should however continue to show good growth but remained dependant on the performance of the global economy. Sound macro-economic management required consistent policies that promoted investment necessary and essential for growth and employment creation. Statements about nationalization and expropriation were counter productive and damaging in that they undermined South Africa’s future economic growth and employment creation potential. NAAMSA supported other business organisations in adopting a more proactive stance on the importance of tried and trusted and successful economic policies.


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NEW VEHICLE SALES PERFORMANCE (NAAMSA) – JUNE 2011 Figure 6.1: Passenger Car Market Actual vs Trend

Figure 6.2: Passenger Dealer Market Actual vs Trend


109

Figure 6.3: New Car Trend Cycle Monthly % Change

Figure 6.4: Y/Y % change in the total new car sales cycle


110

Table 6.5: Summary of sales figures SEGMENT VOLUME

Small Cars (Cubic Capacity 1400cc or less) 2 167 Medium Cars (Cubic Capacity 1400cc - 2500cc) 2 073 Large Cars (Cubic Capacity 2500cc or greater) 65 4X4 Recreational/SUV 491 Light Commercial Vehicles 676 Medium Commercial Vehicles 29 TOTAL 5 501

The following figure indicates total sales of South Africa in terms of passenger cars, light commercials and medium & heavy commercial vehicles. Figure 6.5: Total sales


Figure 6.6 indicates regional sales of the provinces from September 2010 to March 2011.

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Ac

tua

l n

um

be

r

Total sales (local and export)

Passenger Cars Light Commercials Medium and Heavy Commercials


111

Figure 6.6: Regional sales

Figure 6.7 indicates sales in Gauteng from September 2010 to March 2011 in terms bus sales, heavy commercial vehicle, light commercial vehicle, medium commercial vehicles, passenger vehicle sales and extra heavy commercial vehicles. Figure 6.7: Gauteng sales


-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Ac

tua

l n

um

be

r

Regional sales - Provinces

Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Bus Sales HeavyCommercial

Vehicle Sales

LightCommercial

Vehicle Sales

MediumCommercial

Vehicle Sales

PassengerVehicle Sales

Extra HeavyCommercial

Vehicle Sales

Ac

tua

l n

um

be

r

Gauteng sales

Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11


112

6.4 MARKET POTENTIAL ASSESSMENT

The demand-side dynamics within the market have been concisely described in preceding chapters, supported by a retail market growth assessment. An assessment of the net effective demand for additional retail floor space will be made in this chapter. A growth forecast, respectively for a five and ten year horizon are provided based on economic, population and income growth prevalent in the market. Demand modelling has become increasingly specialised over the past decade. One particular aspect that has changed is a notable shift away from broad based supply-demand estimations to multivariate, differentiated models. Contemporary models focus on specific expenditure patterns of selected LSM market segments. The development potential estimations will be addressed under the following headings: Retail Supply Retail Demand Development Potential

6.4.1 MARKET SUPPLY

Subsequent tables summarise automotive related supply in and around the trade area in terms of automotive accessories, automotive spares and automotive sales. Table 6.6: Summary of automotive businesses

Business: Street Suburb Category

Mercedes-Benz Wonderboom

26 Lavender Road West, Pretoria

Wonderboom Motor Dealership

Lavender Road Sinoville Motor Dealership

Toyota Pretoria Noord 597 Gerrit Maritz Street Pretoria North Motor Dealership

Lazarus Motor Company

400 West Street Wolmer Motor Dealership

McCarthy Volkswagen Wonderboom

Lavender Road Wonderboom Motor Dealership

-

Lavender Road Sinoville Motor Dealership

2 Braam Pretorius Street Annlin West Motor Dealership

Kia Motors - Wonderwaters

Braam Pretorius Annlin West Motor Dealership

Renault - Wonderwaters Braam Pretorius Annlin West Motor Dealership

Autozone - Zambesi Drive

Zambesi Drive Montana Vehicle Repairs - Spare Parts & Accessories

Tiger Wheel & Tyre Zambezi Drive, Corner Breed Street

Montana Fitment Centre

Dunlop Tyre Fitment Centre

Bougainvilla Road Montana Fitment Centre

Platinum Wheels 138 Lavender Road Sinoville Fitment Centre

Tip Top Tyres Cc 437c Gerrit Maritz str Pretoria North Fitment Centre

Tiger Wheel & Tyre Lavender Road, Corner Zambezi Road, Wonderboom

Annlin West Fitment Centre


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Business: Street Suburb Category

Hi-Q Thomas Tyres Zambesi Street Montana Fitment Centre

Brooklyn Panel Beaters 33 Gemsbok Street Koedoespoort Autobody Repairer

CPM Panelbeaters 38 Hendrik van Eck St Rosslyn Autobody Repairer

Indibano Auto Body Services

19 Eland St Koedoespoort Autobody Repairer

City Locksmiths Pretoria 478A Church Str East Arcadia Automotive Locksmith

Koops Workshop 657 Voortrekker Rd Gezina Gen Rep

Menlyn Motor Services Cnr Lois + Bali Ave Newlands Gen Rep

AAA Motors 604 Michael Brink Street

Gezina Gen Rep

Propshaft Doctor 371 Taljaard Str Hermanstad Propshaft, Driveshaft Fitment Centre

Driveshaft Baleka 588 Bonita Crescent Kirkney Propshaft, Driveshaft Fitment Centre

Greyling Motors 525 Frederika St Gezina Used Car Dealer

The following section provides the space demand estimations for the trade sector (automotive and related services).

6.4.2 SPACE DEMAND ESTIMATIONS

Space demand modelling has become increasingly specialised. One particular aspect that has changed is a notable shift away from broad based supply-demand estimations to multivariate, differentiated models. In the context of preceding chapters, the trade development potential in the market is subsequently determined, based on a specialist econometric model. It is known that the demand of space depends on the production function of a market area. Defining Demand Retail demand depends on a variety of customer-related aspects. It can be conceptualised as follows: Dret = f {Po; P%; Q; Y; Re; Cp; Sf}

Where:

Po = Population size

P% = Population growth

Q = Existing quality of retail space

Y = Household income

Re = Household expenditure patterns

Cp = Consumer preferences

Sf = Seasonality factors


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Defining Supply The supply of the markets entails the following:

Sret = f {Dret; GLAret; R; Sc; Cc; Lu; Ia; Sp; Vret } Where:

Dret = Demand

GLAret = Current rentable/useable area

R = Rent/m2

Sc = Competition

Cc = Construction cost

Lu = Surrounding land uses

Ia = Infrastructure availability

Sp = Speculative climate

Vret = Vacancy

Trade demand modelling has become increasingly specialised. One particular aspect that has changed is a notable shift away from broad based supply-demand estimations to multivariate, differentiated models. In the context of preceding chapters, the development potential for trade in the market is subsequently determined, based on a specialist econometric model. To develop a model, inter alia three data sets are required in time series format. They are: Total employment of the market area, Trade sector employment, Trade sector productivity indicator.

Related property market indicators, together with the four data series were used in the following formula.

FORMULA:

The following equation is used to determine office space absorption: ABť =*CO)آť – OCt-1) OCt-1 1آ - ( α0 + α1EM1 + α2EWt + α3Qt – α4Rt-2)آ= Key:

It is known that the demand for trade space depends on the level of activity in terms of wholesale and retail trade, (including automotive and fuel retail sales), as well as catering and accommodation within the Pretoria & Akasia areas. Figure 6.8 illustrates cumulative additional trade space demand for the area.

AB = Net absorption of space

OC = Occupied Space

EM = Employment in Wholesale & Retail sector

EW = Employment in Catering & Accommodation sector

Q = Trade Sector Output per Worker

R = Rental Rate for Retail Space


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Figure 6.8: Cumulative Additional Trade Space Demand (Pretoria & Akasia)

Source: Demacon Modelling

The following figure illustrates the forecast take-up for the trade sector. Figure 6.9: Forecast Trade Space Take-Up (Pretoria & Akasia)


-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

202

6

Sq

ua

re M

ete

rs (

GL

A)

Year

Cumulative Additional Space Demand (sqm GLA)

55,720

92,456

119,794

9,522

10,851

12,658

- 20,000 40,000 60,000 80,000 100,000 120,000 140,000

Up to 2016

2016-2021

2021 to 2026

Space (sqm GLA)

Ye

ar

Forecast Space Take-Up

Wholesale & retail trade Catering and accommodation

Cumulative Demand Frontier


116

Figure 6.10 illustrates the respective proportional trade space take up of wholesale and retail trade as well as catering and accommodation for the specified area. Figure 6.10: Proportional Trade Space Take-Up (Pretoria & Akasia)

Source: Demacon Modelling Figure 6.11: Share - Wholesale & Retail Trade; Catering & Accommodation (Pretoria & Akasia)


55,720

9,522

92,456

10,851

119,794

12,658

- 50,000 100,000 150,000 200,000 250,000 300,000

Wholesale & retail trade

Catering and accommodation

Space (sqm GLA)

Secto

r

Proportional Take-Up

Up to 2016 2016-2021 2021 to 2026

75%

80%

85%

90%

95%

100%

Up to 2016 2016-2021 2021 to 2026

Pe

rce

nta

ge

Year

Share

Catering and accommodation Wholesale & retail trade


117

The following table summarised the space demand modelling results for wholesale & retail trade, catering & accommodation as well as automotive sales. DEMAND MODELLING

Demacon’s Demand Modelling results illustrate that the consumer market can sustain an automotive / motor related development of approximately 3,500m2 in the market area with the optimum point of market entry in 2011 / 2012. The following tables indicate the space demand modelling result of the trade sector. Table 6.9: Synthesis of Space Demand Modelling Results (nodal potential) – m

2 GLA (constant

values)





At 28.58% automotive 16,099 27,406 36,287



Average 2,012 3,426 4,536

Table 6.10: Project Space Demand Results - m

2 GLA (cumulative)


Up to 2016 2,000m2 – 2,500m

2

2016 – 2021 3,000m2 – 3,500m

2

2026+ 4,000m2 – 4,500m

2

Table 6.11: Recommended Sizes Recommended Sizes Rand per annum / m

2




Parking 171



The following is evident from Table 6.9, Table 6.10 and Table 6.11: The total trade demand for Pretoria & Akasia areas up to 2016 amounts to approximately




services Optimum point of market entry: 2011 / 2012


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6.5 SYNTHESIS

The findings of the preceding Chapter are integrated into an empirical assessment of the market potential. Demacon’s Demand Modelling results illustrate that the consumer market can sustain automotive / motor related / fitment centres / ancillary services of approximately 3,500m2 in the market area with the optimum point of market entry in 2011 / 2012.


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CHAPTER 7: RETAIL MARKET ANALYSIS

7.1 INTRODUCTION

This section of the report focuses on the retail market, with the objective of estimating the development potential within the designated area. In order to reach this objective, the supply and demand for retail development within the market area should be identified and assessed in light of current trends. Subsequent sub-sections provide a concise overview of the residential property market in terms of the following aspects: Local Development Perspective State of the Retail Property Market Definitions & Concept Visualisation Market Potential Assessment

Retail Market Supply Retail Market Demand Estimation Tenant Composition

Synthesis

7.2 LOCAL DEVELOPMENT PERSPECTIVE

The development and overall sustainability of a retail facility relies strongly on its location. The following location requirements determine the success of a retail facility:

Visibility and exposure: Retail facilities should be highly visible and accessible to potential consumers. It should be located in proximity to efficient road and transport networks.

Accessibility: Retail facilities must be accessible to local labour force as well as consumers. It should be accessible on a local and regional level, as well as on a site specific basis referring to the ingress and egress from the development.

Functionality & complimentary: The centre should fit the urban context and should be functionally compatible.

Sufficient buying power: Total disposable income of the market area population that is available to be spent at a specific retail facility.

Competition: Existing shopping centres present competition and has an impact on the sustainability of future developments.

Role & function in hierarchy: Should fit in with existing retail hierarchy of the area.

Address value: Retail locates in areas where household expenditure is high, where it is accessible and visible.

Growth: Growth in market population, disposable income and retail support impact on developments.

Traffic volume: Level of traffic volumes contribute to level of support and exposure.


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7.3 STATE OF THE RETAIL PROPERTY MARKET

7.3.1 PROGNOSIS FOR THE ECONOMY

A pleasant surprise for shopping-centre landlords must have been the sharp acceleration in retail sales volumes recorded in April 2011. Figure 7.1: Growth in real retail sales

In April, the growth in real retail sales surprised on the upside (+10%; y-o-y), after having shown a moderation in yearly growth for the first three months of the year. The observant shoppingcentre owner would, however, have noticed that sales growth might possibly have been distorted by base effects. This as April 2011 did not only have one less working day than April 2010, but public holidays were also arranged in such a way as to allow many people to take extended leave. For shopping centres, this most likely also meant increased footfall as shoppers had more off days to roam the malls. The April holiday cheer was also seen in the strong sales performance across the various types of retailers. This was especially evident in the usual December holiday seasonal categories such as Clothing & Footwear (+17%), Furniture (+13%) and Food & Drinks (+7%). The following graph shows how sales volumes spike during December in these categories.


121

Figure 7.2: Real retail sales according to type of retailer

For the robust growth in retail sales volumes to be continued, there has to be a sustained improvement in household finances. While the slight drop in petrol prices bodes well for consumers’ pockets, the sharp hike in electricity prices is set to have the exact opposite effect. Having mentioned the electricity price, its sharp rise, together with accelerating food-price growth, does not augur well for inflation expectations and, consequently, interest rates. Hence, households might be deterred from the option of buying on credit. The net outcome of all this surely must be a cooling in the growth of retail sales volumes. The graph that follows shows the strong tendency for the growth in real retail sales and real credit extended to households to move together over time. At the same time, lenders do not have much freedom to recklessly extend credit because of the still stubbornly high ratio of household debt to disposable income, not to mention breaking influence of the National Credit Act. Figure 7.3: Growth in real credit extended to households vd Growth in real retail sales


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7.3.2 NEW SHOPPING CENTRES (EX RODE) Table 7.1 indicates that roughly 370.000 m2 is still expected to come on stream in 2011. Despite it being lower than the 2010 figure, a red flag has to be raised on whether these acres of new space will be absorbed easily. This is so, given the continued weakness in the demand for retail space as displayed by the continued uptick in shopping-centre vacancy rates during 2010.Still with reference to Table 1, note that Pretoria is about to be hit by a wave of 150’000 m² of new stock. Figure 7.4: Shopping centre vacancy rates

Table 7.1: Completions of new shopping centres (m²)

Including extensions but excluding new centres smaller than 5,000m²

2008 2009 2010 2011*

Cape Peninsula 49,700 84,911 33,700 47,200

Durban 73,000 127,000 0 12,500

Port Elizabeth 25,000 10,600 0 0

Pretoria 120,500 64,263 28,900 149,750

Pietermaritzburg 0 0 0 0

Reef 255,700 126,600 82,550 30,000

Other 341,148 130,440 249,823 127,600

TOTAL 846,048 543,814 394,973 367,050 * Provincial 7.3.3 INFLATION (EX STATS SA) Disconcerting for consumers is the continued acceleration in the growth of food prices. In May 2011, food–price inflation stood at 6,3%. Even more upward pressure can be expected on South African food and consumer prices as producers pass some of the increases in administered prices (i.e. electricity, petrol) on to consumers. Table 7.2 summarizes price inflation for key non-durable and semi-durable consumer items as at May 2011, and their respective contributions to the overall CPI.


123

Table 7.2 can be interpreted as follows: The sectors experiencing the lowest inflation rates are those that are struggling most because suppliers cannot pass on rising cost increases. These sectors are clothing & footwear (semi-durables), and furniture & equipment (durables). Table 7.2: Consumer price indices (CPIX) – Growth as at May 2011

Weight in consumer basket % change quarter

(year on year)

Food 14.27% 6.3% Non-alcoholic beverages 1.41% 5.2% Alcoholic beverages 3.29% 6.3% Clothing & footwear 4.11% 1.7% Furniture & equipment 3.22% 1.6% All items 100.00% 4.6%

Source: StatsSA

7.3.4 IN SUM Upward pressure on interest rates - owing to rising consumer-price inflation — presents the possibility of more subdued household demand for credit in future. In addition, lenders themselves might be dissuaded from extending credit recklessly because of the still stubbornly high levels of household debt and the ever-present NCA. Therefore, given the strong correlation between the growth in retail sales and the growth in credit extended to households, a moderation in sales volumes can be expected. In sum, don’t trust the surge in retail sales; it’s quite possibly not sustainable. Add a still relatively large amount of new shop space that is expected to come on line, then you have a recipe for continued weak growth in market rentals for shopping centres Subsequent section provides the market potential assessment.

7.4 MARKET POTENTIAL ASSESSMENT

The demand-side dynamics within the market have been concisely described in preceding chapters, supported by a retail market growth assessment. An assessment of the net effective demand for additional retail floor space will be made in this chapter. A growth forecast, respectively for a five and ten year horizon are provided based on economic, population and income growth prevalent in the market. Retail demand modelling has become increasingly specialised over the past decade. One particular aspect that has changed is a notable shift away from broad based supply-demand estimations to multivariate, differentiated models. Contemporary models focus on specific expenditure patterns of selected LSM market segments. The retail development potential estimations will be addressed under the following headings: Retail Supply Retail Demand Development Potential


124

7.4.1 RETAIL SUPPLY IN THE MARKET AREA

Table 7.3 summarise the support parameter of existing retail floor space beyond the trade area. Please note that there are no listed formal retail facilities within the primary trade area. Summary of existing supply

Table 7.3: Existing supply south of the market area

Name of retail centre Description

CBD SHOPPING CENTRES

Wonderboom Junction

Type of centre: Minor Regional Centre Size: 35,000m² Location: Cnr Lavender Road & Braam Pretorius Extension, Wonderboom Anchor tenants: Pick n Pay, Woolworths, Edgars, Truworths, Dis-Chem Intercare Parking: 1,500 Number of shops: 87, 1 retail floors Year Developed: 2008

Northpark Mall

Type of centre: Minor Regional Centre Size: 30,805m² Location: Cnr Rachel De Beer Street & Emily Hobhouse Avenue, Pretoria North Anchor tenants: Clicks, Edgars Parking: 400 open, 1600 covered, 2000 total Number of shops: 75, 3 retail floor Year Developed: 1997

Sinoville Centre

Type of centre: Community Centre Size: 13,451m² Location: Cnr Brac & Marija Avenues, Sinoville Anchor tenants: Pick n Pay Parking: 502 open, 88 covered, 590 total Number of shops: 38, 3 retail floor Year Developed: 1891 Year Refurbished: 2010

Makro

Type of centre: Community Centre Size: 13,000m² Location: Cnr Lavender Road & Tillie van Wyk Street, Annlin West Anchor tenants: Makro Number of shops: 1

Wonderboom Motortown

Type of centre: Motor Related Centre Size: 11,619m² Location: 26 Lavender Road, Annlin West Ext 19 Anchor tenants: McCarthy Number of shops: 6, 1 retail floor

Lavender Square

Type of centre: Value Centre Size: 11,212m² Location: 26 Lavender Road, Annlin West Ext 19 Anchor tenants: Meltz, Liqour City, Baby Boom, Meat World, Shoe City, Beds for Africa Number of shops: 12, 1 retail floor Year Developed: 2006

Blaauw Village

Type of centre: Neighbourhood Centre Size: 6,806m² Location: Cnr Gerrit Maritz Road & Emily Hobhouse Avenue, Pretoria North Anchor tenants: Shoprite, Ellerines, OK Furniture, Pep


125

Name of retail centre Description

Number of shops: 20 Year Developed: 2007

Shoprite Centre - Pretoria North

Type of centre: Neighbourhood Centre Size: 6,442m² Location: 259 Ben Viljoen Street (Erf 1737), Pretoria North Anchor tenants: Shoprite Parking: 400 open Number of shops: 16, 1 retail floor Year Developed: 1982 Year Refurbished: 2000

De Jongh Centre

Type of centre: Local Convenience Centre Size: 3,500m² Location: Cnr Rachel De Beer & Ben Viljoen Streets, Pretoria North Anchor tenants: Spar Parking: 100 open Number of shops: 15, 1 retail floor Year Developed: 1994 Year Refurbished: 2007

TOTAL GLA (m2) 131,835m

2

Findings: (Table 7.3) Please note that there are no listed formal retail facilities within the primary trade

area. Total existing supply south of the trade area, presently amounts to approximately

131,835m2 (as built). To conclude, the above supply figures can not directly be correlated with the demand of

the market area due to the fact that most of the centres are trading in multiple trade areas and trade area overlap is present. Therefore to determine the supportive net effective demand calculation, just an apportionment of the supply can be added to the market.


126

Map 7.1: Shopping centre supply

The following section provides the retail demand estimations.


127

7.4.2 RETAIL MARKET DEMAND ESTIMATIONS

The retail market is a derived demand. The primary demand drivers are community income and expenditure profiles. An important concept in retailing is the fact that different order size shopping centres cater to different consumer needs and hence, do not compete directly for market share. In this context, the objective of this sub-section is to access the magnitude of retail development that can be sustained by the node and the new resident community. The retail demand estimations are conducted based on prevalent population and income growth trends (all values: 2011 constant prices). The demand estimations are considered conservative and realistic. Subsequent paragraphs indicate the market potential analysis of the proposed development. The retail market estimations are based on a trade area based technique which consists of various drive time isochrones from the development site. MARKET RETAIL EXPENDITURE

The following tables summarise the current and forecast market expenditure and the retail floor space for retail facilities within the retail node. Demand values are presented for 2011, 2016 and 2021 (all values: constant 2011 prices). Table 7.4: Market Area Retail Expenditure, 2011, 2016 and 2021

Retail Category 2011 Rand/annum 2016 Rand/annum 2021 Rand/annum

Bulk groceries R 85,459,592 R 129,547,501 R 196,380,005

Top-up groceries R 25,547,444 R 38,727,163 R 58,706,192

Clothing, shoes, accessories R 37,755,957 R 57,233,949 R 86,760,478

Furniture and homeware R 11,078,095 R 16,793,195 R 25,456,667

Hardware goods R 4,069,504 R 6,168,929 R 9,351,429

Gifts, books and confectionary R 8,365,092 R 12,680,576 R 19,222,381

Specialty / value goods R 2,713,003 R 4,112,619 R 6,234,286

Restaurants, entertainment R 28,034,364 R 42,497,064 R 64,420,954

Personal care R 8,817,260 R 13,366,012 R 20,261,429

Other personal goods & services R 14,243,265 R 21,591,250 R 32,730,001

TOTAL R 226,083,577 R 342,718,258 R 519,523,823 Source: Demacon Retail Demand Model, 2011 MARKET RETAIL FLOOR SPACE DEMAND

The above expenditure patterns translate into the demand for retail floor space as summarised in Table 7.5. Table 7.5: Retail Floor Space Demand, 2011, 2016 and 2021

Retail Category 2011 m2 GLA 2016 m

2 GLA 2021 m

2 GLA

Bulk groceries 3,231 4,225 5,525

Top-up groceries 966 1,263 1,652

Clothing, shoes, accessories 1,973 2,580 3,374

Furniture and homeware 579 757 990

Hardware goods 213 278 364

Gifts, books and confectionary 391 512 669

Specialty / value goods 127 166 217

Restaurants, entertainment 1,465 1,916 2,505


128

Retail Category 2011 m2 GLA 2016 m

2 GLA 2021 m

2 GLA

Personal care 461 603 788

Other personal goods & services 744 973 1,273

TOTAL 10,150 13,273 17,356 Source: Demacon Retail Demand Model, 2011 TENANT COMPOSITION & APPORTIONMENT

Given the above market potential estimation, based on the Residual Demand Technique, the Market Share Model could assist in refining the tenant composition of the proposed centre. PhD research conducted by the author indicates that the share technique should not be applied in isolation, but only once market potential has been established, to inform centre composition and tenant mix. In the context of the market potential analysis, empirical data was utilised to estimate the apportionment of additional floor space. Table 7.6 indicates the retail tenant mix apportionment and findings provide guidelines for the retail components’ tenanting and merchandising. Table 7.6: Retail tenant mix apportionment, 2011

Retail Category Min Demand

(m²) Max Demand

(m²) Midpoint

(m²)

Floor space apportionment

(%)

Bulk groceries 485 808 646 31.8% Top-up groceries 145 241 193 9.5% Clothing, shoes, accessories 296 493 395 19.4% Furniture and homeware 87 145 116 5.7% Hardware goods 32 53 43 2.1% Gifts, books and confectionary 59 98 78 3.9% Specialty / value goods 19 32 25 1.2% Restaurants, entertainment 220 366 293 14.4% Personal care 69 115 92 4.5% Other personal goods & services 112 186 149 7.3% TOTAL 1,523 2,538 2,030 100.0% Source: Demacon Retail Demand Model, 2011

The above table indicates that the market potential for retail (in 2011) is in the region of approximately 2,030m2 retail GLA. The potential is calculated on average benchmark trading densities. The retail component of the project should however take in account the short term growth in demand, as well as the acceptable addition of 10% – 20% for non-retail services. Based on the demand modelling results, the following table indicates the recommended retail options. Table 7.7: Ideal tenant mix apportionment at optimum point of market entry

Retail Category Retail Component Min Demand (m²)

Groceries 1,437 Clothing, shoes, accessories 675 Furniture and homeware 198 Hardware goods 73 Gifts, books and confectionary 134 Specialty / value goods 43 Restaurants, entertainment 502 Personal care 158


129

Retail Category Retail Component Min Demand (m²)

Other personal goods & services 255 Total 3,474 Source: Demacon Retail Demand Model, 2011 Subsequent paragraphs indicate the total retail demand for the retail components of the project. TOTAL RETAIL DEMAND

The total retail market potential is summarised in Table 7.8. Table 7.8: Summary of Total Market Demand, 2011, 2016 and 2021

2011 Rand/annum 2016 Rand/annum 2021 Rand/annum

Retail Expenditure R 226,083,577 R 342,718,258 R 519,523,823

2011 m2 GLA 2016 m

2 GLA 2021 m

2 GLA

Retail Demand 10,150 13,273 17,356

7.5 SYNTHESIS

The findings of the preceding Chapter are integrated into an empirical assessment of retail market potential including a market gap analysis and the demand estimations. Table 7.9: Recommended centre options

Retail component (Rand / sqm)



2

Annual sales potential R 73,124,282 Employment opportunities (on site) 116 Capital investment R26,404,911 Parking bays required 208 Parking infrastructure & landscaping cost R 5,528,104

Given the economic and demographic outlook for the market, the 5 to 10 year forecast recommends a retail component totalling ±3,474m2 GLA. An annual sales potential of R73 million per annum is expected for the retail component for the forecast. The retail component will create ±116 permanent on-site jobs. Based on prevalent consumer behaviour and research findings in similar markets, it can be expected that the retail component will predominantly cater to the LSM 4 – 10+. Performance will be dependent on, inter alia, appropriate tenant composition. The challenge will be to find a balance between market demand (as revealed by consumer income and spending patterns) and tenant demand (i.e. the expressed desire by tenants to occupy space in the centre) and investor demand (i.e. the need for capital growth). The following chapter indicates the trade sector performances and trends.


130

CHAPTER 8: DEVELOPMENT RECOMMENDATIONS

8.1 INTRODUCTION

This chapter provides development recommendations and guidelines for the proposed respective land as well as an overview of development drivers and probable development trends in the future node. Subsequent sections provide concise recommendations for the following components:

Industrial market Trade (Automotive) market Retail market

8.2 INDUSTRIAL MARKET RECOMMENDATIONS GAP ANALYSIS

Table 8.1: Synthesis of Space Demand Modelling results, 2016 - 2026








Developable Bulk (square metres) 3,758 9,552 17,693 Table 8.2: Recommended space demand - cumulative

Forecast Hectares




Table 8.3: Recommended space options (2011) Variables Rand per annum / m

2 GLA


Optimum size (up to 2021) 1.92 hectares


Parking bays 191





Development Type

Yes

Medium - High


131

The following is evident from Table 8.1, Table 8.2 and Table 8.3: The total industrial potential of Pretoria & Akasia areas up to 2016 amounts to




8.3 TRADE SECTOR (AUTOMOTIVE MARKET) RECOMMENDATIONS GAP ANALYSIS

Demacon’s Demand Modelling results illustrate that the consumer market can sustain an automotive / motor related / fitment centres / ancillary services of approximately 3,500m2 in the market area with the optimum point of market entry in 2011 / 2012. SUMMARY OF MAIN FINDINGS

The following tables indicate the space demand modelling result of the trade sector. Table 8.4: Synthesis of Space Demand Modelling Results (nodal potential) – m

2 GLA (constant

values)





At 28.58% automotive 16,099 27,406 36,287



Average 2,012 3,426 4,536 Table 8.5: Project Space Demand Results - m

2 GLA (cumulative)


Up to 2016 2,000m2 – 2,500m

2

2016 – 2021 3,000m2 – 3,500m

2

2026+ 4,000m2 – 4,500m

2



Automotive / motor related / fitment centres

Yes

Medium - High

Development Type


132

Table 8.6: Recommended Sizes Recommended Sizes Rand per annum / m

2




Parking 171



The following is evident from Table 8.4, Table 8.5 and Table 8.6 The total trade demand for Pretoria & Akasia areas up to 2016 amounts to approximately




services Optimum point of market entry: 2011 / 2012

8.4 RETAIL MARKET RECOMMENDATIONS

The following analysis indicates the recommended options for the development in terms of the retail demand modelling. MARKET GAP ANALYSIS

In terms of the above, it is clear that there is an opportunity for a retail component as part of the mixed use development. The following section provides the demand estimations for the project. DEMAND ESTIMATIONS

Demacon’s Retail Demand Modelling results illustrate the following options: Table 8.7: Recommended retail options Retail component

(Rand / sqm)



2

Annual sales potential R 73,124,282 Employment opportunities (on site) 116

Retail

Yes

Medium



Development Type


133

Retail component (Rand / sqm)

Capital investment R26,404,911 Parking bays required 208 Parking infrastructure & landscaping cost R 5,528,104

Given the economic and demographic outlook for the market, the 5 to 10 year forecast recommends a retail component totalling ±3,474m2 GLA. An annual sales potential of R73 million per annum is expected for the retail component for the forecast. The retail component will create ±116 permanent on-site jobs.

8.5 LAND APPORTIONMENT

The following table provides the recommended land uses of the project and land apportionments. Table 8.8: Land apportionment

Recommended Land Use Size (sqm)

Retail 3,500m2

Trade & commercial (automotive / motor related / fitment centres / ancillary services

9,500m2

Industrial 3,500m2

Total (m2 GLA) 16,500m

2

Total (m2 GBA) 19,000m

2

MOTIVATIONAL MEMORANDUM

FOR THE APPLICATION

OF

TOWNSHIP ESTABLISHMENT

OF A LAND DEVELOPMENT AREA

ON

PORTION 157 ( A PORTION OF PORTION 91) OF THE FARM

DE ONDERSTEPOORT 300 JR AND PORTION 238 ( A PORTION OF PORTION 146) OF THE FARM WONDERBOOM 302 JR

PROPOSED TOWNSHIP: ANNLIN X 148

JDK PROPERTY CONSULTANT

P. O. Box 8765

PRETORIA

0001

Telephone: 083-3069902

Fax: 086-5133831


CONTENTS

1. APPLICATION

2. BACKGROUND

3. PURPOSE OF THE APPLICATION

4. DESCRIPTION OF PROPOSED DEVELOPMENT

5. GENERAL INFORMATION

5.1 LOCAL AUTHORITY

5.2 PROPERTY DESCRIPTION

5.3 SIZE OF PROPERTY

5.4 LOCALITY

5.5 ZONING

5.6 EXISTING LAND USES

5.7 TITLE DEED

5.8 REGISTERED OWNER

5.9 TITLE RESTRICTIONS

5.10 MORTAGE BOND

5.11 MINERAL RIGHTS

5.12 LAND SURVEYOR CERTIFICATE

5.13 DEEDS REPORT

5.14 POWER OF ATTORNEY

5.15 PROPOSED ROAD NETWORK

5.16 THE RURAL AREAS SPATIAL DEVELOPMENT FRAMEWORK PLAN

5.17 URBAN EDGE

6. MOTIVATION: NEED AND DESIRABILITY

6.1 BACKGROUND

6.2 MOTIVATION IN TERMS OF THE GENERAL PRINCIPLES OF THE

DEVELOPMENT FACILITATION ACT, 1995

6.3 ACCESS

6.4 PROPOSED DEVELOPMENT

6.5 DENSITY

7. GEOTECHNICAL CONDITIONS

8. FLOODLINE

9. TOPOGRAPHY

10. TRAFFIC IMPACT STUDY

11. ACCESS

12. BUSINESS FACILITIES

13. BUILDING LINES

14. ROADS

15. CIVIL SERVICES REPORT

16. WATER

17. SEWER SERVICES

18. STORMWATER

19. ELECTRICITY

20. DEPARTMENT OF WATER AFFAIRS & FORESTRY

21. SERVICES AGREEMENT

22. ENVIRONMENTAL IMPACT STUDY

23. PROPOSED DETAIL LAYOUT PLAN

24. PROPOSED LAND USE RIGHTS

25. CONDITIONS OF ESTABLISHMENT

26. CONCLUSION

LAND DEVELOPMENT AREA

TOWNSHIP ESTABLISMENT FOR ANNLIN X 148 ON

PORTION 157 OF THE FARM DE ONDERSTEPOORT 300 JR

AND PORTION 238 OF THE FARM WONDERBOOM 302 JR

1. APPLICATION

Jeremia Daniel Kriel, Town Planner of JDK Property Consultant was appointed by A.

P de Sousa, Director of the Company and Member of the Closed Corporation to

compile and submit a DFA application.

This application is to establish a township to be known as ANNLIN X 148 on Portion

157 of the farm De Onderstepoort 300 JR and Portion 238 of the farm Wonderboom

302 JR, in terms of Chapter V Section 32(2) and Regulation 21 of the Development

Facilitation Act, 1995 (Act 67 of 1995) for the development of the following land use

rights in terms of the Tshwane Town Planning Scheme, 2008.

Erven 1 & 2 : Use Zone 28 : Special for public garage, light industrial, commercial

and shops.

Erven 3 & 4 : Use Zone 12 : Commercial Purposes.

2. BACKGROUND

2.1 Portion 157 of the farm De Onderstepoort 300 JR

a) The land use rights of a public garage, filling station, tea room and general

dealer’s business that are presently exercised on Portion 157, De Onderstepoort

300 JR, have been granted by the National Road Board as far back as in March

1945 and in March 1957 – reference number 14/4/1/22 – see documentation

attached. At that time the rights were granted to Portion 91 of the farm De

Onderstepoort 496 which is the parent property for Portion 157.

Portion 91 (a portion of Portion 84) was subdivided on 24 February 1959 into

Portion 157 (SG diagram A 172/59) and the Remainder of Portion 91.

b) The rights were recognised in writing by the Transvaal Provincial Administration

and various local authorities but never included in the Pretoria Region Town-

planning Scheme, 1960, the Peri-Urban Town-planning Scheme, 1975 and the

Tshwane Town-planning Scheme, 2008 which can be regarded as negligence or

an oversight on the part of the relevant authorities as well as the owner of the

property at the time who should have brought the approved rights under the

attention of the relevant officials and insisted on inclusion of the existing land use

rights under an appropriate zoning.

2.2 Portion 238 of the farm Wonderboom 302 JR

a) Portion 238 came about with the excision of Holding 107, Wonderboom

Agricultural Holdings on 20 September 1993.

b) Application was made on 20 November 2002 to rezone Portion 238 from

“Agricultural” to “Restricted Industrial” with a coverage of 60 %, FSR of 0,6 and a height of 1 storey. The application was amended on 25 September 2008 to

“Special for commercial purposes” with a coverage of 30 %, FSR of 0,3 and a height of 1 storey. This application has not been considered for approval yet

because of negative comments from the Department of Roads and Stormwater.

c) The application under consideration makes provision for erven 3 and 4 on

Portion 238 with the same rights that has been applied for in the rezoning

application. The question of access, roads and stormwater will be addressed in

the Roads Master Plan that ITS Engineers is preparing for the Council – see

paragraph 5.13 above

d) On 22 June 2005 the Gauteng Department of Agriculture, Conservation and

Environment granted exemption for the rezoning from “Agricultural” to “Restricted Industrial” – Reference number : GAUT002/04-05/259.

3. THE PURPOSE OF THE APPLICATION

The purpose of this application is to establish Land Development Area for proposed

Annlin x 148 township, which will consist of 4 erven : 2 erven for “Special” purposes and 2 erven for Commercial purposes.

This would ensure that land use rights that have been approved by Central - and

Provincial Government Departments on Portion 157, De Onderstepoort 300 JR since

1945, become permanent zoned land use rights. It will also ensure that the proposals

of the Spatial Development Framework materialise as far as both properties are

concerned.

4. DESCRIPTION OF THE PROPOSED DEVELOPMENT

The proposed development will consist of the following :-

2 Erven for Special (public garage, light industrial, commercial and shops) with a

coverage of 50 % ( 25 % commercial, 25 % retail), height 1 storey, Floor Space

Ratio 0,5 ( 0,25 commercial, 0,25 retail).

2 Erven for Commercial, coverage 30 %, height 1 storey, Floor Space Ratio 0,3.

5. GENERAL INFORMATION

5.1 Local Authority

The local authority for this area is the City of Tshwane Metropolitan

Municipality - CTMM.

5.2 Property Description

The property is known as the Portion 157 (a portion of Portion 91) of the farm

De Onderstepoort 300 JR and Portion 238 ( a portion of Portion 146) of the

farm Wonderboom 302 JR.

5.3 Size of the Property

The total area of the proposed land development area is 4,7110 ha. (Portion

157 = 2,5696 ha. and Portion 238 = 2,1414 ha.)

5.4 Locality – See Locality Plan

The properties under application, are located on the north-east and south-

east corners of the intersection of Lavender Road (P1-3) and Lintvelt Road.

5.5 Zoning

The existing zoning of the two properties under application is “Agricultural” in terms of the Tshwane Town Planning Scheme, 2008.

5.6 Existing Land Uses – See Aerial Photo of Area and Site Development Plan.

The existing land uses on Portion 157 was established in 1945 and at various

dates thereafter and building plans were approved by various local authorities

for 70 odd years – see paragraph 2 above for more details.

The present floor area of all the land uses amounts to 4 193 m2 of which

1 658 m2 is utilized for retail and the rest for commercial uses – see Site

Development Plan and Aerial Photo.

5.7 Title Deeds – See Title Deeds

Portion 157 (a portion of Portion 91) of the farm De Onderstepoort 300 JR is

registered in terms of Deed of Transfer T 64864/93.

Portion 238 (a portion of Portion 146) of the farm Wonderboom 302 JR is

registered in terms of Deed of Transfer T 1610/97.

5.8 Registered Owner

Portion 157 of the farm De Onderstepoort 300 JR is registered in the name of

Plot 157 Onderstepoort (Pty) Ltd., Registration no. 93/02387/07.

Portion 238 of the farm Wonderboom 302 JR is registered in the name of Plot

107 Wonderboom CC, Registration no. CK 96/54894/23.

5.9 Title Restrictions

There are title restrictions applicable in terms of this township establishment

application :-

a) Portion 157, De Onderstepoort 300 JR – (i) the following conditions

contained in Deed of Transfer T 64864/1993 do not affect the Land

Development Area : Conditions A and E.

(ii) the following conditions need not be transferred to the erven in the

Land Development Area : Conditions B (1) to (4).

(iii) the following conditions affect erf 2 in the Land Development Area :

Conditions C and D and needs to be addressed.

b) Portion 238, Wonderboom 302 JR – the following conditions need not be

transferred to the erven in the Land Development Area : Conditions B.1

and B.2.

5.10 Mortage Bond

In terms of Bond no. B 68535/93, Portion 157 of the farm De Onderstepoort

300 JR is bonded to Absa Bank.

In terms of Bond no. B 1852/97, Portion 238 of the farm Wonderboom 302 JR

is bonded to Absa Bank.

The bond holder’s consent to the proposed development is attached.

5.11 Mineral Rights

As far as Portion 157 of the farm De Onderstepoort 300 JR is concerned,

there is no reservation on the mineral rights - see last paragraph of this

Section.

In terms of Condition A in Deed of Transfer T 1610/97 pertaining to Portion

238 of the farm Wonderboom 302 JR, the mineral rights are reserved in terms

of Certificate to Mineral Rights No. 139/1958 R.M. to Wilra Landgoed.

However, in terms of the Mining Titles Registration Amendment Act, 2003

(Act No. 24 of 2003), which came into operation on 1 May 2004, the mineral

rights now vests in the State.

5.12 Land Surveyor Certificate – see Land Surveyor Certificate.

Land surveyor’s certificates have been compiled by the land surveyor, D. G.

van Wyk of the land surveyors, De Ridder & Van Wyk.

Portion 157 of the farm De Onderstepoort 300 JR is subject to existing

servitudes registered over the property and all the servitudes refer to rights of

way. These servitudes need to be transferred to the erven in the township

because all the servitudes refer to rights of way, which is not applicable

anymore because all erven will get access to existing public roads. The

servitude right of way 12,59 m. on the southern boundary of erf 2 will be

cancelled.

Portion 238 of the farm Wonderboom 302 JR is not affected by any servitude,

although a splay for road purposes, is indicated as a servitude on the layout

plan.

5.13 Deeds Report – See Deeds Report.

5.14 Power of Attorneys / Company Resolution / Close Corporation

Resolution

A Power of Attorney and Company Resolution has been obtained from A. P.

de Sousa, one of the directors of Plot 157 Onderstepoort (Pty) Ltd. for Portion

157 of the farm De Onderstepoort 300 JR.

A Power of Attorney and Close Corporation Resolution has been obtained

from A. P. de Sousa, one of the members of Plot 107 Wonderboom CC for

Portion 238 of the farm Wonderboom 302 JR.

5.15 Proposed Road Network

The City of Tshwane Metropolitan Municipality has appointed ITS

Engineers to prepare a Roads Master Plan for the area between

Wonderboom Airport and Lavender Road. According to the proposals of

this Master Plan, Portion 238, Wonderboom 302 JR will have no direct

access to Lintvelt Road but will obtain access via a new mid-block road to

Lintvelt Road approximately 200 m. to the east.

Lavender Road (Road P 1-3), with a reserve of 30 m., has been

proclaimed and built many decades ago over Portion 91, De

Onderstepoort 300 JR ( Portion 157 is a subdivided portion of Portion 91).

The public garage and filling station and access to Lavender Road (P 1-3)

was approved by the National Roads Board in March 1945 – reference

number 14/7/1/22 dated 15 March 1945.

5.16 The Tshwane Regional Spatial Development Framework (SDF) – see

SDF plan attached

The Tshwane Regional Spatial Development Framework for the North

Eastern Region was approved by the Council in October 2008. In terms of

the SDF, the properties under consideration are demarcated for “light industrial” use. The Council has also informed the owner in writing on 31

March 2009, that “There is in principle, from a town-planning point of view,

no objection to the proposed use of the property for the existing rights as it

exist today”.

5.17 Urban Edge

The properties under consideration fall within the Urban Edge as confirmed

by the Tshwane Regional Spatial development Framework for the North

Eastern Region.

6 MOTIVATION: NEED AND DESIRABILITY

6.1 Background

See paragraph 2 above for comprehensive detail.

6.2 Motivation in terms of the General Principles of the Development Facilitation

Act, 1995

The following general principles apply, on the basis set out in Section 2 of the above

mentioned act, to all land developments:

“3(1)(a) Policy , administrative practice and laws should provide for urban and rural

land development and should facilitate the development of formal and informal,

existing and new settlement.

This principle’s main aim is to create a balance in land development

applications/projects. There are a number of issues that must be considered in this

instance:

(a) Equality for urban and rural land development

(b) Equal weight for formal and informal land development processes

(c) New developments and upgrading of existing settlements

3(1)(b) Policy, administrative practices and laws should discourage the illegal

occupation of land, with due recognition of informal land development processes

In this principle it must be noted that there is a major difference between illegal and

informal land development. Although everything must be done to prevent illegal land

development (that is development of land that is not suitable for the use or land not

available for the use), informal settlements (uses that may have been illegal in the

part but are now permanent of nature) must be incorporated into a formal township

without jeopardizing the rights of the existing occupants.

3(1)(c) Policy, administrative practise and laws should promote efficient and

integrated land development in that-

There are nine sub-principal calls for a holistic or synoptic approach to planning and

development. These principles c(iii) to c (iv) will be discussed simultaneously

because they are all closely related.

i. Promote the integration of the social, economic, institutional and physical

aspects of land development;

ii. promote integrated land development in rural and urban areas in support of

each other;

iii. promote the availability of residential and employment opportunities in close

proximity to or integrated with each other;

iv. optimize the use of existing resources including such resources relating to

agriculture, land , minerals, bulk infrastructure, roads, transportation and

social facilities;

v. promote a diverse combination of land uses, also at the level of individual

erven or subdivisions of land;

vi. discourage the phenomenon of ‘urban sprawl’ in urban areas and contribute to the development of more compact towns and cities;

vii. contribute to the correction of the historically distorted spatial patterns of

settlement in the Republic and to the optimum use of existing infrastructure in

excess of current needs; and

viii. encourage environmentally sustainable land development practices and

processes.

3.1(d) Members of communities affected by land development should actively

participate in the process of land development

3.1(e) The skills and capacities of disadvantaged persons involved in land

development should be developed;

3.1(f) Policy, administrative practice and laws should encourage and optimize the

contributions of all sectors of the economy (government and non-government)

to land development so as to maximize the Republic’s capacity to undertake land development and to this end, and without derogating from the generality

of this principle;

3.1(g) Laws, procedures and administrative practice relating to land development

should-

i be clear and generally available to those likely to be affected hereby;

ii in addition to serving as regulatory measure, also provide guidance and

information to those affected thereby;

iii be calculated to promote trust and acceptance on the part of those likely to

be affected thereby; and

iv give further content to the fundamental rights set out in the Constitution.

3.1(h) Policy, administrative practise and laws should promote sustainable land

development at the required scale in that they should;

i promote land development which is within the fiscal , institutional and

administrative means of the Republic;

ii promote the establishment of viable communities;

iii promote sustained protections of the environment;

iv meet the basic needs of all citizens in an affordable way; and

v ensure the safe utilization of land by taking into consideration factors such

as geological formations and hazardous undermined areas.

3.1(i) Policy, administrative practise and laws should promote speedy land

development

3.1(j) Each proposed land development area should be judged on its own merits

and no particular use of land, such as residential, commercial, industrial,

community facility, mining agricultural or public use, should in advance or in

general be regarded as being less important or desirable than any other use

of land

The applicant seeks that the tribunal consider this application in the light of

the proposed use at this specific location and the impact that his use will have

on the area surrounding the site.

3.1(k) Land development should result in security of tenure, provide for the widest

possible range of tenure alternatives, including individual and communal

tenure, and in cases where land development takes the form of upgrading an

existing settlement, not deprive beneficial occupiers of homes or land or,

where it is necessary for land or homes occupied by them to be utilized for

other purposes, their interest in such land or homes should be reasonably

accommodated in some or other manner.

3.1(l) A competent authority at national, provincial and local government level

should co-ordinate the interest of the various sectors involved in or affected

by land development so as to minimize conflicting demands on scarce

resources.

3.1(m) Policy, administrative practice and laws relating to land development should

stimulate the effective functioning of a land development market based on

open competition between suppliers of goods and services.”

It is therefore the wish of the applicant that this application will be considered on town

planning merits.

6.3 Access

Direct access to erf 1 from Lavender (Road P 1-3) and Lintvelt Road has been

approved in the past by the relevant road authorities. Erf 2 will obtain access to

Lintvelt Road by means of a 10 m. wide pan handle access strip. Erven 3 and 4 will

be afforded access to Lintvelt Road approximately 200 m. to the east via a new

proposed mid-block road in accordance with the Roads Master Plan prepared for the

Council by ITS Engineers.

6.4 Proposed Development

The two properties on which the township is established, are separated by Lintvelt

Road. The proposed layout plan makes provision for the following land uses :-

a) Erf 1, area : 1,3398 ha. Zoning : “Special for public garage, light industry, commercial and shops”. Coverage 50 % (25 % retail, 25 % commercial / industrial), FSR 0,5 (0,25 retail,

0,25 commercial / industrial), height 1 storey.

b) Erf 2, area : 0,6847 ha. : Zoning : “Special for public garage, light industry, commercial and shops”.

Coverage 50 % (25 % retail, 25 % commercial / industrial), FSR 0,5 (0,25 retail,

0,25 commercial / industrial), height 1 storey.

c) Erf 3, area : 1,1414 ha. : Zoning : Commercial, coverage 30 %, FSR 0,3, height 1

storey.

d) Erf 4, area 1,0000 ha. : Zoning : Commercial, coverage 30 %, FSR 0,3, height 1

storey.

e) Public Road, area : 0,5451 ha.

6.5 Density

This application makes provision for retail, commercial and industrial development

and no residential erven will be provided.

7 GEOTECHNICAL CONDITIONS – see Report of Geotechnical Site Investigation by Dr J.

Louis van Rooy.

7.1 CONCLUSIONS – PORTION 157, DE ONDERSTEPOORT 300 JR

The site will be suitable for development if the appropriate foundation design and building

procedures are implemented as listed in this report and the NHBRC Home Builders Manual.

The major geological factors that may influence development are the following:

• Highly expansive and compressible soil horizons

• Seasonal saturated soil profile

• Localised excavation difficulty

The recommended foundation precautionary measures and special drainage measures

needs to be implemented to limit damage to the proposed structures.

The site soils are expected to be mildly to highly corrosive to steel pipes.

Based on the trial pits minor localised excavation difficulty are anticipated towards the north

eastern boundary of the site. Medium to large size corestones may also cause minor

localised excavation difficulty.

It is recommended that the 1:100 year floodline be determined with exclusion of

development below this floodline.

Report provisions - While every effort is made during the fieldwork phase to identify the

different soil horizons, areas subject to a perched water table, areas of poor drainage, areas

underlain by hard rock and to estimate their distribution, it is impossible to guarantee that

isolated zones of poorer foundation materials or harder rock have not been missed.

For this reason this investigation has sought to highlight areas of potential foundation,

groundwater and excavation problems, to provide prior warning to the developer.

A competent person should inspect foundation excavations for future structures at the time

of construction or the open service trenches, to determine the variance from the above

assessment of the site.

A Phase II Geotechnical Site Investigation must be conducted at the time of installation of

services to determine any variation in the material properties and site classification

described in this report. NHBRC enrolment can only be completed once this Phase II

Geotechnical Site Investigation has been executed.

The present site zonation is based on the NHBRC Manual with the guideline site class

designation specifically for single-story masonry residential units.

7.2 CONCLUSIONS – PORTION 238, WONDERBOOM 302 JR.

The preliminary impact of the geotechnical constrains on development may be evaluated

according to Table 1, which is a summary of the general geotechnical constraints relevant to

urban development (Partridge, Wood and Brink, 1993). The Class column indicates the

severity of the specific constraints for this site.

Table 1: Geological classification for urban development

CONSTRAINT SITE CONDITION CLASS A Collapsible soil Any collapsible horizon or consecutive

horizons with a depth of more than 750 m in thickness.

1

B Seepage Seasonal saturated soil profiles or perched water tables of less than 1,5 m below ground surface.

2

C Active Soil Very high soil heave expected. 3 D Compressible soils Medium to high soil compressibility expected

(depending on moisture content at time of construction).

2

E Erodability of soil Low soil erodability expected. 1 F Difficulty of

excavation to 1,5m depth

Rock or hardpan pedocretes less than 10 % the total volume. Very localised excavation difficulty expected.

1-(2)

G Undermined ground

No known undermined areas 1

H Instability in areas of soluble rock

Soluble rocks not present 1

I Sleep slopes Slopes between 2 and 6 degrees 1 J Areas of unstable

natural slopes Low risk. 1

K Areas subject to seismic activity

This area is not a known natural seismic active zone. Induced seismicity may occur.

1

L Areas subject to flooding

Areas within a know drainage channel or floodplain.

1

Class: 1 – Most favourable, 2 – Intermediate, 3 - Least favourable

The main expected geotechnical constrains for this site are:

• Highly expansive soils

• Moderately compressible soil horizons when saturated

• Seasonal saturated soil profile

• Localised excavation difficulty where core stones are present

The entire Portion 238 falls into the Site Class Designation H3-S2/3C2BD.

Although shallow groundwater is not considered a major constrain at this site, saturated soil

profiles are expected during the wet season which will result in wetting and drying cycles of

the clays that will causing unwanted differential movement and cause damage to

infrastructure.

Possible foundation options are stiffened or cellular rafts, soil rafts or piles. Special site

drainage and plumbing/service precautionary measures need to be implemented as the

saturation of the clay may result in additional differential movement and dislocation of

services.

It is not expected that this site will fall below the 1:100 year flood line or within a sensitive

wetland area. These factors were not determined during this preliminary site assessment.

Good site drainage will be necessary to prevent undue seasonal moisture variations in the

soil profile and control large surface runoff and possible surface ponding.

The site soils are expected to be highly corrosive to steel pipes and it will be good practise to

use plastic/PVC pipes rather than steel pipes for services.

The soils will also not be suitable as construction material, or subgrade for roads and paced

areas, bedding or backfill for pipelines.

Ideally the clayey soils should be removed below roads and paved areas and replaced with

inert materials.

Report provisions – while every effort is made during the desktop study to gather all

available published information and to deduce the typicalsoil horizons, areas subject to a

perched water table, areas of poor drainage, areas underlain by hard rock and to estimate

their distribution, it is impossible to guarantee that this preliminary process has not

overlooked specific zones of poorer foundation materials or harder rock.

For this reason this investigation has sought to highlight potential geotechnical constraints

typical to this site and geological environment.

A Phase 1 Geological Site Investigation is recommended to determine the actual site

conditions prior to development taking place.

The present site zonation is based on the NHBRC Manual with the guideline site class

designation specifically for single-storey masonry residential units.

8 FLOOD LINE – see Flood Line Certificate issued by PAJ Lochner, Practising Engineer of

Makarios Consulting

In terms of the requirements of Section 144 of the National Water Act, 1998 (Act 36

of 1998), it is hereby certified that the flood line as indicated on the township layout

plan for proposed Annlin x 148 represents the maximum level likely to be reached by

floodwaters in a defined water course on an average occurrence of once in every 50

and 100 years.

Buildings on erven 1 and 2 should be constructed with top of floors at a minimum

contour level of 1212.00m if a 1:50 year flood level has to be respected and

1212.40m should 1:100 year flood level has to be respected.

Buildings on erven 3 and 4 should be constructed with top of floors at a minimum

contour level of 1212.75m if a 1:50 year flood level has to be respected and

1213.15m should a 1:100 year flood level has to be respected.

9 TOPOGRAPHY

The contours as indicated on the layout plan, are in 1 m. intervals. The terrain

slopes from south-east to north-west towards the Apies River with an minimum

incline of 1 :140 and a maximum of 1: 110.

10 TRAFFIC IMPACT STUDY – see Traffic Impact Study

Techworld, Consulting Engineers have been appointed to design and obtain the

necessary approval for access to the proposed development from Gautrans and the

Council.

Recommendations were made by Techworld with regard to the existing and

proposed road infrastructure in the area. The developer will be responsible for the

upgrading and improvements on the existing road infrastructure.

11. ACCESS – see paragraphs 6.3 and 10 above.

12. BUSINESS / INDUSTRIAL / COMMERCIAL COMPONENT – see Report on Market

Research Findings and Recommendations by Demacon market Studies.

13. BUILDING LINES – as indicated on the Site Development Plans.

14. ROADS – see paragraphs 6.3 and 10 above – no new roads are proposed.

15. CIVIL SERVICES REPORT – see Civil Services Report by PVA Consulting

Engineers.

16. WATER – see Civil Services Report.

17. SEWER SERVICES – see Civil Services Report.

18. STORM WATER – see Civil Services Report.

19. ELECTRICITY – see Services Report by RPC Consulting.

20. DEPARTMENT OF WATER AFFAIRS AND FORESTRY – see application by

Bokamoso.

21. SERVICES AGREEMENTS – see Civil and Electrical Agreements.

22. ENVIRONMENTAL IMPACT ASSESSMENT – see Report by Bokamoso

23. PROPOSED DETAIL LAYOUT PLAN – see Layout Plan.

Annlin x 148

LAND USE ERF NUMBERS

NO OF ERVEN

AREA (ha) (+-)

PERCENTAGE OF TOWNSHIP

“SPECIAL” FOR PUBLIC GARAGE, LIGHT INDUSTRIES, COMMERCIAL AND SHOPS

1 & 2

2

2,0245 ha.

43,0%

COMMERCIAL 3 & 4 2 2,1414 ha. 45,6%

PROVINCIAL ROAD 0,5451 ha. 11,5%

TOTAL 4 4,7110 ha. 100%

24. PROPOSED LAND USE RIGHTS.

In terms of the Tshwane Town-planning Scheme, 2008.

Erven 1 and 2 :

Zoning : Use Zone 28 : Special for public garage, light industrial, commercial and

shops.

Height : 1 storey.

Coverage : 50 % ( 25 % retail, 25 % commercial).

FSR : 0,5 (0,25 retail, 0,25 commercial).

Parking : Clause 28, Table G of the Scheme.

Building lines : 16 m. on Road P 1-3, other roads according to Site Development

Plan.

Erven 3 and 4 :

Zoning : Use Zone 12 : Commercial.

Height : 1 storey.

Coverage : 30 %.

FSR : 0,3.

Parking : Clause 28, Table G of the Scheme.

Building lines : 16 m. on Road P 1-3, other roads according to Site Development

Plan.

25. CONDITIONS OF ESTABLISHMENT - see conditions.

26. CONCLUSION

In the light of the history of the existing land uses on Portion 157 and the above-

mentioned information and motivation, the application for a Land Development Area

known as Annlin x 148 on Portion 157 of the farm De Onderstepoort 300 JR and

Portion 238 of the farm Wonderboom 302 JR, should receive favourable

consideration by all role players and be recommended for approval.

JDK PROPERTY CONSULTANT

FEBRUARY 2012

1

My ref : Annlin x 148 Enquiries : PAJ Lochner Pr Eng (ECSA 810408) Date : 15 December 2011

TO WHOM IT MAY CONCERN

FLOOD LINE CERTIFICATION FOR PROPOSED ANNLIN X 148 In terms of the requirements of Section 144 of the National Water Act, 1998 (Act 36 of 1998), it is hereby certified that the floodlines as indicated on the township layout plan for Proposed Annlin Extension 148 represents the maximum level likely to be reached by floodwaters in a defined water course on an average occurrence of once in every 50 years and once in every 100 years respectively Buildings on Erven 1 and 2 should be constructed with top of floors at a minimum contour level of 1212.00m if a 1:50 year flood level has to be respected and 1212.40m should a 1:100 year flood level have to be respected Buildings on Erven 3 and 4 should be constructed with top of floors at a minimum contour level of 1212.75m if a 1:50 year flood level has to be respected and 1213.15m should a 1:100 year flood level have to be respected

. 15 December 2011 ………………………… …………………… PAJ Lochner Pr Eng Date ECSA Registration Nr 810408

Landscape Architects & Environmental consultants

P.O.BOX 11375 Maroelana

0161

Tel: (012) 346 3810 Fax: (086) 570 5559

E-mail: [email protected] Website: www.bokamoso.net

01 Executive Summary

02 Vision, Mission & Values

03 Human Resources

05 Landscape Projects

06 Corporate Highlights

08 Indicative Clients

09 Tools

Table of Contents

04 Services

07 Environmental Projects

01 Executive Summary

Bokamoso specialises in the fields of Landscape Architecture and all aspects of Environmental Management and Planning. Bokamoso was founded in 1992 and has shown growth by continually meeting the needs of our clients. Our area of expertise stretches throughout the whole of South Africa. Our projects reflect the competence of our well compiled team. The diversity of our members enables us to tend to a variety of needs. Our integrated approach establishes a basis for outstanding quality. We are well known to clients in the private, commercial as well as governmental sector.

At Bokamoso we stand on a firm basis of environmental investigation in order to find unique solutions to the requirements of our clients and add value to their operations.

011 Company Overview

02 Vision, Mission & Values

Vision:

At Bokamoso we strive to find the best planning solutions by taking into account the functions of a healthy ecosystem. Man and nature should be in balance with each other.

Mission:

We design according to our ethical responsibility, take responsibility for successful completion of projects and constitute a landscape that contributes to a sustainable environment. We add value to the operations of our clients and build long term relationships that are mutually beneficial.

Values:

Integrity

Respect

03 Human Resources

Bokamoso stands on the basis of fairness. This include respect within our multicultural team and equal opportunities in terms of gender, nationality and race. We have a wide variety of projects to tend to, from complicated reports to landscape installation. This wide range of projects enables us to combine a variety of professionals and skilled employees in our team. Bokamoso further aids in the development of proficiency within the working environment. Each project, whether in need of skilled or unskilled tasks has its own variety of facets to bring to the table. We are currently in the process of receiving our BEE scorecard. We support transformation in all areas of our company dynamics.

031 Employment Equity

032 Members

Lizelle Gregory (100% interest)

Lizelle Gregory obtained a degree in Landscape Architecture from the University of Pretoria in 1992 and passed her board exam in 1995. Her professional practice number is PrLArch 97078.

Ms. Gregory has been a member of both the Institute for Landscape Architecture in South Africa (ILASA) and South African Council for the Landscape Architecture Profession (SACLAP), since 1995. Although the existing Environmental Legislation doesn’t yet stipulate the academic requirements of an Environmental Assessment Practitioner (EAP), it is recommended that the Environmental Consultant be registered at the International Association of Impact Assessments (IAIA). Ms. Gregory has been registered as a member of IAIA in 2007. Ms. Gregory attended and passed an International Environmental Auditing course in 2008. She is a registered member of the International Environmental Management and Assessment Council (IEMA). She has lectured at the Tshwane University of Technology (TUT) and the University of Pretoria (UP). The lecturing included fields of Landscape Architecture and Environmental Management.

Ms. Gregory has more than 20 years experience in the compilation of Environmental Evaluation Reports: Environmental Management Plans (EMP); Strategic Environmental Assessments; All stages of Environmental input ; EIA under ECA and the new and amended NEMA regulations and various other Environmental reports and documents.

Ms. Gregory has compiled and submitted more than 600 Impact Assessments within the last

5-6 years. Furthermore, Ms. L. Gregory is also familiar with all the GDARD/Provincial Environmental policies and guidelines. She assisted and supplied GAUTRANS/former PWV Consortium with Environmental input and reports regarding road network plans, road determinations, preliminary and detailed designs for the past 12 years.

03 Human Resources

Introduction to Sustainable Environmental Management—An overview of Principles, Tools,& Issues (Potch 2006) Leadership Training School (Lewende Woord 2010) BA Environmental Management (UNISA 2011) PGCE Education (Unisa 2013) - CUM LAUDE Project Manager More than 10 years experience in the compilation of various environmental reports

Anè Agenbacht

033 Personnel

Ben Bhukwana

Consulting

03 Human Resources

BSc Landscape Architecture (UP) More than 5 years experience in the field of Landscape Architecture (Design, Construction, and Implementation). Specialises in Landscape Design, ECO,& Environmentalist in training (Assisting with DBAR).

Dashentha Naidoo BA Honours Degree in Environmental Management (UNISA) Bachelor Social Science in Geography & Environmental Management (UKZN) More tha 4 ears e perie ce i WUL Applicaio & I tegrated E iro e tal Ma age e t

ithi ater resource a age e t. Senior Environmental Practitioner & Water Use Licences Consultant

Mary-Lee Van Zyl Msc. Plant Science (UP) BSc (Hons) Plant Science (UP) BSc Ecology (UP) 1year 5months working experience in the Environmental field Specialises in ECO works, Basic Assessments, EIA’s, and Flora Reports

Anton Nel B-Tech Landscape Technology (TUT) N Dip Landscape Technology (TUT) 1 year experience in ECO. Specialises in Basic Assessment Reports.

Alfred Thomas

Juanita de Beer Events Management and Marketing (Damelin) Specializes in Public relations and public participation processes

CIW Foundation& Internet Marketing (IT Academy) 12 years experience in GIS and IT in general. GIS Operator and Multimedia Specialist.

034 Personnel

03 Human Resources

Bianca Reyneke Applying SHE Principles and Procedures (NOSA) Intro to SAMTRAC Course (NOSA) SHEQ Coordinator and compilation of environmental reports

Elsa Viviers

Merriam Mogalaki

Elias Maloka

Landscape Contracting

035 Personnel

Site manager overseeing landscape installations.

Irrigation design and implementation.

Landscape maintenance

18 years experience in landscape contracting works.

The contracting section compromises of six permanently employed black male workers. In many cases the team consists

of up to 12 workers, depending on the quantity of work.

03 Human Resources

Interior Decorating (Centurion College)

( A ccounting/ Receptionist ) and Secretary to Lizelle Gregory

Administration Assistant with in-house training in bookkeeping

Loura du Toit N. Dip. Professional Teacher (Heidelberg Teachers Training College )

Librarian and PA to Project Manager

04 Services

041 Consulting Services

01 Environmental Management Services

Basic Assessment Reports

EIA & Scoping Reports

Environmental Management Plans

Environmental Scans

Strategic Environmental Assessments

EMP for Mines

Environmental Input and Evaluation of

Spatial Development Frameworks

State of Environmental Reports

Compilation of Environmental Legislation

and Policy Documents

Environmental Auditing and Monitoring

Environmental Control Officer (ECO)

Visual Impact assessments

Specialist Assistance with Environmental

Legislation Issues and Appeals

Development Process Management

Water Use License applications to DWA

Waste License Application

02 Landscape Architecture

Master Planning

Sketch Plans

Planting Plans

Working Drawings

Furniture Design

Detail Design

Landscape Development Frameworks

Landscape Development Plans (LDP)

Contract and Tender Documentation

Landscape Rehabilitation Works

042 Contracting Services

04 Services

03 Landscape Contracting Implementation of Plans for:

Office Parks

Commercial/ Retail / Recreational

Development

Residential Complexes

Private Residential Gardens

Implementation of irrigation systems

Team Composition

Environmental

Landscape

043 Orientation

04 Services

01 Valpre Bottling Plant, Heidelberg

051 Commercial

05 Landscape Projects– Current


051 Commercial



051 Commercial



051 Commercial


02 Melodie Waters, Hartebeespoortdam

Spatial Planning

Indigenous Planting

Streetscape

05 Landscape Projects – Current

052 Commercial/Recreational

Development Framework

Rehabilitation Area Layout 052 Commercial/Recreational

02 Melodie waters, Hartebeestpoortdam


053 Offices

03 Grain Building, Pretoria

05 Landscape Projects– Completed

053 Offices

04 Ismail Dawson offices, Pretoria

05 Landscape Projects – Conceptual

05 Celtic Manor, Pretoria

05 Landscape Projects - Completed

054 Complex Development

06 The Wilds, Pretoria

054 Complex Development

05 Landscape Projects – Completed



055 Residential

055 Residential



055 Residential


05 Landscape Projects– Completed 05 Landscape Projects – Completed

055 Residential

05 Landscape Projects– Completed



055 Residential

011 Governor of Reserve Bank’s Residence, Pretoria

Option 1 Option 2 Plant Palette

05 Landscape Projects – Conceptual

055 Residential

012 House Ismail, Pretoria

Front Garden

Back Garden

05 Landscape Projects - Conceptual

055 Residential

013 Forest Garden, Pretoria


055 Residential

015 Forest Garden, Pretoria

05 Landscape Projects - Completed


061 Awards

01 Safari Garden Expo

Received a Silver Certificate at the Safari Garden Expo, 2010


061 Awards

02 UNISA Sunnyside Campus, Pretoria

Best Commercial Paving Plan in Gauteng, 1997

071 EIA, Scoping& Opinion

Doornkloof 68 (Ross) In Progress Opinion

Monavoni X 53 In Progress BA & Opinion

Mooikloof (USN) In Progress Opinion

Norwood Mall/Sandspruit In Progress Opinion

Riversong X 9 In Progress Opinion

Sud Chemie In Progress Opinion

USN Benjoh Fishing Resort In Progress Opinion

Environmental Opinion

07 Current Environmental Projects

The adjacent list host the status of our current projects. Only a selected amount of projects are displayed.

Project Name Status Project

Junction 21 ROD EIA

5 O'clock site access In Progress EIA

Bokamoso X 1 In Progress Scoping & EIA

Doornvallei Phase 6 & 7 In Progress EIA

Engen Interchange In Progress Scoping & EIA

Erasmia X15 In Progress EIA

Franschkloof In Progress EIA

K113 Amendment of ROD EIA

K220 East ROD EIA

K220 West ROD EIA

K54 ROD conditions In Progress EIA

Knopjeslaagte 95/Peachtree ROD EIA

Knopjeslaagte portion 20 & 21 ROD EIA

Lillieslief/Nooitgedacht In Progress EIA

Mooiplaats 70 (Sutherland) In Progress EIA

Naauwpoort 1 - 12/Valley View In Progress EIA

PeachTree X5 In Progress EIA

Strydfontein 60 In Progress EIA

Thabe Motswere In Progress Scoping & EIA

Vlakplaats In Progress EIA

Waterval Valley In Progress EIA

Environmental Impact Assessment(EIA) and Scoping Report

Grace Point Church In Progress ECO

R 81 In Progress ECO

Highveld X 61 In Progress ECO

Mall of the North In Progress ECO

Olievenhoutbosch Road In Progress ECO

Orchards 39 In Progress ECO

Pierre van Ryneveld Reservoir In Progress ECO

Project Shelter In Progress ECO

Environmental control officer (ECO)

072 BA, ECO & S24 G

Annlin X 138 In Progress BA

Clubview X 29 ROD BA

Darrenwood Dam In Progress BA

Durley Holding 90 & 91 In Progress BA

Elim In Progress BA

Fochville X 3 In Progress BA

Hartebeeshoek 251 In Progress BA

Klerksdorp (Matlosana Mall) In Progress BA

Monavoni External Services ROD BA

Monavoni X 45 Amendment of ROD BA

Montana X 146 In Progress BA

Rooihuiskraal X29 In Progress BA

Thorntree Mall In Progress BA

Basic Assessment(BA)Project Name Status Project

Wonderboom In Progress S24 G

Mogwasi Guest houses Completed S24 G

S24 G07 Current Environmental Projects

073 Objection, DFA & WULA

Burgersfort In Progress DFA & BA

Doornpoort Filling Station In Progress DFA & EIA & Scoping

Eastwood Junction In Progress DFA

Ingersol Road (Erf 78, 81 - 83) In Progress DFA

Roos Senekal In Progress DFA & EIA & Scoping

Thaba Meetse 1 In Progress DFA & EIA & Scoping

Development facilitation Act- Input (DFA)

Britstown Bulk Water Supply In Progress WULA

Celery Road / Green Channel In Progress WULA

Clayville X 46 In Progress WULA

Dindingwe Lodge In Progress WULA

Doornpoort Filling Station In Progress WULA+DFA+EIA+SC

Eco Park Dam In Progress WULA

Groote Drift Potch In Progress WULA

Jozini Shopping Centre In Progress WULA+BA

K60 Completed WULA

Maloto Roads In Progress WULA

Kwazele Sewage Works In Progress WULA

Monavoni External Services In Progress WULA+BA

Nyathi Eco Estate In Progress WULA

Prairie Giants X 3 In Progress WULA

Waveside Water Bottling Plant Completed WULA

Water Use License Act (WULA)



Colesberg WWTW In Progress Objection

Nigel Steelmill Completed Objection

Chantilly Waters Completed Objection

Objection


Swatzkop Industrial DevelopmeCompleted Assessment +DFA

Erasmia Completed Assessment

Visual Impact Assessment


074 EMP, Rehabilitation , Waste Management & Signage Application

Heidelberg X 12 ROD EMP

Monavoni Shopping Centre Completed EMP

Forest Hill Development Completed EMP

Weltevreden Farm 105KQ Completed EMP+EIA

Raslouw Holding 93 Completed EMP+BA

Durley Development Completed EMP+BA

Rooihuiskraal North X 28 Completed EMP

Environmental Management Plan(EMP)

Norwood Mall/Sandspruit In Progress Rehabilitation

Project Shelter Heidelberg In Progress Rehabilitation

Sagewood Attenuation Pond ROD Rehabilitation

Velmore Hotel Completed Rehabilitation

Grace Point Church Completed Rehabilitation

Mmamelodi Pipeline Completed Rehabilitation

Rehabilitation Plan

Menlyn Advertising Completed Signage

The Villa Mall Completed Signage+EMP+BA

Signage Application

08 Indicative Clients

- Billion Property Group

- Cavaleros Developments

- Centro Developers

- Chaimberlains

- Chieftain

- Century Property Group

- Coca Cola

- Elmado Property Development

- Flanagan & Gerard

- Gautrans

- Hartland Property Group

- Moolman Group

- MTN

- M&T Development

- Old Mutual

- Property Investment Company

- Petroland Developments

- RSD Construction

- SAND

- Stephan Parsons

- Twin City Developments

- Urban Construction

- USN

09 Tools

- Adobe Illustrator CS3

- Adobe Photoshop CS3

- Adobe InDesign CS3

- AutoCAD

- Google SketchUP

- GIS

- Microsoft Office Word

- Microsoft Office Excel

- Microsoft Office Publisher

- Microsoft Office Power Point