2013 - Maboneng Precinct

TABLE OF CONTENTS MESSAGE FROM CEO 1 MESSAGE FROM CEO I. GLOBAL PROPERTY MARKET OVERVIEW 1 2 INTERNATIONAL TRENDS PROPERTY GROWTH IN AFRICA URBAN REGENERATION DISTRICTS AROUND THE WORLD II. SOUTH AFRICAN PROPERTY MARKET 4 NATIONAL ECONOMICAL TRENDS JOHANNESBURG ANALYSIS AN IMPROVED URBAN ENVIRONMENT SOUTH AFRICAN PROPERTY MARKET INDICATORS III. PROPERTY GROWTH IN MABONENG INVESTING IN MABONENG URBAN STRATEGY FOR THE PRECINCT THE MABONENG NEIGHBOURHOOD IV. CONTACTS V. DISCLAIMER VI. SOURCES / APPENDIX VII. ADDENDUM: PRESS RELEASES & ARTICLES 6 15 16 16 17 When I began with the foundations of developing The <strong>Maboneng</strong> <strong>Precinct</strong> in 2007, the property market had just started its downward cycle and the Johannesburg CBD was a complete no-go zone. Now, in <strong>2013</strong>, we have seen a major turnaround with the city becoming a viable investment hotspot once again with the broader South African property market showing some real positive signs of recovery. Our first sectional title unit in Main Street Life (the first residential development in The <strong>Maboneng</strong> <strong>Precinct</strong>) was sold at R8,788 per square meter in July 2010. Our latest unit in Main Street Life was signed in June <strong>2013</strong> for R12,700 per square meter. This amounts to nominal growth of 45% in 36 months equating to annual growth of 15%. To put this into perspective the national price growth during the same period fluctuated between 0% and 9% growth per annum. In addition units in Main Street life are presently achieving yields up to 10% compared to peaking nationwide average property yields of 6.2% As an investor buyer, a total annual return of 20% is unique in the South African residential market and in some cases is resulting in people achieving a return on investment without ever really having to incur a monthly net cash outflow. The fundamentals of the properties in <strong>Maboneng</strong> are particularly solid and this underpins the growth of these properties. Major highways and infrastructure surround the neighbourhood, which makes for a great long-term property strategy. Over the last 6 months, Propertuity has successfully secured over 350 million rands to expand on our plans to grow the area. This growth will reinforce the value of the buildings already developed in that they will now be part of a much broader, holistic vision. We also have an added incentive in the form of the Urban Development Zone (UDZ), which has been extended to 2020 to allow for future tax savings. The Propertuity portfolio alone consists of 34 buildings in <strong>Maboneng</strong>. If one considers that to date we have only fully developed 5 of these buildings, you can begin to imagine the growth in development and value that is still to come in the precinct. We have successfully set up 2 City Improvement Districts (CIDs) that effectively will become the <strong>Maboneng</strong> urban management frameworks. This management of the public space around our buildings will add further value to your investment and to the lifestyle of residents in the area. During the course of <strong>2013</strong>, we will be completing a number of new buildings including Artisan Lofts, MOAD (Museum of African Design), Curiocity, the Urban Fox, Maverick Corner and Remed’s View. These 6 new developments will double our current developed portfolio by year- end: a major step forward in the overall goal of building a fully fledged neighbourhood. Later this year, we will also launch 5 new developments that will be built over the next 2 years including 1,000 residential units, a hotel, more parking, retail and office spaces. All of our buildings are within walking distance of each other and will become integrated into and connected by the <strong>Maboneng</strong> public spaces framework. The first phase of <strong>Maboneng</strong> has been a great success for all invested parties and I look forward to welcoming on board our next round of investors as the revolution continues. Jonathan Liebmann, Founder and CEO of Propertuity June <strong>2013</strong> <strong>2013</strong>