News/Insights

TUHF Limited hosted its Annual Client Year End Function in conjunction with the TUHF Programme for Property Entrepreneurship Graduation Ceremony on the Thursday 16 November 2017. Clients were invited to the evening function to network with fellow property entrepreneurs, service providers, and got the opportunity to chat with TUHF’s portfolio managers on any news surrounding TUHF and the space that it operates in.

Paul Jackson, CEO of TUHF Limited, welcomed and thanked guests in attendance and got the evening started by introducing the CEO of Joburg Property Company, Helen Botes. Helen gave a brief presentation on the initiatives of the JPC and the projects it is involved in.

The graduation ceremony followed including the announcement of winning groups from the TUHF Programme for Property Entrepreneurship Programme (TPPE), ending off with casual dinner and drinks.

The TUHF Programme for Property Entrepreneurship (TPPE) is aimed at supporting entrepreneurs in growing their businesses and helps them improve both their investment and management decisions. In collaboration with the University of Cape Town, TPPE allows our clients the opportunity to learn and acknowledge property as an asset.

TPPE is aims to equip clients with the skills and knowledge of the industry and provides them with an understanding of various aspects of property including:

• Property Entrepreneurship and Property Investment
• Property Studies and Feasibility Studies
• Construction Management
• Green Building
• Property Law
• Drivers of the Real Estate Market

The TPPE graduation ceremony celebrated winning delegates with award certificates based on the proficiencies applied to the tasks in the programme.

TUHF has made investments to date in the inner-city, and they currently assist in financing entrepreneurs looking to purchase and convert buildings into low cost housing for residents in the city. Sizakele Majola is an inner city entrepreneur, whom with the assistance of TUHF, has received access to finance for the purchasing and refurbishment of a building in the inner city of Hillbrow.

 

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TUHF and the Johannesburg Development Agency (JDA) together with other partners, including the City of Joburg, signed a memorandum of understanding for a DIU (Development Impact Unit) initiative regards a number of development objectives including developing affordable urban neighbourhoods.

DIU recently held a pilot workshop with new and emerging clients; developers and investors; the JDA; City Transformation and Land Use Management.  Our objective was to facilitate and streamline both the development application process and the loan application process for the Inner City Eastern Gateway, along the Perth Empire Development Corridor (the Knowledge Precinct SDZ) and the Louis Botha Corridor (the Orange Grove SDZ); and to have the ‘bank’ and the ‘City’ in the same room, accessible to small scale property entrepreneurs so as to simplify the development application process.

This was a first in Urban Planning and Development history in Johannesburg and possibly South Africa.

The Result? Investors, small scale developers and small scale landlords all gained real knowledge around:

• Understanding of the market & opportunities operating in each area
• Understanding of current basket of rights applicable
• Understanding regards the SDZs ability to fast track approvals
• Understanding various City projects and where the City is spending Capex
• All the necessary requirements for finance application

And TUHF gained new finance opportunities!  The feedback we received was incredibly positive, all of those attending indicated that the workshop was extremely useful. We look forward to this being replicated in other focus areas.

The ruling that new home owners are not liable for historical debt

Historically the applicants in this matter were various consumers from a number of municipalities.  They had been refused the supply of services to their properties, or had had the services to properties terminated, on the basis that they refused to pay the municipalities concerned any amounts incurred by the prior owners of these properties.

TUHF was one of the “other parties” that intervened in the matter in the Constitutional Court. 

TUHF Ltd (“TUHF”) was admitted by the Court as the first amicus (friend of the court).  TUHF made novel submissions to the Court explaining how (in its view) it was not necessary to deal with the constitutionality of section 118(3) if it was properly understood and interpreted in light of its historical common law treatment.  BASA (the Banking Association of South Africa) was admitted as the second amicus.

TUHF’s main argument was that the common law requires that a creditor (i.e. the municipality) can only acquire limited real rights in the property of another (even for security purposes) as envisaged in section 118(3), if some form of publication of those rights occurs, to notify the public at large (and other creditors) of the fact that the property stands as security for someone else’s claim against the owner thereof.

The metropolitan municipalities of Tshwane and Ekurhuleni have been ordered by the Constitutional Court to cease the widespread practice of making new homeowners liable for historical debt of former owners. New owners now have no connection to a seller’s municipal debt (including water, electricity, rates and taxes charges).

“Over the years, our clients have come to rely on TUHF for more than just funding – we provide support in all areas that affect our clients. We continue to make a concerted and collective effort to develop our industry providing support, guidance and risk management,” says Paul Jackson, TUHF CEO.

Thank you to all our guests that attended our TUHF Talk on Trends and Opportunities in Downtown Joburg Property recently in Johannesburg.

 

We especially thank our guest speakers for sharing their knowledge. Click on the links below to download their presentations:

 

• Gabri Viljoen – Information on the Fraud Hotline
• Andrew Shaeffer – Trends & opportunities in the inner city Joburg multi-unit property market
• Aubrey Schneider – Trends in affordable mutli-unit products
• Christian Gable – Conducted a study on the Formal Rental Housing Market in Johannesburg Inner City
• Captain Zondo – Safety for property owners & their tenants in the Joburg Inner City

On Thursday, 26 January, TUHF Limited successfully launched the first R280m tranche of their R1 billion DMTN (Domestic Medium Term Note) Programme on the JSE (Johannesburg Stock Exchange).

TUHF welcomed new investors including Sanlam, Stanlib and RMI, who joined existing TUHF funders – Old Mutual ’s Futuregrowth and Mergence.

These funds will enable TUHF to grow its financing of inner city development projects in all major city centres of SA, directly improving rejuvenation and meeting the high demand for affordable accommodation downtown.

“The listing of this note on the JSE marks a new dawn for TUHF in accessing debt capital markets. Our credit rating and 14 year track record speaks to the specialisation, governance and excellent risk management our business has become known for in commercial finance and inner city property,” said Ilona Roodt, TUHF’s CFO.

She added that “Although the pricing was higher than originally anticipated, we realise that as this is TUHF’s inaugural debt listing and rating, new investors are being cautious. Seeing and managing investment opportunity in inner cities is our specialisation, with proven growth over 14 years having financed over R4 billion and 43 000 units downtown.  Over time we look forward to building on this performance and developing strong new investor relationships.”

Paul Jackson, TUHF’s CEO and Co-founder added: “We look forward to the opportunities this unlocks for TUHF and our clients’ business growth.  The funds will be instrumental in sustaining our 5 year average loan book growth of 13%.  This building block in our long term debt capital strategy means we are one step closer in achieving our vision of a R5 billion book servicing every major city in South Africa.”

Launching the R280m tranche marks the first of 3 tranches planned over the next 3 years totalling R1 billion. The debt arranger for TUHF’s DMTN is Deloitte Capital.

Greening and environmentally friendly solutions are increasingly gaining traction and duly so. TUHF recently hosted an event on practical greening for inner city landlords resulting in an interactive experience that spoke to property entrepreneurs in a unique manner changing the way they understand the concept of ‘green buildings’ particularly for inner cities.

Paul Jackson, CEO of TUHF Limited was the host for the morning and helped guide clients through the exciting presentations. “It’s well worth noting that South Africa has the fastest growing green building industry in the world,” noted Jackson, “it means that there is huge opportunity to provide knowledge and professional development prospects in the industry.”

While often used without real understanding, the ‘greening’ concept has become a formidable differentiator if properly grasped and implemented. Warren Gray from Solid Green, Nic Barnes, CEO of Jozi Housing and Grahame Cruickshanks from the Green Building Council of South Africa (GBCSA) shepherded everyone on the green journey.

Warren Gray, Solid Green was instrumental in giving insight into the concept that when going green, it usually takes some time before a return on investment is seen. Using energy saving light bulbs or implementing solar geysers can often take up to 2 years before any meaningful impact can be felt and any savings can be passed along to tenants. However, once you pass that mark, the savings increase exponentially compared to traditional methods such as incandescent light bulbs.

Nic Barnes, CEO of Jozi Housing stated: “If you can’t measure it you can’t manage it.” Barnes advised that making sure that you utilise suppliers who are true professionals and have a good track record around green installations required was key to success. Specifications of any equipment installed is of vital importance and ‘one size fits all’ is an absolute no-no.

Grahame Cruickshanks introduced everyone to the GBCSA and how they work with their members, local government and other professionals in the property market to #bring changehome. He also reminded us that interaction with the people occupying the building, communicating about the redesign or refurbishment is therefore as important as the actual redesign or refurbishment.

The interactive nature of this talk filled the much needed “information
gap” between owners to engage with green experts and start the discussion around requirements and choices. “It also allowed them to go beyond a typical greening discussion, and have a meaningful conversation about the impact of any decisions on the buildings and its resources,” concluded Jackson.

As always, the morning ended with an opportunity to network with partners and clients as well as the presenters. Additionally, it provided an opportunity to maintain relationships previously formed and forge new ones – remaining true to our vision of providing support and guidance for all our clients.

Thank you to all our guests that attended our TUHF Talks on Practical Greening recently in Johannesburg and Durban!

We especially thank our guest speakers for sharing their knowledge. Click on the links below to download their presentations:

Johannesburg

• Nic Barnes, CEO of Jozi Housing
• Warren Gray, Founding Partner at Solid Green, Green Building Consultants
• Grahame Cruickshanks, Managing Executive: Residential at the Green Building Council of South Africa

Durban:

• Travis Lester from Schoombie Hartmann KZN
• Warren Gray, Founding Partner at Solid Green, Green Building Consultants
• Sian Cohen, Business Development Manager, Green Building Council of South Africa

For photos from the events, visit our Facebook page:

• Johannesburg, 7 September
• Durban, 15 September

Recent announcements by the eThekwini metropolitan municipality combined with a renewed appetite for inner city property is creating opportunities for investors in Durban. We spoke to Sivan Govender, Regional Manager for TUHF’s KwaZulu Natal branch about these opportunities.

 

Read the original article published in the Real Estate Investor Magazine : June 2016

 

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