JHI Properties - from strength to strength
Over the past five years, JHI Properties has dramatically increased its portfolio of assets managed on behalf of property funds and investors.
This now stands at a total value of approximately R50 billion – more than double the R22 billion managed by JHI Properties in 2007.
Comments Johann Boshoff, director: property management for JHI Properties: “Over the past year JHI has been successful in acquiring the management contracts for a number of ‘new’ portfolios. These include a total of 220 properties, comprising retail, office and industrial properties owned by Arrowhead Properties, Vividend Income Fund, Cape Joint Pension Fund and privately owned property portfolios around South Africa. In addition, we were awarded an additional 40 properties to manage by existing clients Dipula Property Investment Trust, Vukile Property Fund, Vunani Property Fund and Resilient Properties.
“We also renewed management contracts with major funds and property owners such as Capital Property Fund, the Resilient/Fortress stable, Vukile Property Fund, Vunani Property Fund, MICC group in Namibia, the Namibian Government Institutions Pension Fund and the Ministry of Finance & Development Planning in Lesotho. These represent a total of 328 retail, office and industrial properties.
“The above properties are located in various regions around the country, and our exposure to property management in Mpumalanga and Northern Province has grown to such an extent that we have opened a new office in Nelspruit, with a further new office about to launch in Polokwane,” he says.
“Interestingly, it is evident that investors are using the current trading period and conditions to grow their portfolios at attractive yields. There are quite a number of listed companies in the property sector who are actively pursuing investment opportunities in order to increase their market capitalisation.”
Boshoff says key to JHI’s success is a focus on providing a strategic service which is geared to help clients realise the potential of their investments – increasingly important in today’s challenging economic environment. As utility costs have become a major factor in property expenses and occupation cost, JHI has dedicated staff focusing on minimising or optimising utility costs, and as defaulting tenants have a detrimental effect on clients’ cash flow and the performance of their investments, the company utilises an in-house department of qualified attorneys to manage and reduce legal cases.
He adds: “Increasingly we find that landlord and tenant mindsets are changing and progress in achieving greener standards in buildings is becoming noticeable. There is a perception that implementing green methodologies costs more and is therefore not viable, however, studies have shown that the costs and benefits of green building have a modest initial cost premium, but that long-term benefits far exceed the incremental capital costs.
“The fact is that green building initiatives strive to create high-performance, energy-efficient structures that improve tenant or owner comfort and well-being, while minimising environmental impacts. With the support structures in place by organisations such as SAPOA (South African Property Owners Association) and the GBCSA (Green Building Council of South Africa), both public and private entities are increasingly pursuing green buildings in the institutional, commercial, and residential sectors. And with government to implement green building legislation - with carbon taxes based on the end users’ energy usage, reducing one’s carbon footprint now will benefit property owners and tenants in the long term.”
JHI is providing a proactive approach in minimising carbon footprint through systems and procedures being developed in-house. By implementing energy and water saving initiatives operating costs are reduced, which adds to the appeal for tenants.
Says Boshoff: “If the landlord offers lower operating costs through an energy and water efficient building, he/she has the potential to achieve a higher rental rate and still keep the tenant’s occupation costs unchanged. This becomes even more imperative given rapidly rising electricity tariffs. Energy savings which add value to property owners incorporate basic lighting efficiencies which include more optimised power factor installations, solar panels, motion sensors or even design changes, just to name a few of the initiatives.”