PROPERTY - A LANDLORD’S PERSPECTIVEPROPERTY - A LANDLORD’S PERSPECTIVE

“WOMEN LANDLORDS for the DPW”“WOMEN LANDLORDS for the DPW”

CHICHI MAPONYACHICHI MAPONYA

INTRODUCTIONINTRODUCTION

• My name is Chichi Maponya from Maponya My name is Chichi Maponya from Maponya DevelopmentsDevelopments

• We are a national property development company We are a national property development company • Over the last decade we have developed over Over the last decade we have developed over

R700 million Rands worth of property. R700 million Rands worth of property. • We have numerous leases with the Department of We have numerous leases with the Department of

Public Works at provincial and national level.Public Works at provincial and national level.• We have approximately 10 000m2 of leases in We have approximately 10 000m2 of leases in

place with DPWplace with DPW

Liberty Towers, DurbanLiberty Towers, Durban- eThekwini Municipality Library (3,034 m²)- eThekwini Municipality Library (3,034 m²)

- Dept. of Public Works (2,025 m²)- Dept. of Public Works (2,025 m²)- Dept. of Welfare (3,341 m²)- Dept. of Welfare (3,341 m²)

247 Burger Street, Pietermaritzburg247 Burger Street, Pietermaritzburg- Dept. of Education (5,130 m²)- Dept. of Education (5,130 m²)

WHAT IS A LANDLORDWHAT IS A LANDLORD

• The landlord is the owner of a property which is rented out The landlord is the owner of a property which is rented out to a tenant. The landlord and tenant are also referred to to a tenant. The landlord and tenant are also referred to as the lessor and lessee.as the lessor and lessee.

• The relationship between the landlord and the tenant is The relationship between the landlord and the tenant is regulated by a lease. This is almost always written and is regulated by a lease. This is almost always written and is generally a comprehensive legal agreement.generally a comprehensive legal agreement.

• Although the major obligation in any lease is for the tenant Although the major obligation in any lease is for the tenant to pay the rent, there are in fact duties and responsibilities to pay the rent, there are in fact duties and responsibilities which flow both ways.which flow both ways.

• One of the key functions of the landlord is to be the “asset One of the key functions of the landlord is to be the “asset manager” of the property. Asset management involves manager” of the property. Asset management involves getting the maximum possible sustainable return from the getting the maximum possible sustainable return from the capital invested in the propertycapital invested in the property

THE LANDLORDS RELATIONSHIPSTHE LANDLORDS RELATIONSHIPS• The landlord has a pivotal role in property.The landlord has a pivotal role in property.• Apart from the main relationship with the tenant, the Apart from the main relationship with the tenant, the

landlord deals with all of the following groups, entities landlord deals with all of the following groups, entities and people:and people:– Property managerProperty manager– Service providersService providers

• CleaningCleaning• SecuritySecurity• Landscape maintenance etcLandscape maintenance etc

– Property professionals – electrical, mechanical, fire Property professionals – electrical, mechanical, fire protection, structuralprotection, structural

– The local authority – municipality, cityThe local authority – municipality, city– Property brokersProperty brokers– AttorneysAttorneys– FinanciersFinanciers

ASSET MANAGEMENTASSET MANAGEMENT

• Asset management is ultimately the most Asset management is ultimately the most important responsibility of the landlord.important responsibility of the landlord.

• Asset management looks to:Asset management looks to:– Maximise revenuesMaximise revenues– Contain expensesContain expenses– Focus on long term sustainabilityFocus on long term sustainability

• To maximise revenue, the landlord needs happy To maximise revenue, the landlord needs happy tenants who are willing to pay a premium if tenants who are willing to pay a premium if necessary to be located in a great building. If necessary to be located in a great building. If necessary the landlord will change tenants, or necessary the landlord will change tenants, or the mix of tenants.the mix of tenants.

ASSET MANAGEMENT cont.ASSET MANAGEMENT cont.

• Containing expenses needs professional Containing expenses needs professional procurement of services as well as good procurement of services as well as good controls of expenditure. The setting and controls of expenditure. The setting and monitoring of service level agreements.monitoring of service level agreements.

• Sustainability is vital. There is no use running a Sustainability is vital. There is no use running a building into the ground by cutting out all building into the ground by cutting out all maintenance and repair work, failing to renew maintenance and repair work, failing to renew capital goods at the end of their design life etc. capital goods at the end of their design life etc. This is a problem that has blighted many of our This is a problem that has blighted many of our CBD’s.CBD’s.

WHAT DEFINES SUCCESS AS A LANDLORDWHAT DEFINES SUCCESS AS A LANDLORD

• Happy tenants! Happy tenants:Happy tenants! Happy tenants:– Renew their leasesRenew their leases– Are willing to pay a premium to be in the Are willing to pay a premium to be in the

buildingbuilding– Spread the word which helps to pull in other Spread the word which helps to pull in other

tenantstenants– Respect the building and invest into their Respect the building and invest into their

premises.premises.• On a cold accounting or asset management On a cold accounting or asset management

basis this translates into a higher yielding basis this translates into a higher yielding building. This has higher net income and in building. This has higher net income and in turn a higher capital value.turn a higher capital value.

THE BENEFITS OF THE FEMALE TOUCHTHE BENEFITS OF THE FEMALE TOUCH

• Ladies make wonderful landlords!Ladies make wonderful landlords!• The reasons go to the heart of femininity:The reasons go to the heart of femininity:

– A caring relationshipA caring relationship– Long term thinkingLong term thinking– RespectRespect– Co-operationCo-operation– Fairness, but firmness tooFairness, but firmness too– Attention to detailAttention to detail

LANDLORDS AND EMPOWERMENTLANDLORDS AND EMPOWERMENT

• Government, at both national, provincial and Government, at both national, provincial and local levels can achieve meaningful local levels can achieve meaningful empowerment. This is both for the previously empowerment. This is both for the previously disadvantaged, but more importantly for woman.disadvantaged, but more importantly for woman.

• Well though out and effective structures are in Well though out and effective structures are in place for empowerment landlords to get a leg place for empowerment landlords to get a leg up/ This can be by way of premiums on rentals, up/ This can be by way of premiums on rentals, or the length of a lease.or the length of a lease.

• Government is also able to steer ownership of Government is also able to steer ownership of buildings towards empowerment entities.buildings towards empowerment entities.

• With that leg up, the empowered landlord with With that leg up, the empowered landlord with hard work and focus is able to asset manage hard work and focus is able to asset manage the building and add genuine value.the building and add genuine value.

BECOMING A LANDLORDBECOMING A LANDLORD

• We’ve discussed the theory...now let’s talk about how to We’ve discussed the theory...now let’s talk about how to become a landlord.become a landlord.

• Becoming a landlord is the end point of property Becoming a landlord is the end point of property development. We need to talk a bit about property development. We need to talk a bit about property development.development.

• The property developer brings together the following The property developer brings together the following elements:elements:

– A tenant or purchaser of the propertyA tenant or purchaser of the property– A siteA site– A comprehensive design – including A comprehensive design – including

contributions from all of the design contributions from all of the design professionalsprofessionals

– FINANCEFINANCE

• Getting going as a developer is tough:Getting going as a developer is tough:– Tenants want a track record and credibilityTenants want a track record and credibility– Unless you have capital of your own securing finance is Unless you have capital of your own securing finance is

hard work – especially in the current environmenthard work – especially in the current environment• For someone with vision and perseverance however, For someone with vision and perseverance however,

becoming a developer and then a landlord is possible, and becoming a developer and then a landlord is possible, and very rewarding.very rewarding.– Start small – cut your clothes to suit your clothStart small – cut your clothes to suit your cloth– Consider getting experience of the property process by Consider getting experience of the property process by

investing in residential propertiesinvesting in residential properties– Look for partners. We have talked about the role of Look for partners. We have talked about the role of

empowerment. There are a lot of old order developers empowerment. There are a lot of old order developers looking for energetic and enthusiastic partnerslooking for energetic and enthusiastic partners

– The state is your friend. The state has an excellent track The state is your friend. The state has an excellent track record of helping newcomers in propertyrecord of helping newcomers in property

BECOMING A LANDLORD cont.BECOMING A LANDLORD cont.

• The key element is in securing a tenant:The key element is in securing a tenant:– Work your contactsWork your contacts– Engage with property brokersEngage with property brokers– Keep your ears to the groundKeep your ears to the ground

• With a good tenant, finance and a site will With a good tenant, finance and a site will generally follow easily.generally follow easily.

• See you in the market place!See you in the market place!