Real Estate Investor Magazine South Africa May 2013

CASE STUDIES BY MONIQUE TERRAZAS Beware! New Scam In Operation The Good The Bad The Ugly GEPF implements international sustainability benchmark Commercial property sector under pressure in 2013 Yet Another Scam Africa’s largest pension fund, the Government Employees Pension Fund (GEPF), has become the first South African institution to implement t he Globa l Rea l Estate Susta inabi l it y Benchmark (GRESB), used by institutional investors globally to improve the sustainability performance of their investment portfolios. Assessing where its property portfolio ranks on the global GRESB enables the GEPF to determine which of its buildings or property funds excelled in terms of environmental sustainability and where improvements are required. “ This is a huge boost for responsible investment in the property sector in South Africa and shows that asset managers will prioritise investment in companies with sustainable environmental management,” says Green Building Council of South Africa (GBCSA) CEO, Brian Wilkinson. "Increasing demand for green and efficient buildings by blue-chip corporate tenants allows owners of green and efficient buildings to attract and retain a better quality tenant and, in turn, attract higher rentals," comments GEPF environmental, social and governance manager Adrian Bertrand. Significant scope exists for improving the carbon footprint of the built environment, which currently contributes one-third of the world ’s greenhouse-gas emissions, while buildings are estimated to consume over 40% of electricity generated globally. 18 May 2013 SA Real Estate Investor The Broll Property Report 2013, which considers South Africa's commercial property market and the real estate sector in sub-Saharan Africa, says downward pressure on South African GDP will place the country's commercial property sector under pressure for the rest of the year. According to a report in the Weekend Argus, 32 cases of funds being misappropriated from conveyancing attorney's accounts have been reported to the Attorney's Insurance Indemnity Fund (AIIF), involving sums ranging between R45 000 and R488 000. Malcolm Horne, CEO of Broll Property Group, part of the global CBRE Affiliate Network, says, "The report shows the outlook for an upturn in world growth is now brighter than in 2012. However, many of South Africa's international trading partners are experiencing little or no economic growth, in a sluggish global economy, especially the Eurozone. The scam involves criminals targeting conveyancing attorneys’ bank accounts, transferring the profits of a sale before the money can be paid into the seller’s account. It is a form of identity theft perpetrated against the seller, causing the conveyancing attorney to pay the proceeds into the wrong bank account. "The research shows that landlords are likely to face a difficult year, as they cope with rising costs on one hand and an income squeeze on the other. This is exacerbated by economic conditions and the trend among tenants towards more efficient space use." The report reveals a continued slowdown for the retail property sector. The outlook for industrial property is closely influenced by the manufacturing and mining sectors, which are predicted to experience another year of lacklustre performance. For offices, soft demand will continue to define 2013. Nevertheless, investors are recognising that the time to re-enter the property investment sector is starting to look positive, although securing finance from banks is likely to remain a constraint. For a copy of the report, visit www.broll.co.za. The scam has affected conveyancing attorneys around the country, however, in all but one instance, the same bond cancellation bank was involved. According to the report, Greg Salter, head of risk at Nedbank Home Loans, confirmed that isolated fraudulent instructions had taken place. He said Nedbank’s attorney firms have all been made aware of preventative measures to be taken and that a forensic investigation was under way, with the bank engaging with police and other banks to identify the perpetrators. Although monies deposited into an attorney’s trust account are protected by the Attorney’ Insurance Indemnity Fund, the Fund cannot be held liable if there is no wrongdoing on the attorneys’ part. If you are selling a property, keep in contact with the conveyancing attorney and confirm that the proceeds of the sale are being paid into the correct account. www.reimag.co.za

Real Estate Investor Magazine South Africa May 2013 | Page 20