LOUIS VAN DER WATT
LOUIS VAN DER WATT
In 1990 , Louis van der Watt , CEO of Atterbury Property , met his future business partner , Francois van Niekerk who was head of his own IT company , Infotech . Louis , who was an articled clerk at Deloitte at the time , expressed a keen interest in property from a young age and Francois was starting to venture into the property market . Their first deal together was developing the Auditor General ’ s head office in Brooklyn , Pretoria . Now , 26 years later , their partnership has grown to become one of SA ’ s largest and most successful Property Groups , Atterbury , which recently opened the Mall of Africa , Southern Africa ’ s largest single-phase shopping centre development to date .
The Atterbury Group was formed in 1994 and , for its first few years , Louis and Francois were the company ’ s only employees . Today , Atterbury employs over 100 people , with Louis remaining the CEO as well as a non-executive director of JSE-listed property companies Attacq and Hyprop Investments while Francois served on the Attacq board as Chairman until 2012 and remained as a non-executive director for some time .
Atterbury began construction on the Mall of Africa on the 28 October 2012 . At 130,000sqm , it is the largest single-phase shopping mall development in South Africa .
The head office of the Auditor General was completed shortly after forming Atterbury . “ At the time , Francois van Niekerk and I were the only employees and shareholders in Atterbury , with a third of the shares owned by our charity trust , the Atterbury Trust . We did not need to borrow money from any financial institution as Francois provided the capital . This also meant the building remained the property of Atterbury ,” says Van Der Watt .
He adds : “ Often , developers of a building sell it at a profit and use the proceeds to develop their next building . Fortunately , we did not need to do that . We went on to develop Atterbury Value Mart . It also remained the property of Atterbury .”
In this way , Van Der Watt realised the massive benefits of having a strong balance sheet behind them . “ After our fourth development , our own balance sheet was strong enough to use as security for future , bigger developments .”
In 1999 , Atterbury expanded outside of Gauteng to operate in Cape Town too . Shortly after that it formed Attfund , which at the time counted among its developments Woodlands Boulevard in Pretoria , Clearwater Mall in Johannesburg and Garden Route Mall in George . In 2011 , Attfund was sold to Hyprop for R9 billion .
“ In 2007 and 2008 , during the global economic turmoil , Atterbury could continue and expand because our previous developments remained in the hands of the company . Ironically , we did the Waterfall deal , which was named the biggest property transaction ever in South Africa by the Financial Mail at the time , in 2008 when the global sentiment was so pessimistic and other developers cut back on their projects .”
Van Der Watt considers the Waterfall land transaction in 2008 as his most significant property deal . “ The Islamic Institute retained an economic interest . They benefit from our success in Waterfall as they earn a percentage of the rental .”
For Van Der Watt , it is important to make the deal as profitable for the seller as it is for the developer . “ Atterbury will usually include the seller in the new development ,” he says , “ in a partnership or joint venture ”.
LOUIS ’ S TOP INVESTMENT TIPS
1 . I will only invest in a company where the employees are included as shareholders .
2 . An investment that is funded by way of a loan , must also generate income at the same time , for example , don ’ t buy an undevelopment piece of land and keep it undeveloped for a number of years , rather buy a student flat from which you are able to earn rent from day 1 .
3 . Property companies must be focused and specialise in a specific area of development , ie retail , commercial , residential or industrial . Fortunately Atterbury is now a large company and we can have specialist divisions within Atterbury that focuses on each of these areas .
4 . I will be very hesitant to invest in a non-performing development , ie , we will not invest in a shopping centre that currently has a 10 % vacancy . We will rather pay more for a well-performing centre with good access in a soughtafter area . There is no such thing as a “ bargain ” property .
www . reimag . co . za MAY 2016 SA Real Estate Investor 9