Real Estate Investor Magazine South Africa Real Estate Investor Magazine - May 2017 | Page 14

The beginnings of the Spear Properties
years
Flax went on to join Marc Wainer and Wolf Cesman
at the newly listed Madison Property Fund managers.
“We folded Madison into Redefine together with
Apex-Hi in a mega merger in 2009,” explains Flax.
He stayed on at Redefine for a few more years, but,
when the constant travel while doing international
acquisitions in Australia and the United Kingdom
eventually got the better of his life with his young
family, he decided to resign from Redefine and focus
his business life in Cape Town.
Spear Properties emerged in 2011 from Flax’s
timely partnership with one of his old friends, and
his former quantity surveyor, Abu Varachhia (who, at
the time, was in the process of retiring from his role
as CEO of his national quantity surveying practice,
LDM) and a former, younger colleague, Quintin
Rossi, who Flax describes as a “brilliant leasing man”.
“We borrowed part of our old name from the
former gem, Spearhead and called ourselves Spear
Properties,” explains Flax.
The business started slowly in 2011. Flax, Varachhia
and Rossi began acquiring undervalued properties
in the Cape Town area, including Doubletree by
Hilton hotel at Upper Eastside in Salt River, a few
prime beachfront properties in Paarden Island, and
a number of office buildings in Tygervalley and
Southern suburbs.
“We later added great retail properties like Sable
Square and Viking Park to round off the R1, 5bn
portfolio. We put it together with a combination of
our own cash and aggressive gearing from supportive
banks like Nedbank and Investec,” says Flax.
This began an exciting five-year period for the
partners during which time they managed to build
Spear up into a well-diversified, but regionally
focused, fund. While Flax enjoyed being out of the
public domain, he explains the lure of the REIT
structure eventually drew them in and, around mid-
year last year, they decided to list their business on the
JSE. This was Flax’s third listing.
“So now we have listed on the JSE, the combination
of Abu, Quintin and I work very well with Abu and
I the experienced old hands and Quintin providing
the energy to grow the business both organically and
through acquisitions. We are confident of our strategy
of focusing on Cape Town, a region we know like the
back of our hands, and that never having to be more
than one hour’s drive from our properties will pay off
big-time for our shareholders and staff.”
In the three months since listing, Spear has almost
doubled its portfolio and has some great opportunities
to focus on. Flax says that listing Spearhead with
8,000 shareholders and giving them stellar returns
10
MAY 2017 SA Real Estate Investor
(over 30% per annum compound) over the company’s
seven-year life span has been one of his greatest
achievements.
Flax’s aims to develop Spear to the point where it
is the industry-leading property investment company
in the Western Cape that operates across all property
types. “Spear will continue to be an innovator ‒
bringing residential, work and play opportunities
for the people of the region. It will also be seen as
a fun and challenging place to work where equality
reigns and the only constraint will be your energy and
enthusiasm,” says Flax.
FLAX’S KEY STATS
Age: 52
Current position: CEO, Spear REIT Ltd
Family: Married to Marize (professional dancer and Pilates &
Barre instructor)
Books currently reading: The Fall of the Human
Intellect by Avula Parthasarathy and The Last Mile by David
Baldacci
Favourite quote: “You don’t get what you deserve. You
get what you negotiate.” (Chester Karrass)
Life motto: When is enough, enough? What you have right
now is enough.
Spear REIT Ltd
www.reimag.co.za