Real Estate Investor Magazine South Africa Real Estate Investor Magazine - October 2017 | Page 12

MASTER INVESTOR
one was moving out of government we became the specialists,”
says Sandile,
“If you look at the type of security that international inves-
tors prefer, government bonds are often the best rated. For me,
our sovereign underpin provides us with a similar security, but
with an above average capital and distribution growth.
“Our strategy is starting to reap rewards, compared to the
rest of the commercial office sector. Over time investors will
differentiate between politics and bureaucracy and realise the
potential a fund such as Delta offers.”
In this regard, Delta has some exciting and sizeable trans-
actions on the table that may lead to a R5 billion injection of
fresh capital into the business.
“Over the short-term there may be a sacrifice in terms of di-
lution of shareholding, but if our investors approve this trans-
action, we would have created a very long runway for future
sustainability.
“Besides BEE, the benefits of the transaction will transform
the Fund tremendously as far as quality of earnings are con-
cerned. Our current yield looks quite attractive. If we continue
with these kinds of returns from a much broader base, it speaks
well for the future,” he concludes.
Expert tips
Share some of your best property investment principles
• Location, location, location works
• But also understand your potential tenant’s requirements
– if you understand where your tenant needs to be you
will always buy in the right place.
• Sometimes it’s not about the right property – it’s about
the right tenant.
In your opinion, what makes a great property investment?
• There’s no one thing – it’s a convolution of a lot of fac-
tors. The investment has to provide rental income with
escalations above CPI so you can outperform costs. But
it also has to have redevelopment and expansion oppor-
tunities. If you look at what we do as a fund, we go into
areas where people generally tend to be fearful – first
mover advantage is always good.
• Take a broader view on challenges – there is always cli-
ents who are bigger than you – you need to be able to
find your value to them and deal with challenges
What is your vision for your current company into the
future? Any exciting projects on the cards? 
• Obviously, we cut our teeth in the sovereign office space
and consider ourselves the largest landlord to sovereign
tenants. We want to push forward this advantage. The
“fear factor” some landlors have in taking on sovereign
tenants acts as barrier of entry.
• At some stage, I would like to include retail exposure,
considering I cut my teeth in shopping centre manage-
ment. At this point shareholders like the focused strategy
though and we will continue to push our advantage and
focus in this sector.
What other opportunities do you foresee in the future of
the South African property industry? 
• South Africa is very fortunate that it has a sophisticated
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OCTOBER 2017 SA Real Estate Investor Magazine
property sector even by global standard. There is a real
opportunity for more for specialist funds.
• Obviously, a key factor missing is residential REITS. all
REITs. With housing a huge shortfall in SA and the
continent, there is a huge opportunity.
• Other specialist funds such as residential, student ac-
commodation, and sovereign underpinned fund are cur-
rently only scratching the surface of what can be done.
Share some insights and lessons gained during your ca-
reer.
• Believe in yourself listen more be open to advise. The
more I listen the more I learn from those with similar/
better experiences.
• Surround yourself with people who have different expe-
riences that your own. A problem with entrepreneurs is
that you also need to recognize what you don’t know.
What is your life philosophy? 
• Treat others with respect.
What advice would you give to someone looking to start
in the real estate investment world?
• Be prepared for the long haul – property is a long-term
game. You need stamina and stability to stay the course.
There are no quick wins or overnight success. Some of us
are still searching for it after 20 years in the sector.
Given the current economic and political climate, which
areas of the real estate industry do you think is best to in-
vest in?
• Without a shadow of a doubt sovereign underpinned
asset, as you will be buying low and can benefit from
adding value. Given the current negativity in the market
towards the sector, it can only get better from here. One
thing for sure is this is not a bubble – if the fundamentals
are right, it’s a buy.