PROPERTY - A LANDLORD’S PERSPECTIVE “WOMEN LANDLORDS for the DPW” CHICHI MAPONYA

INTRODUCTION My name is Chichi Maponya from Maponya DevelopmentsMy name is Chichi Maponya from Maponya Developments We are a national property development companyWe are a national property development company Over the last decade we have developed over R700 million Rands worth of property.Over the last decade we have developed over R700 million Rands worth of property. We have numerous leases with the Department of Public Works at provincial and national level.We have numerous leases with the Department of Public Works at provincial and national level. We have approximately m2 of leases in place with DPWWe have approximately m2 of leases in place with DPW

Liberty Towers, Durban - eThekwini Municipality Library (3,034 m²) - Dept. of Public Works (2,025 m²) - Dept. of Welfare (3,341 m²)

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

WHAT IS A LANDLORD The landlord is the owner of a property which is rented out to a tenant. The landlord and tenant are also referred to as the lessor and lessee.The landlord is the owner of a property which is rented out to a tenant. The landlord and tenant are also referred to as the lessor and lessee. The relationship between the landlord and the tenant is regulated by a lease. This is almost always written and is generally a comprehensive legal agreement.The relationship between the landlord and the tenant is regulated by a lease. This is almost always written and is generally a comprehensive legal agreement. Although the major obligation in any lease is for the tenant to pay the rent, there are in fact duties and responsibilities which flow both ways.Although the major obligation in any lease is for the tenant to pay the rent, there are in fact duties and responsibilities which flow both ways. One of the key functions of the landlord is to be the “asset manager” of the property. Asset management involves getting the maximum possible sustainable return from the capital invested in the propertyOne of the key functions of the landlord is to be the “asset manager” of the property. Asset management involves getting the maximum possible sustainable return from the capital invested in the property

THE 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 landlord deals with all of the following groups, entities and people:Apart from the main relationship with the tenant, the landlord deals with all of the following groups, entities and people: –Property manager –Service providers CleaningCleaning SecuritySecurity Landscape maintenance etcLandscape maintenance etc –Property professionals – electrical, mechanical, fire protection, structural –The local authority – municipality, city –Property brokers –Attorneys –Financiers

ASSET MANAGEMENT Asset management is ultimately the most important responsibility of the landlord.Asset management is ultimately the most important responsibility of the landlord. Asset management looks to:Asset management looks to: –Maximise revenues –Contain expenses –Focus on long term sustainability To maximise revenue, the landlord needs happy tenants who are willing to pay a premium if necessary to be located in a great building. If necessary the landlord will change tenants, or the mix of tenants.To maximise revenue, the landlord needs happy tenants who are willing to pay a premium if necessary to be located in a great building. If necessary the landlord will change tenants, or the mix of tenants.

ASSET MANAGEMENT cont. Containing expenses needs professional procurement of services as well as good controls of expenditure. The setting and monitoring of service level agreements.Containing expenses needs professional procurement of services as well as good controls of expenditure. The setting and monitoring of service level agreements. Sustainability is vital. There is no use running a building into the ground by cutting out all maintenance and repair work, failing to renew capital goods at the end of their design life etc. This is a problem that has blighted many of our CBD’s.Sustainability is vital. There is no use running a building into the ground by cutting out all maintenance and repair work, failing to renew capital goods at the end of their design life etc. This is a problem that has blighted many of our CBD’s.

WHAT DEFINES SUCCESS AS A LANDLORD Happy tenants! Happy tenants:Happy tenants! Happy tenants: –Renew their leases –Are willing to pay a premium to be in the building –Spread the word which helps to pull in other tenants –Respect the building and invest into their premises. On a cold accounting or asset management basis this translates into a higher yielding building. This has higher net income and in turn a higher capital value.On a cold accounting or asset management basis this translates into a higher yielding building. This has higher net income and in turn a higher capital value.

THE 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 relationship –Long term thinking –Respect –Co-operation –Fairness, but firmness too –Attention to detail

LANDLORDS AND EMPOWERMENT Government, at both national, provincial and local levels can achieve meaningful empowerment. This is both for the previously disadvantaged, but more importantly for woman.Government, at both national, provincial and local levels can achieve meaningful empowerment. This is both for the previously disadvantaged, but more importantly for woman. Well though out and effective structures are in place for empowerment landlords to get a leg up/ This can be by way of premiums on rentals, or the length of a lease.Well though out and effective structures are in place for empowerment landlords to get a leg up/ This can be by way of premiums on rentals, or the length of a lease. Government is also able to steer ownership of buildings towards empowerment entities.Government is also able to steer ownership of buildings towards empowerment entities. With that leg up, the empowered landlord with hard work and focus is able to asset manage the building and add genuine value.With that leg up, the empowered landlord with hard work and focus is able to asset manage the building and add genuine value.

BECOMING A LANDLORD We’ve discussed the theory...now let’s talk about how to become a landlord.We’ve discussed the theory...now let’s talk about how to become a landlord. Becoming a landlord is the end point of property development. We need to talk a bit about property development.Becoming a landlord is the end point of property development. We need to talk a bit about property development. The property developer brings together the following elements:The property developer brings together the following elements: –A tenant or purchaser of the property –A site –A comprehensive design – including contributions from all of the design professionals –FINANCE

Getting going as a developer is tough:Getting going as a developer is tough: –Tenants want a track record and credibility –Unless you have capital of your own securing finance is hard work – especially in the current environment For someone with vision and perseverance however, becoming a developer and then a landlord is possible, and very rewarding.For someone with vision and perseverance however, becoming a developer and then a landlord is possible, and very rewarding. –Start small – cut your clothes to suit your cloth –Consider getting experience of the property process by investing in residential properties –Look for partners. We have talked about the role of empowerment. There are a lot of old order developers looking for energetic and enthusiastic partners –The state is your friend. The state has an excellent track record of helping newcomers in property

BECOMING A LANDLORD cont. The key element is in securing a tenant:The key element is in securing a tenant: –Work your contacts –Engage with property brokers –Keep your ears to the ground With a good tenant, finance and a site will generally follow easily.With a good tenant, finance and a site will generally follow easily. See you in the market place!See you in the market place!