Property Flash


Devmark Property Management, a Cape Town-based commercial office specialist, says that while South Africa battles through a water and power crisis, it’s of utmost importance that tenants are provided with the best possible services. It is possible for each tenant to have access to energy and plumbing throughout most of their operating hours, but the reality is that South Africa’s electricity and water provision woes will continue for years. The government and private sector are scurrying for solutions and often missing one another. Any power station, green or not, will take a long time to build.

“Unless you are completely off the grid, I don’t think anyone can guarantee access to water and electricity. Going off the grid completely is out of reach for most landlords. The national grid is under severe pressure and with Koeberg Power station generation units coming to the end of their lifespan next year, the grid will be put under even more pressure. We must expect more rolling blackouts. It is going to get worse before it gets better,” says Heinrich Ehlers, Managing Director at Devmark Property Management.

Ehlers says there is a fine line between acquiring adequate backup power and spending too much on power solutions. Landlords may find themselves in serious trouble if they over-capitalise.

“If you have a small 300m2 office building, you can take the building of the electricity grid for about R200 000. The big industrial and commercial buildings will be significantly more, and the initial capital expenditure might not make sense for the landlord,” he says.

Ehlers says that Black River Park, a top-end office property located in Observatory, Cape Town owned by JSE-listed Redefine Properties, has enough solar panels to cover roughly two rugby fields; 11 000m2 . This was the largest PV installation in Africa at one stage. However, that staggering space of panels is still only enough to cover between 20% and 30% of the building’s peak power demand.

“I think it would be more prudent to have a load-shedding protection package in place than taking the building off the grid,” says Ehlers.

It would be more effective if landlords did simple but clever things in order to keep serving the tenants that occupy them.

“Most landlords purely focus on electricity but there are simple ways of taking your building off the water grid. An effective method is to introduce a borehole with a filtration system. The filtration system is expensive, but the payback period is normally around two years and there are great savings on your municipal bill. You can also achieve additional income streams as a landlord. You can register, if you are in Cape Town for example, at the municipality to become a water reseller and then sell the water back to your tenants,” says Ehlers.

Landlords need to use multi-pronged approaches to manage their water and electricity use. A generator is not necessarily the silver bullet for ensuring an office can operate from 8am to 6pm or longer.

“Generators are still more expensive than Eskom provided power. But, as a commercial landlord in SA, you are left with little choice but to have to have a generator or battery as back-up power. Tenants will ask their landlord in their first meeting whether or not there is load-shedding protection in the  building ,” says Ehlers.

Devmark Property Management realises that it’s especially difficult for commercial and retail landlords to operate in an environment where infrastructure is constantly under severe strain. Tenants are also battling to stay profitable or even to remain in business. This makes it difficult for landlords who want to increase in the next coming years.

“There is definitely a misalignment between the landlord and the tenant. Because of Covid-19, many commercial buildings were left vacant, and the tenants who remained could then make the demands. Tenants who wanted to rent space were spoiled for choice,” says Ehlers.

“Recently, trends shifted and landlords do not have to give in to the tenants demands any longer. A tenant might want two to three months rent free occupation or they might want a substantial amount for their tenant installation. They might also only want to sign for two years, but the buildings they occupy will still need the back-up power, and this still costs the Landlord ” he says. 

During the past few years Landlords gave in to these demands. Today, they simply don’t have to because of this change and also because they now have the power to say, the back up power plans take up most of the capital they could’ve spent on tenants.

Nevertheless, Devmark Property Management might be operating in a shrinking South African economy where companies are facing pressure from unreliable electricity and water providers, but it is still committed to providing a world-class service and never compromising on quality.

“Being a property owner in South Africa can be complex and stressful. We try our utmost to take away as much stress from the landlord by offering a world class, boutique style service where we are always available. We have a 24 hour turn around policy and we never over charge our clients. We have a longstanding relationship with our maintenance contractors who will bend over backwards to deliver on time. Being property owners ourselves we know exactly the struggles landlords face daily,” says Ehlers.

“We truly manage each property as if it was our own. This is why our management software is integrated with banking and is always live. A client can log in at anytime onto the portal and can get a live overview of the financial state of affairs of their property, but if they prefer, they can still pick up the phone and call. Someone will always answer,” he says.

Heinrich Ehlers has been managing director of Devmark Property Management since 2019, with previous experience in renovations, maintenance, construction and software management. This is an advertorial piece for Devmark Property Management.

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