EMAIL NEWSLETTER - SUMMER 2013
WELCOME TO 2013!

As we all return to our offices and building sites after the annual 2012 Builders Holiday, we stand amazed at all that happened during 2012, and all that we can look forward to in 2013.
As I predicted, 2012 was a very busy and all round successful year for Renico Construction, with building and development at an all time high. We handed over 459 residential units to the value of R325 955 000.00 and 4 industrial units to the value of R71 575 000.00.

Our biggest achievement for 2012 was the sell-out of our 102 unit residential development in Parkwood, known as Parkwood Manor. We secured the land early in 2012, launched the 102 unit development in May, sold it out in a weekend at an average unit price of R1 150 000.00, and built the complex in the ensuing six months. The units were handed over to the 102 new owners on 1 December 2012.
Other developments we completed, and handed over, were the forty-eight unit Forest Gate development in Bergbron Ext.11, and Falconwood, a twenty-four-unit development in Randpark Ridge Ext 75.
We also completed the 374 units in Sugarbush Estate, made up of four complexes known as Watsonia, Clivia, Suikerbossie and Strelitzia.

All round, we had a busy year in the Residential market.
Our outlook for 2013 is once again positive. While the residential property market is showing positive signs of growth, with double-digit growth predicted in certain sectors, homeowners and investors are being battered by increases in petrol, electricity and rates and taxes, and interest rates, which stabilised themselves at 8.5% over the past year, could well rise towards the end of 2013 or early in 2014.

However, I am seeing a gradual upward trend for demand from investors who look past the doom and gloom, and see the rewards in their returns from residential development. Over the last couple of months, I have seen some investors being handsomely rewarded when selling off units they bought from Renico three to five years ago. Some of our long-term clients have also re-positioned themselves by selling off scattered units to secure a single complex that they own and manage (or have managed by an agent).

Construction work in 2013 will commence at a fair pace with our seventeen-unit Banbury Estate development in Westdene (bordering the UJ Sports fields) already up to first floor slab height. We will also be on site at Daniels Landing, a forty-four-unit development in Boskruin Ext 57, where many pre-build sales have already been completed. Occupation of both these developments is set for the first and second quarters of 2013.

In addition to these developments, I have secured another 684 opportunities over nine developments that we anticipate launching, selling, and building these over the next twelve months.
We found that 2012 was a slower year in the Commercial and Industrial market, with a lacklustre demand for Industrial space being experienced. Renico never the less did well in completing and giving the first occupation of a newly constructed building in Lanseria Corporate Estate to Hakk Industries.
In general, a fair demand is still seen for 1500sqm freestanding warehouses with small office components. The limited amount of well-positioned and well-priced land that can accommodate buildings of this size is making them very difficult to find.

During 2012, we noticed that there was a marked trend towards consolidation, with cost saving attempts by all tenants, owners, and investors. Everyone is acutely aware of the current world economic outlook, with several members of the EU struggling to cope with their debt crises, although they currently appear to be weathering the storm, and the US having to take drastic steps to curb its national debt. The impact of labour unrest and the constant threat of strike action in various sections of the economy, coupled with inflated labour costs, are having a definite impact on the economy. With the pressures of the Eskom price hikes and the ever-increasing fuel costs being felt on the bottom line of every business, I foresee a far greater demand for affordable, but also environmentally friendly, warehouse space.

Some of our tenants and owners, who bought smaller type warehouse buildings 3 to 5 years ago, have maintained their business size. However, in many cases, we have seen owners reap the rewards of hard work and owning their own premises and I have seen a couple of the more successful businesses amongst them upgrading their premises to buildings of 5 500m² and larger.
During 2012 we also completed, and handed over, a new 11 550m² facility to BATSA in our Randleases Industrial Estate development, while we completed a new 6 650m² warehouse with offices in our Mostyn Park Ext 1 development for Hitech. On the commercial front, we were fortunate to secure leases from Nedbank and Standard Bank, as well as a new Medicross Facility, in our Rangeview Shopping Centre.
I anticipate that 2013 will be a year where we return to the 2008 through to 2010 activity levels. We are already on site with a new 8 550m² facility as the first phase of a new development for Westpack on Erf 11 Mostyn Park, with a 2nd phase of 8 900m² planned on Erf 10 for late 2013.

As I expect one of our larger users to be looking for extended premises early 2013, we are also well advanced with the construction a 22,510m² warehouse and office facility set on Erf 23 Mostyn Park, a 4ha site. This site enjoys not only access from two feeder roads, but also has 1 mva of power on site.

On Erf 5 Mostyn Park, we commenced with a 7 500m² speculative warehouse with offices in 2012. This building is being developed for sale, but will probably be let to a suitable tenant. We also commenced with Block C in the Kimbult Industrial Estate development in Zeiss St, Laserpark late in 2012. This 5 500m² building is set for completion in April 2013 with tenants already standing in line to take up the space in this very popular Industrial Estate. Two other buildings in Kimbult Industrial Estate are in final design phases, along with two new warehouses in Lanseria Corporate Estate.

The demand levels in 2012 were not as expected, but while Renico keeps on developing the stock, we trust the calls and enquiries will come. It is clear in the residential and industrial markets, that stock (available and suitable property) is very limited, with most people holding on to what they have.
ESTATE AGENTS AFFAIRS BOARD
As required by law, Renico is registered as an estate agent with the Estate Agents Affairs Board. The Board was found to be in turmoil in 2012, and placed under administration by Tokyo Sexwale, the Minister of Human Settlements, under whose portfolio the Board now operates. Hopefully, it will again become an effective regulatory and controlling body within the industry in the not too distant future.
LAUNCH OF OUR NEW WEBSITE
Our current website, which we endeavour to update on an almost daily basis, has obviously proved a valuable tool to those searching for property to buy or rent, if we judge it by the numerous enquiries it generates. Over the past months, we have been working with our website developers to create a new website that we plan to launch within the coming weeks. The new site is both user friendly and interactive, with a number of added features which we are sure will make your search for your ideal property even easier and more pleasurable. We will keep you informed once it is launched!
Tel 011 794 1177   Fax 011 794 1159   Email info@renicoconstruction.co.za