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EMAIL NEWSLETTER - SUMMER 2014
Summer 2014!

With all the Schools back into the swing of 2014 we see everything going up...! Huge fuel price increases on a monthly basis, coupled with the pressure the Rand/Dollar Exchange Rate is under, resulted in our first interest rate hike with the prime lending rate being increased by 0.5%! We are now also in the midst of labour unrest ("strike season" they call it) with strikes for higher wages hitting almost anyone with a labour force of 2 or more. With inflation on a steady upward spiral, the pressure to live and put food on the table increases daily.

The 0.5% increase in interest rates has seemingly not had a great effect on the market, but it is clearly just the start of these increases. The old hands will remember when interest rates peaked at 23.75% and the property market just about came to a stand still during the 90's. I do not however, believe that they will run away from us as it did then, but any prudent investor will now realise that the market dynamics are changing. Hiked interest rates, coupled with the stringent qualification criteria that bond financiers are using for end-user buyers, will result in fewer sales. But this will also result in an increase in rentals as more potential home buyers are forced to remain in rented properties.

15 Years ago I made the statement, and tried to get anyone and everyone thinking of buying property to listen. Property ownership, or not, is the difference between hardship and wealth! The advantages of owning property, being able to pay off property, being able to collect rental/revenue from property, and enjoying the capital appreciation outweighs ANY other investment class. Just the thought that one can buy a property and NOT have to pay rent for the rest of your life is good enough. Everyone that can should no longer spend their time in Shopping Malls buying unnecessary junk or partaking of fast food meals but rather invest all they have in bricks and mortar. Once you are old, and perhaps your Provident Fund or Retirement Annuity has let you down, your property will still be there.
As noted in my Spring 2013 newsletter, Renico Construction has secured various properties/sites in the Randpark Ridge area. This is not only the area in which we work and live, it is also well established, with all the advantages of having top schools, shops, leisure, communal and other amenities that are required for good living.
STONEBRIDGE
The proximity of our Stonebridge development in Randpark Ridge Ext 133 (Jan Frederick St), launched in our last newsletter, to Eagle Canyon, Trinity and Curro Aurora Private Schools, and the fact that it is on main arterial roadways, makes it an excellent investor, or home ownership project. The perimeter walling and external services have been completed, but due to the ongoing rains, (welcome relief from the drought, but not good for building), progress on the units themselves has been delayed considerably.
However, this has fortunately caused no slow down in sales and we are nearing the 60% sold-out stage prior to our starting any real construction on site. Occupation is set for 1 August 2014.

The second development we will be launching is in Randpark Ridge Ext 139, directly opposite Randridge Mall on John Vorster Avenue. In this 45 unit development, "Piccadilly", we have seen strong demand already due to its close proximity to Lifestyle Centre, Randridge Mall, and the motorways.
ANGELS VIEW & VILLA NIRVANA
For some time we have realised that there is a strong demand for cluster developments. The costs of bringing these to the market are very high, with the administration process often long and drawn out. Rather than starting from scratch, we have been buying out cluster even in established estates where developers have faltered, or stopped selling due to various factors. We were fortunate to secure 13 stands in the Angels' View Complex, Strubensvalley, and 37 stands in the Villa Nirvana complex, Greengate X8, Mogale City.

Since banks are not financing end-user building packages, Renico Construction is developing these sites on a speculative basis, having done considerable market research on design. It is pleasing to see that the sales in both these developments are going very well.
PARKVIEW MANOR & WESTWOLD MANOR
Parkview Manor and Westwold Manor, in the Zoo Lake area of Parkview and Saxonwold respectively, shot the lights out with their sales and are completely sold out, proving the strong demand for well-priced property in established areas. We will be giving occupation to the new owners of the 20 units in Westwold Manor on 25 March 2014.
HLANGANANI VILLAGE
With a belief that we need to spread our risk over the entire property sector, and with a commitment to contribute to the affordable housing market, we are also busy developing 1648 freestanding homes in Sharon Park Ext 2 on the East Rand. To date 92 homes have been built in "Hlanganani Village", and 68 new home owners have taken occupation of their new homes.

Renico tries to develop homes outside the stereotype 2 and 3 bedroom homes typical to this segment of the market. With our broader knowledge of commercial and industrial technology, and dealing with corporate building material suppliers we are in the favourable position to develop homes that look and feel different, with finishes way above the norm. This results in family homes of good quality and value suitable for the average home owner's budget.

At Renico we believe home ownership is critical, and goes to the very fibre of society, therefore we strive not only to develop for the investors, but also for those of the grass roots society, since people buying a 42m² two bedroom freestanding home today, are the ones that will later sell, buy bigger, and one day enjoy the benefit of better home ownership, and have a strong realisation of place.
In the Commercial and Industrial segment we remain extremely busy with great opportunities coming across our path as well as developments for Commercial and Industrial clients (both tenants & buyers), where clients become friends.
LANSERIA CORPORATE ESTATE
Eighteen months ago we forged a good relationship with the developer of Lanseria Corporate Estate, and a land availability agreement was negotiated. Today Renico Construction is very active in this prime Estate situated next to Lanseria Airport. Not only has Erf 610 Lanseria been sold to an end-user, but Erf 609, that was developed as a speculative warehouse is now being let! Erf 608, for Van Dyk Chemicals, is well advanced and on track for hand-over at the end of May 2014.
With Lanseria Ext 26 almost 100% developed, the emphasis is now moving to Lanseria X42 where we have three buildings on the drawing board. Two of these we are developing for business owners who will lease the properties and the third is being developed as a building contract. I foresee huge activity in the Estate over the next 24 months.
MOSTYN PARK
At Mostyn Park, Erf 5 for BRM Brands is well advanced, and BRM is now in the fit-out stage of this building aiming to commence additional production out of these premises from 2 May 2014. The 10500m² speculative warehouse on Erf 24 Mostyn Park, is well advanced, and set for the planned 25 March 2014 hand-over. We have had good enquiries on this building, and believe we will probably rent out this building, although a sale would be first prize.
KLIPRIVER BUSINESS PARK
As commercial land on the West Rand is now starting to become harder to find, Renico Construction is forming a good working relationship with Basil Read on their fully developed, and serviced Kliprivier Business Park in the South of Johannesburg. This prime site is situated at the intersection of the R59 and R550 freeways, servicing Alberton and Vereeniging, with easy access to the N3 and the rest of South Africa. This site doesn't just enjoy excellent exposure to the main regional roads but is set to become one of the fastest developing parts of Johannesburg. The neighbouring site to the south of Kliprivier Business Park is occupied by the Sedibeng Brewery (Heineken Plant), and just south of that is a 200,000m² warehouse that will shortly be developed for Proctor & Gamble.

We have already secured a lease from PNR Trucking to develop Erf 30, Kliprivier Business Park as a new depot for their logistic division, and will also commence with the development of a 2100m² speculative generic warehouse within the business park. Renico Construction believes the area is perfect for large scale users in the warehousing and logistics segments, and we hope this is the area where our first warehouse in excess of 40,000m² will be developed.
LAKESIDE AND AMOROSA OFFICE ESTATES
Both Lakeside Office Estate and Amorosa Office Estate have been fully let at A-grade Sandton rates, indicating that the West Rand is becoming more and more popular. This is mainly due to the traffic gridlock scenarios in other areas, and the toll fees that national roads now attract.
COSMO CITY
In Cosmo City, Renico Construction secured a 10 year lease with Cambridge Food (a division of Massmart) to develop a free-standing 2200m² retail shop. The site clearing and earthworks on this site have already commenced.
There's more to come in our Autumn Newsletter since we have secured two very prime Commercial sites on the West Rand and will be building new Shopping Centres on these during 2014.

As always, new developments and progress details on all our current developments mentioned in this newsletter will be added regularly to our Website, so visit it often to keep in the know and find the property you are looking for! Alternatively, you will find us on Facebook or Twitter.
Tel 011 794 1177   Fax 011 794 1159   Email info@renicoconstruction.co.za