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This month we focus on the property market and the outlook for 2016, we offer some guidance for growing your property portfolio, and we meet square pegs Gary Down and Bobby Forssman.
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Property market outlook: gloomy, but with pockets of growth

It is getting close to a decade since the bottom fell out of the property market and still the global financial crisis of 2008 casts its long shadow over the year ahead. The gloom is made worse by yet more shadows cast by recent setbacks.

“The property market is not independent of the overall economy and how it performs,” says Gerrie van Biljon, executive director at Business Partners Limited (BUSINESS/PARTNERS). Rising inflation, a falling currency, doubts over the stewardship of the economy and expected economic growth a hair breadth away from recessionary levels all mean that property values will remain low for those who have it, and unaffordable for those who want to acquire it.

“Businesses are under severe pressure to survive the difficult conditions and limited disposable income of households contribute to prices of property not beating inflation. The rising costs associated with a property investment will influence the decision to invest or not,” says Van Biljon.

 
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Growing your property portfolio not as simple as it seems

In many cases, the most straightforward property investment decision you can take is to buy the building that your business is based in. Although no property deal is risk free, at least you know the building, the area - and of course the tenant. But what if you're interested in expanding your property investment portfolio beyond the building that you occupy?

Don't be fooled by how easy property investment seems, says Owen Holland, national asset manager: properties at Business Partners Limited (BUSINESS/PARTNERS). Compared to other lines of business, the number of transactions may be limited, and the operational burden of owning a building may seem light, but the amounts of money involved is such that one mistake can wipe out all the gain in your portfolio.

The most important principle of property investment is to buy well, says Holland. In other words, buy a good quality property at a good price in the right location with no hidden physical and legal defects.

 
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May 2016 / Vol.7.5

IN THIS ISSUE:

Are you a
square peg?

This quiz is not scientific but serves to highlight some of the key attributes of entrepreneurs or “square pegs”, as we at Business Partners affectionately call them. The quiz should give you some idea on whether you “possess” entrepreneurial qualities, or not. However, please remember that a positive outcome/score is not a recipe for success.

 
Take the quiz

How failure taught me to lose my fear

The life of a serial entrepreneur does not necessarily get easier with age and experience, says Gary Down, 57-year-old Durban-based business man, reflecting on his career of “doing a bit of everything” since the age of 24. “It's still pain and suffering,” he laughs. “But you know what I think it is? You lose your fear of failure.”

The pivotal moment in Down's career as an entrepreneur was also the lowest. In 1996 the property market fell, and Down lost his entire construction business which he had built up over the preceding decade.

After school, Down had studied civil engineering and worked for all of two years for someone else. He was “pushed over the edge” into entrepreneurship when the company he worked for went bust. He always knew he would start out on his own, and took the loss of his job as an opportunity to start his own construction company.

 
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Self-storage on steroids a boost for entrepreneurship

That some great businesses and bands have started in a garage is by now an entrenched part of entrepreneurship lore, but is it possible that the garage itself, rather than something emerging from it, can also turn into a great business?

Bobby Forssman, a 52-year-old property developer from Johannesburg, certainly believes it is possible, and has invested millions in his idea to create a safe and cheap base for hundreds of entrepreneurs to tinker, experiment and scale up in.

If the first month since the launch of his Storehouse in Midrand is anything to go by, he is well on his way to proving his hunch right. With the barest minimum of marketing campaigns, two dozen business owners have already signed up as tenants because the flexible offering of Storehouse is just what they need as a first base away from their garages and kitchens for their emerging businesses.

 
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Aldo Park
Location: Greenbushes Industrial Park, Gate 2, Old Cape Road, Port Elizabeth

Description: 598m² space available to let (Unit 9). The unit consists of one garage door with access to factory, an open plan reception, offices, toilets and showers. It includes 24-hour security with electric fencing and guards at access.

Rent:R28 800.00 excl. VAT pm (Prepaid 3 phase power & water charged separately)

Contact:
Sharon Lines
041 367 1082
slines
@businesspartners.co.za
Vacant Shop
Location: Kamma Crossing Shopping Centre, 3 Verdun Road, Lorraine, Downs, Port Elizabeth

Description: Unit 3, A 60m², is available. The centre contains national tenants including Checkers, Clicks, Devine Water, Cassies, ATM’s as well as a a pizza shop. It is just off the busy Kragga Kamma Road and 10 minutes from the N2.

Contact:
Sharon Lines
041 367 1082
slines
@businesspartners.co.za



 
Vacant Shop
Location: Walmer Downs Family Centre, William Moffett Expressway, Walmer Downs, Port Elizabeth

Description: Unit 3, A 60m², is available for use as shops or offices. The centre has special zoning for sports, education, health and recreation and is centrally located five minutes from the N2.

Contact:
Sharon Lines
041 367 1082
slines
@businesspartners.co.za




 
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