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Public Land Development Research Programme

The Public Land Development Research Programme is a major research stream being run through the URERU and is sponsored by the Johannesburg Property Company (JPC). The research represents a collaboration between the URERU, JPC, the City of Cape Town and the City Support Programme in the National Treasury.

Property Development Process Model for Cape Town

The Urban Real Estate Research Unit and industry members representing the Western Cape Property Development Forum (WCPDF) have jointly produced a Property Development Process Model for Cape Town. The model was created to assist in highlighting the exceptionally long development timeframes (and resultant costs) for all stakeholders in the property development industry, including developers, consultants and government, with the objective of identifying opportunities to reduce time and costs by consensus.

Background:

The model was originally conceptualised in 2014 by project management firms, MDA and its consultants Jedd Grimbeek and Johan Slabber, and Alwyn Laubscher & Associates’ current CEO, Deon van Zyl, to graphically identify their own firms’ experience of the protracted development timeframes. In 2017, and as a result of the impact that the long development process was having on housing affordability, Rob McGaffin from URERU agreed to further develop the model with the assistance of recently graduated Lewin Rolls and later Mida Kirova, a town planner with Nigel Burls & Associates. Chris Steffen with Talani Quantity Surveyors, later incorporated costings into it to highlight the time-related financial implications. Further valuable input was also received from various professionals and officials in the industry.

Using the Model:

This model is broadly based on the PROCSA (2017) stages and is largely premised on the development process associated with a 10,000m2, mixed-use. However, it is important to note that not all of the authorisation processes illustrated in the model may be triggered by a development of this type; nevertheless, they have been included for the purposes of completeness. The timelines indicated either represent statutory stipulated timelines or the timeframes usually experienced in practice. However, the timeframes may be shorter or longer, depending on the statutory approvals that are triggered and other delays that may be experienced by a particular development. The Triggers for Authorisations worksheet identifies the types of authorisations that may be triggered depending on the specific characteristics of the development project. Users of the model can navigate through the process by clicking on the different stages in worksheet labelled, “Overview of the Development Process”.

Disclaimer:

The model presents a snapshot of the Cape Town property development process in time (March 2019). The processes and associated timeframes are subject to change with amendments to legislation and general practice. This model is indicative and for illustrative purposes only. Although every effort has been made for it to be as accurate and comprehensive as possible, is not intended for it to be a definitive or exhaustive reflection of the property development process, nor is it intended for use as a project management tool and therefore professional and official advice is recommended at all times. The model should be viewed as, “working document” that will be updated, extended and corrected over time.

Please follow the links below to download the various documents associated with the Development Process Model:

Information Sheet

Model Presentation (Presented at WCPDF Conference)

Cape Town Development Process Model

Legislation Relating to the Development Process in Cape Town

Queries, suggestions and corrections can be sent to Rob McGaffin at Robert.mcgaffin@gmail.com 
 

Leasehold Structure Case Study: The Waterfall Estate

The Waterfall Estate is a successful development undertaken using a leasehold model between private parties. Through this process, numerous issues and challenges have been resolved such that a leasehold structure has been designed that addresses the needs of the land-owner, developers, financiers and buyers and end-user tenants. 

The Urban Real Estate Research Unit examined the Waterfall Estate case in order to assess whether municipalities could dispose of their land using a similar leasehold model. A particular focus was placed on the security offered by the lease agreements, the sale, cession and sub-letting conditions of the lease agreements and what happens at the end of the lease terms.

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Public Land Lease Length Model

The Urban Real Estate Research Unit is attempting to gain a greater understanding of how best to structure the terms and conditions of Public Sector Land Development Leases within the South African Legal Framework.

Municipalities and other public entities in South Africa often dispose of land they own to generate income for municipal purposes and or to achieve broader economic and social objectives. To date, the most common method to do this has been to dispose of the land on a freehold basis. However, this approach has been questioned in that it is argued that the municipality may forego higher annuity income in the future and the long-term assets are lost in perpetuity.

Despite these concerns, there has not been a systematic assessment of the advantages and disadvantages of disposing of public land through leasehold versus freehold methods and how such disposals should be structured in each case.

In response to this, the Public Land Development Research Programme in URERU has developed a financial model to assess the optimum length of a public land development lease. Below is the first draft of this model.

User Guide

Optimal Lease Length Model