Fan­fare and razzmatazz

But show me the money

Finweek English Edition - - Openers - VIC DE KLERK vicd@fin­week.co.za

ARTISTS’ REP­RE­SEN­TA­TIONS of large, planned new prop­erty de­vel­op­ments – such as the new, multi-bil­lion rand Cra­dle City near Lanse­ria, north of Jo­han­nes­burg – al­ways look very im­pres­sive. Any­one who’s not very good with his hands and short on cre­ativ­ity will stand gap­ing at the re­al­is­tic scale mod­els.

Un­for­tu­nately, the fan­fare and razzmatazz ac­com­pa­ny­ing the dream of such a new de­vel­op­ment sel­dom, if ever, in­cludes an au­di­tor’s re­port of its vi­a­bil­ity and – es­pe­cially – its fund­ing. Of course, au­di­tors’ re­ports or fi­nan­cial state­ments in black and white wouldn’t look nice be­side those colour­ful artists’ rep­re­sen­ta­tions.

Over the years there have been many such im­pres­sive artists’ rep­re­sen­ta­tions to which jour­nal­ists have been in­vited. I can re­call the won­der­ful model – now a mini mon­u­ment – of what the Gar­dener Ross es­tate out­side Cen­tu­rion would look like once com­pleted. It’s not far from Cra­dle City. A pic­ture shows golf­ing hero Ernie Els gaz­ing out over the beau­ti­ful golf course bear­ing his name. The golf course is there: quite a nice one, too. Un­for­tu­nately, af­ter five years only six houses have been built on the bare hills of the Highveld and they don’t look like much in the win­ter.

A trav­eller on the Platinum High­way be­tween Pre­to­ria and Rusten­burg over the past two years would cer­tainly have been im­pressed by the huge de­vel­op­ment called Zilka­ats. Al­most 2 000ha of it. That’s right: 2 000ha of beau­ti­ful, wooded, frost-free land in the Ma­galies­berg near Hart­beespoort Dam that’s now been sur­rounded by a very strik­ing – and no doubt ex­pen­sive – en­clo­sure.

The full-time Pam Gold­ing sales rep on site wel­comed ev­ery vis­i­tor with an ex­cep­tional and colour­ful brochure. An im­pres­sive full-colour pho­to­graph of Joost van der Westhuizen and his fam­ily in­vited prospec­tive buy­ers to come and share in this pros­per­ity. It was pre­sented as South Africa’s largest sin­gle res­i­den­tial prop­erty de­vel­op­ment ever. Just like other artists’ rep­re­sen­ta­tions, the glossy doc­u­ment didn’t in­clude any bor­ing fi­nan­cial re­ports about how and by whom the project was be­ing fi­nanced.

Re­cently, Toit’s Nis­san, a very well known mo­tor deal­er­ship in Pre­to­ria, and its owner, Toitjie du Toit – as well as the huge Zilka­ats es­tate – were all pro­vi­sion­ally se­ques­trated. That was be­fore we cyn­i­cal, but nev­er­the­less in­ter­ested, prospec­tive buy­ers even had the priv­i­lege of be­ing able to read a bor­ing vi­a­bil­ity study. Now the banks – ap­par­ently Absa and In­vestec – are putting Zilka­ats back on the mar­ket as farm­ing land.

It would be won­der­ful for SA if the dreams of the pro­posed Cra­dle City were re­alised. The R40bn prop­erty de­vel­op­ment, even if it ex­tends over many years, would be very wel­come in SA.

Just last week we read the num­ber of build­ing plans ap­proved in De­cem­ber last year had fallen to their low­est level since 1986. That’s more than 20 years ago. Any new project on the scale of Cra­dle City must there­fore be wel­comed.

The beau­ti­ful artists’ rep­re­sen­ta­tions of new projects aren’t only used to im­press jour­nal­ists. The idea is to also im­press prospec­tive buy­ers and in­vestors. In the past it was usu­ally good prac­tice to get in first with a new de­vel­op­ment be­fore the prices went up. In the cur­rent cli­mate in­vestors would be bet­ter off wait­ing a while to see what hap­pens.

The first sod of the new Cra­dle City will ap­par­ently be turned in May – or prob­a­bly be scoured out of the earth by bull­dozer. I hope I’ll get an in­vi­ta­tion to be there and I hope there will be a few fi­nan­cial state­ments and vi­a­bil­ity stud­ies avail­able, along with the im­pres­sive artist’s rep­re­sen­ta­tion.

It would be nice to re­port on such a pre­sen­ta­tion for the first time in a long ca­reer.

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