Fanfare and razzmatazz
But show me the money
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.