"You're horribly overpaid, we're all going to suffer, I'm outta here"

This week in Tabloid Tuesday, which offers a light-hearted snapshot of the goings on of property people as published elsewhere in the media:

The CEO who fired catty public parting shots at prominent property asset managers; the international lingerie model-turned-landlord who is feeling pretty glum about her SA investments; and a PGP quiz for property market followers.

The smiling assassin. Public property company boss Gerald Leissner seems to have the knack of telling people to get lost in the politest possible way and with maximum impact.

He effectively told more than 3m people this weekend that his business associates are horribly overpaid, the government - a big tenant - is most bothersome and that the listed property sector in general is set to "suffer".

Leissner, 67, is set to leave the listed property sector because ApexHi Property (JSE: APA), which he heads, is to merge with Redefine (JSE:RDF) and Madison (JSE:MDN) to form the country's second-largest property entity. A major objective is to make the combined entity more attractive for JSE stock market investors in general.

In an interview with the Sunday Times, headlined "Property guru times his exit to perfection", Leissner fired some nasty parting shots at Madison Property Fund Managers' executives.

He "agrees" with journalist Chris Barron his company has "been paying more than it feels it should have" to Madison. And, he says "carefully", these management costs are "high probably in relation to the skills that are being used by Madison".

"Madison is making a profit...What's happening is you're taking profit from Redefine and ApexHi and putting it into Madison," he is quoted as saying.

In the next breath, Leissner says he has "no complaint about Madison's performance and what they've brought to the business" before throwing in a line that it "may have been a bit more expensive than I would have thought".

ApexHi's contract with Madison was based on 0,5% of market cap, we are told. Seven years ago, this market cap was R2bn; today it is R10bn. Leissner "feels compelled, in the gentlest possible manner, to suggest that ‘it is now disproportionate to the effort involved by Madison'".

About half of ApexHi's office space is let to the government, a discussion point where Leissner must "tread carefully", says the Sunday Times.

"Government pays its rent, but is difficult to deal with," and "it's difficult to negotiate new leases or get leases renewed, to get decisions from government".

And just in case we were thinking a new arrangement might be good for shareholders, Leissner delivered his prediction that the "10-year upward trajectory the industry has enjoyed is about to end."

There is "no reason why the sector isn't going to suffer like everything else because of a slower economy. It has to". "Rentals will slow down and we are going to see more vacancies and more liquidations," reckons Leissner.

The caption accompanying a photograph of the white-bearded Leissner tells us he is "still smiling" as he bids an exciting career farewell. Erm, only just...

Knickers-in-a-knot over property. Former lingerie model Caprice Bourret is apparently licking her wounds over bad residential deals in Johannesburg and Cape Town. According to the UK's Mail Online, her property assets have slumped by hundreds of thousands of pounds.

"She would whittle out distress sales by offering 30% less than the asking price - regardless of how healthy the property market was. But now she says her carefully compiled property portfolio has been badly hit - no amount of bargain-hunting has insulated her against the global fall in property values," says that report.

"Shall I just slash my wrists right now?" the sexy blonde asked before explaining her predicament to Mail Online. "This market is totally depressing and is even worse if you own property abroad because then you are hammered by unfavourable exchange rates as well.

"I have always done well with property and I used to put a lot of emphasis on it as a good way to invest but now I am not so sure. I thought it was simple - if ever you can't sell just hold on and let, but that's not true any more. Now there are so many others in the same boat as me with property on the rental market, I just don't know what to do."

Although her properties in the US and UK are cause for concern, knocking Caprice particularly hard are her purchases in South Africa. We are told that she bought a house in Bryanston, Johannesburg, for the equivalent of £300 000 and then spent an astonishing £400 000 renovating and adding to the house. She planned to use the home as a base while she expanded her lingerie empire in this country. That property is on the market for about R5,3m (£373 000), says Mail Online.

Meanwhile, in Cape Town Caprice has a glitzy pad in an unnamed suburb for which she paid cash (an undisclosed amount) and has watched it plummet in value along with the fall in the rand.

Caprice would have lost nearly £250 000 through the currency fluctuation alone, says Mail Online. It factors in a 20- 25% slump in house prices, and claims the value of her Cape real estate investment has nearly halved.

"I know it's a bad idea to sell at the bottom of the market,' Caprice allegedly said with a moan. "But I am pulling my business out of South Africa and I have no more need of that house. I could hold on to it, but in my opinion it's going to take years before the market recovers and renting it in the meantime is a risk - and there's a much higher chance in South Africa that tenants may trash it. It seems best just to swallow my pride and cut my losses.'"

For now, Caprice will be re-focusing on her lingerie business in Europe and elsewhere.

Just goes to show the return on some fixed assets are more exciting than the return on others.

Quick quiz for property people. Speaking of photographs and people getting their proverbial knickers in a knot, some Pam Golding Property (PGP) people took great umbrage at last week's Tabloid Tuesday. They complained, in a nutshell, that the column was unfair (read Pam Golding parties hard amid property pain and Seychelles staff gathering: the facts - Andrew Golding) and unbecoming of a prestigious website such as Realestateweb.

Last week's Tabloid Tuesday contrasted PGP's boasting about its lavish island conference, and accompanying happy snaps, with the company's sad regret over staff cuts necessitated by poor economic conditions.

News of both developments were presented in the Spring 2008 issue of PGP's glossy in-house tabloid, GoldTalk.

And yes, we agree that handsome PGP chief executive Andrew Golding and his fellow conference-goers look more rosy-cheeked and dishevelled than we know them to be in real life.

Avid readers of GoldTalk, however, will know that there were more than enough other photographs to make up for those images. Take Realestateweb visitor West Coast, who sent in the following quiz:

Question 1: In the 16-page Spring 2008 issue of GoldTalk, how many pictures of Pam Golding are there? A. 10 B. 20 C. 23.

Question 2: Who in PGP would publish no less than 40 pictures of themselves in the same publication:

A. Anthony Stroebel. Group Marketing Director

B. Gary Lazarus (joint PGP national agent of the year); or

C. Dr Andrew Golding, chief executive.

 Answers

"Yes, you guessed it folks, Queen Pam ran no less than 23 pictures of herself in her company magazine. But this pales in comparison to the monumental feat of Prince Andrew whose 40-plus reproductions of himself in one magazine must rank as something of a national record. Clearly humility is not a family trait for South Africa's property royals," said West Coast.

Got some property gossip or a quirky real estate tale? Send it to news@realestateweb.co.za. 

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responses to this article

"I thought it was simple" quote of the week When a lingerie model was photographed being shown SA investment houses by ex Miss SA / now estate agent Michelle Mclean, it was pretty apparent that the property peak had been reached. As the good ship "Property", as unsinkable as the Titanic, . .more quietly slips into the deep, the lifeboats are full of Sub Primers, Flippers, estate agents, buy to leters and ex models all screeching "I thought it was simple". . .less by CJ Says on February 03 2009, 12:09 Find this comment inappropriate? Report it

cj is back and with a vengence :) CJ tell me what you would do . I have sold my house in JHB and moved to Cape Town , currently renting right now. My house was paid for so i have the cash in a fixed deposit about to expire. The prop mkt in the Atlantic seaboard is still unaffordable so . .more i rent , should i leave the cash in the money mkt or stuff it in the stock mkt or spend it on trivial goodies before inflation kills it. . .less by frosty on February 03 2009, 13:34 Find this comment inappropriate? Report it

@ CJ Ouch - that hurts ;-) You describe it so succinctly. Hell, at the end even the gardener was doing SSFs. by Umfiki on February 03 2009, 13:47 Find this comment inappropriate? Report it

Not so sure its ever that cut and dried http://www.bycapricelingerie.com/what-the-papers-say.php site is obviously biased, but she obviously aint too daft... by sasoros on February 03 2009, 14:27 Find this comment inappropriate? Report it

To Frosty I don't know how much you have to invest, but here's my observation after being in Cape Town property for 25 years. There are prime properties in Cape Town, and then there are super prime ones. eg in Llandudno, all properties with a sea view are . .more prime. Those on the beach front could be regarded as far more prime than those behind them. Those on the beachfront, but that are North facing, are far more prime than other beachfront properties. There are about 8 North facing beachfront properties. These are truly superprime properties, essentially because of their rarity value. Current legislation prohibits development 400 odd meters from the water's edge. That means today another Llandudno could not be created, never mind those 8 superprime plots. Every year dozens of billionaires and hundreds of thousands of multi millionaires are created. When they come to Cape Town for a superprime holiday pad, there are 8 in Llandudno, 10 in Bakoven, 10 on Clifton beach = 28, - and NO MORE will ever be made. Of these 28, at least half are already owned by the really rich who aren't sellers. If you can afford to buy into scarcity like that, you will not look back. If you can't afford such a property on your own, form a syndicate to buy one. A R50 million superprime property will generate enough rental to cover holding costs (rates etc). . .less by Andy on February 03 2009, 15:21 Find this comment inappropriate? Report it

"South Africa's property royals" THey're garden variety estate agents, no more... by zee on February 03 2009, 15:33 Find this comment inappropriate? Report it

US Pending home sales post increase of 6.3 pct So according to property bears...SA property follows US property that must mean an increase in the pending home sales for SA? As for the model, anything to get free publicity. by Tuscanite on February 03 2009, 17:46 Find this comment inappropriate? Report it

Titanic C.J. myself brennan tuscanite and gem are watching the speculators drown while renting cabins and lifeboats to persons such as yourself. Remember with inflation at 13.6% in 5.3 years we will OWN half of another ship while you will still be ROWING it for . .more us (hows that for a simile!) Glad you are posting again regards andrewa P.S.please keep on renting..............I need the money . .less by andrewa on February 03 2009, 18:10 Find this comment inappropriate? Report it

Welcome to south africa Wait for land Redistribution by Boerseun on February 03 2009, 21:09 Find this comment inappropriate? Report it

For Frosty, andrewa and Tuscanite Frosty Take the 11% in the money market. The equity market is going to offer some great deals when it is ready to turn but I think it is too early. For what it is worth, I think stage 2 of the equity crash will be happening a few months down the . .more line Andrewa No, you owned part of the ship that went down. I rented a cabin so my costs ended when it sunk. Sure, you could invest in a new ship and if it goes up with 13% inflation every year for the next 5 years then it is worth double - BUT in present times that is a BIG "If". Tuscanite Show me a "real" increase on the annual national Shiller US property index and then we can fix a date a year or two down the line for our bottom. . .less by CJ Says on February 04 2009, 06:22 Find this comment inappropriate? Report it

Nothing gives more pleasure than to watch thieves like Goldings go down Nothing! by Milkshakes on February 04 2009, 08:04 Find this comment inappropriate? Report it

You lost the plot CJ? Shiller US property index does not cover pending home sales. Different indices measuring different things. Don't let the pressure get to you. Stay focussed! by Tuscanite on February 04 2009, 10:55 Find this comment inappropriate? Report it

Madison The Madison deal was thievery from the beginning. A disgarce of huge proportions. and only now has the market clicked. How could the management, including Leissner, have signed the contacts at all. Pathetic. But do Wainer and Cessman care? The Joke is on . .more the institutional fund managers who also supported the deal. BUt were issued listed property stock at a discount by these guys. And now Brian Aziz has lost his job as ceo as well. You sleep with dogs........ . .less by Batty on February 04 2009, 11:14 Find this comment inappropriate? Report it

To Frosty. Buy prime linked preference shares With interest rates coming down, the reduction in the tax free interest on a pref share comes down proportionatelly less (75% of the interes rate in most cases) than the money market. Currently, Investec and others are yielding 14% .Compared . .more to the money market , this is a much better return.AND TAX FREE. In addition, expect capital gains as these prefs become more attractive in a declining interest rate cycle- yield declines less than cash AND TAX FREE. . .less by (K)oes on February 04 2009, 12:25 Find this comment inappropriate? Report it

@c.j. sorry, all my ships floating nicely, rated aaa at Lloyds and insured. Im actually looking for another at this moment in time.Well maintained and captained ships dont sink and the price of cabins aboard the RMS Andrewa Retirement Fund goes up every year . .more (as does the scrap value of steel for some reason) RMS = Real Money Saver RMS = Really Makes Sense . .less by andrewa on February 04 2009, 15:51 Find this comment inappropriate? Report it

er Tuskers ... that's the point Don't give me 'pending sales' ... give me a positive annual real result on the Shiller and we have a starting position. by CJ Says on February 05 2009, 20:31 Find this comment inappropriate? Report it

The real point CJ... Is that one is a leading indicator the other a lagging indicator..... by Tuscanite on February 06 2009, 16:38 Find this comment inappropriate? Report it

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