Riding the rental wave
Just Property CEO Paul
Stevens explains that by focusing on rentals, the business sidestepped challenges faced by other sales agencies
Just Property recently rebranded as one business. The move was designed to reflect the company’s evolution from a specialist letting agency – Just Letting – to a business providing a complete property solution. Since 2016 its offerings include residential, commercial and industrial property for rentals, sales and investment. The home-grown company now has more than 100 franchises across South Africa and Namibia.
“Just Property has built its rental property business the opposite way to most real estate companies in that we dug our teeth into the hard work of property rentals, while many other agencies were not prepared to do this,” Stevens says. With this focus, they built Just Property, the biggest rental business in South Africa. It provided a solid foundation from which to springboard into other real estate services such as sales. “Despite the competitive market, we also view it as a time for opportunity when your typical salesonly brands start to feel the pinch of the weakening economy.” Stevens predicts that the rental market will never lose momentum in South Africa because of the large influx of people from rural areas into the more populated parts of the country in search of work. At the same time, those from disadvantaged areas are moving into affluent suburbs as the middle class grows. “These factors allow for a growing rental market along with the fact that fewer people are able to raise the finance to own their own homes.”
“South Africa tends to paint a picture for the rental market that varies for different regional areas,” says Stevens. For instance, he says rentals have been under strain in Gauteng with large amounts of rental stock coming onto the market because developers have either not been able to sell units that have been built or because institutions have bought large portfolios of residential units to diversify from commercial or industrial portfolios. In addition, as many as 50% of prospective renters do not qualify because of affordability issues or poor credit records, which reduces the tenant pool – a key factor in the success of the rental game. “On a positive note, last year’s rental growth in Gauteng was less than 5%, while for this year, we are seeing a remarkable improvement in this figure to just less than 10%,” Stevens says.
RELOCATION AND RENTALS
The Cape – particularly Cape Town – paints a different picture indeed. “There is a large movement of people relocating to this area, which naturally has a positive influence on the rental market,” says Stevens. “The market here has seen higher growth than most other parts of South Africa, with rental growth of just more than 10% so far this year. This can be expected to sustain itself for some time to come.” He says that most other provinces are seeing slow growth in rentals under the 4% mark – below the rate of inflation – which is a concern for property investors. “As the political picture in South Africa remains uncertain – and with the recent news of further downgrades by rating agency Moody’s – there is a reservation in the market for home buyers and investors. They are waiting to see what the future holds for the confidence in our country and in property.”
THE JUST PROPERTY TIMELINE
2000 – Just Letting Property rental and management
2005 – Just Commercial Leasing, sales and management
2010 – Just Residential Property sales
2016 – Just Property
KEEP TABS ON
“We have received a draft of the proposed Property Practitioners Bill and have been asked to comment as an industry. We were given very little time to provide feedback.”
Stevens says the scope of the Bill is “far beyond” the capabilities of the industry to manage. “We are working closely with industry partners and others aﬀ ected by the proposed Bill to lodge the objections that are a result of poorly considered and badly constructed policies.” The Property Charter will be yet another hurdle to overcome when it is released, possibly later this year. “As with many industries, the feeling is that regulation and legislation are good things but the industry that it is going to impact on needs to be addressed prior to drafting these policies. We need to be wide awake to possible changes that challenge us. “We need to work together with government and industry partners such as REBOSA to ﬁnd constructive ways to achieve transformation goals within the landscape that we operate. I would encourage all agents to support REBOSA. The organisation is there to address and represent the needs of the industry at large.”
“With this focus, they built Just Property, the biggest rental business in South Africa”
DIGITAL DISRUPTION IS KNOCKING
“Disruption is the ﬂavour of conversation at the moment and our industry is one that is high on the list of industries that could face disruption,” says Stevens. Many of the emerging “hybrid” or “smart” agencies have not yet gained traction, but they could certainly make their mark as millennials continue to come into the property market. “I do however believe that if an agent can add exceptional value through the service that they offer, they will always have their place. But I also think that the fee being charged for commission on sales is going to be something that starts to decline and become more in line with fees charged in other parts of the world.” Many agents have started to utilise the social media space as an extremely eﬀ ective marketing medium – and it’s cost-eﬀ ective. “The great thing with social media is the audience reach and targeted approach through the right parameters. The latter is something that most agents still get wrong,” says Stevens.
CRAFT THE MESSAGE
“Millennials engage hugely with social media but the message they receive needs to be carefully crafted. Buying property is a major milestone and they still prefer to deal with a real person, someone that they trust. The social media messages must be personal; they need to tell an agent’s life story and stand out on a personal level if a millennial is going to take the time to engage.” Stevens warns that the possible Property24 purchase of Private Property poses a realistic threat. He says that when a media house has a monopoly and can start to dictate prices, this could be dangerous. “I’m hopeful, though, that the industry will be able to prevent this deal from taking place and that as an industry we take ownership of our own portal.” However the online space is the next big challenge to manage so agents need to remain mindful of providing solutions to their clients that make their oﬀ erings easier, at a fair price, with lots of value. Stevens concludes: “We are working hard internally to build resilience and optimism in our teams so that we emerge stronger in the long run.”
“I do however believe that if an agent can add exceptional value through the service that they offer, they will always have their place”
Words: Georgina Guedes