This follows the successful acquisition of Spearhead by the Madison managed Redefine Income Fund. Madison is South Africa’s largest property asset manager and the first company of its kind to be listed on the JSE.
The prospects for the development team, says Mike Flax, Executive Director of Madison, are "almost limitless". It is, he says, likely to become one of the most active development teams in South Africa this year -- with an initial development expenditure of some R2 billion over the next 24 months.
Flax foresees ‘greenfields’ projects such as the Cape Town Convention Tower and the Isando Pepkor warehouse, both being developed for Redefine, taking up 70% of the team's time and budget, with ‘brown fields’ or redevelopment work comprising the remainder.
The new Madison development team is largely made up of experienced staff from the former Spearhead. Madison has until now focused on property asset management of Hyprop Investments Limited, ApexHi Properties and Redefine rather than in redevelopment.
An important new recruit to the team is Mike Ruttell, formerly Development Manager for WBHO, now back in Johannesburg after a seven years in Dubai where he worked with the development arm of Blue Chip Al Futtaim Group. Ruttell formed part of a 150 strong construction management team of senior professionals from all over the world which was put together for the Dubai Festival City Project. He is now Madison's Gauteng Development Manager, based at Madison’s corporate Rosebank offices.
The new team, says Flax, is youthful and energetic and has in its ranks a range of financial, architectural, engineering and quantity surveying skills. The team, he adds, will benefit from the interest in it being shown by the two experienced founders of Madison, Marc Wainer and Wolf Cesman.
Already, says Flax, there has been welcome support from the CEOs of Madison’s funds under management and the Madison development division will work closely with them to achieve the individual funds’ objectives.
“The establishment of this development division,” said Flax, “could add as much as 15% to Madison’s bottom line this year and should make the existing portfolios within the funds more profitable because many of their existing commercial, retail and industrial properties are ripe for upgrades and improvements and the funds are now keen to expand their property assets with appropriate new developments ".
As Madison is responsible for the asset management of properties worth R24 billion, upgrade initiatives alone could keep the new development team "pretty busy", says Flax. However, the accent will be kept on green fields projects.
“The new team,” said Flax, “will cultivate and expand relationships with developers whom they have partnered previously in Cape Town, Johannesburg and Pretoria, and will, we hope, often be in joint ventures. Certain specialist development companies have valuable expertise that we would like to draw on.”
Durban and KwaZulu-Natal, he added, represents new territory for most of the team members. Here, too, joint venture development opportunities will be pursued and new relationships formed.
"The formation of this development team," says Flax, "is well timed to take advantage of the new buoyancy and confidence in the property sector which is being driven by strong economic growth and Fifa World Cup 2010 fever.
“Economists are now predicting that the favourable conditions will last at least until 2012, which augers well for the type of activities with which we plan to become involved.”
For further information contact Mike Flax on 021 425 1000.