 Good evening and welcome to episode 364 of the Private Property Podcast. I'm your host, Uzan Mando. As the Monday edition of the Private Property Podcast, if you're joining us for the first time, welcome to the family you're tuned in to the Reading Property Podcast in South Africa, catering to your property needs. And to all our regular viewers on Facebook and Instagram as well as on YouTube, welcome to it. You know how we do every single weekday. You and I have an appointment at 7 p.m. We're always in conversation with a property expert who helps us navigate our property journey. It doesn't matter where you are in your property journey, we'll be looking to find something to build. This is the show that helps you along the way. And talking about helping you along the way, you know that you can also tune into a whole host of other shows that we have right here across private properties of social media pages every single weekday at 8 p.m. It's a Monday, so Chad's going to bring you the Home Shoppers show at 8 p.m. and is also on your screens every single Friday at the same time. And if Tuesdays and Thursdays are warm and I'm not going to bring you the cast of the sheet of four things agriculture and on Wednesdays, always in conversation with people who are on the board that first time on buying the truth string. So one of the things that I'm doing and I can already see that this is actually happening that I have to apologize first is that I'm having load reduction at my place. So my signal sometimes freezes. You're not having an issue. It's on my end. But I know that you're going to continue hearing me very well because one of the things that we always do is make sure that the show continues. And the thing that was annoying me was my dress shifting gear. I was looking at it and I was getting sorry. I was like, no, I have to fix this. Otherwise, it's just going to be one of those things that I cannot get out of my head. Well, one of the things that you can look forward to that the team has been working on behind the scenes is something that's very exciting that's going to be taking place later on this month. And that's the real estate industry summit. And it's brought to you by private property in partnership with Apsa. It's going to be taking place on October 29. And this is a wonderful opportunity to expand your real estate knowledge and expertise and hear from some of the most influential players in the property sector. And you can, of course, join this virtual event that's going to be taking place right here on Facebook on the 29th and it's GM. The link to the event is going to be shared in the comments section. And the details are also going to follow. And of course, if you want to keep up to date with the program and who some of the great speakers are, we can go to www.realestateindustriesummit.co.za. That's real estateindustriesummit.co.za. That's course on the 29th. I'm looking forward to it. I'm sure many of you at home are also going to be joining in. Well, get us started on our conversation this evening. I first want to ask you, how was your weekend? What did you get up to this past weekend? Mondays are always a great way to have a nice chat to see what everybody at home got up to over the weekend. This evening, we're going to be looking at mixed-use developments and co-working spaces. I'm joined by Simon Wilkins, who's the head of Global Corporate Services at Kaleiti Corporate Real Estate. Simon, good evening, and thank you so much. Hi, it's a pleasure. Well, thanks for having me. It's only a pleasure, Simon, and you and I had a great chat of air, and I'm so excited to bring in our viewers of home on our conversation. I think when we look at mixed-use developments and co-working spaces, as I was saying to you, of air, is that when we look at co-working spaces, this is something that was already on trend pre-COVID. It was such a big thing of trying to make sure that more of us have different options of how we can work. And of course, mixed-use developments has been something that's been on the rise as far as trends are concerned. I think before we even look at the integrities of these two, perhaps just paint a picture for us with how the market has been in the past two, three years and some of the activity that's taken place. Sure. Well, listen, I think certainly the last two, three years, specifically the last 18 months have been very challenging. As we know with the COVID-19 pandemic, I think it's interesting. I think vacancies on office and specifically retail are at an all-time high. We've obviously seen a lot of home-working, which has obviously been driven by COVID, and that's really made a big impact on landlords and on specifically the retail sector and the office sector. So that's something that's been challenging. We have seen a bit of a bounce back, I think, certainly in the last three to six months. I think the vaccinations are helping. I think everyone is starting to be eager to get back into that office environment and certainly the retail and the restaurants environment. So I think it's hopefully on the mend and on the improvement. But again, that very much depends on the next wave and if there is another wave and where we go with COVID into the future. Yeah, when we look at co-working spaces, Simon, I was saying to you that it's one of those things that it was on the rise so rapidly with different companies from your reworks, such as 17s and Reaches and a whole host of others, that part of me wonders what the fundamental business model is, especially when we look at who would typically be using those particular co-working spaces. Even the packages are mostly for your solo preneurs, perhaps two people as opposed to bigger corporates, of course. When we look at the underlying business model and the scale at which we saw a lot of these co-working spaces coming up, is there enough demand for, we'll say, the supply that we see? I've gone to a few of them. They are always relatively empty, which suits me because I don't like crowded spaces. But a part of me always think, oh my word, this is prime real estate and it's never in sort of cheap areas. It's very expensive areas that they're typically in. And I always wonder what the bottom line ultimately looks like. Yeah, absolutely. I think obviously the key to the co-working spaces are those prime areas. I think that's where the we works, the Registers, the workshops like to be. I think, obviously, specifically, as we know now with COVID, I think co-working spaces was really on the rise. It was really the hot topic. I think the big drivers around that were flexibility and being able to grow and contract as you need to. I think, obviously, with the traditional office spaces, that's obviously very difficult. You locked into a three-year lease or a five-year lease and historically has been very inflexible. So I think there was a big driver for co-working spaces. I think with COVID, I think a lot of people have realized that working from home is almost just as easy. So I think that's what's quieting down the co-working space specifically. But we do see an increase now moving forward. And I think we are going to see people wanting to go back to that kind of collaboration or collaborative environment where they can, where they can, yeah, I think feed off each other and look to grow their businesses from there. But it is, as you said, it's the smaller businesses to start. There have been some big corporates who've taken up some space in the co-working environments. But I think in general, it's very much down to the smaller and the growing businesses that are looking for that flexibility and the month-to-month kind of growth of contraction. I am this evening in conversation with Simon Wilkins, Head of Global Corporate Services at Galactic Corporate Real Estate. We're looking at mixed use developments and co-working spaces, taking your questions, comments at home. One thing that's definitely still happening, I see some of you have asked. We are, of course, still running that competition. We're used to the chance of walking away with 500 rands in cash. We currently have 1,000 rands in the money bag. And of course, all you have to do to stand a chance of walking away with the cash price is to first comment in the post that we have pinned on our Facebook page. And of course, if we call your name during the show, drop us a message to claim your price. It's that simple. And this time around, we want to find out from you what you have learned while watching the show in the past couple of months. Or perhaps you've been with us from day one. That's all you have to do. And later on, we will be finding out who the potential lucky winner is of that 1,000 rands in cash. Now, Simon, I think when I look at mixed use developments, I actually quite love mixed use developments. And I think I am liking the trend towards more and more of them kind of popping up. First of all, what would you say are some of the sweet spots or really good mixed use developments that are going to make sure that the developer or certainly the shareholders are able to make their money. And it's still going to continue making business sense. Yeah. I think it's interesting. I think a lot of it's got to do with location. We're seeing the likes of the mixed use. And if we start with the really big ones, you've got a waterfall city, for example, or Mara's Arch, which is one of the originals. Or even the waterfront down in Cape Town, which I think was one of the first ones out there. And it's got to be location. It's got to be a good balance of obviously residential, of hotel, of the retail and of the restaurants, and also of the gyms. And that's the last side of things as well. So I think that's key. And it very much depends on the size of the development or the precinct. But generally, that's really how it needs to have all of those factors. We are seeing, certainly with mixed use, as you say, it's becoming a very popular type of development. We're seeing a lot of investors looking at that because it's also a bit of a diversification from just your individual sector type of investment where you can just build an office block or just build a warehouse or just build a shopping centre. Now there's an opportunity to hedge your bets and look at a multiple revenue stream where you've got residential coming in, you've got the retail, you've got all sorts of things. So I think that makes a lot of sense financially as well. One of the things, when you mentioned there was art, one of the things that a lecturer of mine who I think he took us for for real estate market analysis actually, a part of him, a part of he has a love hate relationship with that particular development. And I think the love hate relationship is primarily premised on, as you say, the lack of market analysis that was done when it came up. And that speaks to what was built first as opposed to was this going to be a successful development from the get go. And I think that's something that some developers don't always get right. In as much as you know that you may want these four touch points in your mixed use development, they don't always build in the right order. And we see it sometimes with certain developments taking longer than we know that they should be, vacancies being higher than they ought to be because really they started with the wrong type of development and that particular precinct. And I'm keen to hear from you, Simon, what you've probably picked up as some of the things that developers sometimes get wrong when they do mix use developments? Yeah, again, I think it comes down to scale. And as you said, and perhaps positioning, positioning the wrong offerings first or second, you know, I think Malra's for example is, you know, 15 years in the making. And, you know, I'm actually speaking our offices on Malra's. So I know the precinct very well. And literally we, I mean, we came from Bryanston, we've moved here, you know, three and a half years ago and absolutely love the place because it's got a great mix of things. You know, you've got your gyms downstairs, you've got your restaurants, you've got your coffee shops. If I want to meet with some clients or even take some colleagues out, it's very easy to do. And I think that's, you know, that's just such a major appeal. And on top of that, you know, and I think the major thing about multi-use is the safety, you know, and I think the secure environments that they often make a huge difference. So I think in terms of ordering and getting it wrong, I think, I think things like that is a massive play. I think ultimately, you know, the security and the safe environment, you know, it brings in customers, it brings in tenants, it brings in, you know, it brings in restaurants and all of that adds to the vibrancy of the precinct. And of course, taking more of your questions and comments at home as we're looking at mixed use development and co-working spaces. I'm in conversation with Samuel Wilkins on this topic this evening. I'll just go for a quick break and see who the potential lucky winner for that 1000 grand cash prize that is in the money bag is. I hope you're watching and of course, are going to drop your message down here below to claim your prize. And the lucky winner this evening goes out to Michelle Volmarans. Michelle Volmarans, I know I've seen you always tweeting and, you know, crossing fingers that one day you can win the prize. Well, this evening is your opportunity. I hope that you're tuned in. You're watching. Drop us a text down here below in order to claim that 1000 rands that is in the money bag. And of course, if you want to be just like Michelle, all you have to do is to comment on the pinned post on our Facebook page sharing with us some of the insightful, you know, things that you've learned along the way as you're watching the show. And of course, if you call your name, you stand a chance of walking away with 500 rands in cash. It's that simple to walk away with some cash. And I do hope that Michelle is indeed tuned in and watching us this evening so that she can walk away with that 1000 rands. And going to your comments and questions at home, we've got on Facebook, Martha Schenganger saying I like those kinds of mixed use developments with residential components. And I mean, I'm also quite a big fan. I think one of the great things with with those that actually also happen crazy is everything is within relative close proximity. And one of the things that I sometimes worry about is just where some of the apartments get positioned. Just because having lived close to, you know, restaurant node, it gets quite loud. I'm more like it's quite loud. But I think when it's sort of nicely spaced out that, you know, the shops in the restaurants sort of on one end and the apartments are within walking distance, but far enough not to be disturbed by the noise, then it really is an incredible match. I mean, I've seen that with Mel was actually obviously also different hotels and that you're able to, you know, have access to in the particular precinct. So it really is a nice mix of, you know, different components that one is able to choose from. Now, Simon, one of the things that I even mentioned this off in, we typically tend to find when it comes to trends in South Africa, particularly real estate, but really in many, many other industries is that we tend to be relatively behind with certain trends. You know, we see our colleagues in the States or even in the UK or Australia sort of leading the pack. I think even with, even when we look at co-working spaces, they had already been doing it before it picked up as much as it did in South Africa. And I usually just think, you know, this can be a huge advantage because they're able to stress test it and, you know, do it, do it well, fail, fall forward. By the time it hits our shores, we kind of skip through all of that. I'm keen to hear from you if there any, you know, trends that have kind of picked up when it comes to mixed use developments or even co-working spaces that you've seen perhaps in other markets that hasn't quite hit our shores yet or perhaps it has, but at a really, really smaller scale. Yeah, I think, you know, again, it's a smaller scale. You know, I think our property industry is still developing. I think we're still relatively new in terms of mature, well, certainly getting to a mature market. So I think on the co-working space, very new to us. You know, I think, you know, I remember, you know, I worked in London sort of 10, 15 years ago and there were a number of different opportunities to co-working spaces back then, whereas, you know, really only in the last three or four years, we started seeing something substantial coming into South Africa as the offering. And that's really led by the global, the global guys like the WeWorks and the Reguses. So I think, yeah, I think we're a little bit behind the curve. I think in terms of take up as well, I think the demand has really driven that kind of take up. I think initially when, when certainly companies like WeWork came into the market, they were looking at, you know, having, you know, 10 to 15 different locations in every major city in the country. And that very quickly adjusted down and, you know, to, to sort of three or four. And in some instances, it didn't even happen. Sort of the Durban, Pretoria sort of sections didn't even happen because of just, just there wasn't a quick enough take up. So I think, I think that's something that we're still catching up on certainly the sort of the younger startups, the entrepreneurs, the new businesses embracing this kind of culture, I think is something that still needs to happen. And I think it's probably one of the reasons why I like that we're able to see certain trends in different parts of the world, see if we're able to replicate it here. Maybe I was even saying earlier that one of the things that I sometimes struggle with is getting a sense of what the numbers, particularly for the co-working spaces, look like because the uptake and in every co-working space that I've essentially ever been to, I've never found it packed at all. And so there's always a part of me that has anxiety about whether or not, you know, money is being made, obviously, by, you know, by the companies that are running this or they're trying to look at a slightly more long term perspective, know that initially the pick up is going to be relatively slow. Now we're taking more of your questions and comments on our social media pages as we look at mixed use developments and co-working spaces. I'm in conversation with Simon Wilkins, who's the head of Global Corporate Services at Caleti Corporate Real Estate. And we've got a question here coming from Facebook, Manzana Victoria saying, what are some of the benefits of mixed use developments? So what are the benefits, Simon, of mixed use developments? I think, yeah, I think, you know, certainly I think from the, I think we've covered the benefits from the investor perspective or the developers perspective is that it, you know, you really aren't looking to sort of hedge or you're looking to split out those the multiple revenue streams and you really have more than one sector that you are focusing on, which I think, which I think does diversify your investment. I think from a, you know, from a, from a tenant or from an occupier's perspective, you know, the benefits are, you know, that collaborative, that social, you know, that social culture, I think, you know, I think, you know, generally we all social creatures, you know, we all want to be around others, be with others, you know, collaborate. We want that sense of community. And I think, I think what a multi, you know, a mixed use, sorry, type of scenario does it, it gives us that kind of living experience, you know, where, you know, you can live, you can work, you can, you can, you can, you can exercise, you can, you can do everything in, in the same place or certainly very close to where you are. You know, I think a, a Rose Bank is a very good example, you know, the reason why, you know, Stanton is our, you know, it's our main business district, but Rose Bank has suddenly shot up in the last few years and become a major challenger to, to, to, to the likes of Stanton. And I think a lot of the reason around that is, is the close proximity to residential, you know, you can walk, you can walk places, you've got the wonderful, you know, retail, you've got restaurants, you've got that whole environment, which in a way Stanton, certain parts of Stanton certainly doesn't offer, you know, there's the standalone big office buildings in Stanton, but it's not quite the same environment. And, and I think that's where mixed use works, is that it allows you to have that, you know, you live where you work, you know, it simplifies life. You're not, you're not spending, you know, three hours in a car every day driving to work and you, you're not, you know, everything is, everything is, everything is nearby, it just becomes simple. And that I think ultimately makes everything more pleasurable. You know, Simon, when we look at, you know, people at home who may want to perhaps invest in, you know, mixed use developments, what are some of the things should they be looking out for? You know, I think it's interesting. I think from an investment perspective, you know, obviously there's, you know, there are a number of different and great sort of residential developments out there that offer that kind of mixed use offering. And I think we are seeing most of the residential developments now offering mixed use and that's kind of a, you know, that's the lifestyle plus it's the co-working space. Plus obviously there's a, there's kind of a retail offering environment. And I think, I think what you're looking for is, is location, location is absolutely important. And yeah, I think, and you've got to be price sensitive. You know, I think there's got to be, you've got to understand the node or the areas that you're investing into. And I think, you know, if you're looking at specific nodes where the corporates are coming in, there's going to be a multiple of tenants or opportunities for tenants who can literally walk to the pow train or walk to the offices or walk to the restaurants. You know, I think that just adds to the viability of the investment. And I think that's actually just such an important one. When I think of how just earlier today we heard that, you know, potential prices are going to be up. We're very likely going to end up, you know, paying 20 rounds a meter for, for petrol. So there are always these different ways that we're trying to be as economical as possible, especially when it comes to fuel. Or I think one of the perks of course with working from home is that we're not driving as much, but we also know many people are back to the office. I mean, when I look at traffic, you know, leading up to Sant and every morning and every afternoon, it's pretty much back to what it was before. So for the last majority, we're sort of back at the office. And of course, we want to find then different ways of optimizing costs as consumers now. So certainly from a consumer in one to be able to do that as much as possible. And of course, the team has actually just told me that the winner has claimed their price. So Michelle Bourmoran's congratulations to you. That 1,000 rand in cash is coming your way. And if you want to be just like Michelle, winning money here on the private property podcast with myself was I'm doing what my law is that simple. Just comment on the pinned post on our Facebook page. Make sure that you tune in every single weekday after NPM. And if you call your name, drop us a text and the cash is yours. It is that simple to walk away with that cash. And staying with what we're seeing on our Facebook page, Christine DiCiaba saying it becomes a city on its own, having everything close by and it certainly does. I mean, Melrose is an amazing example because it really is a city on its own. You pretty much have everything that you're going to need, you know, in that precinct, very few reason why you might need to leave as much as possible, which is exactly part of the point of some of these mixed use developments. I think with some, they want to be able to at some point offer everything with others. They kind of choose what is important for the target market that they have that they want to make sure is included in the particular precinct. Now, Simon, I cannot let you go without getting your predictions about where you think the trends are going to go when it comes to mixed use developments and co-working spaces in the future. And let's split them up. Let's start with co-working spaces, sort of trends for the future and then mixed use developments. Yeah, I mean, I think co-working is really interesting. I think it makes sense, right? You know, we want to have that flexibility as tenants, as occupiers. We want to be able to say, you know, I'd like to just rent two discs this week and actually ramp it up to 10 discs next week. You know, I'd like to not be able to pay for meeting rooms, but actually when I need to book one, I'll book one or actually the use of a canteen or whatever it may be. So, you know, I think in the longer term, it absolutely makes sense. You know, I think, you know, as people go back to the offices and look for that kind of collaboration type of opportunity, then this will grow and it'll really go back strength to strength. I think there are more and more co-working spaces coming into the market. We're even seeing, sort of, you know, big occupiers looking to sublet some of their space and offer that kind of co-working space and flexible space directly to the market. So it's not even like it's just the we works and registers now, you know, now they're competing with the big corporates who are also looking to potentially downsize slightly and have that extra office space that they can rent out. So that'll be, you know, with furniture, with the full setup and, you know, that makes sense. So we see a lot of that happening in the future and I think it's going to grow from strength to strength. I think on the mixed use, you know, I think it also, for me, it's certainly the biggest, sort of, drive in development and investment at the moment. You know, we're seeing a lot of focus on the inner city, sort of, regeneration. So we're going to see a lot of that and, you know, the number of ones in Cape Town where there's all sorts of development zones and tax incentives for people to invest in those because they're trying to drive regeneration back into those nodes. And we're also going to see a big sort of growth in the, you know, the neighborhoods, you know, the suburban sides where people actually just go, you know what, there's no point, I don't have to drive into Stanton or wherever every day and actually I can live, work, play in a suburb where it makes sense for me, you know, and I think that's going to, that's going to really drive, we're seeing a lot of new developments coming up like that in the, sort of, the suburban areas as well, yeah. You know, so I'm talking of tax incentives, I've actually got a question coming through from Umez Uttilesi on our Facebook page saying, I'm aware of the tax provisions for primary residents and corporate buildings, but do tax provisions exist for mixed use properties? Again, it depends, I think, on the mixed use development. So, yeah, so again, if there is a specific identified development zone and there is some sort of tax incentive, absolutely, you know, we're seeing that, but yeah, in other instances, no, it's just a straight investment. Yeah. Well, Simon, that's where we're going to leave it this evening. Thank you so much for joining us in the show. I know we're going to definitely have you back for future episodes. Awesome. Thanks for your time, Samtibah. And that is Simon Wilkins with the head of Global Corporate Services, at Kaledi Corporate Real Estate, wrapping up the Monday edition of the Private Property Podcast with myself, Usamanklu Hoakumailo. It has been a pleasure to be with you this evening and congratulations again to Michelle Pomerantz on walking away with that 1000 rand in cash. Well, I'll be back on your screens tomorrow evening at 7 p.m., but do stay tuned for Chad on the Home Shopper Show that's coming to your screens at 8 p.m. Until then, hoping you're staying home and staying safe.