Land Equity Group was founded in 2008 by veteran South African property entrepreneurs Stuart Chait and Russell Smith and is fast approaching its 10th anniversary next year. Over the last decade, the company has developed a wide range of skills and expertise within the South African property sector, which have been instilled by Chait and Smith from their vast experience in previous roles.
Chait has been in property for 30 years, during which he has established a number of companies which have evolved into Land Equity Group, beginning with Newport Property Group back in 1989. From there, he started a BEE property development company called Mvelaphanda Property Development Holdings in 2001, which was followed by Property Partners in 2003 and finally Land Equity Group five years later.
Throughout its existence, Land Equity has focused on developing properties across a number of varied sectors in South Africa, including residential, retail, commercial or a combination of all three in its mixed-use developments.
The firm has also been involved in a series of industrial and factory projects, and has built its budding reputation on locating existing property with high and unexplored potential, finding equity and then transforming the buildings into world-class developments across all its focus sectors.
With a clear emphasis on regenerative projects across South Africa’s two most highly developed cities Johannesburg and Cape Town, Land Equity has formulated a unique strategy which relies on a number of difficult skills, including foresight and imagination, but also deal-making.
Business strategy
“Our key strengths include deal-making and being to identify existing sites of high-potential and being able to then recycle them or redevelop them into something that wasn’t there before,” says Chait.
Land Equity’s formation directly coincided with the onset of the 2008 global credit crisis, which was a crucial contributor towards the company’s embryonic business strategy, that has gradually evolved since the period Chait labels ‘the apocalyptic years’ in the property market.
The volatile financial market of 2008, and the resulting widespread elimination of equity across the South African property sector, proved to be a baptism of fire for Equity Group. However, the credit crisis also served to recalibrate the firm’s business plan.
“After [the credit crisis], we began to focus on our ‘post-apocalyptic’ projects. We went about changing our business plan, raising a lot of capital and tying up various strategic sites, always reading the market carefully and correctly.”
This engaged and considered approach has allowed Land Equity to build its portfolio of property developments over the last decade to the point where today the firm has a glowering reputation along with a steady stream of new projects.
In fact, the company has about R4.5 billion of new developments coming out of the ground in the Western Cape and R9 billion in Johannesburg.
Over the last 10 years, Land Equity has carried through a number of successful property developments, none more so than the Old Match Factory, one of its early Western Cape redevelopment projects.
Tradition and modernity were successfully combined in Land Equity’s redevelopment of the near century-old Lion Match Factory in Observatory, a suburb in Johannesburg which was completed in 2011.
Original facades of the building were retained and refurbished throughout the project, while interiors were completely recreated in order to provide adequate facilities for a call centre, which became the largest of its kind in the Southern hemisphere upon completion.
Other success stories for Land Equity include the Iron Works mixed-use development in the Woodstock suburb of Cape Town and the Docklands development near the luxurious V&A Waterfront, both of which have sold out in rapid time.
In particular, the Iron Works project is illustrative of Land Equity’s greatest strengths in property development, as the regeneration project will eventually deliver a state-of-the-art mixed-use building with retail, parking and residential space within its walls.
Zero-2-One Tower
However, Land Equity’s current landmark development is undoubtedly the Zero-2-One Tower project, which is set to dominate Cape Town’s skyline in becoming the city’s tallest building.
When completed the property will stand at 44,000-metres tall, incorporating 624 apartments, 760 parking bays, 5,000-metres of retail space and a 360-degree viewing deck from a restaurant at roof level across 44 storeys.
“Zero-2-One Tower is what you call a vertical mixed-use development which has been inspired by similar mixed-use towers in New York and Hong Kong,” explains Chait.
“These towers create a vertical mixed-use building by having retail at the bottom, then a bit of hotel space, as well as offices and then residential at the top, and this is what we have in mind for Zero-2-One Tower.”
From its sky-high vantage point, Zero-2-One Tower is set to become the premier mixed-use development in a city which is fast becoming a world-class destination for work and play.
The ambitious project is a perfect example of the firm’s skills as a specialist in property regeneration, but it has also been a test of endurance for Land Equity and Chait in particular, who’s long-held faith in the potential of the building has never wavered.
“I’ve been keen to buy that building for the last 12 years, but Old Mutual Properties [the previous owners] didn’t want to sell until recently, when they had a change in strategy and wanted to offload. Luckily we won the subsequent tender for the building.”
The location of the former Old Mutual building has been a crucial contributing factor towards Chait’s enduring interest, which has only been strengthened by recent trends in Cape Town’s property market.
Situated across the road from Cape Town Central Station (which is also due to be developed in the near future) in the city’s pulsating CBD, the building is perfectly located to take advantage of the rapidly expanding commercial activity taking place in the area.
“It’s very strategically situated opposite Cape Town Station and has between 60,000 to 100,000 commuters walking past the building every day.
“The building is nestled centrally within the CBD of Cape Town, which is now becoming a real mixed-use node where older office blocks are being recycled into hotels and residential properties.”
Having kept its finger on the pulse with regards to the latest developments in the city’s property market, Land Equity is now well placed to capitalise on the growing demand for stylish mixed-use developments within the CBD, with its Zero-2-One Tower project.
“The city is becoming very much alive at night. Now the best restaurants in Cape Town are within three central streets rather than being confined to the V&A waterfront.
“There is a cosmopolitan quirkiness about being in the city which people really like, and I think that it is going to grow faster and faster,” predicts Chait.
Cape Town CBD’s increasing attraction as an all-encompassing destination where one can live, work, eat and socialise has been reflected in the type of tenants who have applied for commercial space in the Zero-2-One Tower.
“We have seen a lot of international retail tenants express interest, along with a number of boutique hotels. Overall the CBD is appealing to a different kind of client from times gone by.”
In addition, the speed at which space in Zero-2-One Tower has been snapped up by investors and tenants reflects the widespread level of enthusiasm bestowed in the project.
The building’s 610 units have already become over-subscribed, with at least 2,000 buyers registering an interest in the units, despite the project not set to be completed for another two years at least.
The Future
Nearly 10 years down the line and Land Equity is already scaling the pinnacle of South Africa’s property development industry. But rather than resting on its laurels, the company is pushing forward with an ambitious five-year growth plan.
“We want to diversify and grow our business outside of South Africa and into a number of sub-Saharan African countries. In the next five years, we want to be in another seven countries and 23 cities,” reveals Chait.
Land Equity has identified several emerging sub-Saharan markets across the continent, which are among the fastest growing economies in the world, and ripe for property development with a particular focus on the retail sector.
These countries targeted for retail property development by Land Equity are Nigeria, Ghana, Ethiopia, Kenya, Tanzania, Zambia and Mozambique, with a blueprint already afoot to develop convenience strip malls, followed by industrial distribution centres, before finally evolving towards a focus on mixed-use developments.
With the Zero-2-One Tower development in Cape Town acting as the benchmark of the company’s aptitude in the African property sector, the future is bright for Chait and co at Land Equity Group.
