Adapting its business strategy to suit the local market is a skill that JHI Property has already perfected—and one that will prove invaluable as it eyes further expansion on the African continent. Andrew Pelis talks to project manager Jaco Nel to find out more.
One might expect recent economic conditions to have created the greatest concern for Africa’s property management market; but it is the reliability of contractors that remains the pre-eminent factor for Johannesburg-based JHI Property.
“Economies are constantly going up and down, but the challenge for us in Africa is always to deliver at the right price for our clients,” states Jaco Nel, project manager at JHI.
A flexible commercial strategy has been the driving force behind the company’s success for the past couple of years since it was formed by a merger between Gensec and JHI Real Estate (the company is registered as Gensec Property Services). In that time the business has expanded its operations beyond South Africa’s borders into Botswana, Ghana, Lesotho, Mozambique, Namibia, Nigeria and Zambia.
However, although speaking on-location at the company’s latest project in Ghana, Nel says that aside from South Africa and its neighbours, the concept of JHI’s portfolio of services remains hard to grasp for much of corporate Africa. “As an all-round property services company, we offer a wide range of services including property management, project management, facility management, broker services, property development (and re-development), maintenance planning, consulting and valuations.
“Although we are successful, I think that facility and property management in Africa is still a relatively new concept and it really takes a bit of selling to convince corporate clients that you can add value to their property and bottom line.”
It is a message that JHI has conveyed better than most, however, with approximately R31 billion of assets under management, including 1,035 buildings and 7.7 million square metres of floorspace. “We mostly focus on retail, commercial and industrial sectors and offer a variety of services; but cleaning and security would be among the biggest areas of business for us,” Nel explains.
The company boasts an impressive portfolio of projects including the Ikoyi Hotel in Lagos, Nigeria; the Greenstone Shopping Centre in Edenvale, Johannesburg; the PricewaterhouseCoopers building in Sunninghill, Johhanesburg; and a Marriott hotel in Accra, Ghana.
Nel is currently in Takoradi, Ghana, overseeing a construction project that will build a new facility for US-based Expo. “The facility will service the needs of the oil industry and the rigs,” he explains. “Construction started in January and should be completed by August this year. The main challenge has been to get the materials into Ghana, as many of them are not readily available here.”
The project represents an interesting challenge for JHI, as American companies tend to be very forward-thinking on issues of green buildings and energy efficiency—something Nel feels is perceived as less of an issue in most of Africa (excluding South Africa). “Many companies in Africa are less clear on the benefits and the savings they can make. However with Expo, we have to bring these issues into the design—even small acts like using certain types of paint can give a feeling of green.”
Nel says that in addition to ‘thinking green’, JHI’s investment in technology has brought the company closer to its clients, wherever they are in the world. “We operate an internet system that allows the client to view a project from anywhere in the world. This has been particularly helpful in the Takoradi project. So much of what we do relies on good communications.
“We have been using the same IT system for the last 10 years with great success and the main thing is that it is a live thing—so, with the right security measures, the client can view contacts, drawings, documents, tender bids, photographs and even financial reports immediately.” At the same time, Nel concedes that the African continent as a whole has room for improvement, suggesting that in Ghana, for example, although internet and wireless are available, speeds are excruciatingly slow and bandwidth can be extremely costly.
With a workforce totalling around 700 people, JHI has invested heavily in human resources and in-house training. “The right skills exist in South Africa, and rural upliftment has meant that lots of skills transfer has taken place. I also see here in Ghana a genuine willingness to learn,” Nel comments.
Part of the motivation behind training staff up has been JHI’s successful implementation of South Africa’s Black Economic Empowerment initiative. At present, JHI is approximately 35 per cent black owned, and the company has been actively involved in the development of black owned and empowered SMMEs within the property field.
The company has a strong belief in ‘sharing the business’ and supports black SMMEs by entering into agreements whereby the company and the black SMME form a joint venture and tender for specific projects. Once the joint venture is formed, an operating committee is established to assume the responsibility of managing the joint venture for the benefit of both parties.
Nel admits that the economic slump has affected business; but JHI is now very much looking ahead to busy times. “Last year we did see a lot of projects shelved,” he acknowledges, “but this year has seen a definite upturn. We have benefited from not having a specific focus on any one sector—if you have to wait for the big contracts you will quickly go bankrupt. From small to big accounts, our approach is the same and in bad times, you have to do more of the smaller contracts. We always have to watch materials costs and are often price victims when there is more demand than supply, but if anything, next year looks like we are going to be over-busy.”
The real challenge, he says, is to obtain products at a realistic price and within a realistic timeframe—always an issue throughout Africa. “The contractors we chose in Ghana were local as we wanted to help the local economy but we still have to ensure that the client delivers the guarantees promised. We always aim to get the pricing and bidding right and to put guarantees on the table.”
As we speak, JHI has just announced its intentions to expand its African footprint into Zimbabwe and Tanzania, while assessing business opportunities on a project-by-project basis in Sudan, Mauritius and Swaziland. “The competitiveness for services like property management remains fierce and it is essential that we focus on what we can do to deliver at the right price for the client. I’ve been with JHI for fifteen years now and under our dynamic CEO, Marna van der Walt, the company will definitely continue to grow,” Nel concludes.
