The real estate deal
With short and long term plans in place and a technology system that is quickly becoming the cornerstone of the company, NRE are well placed to retain their market leader status for the foreseeable future
Writer Matt Bone
Project manager James Mitchell
Since 1933, National Real Estate (NRE), based in Bloemfontein, have been in operation and owned by the Du Toit family, who still manage the company’s day to day operations. Brothers Francois, MD, and Wilco Du Toit are the driving force behind the company’s massive expansion over the last 9 years. In 2005 the company moved to new premises with a staff compliment of 46 and an annual turnover of R9.1 million. today the company has a staff of over 100, a turnover of R52 million per annum and is thriving in a market that has been very turbulent in recent years.
Wilco Du Toit, Special Projects Director of NRE, has overseen much of the major changes NRE have made and believes it was all down to one significant change: Technology. Over the last few years NRE have invested R600 million in IT upgrades in order to ensure that the company has the latest innovations in portfolio management software. “When I joined the company in 2005, we did not have a system in place to handle big numbers of accounts and house portfolios, one person could only realistically manage about 300 accounts and this was diffi cult to keep track of. We began to look at new systems and together with Propsys, who designed a piece of new software for us, we created a property management system that revolutionised how we managed our business. Now our account managers can keep track of 3000 accounts,” he explains.
Highly Trained Staff
In any industry, a company will try to hire the best workers possible, however sometimes that is not always possible due to skilled worker shortages or rival companies looking for new staff as well. Du Toit has seen these skills shortages become an increasingly hard area of the market and decided to take a different approach to his staff. “We always make sure our staff are trained to the highest level possible. we have exams for our staff created by the University of Freestate’s accounting Professor, so that those who passed the test were highly competent and well versed in the capabilities needed in this competitive industry,” says Du Toit.
There is more to the staff than just entrance exams, NRE have a people management strategy of empowerment in place. This has proved to be a highly beneficial and effective way of managing the company employees. “We want to make sure that every member of staff feels as if they actually help run the company and are not simply workers. Each one of our department managers are encouraged to run their respective departments as if the business was their own. We want our staff to understand that they are the most important assets and without them our company would not be where it is today,” remarks Du Toit, clearly showing that his staff are quintessential to the company’s achievements and industry status.
A Lull in the Market
With South Africa still reeling from the economic downturn and global recession, one of the biggest markets to be hit by this was property and housing. Banks have stopped offering 100 per cent mortgages in favour of lower offerings and in some cases have ceased loaning money to first time buyers. There was a small rise in the housing market in 2012-13 but current trends have shown that the average household in South Africa has less ‘disposable income’ than in previous years and subsequently buyers have not been as active. The other side of the housing market is in the form of rental properties, which has remained steady over the last 5 years but is also seeing a slowdown in the number of properties being rented out.
National Real Estate have avoided losing business during this lull by looking across borders to the north, and are busy expanding their commercial and housing portfolio in Botswana, Namibia and Zimbabwe in order to ensure the company maintains its role as a market leader. “With the market in South Africa becoming stagnant again after a brief resurgence in the sector, we have been looking cross-border into our neighbouring countries in order to tap into the housing markets there. It has proven to be a great move indeed as we have seen a rise in our sales figures and property numbers on our books have grown steadily. However, you cannot just walk into Botswana or Namibia and start working; we took our time in crafting our image and rolling out the NRE brand across the areas. This approach enabled us to establish ourselves in the market and gave the countries a chance to see that we are a company who does business the correct way,” Du Toit cites, highlighting the importance of market research and careful company expansion.
The Long Term Plan
One of the biggest factors in National Real Estate’s success has been their ability to look past the short term profits and create long term adaptable plans as Du Toit commented: “Long term planning is very important at NRE; we look at factors affecting our markets currently and factor these into our short term plans, 6 months at most. We then look towards options and potential factors which could become game changers in a year or two and formulate our plan with this in mind. Of course plans can change and not being flexible in our approach would be foolish, so we always maintain a degree of adaptability in our preparations. This is really where our success lies, in being able to adapt and change our long term visions to make use of market trends and future market forces.”
A Positive Future
With confidence beginning to seep back into the housing market in South Africa, NRE are beginning to see positive signs of growth and sales. It is nowhere near the level it has been at, but from a tiny acorn, grows a mighty oak tree and Du Toit is confident that the housing market will grow much the same way: “There is a new positivity in the market, with buyers beginning to purchase houses again. agricultural properties have seen a surge in buyers interest, with visionary farmers buying up large plots of land for their existing businesses, allowing them to expand and make use of the growing agribusiness sector in Southern Africa,” he said and added “Food is the biggest commodity right now and it’s big business for everyone.”
With short and long term plans in place and a technology system that is quickly becoming the cornerstone of the company, NRE are well placed to ensure their market leader status for the foreseeable future and Du Toit is convinced that the passion NRE has for what they do is evident in every transaction they make: “We are very proud of the success we have achieved. Of course, technology and planning come into play a great deal but it is the company’s passion for the markets that really sets us apart. We do not just offer you a house or a plot of land, we offer you a home and a new future and this is what drives us and why every day is a new chance to show just how much this industry means to us.”