Timothy Irvine, the newly appointed Head of Nedbank Corporate Property Finance in the Cape, has just completed a restructuring and realigning of his division, which consists of just on 100 people. This, he says, "will put us more firmly than ever in a position to give good service, to grow and to build on our position as the number one financier of commercial, industrial and other property in the Cape".
Irvine stressed that the exercise had not in any way "changed the faces" that Nedbank clients will be dealing with."Our clients," he said, "will be liaising with the same people as always. We understand only too well the importance of preserving relationships that are well-established and have been proved to work over a long period."
In the restructured division, Richard Edwards and Casey van der Vlugt, whose experience and competence with property finance are, says Irvine, well known in the market, now head up the sales team. They are supported by nineteen relationship managers and three "dedicated" internal valuers. In the "all important" post-loan-approval phase, a team headed up by four former attorneys and qualified conveyancers, deals with the transaction – and for those deals involving building disbursements Graham Greentree leads a team of three quantity surveyors to ensure that payments are professionally and timeously managed.
Irvine says that members of the Cape regional credit team have on average 15 years of experience with the Nedbank group – exclusively related to property finance. This experience of the regional credit team has, he said, been recognised by the group, and this team has been empowered to approve loans up to approximately R75million without approval from "upcountry".
"There is in this team a reservoir of experience and skill available to clients," said Irvine, "that is, I believe, probably greater than that of any other property financing organisation in South Africa."
Nedbank Corporate Property Finance Cape's loan book now stands just on R8 billion. Last year they approved over R3 billion worth of loans - a significant figure in what has clearly been a buoyant property market. Of the loans approved, approximately half were for short term development (usually 12 to 18 month), and the remainder for longer terms.
Looking at the year ahead, Irvine said that the residential sector is likely, after its three year Bull Run, to experience another good year but at a reduced level of activity. Increasing construction costs could make it more difficult for new entrants to enter the market, but vacant land with the necessary rights in sought after residential areas will always be ripe for development.
Irvine said that the bank will also focus on longer term business. The industrial sector, he said, appears set for real growth and Nedbank has approved loans for a number of new industrial projects to be launched within the next few months.
"A division of our business, Nedbank Property Partners, will usually consider taking an equity stake in transactions – typically no more then 30 to 35%, and for no more than three to five years, after which we exit on a basis of put-and-call options agreed with the client. This arrangement can add value and can create opportunities for our clients and the bank’s lending division."
Irvine stressed that Nedbank Corporate Property Finance has to balance "a real hunger for new business and increased market share" with a responsible attitude to shareholders and their clients.
"Last year," he said, "the property division made a significant contribution to the Nedbank results. Arrears - just one indicator - were down to 0,13% of the total book and non-performing loans to under 2%. That was due partially to the benign interest rate environment but more significantly to the fact that these figures are probably lower than the market norm because of our proactive approach to clients in difficulties and because we maintain an even handed control of new approvals. We have to be completely certain that a deal will work before we invest in it. Taking unnecessary risks is bad, not only for the shareholders, but also for those we are investing with."
For this reason, added Irvine, he cannot be overly concerned when the occasional deal on a project in which he does not have complete faith goes to competition offering less stringent conditions.Irvine stressed that Nedbank's property experience enables it to be extremely flexible.
"Yes," he said, "we do have very definite policies for loan approvals - but they are only guidelines. We are fortunate to have good relationships with and an understanding of our clients and this makes it easier for them to do business with us. Depending on the fundamentals of the transaction as we assess them, we might be more or less lenient than our policies dictate, but we will always have a good look at any deal presented to us to see if we can make it work."
