Backed by Sasfin Bank, Land Equity is acquiring land in strategic development node's. It will create a consistent pipeline of property opportunities suitable for new development. It will also warehouse land for developers who wish to free up capital and avoid the onerous holding costs associated with holding land.

Smith, a CA, is the financial director of Property Partners, known amongst others, for its purchase of Melrose Arch in Johannesburg in 2004, and in which Chait has a substantial holding. He has also taken over strategic acquisition, deal structuring and investment management enabling Chait to reduce his management responsibilities and order to devote more time to deal making.

"I want to build a strong research operation besides building the systems and infrastructure of Land Equity," says Smith. "Outside of shopping centres, lack of proper research for property development is the biggest weakness in our industry. Old Mutual has an excellent research team but their data is not available outside that institution. Developing  a database of market information will be collateral to the land bank's primary operations. This database can provide valuable insights to developers and institutions for demand based development pricing and supply economics.

"It didn't matter when your choice of development sites was Johannesburg, Durban or Cape Town. But the market is now far more complex. Proper research will be important to identifying strategic development areas over the next 10 and 20 years.

"We will be the land providers and financiers to established property developers around SA, particularly BEE and black developers. They will have the local expertise, but we want to enhance this with our research, experience and capital."

Land Equity will probably list once its land investments reach R1bn. This implies a pipeline for future developments of about R8bn. The company will also look to introduce an empowerment partner at that stage with the introduction of a strategic group or groupings.

Smith says many developers have neither the capital nor time to buy land and hold it without tenants. High interest rates and the uncertainty resulting from Eskom electricity supply constraints are adding to their dilemma."

"Land Equity has raised patient capital that can afford property the necessary time in order to maximise its value and use." He adds. "And we don't intend trading the land for profit.

"Once a property has obtained the optimal rights and the local environment is ripe for its development, the company's shareholders will form strategic partnerships with developers to create valuable investment products. These, in turn, will be bundled into property funds to give long term income to their investors."