A Positive Outlook
Category Market News
A challenging economy and a tricky market is how Tyson Properties’ managing director, Chris Tyson, described the current challenging economic landscape.
Yet the company, which went national just over two years ago is more than holding its own during tough times. There’s a sense of energy and excitement. Is this a case of, if you’re doing well during tough times, imagine what you can do when the tides turn?
Tyson’s reply is that he remains optimistic that a little more policy certainty at year end could usher in the beginnings of a turnaround. “Our outlook remains positive. We wouldn’t be opening more offices if we weren’t expecting further growth,” he says.
The company, which Tyson established simply to create a pleasant working environment with a strong professional ethic that would benefit both agents and clients in 2005 will end 2017 with 30 offices nationally. Tyson expects this to reach at least 35 by the end of 2018 and 50 by 2020. The 400-strong Tyson Properties team is estimated to grow to 750 by 2020. But the journey has proved a steep learning curve. Tyson Properties had expanded to 10 offices within its first two years when the credit crunch hit in 2008. “We took a decision to take some of the offices back and support them until the market improved. That was a good move for us and allowed us to position ourselves well in marketplace for when things improved - which they did,” he remembers. This also created a strong business model. Most real estate companies either follow a franchise model or a branch model. Tyson Properties has combined the two, retaining the major shareholdings in the branches it establishes in city centres. These strong operations form a sustainable core around which a wider franchise operation can be built cost effectively.
Tyson believes that the “push to go national” was the best thing Tyson Properties did and took the company to a whole new level. The company opened in the Western Cape and Gauteng simultaneously. “Our 2016/7 financial year was our best year ever. We grew by 47 percent. The past 12 months have been challenging but we have held steady and matched our performance from last year. If our figures are remaining constant in a poor market and we are growing market share, then were are doing something right. In this climate, not too many companies can say that. We are very pleased with our performance.”
Nevertheless, he admits that although they may have initially felt nervous about expanding too quickly during the first half of 2017, they are now confident enough to forge ahead, bearing in mind that in a diverse country like South Africa, each region is unique.
While KwaZulu-Natal, where Tyson Properties is a market leader, remains very balanced and stable, the Cape Town market is strong and exciting although there is some price leveling at present and the market is showing signs of adjusting. Gauteng is more of a buyers’ market and less exciting but is the fastest growing region for Tyson Properties simply because of the size of the area and the population.
STANDING STRONG IN KZN
According to Tyson, growth in KwaZulu-Natal (KZN) has been significant with some market share gains. The main focus this year has been “plugging holes” and opening offices in areas where the company has not been represented such as Richards Bay, Empangeni and the Bluff. An Umhlanga sub office has also been opened to service gated estates in the Ballito area. “Tyson Properties branches dominate the residential markets in Westville, Cowies Hill, Pinetown and Malvern”, offering clients a top notch overall service. In the last few months, there has been considerably more activity in the local residential marketplace linked to the fact that interest rates seem to have stabilized. The financial institutions are still buoyant and positive with regard to the residential market and are willing to grant potential Buyers bonds, adds KZN operations director, Lee Ellis. Ellis pointed out that in the Upper Highway, there had been strong growth in the likes of Westville, Hillcrest, Kloof, Pinetown and Queensburgh where houses are generally more affordable. Interestingly, according to Ellis, KZN has a far higher proportion of buyers over the age fo 65, probably because many people chose to retire at the coast.
CLIMBING THE CAPE PROPERTY LADDER
Describing the Cape Town market as exciting and energetic, Tyson says that the opening of two more offices in Cape Town in Camps Bay and on the V&A Waterfront by year end will bring the number of offices to four. This will be followed by a further two at the beginning of 2018 – Hout Bay and the Western Seaboard. A campaign to establish franchises to cover the rest of the Western Cape will also be launched next year. Although this market has been flying for the past couple of years with house prices and return on investment growing exponentially, tyson cautions that some adjustment is beginning with prices lively to level out and houses remaining on the market for a little longer, However this is not necessarily a negative.
Although the Cape Town office began with a focus on residential sales and then letting, it now offers a full service and includes commercial, holiday and short term letting and an after sales service. Cape managing member, Nick Pearson, says this is definitely a sellers’ market. But this comes with a challenge – changing the mind-sets of those entering the Cape Town market for the first time. “They need to expect smaller properties and apartments selling for higher prices. They need to understand that, here, it is not about square metres and value for money but about location, location, location and lifestyle.”
He says that Tyson Properties has already proved itself in Cape Town and already enjoys the third largest market share on the Atlantic Seaboard and the fourth largest in the city bowl. “This business is built on people and we have the right people. To have a team of people who are on the same mission is a very powerful thing.”
GAINING TRACTION IN GAUTENG
In Gauteng, Tyson Properties focuses on residential sales and letting. The existing office has been expanded to accommodate more agents and offices have been opened in both Pretoria and Rosebank. “The Johannesburg market hasn’t been very exciting but we’ve shown exceptional growth which means that the brand has been exceptionally well received,” Tyson points out.
Gauteng regional director, Jonathan Davies, says that current uncertainty has seen people being ultra-cautious when it comes to property with most movement coming from the large numbers of people selling up to move to Cape Town. The uncertainty has led to an uptick in rentals. He says that although “the average Joe is feeling the pinch”, the lower to middle market is doing well. At the upper end of the market, sellers are waiting out the downturn in the market.
However, big commercial developments and driving pockets of excellence in the likes of Fourways wher ehe says the Tyson Properties office is growing in leaps and bounds. The recently opened Rosebank office is showing strong growth as well with established areas such as "the Parks (parktown and parkhurst)" which are good addresses close to good schools remaining resilient.
LOOKING TO THE FUTURE
Going into 2018, Tyson Properties is not just looking to continue its growth but also to continue to deliver on a vision that began with a strong emphasis on professionalism and ethics. Tyson is in the throes of creating a division that is dedicated to providing full after sales service.
“This will take after sales service to the next level through ensuring that everything runs smoothly from sale to transfer and beyond. We’ve got a lot of fi rst time buyers coming into the market place who have never bought a house before and need help from start to finish,”.
Strong after sales service will also enable clients to form a strong relationship not only with specific agents but with the company, something that Tyson believes is important when it comes to building brand loyalty and ensuring that clients return, even if they are in different cities.
“In many areas we have large market shares of up to 60 percent. We should never take that for granted. This is about maintaining it and providing the best service to our clients.”
He says that, with its expansion in 2018, Tyson Properties will also ensure that it complies with the new Property Charter. The process has started already and five offi ces already meet the BBEE criterion outline. “We are proud of our BBEE strategy and we have encouraged people within our company to become partners with us and move the company forward.”
Established in 20015 Tyson Properties will end 2017 with 30 offices natioanlly and a 400 strong team nationally!
Author: Tyson Properties
