Newsletter - February 2011

PVA SETS THE TECHNOLOGY PACE

In our special news flash earlier this year we unveiled early details of our breakthrough on line bidding system. We had also previously given you a heads up on our new asset management system. Now we can unveil further details of this latter development which will be rolled out across our vehicle storage centres initially, then later into other assets.

The system, which we have decided to call the Direct Assets Wireless Network (D.A.W.N.), will enable clients to extract and look up necessary information about their assets such as vehicles, yellow metal items, trailers, bakkies, etc. thus providing a powerful facility for keeping track of those assets as the auction process unfolds. That’s accomplished almost instantaneously, via the Internet, online, in real time and it offers tremendous advantages for clients unmatched by anyone else in the market.

D.A.W.N. uses Radio Frequency Controlled tagging, similar to the new toll road system in Gauteng, to capture information. This is a first for the auction industry – and one, incidentally, that’s bound to be a lot more popular than the toll system.

Meanwhile development of the Electronic Live, Vehicle i-bidding System (E.L.V.I.S) is also making progress. As previously reported, features include no more waiting in lines to register, information is readily to hand both before the auction begins and during the auction process and all the necessary formalities are accommodated on the software platform, including confirmation of the amount payable by the buyer and the necessary tax invoices. Between them, D.A.W.N. and E.L.V.I.S. are going to be hard acts to follow.

PARK VILLAGE CELEBRATES THE RELOCATION OF ITS WAREHOUSE AUCTIONS WITH A MAJOR INAUGURAL CLEARANCE SALE

Park Village Auctions celebrated the launch of its new warehouse facility in Prolecon with a highly successful, stock packed clearance and relocation sale involving a large variety of catering equipment, office furniture and engineering machinery.

The change of address for warehouse storage and auctions from the Booysens Reserve to Prolecon in no way affects vehicle auctions at Prolecon, which will continue as usual every second Wednesday of the month.

From a warehouse sale point of view the new facility, with some 6700 square metres under roof, is a vast improvement for the public according to PVA Operations Manager LeRoy Augustyn.

“It’s more customer friendly, with ample, secure parking. It’s modern, spacious and it handles recoveries, valuations and general administration in a dedicated office section, as well as storage using a secure palletised system and advanced computerised stock control.”

PRIME OFFICE BUILDING IN STRATEGIC WOODMEAD UP FOR AUCTION

Against the background of a commercial and industrial property market that’s showing distinct signs of recovery PVA was mandated recently to sell a prime, midsized office block in strategically situated Woodmead in Johannesburg’s Northern suburbs.

This former corporate HQ is the epitome of the new generation of commercial property coming onto the auction circuits, being up-market, flexible and in a prime, secure location. Working in the property’s favour is the new trend towards establishing small office blocks close to and even in residential areas, says PVA’s Clive Lazarus.
“The advantages from an accessibility and commuting point of view for staff and management are obvious. These factors, together with the revival of the commercial and industrial property market in general and the good returns available from tenanting and capital gains down the line, made this building a highly attractive proposition.”

IMPROVED OUTLOOK FOR COMMERCIAL AND INDUSTRIAL AUCTION PROPERTY IN 2011

The commercial and industrial auction property market has seemingly reached a turning point and there could be some excellent opportunities for investors and owner occupiers in 2011 says Park Village Auctions’ director, Roy Lazarus.

He bases his views on trends towards the end of last year in particular where “C&I” property placed on auction by the company found a ready market at good prices, subject to important provisos.

Those provisos have to do with whether the property is well tenanted, has a stable power supply, is in reasonably good condition, is well positioned relative to transport routes, markets and labour pools and has a good rental income producing a steady return on investment, with potential for further growth he says.

“The low interest rate environment accounts for much of this positive picture in that bank deposits produce a meagre taxable return, whereas good commercial and industrial property can return between 12-15% pa, excluding possible capital gains on re-sale.
These returns are not true of all commercial and industrial property, so selectivity is the name of the game.”

MEANWHILE ON THE RESIDENTIAL FRONT .............

A Zimbali residential property mandated to PVA realised R7,6m recently. This superb property in the exclusive resort estate of Zimbali on the KZN North coast, reflects
on-going demand for up-market luxury coastal property.

Indeed, the developers of the estate advertised on the front page of the Business Times recently that no less than R130m. worth of property had been sold in the development in just two months!

“Zimbali, which lies North of burgeoning Ballito, is one of the country’s premier developments and is home to numerous high net worth individuals, captains of industry and commerce, etc, so this was an ideal opportunity for the discerning new owners” comments Peter Havenga of PVA.

NEW CAR SALES INCREASE GOOD FOR AUCTION MARKET

Total new vehicle sales in January increased by 16% compared with January last year, a performance which bodes well for the entire vehicle industry going forward and that includes auction vehicles. The figures reflect a continuing pattern of rising vehicle sales in recent months and the rest of the year is looking just as promising says PVA spokesperson Clive Lazarus.

Lazarus says the sales trends at vehicle auctions recently are strong pointers to general market trends
“These sales patterns are mirrored in trends at our vehicle auction sales which tells you that buyers are selective and are extremely aware of rising petrol prices and increased motoring costs in general including the upcoming inauguration of the new toll road system in Gauteng and elsewhere.

KEEP ON TRUCKING

Park Village Auctions’ first truck sale of the year was a virtual sell-out, boding well for the rest of the year’s programme. Mercedes Benz, DAF, Hino, Volvo and MAN continue to feature strongly among the lots at PVA’s sales. In addition, a large variety of heavy capital equipment and ‘yellow metal’ is coming to the fore – and this too is finding a ready market among bidders with PVA handling an increasing share of the market
PVA Operations manager LeRoy Augustyn says demand for auction trucks is clearly strong as the year kicks off and prices appear to be hardening, suggesting the need for potential bidders to buy sooner rather than later, to avoid the possibility of increases down the line.

He refers to the latest vehicle sales figures for new commercial vehicles issued by NAAMSA which showed increases across the board with medium duty commercials recording the biggest rise in sales at 39% year-on-year, in January. The new toll roads and the truck drivers strike are unlikely to have any major impact on overall sales trends for the year.

HEAVY ENGINEERING EQUIPMENT AND MANUFACTURING EQUIPMENT IN DEMAND

The recent auction of back up heavy duty generator sets to offset possible looming power outages illustrates what can only be described as an upsurge in demand for heavy duty capital equipment.

The sale took place at the Blue Ridge Platinum Mine, part of Aquarius Plats, near Groblersdal and the assets comprised two tanker trailers and nine diesel generator units The auction represented an excellent opportunity to acquire heavy duty gensets at auction prices, particularly for use in mining and large scale farming.

The units were reconditioned items acquired from the United States at the height of the last power outages scare and when the site itself did not have Eskom supply. They had hardly been used other than for test start-up.

WADEVILLE BASED HEAVY ENGINEERING BUSINESS SALE

In keeping with the heavy capital equipment theme, Park Village Auctions recently offered the substantial assets of a heavy duty engineering and manufacturing business based in Wadeville, Germiston. This major sale included an electric motor manufacturing plant, machine shop equipment, fabrication shop, forging shop, miscellaneous items and stock as well as office furniture and effects and assorted motor vehicles and trucks.

AND NOT FORGETTING THE ANNUAL RAND WATER AUCTION

Park Village Auctions again conducted Rand Water’s always popular annual fleet and asset auction recently. The disposal took place as is customary, on site at the Rand Water central depot in Alberton. Rand Water annually disposes of its surplus assets and the event is eagerly anticipated by interested buyers says PVA spokesperson, Dr. Bertie Saunderson.