Tracing Hein Ehlers’ journey from Pepkor in the 80s to leading Devmark Property Group reveals a tale of adaptability and vision. His early work in retail and shopping centre development set the stage for a dedicated move into property development, leading to the creation of the esteemed Devmark Property Group. This shift from corporate life to entrepreneurship highlighted Ehlers’ resilience and strategic insight through economic and global challenges.
Devmark Property Group’s pioneering projects, such as Clé du Cap Retirement Village, Glen Beach Terraces, residential development Camps Bay, and the Bantry Bay Luxury Suites Hotel, have significantly impacted the South African property landscape. These developments, built on the company’s solid foundation, illustrate Hein Ehlers’ blend of innovation and practicality, setting new benchmarks for community living.
Innovative Developments Shaping the Future
Devmark’s expanding portfolio showcases its commitment to excellence through key projects like Langebaan Manor and Helderberg Manor, and the transformative De Zwartland Werf Mixed-Use Development. This holistic strategy not only aims for architectural significance and a comprehensive blend of residential, commercial, and healthcare facilities, but also emphasizes social sustainability, as seen in the pioneering Glenhaven project.
In our final article of this compelling series, we delve into the current dynamics of the South African property market, the strategic positioning of Devmark Property Group amidst these conditions, and Hein Ehlers’ advice for aspiring entrepreneurs in the property development and investment arena.
Navigating Market Challenges
In the current climate of the South African property market, characterized by prevailing scepticism and significant challenges, Devmark Property Group distinguishes itself through strategic flexibility and a strong commitment to innovation, led by the visionary Hein Ehlers. Ehlers notes that the market sentiment is overwhelmingly pessimistic, heavily influenced by the underperformance of property investment funds.
The downturn is intensified by the widespread governmental inefficiencies. Problems like mismanagement, financial waste, and theft worsen the situation. To bridge financial gaps, authorities and entities like Eskom often increase rates significantly above inflation, escalating the costs associated with property management and operations to unsustainable levels. Property owners are forced to absorb some of the escalating costs as it is impossible to recover such significant increases from tenants. Consequently, there’s a cap on how much rental prices can rise, creating a ceiling that impacts the entire economic framework of the South African property industry.
“I embrace a Warren Buffett-style investment philosophy when it comes to property development and investment,” Ehlers remarks. “In times when the property market is very active, everyone jumps onto the development bandwagon, often without the necessary experience and without proper market research. This scenario often resembles a pyramid scheme where the early entrants enjoy substantial profits, those joining in the middle earn less, and unfortunately, the latecomers tend to not make any profit, and might even face losses. My approach aligns closely with that of Warren Buffett’s: be bold when others are fearful, and cautious when others are bold. Unless we’re leading the charge or among the first few to act, I steer clear of such ventures.”
Devmark Property Group’s development portfolio showcases a significant focus on retirement villages, an area they ventured into while it remained largely untapped by others. Over the years, Devmark has built up its presence in this sector, having completed approximately 2,300 units with around 400 units currently under development and nearly a thousand more in the planning stages. Particularly noteworthy is the Western Cape, which stands out as a prime region of opportunity. Observations in towns like Malmesbury, which was quiet just a few years ago, now reveal a surge of construction activity. Similarly, in areas like Paarl, the growth of developments is exceptional. This pattern of growth extends to a number of smaller towns as well, including Langebaan. Strategically, Devmark positions itself in towns with excellent municipal management poised for growth, capitalizing on the increased demand for both residential and commercial spaces.
Ehlers’ Blueprint for Success: Guiding the Next Generation
Reflecting on his extensive career, Hein Ehlers offers invaluable advice to young entrepreneurs aspiring to make their mark in the realms of property development and investment. Drawing from his own experiences in establishing Devmark Property Group, Ehlers emphasizes several key principles that have underpinned his success.
Attention to detail, Ehlers argues, is the critical differentiator between mediocrity and excellence in business. He has observed that businesses that fail often do so due to a lack of thoroughness in managing the complexities of their operations.
Ehlers also advises on the importance of financial caution, especially when profits start to materialize. He suggests that the majority of profits should be reinvested back into the business to fuel growth and sustainability. This disciplined approach to financial management has been a cornerstone of his business philosophy.
Moreover, Ehlers stresses the importance of maintaining a clear divide between personal and business finances. “Some might think that ample business funds can justify personal luxuries, such as buying boats or new cars through the company. However, in my practice, no personal expense is ever charged to the business. This clear division is the benchmark I set for my team, ensuring the financial integrity and well-being of our business operation.”
Navigating the property industry, with its high entry barriers due to significant capital requirements, Ehlers highlights the necessity of a strategic approach. The landscape has changed dramatically, with financial institutions now demanding more substantial financial foundations from developers seeking funding. Ehlers suggests finding a successful formula and sticking to it, cautioning against the risks of overextension. He has witnessed numerous businesses struggle by moving away from their proven models, underscoring the importance of consistency and focus.
Ehlers explains, “I’ve witnessed firsthand how maintaining a balance between structured management and an entrepreneurial spirit is crucial, regardless of a business’s scale. I’ve seen couples manage sales on their own, focusing on a modest ten-unit development. Often, they outearn those who ambitiously tackle 300-unit projects.”
“My mantra is that no enterprise is too small to benefit from corporate-style management, nor too large to relinquish an entrepreneurial approach. Entering the property industry today poses significant hurdles, but this balance can navigate them successfully.”
His Legacy
As we conclude our exploration of Hein Ehlers’ journey and the evolution of Devmark Property Group, the lasting narrative is one of steadfast resilience, visionary planning, and a deep-seated dedication to excellence. The strategic moves and groundbreaking initiatives of Devmark have not only transformed the property landscape, but have also set a benchmark for innovation and leadership.
The legacy left by Ehlers, enriched by his insightful advice to emerging entrepreneurs, firmly establishes both his and Devmark’s enduring impact on the landscape of South African property development history.
For more information visit www.devmark.co.za
