17 June 2020
Just Property turned 20 during Covid-19. CEO Paul Stevens tells us how innovation and rentals have provided a solid shield against economic downturns.
“The company was founded in the last year of the old millennium and has turned 20 during what will surely go down as one of the most tumultuous years in the 21st century,” says CEO Paul Stevens, who has been with the company since 2003.
Just Property was previously known as Just Letting and Stevens notes that this foundation has future-proofed the business and ensured its resilience during downturns, including the current one.
“We are very fortunate that we focused on building our letting book. The 2008 crash had no impact on us - it was just an economic slump and the annuity income from managing rentals kept us going. Now that we’ve diversified, the effects of 2020’s Covid-19 lockdown have affected us a bit more as our agents could not physically show houses. That said, I’ve been surprised at the number of offers to purchase we facilitated during the pandemic – many properties have been sold after being viewed solely on-screen.”
Rent collections have fallen during lockdown and people are under pressure, Stevens concedes, but, as the brand with the biggest market share of the rental industry, Just Property is protected from the ravages other agencies are experiencing.
“It is heart-breaking to see some of the established names in our business closing up shop,” says Stevens. “We will always help where we can and with our national footprint, our franchisees are often able to offer great agents positions; we can also look at offering to purchase letting books. But it is a very sad time, and I just thank goodness our business is rooted in rentals.”
That may be true but Just Property has diversified over the years. While commercial property remains a small percentage of the business, the big change came in 2014 when Paul started encouraging franchisees to migrate from letting only, pivoting to adding a sales arm.
“It made sense - we had the franchises in place and sales is far less admin intensive. If you have the annuity income from letting, the revenue from sales is the cherry on top.” But there was an adjustment to be made. For example, when recruiting, franchisees were used to focusing on applicants with excellent managerial skills. Now, when recruiting for sales, they had to remember to look for a very different type of person. “It’s taken a bit of time but our sales are growing year on year,” says Stevens with satisfaction.
This ability to adapt and innovate is key to Just Property’s success. “We have always tried new things,” says Stevens, “even if it has cost us. On our third attempt at getting our website right, I realised we actually needed to incorporate this as a core function within the business.”
Doing that opened up the opportunity to develop the business on the IT side, which meant that when the lockdown was announced, Just Property already had all the protocols in place and remote systems developed for teams to work from home using the company’s digital dashboard.
The success of Just Property’s franchise model is based on the belief that everyone is capable of achieving greatness. Stevens views his franchisees as business partners: “We are working together towards a win-win outcome. And we encourage the same relationship between our franchise holders and their agents. The greatness to come will come from the people in our organisation.”
Stevens says his aim is to be seen as not just a leading South African property brand, but a brand of the people. “We don’t focus only on the high end, but instead cover the whole market and offer outstanding service to all South Africans.”
And he sees those South Africans living very differently going forward. “Corporates will be wondering whether they really need those enormous office blocks. At the same time, employees who have endured long commutes will be wondering if they should continue to work remotely. In the future they won't have to buy close to their workplace; they’ll be able move to the best home they can afford. Or they’ll stay where they are but they won’t sit in the traffic any more. Many of them will work from home,” he says.
For those who want to find that new house beyond the commuter belt, there’s good news: the country’s repo rate is currently at its lowest levels in nearly 50 years, and the gap between the cost of renting and owning in certain segments is closer than ever. And sadly the lockdown placed enormous pressure on many South Africans, some of whom may need to sell their homes. Stevens notes that ethical agents will be pushing to get the very best value they can for these clients, but concedes that it is a buyers’ market, where assets may be acquired at a lower price than usual.
The pain of the lockdown can also be seen in a decline in the number of tenants in good standing with regard to their rental payments. Rent escalations are likely to be limited, he adds. “I expect to see continued strain on the rental market for some months and tenants with good credit ratings and low risk profiles will have their pick of properties to rent,” Stevens notes. “Tenants under pressure will be looking to protect their credit ratings and I expect more tenants to down-size or move to areas where rent is cheaper.” With more than 5 400 active residential listings priced from R2 305 to R150 000 per month, Just Property is well placed to help tenants in all segments of the rental market to make their moves.
For landlords worried about their portfolios, Just Property is able to run monthly credit checks, looking at details like new defaults or judgements received, as well as vehicle, rent and loan repayments. Collective risk profiles of portfolios can be measured against industry standards to provide context. Patterns, particularly negative trends, can be quickly identified and action taken. “Diligence and attention to detail is how our rental agents are adding the most value to landlords right now,” Stevens says.
His watchword for the future of real estate is “simplification”. “This is a very layered industry – there are many, many brands, lots of franchisees, agents, divided into letting, sales and admin teams. But if you’ve got the right tech you can cut through the layers and improve the customer experience. And we have to do that. Service levels have to change. We need to move away from being a transactional business and become a relationship business”.
For more information on Just Property please visit www.just.property or call (087) 550 2258.
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