24 June 2022. The South African Institute of Valuers (SAIV) hosted an insightful webinar chaired by Malusi Mthuli, President of the SAIV. The webinar focused on the valuation of wind and solar farms, as well as the impact on the property market in the aftermath of the recent devastating floods and the unrest experienced in KwaZulu-Natal in 2021.
Mthuli, an expert on property valuations with over 20 years of experience, focussed on the impact of the floods and the unrest on the KZN property market. “It’s important for the SAIV to reflect on the crisis experienced in KZN. By analysing data and the lived experience of property investors in the province, we can assist and empower the SAIV’s members as they prepare their property valuation reports – this is the value we can provide to our clients.”
He delivered an in-depth study on the floods – how and where it happened and the potential causes that exacerbated the impact. He also shared interesting data, such as the 100-year floodplain (an area of low-lying ground adjacent to a river, formed mainly of river sediments and prone to flooding), impacted businesses at risk within the specific region, and the impact this has for valuers in KZN. He pointed to a survey undertaken by the eThekwini Municipality after the floods, which showed that more than 55% of businesses impacted within the 100-year floodplain were not insured.
LTM Energy CEO Dhevan Pillay took the audience through the future of sustainable energy in South Africa. He presented arguments for adopting a sustainable energy journey. He says that green energy is more cost-efficient than conventional energy, which he substantiated with success stories from prominent corporates in South Africa. “It is a myth to say sustainable energy will be costly. Green energy solutions can be funded, especially for the commercial industry,” says Pillay.
Lyndon Storer, an experienced valuer from Jamrec Property Solutions, highlighted the valuation methodologies for solar and wind farms in South Africa and a historical context of the development of green solutions in South Africa. Storer’s presentation certainly had fellow valuers deep in thought when he posed the question: “What will be valued on a wind or solar farm? The land, the equipment, or the business?” “When a wind or solar farm is developed on someone else’s land, the value of the land is difficult to determine because the implantation of green energy projectsis usually attached to contracts that span many years.
He added: “At present in South Africa, we, as valuers, must face the reality that most of the wind farm and solar parks do not belong directly to the landowners on which they are built and are contracted for long periods between five to twenty years.” Therefore, he suggests that valuers include the wind or solar farm contract as part of the valuation.
Very rarely is a webinar of 2h30mins so captivating. The presenters certainly displayed proof of expertise in their respective fields with factual, researched, and pertinent information. Mthuli professionally steered the conversations after each presentation, forming expert opinions on both the sustainable energy solutions proposed by Pillay and the valuer’s perspective from Storer.
