Since his school days Louis van der Watt has been interested in property. His initial small investments later blossomed into a career as a highly respected large-scale property developer in South Africa and Europe. After he and Francois van Niekerk formed the Atterbury Group almost 30 years ago, he led his team in the development of some of South Africa’s most iconic property initiatives.
Van der Watt’s philosophy is that working with partners makes everyone stronger. That is why he has not only established excellent relationships with international investors, but also with top developers in Eastern European countries. Here Atterbury Europe is involved in high-profile, successful developments such as the Mall of Cyprus, Iulius Mall Timișoara in Romania and BEO, a multi-level modern shopping centre in Belgrade, Serbia.
How do you find and evaluate the partners you want in the development of properties in foreign countries such as Cyprus, Romania and Serbia?
I look for companies with a culture similar to that of Atterbury. Those we’ve partnered with were also started by entrepreneurs, around about 20, 30 years ago; they don’t like the listed space and they have the same work ethic as Atterbury. I think it’s relevant to note that the time when Atterbury was founded coincides with the start of the new dispensation in South Africa, while Europe saw the fall of Communism. In this environment entrepreneurs saw an opportunity, and these companies were started – that’s why the founders are all more or less the same age as I am, and our companies share the same values.
What is interesting to you as a developer about specifically Eastern Europe, where quite a few South African property developers have ventured?
These are all countries that have a shortage of retail – it was only after Communism that development started happening, and the citizens have really embraced the shopping-centre culture. People will spend hours in malls, and will spend huge amounts of money on themselves. It is very much viewed as entertainment, and you only have to look at the numbers and the turnover to see the proof.
Many SA-based businesses have become hugely successful overseas, such as Naspers and others. Why do you think this has happened?
South Africans live with many complex pressures, and as a result we have learnt to become enormously agile and adaptable. Our entrepreneurs tend to think out the box and we have developed great expertise in entrepreneurship and deal structuring, all of which makes us highly sought after in business. We don’t always realise this – you have to operate in other countries to really see how far advanced we are in many respects.
Please share some trends about the European, or perhaps Eastern Europe property environment that has attracted your attention.
What I’ve learnt is that shopping is very much seen as entertainment in these countries, much more so than in South Africa. People live in flats and don’t have large homes for entertaining, they don’t have holiday homes, so with limited other entertainment options, they view the mall as their escape. The food court in a mall is often the anchor tenant, and on a Saturday you’ll find shoppers spending five hours there… So as a developer you note this and structure a mall around the food court, and you activate everything in the mall in line with this view of retail as escapism.
With the war in Ukraine now well over a year old, how has this conflict and the sanctioning of Russia affected Atterbury Europe?
Romania borders Ukraine, but being part of the EU as well as NATO, we have not felt particularly at risk despite sharing a border. Being part of NATO means that should the conflict cross the border into Romania the whole of NATO, which includes the US, UK, Germany and 28 other NATO member countries, will be forced to engage. There have been both economic advantages and disadvantages to the war. The cost of electricity and inflation has increased a lot throughout Europe, which is a strain. Cyprus, however, has short winters and is therefore not that heavily impacted by the increased electricity and gas prices, and Serbia, not being an EU member state yet could negotiate better electricity and gas contracts, and therefore not encounter the significant increase in utility costs.
In Romania we also experienced the effects of the multitudes of refugees who streamed across the border and came to shop. In many cases these are educated people having to re-establish themselves, therefore adding to the Romanian workforce and to the spending power. People had fled from their homes and needed to replace nearly everything, and shopping patterns have definitely confirmed this.
How often do you visit Europe and how important is it for a property developer to have boots on the ground? Or do you rely mostly on your partners to add their local expertise to the mix?
No, we don’t rely on partners alone. Those boots on the ground are what differentiates Atterbury Europe and I believe our success is thanks to having an incredibly competent South African management team led by Henk Deist based in Europe. Unfortunately, many other South African companies rely on local partners, but you can never achieve the same level of efficiency. I travel across as and when the team needs me, I am mainly involved in new developments and building and maintaining relationships with our strategic partners – many of whom have since become great friends. But for the rest, the team runs on its own, and having our own people manage operations from there is definitely what gives Atterbury Europe the edge.
