Quoin Online, a specialised web-based property transactional business system, has recently been selected by Fountainhead Property Trust to handle the online sale of 27 commercial properties.
Property portals are not new to the world of immoveable assets. What is new, however, is that by taking commercial property trading online, the property business is set to change forever.
The digital world has brought enormous change to business. Think of the online investment business. Back in 1999, some one already made the observation that on-line brokerage– and they were talking about the USA – brought about the “one of the biggest shifts in individual investors’ relationships with their brokers since the invention of the telephone”.
According to FinWeek, South Africa’s online trading – launched in 2003 – has doubled in the past three years, and over the next five to seven years more than 10% of the population is expected to be making use of online trading platforms.
This has not lead to the demise of the traditional broker, but it has brought down dramatically the costs of trading in securities, increased the efficiency of the process and provided the average investor with greater access to financial information – all the better for making intelligent decisions.
Given that an estimated 80% of all property enquiries are made online, the potential to grow online property trading cannot be underestimated. South Africa’s first online commercial property trading portal, Quoin Online, is leading the charge.
Quoin Online Director Wayne van der Vent said that the property market has effectively used the Internet as a marketing and communication channel. Now it needs to take it to online sales.
“Quoin Online is a specialised web-based property transactional business system offering clients tried-and tested, state of the art software that will allow buyers and sellers to transact on property anywhere in the world,” said Van der Vent, adding, “Our locally developed technology incorporates the idiosyncrasies of the South African property market.”
Van der Vent said they realised that there was a problem regarding the information relating to properties and the tenants who occupied them.
“This raised two issues,” he said. “First, without proper information, buyers have difficulty determining the true value of a property. Second, with more than one offer being made on a property, it’s often an arduous process for the buyer and seller to arrive at an eventual best price. Quoin Online addresses these concerns.”
Quoin Online’s management brings considerable experience to the digital and property sectors. Renaldo De Jager and William Miller, pioneers of online auctions, developed online auction sites for the motor industry. Karen Miller, Panos Zagaretos and Wayne van der Vent all have lengthy experience in property mergers and acquisitions, structured transactions, investment strategies and property development management. Van der Vent and Zagaretos both worked for the Public Investment Corporation (PIC), the major asset manager for the Government Employees’ Pension Fund; Van der Vent was the head of the property investments division, managing a portfolio of more than R24-billion, while Zagaretos served as senior manager of investments.
“Quoin’s software system has been used and perfected over the last seven years in the auto business industry where it has to date concluded more than 100 000 successful transactions,”said Van der Vent.
“From experience, we know that increased exposure and more information results in a wider audience. But we also know that online transactions, (with access to proper information), reduce deal time and failure rate. Bringing this to the property sector makes for a win-win combination.”
Quoin Online has recently been selected by Fountainhead Property Trust to handle the online sale of 27 commercial properties. Van der Vent points out that Quoin is providing and administering an online transactional tool for Fountainhead.
“In this case, Fountainhead are the sellers,” he said. “We provide the tools for the buyers to register with us online. Brokers are required to do the same. Once all the requirements have been met, buyers and brokers will be able to access the sales packs, draft sales agreement and a comprehensive package of essential information online.”
During the first phase of the process buyers submit online a non-binding expression of interest (EOI) and a marked up version of the sales agreement. One of the unique differences of Quoin is that buyers are given access to a full pack of essential “due diligence” information, necessary to make an informed decision. The seller (in this case Fountainhead) then compiles a short list of preferred buyers and, at a given date, the final binding offers (FBOs) are open for acceptance.
Van der Vent points to the bidding methodology which, although this is not an auction site, it allows buyers to revise their offers against each other as they are able to view both the number and conditions with the requisite anonymity.
“This means that buyers do not have one bite at the cherry but are able to compete on pricing and conditions with their peers,” he said. “On the other hand, it allows the seller to maximize the pricing without having to enter into convoluted pricing debates and counter offers.”
Van der Vent said online commercial property trading is attractive because it tends to reflect a more realistic market value and can be coordinated as a one- or two-stage process at the discretion of the seller. The ability to incorporate the buyer’s conditions means that a full picture of the offer is provided.
He said that the Quoin Online’s product has a number of advantages over traditional property transactions. First, it allows almost any one selling or buying property to participate; second, the process is straight forward and simply requires ensuring all the necessary data is filled in online and then the software generates a correctly formatted offer. And finally, it is enormously time saving: speedier transactions – faster turn around of stock – means more business.
“The whole process can be tailor made by Quoin to fit the needs of the seller,” says Van der Vent. “It is this transparency and flexibility that makes Quoin’s property trading portal unique.”