There’s an old saying that the only two sure things in life are death and taxes.
Nobody will argue that tax is infinitely depressing, but just sometimes death doesn’t have to be - especially if it turns you into a successful entrepreneur. Most people aren’t aware that private cemeteries are becoming big business in South Africa, but they’re not simple ventures to launch because they require sizeable chunks of land in the right areas.
“Then there’s the hellish process of obtaining local authority planning permission - an endeavour that would stretch the patience of a saint,” says High Street Lead Auctioneer and Director Joff van Reenen.
“It’s no wonder, then, that after so much spadework and grey hair, most people who own private cemeteries hang on to these very lucrative businesses for dear life, but every so often a Fairy Godmother comes along and magically, someone gets the chance to bid at an auction and effectively win the commercial lottery, because in the cemetery game, the one thing that’s certain is a steady stream of clients,” he says.
In what is understood to be a South African auction first, a completely unoccupied 8.5ha cemetery in Winterveldt AH will go under the High Street Auction Co.’s hammer at the end of the month, with all planning permits already granted by the City of Tshwane for a massive 12 500 plots.
The process of obtaining planning permission for a cemetery is a complicated one for obvious reasons, and business opportunities of this nature - where all the permits are already in place - are as rare as hen’s teeth, he says.
“Private cemeteries are enormously lucrative ventures, though, because the country’s general mortality rate is high, there is ever-dwindling space available in existing cemeteries and South Africans predominantly favour traditional burials over cremation.”
According to SAFuneralPlan.com, Van Reenen says the average cost of burial plots nationally is around R12 000, but in areas where supply is low the cost can rise as high as R30 000.
“On this lot, we’ll open bidding at R3 million, but do a quick calculation of R12 000 times 12 500 plots, and the value proposition becomes a no-brainer,” says Van Reenen.
He says they anticipate there’ll be fierce bidding on the cemetery lot at the auction on 29 June 2017, because the odds of this business being hugely successful are infinitely higher than the chance of it failing.
High Street Auction Co. Joint Managing Director, Lance Chalwin-Milton says June’s auction will be bigger than their most recent bumper sale in May, in which more than 30 lots went under the hammer.
“On average, more than 90% of our lots comprise voluntary sales, usually by corporate clients reshuffling their portfolios and the current high stock volumes coupled with competitive bidding indicates we’re in a very active market period.”
He says despite the country’s ongoing economic difficulties, the dissolution of assets under bank instruction as a result of liquidation or sequestration still accounts for less than 5% of High Street’s overall auction stock.
“It goes without saying that the willing buyer/willing seller scenario is always preferable, because even in our economic doldrums it’s indicative of a property market that’s still relatively far from breaking point,” says Chalwin-Milton.
The next High Street Auction will take place on June 29 at Summer Place, 69 Melville Road, Hyde Park, starting at noon.
For more information on the cemetery auction, click here.
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