What an African billionaire wants from their Joburg super home

LONDON — This is The Rational Perspective. I'm Alec Hogg. In this episode, we revisit Gatsby and find out how to sell a R100m Johannesburg Palace. In April last year, I conducted a sponsored interview with Rory O'Hagan, former private banker who switched to selling super homes for the estate agency, Chas Everitt. He showed me around his prize project at the time – a R100m+ palace on Johannesburg's Houghton Ridge – a palace they call Gatsby. I made a mental note to revisit the project and hopefully discover what kind of person would make such a massive personal investment in South Africa's commercial capital at such an uncertain time. This week, I duly caught up with Gatsby's creator – Steve Pellerade, whose company of the same name as the go to place when South Africa's super-rich are looking for new homes. He didn't drop any names in this business, discretion is absolute, but he did share enough to give us useful insight into the lifestyle of an African billionaire – that 0.1% of the 1%. We kick off the discussion by exploring what made him create the palace he named after the central character in F. Scott Fitzgerald's legendary novel. – Alec Hogg.We started with Gatsby over 10 years ago and we knew it was going to be an incredible super home and that it would appeal to a certain type of person, a regional magnet, a really large person. It entered the markets just shy of 18 months ago at quite a price and we had a great, great response. It's a unique property. It's quite iconic and we got an offer within, I would say within the first six weeks, which is great..___STEADY_PAYWALL___.Well, particularly for that time of South Africa's history, it's very different today, but you look back 18 months. It wasn't looking as rosy..Absolutely. And you know, the offer was north of R100m. So, we were delighted and the high-profile buyer wanted to purchase it fully furnished. We were obviously really excited..However, the deal didn't go to completion. We had it off the market for six months whilst waiting for the buyer to perform. And we believe, for almost political reasons, he decided not to purchase the house. And he didn't eventually come to South Africa with his family, which we know was his plan. .Steve, what kind of a profile are we talking about – people who buy homes in Johannesburg for R100m plus?.This chap and his family were looking at relocating to Johannesburg (involved in mining) and, had plans to expand his business and for us – because we look at the family dynamics – to have a home that was a showcase and a home where he could have his meetings. Just to give you an idea, this property has eight bedrooms. It actually has its own private nightclub and entertaining venue. It's got conference facilities and it's got guest suites. Literally, every little whistle and bell that you could possibly want. So, this was going to be superb for him. He wanted to move his African head office to Johannesburg and this home would have really been his Johannesburg home as well as his private hotel to entertain and carry out business activities..But what kind of people (not talking about him in particular) but clearly, you know, bringing the house back onto the market; who is likely to be the person who would finally end up with it?.It's a big house for a big person. It's akin to the trophy properties that you find all over the world. In our business we've been catering for this unique clientele and the type of home they would want. They really are looking for something completely out of the usual. They look for extravagant necessities that are important for them. And these homes are really extensions of themselves and people they (I think) want to be seen as. For us, it's also looking just behind the business side of it. What sort of home would appeal to his families? So, you're not just catering for him. You're also catering for his private staff, his au pairs, and his secretaries. You're also looking at the managers that run the estate. You're also looking at where the kids go to school. Where do the chauffeurs park? It's really quite multidimensional. When we create super homes, we're trying to look at it as really, a complete package. It's not just personal, as you get with most homes. It's also business and we need to cater for that..So, take us through how Gatsby came into being..One of the things that I do is I try and find unique locations for our type of clients and whether it's the beach, one of the leading suburbs, or it's a particular view site… With Gatsby, we find an absolutely unique site on Houghton Ridge so you've got almost (I would say) quite incredible views. It's a large site. The issue for us with that site was that it was quite steep and quite difficult to try and fit in all the things that we had planned to put in there. What should have been a 24-month project ended up taking us a six to seven years to complete. And, that in itself is something that you wouldn't ordinarily do for a client. They're not going to wait that long, so this particular site was unusual..So, was there a house there? Did you go in and knock a house down and start from scratch?.There was an old 1960s Frank Lloyd Wright type house and it wasn't protected heritage-wise, tired, and we literally flattened it and then started establishing the site for the home..What you do then is find the right location to begin with and then bring your ideas and your dreams and your creativity in building, which many people who've seen Gatsby have said, "It's a palace – the closest thing that you'll find to a palace in Johannesburg.".I think that when you start establishing a site, you have to look at the end game. So, we pretty much knew the sort of property that we wanted to create there. We knew right from the beginning that the house would be in the region of 2,000m². So, you've got your platform to move from there. And then of course we know what has to go into that so then, it's really building blocks. You then start looking at the amount of reception rooms, the ingress and the egress, the security issues and you just have a team around you, which normally consists of your architectural team, your interior architectural team, your interior designers, and your landscapers. They work in conjunction with your various engineers, your electrical, and your home automation engineers. The planning and preparation for a home of this magnitude before we even lay the first brick, can take two years..And this one took you six in total?.Yeah, I think it was mainly because of the site. We had to create multiple tiers to the garden. So, we had to build up the garden in various stages. Because it was mostly rock, we couldn't blast it because of the neighbours, so we had to drill and dynamite. That took four years. In the evening, you would hear these cracks and we knew the job was on the way. In the mornings, we had to with small TLB's, break them into smaller pieces, lift them to the top, and then sort of take them off site, so that was the rock. The next thing is once the walls/tiers of the lawns were created, we had to bring in soil – some 30,000 tons. At that time, they were creating at the one end of the Munro drive, huge, huge mounds of soil that were coming out and they didn't know what to do with it. And we needed soil. So, we spoke to the powers that be, and we ended up with… Gosh, some days 40 or 50 trucks at a time moving soil from one end of the Saint John's School Road right up to where the property is and having to sort of appease neighbours. But we got it done..And what about inside? You spoke about the interior architects and the interior designers. Where does the furniture come from and does that get sold with the house as well?.I think the architecture Alec, was that we wanted to create something that sort of had a classic lean but was living in today's world. So, it had to have quite a lot of contemporary aspects. The architecture of the home is very much a Belle Époque feel so we know that it's timeless and it's particularly elegant. The interiors obviously have to match that, but you have interior architecture and you have interior design. And a lot of people don't really get that distinction. The interior architecture are things like the detailed ceilings, the details on the marble floors, the cabinetry detailing. That's even before you put one stock of furniture in. That is terribly important because not only has that got to live with the architecture and the feel of the structure, but you know it's got to complement the furnishings that come in. You have two teams. One that's working in interior architecture, but there they are coordinating constantly with the interior design team who are putting together the furnishings. With Gatsby, a lot of the furnishings I personally sourced from around the world. I forget how many years I was picking up chandeliers from markets in Paris. I was buying Murano Crystal, I was going to markets in Belgium picking up marble statues. I went to Argentina to pick up the front doors from an old palace. It was really quite exciting. So, I think in that regard, it is totally unique..Is this a business for you that you build these incredible homes and take so long to build them, and then live in them at least, or do you enjoy them at all before you do sell them?.Alec, it's an interesting question because – and this is obviously part of my business – we create these bespoke homes for clients. With Gatsby, it was really a personal love affair. I loved the site and I wanted to take time to create something that I personally would love. So hence I could take, I could take a lot longer than we normally would. Interestingly, from the very beginning, I realised that I was just really a custodian or something quite amazing and as it started taking form and taking shape and coming toward completion, I knew that this would pass on to somebody great..How are you going to be marketing and how do you make sure that you don't have a repeat exercise as the one that you told us about right in the beginning of this discussion?.Alec, I think the thing is to market this quite quietly and positively, but confidentially. The sort of person that's going to purchase this house and come and view the house from the very beginning, even from introduction side is by referrals. They're looking for a trophy property and very many times the biggest thing for them is confidentiality. That really sort of presents an issue when you're marketing, but we're quite a well-known brand and so we network widely here and regionally and worldwide to hopefully attract that sort of person. We only need one person to purchase this sort of home, but there is only one home like this. So, it really is just to connect to connect the two..And the price-wise. Are you also north of R100m?.Other things being equal, if we were in particularly strong economic times, this house – even my replacement value would be in excess of R120m. So, you know, one would expect that would be a starting point. We're obviously open to offers and we do know that whoever purchases this home would want it fully furnished and it is literally fully furnished. It has everything there just to move in. What is very nice with the sort of clientele that we also provide a service where even aspects like your clothes, your linens, your cutlery, which is obviously of a particularly high standard, can be purchased bespoke for you prior to you moving in and even put into its place or laid out for you..It sounds to me like there's a billionaire – somebody who's made an enormous amount of money or inherited it or someone who sees South Africa (or Johannesburg, in particular) as the gateway into Africa. Is that the likely purchaser?.Spot on, Alec. That's the sort of client.That was the owner of Johannesburg headquartered Pellerade, creators of luxury homes for the super-rich of South Africa. This has been The Rational Perspective. Until the next time, cheerio.

What an African billionaire wants from their Joburg super home

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