Michael Bromley is a director in our Corporate and Commercial practice. Michael has practised as an admitted attorney for 27 years and for the last 15 years has practised commercial law specialising in mergers and aquisition property transactions and construction, particularly in the property transactions and hospitality and leisure sectors. Michael is the Hospitality and Leisure Sector Head and specialises in law relating to the development and construction of substantial capital intensive facilities, such as convention centres, casinos and hotels which includes advising on and drafting agreements relating to the corporate structuring (consisting of inter alia choice and establishment of special purpose vehicles, shareholder relationships and financing) of the developer, land tenure issues, and structuring relationships with stakeholders during the development (tender and construction) and operational phases (leases, license agreements, franchise and management agreements). Michael is a non-executive director of Cape Consumers, a buying co-operative, and of the property owning and operating companies of the Winchester Estate Group, incorporating the Winchester Mansions Hotel (Sea Point), residential and retail properties. Michael began his career as a candidate attorney at Prisman Wilson Choritz and Goldberg in 1987 and became a partner in 1993. In 1996, he joined Herbsteins as a director and remained a director of Hofmeyr Herbsteins and Gihwala, pursuant to a merger a year later. Michael became a director of Cliffe Dekker Hofmeyr pursuant to a merger in 2008, where he became the Hospitality and Leisure Sector Head for Africa. Michael joined STBB in April 2017, where he continues to practice as a property transaction advisor specialising in hospitality.

Blog | SA REIT Association to Update Best Practice Recommendations in Early 2019

The SA REIT (real estate investment trust) Association is currently in talks with government and other interested parties regarding an update to their 2016 Best Practice Recommendations (“BPR”) for financial reporting. Once all necessary discussions have taken place and all submitted commentary is reviewed, they will release the update. This is expected to happen in the first quarter of 2019.

The SA REIT Association purports that best practice compliance is necessary to standardise reporting and ensure greater transparency within the sector. According to the Association, improved transparency and reporting assist in building better relationships with regulators and improves public and investor confidence.

The 2016 BPR was overseen by the SA REIT Best Practice Committee comprising of Laurence Cohen from Hyprop (Chairman), Nick Hanekom from Resilient and Gerald Völkel from Growthpoint. Input from representatives from KPMG and Deloitte was also included.

The 2016 BPR covered issues and recommendations for specific sector matters, ratios and accounting and financial reporting matters. The report stated that REITs do not have to comply with the best practice recommendations:

  • If a recommendation is prohibited by a REIT’s legal, regulatory or other requirements;
  • If a recommendation relates to an amount or item that is immaterial; and / or
  • If compliance with a recommendation would lead to substantial additional costs in gathering information.

Examples of issues and recommendations raised in the 2016 BPR include:

Issue: Number of Shares in Issue for Dividend Per Share

The number of shares used to determine the dividend per share for the period is often not the same as the number of shares used to determine earnings or headline earnings per share in terms of IFRS.


The number of shares in issue used to determine dividend per share should be disclosed.

Issue: Borrowing Costs

In terms of IAS 23 (Borrowing Costs) an entity is not required to apply the standard to borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset measured at fair value.


Where development projects meet the criteria for capitalisation, borrowing costs should be capitalised.

“The improvements introduced by the 2016 BPR will be enhanced through the 2019 update, which will continue to focus on improving disclosures and achieving consistency across the sector. The 2019 update is being drafted in consultation with a broader stakeholder base and intends to address concerns raised by the investment community, regulatory bodies and other affected parties”, says Bram Goossens from the SA REIT Association.

The 2016 Best Practice Recommendations can be found on the SA REIT website and comments for the 2019 update can be submitted to info@sareit.com by end of January 2019.



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