Oct 12, 2012
Affordable rental housing programme undertakes construction of first projectBack
Construction|Jeppestown|Johannesburg|Pretoria|Flow|Housing|National Housing Finance Corporation|PROJECT|Projects|Property Development|Rental|Take Off Real Estate|Building|Flow|Property Development|Vinolia Mashiane
© Reuse this
The EEPF, which is a partnership between the Gauteng Partnership Fund (GPF) and the National Housing Finance Corporation (NHFC), reports that funding has been secured for six projects this year. Construction on the projects, which are at different stages, will mostly start next year.
In total, funding has been secured for 13 projects since the EEPF’s launch in 2010, which will result in about 500 units being constructed, says GPF investment officer Vinolia Mashiane.
The six approved projects for this year are in the areas of Roodepoort, Springs, Benoni, the inner city of Pretoria and two projects in Kempton Park.
Mashiane says if the project, at the corner of Park street and McDonald street, runs according to schedule, it will be completed by April 2013.
The project entails the construction of 32 units – seven studio units of 27 m2 each, 13 one-bedroom units of 30 m2 each and 12 two-bedroom units of 45 m2 each on three consolidated stands, measuring 991.86 m2 in total.
On average, each unit will cost R3 400 a month to rent, says Mashiane.
Through the EEPF, the GPF has assisted property development company Take Off Real Estate, the company that was awarded funding to develop this project, in overcoming some of the barriers that prevent historically disadvantaged individuals-owned companies from entering the affordable housing rental market.
These barriers include capital constraints such as access to funding for small companies. Some financial institutions require companies to contribute 30% to 40% of the ¡total project cost as equity towards rental projects.
The GPF has provided a 40% loan of R3.8-million over a 20-year loan period for the Jeppestown project, while the NHFC has provided the bulk of the funding.
The developer’s contribution, which is dependent on the project feasibility and cash flow, may vary between 2.5% and 10% of the total project cost, says Mashiane.
The programme, which is limited to prospective participants invited yearly on public tender, allows each participant 12 months to secure a project, with a maximum project cost of R15-million.
Any 100% black-owned company with an interest in providing housing for people earning an income of less than R15 000 a month can approach the EEPF for funding. However, companies will only be eligible for the programme if they are a registered legal entity with a valid tax clearance certificate, clear credit records, able to identify a potential project that can yield over 15 affordable housing units in Gauteng and can demonstrate access to unencumbered capital as the sponsor’s equity contribution.
Further, the EEPF will provide mentorship and training programmes aimed at moving the skills level of black economic-empowerment companies from a low skills level to a high skills level where there is improved success in the delivery of rental housing units and less reliance on GPF and other concessionary funding from the State.
Mashiane says other greenfield projects under the EEPF, such as the projects in Roodepoort and Kempton Park are in the process of registering bonds with the deeds office of the Department of Rural Development and Land Reform and obtaining municipal approvals to start construction.
The Pretoria inner city project, which is located at 164 Schoeman street, involves the renovation and reconfiguration of an existing building that currently consists of 23 spacious two-bedroom units.
Once completed, the development will comprise 46 one-bedroom units, says Mashiane.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Construction News
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.