Jun 29, 2012
Gauteng Partnership Fund marks housing development milestoneBack
Construction|Ekurhuleni|Engineering|Johannesburg|Pretoria|Rama City|Soweto|Housing|PROJECT|Projects|Rental|Nelson Mandela Bridge|Boni Muvevi|Kutoane Kutoane
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The fund believes that its Brickfields project has been its most successful project. The project is located between West and Bezuidenhout streets at the foot of the Nelson Mandela bridge, in Johannesburg.
This project was constructed in two phases, with construction starting in 2004. The first phase comprised 631 units and the second phase 178 units. The project comprises 809 mixed-use units, including low- to moderate-rise buildings, most being three-storey walk-ups.
Speaking to Engineering News, GPF chief investment officer Boni Muvevi says that most of its projects are based in the Johannesburg central business district; however, the fund has also helped develop projects in the greater Germiston area, Soweto and Pretoria.
The GPF funds both newly built projects and conversion projects. The latter entails the conversion of old office buildings into residential buildings.
“There are a number of buildings in the inner cities that need an upgrade. In a way, it is indirectly ensuring that there is some sort of revenue for government. Some of the buildings in the city are not paying rates and taxes, and when you rejuvenate areas, you will increase revenue. However, we encourage greenfield housing stock, as it gives the developer a superior location. This also promotes development in certain areas that need it – for example, townships,” he notes.
Muvevi points out that the company is now looking to develop another 20 projects in the next year. “There is a big project in Garangkuwa, called Rama City, which we are currently aiming to participate in, as well as a number of projects in Pretoria and Ekurhuleni.
“We view Kempton Park as a vital development node, as government has planned the development of an aerotropolis in the area, which will create huge demand for housing in the area,” he notes.
GPF CEO Kutoane Kutoane tells Engineering News that the fund’s mandate is to fund afford- able rental housing. “[There are] two cate- gories, the first being social housing, which is government-supported housing, with the second being entrepreneurial funding, where an entrepreneur is [provided with] the capital to develop rental stock.
“An entrepreneur is able to approach the GPF, which would provide the first layer of risk capi- tal. This will then enable the entrepreneur to approach other funders, such as senior debt funders, whereafter a housing development package will be set up and rolled out.
“We are not commercial funders as such, so we look more at the broader socioeconomic impact, and one of those is if you develop housing, you improve people’s social esteem and enable productivity. Further, when you develop housing through a rapid housing development programme, the material supplies industry will develop, further increasing employ- ment,” he says.
To procure funding, Kutoane explains, one must have a secure project, whether it is a greenfield project or the refurbishment of an existing building. “The most significant criteria are that the entrepreneurs can run with the project and that they are serious about their business, and not just fly-by-night developers.
“In the next fiscal year, we aim to increase our funding reach, depending on the additional capital we receive from government. If we achieve that, we will be able to form an expanded network of funding and development partners, rolling out more projects,” Kutoane concludes.
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