A R625-million investment by Futuregrowth Asset Management will see more than 20 000 Gauteng families become first-time homeowners, enabling them to secure a firm foothold in the residential property market.
The company has invested in major housing projects being developed by the Cosmopolitan Group, with the funding being used for the installation of internal and external bulk services, ranging from the provision of water and sanitation, to electricity and roads, prior to the proclamation of council-approved stands that will be developed with new houses for sale into the market.
Lower- to middle-income housing company Cosmopolitan sells houses priced from R400 000, with packages tailored for families earning between R10 500 and R30 000 a month.
“Demand for housing in this income group far outstrips supply. These developments enable mainly first-time homeowners to move from outlying areas into growing metropolitan suburbs situated closer to places of work, with amenities and facilities on their doorsteps,” noted Futuregrowth portfolio manager and investment analyst Paul Semple, highlighting the investment as “real social transformation and wealth creation”.
“It gives young families upward mobility by enabling them to create equity and to eventually trade up in the property market,” he added.
Futuregrowth views its investment in the housing projects as part of its commitment to the principles of responsible investing. “This is a major investment in a market where, while there is huge demand and a strong social need, many developers have failed owing to problems with financing and because margins are so tight,” Semple said.
Cosmopolitan plans to roll out a total of 30 000 homes over the next eight to ten years, with the largest development near Alberton, south of Johannesburg, where 15 300 residential and high-density housing units are planned in a 740 ha area.
Known as Watervalspruit, the project will be launched in early 2017 and makes provision for the development of a regional shopping centre, 16 educational facilities, including an independent school, and 17 social nodes for community facilities.
Services are also being installed at other projects in Alberton, and in Protea Glen and Windmill Park.
Further, Cosmopolitan is developing projects in Savana City, Stretford and Evaton, and is planning to develop 4 700 homes and various amenities on land formerly occupied by the Lion Park, north of Johannesburg.