The slowdown in the availability of major infrastructure projects in the past three years has caused civils and construction com- pany Esorfranki Construction to focus on securing housing projects in both the public and the private sector.
Esorfranki CEO Bernie Krone notes that there are currently many residential development opportunities available to the construction industry, including the demand for sanitation in the informal settlements. The company is currently involved in a number of large projects, three of which are situated in Diepsloot, Three Rivers and the Orchards.
First National Bank household and property sector strategist John Loos said during an interview with publishing company Oxford Business Group (OBG) that property development was likely to increasingly factor in infrastructure considerations in the coming years. To some extent, this could be funded by private developers, given the potential premium around transport hubs.
Esorfranki is currently developing 1 370 stands in Orchards, Pretoria, where the company is responsible for providing the infrastructure for the project. Serviced stands are being allocated to top-structure developers to market and construct houses. Krone notes that demand has been strong and sales have been going well.
“In Diepsloot East, Gauteng, the company is involved in an 8 000 unit integrated development. The land is owned by the Gauteng Department of Housing, and Esorfranki acquired the development rights to the project including all infrastructure and top structures. We are also currently building two pedestrian bridges that will link Diepsloot East and Diepsloot. This project is also going well,” he explains.
Esorfranki will also develop 4 200 units in Three Rivers, near Vereeniging, beginning in early 2014. In addition to providing the infrastructure, the company has the option to market and build the houses itself or sell the serviced stands to top structure contractors.
“Investing in housing developments has been a strategic change of direction for our company and is yielding good results. It has also enabled us to avoid having to compete for the limited number of major infrastructure contracts in industry while keeping our business functional,” adds Krone.
He says, although government is willing to invest in construction projects that will improve South Africa’s infrastructure, the industry is yet to see these plans materialise. Mass housing projects that could be beneficial for the construction industry will require some form of additional government support in terms of funding, he adds.