DEVELOPMENT: Housing Fund Expands To Cape
Recent Western Cape Business News
Nearly 500 new homes and shops worth R170-million are to be built in the Cape Town suburb of Eerste River thanks to a massive cash injection by private equity partners, International Housing Solutions (IHS).
Eerste River, which borders the Cape’s Winelands, is experiencing a desperate shortage of accommodation. With high levels of employment, the area’s residents buck the country’s general unemployment trends, with most being in a position to buy or rent homes. By virtue of a lack of development funding and developers, however, insufficient new homes are being built to satisfy demand.
The project represents IHS’s first foray into the Cape. It has already spearheaded a string of new affordable housing developments in Gauteng, including 3550 new homes in downtown Jozi, 2400 homes at Carnival City on the East Rand and 11725 units in massive new developments in Soweto and surrounding areas, including Fleurhof (between Soweto and Roodepoort), Protea Glen and Jabulani Village.
The new Eerste River homes are to be built as a series of housing complexes, to be called ‘Alpine’, ‘Himalaya’, ‘The Rocky’s’ - all located on Forest Drive some 500m from the Station - and ‘First Terraces’, situated adjacent to the Station itself. In total the development will comprise 441 residential sectional title apartments and 31 retail spaces. The apartments range in price from R250 000 to R 499 000.
Named after mountain ranges because they will be the ‘highest’ buildings in the area, the complexes comprise 3-storey walk-up units featuring both apartments and duplexes in garden settings with landscaped walkways. All the developments will enjoy appropriate security measures.
The units also offer excellent investment potential, with anticipated returns of around 8%, because of the high demand for rental accommodation in the area.
Another major plus factor is the area’s close proximity to the excellent public transport system. Eerste River station and taxi rank is one of the busiest in the country with substantial volumes of foot traffic, making it ideal for a retail and residential mix.
Soula Proxenos, Managing Partner of I H S says the project is a first of its kind for the area. “We are very excited to close our first deal in the Western Cape, and we have several more transactions we hope to close this year in the Cape.
“The developer, Frans De Jongh of Jumbo Properties, is a well known civil contractor in the region. He brings over 20 years experience in the area as well as a bird’s eye insight into community needs and is providing homes that are secure, modern and sophisticated.
“The retail component of the project will allow entrepreneurs to buy or rent retail sites in a prime location with major pedestrian and commuter traffic.”
Proxenos says IHS partnered on this project after identifying the massive demand for, and shortage of, suitable housing in the area.
“IHS not only provides equity finance, but our research and global expertise allows us to minimise risk for the developer and our investors.
“We know the development will be a success owing to its proximity and easy access to various amenities including shopping centres, schools and various transport nodes.
“Another positive is that the product is the first of its kind for the area and will offer residents a new concept that will cater for a growing population.”
Joel Rosen, IHS dealmaker for the project, says regional market research shows that the average asking price for rental accommodation in the area is between R3 000 and R3 500 per month.
“This makes significant financial sense for the buy-to-let investor, which is a very important target market for developments like this. Many employers in the area want to secure good accommodation for their staff and the investment potential makes a strong business case.
“The location is an excellent one - it is an area with a very active property market and high demand for townhouses. The units are priced correctly and well sized. The location of the development sites and their proximity to amenities and public transport is a strong selling point. Investors and buy-to-live owners will find value and the developments will do well.”
Building will commence shortly, to be accompanied by a sales launch of the units. The development will be constructed in phases with the first phase expected to be completed by year end.
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