Billion Rand development for east rand

Posted On Tuesday, 16 June 2009 02:00 Published by eProp Commercial Property News
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A massive new R1-billion affordable housing development East of Johannesburg, near Carnival City Casino in Boksburg will breathe new life and 2400 new homes into the area along the North Boundary road


The project, developed by the Brian Falconer Property Group, in partnership with International Housing Solutions (IHS) will consist of 10 phases providing a total of 2400 sectional title units.

The units will be housed in four-story apartment blocks each having between 12 and 16 units offering accommodation ranging from bachelor pads to 3 bedroomed apartments.

Called Carnival City, the development will feature solar-generated energy and provide lifestyle features such as various recreational areas with swimming pools and crèches for young families.

Phia van der Spuy , IHS Business Development Director in SA, says the homes which will be to rent or to buy, will cost an average price of R350 000 which is in line with the IHS philosophy of providing homes costing less than R550 000.

“The entire project is worth about R1-billion with each of the 10 phases estimated at an average cost of R120-million.

“The location and the very compelling pricing of the development are its major drawcards. It is superbly positioned with Boksburg on one side and the Wadeville industrial area on the other and will offer a highly sought-after affordable home for many working in the East Rand area.

“Pre-sales of the project in the past month at a starting price of R R279 000, have shown there is good demand. 105 units were sold in the first few weeks alone”

Justin Cohen, Sales Manager Brian Falconer Property Group says this project will be a great success, “With over 30 developments successfully completed we understand what the market wants”.

Van der Spuy says the first phase construction will commerce early next year and occupation will be by mid 2010.

She said developers like the Brian Falconer Property Group chose to partner with I H S in order to reduce some of their risk exposure.

“I H S provides capital upfront without the need for the developer to pay interest. It operates on an equity basis instead which allows developers to grow their businesses and manage their own capital more efficiently without having to worry about interest payments.”

Elize Stroebel Country Director SA says institutional equity investments in housing projects, especially in the affordable housing space is still a relatively new concept in SA, most funders still provide debt-based instruments to projects.

“I H S is different in that it provides the majority of the equity needed in a large development deal. Simply put, this is the total cost of the project less the portion that will be funded by debt (generally provided by commercial banks).”

 “For I H S as an equity investor, the return will come in its share of the profits, which will flow from the success of the projects.

“Another advantage I H S has over traditional development financers is that we have in-depth experience and global perspective and best understand the challenges from a global view,” says Stroebel.

Last modified on Tuesday, 11 March 2014 19:14

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