October 2012 - Trademax Publications

financeProperty boom in West SowetoSouth Africa’s overall property market may be experiencing a slump,but affordable housing in Soweto is booming.“Protea Glen in West Soweto may be the fastest growingarea in the country in terms of housing,” said Futuregrowthportfolio manager, Paul Semple.Futuregrowth has loaned R45m in a joint financingarrangement with development finance company NURCHA,to Cosmopolitan Projects, the company that is undertakinghousing developments in Protea Glen.NURCHA (National Urban Reconstruction Housing Agency)was set up in 1995 as a joint venture between the RSAGovernment and the Soros Economic Development Fund.NURCHA’s primary business involves the provision ofbridging finance to contractors in the subsidy andinfrastructure markets, as well as development finance todevelopers involved in the affordable housing market.NURCHA Managing Director, Viwe Gqwetha, said thatPhase 3 consists of 793 units and Cosmopolitan Projects isestimating they are expecting to sell approximately 80units per month, with transfer of properties startingaround March 2013. “Loan repayments to Futuregrowthand NURCHA will start with the first draw of bank financefrom the purchasers and should be completed by the endof 2013.”The Protea Glen project is targeting first time homebuyers, aged between 20 and 35. The area’s goodinfrastructure and easy access to the Johannesburg CBD,as well as the Protea Glen industrial area, make it adesirable location. It’s also close enough to central Sowetoso that young people can stay close to friends and familywho live in the more established areas of Soweto.The GAP market is aimed at households with a joint incomeof R3 500 to R13 000 per month and it is estimated that22% (2.7 million) of South African households fall withinthis category. “This market has been historicallyunderserviced and the demand for properties is high,” saidSemple.Over 2000 units will be developed by CosmopolitanProjects in Phase 1 and 2 of the Protea Glen developmentand these have been completely sold out. The topstructure construction of the units is at various stages ofcompletion.The financing arrangement between Futuregrowth andNURCHA consisted of purchasing land for Phase 3, whichwill then be developed by Cosmopolitan Projects. Fundingfor the actual homes will be financed by the purchasers inthe form of bank bonds.24OCTOBER 2012