Housing in Southern Africa July 2016

and Developers

the Financial Sector Charter as banks had to score points investing in the redevelopment of the country. This precipitated Old Mutual to acquire 50% of Afhco over a decade ago. With a 3% to 4% vacancy rate over a 20 year history, Renney says, “In reality, where is the risk?” He says that even today the commercial banks are still backing the bigger players rather than new developers coming into the market. Ahfco was sold for R1,4 billion to SA Corporate on 1 st July 2014. “It was a cultural fit,” says Ren- ney. SA Corporate CEO, Rory Mackie oversees a R13 billion portfolio. Afhco is now a subsidiary of SA Corporate Property Reit. This has enabled the Plit brothers to accelerate the roll out of affordable housing for the middle income market. With three year contracts and a one year profit warranty, which they have already

decided to build up a rental portfolio insteadof selling off the golden goose. The NHFC provided Afhco with out- standing levels of funding at attrac- tive interest rates that allowed us to do some very big projects.” NHFC’s role was to entice the private sector back into the city and to change perceptions in the market place about crime and degradation in the city. “It took a long time before the banks began funding the inner city. The NHFC got themarket moving and lot of developers have followed in our footsteps and borrowed from the state entity.” NHFC was always open for business, obviously they would go through their feasibility and business models but we built up a good track record with them and never missed a payment. That develops levels of trust as well. What changed to a certain extent was the implementation of S imon recalls in 2004, when he approached the owner of the Yeoville block of flats in which he lived, asking if he could buy his apartment. “The landlord said that he wanted to sell the entire building for R350 000. I knew it was a fair price but I had no money or savings.” Mkhize had seen the TUHF signs on other buildings financed in the area and a friend told him to go see Nano at TUHF in Braamfontein. A meeting with Nano yielded him an Intuthuko loan, andwithin a short space of time he was signing an offer to purchase Mabel Court on Natal Street. The tenants refused to leave and not even a High Court order made them budge. The Sheriff of the Court seemed unwilling to enforce the evic- tion order unless hewas paidR10 000. Simon arranged for a private security firm to do the job. The Sheriff then took exception, insisting that it was his job to carry out court-ordered evictions, and promptly moved the tenants back into Mabel Court. TUHF advanced Simon the money, he paid the SheriffR10 000 and as the eviction proceedings got underway, it started to rain. “They were on the street and were getting wet, so I told them to

Renney and Wayne Plit

exceeded, Renney and Wayne are set to deliver another 800 apartments in the conversion of the 60 000m² Jeppe Post Office, in downtown Joburg. The project of scale will compete with Afhco’s flagship development at 120 End Street totalling 927 apart- ments and shopping precinct. The brothers are relentless and continue to find new business opportunities and development acquisitions. “We do not borrow money anymore but as loyal customers, we appreciate the growth in our business due to the NHFC,” concludes Renney.

Case study Simon Mkhize

Simon Mkhize does not mince his words when he talks about TUHF: “Theymean everything tome. I ama newman because of TUHF,” says the 53-year-old entrepreneur.

put their belongings in my garage,” says the soft-hearted Simon. “What could I do; these aremy fellowhuman beings?” The old tenants eventually left and he started his new business. In 2013, Simon was charging ten- ants R1 800 per person per month, including utilities. Mabel Court’s two, two-bedroom apartments that typically sleep three people and the four, one-bedroom apartments

accommodate two people. After working at a hardware andpaint shop as a clerk for more than 25 years, Si- mon is today a full-time entrepreneur. He bought two semi-detached prop- erties near Mabel Court (also financed by TUHF, at a total cost of R800 000) and also runs a small driving school. Simon expects to pay off his original loan to TUHF shortly and is consider- ing other purchases in Yeoville.

Simon Mkhize

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