Housing in Southern Africa November 2015

Settlements

Infrastructure

in Southern Africa MALIBONGWE RIDGE

Accommodation for 50 000 students

www.crown.co.za

GROWTH IN AFFORDABLE HOUSING • IHS CONFERENCE • COEGA RIDGE NHBRC COUNCIL ON SIT • Z MA OPEN N2 GATEWAY • PELIC N PARK

november 2015

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H O U S I N G in Southern Africa CONTENTS

NEWS

2 4 6 5 6 7 8 9

Ed’s Notes Zuma Officially Opens N2 Gateway NHBRC Council on Site Visits UK Addresses Housing Backlog Gas Installations in Sectionals Verifying Due Diligence Atlantis Opens Doors for Entrepreneurs Build Week at Pelican Park

5

HOUSING

14 10 12 16 18 17

Malibongwe Ridge Rental Market Continues to Perform Accommodation for 50 000 Students Credit and Mortgages Banks to Invest Billions in Agri-Parks Single Digit Growth in Residential Building Activity

10

CEMENT & CONCRETE

20

Precast Technology Plant Lafarge’s Artevia Flooring Solution Concrete Flooring DOORS, WINDOWS, FLOORS & WALLS Energy Efficient Double Glazed Windows 22 23

24 26 26 27

Scheltema’s Management Team has it Covered REHAU Launches Windows for Affordable Housing Colourful Flooring

14

INFRASTRUCTURE & MIXED USE

28

Construction Management Due for Overhaul Poor Building Performance Blamed on Tender Process INDUSTRY BUZZ, EVENTS & PRODUCTS Versatility and Mobility Residential Demand for Portable Solar Power Middle Weight Cat Excavator Department Fails Sector 29 30 30 31

34 32 35 36 32

24

Corobrik Executive Appointments Largest Pump Rental Hub in Africa Safety First Handheld Power Mixers

H O U S I N G in Southern Africa

ED’S NOTES

Malibongwe Ridge… a grateful community The bright sparks at Codevo, Basil Read and developers of the City of Joburg, province and national Department of Human Settlements got together to celebrate United Nations Habit for Humanity during October. It really was a fun-filled day as we wobbled over the rural roads around Itsoseng inOldMutual branded threewheeler Tuk Tuks.

THE TEAM

EDITOR Carol Dalglish housing@crown.co.za ADVERTISING Brenda Grossmann brendag@crown.co.za DESIGN

T he novel transport was slow through the informal settle- ment but what was so great was the residents’ acceptance and interest to join in and be part of the celebrations. The children at the small informal créches welcomed photographers and camera crews by showing their dancing abilities. Many residents carried on with their daily chores, washing clothing in basins outside, whilst chatting to neighbours. It was really heart-warming to be welcomed and accepted. Residents took part in ‘The Amazing Race’, a crib of the TV show. Clueswere placed around the informal settlement and at the newly built fully subsidised housing development. Winners were awarded for their efforts with takkies, T-shirts, caps and other prizes. The housing project borders the City of Joburg’s first fully integrated human settlement at Cosmo City. Malibongwe Ridge has benefitted from the lessons learned at Cosmo City and has been innovative in creating additional rooms so that beneficiaries can rent out the rooms on their properties or establish small businesses in that space. Unlike Cosmo City, the cul de sac design pre- vents owners expanding their units or encroaching on neighbours. The cul de sac design has paved areas and each block offers a safe and secure place for children to play. Most of those government officials who were not on site at the Grayston Drive bridge collapse on the M1 High- way site in Johannesburg, attended the event. Malibongwe Ridge Project Manager, Adam Masonganye, called for a moment of silence during the proceedings, inmemory of thosewho lost their lives in this disaster. On a happier note, the Nedbank Affordable Housing division has granted a R62,3million loan for a new affordable housing development for rental stock in Centurion. STAG African is leading the way in

student accommodation. The com- pany aims to roll out 50 000 beds for students over the next five years. In the Cape, Bendicta van Minnen the City of Cape Town’s Mayoral Com- mittee Member for Human Settle- ments took part in the Build Week at the Pelican Park integrated housing settlement. The councillor laid bricks and showed off her skills with a spirit level. President Jacob Zuma officially opened the N2 Gateway project in Cape Town. He showed that he was a dab hand at bricklaying whilst Zou Kota Fredericks, Deputy Minister of Human Settlements accompanied the President. The National Home Builders Registration Council members took part in site visits at Cornubia. The multi billion randproject onKwaZulu- Natal’s north coast is one of the most exciting developments to be rolled out in the next decade. British Prime Minister, David Cameron has promised to address the housing backlog in the UK and will give tenants the right to buy their government owned houses next year. With the promise of a substantial discount compared tomarket values. Keep the emails and suggestions flowing and we do hope that you enjoy the read!

Colin Mazibuko CIRCULATION Karen Smith DIRECTOR Jenny Warwick

PUBLISHER Karen Grant

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Carol Dalglish • Editor

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Govan Mbeki Awards 2014 - Best Media - Housing in Southern Africa

November 2015

News

President Jacob Zuma

Zou Kota Fredericks

Zuma officially opens N2 Gateway President Jacob Zuma says government’s efforts to restore the dignity of the residents of Langa through the roll-out of integrated human settlements have paid off.

T he President officially opened the N2 Gateway project in the Cape Town informal settlement during October. The N2 Gateway Integrated Hu- man Settlements Development is a national priority project designed to address poverty, destitution and homelessness through the elimina- tion of informal settlements. The President said that prior to the launch, there was no adequate hous- ing in the area and residents lived in squalor. “We wanted to ensure that the N2 Gateway project becomes an important intervention. “We realised that in order to cater to the needs of the residents of the city, there had to be a change of gear and approach in the way of doing things,” said Zuma. The President said that govern- ment wanted to ensure that the project not only created houses, but was part of an overall strategy to provide facilities such as schools and clinics, correct apartheid spatial

planning and bring people closer to work opportunities. To date, the project has delivered over 14 000 houses. The Department of Human Settlements will complete a further 8 000 units by 2019. The President unveiled a plaque to commemorate the official opening of the project. He put on a protective jacket and hard hat and laid bricks at one of the units under construction. Accompanied by Water and Sani- tation Minister Nomvula Mokonyane and Human Settlements Deputy Minister Zou Kota-Fredericks, he proceeded to hand over houses to several beneficiaries before address- ing members of the community. Similar projects being rolled out nationally include Ethekwini in KwaZulu-Natal, the Nelson Man- dela Metro in the Eastern Cape and

Lerato Park in Kimberly in the North- ern Cape, amongst others. “We have also made tremendous strides with regards to human settlements in the mining towns, thanks to the part- nership and support of the mining companies,” he said. The President added that the N2 Gateway project, along with others around the country, would go a long way in putting a dent on the country’s housing backlog. He said government would also ensure that it speeds up the process of building sustainable human settle- ments becauseCapeTown, inparticu- lar, was still faced with a challenge of informal settlements. “Projects such as the N2 Gateway had a positive impact on the lives of many people in areas such as Langa, Delft and Gugulethu townships.” ■

November 2015

News

NHBRC Council on site visits

A s part of the Council Member’s oversight mandate, the pur- pose of the inspection by these senior officials was to highlight the importance of regulation in the hous- ing industry. NHBRC’s Provincial Manager for KZN, Gary Olckers said that repairing poorly constructed houses had in the past years cost South Africans billions of rands. “With a multi-billion rand project such as Cornubia, ensuring quality becomes vitally important.” Olckers said that each of the thou- sands of units have to be assessed at various stages of construction to ensure that problems are identified early and rectified as soon as pos- sible. “Instead of trying to correct pos- sible issues after the house has been built, compliance is tested through- out the duration of the project,” he said. NHBRC member of Council, Hla- leni Dlepu expressed however, that the NHBRC’s role goes beyond this, “A home or a housing development that is registered with the NHBRC automatically falls under a warranty against construction-relateddefects.” She added that many home- owners are unaware that building contractors are required by law to register all building projects with the NHBRC. “Members of the South African public have a right to demand that their builder or contractor is reg- istered with the NHBRC, and that council members are conducting unannounced site visits in KZN and the Western Cape,” she continued. Olckers acknowledges that since the NHBRC obtained responsibility as a regulator, there had been sig- nificant improvements in housing quality standards, “lack of proper skills is one of the major reasons that Newly appointed Council Members of the National Home Builders Registration Council (NHBRC) recently assessed building standards at two of Durban’s largest building projects – Cornubia and Clermont.

Hlaleleni Dlepu

Council Members

Chairperson of Council Abbey Chikane Deputy Chairperson of Council Julieka Bayat Chairperson of the Social Transformation Committee Xoliswa Eunice Daku Chairperson of the Registrations Committee Themba Thomas Cyril Dlamini Chairperson of the Bid Adjudication Committee Hlaleleni Kathleen Dlepu Chairperson of the Social & Ethics Committee Ambassador Segogwane Samuel Kotane Member of HCREMCO & Fund Advisory and Finance Committees Phetola Nailana Solomon Makgathe Member of HCREMCO & Bid Adjudication Committees Mankwana Christinah Mohale Chairperson of Technical Research & Advisory Committee Busisiwe Nwabisa Nzo Chairperson of Human Capital and Remuneration Committee Alvin Phumudzo Rapea Chairperson of Fund Advisory and Finance Committee Goolam Hoosen Manack Department of Public Works representative Obed Lucas Molotsi Department of Trade and Industry representative Lulama Andisa Potwana

a contractors’ work may not be up to standard.” He continued that other reasons may be the use of inferior materials and through the NHBRC’s interventions, builders get to know the implication of using materials that are not of the right standard”. “Regulation plays a vital role, as it ensures contractors and home own- ers recognise that they too have a part to play. As a regulator we work closely with contractors and build- ers to ensure compliance in building standards,” concluded Olckers. Member of Council, Phetola Mak- gathe, said that the councillors were satisfied that work on the sites was progressing smoothly and in keeping with the required standards. “Our inspectors are here on a regu- lar basis and working in conjunction with the eThekwini Municipality to ensure compliance at every stage of the building,” he said. Other members of the council who participated in the unannounced site visits included Goolam Mameck and Ambassador Sam Kotwana. The National Home Builders Reg- istration Council (NHBRC) is a statu- tory body with the responsibility to provide protection in terms of the Housing Consumers Protection Mea- sures Act. It is mandated to provide protection for housing consumers and to regulate the home building industry. For more information visit www.nhbrc.org.za ■

Member of Bid Adjudication & Industry Advisory Committees Mziwonke Jacobs

November 2015

News

UK addresses housing backlog

C ameron promises that the initiative will give social hous- ing tenants the opportunity to build a stake in society, and 1,3million householders will receive substantial discounts if they opt to buy. Reacting to the Prime Minister’s speech, Martin Clark, Deputy CEO of Allia, a social profit organisation that funds people, projects and housing developments said: “Allia agrees that it is important to encourage people to build a stake in society. But it is already widely accepted that a discount of 20% from market values - whether for sale or rent - does not do enough to assist those on lower incomes, especially inmore expensive parts of the country. The only way for government to create genuinely affordable housing is firstly to make public land available at a cost which I n sectional titles schemes, if the necessary precautions are not taken or if the installation is not done properly, this could affect other residents negatively. Residents con- sidering gas must remember that the installation must be done by a certi- With the rising costs of electricity many people are becomingmore conscious of alternative energy solutions and many have opted for gas. Gas installations in sectionals

Britain’s Prime Minister David Cameron has announced that government will give tenants of government housing the right to buy their homes from next year.

need to be available on a ‘rent to buy’ basis as well as outright purchase, in order to empower those who cannot yet make the jump to 80% of market prices.” ■

allows low income families to start on the property ladder; and secondly, to create a planning category that zones such public land for new affordable housingdevelopments. Starter homes

fied professional. According to Mandi Hanekom of Propell sectional title finance company, a certificate of com- pliance must be issued to the owner of the residence after completion of a gas installation, modification, altera- tion or change of user or ownership. “This means that even if a certifi- cate was issued on the initial installa- tion, if any improvement or alteration has beenmade, a newcertificatemust be obtained,” said Hanekom. The rea- son for this being that there is always a risk of fire, which could cause damage to property and injury to residents. The certificate confirms that the installation is compliant with safety regulations and that the appliance and gas canisters are installed prop- erly, and inspected to be safe and

leak-free. The only people authorised to issue gas certificates of compliance are those as defined in the regula- tions. “Many sectional title bodies corpo- rate management rules will prohibit any owner or occupier from storing any material that is harmful, or will prohibit any dangerous acts on the property, and gas installations may in many cases be included in this risk. In turn, if there are ‘high-risk’ activities or installations on the property, the insurance premiums of the scheme might be increased, which the body corporate would want to avoid,” said Hanekom. When it comes to insurance, an ad- ditional concernwould be that if a gas installation is not compliant, then the insurance companywill not pay out on any claim. The financial implications for owners and the scheme itself can be disastrous. “Before any gas installation is car- ried out in a sectional title scheme, the insurance requirements (both homeowner and body corporate poli- cies) should be checked to ensure that there is cover if any gas related dam- age takes place,” said Hanekom. ■

November 2015

News

W ith building plans being such a common part of commer- cial property sales, and often included in due diligence clauses, a lot of people assume that commer- cial property brokers are qualified to perform their verification. This common misconception can result in serious problems for com- mercial property purchasers, accord- ing to JasonGregoriades fromRawson PropertyGroup’s commercial division. “Experienced brokers can often provide valuable insights and opin- ions on a wide variety of things. The problem is that those opinions are not usually backed by the relevant specialist qualifications and cannot, therefore, replace the services of the various industry experts.” Gregoriades illustrates his point by describing the difference between suitably qualified professionals, acting in their expert capacity in relation to building plans, and a well experienced commercial Verifying due diligence

broker. “Only a professional architect, quantity surveyor or other accredited industry professional can verify build- ing plans. If a broker offers to do it, don’t take the risk as it’s not worth having issues crop up later. Brokers who falsely represent themselves as building plan experts, or who make assertions to that effect, can find themselves facing legal repercussions should issues with the building plans later arise.” “It’s up to the purchaser to per- form due diligence, using their own resources and at their own cost,” says Gregoriades. “When it comes to

building plans that means hiring an architect, quantity surveyor, or simi- larly accredited industry professional to certify that everything is in order. Anyone else simply isn’t qualified to perform the duty with any kind of legally recognised authority.” Where a purchaser confirms to the seller that he is satisfied with the building plans (as part of the due diligence clause) without approaching such a well-qualified external party for their opinion on the matter, the purchaser may later find themselves in a difficult situationwith less right of recourse against the seller. ■

News

Atlantis opens doors for entrepreneurs

T he newManufacturing Technol- ogy Centre (MTC) situated in Atlantis will open the door for more entrepreneurs to participate in the green economy. The City of Cape Town’s Economic Development Department and the Small Enterprise Development Agency (SEDA) provided funding, technical support and sharing of expertise for the new centre. Located in the heart of the Atlantis industrial hub and occupying 15 000 m² of factory space, it is well equipped to lend a helping hand to entrepre- neurs to ensure the sustainability of their businesses in the renewable energy/energy saving sector. The R500 000 match funding grant provided by the City in support of this entrepreneurial incubation pro- grammewill contribute to the City and Western Cape Government industrial incentives to attract companies to relocate to the Atlantis area. The City has partnered with SEDA. The South African Renewable Energy Business Incubator (SAREBI) is a business in- cubator funded by SEDA Technology Programme and focuses on providing non-financial assistance to entre- preneurs in the renewable energy industry. The MTC has been set up to provide subsidised facilities, infrastructure, equipment support, access to tech- nology and a link with professionals and experts in the field, to assist the selected companies to develop their businesses. “The objectives of this business incubation development programme is to create an enabling environment to help entrepreneurs and attract investment in the area. This will in turn create economic growth and job creation and ensure sustainability of

small andmediumenterprises (SMEs) through the provision of resources. In Phase One, five entrepreneurs have already set up viable business entities. They will receive further support by way of mentorship and coaching that will ensure the future sustainability of their ventures,” said the City’s May- oral Committee Member for Tourism, Events and Economic Development, Garreth Bloor. A substantial amount of work had to be undertaken at the MTC to cus- tomise the work area and the incuba- tion space to suit each SME. One of the first businesses to relocatemoved from Killarney Gardens to Atlantis. Over and above office space, tele- phone lines and internet connectivity, they required a secure product storage area for their materials and finished goods, as well as welding tables and a spray-painting facility. In comparison, the requirements for a LED lighting company that is now situated at the centre differed substantially. Working with small and expensive components required a very secureworkspace, which necessitated the building of a cage around their workshop. Due to the nature of their operation, a stable electricity supply was also a prerequisite. In addition, they required support with branding and advertising. A luminaire manufacturer request- ed a much larger space to be fitted with a specialised casting room, for curing the resins used in their lights. Support for another start-up busi- ness took the form of allocating a business mentor to help with busi- ness planning and to facilitate a loan application process. “These examples highlight the versatility of the services offered by the business incubation

centre. We see this as being a crucial component for the success and sus- tainability of budding entrepreneurs. Many SMEs fail due to the one-size- fits-all solutions that are generally pro- vided. The best return on investment for the City is to see these businesses grow and at the same time stimulate further job creation,” said Bloor. The renewable energy sector, cur- rently in its infancy stage, requires development support and assistance specifically for small and medium enterprises who wish to enter the sector. The South African Renewable Energy Business Incubator (SAREBI) was set up to help start-up businesses in this sector. “One of the aims of SAREBI was for the entrepreneurs to stimulate job creation in Atlantis and surrounding areas. New jobs were created for the local community within the first six months of the project. This is a step in the right direction and we are pleased that these up and coming entrepre- neurs have risen to the challenge,” concludes Bloor. ■

November 2015

News

T he City of Cape Town partnered with Habitat for Humanity and Power Developments to build houses at the Pelican Park integrated housing development. Build Week cements the final phase of construc- tion at Pelican Park, which is due for completion before the end of the year. The project offers housing opportu- nities across the residential spectrum with 2 024 totally subsidised homes (BNG) being built alongside 760 Gap market units selling for R375 500, and 360 affordable housing units from R497 500 to R700 000. With 1 600 BNG houses already completed, the balance of 424 will be handed over to beneficiaries in December. The R700 million development comprises government and private sector investment. City’s Mayoral Committee Member for Human Settlements, Benedicta van Minnen said: “The City would like to thank all volunteers and every organisationwho participated in Build Week. By being a part of this project, they are building more than just houses, they are contributing towards building better lives and better futures for some of our most vulnerable resi- dents,” said van Minnen. “This is key to the empowerment and transformation of our city. Previ- ously disadvantaged residents will commemorates the progress in human settlements and shelter rights worldwide. Build Week at Pelican Park World Habitat Day, a United Nations (UN) initiative

Benedicta van Minnen

have the opportunity to own an asset and the city is making every effort to address housing delivery. This project is testament to the need for partner- ships between government and the private sector to balance the dynamics of the housingmarket. We also have to devise newways to ensure large-scale delivery of housing opportunities,” said van Minnen. The Pelican Park development receivedGoldStar status in theMayor’s Portfolio for Sustainable Development, which incorporates provision for two new schools and a regional clinic to be developed by the Western Cape Government Depart- ment of Education and City Health, as well as two properties zoned as places of worship. A commercial precinct opened in November 2014 in an effort to

Michael Mamabolo teaches the councillor skills on site.

enable economic opportunities for residents. There are generous open spaces within the development and courtyards encircled by houses offer safe play areas for children. Pelican Park also fronts onto the False Bay Ecology Park, which can be accessed during daylight hours and provides pleasant opportunities for bird-watching and picnicking while overlooking the Zeekoevlei. ■

November 2015

Housing Malibongwe Ridge

Zippy three-wheeler Tu k Tu k s r e ce n t l y took camera crews , provincial, local and nat ional digni tar ies on site visits around Ma l i b o n gwe R i d g e development , North West of Johannesburg. All guests then joined in the celebrations to honour World Habitat Day with the Itsoseng informal residents at Malibongwe Ridge.

H eld in October, the ‘Born with Dignity’ event honouredWorld Habitat Day, held during Oc- tober, and it was an opportunity for Codevco, a subsidiary of JSE-listed Basil Read, to conduct site visits as Phase One of the innovative housing development nears completion. The innovative Gauteng Depart- ment of Local Government and Hous- ing and the City of Johannesburg project is located 20 km from the CBD and borders Cosmo City. Codevco, the implementing arm for the City of Jo- hannesburg, will provide 489 serviced stands and 486 houses in Phase One. The development will create 11 100 job opportunities in an economically distressed environment. Skills devel- opment in construction and entre- preneurial programmes will improve the community’s employability, and 5 600 jobs post construction. Of the 164 ha site, 112 ha is developed. The

scope of the work includes 3 510 fully subsidised houses, 646 Finance Linked Individual Subsidy Programme units, 464 fully bonded units and 894 high density residential units – a total of 5 514 units. Four sites have been zoned for urban agriculture. The City of Johannesburg De- partment of Development Planning Strategic Advisor, Bongani Nkosi said, “There is a huge appetite for housing developments close to economic activity and it was important for the city to play a big role in ensuring that housing needs in this area being met. The Department is the custodian of planning throughout the city.” He added that the city has spent over R500 million to ensure that people receive decent housing. These housing developments are meant to improve the lives of the people in these communities and this includes providing schools and

November 2015

Housing

clinics like the amenities at Cosmo City. Joburg’s first pilot proj-

clearly evi- dent in Phase One of the project and is seen by the high level of services and quality of workmanship. The 486 fully Subsidised Housing Units in Phase One should be complete and occupied by March 2016.” The Development Agreement was signed in March 2010 and the Town- ship Application Approved during October 2011. Urban Dynamics spe- cialists in strategic and regional urban planning assisted with the creative design and layout of the project. Mali- bongwe Ridge broke ground in July 2012 and the duration of the devel- opment is approximately 40 months. Malibongwe Ridge is an extension to the Cosmo City Development. 54 ha of the 164 ha had to be developed and formed part of Cosmo City. The 489 fully subsidised stands

ect for integrated human settlements. “We want to see this happen at Mali- bongwe Ridge.” Nkosi addressed the strain onmunicipal services as people relocate to urban areas, in search of work and a better life. “There are 320 000 informal dwellings in the City of Johannesburg and this requires immediate and long term strategies.” The City also aims to increase rental units and sustainable human settle- ments that create safe environments. “We must never forget that we have a moral and governance obligation to provide housing for the poor in our society. There is nothing more satis- fying than having affordable decent accommodation along transport routes within a safe healthy environ- ment that supports our culture and heritage,” said Nkosi. Adding that the City is proud to be associated with this initiative and for

beneficiary a n d a d -

dresses the dire shortage of accommodation in the area. Those who do not qualify for subsidised housing can rent a room from the home owner, thereby offering formal accommoda- tion. Malibongwe Ridge will formpart of the human settlements economic growth zone linking Lanseria Airport, Krugersdorp, Centurion and the Preto- ria economic Corridor. Stakeholders from

the people of Itsoseng the future looks bright. Brian Mulherron, General Manager, Basil Read comments, “Mali- bongwe Ridge was de- signed by the City of Jo- hannesburg, Gauteng Department of Human Settlements and Ba- sil Read to eradicate the existing informal settlement of Itsoseng. The development aims to provide housing for qualifying and non- qualifying beneficia- ries. The urban design

Eskom, the City of Jo- hannesburg and the Gauteng Department of Human Settlements listened to Codevco and members of the Malibongwe Ridge community, formerly known as Itsoseng share inspirational stories from the resi- dents and celebrate the houses that have already been con- structed. Codevco’s Develop-

includes social, commercial as well as urban agriculture, which will cre- ate additional job opportunities. The development and provides a safe, healthy and dignified living environ- ment that all its residentswill beproud of.” Mulherron explains, “The dedica- tion of the development partners, professional team and contractors is

in Phase One have been serviced by Basil Read and 486 houses built by subcontractor Toro Ya Africa. The unique duplex and single sto- rey design includes a house for each beneficiary plus the opportunity for the home owner to rent the two out- side rooms with separate facilities. This creates a viable income for the

ment Manager, Adam Masonganye added: “Malibongwe Ridge, similar to Basil Read/Codevco’s other suc- cessful developments Cosmo City and Savanna City in Gauteng, comprises integrated mixed-use housing for over 5 500 families as well as clinics, parks, schools, commercial and retail opportunities.” ■

November 2015

Housing

Rental market continues to perform

R ecent studies suggest that while the demand for afford- able housing is on the rise, affordability remains a barrier for millions of South Africans in this segment, resulting in renting increas- ingly becoming a more feasible op- tion than buying. According to the Centre for Affordable Housing South Africa, developers report that for every ten buyers they present to lenders for mortgage finance, two are declined for adverse credit track records and five are declined due to affordability constraints. As a result, only three of every 10 applications submitted are approved, making rentals an alter- nate option. In recognition of this increased demand, the Nedbank Affordable Housing division provided Rilamax, part of theRealgrowthGroup, funding for its ‘Midnight Valencia’ affordable housing rental development. “The single most important de- cision that a property developer makes in any endeavour, is the choice of financial partner for each project”, says Erika Sutton, CEOof the Realgrowth Group. “At Realgrowth, our brand promise seamlessly aligns with the Nedbank culture of ‘making things happen’. We believe in the integrity of the Nedbank brand, and decided to take handswith themfor the development of ‘Midnight Valencia’. Our specialisa- tion in affordable housing follows on from our intensive research into the

Nedbank Corporate and Investment Banking Affordable Housing division has granted a R62,3 million loan towards a new affordable housing development for rental stock in Centurion

employed in the vicinity as teachers, nurses, policemen and government employees. “As a financier to affordable hous- ing property developers, one of our mandates is to ensure that our cli- ents and their consumer needs are serviced andmet by consistently pro- viding agile solutions. This principle has been applied in the decision to provide financing for Midnight Va- lencia, a development that has been constructed and smartly designed to respond to the current market de- mands for affordable housing,” says Manie Annandale, Head of Affordable Housing at Nedbank Corporate and Investment Banking. Rilamax is 100% owned by Real- growth Developments and Midnight Valencia is the first development by the newly established entity. Annandale says: “Affordable home ownership is a critical driver of the economy and as such, we are proud to be associated with this property development. We also look forward to good returns for the development - not only in socially responsible terms but also in the economic sense with local government earmarking Cen- turion ‘African Gateway’, as one SA’s largest public-private partnership developments, in the near future.” ■

specific housing requirements of the young professional and indicated to us that this unique demographic group prefers spacious living units that are safe, easily accessible from main amenities and routes, with the popular ‘lock-up-and-go’ feature that consistently increases in demand. The company has managed to posi- tion itself well in this unique market sector by offering stylish, yet afford- able living space that caters for the young professional generation as they commence their ascent up the corporate ladder. And also for those that want to scale down due to the current economic crunch.” Located at 245 Basden Avenue, Lyttelton inCenturionand comprising of 224 rental units, these apartments are available for rental purposes and feature one bed and one bath as well as two bed and one bath units, with rentals ranging between R4 800 to R5 800 per month. Midnight Valencia comprises of 4-storey walk-up residential blocks, a design feature that is already gaining popularity within affordable rentals. Densification of the land available ensures cost efficient construction. It is also located in a prime position where rentals in the area are in high demand as many individuals are

November 2015

Housing

Accommodation for

accommodation in South Africa is in a dire state. The knock on effect of poor accommodation is directly linked to the high failure rate at universities; “By creating optimally designed residences, the pass rate can be in- creased from 60 to 80%. Simply put, by not providing adequate housing, we’re setting up our learners to fail. The ramifications are huge,” says Schooling. The problem for universities is that the cost of student accommodation is very expensive. Using green build- ing practices, STAG African is able to reduce building time by 40% and the costs associatedwith it dramatically. At universities, where cost ultimately is the deciding factor, sustainable, environmental building is an obvious economic choice. STAG’s commitment to green de- velopment is one of the company’s biggest advantages; “In the near future it will be the preferred way of building. Our aim is to be known as the most innovative green company in Africa, not just in the student ac- commodation sector, but for all our projects.” With this in mind, STAG is already developing skills in its local areas of operation to prepare for amore envi- ronmentally aware construction sec- tor; an initiative which fits perfectly within the company’s encompassing philosophy of enriching lives. “Not enough is being done at the moment to promote internal development through green skills and green jobs. We are committed

S TAG African is leading the way in the student accommodation sector. The company changed their company direction in 2008 due to the property crisis and recession. Managing Director and founder of the student accommodation group, STAG African, John Schooling said: “Developers were crashing right left and centre and we found ourselves in some serious trouble; we had to in- novate in order to survive. During that time we identified an opportunity to develop, build, operate and finance student residences.” With university budgets facing major constraints and cutbacks from national government, student

The growth of green building in South Africa trumps that of established sustainability building regions such as Europe, Australia, United States, United Arab Emirates, Singapore and Brazil. This was confirmed in a World Green Building Trends survey run by US-based McGraw-Hill Construction.

November 2015 March 2014

50 000 students Housing to creating unique skills in the use of new technology in the green building sector and have received a lot of sup- port from the Department of Higher Education and Training to do so,” says Schooling.

“We project around 6 700 employ- ment opportunities based on our current work scope, which will go a long way in addressing high unem- ployment rates and upskilling young job seekers with sustainable skills.” Over the next five years STAG Afri- can aims to roll out accommodation for 50 000 students. “We approach every development holistically and take the social, physical, financial, political and environmental impact of our proposal into account. We then apply our founding principal of developing green skills, for green jobs for a green economy,” said Schooling.

So far, expansion, outside of STAG African’s core South African op- erations has incorporated Mauri-

tius, Mozambique and Zambia, with Botswana, Madagascar and Namibia firmly in the pipeline. ■

Housing

Credit and mortgage advances

A ccording to Jacques du Toit, Property Analyst Absa Home Loans, “The further uptick in growth towards the end of Septem- ber from the preceding month came on the back of faster growth in house- hold secured credit balances, driven by higher growth in the component of mortgage balances. Growth in unsecured credit balances was some- what lower at end-September from end-August. He explains that growth in the value of household secured credit balances (R1 102,5 billion and 75,7% of total household credit balances) increased to 3,6% y/y at end-Sep- tember from 3,4% y/y at the end of August. This is drivenby faster growth in mortgage balances on the back of some base effects. Growth in instalment sales bal- ances, 22,1% of household secured balances and mainly related to ve- hicle finance, continued its declining trend to 3,3% y/y in the nine-month period up to the end of September, with growth at its lowest levels since July 2007. The downward trend

The first nine months of 2015 saw the value of outstanding credit balances in the South African household sector rise by 4,3% year-on-year (y/y).

growth from 3,5% y/y at end-August was to some extent due to the base effects of declining growth in the outstanding balances in August and September 2014, which continued up to October last year. The valueof outstandingmortgage balances is the net result of all prop- erty transactions related tomortgage loans, including additional capital amounts paid into mortgage ac- counts and extra monthly payments above normal mortgage repayments. Du Toit says, “Despite the recent slightly rising trend in year-on-year growth in household credit and mortgage balances, developments in and the outlook for the economy, household finances and consumer confidence will remain key driving factors of the demand for and growth in household credit in the rest of the year and in 2016.” He says, “Economic and em- ployment growth is set to remain relatively low over this period, with expected inflationary pressures to contribute to further interest rate hikes up to end-2016.” Du Toit says, “Should these ex- pectations materialise, consumer finances will be adversely affected. Against this background, growth in household credit balances, includ- ing mortgages, is forecast to stay in single-digit territory for the rest of the year and during next year.” ■

balances (R353,4 billion and 24,3% of total household credit balances) registered growth of 6,6% y/y at end-September, down from 6,8% y/y at the end of August. The slightly lower growth in unsecured balances came on the back of slower growth in the components of credit cards (down to 7,1% y/y from 7,4% y/y at end-August) and overdrafts (down to 8,8%y/y from10%y/y at end-August), whereas growth in general loans and advances remained unchanged at 6% y/yby end-September comparedwith end-August. Private sector mortgage balances, comprising commercial and resi- dential mortgages, recorded growth of 6% y/y at end-September com- pared with 5,3% y/y at the end of August this year. This was the result of higher growth in both above- mentioned components of private sector mortgage balances. The value of outstanding

in instalment sales balances growth r e m a i n s

household mortgage bal- ances increased to R855,8 billion in the nine-month period fromJanuary to September, s h o w i n g growth o f

f i r m l y in line with

newvehicle sales vol- umes which dropped by 4%y/y in the first ninemonths of the year. Household unsecured credit

3 , 8% y / y over this period. The further increase in mortgage balances

November 2015

Housing

Banks to invest billions in Agri-parks

R ural Development and Land Reform Minister, Gugile Nk- winti, says that the Banking Association of South Africa is to invest R1 billion every year in agri-parks to revive rural economies. This followed the Minister’s an- nouncement at the Economic Sec- tors, Employment and Infrastructure Development Cluster that govern- ment would contribute R2 billion to support rural economies and create industries in those areas. “The Banking Association of South Africa (BASA) will invest over the next 15 years, starting this year with R1 billion every year in land reform initiatives. This is encouraging andwe are working with them in developing amodel for agri-parks,” said Nkwinti. The Minister said the involvement of the banking sector will further give credibility to the agri-parks project as government aims to ensure that poor peoplework closer towhere they live, instead of migrating to bigger cities in search of economic opportunities.

Over the next 10 years, the country will have a very different rural com- munity, one which will stimulate economic growth, enterprises and industries. He added, “It also provides us with the opportunity to invest in the underdeveloped side of the economy. We want to spend more money in

44 rural districts, so that we can transform the economy in those areas, because it will provide job opportunities.” A total of 12 221 smallholder producers were supported through advisory services, training, technical support and infrastructure fromApril June 2015. ■

Assuring Quality Homes Since 1998 The NHBRC is a statutory body whose role is to protect the interests of housing consumers and to regulate the home building industry – in line with the Housing Consumers Measures Protection Act.

Toll Free Number: 0800 200 824 / Fraud Hotline 0800 203 698 / Webpage: www.nhbrc.gov.za / Tel: +27 11 317 0000

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18/09/2014 14:14

Housing

Single-digit growth in residential building activity

H owever, growth in activity levels in both the planning and construction phases of new housing remained largely seg- ment driven up to August, according to Jacques du Toit, Property Analyst Absa Home Loans. Year-on-year (y/y) growth in the number of new housing units for which building plans were approved came to 6,8%, with a total of just more than 41 000 units planned since January. This growth was largely driven by the segments for houses less than 80m² and flats and townhouses, with these two segments showing combined growth of 10,1% y/y to a total level of 29 855 units in the eight- month period. The volume of newly construct- ed housing units increased y/y to a total of more than 25 000 units between January and August this year. This growth was largely the result of a relatively strong im- provement of 14,5% y/y in new houses built, to an overall total of 18 028 units. The number of new apart- ments and townhouses built dropped by 8,1% y/y in the eight- month period. However, apart- ments and townhouse develop- ments normally take quite some time to complete as a result of the extent of construction activity, with growth of almost 10% y/y in the planning phase. The average cost per squaremetre of new housing built came to an av- erage of R6 055 in the eight months to August, which was 5,3% higher than in the corresponding period last year. Building costs per square metre were as follows in the various segments of housing in January to August this year: • Houses of <80m²: R3 844, up by 11,2% y/y • Houses of ≥80m²: R6 301, up by 4,1% y/y • Flats and townhouses: R6 921, up by 8,3% y/y Residential building activity will con- tinue to be driven by trends in and prospects for the macro economy (economic and employment growth,

Building activity with regard to new private sector-financed housing in South Africa continued to grow at single digits in the first eight months of 2015 compared with the corresponding period in 2014, based on data publishedby Statistics South Africa.

inflation, interest rates), household finances (income, savings, debt, cred- it-risk profiles) and confidence levels (consumer and building confidence). Du Toit says that these factors, together with aspects such as build- ing costs, the process of property

rezoning where applicable, the avail- ability of municipal services and the extent of the planning and construc- tion phases, eventually affect new housing demand and supply trends, as well as the timing and timespan of building activity. ■

November 2015

WE ATTACH IMPORTANCE TO PERFECTION

Saint-Gobain’s mobile onsite facility

„We ship German quality and best machinery“

JensWätzlich Quality Control

With the growing need to facilitate onsite training and increase accessibility and technical support to the Saint-Gobain Gyproc product portfolio, the Gyproc technical team has developed a mobile wall and ceiling demonstration trailer.

TURN-KEY PRECAST CONCRETE PLANTS THE PREMIUM SUPPLIER FOR THE PRECAST CONCRETE INDUSTRY machines & installations

T he concept was de- veloped with the aim of supporting sales efforts and to assist in meet- ing the demand to be more accessible to their customer base. The mobile unit offers flexibility and can be sta- tioned on construction sites, in rural areas, at consultant’s offices, builder’s merchants, trade events and tertiary in- stitutions, to name but a few. The customised demon- stration station is not only visually impactful; it offers a range of benefits as an onsite training facility. It reduces any down time usually as- sociatedwith training awork force. Training can be done in areas much further afield than Gyproc’s formal train- ing facility, and many more contractors will have access to the training being offered.

The training further affords the professional team the as- surance that installationswill be carried out in accordance with Saint-Gobain Gyproc’s standards. The unit was recently un- veiled at the University of Pretoria where a class of sec- ond year architectural stu- dents attended a two hour demonstration on dry wall- ing and ceiling installations. Onsite training took place at the Eldoraigne Retirement Village development, who invited Saint-Gobain Gyproc to demonstrate the installa- tion of their ceiling systems, which had been specified. To book the Saint-Gobain Gyproc mobile unit or train- ing, contact Pravashan Nai- doo on 082 319 7940 or email Pravashan.Naidoo@saint- gobain.com ■

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Cement & Concrete

W ith the state of the art weiler GmbH plant design and pro- duction equipment supplied by weiler to Grupo Perse, the Mexican plant is now producing dry-mix hol- low core pre-stressed slabs and pan- els in cycles as low as six hours, at a direct cost per m² 28% below that of wet-mix slip-formed slabs also being produced on site. Along with lower production costs and a profitable production solution, theweiler dry-mix extruded slabs and panels have compressive strengths 70% higher (75 MPa versus 44 MPa) than similar wet-cast products, re- sulting in lighter and stronger floor and wall elements, capable of higher loads and longer spans. Perse, Mexico’s fastest growing precaster serving the industrial and commercial building market, with full precast production and erection capability, has set ambitious goals for continued expansion. With projects in various regions of Mexico and op- portunities to expand internationally, Perse is relying on advanced precast solutions offered by weiler to realise In order to meet the need for high volume, low cost precast production of flooring and walls, Grupo Perse (Mexico) is increasing production with a new weiler extruder factory capable of 1680 m² of hollow core pre-stressed slabs and panels per day, using only four production beds.

Precast

their objectives. Commissioned in late 2013, a new factory hall construc- tion using weiler drawings began in 2014, equipment arrived four months later. By 2014 the new hall was com- plete, with all equipment installed and running. Fully operational since January 2015, the factory is meeting expectations for low cost, high vol- ume precast production. In 2013, faced with an existing slip former factory with limited produc- tion capacity, Perse met with repre- sentatives of weiler, Gau-Algesheim, todiscuss advancedprecast solutions for a new production hall. The main limitations of the existing slip plant were low production capacity and high costs per m² of flooring and walls. Production cycle times were over 30 hours total, including four hours to cast each bed and up to 24 hours curing, with slow concrete delivery and labour intensive processes. The need for admixtures and high cement content in the concrete mix contrib- uted to higher material costs for the wet-mix products. weiler engineers presented nu- merous solutions to address pro- duction and cost issues. Beside the machinery for the production of the concrete parts, the order also included a batching andmixing plant connected to a concrete distribution

November 2015