Housing in Southern Africa 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