AFHCO - Dec 2019

AFHCO

AFHCO

Real Solutions

to Johannesburg’s Housing Crisis PRODUCTION: William Denstone

Since its founding in 1996 Afhco has remained the leading developer and investor in affordable housing and commercial property in the Johannesburg inner-city. Numerous factors such as the shortage of suitable affordable housing, growing disposable income in the emerging market and changing population demographics present unique opportunities as it looks to spread its reach throughout Sub-Saharan Africa.

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The lack of affordable housing in South Africa is a well-documented problem; at the close of 2018 fin24 reported that the housing backlog stood at 2.3 million houses, a figure growing by around 178,000 houses each year. Despite various schemes and initiatives neither the public both the formal private sector continue to have difficulty in closing this gap.

The protests over housing shortages in Gauteng, South Africa’s richest province and economic hub, will live long in the memory, and succeeded in putting the spotlight on a problem which can see people languishing on housing waiting lists for many years.

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INNOVATION IS KEY South Africa’s mass housing programme has been hugely successful since democracy in 1994 in terms of the number of houses built: the Reconstruction and Development Programme has seen nearly four million “housing opportunities” – serviced stands, houses or social housing units – supplied. What has yet to be addressed is the issues arising from the supply of houses being unable to keep up with the increase in demand in urban areas.

“The government’s approach,” wrote The Conversation in 2017, “has given rise to rows upon rows of ‘one-size-fits all’ houses located at the periphery of cities, far from work opportunities and services, reinforcing

apartheid’s spatial patterns.

“While it’s acknowledged that the country must think beyond free houses, and that sustainable human settlements must include socio-cultural amenities and jobs, not much has been done to make this a reality.” Johannesburg’s inner-city area is a prime example of somewhere whose deficit needs urgent attention. Huge demand for accommodation from all sectors of society is not met with sustainable and quality supply, pushing prices up and leaving many in need.

“Less known are the innovative approaches emerging in the rental housing space, and particularly in townships,” remarked fin24, “where property entrepreneurs are quietly

Jeppe Street PO

INDUSTRY FOCUS: PROPERTY

getting on with the business of building houses for people who need a roof over their heads – often with minimal support from financial institutions, investors and the formal real estate sector.”

Afhco has been one of the firms leading this charge in South Africa, whose formation was driven in large part by a desire to do something about this grave, and worsening, situation.

It has been working to deliver an affordable, safe, quality lifestyle to

// TOGETHER WITH SACORP, THE GROUP WILL CONTINUE TO DEVELOP AND ACQUIRE SUITABLE BUILDINGS //

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Johannesburg’s inner-city for more than 20 years now, since its establishment by entrepreneur Wayne Plit back in 1996.

From identifying profitable emerging trends in Johannesburg to expertly managing over 8000 residential and commercial property units, Afhco’s residential units are stylish but affordable and its retail space provides opportunities for a range of commercial traders.

BRINGING ABOUT CHANGE The stock of empty buildings left in Johannesburg in the wake of the 1994 election looked to Wayne Plit like a perfect starting point in solving the housing shortage.

He acquired some buildings and existing residential stock, repurposed and refurbished them into quality residential space and began selling units to end users who were unable to obtain finance from banks for the

purchase of property in the inner-city.

“There were so many vacant buildings in the inner-city, which was essentially the business hub of South Africa, and some had become hijacked and others had fallen into a state of disrepair,” Afhco Property Management Managing Director, Kevin van den Heever, told us last year.

“In the early 2000s, Plit started the first conversion from open commercial to residential, a building called Castle Mansions. That is what started the trajectory of the business to where it has ended up today.”

Today, Afhco transforms old, unused, derelict and even destitute buildings that blight the landscape of Johannesburg into quality rental accommodation. These are of a higher quality than almost every other company operating in the inner-city, van den Heever explained.

“We like to think our newer units

AFHCO

Somkhanda Projects Proudly supporting Afhco Contact Elvis or Paul Gumbi on 083 210 8841 or email: somkhandaprojects7@gmail.com

// OUR NEWER UNITS ARE A CUT ABOVE WHAT MOST PLAYERS DO IN THE INNER-CITY // are a cut above what most players do in the inner-city. There are many new entrants in the market who have a certain amount of capital for projects and it just isn’t the same level as us. Our buildings often have more amenities and we are looking at putting in free Wi-Fi where others could not afford to do this.”

TANGIBLE EFFECTS The impact that Afhco’s endeavours have had on the housing backlog is tangible.

“As we sit today, we have approximately 6500 rental units in the

Johannesburg CBD and a further 2500 in suburban areas, mainly in Gauteng but we do have other assets in Cape Town and the mining town of Steelpoort,” said van den Heever.

The company’s influence does not stop there, however. The latest demonstration of its strong sense of social responsibility is in collaboration with Sowetan and Sunday World, to award one undergraduate a R50,000 bursary, paid directly to either University of Johannesburg or Wits University and wiping the recipient’s accommodation bills.

“A strategic imperative of Afhco has been social upliftment, community development and inner-city regeneration,” the company finishes, and this translates both the people and property. “The Afhco Group is extremely optimistic about the ongoing growth of

its market and its ability to fund future expansion throughout South Africa and Sub-Saharan Africa,” it continues of what is next for the pioneers.

“The Afhco Group was acquired in July 2014 by SA Corporate Retail, a Real Estate Investment Trust listed on the JSE. Together with SACORP, the Group will continue to develop and acquire suitable buildings. The underlying foundation of the Afhco business philosophy is that morality, ethics and empathy do not detract from doing good business.”

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December 2019

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