INFRASTRUCTURE & DEVELOPMENT January / February 2014 // Issue: 44
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Ringing in the New Year With a new year comes new things and 2014 bears no exception.
n our first cover for 2014 is the South African Affordable Residential Developers Association, whose efforts have recently been resurrected, and which is poised to tackle issues related to affordable housing delivery going forward. SAARDA is motivated to become the voice, as well as an organisation offering support to stakeholders in the affordable housing industry, “and to ultimately provide not only environments for communities to thrive, but also to stimulate the local economy and social growth.” The organisation plans to focus on the resolution of a number of challenges associated with affordable housing property development, including the standard of services, building regulations regarding energy efficiency, and water affairs, among others.
This issue highlights the association, as well as a number of SAARDA members and their unique expertise. Among the members showcased in this issue are RBA Homes, Van Staden & Booysen Attorneys, e-Home Loans and Molefi Development Properties, who represent a broad spectrum of industries involved the in the chain of affordable housing delivery in South Africa. We, at the SA Affordable Housing magazine, wish SAARDA and their members all the best with their future endeavours, and all our loyal readers and advertisers an inspiring and prosperous year ahead. Welcome to the Jan/Feb issue of SA Affordable Housing magazine. Enjoy the read. Jen
Infraconsult Engineering cc is a Professional Engineering Consulting ﬁrm established in Germiston, more than 26 years ago (1984). Infraconsult Engineering specialize in the design and construction management of Civil Engineering / Municipal Engineering Services (i.e. water, sanitation, roads, transportation, stormwater) for existing and new residential developments. Infraconsult Engineering is also a preferred Civil Engineering Consultant by most private property developers who specialize in affordable housing developments. Mr. Monro Jansen is the Managing Director of Infraconsult Engineering. Mr. Jansen is a professional civil engineer with extensive experience in the design and project management of small to very large civil engineering services projects.
Monro Jansen, MD of Infraconsult Engineering
He has a Masters Degree (Cum Laude) in Engineering Management with the University of Johannesburg.
Tel: 011 873 8126/ 7 /8 Fax: 011 873 0674 Email: firstname.lastname@example.org Web: www.infraconsult.co.za
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SAARDA back in operation The South African Affordable Residential Developers Association has been resurrected to tackle some tough challenges in the housing sector.
AARDA is an association for developers and stakeholders, including attorneys, town planners, engineers, contractors, estate agents and mortgage originators in the affordable housing sector who provide the majority of affordable housing in the current residential market. These members are motivated to undertake and resolve challenges that lay before them as a collective to provide the current shortfall of 400 000 housing units in Gauteng alone. The association aims to address issues of concern on a collective basis. According to Harry Gey van Pittius, Chairman of SAARDA, â€œAs a developing nation, our environment is changing and evolving at an alarming rate and together with this extraordinary evolution, snags and challenges arise. Together, the members of SAARDA aim to facilitate necessary changes to the housing delivery sector, to improve relationships with governance, to provide the best product possible for buyers and to step up production.â€? SAARDA has a single goal to be the voice and support body for the stakeholders in the affordable housing network, and to ultimately provide not only environments for communities to thrive, but also to stimulate the local economy and social growth.
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SAARDA plans to represent its members in negotiations and sector dialogues with a range of stakeholders, including local and national government, the NHBRC, Department of Water Affairs, GDARD and Eskom. Financial institutions represent the sectorâ€™s biggest allies and SAARDA aims to strengthen the relationship between the five major financial institutions and the affordable housing developers, for both development finance and end-user finance. Through the increased support from these institutions, stakeholders in the housing sector can work together to innovate and increase production and quality. These innovations have been long outstanding, and although they are challenging, they are being embraced be the industry sectors. These innovations range from an improved variety of products for home buyers, making more South Africans eligible for home ownership, to technological innovations ranging from online borrower education and energy-friendly solar products. By far the largest challenge is the cornucopia of channels and regulations needed to deal with when working with multiple municipal/governmental organisations and departments.
SAARDA WANTS TO CONCENTRATE ON RESOLVING THE FOLLOWING MAJOR PROBLEMS: STANDARD OF SERVICES The Red Book: In 2005 the Minister of Housing, Ms. MthembiMahanyele, issued two volumes of the Guidelines for Human Settlement Planning and Design. This document, referred to as the “Red Book,” is viewed as the industry standard and provides detailed guidelines for the installation of infrastructure.
Windmill Park Ext 12.
Currently, local authorities are not implementing these standards and have neglected the importance of such an industry reference used by all the stakeholders involved. In some cases, expectations and regulations from authorities do not reflect established engineering and design principals. It is of vital importance that a standard be adopted by all authorities in regards to all facets outlined in the “Red Book.” In addition to these standards, bulk service contributions have become a heated topic, as they represent a regular matter of dispute with local authorities. SAARDA aims to get clarification on the specific details of these contributions and what channels currently exist to dispute these unreasonable payments.
THE NEW SANS 10400-XA BUILDING REGULATIONS Windmill Park Ext 12.
SAARDA does support efforts to reduce the energy crisis in South Africa, but many parts of the new regulations are not viewed as relevant standards for affordable housing. SAARDA believes that a greater effort needs to be made by government to assist home buyers directly; subsidies will assist, but increased costs will only make it more difficult for the industry to remain sustainable.
ESKOM Implementing electrical planning alongside Eskom is resulting in much difficulty, which is causing strain on the feasibility of housing projects. Eskom’s present aspirations to implement underground reticulation will not only escalate costs on new projects, but also unnecessarily add costly additions to existing networks. Protea Glen Ext. 16.
Eskom standards and parameters should also correlate with the “Red Book” to ensure broadly accepted practices to avoid unnecessary disputes and costly design changes. To ensure a realistic and feasible program going forward, it is vital that the design parameters for each project be approved by the Technical Evaluation Forum in consultation with the developer. After the approval of these parameters, amendments must be avoided, as they have great economical and infrastructural consequences. It is also vital to establish an appropriate material and equipment standard related to the Method of Reticulation to manage and minimise installation and vandalism costs, as copper theft is commonplace. Developers find it unfeasible to maintain these networks for long periods, until Eskom takes ownership, due to maintenance and wide spread vandalism.
Protea Glen Ext. 28.
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According to the National Housing Consumers Protection Measures Act, the composition of the council has to include representatives of the homebuilders. Currently, no such representatives are on the council. SAARDA aims to involve itself on the council to introduce issues such as: Reimbursement of a portion of the fees after 5 years, NHBRC processing time limits (for example registration of projects and issuing of certificates) and also many NHBRC functions seem to have replaced basic responsibilities by local authorities, creating confusion and conflict of jurisdiction.
SAARDA will try and resolve the implementation of the National Water Act, No 36 of 1998, specifically the issuing of water licenses, the process and time limit. Currently, this process is taking up to two years to resolve.
According to new requirements published in table 1 of SANS 1936-2:2012, the Council of Geoscience requires additional boreholes to be drilled for new developments. After consultation with the NHBRC, it came to light that developers are required to drill the additional boreholes on existing developments before a B4 certificate can be issued for enrolment. The resulting challenge is that services have already been installed and house construction started on many existing projects. It is SAARDAâ€™s opinion that it is unreasonable for the NHBRC to withhold enrolments due to these requirements, as townships have been approved prior to the new condition in the SANS 1936.
Sustainability is key to the longevity of this industry. Many challenges arise, which can be resolved by rational solutions. Together, SAARDA can make sure the reduction of the housing deficit in South Africa stays a feasible priority.
SAARDAâ€™s proposal is to have all stakeholders, authorities and councils use a uniform reference to ensure a successful and a sustainable industry. Although mainly focused in Gauteng and with a small footprint in Mpumalanga, they will gradually expand on a national basis.
SAARDA plans to honour its members in their efforts to improve the industry mechanisms at an annual award ceremony, which will form part of a conference at which SAARDA members can celebrate industry improvements and also alter their goals as our unique country evolves and grows.
FOR MORE INFORMATION AND TO APPLY FOR MEMBERSHIP, CONTACT:
SAARDA wants to negotiate with GDARD regarding the process and time limit regarding applications to this department to try and resolve the enormous delays.
(t) 011 607 8013 (e) email@example.com (w) www.saarda.co.za
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Celebrating 71 years in business Kiron, a successful South African development company specialising in the affordable housing sector, focusing on GAP/charter housing, creates housing stock for monthly income earners between R3 500 and R18 000.
iron is proud to be celebrating its 71st year in business and attributes its success to the fact that the company always strives to guarantee a high standard of professionalism and quality, building communities and providing homes for generations to come. Kiron has developed more than 100 000 housing units to date and can state that it will always provide quality homes at competitive prices, ensuring that high capital growth is sustained. This is evidenced by Protea Glen Ext.16, developed in 2006 over a period of 24 months – a project that consists of 3 033 homes. Initially selling at around R160 000 for a three-bedroom unit, market value has increased with more than 150% in the first five years, with houses currently reselling around R380 000, hence the area’s nomination as the fastest for capital growth of affordable housing. More recent developments in which Kiron has also shown its exceptional development expertise include Windmill Park Ext.12, 16 & 17, Mahube Valley Ext.24, Roodekop and Protea Glen Ext.28. These accomplishments are not manifested overnight and standing at the helm of Kiron, situated in Bedfordview, is the CEO, Harry Gey van Pittius and Michael Page, heading
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the operational requirements of the organisation. Michael joined the affordable housing sector in the early 1990s and formed part of an elite group of developers who enrolled the first 1 000 houses with the NHBRC. His additional involvement in the financial services sector for six years, developing housing finance products aimed specifically towards the affordable housing market, managing debtors’ books in the same segment and leading national sales teams, contributes to their success. With more than 50 years’ combined experience in the affordable housing market, they are confident that Kiron will remain one of the major role players in this market for years to come. Their success is also brought about by the vibrant professional personnel base and involvement from various financial institutions. Some have brought exciting new loan products to the market, and very close working relationships with local authorities, especially in Gauteng, and the NHBRC helps ensure that high standards and quality are sustained. Kiron is also an active member of the South African Affordable Residential Developers Association (SAARDA), with Harry Gey van Pittius as current elected Chairman.
This development is situated within a secure estate and land has also been earmarked for a school. Selling prices currently range from R295 900 for a two-bedroom 45m² unit to R309 900 for a three-bedroom 55m² unit and FLISP subsidies are available for qualifying clients. Furthermore, the secure estate is also comprised of an additional 830 units already constructed with a mix of ownership and tenancy. Rental stock is specifically earmarked for low- to middle-income earners and depending on the sizes of the unit, monthly rental averages around R3 000 per month. Kiron has also launched Protea Glen Ext. 22 with a project value in excess of R360m. This project will consist of 940 free hold homes and prospective buyers have the option between three house sizes (45m², 55m²and 67m²) with an option of a gable or hip roof style. These homes will be sold from R320 000 up to R405 000. The project is situated close to all amenities, including the new Glen Ridge Shopping Centre situated in Protea Glen Ext. 16. It has always been Kiron’s philosophy to strive to provide not just a house or an apartment, but a home.
The Windmill Park Ext 12 development. Recent changes in legislation enforcing the application of energy saving methods to be incorporated into newly constructed homes have been a tremendous challenge, due to the additional costs involved, which ultimately raise selling prices for which Michael Page from Kiron Pty Ltd. prospective purchasers will ultimately pay. Kiron has managed to implement these new methods successfully and cost effectively and all new homes have been certified as ‘eco-friendly’ and compliant by local authorities. Kiron is currently delivering between 1 000 and 1 200 homes per year and with the current upward trend and stability in the market, they will hopefully increase delivery in the next six to twelve months to around 2 000 houses per annum. Although the South African market did not experience the full effect of the downward spiral of the world economy in 2008, it has taken a number of years to recover and to ride out this cycle. Kiron is currently developing in Windmill Park Ext. 12 phase 3, which consists of 850 free hold units and 136 sectional title units with an estimated project value of R320m.
FOR MORE INFORMATION, CONTACT: (t) 011 607 8000 (e) firstname.lastname@example.org (w) www.kironprop.co.za
WHAT IS A HOME? Kiron believes that a home is more than a roof, four walls and floors, to keep out the rain, wind and cold. For them, a home is a baby’s laughter, a mother’s song, a father’s strength. A home represents warmth, light, kindness, loyalty and comradeship. Home is first school and church for young ones, where they learn what is right, what is good and what is kind and where they go for comfort when they are hurt or sick. A home is where joy is shared and sorrow eased; where fathers and mothers are respected and loved and where children are wanted. A home is where the simplest food is good enough for kings, because it is earned, where money is not as important as kindness and where even the tea kettle sings from happiness. That is a home.
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JFS Group Changing the affordable housing landscape in Gauteng
A JFS house in Cosmo City.
hen driving towards the north of the city on Malibongwe Drive, JFS Housing’s mark is clearly visible as the Cosmo City development catches your eye. JFS recently completed the Cosmo City integrated housing project when it handed over the last of the 3 000 partially subsidised houses of the project. While there are no open stands remaining for free-standing houses, stands zoned for high-density apartments are still available. Development of these apartments will commence shortly. 51 free-standing JFS sectional title units (“Sonwaba”) also span the Cosmo City landscape. After the successful development of these units, the company is planning a second complex of sectional title apartments.
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These units offer owners high-level finishes, raked ceilings with exposed roof beams and exceptional security. JFS CEO, Peter Hofmeyr, is particularly positive about the affordable housing market and is excited about the group’s pipeline for the new year. New projects in Benoni and Midrand, maturing in 2014, will enhance the group’s current portfolio of stock. JFS has completed cluster housing projects, student accommodation, sectional title apartments, industrial townships, affordable housing townships (over 15 000 stands to date) and RDP townships (close on 12 000 stands).
Homes in Cosmo City Ext 10. The company is currently marketing stands on seven developed projects, serving the west, east, north and south of Gauteng and parts of Mpumalanga. In addition, JFSâ€™ subsidiary, Homes For All, markets and constructs bonded house packages in the same affordable market.
Above and below: Sectional title project in Cosmo City
JFSâ€™ core business is the development of serviced stands which are either sold or allocated to top structure developers. The majority of JFS clients are emerging developers who rely on stand developers, such as JFS, to empower them to provide housing opportunities and to ensure the sustainability of their businesses. In an effort to give back to the community, JFS have launched a CSR (Corporate Social Responsibility) programme. The company has been involved in the Santa Shoebox programme, the sponsorship of a soccer team and outreach efforts to community groups and schools in Cosmo City. Although the number of developers has grown significantly as a result of the high demand for affordable housing, it is becoming increasingly difficult to supply stands to the market as a result of over-extended bulk services and a shortage of appropriate skills at a number of the local authorities. These shortcomings hinder the provision of affordable home ownership in South Africa.
For more information, contact 011 326 0820 or visit us at www.jfs.co.za and www.homesforall.co.za.
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Molefi Properties Creating futures
Molefi Properties has a proud history of building quality affordable homes. We are passionate about building futures for our buyers and our staff.
ith a history of leadership and management of many construction projects in Gauteng over the last 22 years, Boetie Moses Molefi has much experience in this field.
preparation, road construction, services installation, including stormwater drains, water and sewerage. As such, we service all our own sites, as well as offer competitive services to fellow developers and tenders.
The company, Molefi Properties, is uniquely positioned as one of the few 100% black-owned property development companies with a successful history of housing and construction projects throughout Gauteng. These include Lakeside 1, 2 and 3, Vosloorus Extension 21 and 31, Sebokeng Extension 21. Molefi Properties Developers (Pty) Ltd was established in 1999, with its offices in Parktown, Johannesburg. Molefi Properties is an NHBRC accredited Developer operating mainly in Gauteng and active in all aspects of Housing and Shopping centre development. We have a team of able professionals who collectively have years of experience in the property development industry, including project managers, town planners and building and construction specialists. We have our own civils division that is certified with necessary CIDB ratings. With our range of earth-moving equipment and qualified staff, we have a solid history of site
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While we have many exciting projects in the pipeline, our current projects under construction include Kgorong Estate in Protea Glen, Moagi Estate in Vosloorus ext 23 and West Side Park in Sebokeng ext 21. Kgorong Estate is a secure estate offering modern style accommodation of 282 apartments. Double-storey units offer options of ground floor or upstairs apartments. These include two bedrooms, a lounge and dining area with builtin kitchen, bathroom and a separate toilet. This walled estate with a single secure entrance and exit borders a greenbelt and is conveniently close to schools, Protea Glen Mall and major transport routes.
Moagi Estate is unique as the first secure residential estate in the heart of Vosloorus. Housing 100 full title houses, with three and four bedroomed options for sale. All houses are double storey design, with options of master bedroom and en-suite bathroom or loft room living areas upstairs. Both options lead onto the upstairs balcony area. Covered patios below, adjoin the lounges, further extending the useful living space. The development is close to schools, the major transport routes and situated between Spruitview shopping centre and Chris Hani Crossing.
FOR FURTHER DETAILS CONTACT: (t) 011 484 7136 (e) email@example.com (w) www.molefiproperties.co.za
We view every challenge as an opportunity!
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The client at the centre RBA is a property developer that places people at the heart of everything it does. We understand the emotional leap towards home ownership and firmly believe that a fully informed client becomes a satisfied home owner. This means that we ensure that first-time home owners enter the market with all the facts at their fingertips. Through personal interaction with buyers, we familiarise clients with the steps towards property ownership and the benefits that home ownership creates.
BA’s slogan – “We’ll do more for you” – is the core around which we have structured our business. In addition to educating our clients on home ownership, we are endeavouring to provide our clients with “more” during the entire property purchasing process. This includes: providing clients with free education-based seminars that empower buyers with the information to make the right choice; a website packed with consumer-oriented information; a call-centre dedicated to always being there for our clients and an after-sales team to make the journey towards gaining the benefits of home ownership as smooth as possible. We are committed to making the process as seamless as possible for our clients by taking the frustration out of building and by providing personal service. Featured is one of RBA’s flagship developments, Kirkney Village, situated west of Pretoria. This fast-growing suburb is only 20 minutes’ drive from the CBD.
THE FUTURE OF KIRKNEY VILLAGE Ideally situated to cater for the high demand that exists amongst the fast-growing middle class population, there are already more than 200 families who call this vibrant area home. The current phase of 170 stands is 50% sold.
Future phases are set to bring the number of homes available in the development to over 1 700. With its convenient location for commuters, rapidly developing infrastructure and attractive homes finished to a high standard, Kirkney is set to become highly sought-after among the house-hunters who to live in a new residential community.
OTHER PROJECTS In addition to Kirkney Village, RBA has seven active projects, with two new projects being launched early in 2014. We are committed to making the process towards benefitting from home ownership as seamless as possible by taking the frustration out of building and by providing personal service to each of our clients.
"To assist clients in deciding what size home to purchase, and to give them an idea of what will fit into their new future homes, Kirkney Village has a fully furnished show-house with client service representatives available to answer questions and provide more information."– AJ Rothman, CEO of RBA Homes JANUARY / FEBRUARY 2014
Saints Branding BRD001
Basil Read Developments, building neighbourhoods.
In Africa, the need for effective and affordable housing solutions has never been greater. That’s why, since it was established as a separate division in 2004, Basil Read Developments has dedicated itself to pioneering the design and construction of integrated, sustainable, mixed-income residential neighbourhoods that will nurture future generations. And Basil Read Developments’ track record speaks for itself. With several local and international awards to its credit, over 60 000 homes in development, and nearly 170 000 people under employment, the company is making a profound contribution towards realising the dream of quality housing for all. But the real socio-economic impact of Basil Read Developments goes beyond the provision of homes and jobs. By applying the knowledge gained during the construction of projects such as their ground-breaking Cosmo City complex, the company understands that the true value of their work is in building fully-functional neighbourhoods that will support the growth of healthy communities. This unique perspective is the guiding principle behind all of Basil Read Developments’ projects, including Phakisa Estate, Malibongwe Ridge, Garden Cities and especially their latest flagship project, Savanna City.
Singing of the national anthem at the launch of Savanna City.
Located about 35kms south of Johannesburg’s CBD, Savanna City will be one of the largest privately initiated urban developments in South Africa – creating an entirely ‘New Town’ with a healthy urban environment that offers its residents a nourishing and stable lifestyle. The scale of Savanna City is certainly impressive, with: 1462Ha of land under development 18400 integrated housing units 16 Education facilities 32 Institutional sites, including clinics, crèches and churches 9 Retail/Commercial sites Construction on Savanna City began in November 2013, and is scheduled to be completed over a 10 year period. Total development costs are estimated at over R24 billion, creating nearly 55 000 work opportunities. By building neighbourhoods, such as Savanna City, Basil Read Developments is quite literally changing the face of South Africa for the better. For more information, you can visit the website savanna-city.co.za or contact 086 SAVANNA (086 728 2662)
Soil Turning at Savanna City, 20 November 2013. Des Hughes (Basil Read) ; Midvaal Mayor Bongani Boloyi; Simon Maphalla Sedibeng Mayoral Committee ; Ward Councilor Modikeng; Premier Nomvula Mokonyane
Glenridge in Protea Glen – with more than 3 000 units – is another success story that proved market demand and the area continues to grow.
The South African affordable housing market shows great demand and growth prospective FNB’s Housing Finance division is going strong with around 20% growth in the market over the last financial year and a good outlook. The business division, which is 10 years old, has grown its loan book to close to R13 billion and recently reached its 10 year target of over a 100 000 units financed. “There is still an enormous amount to do in this market and we are confident that we will see good growth in our business and loan book in the years to come. There is very high demand in the affordable housing sector with an estimated million homes still needed and an average of only 20 000 units developed a year without taking into account future demand,” says Marius Marais, CEO of FNB Housing Finance. The business unit plans to finance the next 100 000 homes in half the time by 2018 and has made a commitment to fund approximately 6 000 new housing units to the value of R2bn over the next two years. These units will come from 40 developments that the bank has approved, consisting of a total of 12 000 units. The affordable housing market in South Africa is defined as households earning between R3 500 and R25 000.
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This market accounts for about 32% of the entire home loan market, requiring cost-effective, good quality housing up to R600 000. “We recently analysed the latest Census data and our analysis shows that the entire home loan market comprises of about 14 million households. Of this, 9 million households earn less than R3 500 per month and qualify for fully subsidised housing. Above this layer lies the affordable housing market, which, according to our research, comprises of around 4.5 million households, of which there is a demand for around a million new homes,” says Marais. On the demand side, there is a major need for innovation in financial products in this market, as the traditional mortgage loan financial product cannot be the only solution as it is in the higher end market.
“There is a strong need for more innovation and a holistic approach around alternative loan structures, such as pension backed loans, and unsecured home improvement loans, as well as government subsidies and employer support. We are looking into developing different ways of financing this market, combining a mix of these different financial options that can really serve this market’s housing needs,” says Marais.
We would like to see the whole market moving onto a fixed rate mechanism, which will protect the customer from rate increases in the future. Noteworthy to this market, the default rate is more stable than that of the traditional mortgage segment where household income is higher than R300 000 per annum,” says Marais.
On the supply side, it is essential to start building more units at the right price level to meet the market demand, Marais says. “Currently there is no supply of houses to a household earning between R3 500 and R9 000,” says Marais. We are in the process doing work around building specifications with players in the supply chain with a view of finding a lower priced design. This may also mean reducing the starter home size to below 40m².” FNB’s Housing Finance market, of which 96% are first-time homeowners, are most affected by issues of affordability and economic risks, such as interest rate increases, inflationary pressures and unemployment. “The bank can help with some of these risks and about 40% of our new loans are on a fixed rate basis.
The business unit’s work with Calgro in Fleurhof and Jabulani has indicated that high density housing developments are also viable. Together with developers, FNB Housing Finance is creating more options for the market all the time.
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Example of affordable housing in the Windmill Development in Benoni.
Over the last ten years the business has been looking at alternative building technologies that can potentially assist with affordability issues, as well as ease the housing backlog and also ensure buildings are completed quicker. FNB Housing Finance is also currently looking at projects that will release capital into the market, such as ways of using tribal land. It recently completed a pilot project, the first of its kind, with the Free Market Foundation and the Ngwatha Municipality in the Free State to provide 100 households in the municipality with fully tradable title deeds which enable the owners to use these homes as a vehicle to create wealth. “We are invested in the communities in South Africa to find non-traditional ways of providing for this market in new technologies, energy and ways of utilising land and homes as an asset,” says Marais. The affordable housing market has been identified in the rest of Africa as a growing market. FNB Housing Finance is starting to look at markets in countries in which it has operations to begin expanding its footprint. "After ten years FNB Housing Finance business is playing a leading role in the sector and we are looking forward to growing our business in South Africa and the rest of Africa in the near future," concluded Marais.
Marius Marais, CEO of FNB Housing Finance.
ADDITIONAL NOTES Smart Bond FNB Housing Finance provides 100% bonds with no deposit and an option for a five year fixed interest rate. There is also an opportunity to access additional funds by applying for a Smart Bond Re-advance or Smart Bond Further Loan.
SUCCESS STORIES: • Cosmo City in Gauteng is a case where the team really had an opportunity to work in multiple markets all in one place. The project included 15 000 units ranging from RDP to high-end homes – Cosmo City is one of the reference points in the country that proves that integrated developments can work. FNB Housing Finance roughly estimated that the first 1 000 families in Cosmo City who received finance have accumulated R100 million worth of wealth over the years.
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• Glenridge in Protea Glen – with more than 3 000 units – is another success story that proved market demand and the area continues to grow. • The business unit’s work with Calgro in Fleurhof and Jabulani has indicated that high density housing developments are also viable. Together with developers, FNB Housing Finance is creating more options for the market all the time.
eThekwini Municipality leads the way with sustainable buildings The eThekwini municipality leads by example when it comes to stateof-the-art green building, as demonstrated by the eThekwini Water and Sanitation (EWS) Customer Service centre in KE Masinga Avenue, developed by City Architects.
or this reason, Corobrik, which sees design innovation and green construction as long-term priorities, was proud to have played a part in this project, said Dirk Meyer, Managing Director of South Africa’s largest clay brick manufacturer. He said that Corobrik’s low embodied energy clay bricks – in this case 40 000 Firelight Satin and 1 500 Firelight Plinth Stretcher special shapes used as facings plus 70 000 Plaster Brick NFP as the backing brick – complemented both the overall design and specific features of the building.
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“Clay brick is extremely versatile and compatible with complementary green building methods and design fundamentals. Importantly, clay brick has mineral properties recognized for meeting all necessary requirements for healthy living, providing noise insulation and no release of toxic gases. Additionally, clay brick’s natural propensity to manage the sun’s energy and support superior indoor thermal comfort conditions means that clay brick structures are typically cooler in summer and warmer in winter,” he said.
Longer periods of thermal comfort associated with clay brick buildings minimize heating and cooling energy usage. Clay bricks are also re-usable and recyclable and through their durability and low maintenance qualities, help mitigate future carbon debt over a building’s lifecycle.
Green features include a UD (urine diversion) system using phosphates derived from urine from waterless urinals for processing into fertilizer and tanks that collect groundwater, rainwater from the roof and condensate from the air conditioning units for flushing toilets and irrigating plants.
City Architects’ Rob Johnson said the project brief was both specific and stringent. Not only was the customer service centre intended to provide customers with better facilities and waiting areas, but to illustrate what a carefully thought through ‘green’ building could achieve in a high density urban environment.
He said that ground floor construction method was conventional column and beam with PT slabs over the basement and public service facilities space. Non loadbearing brickwork encloses space on this level. To minimize the load on the columns, and then to the piles, the first floor is a lightweight structure consisting of corrugated sheeting externally, insulation, and drywall cladding internally. Steel portals span without further support between the external walls, affording uninterrupted office space.
He said that EWS had identified the site diagonally opposite its main building as ideal, not only because it facilitated pedestrian flow, but also formed part of the municipality’s greening programme between the Centrum site and the station. The centre now comprises a ground floor occupied by the customer service facility, which leads on to a covered piazza, radio dispatch and offices on first floor and a planted roof terrace that provides outdoor relief for the 24/7 radio dispatch staff.
To promote energy efficiency, a green canopy over the piazza pergola structure provides shade and reduces heat load at office windows, lowering power demand for mechanical cooling and making it possible to install large areas of glazing to provide lighting largely by natural means. The air conditioning system automatically shuts down in sections when demand drops.
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Construction on the first phase at Vanguard Residential Village, an Asrin and International Housing Solutions joint venture, started in September 2013 and completion of this phase and handovers are expected to begin in April 2014.
Construction under way at Asrin and International Housing Solutions’ Vanguard Residential Village in Heideveld Construction on the first phase at Vanguard Residential Village, an Asrin and International Housing Solutions joint venture, started in September 2013. Completion of this phase and handovers are expected in April 2014, says Shiraaz Hassan, commercial director for Asrin.
he first phase is a mix of freestanding homes and sectional title apartments, and only 10% of the 135 units are still available for sale, he said.
“We expect to be fully sold out at phase one by the end of February 2014,” said Hassan. “This project continues to be the only lifestyle development available within the affordable segment in this area.” Pam Golding Properties are handling the marketing of the project and they have a full time show office on site, he said. A large percentage of the purchasers at Vanguard Village thus far have been first time homebuyers, said Hassan, and owner-occupiers make up a very high percentage of buyers here, which they prefer. The higher the number of owners in a scheme, experience shows, the better the properties are maintained and the conduct rules adhered to. Owners tend to want to create the best living environment for themselves, he said. Units here are priced from R423 895 for a 45m² twobedroom apartment and R582 895 for a 60m² twobedroom house.
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“Full sell-out of most new developments like these,” said Hassan, “tend to take slightly longer, because of the large problem experienced by buyers in securing bonds. Although the demand is very high for affordable housing, the banks are extremely cautious, and we are finding that many buyers, who should be able to qualify for finance, are not successful in their bond applications.” “A concern is that with the credit amnesty coming into effect, most banks have become ‘risk averse’ in granting finance to first time owners, especially those applicants who benefited from the amnesty act,” he said. “The banks are dealing with a lot of ‘toxic debt’ dating back to 2009, and the credit amnesty would just add to their woes. However, we approach challenges like these with absolute optimism, every application will be driven by our team until we have satisfied ourselves that all efforts have been exhausted in procuring the required end user funding.” Asrin are not deterred by these factors and will work towards their goal of creating affordable housing opportunities in secure lifestyle developments, with no compromise on quality, said Hassan. “Sticking to the formula with which we have been successful for a long time makes sense, even if it seems challenging in the current economic climate.”
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CEMENT & CONCRETE
Three partially completed apartment blocks (background) at The William.
predominates at ‘The William’ Prestressed hollow-core slabs and concrete staircases are some of the precast concrete elements being used to construct 110 eight-unit apartment blocks at The William, a middle-income high-density residential development currently being constructed by Balwin Properties in northern Johannesburg. Other precast concrete products being used include bricks, paving blocks, retaining wall blocks, L beams and lintels.
ccording to Wally Armstrong, executive director of the Concrete Manufacturers Association (CMA), three of The William’s precast concrete suppliers were CMA members. Each apartment block comprises four storeys which include two three-bedroomed ground floor units, two twobedroom units on the first and second floors, and three one-bedroomed units on the third floor.
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The smallest one-bedroomed unit covers 40m² and the three-bedroomed units are 110m² each. “Precast concrete is what makes this type of development viable for us,” says Rodney Gray, managing director of Balwin Properties.
CEMENT & CONCRETE
“We operate in a very competitive environment and from the moment we move on site, the clock starts ticking. It is imperative that we maintain our programme to ensure we don’t overrun the budget and to ultimately ensure the financial viability of the project. “Using precast concrete elements assists us with this process in several ways, but maintaining the programme and ensuring quality are key factors. Take precast hollow-core flooring slabs by way of example; they offer fantastic quality and high standards of finish and far outweigh in-situ or beam-and-block flooring, which take weeks to complete. “Slabs, by contrast, require only a matter of hours to install. Thereafter, grouting and masonry work can begin almost immediately. Moreover, slabs come with a smooth soffit which can be painted.” Supplied by CMA member, Echo Prestress, the hollow-core slabs in use at The William vary between 3.5m and 6m in length and are supplied in three depths, 120mm, 150mm and 170mm. The depths were specified at the outset by the structural engineers, based on loading requirements.
Three precast concrete elements, bricks, staircases and hollow-core slabs are clearly visible in this stairwell.
A conventional precast concrete brick is being used at The William, which is supplied by CMA member, Savanna Brick and Paving. “Savanna maintains strict quality controls and delivers an extremely reliable product. We work to a minimum strength rating of 10MPa on our developments and we are averaging 12/13MPa with Savanna. “What we like in particular is that the Savanna bricks don’t vary in size. This means they are easy to lay and plaster. Some of the other brick suppliers we have used in the past have given us a product which varies in size and strength ratings.
Freshly laid concrete block pavers supplied by CMA member, Cast Industries.
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CEMENT & CONCRETE
Two of the completed blocks at The William.
â€œWe are also realising substantial time and cost savings on precast concrete staircases which are being supplied to us by Specialist Precast Erections (SPE). The concrete block pavers, which include a 60mm interlocking block and a 60mm bevelled block are being supplied by CMA member, Cast Industries. The latter are being used for the paths and decorative road edgings and the interlockers are being deployed on the roadways,â€? added Gray. The William is being built in six main phases. Construction began in May 2012 and the entire development is due for completion at the end of 2015. The professional team includes: Cimato Moroldo Architects Inc.; Kantey and Templer, civil and structural engineers; Topack Electrical (internal electrical); and Rawlins Wales and Partners (external electrical).
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Some recently installed prestressed hollow-core slabs, supplied by CMA member, Echo Prestress.
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CEMENT & CONCRETE
Concrete roads play an important role in infrastructural development, both large and small, says The Concrete Institute.
Life cycle costs vital for road-building decisions, says The Concrete Institute The initial investment cost of concrete roads compared with asphalt alternatives often misguidedly influences decision-makers in charge of infrastructural development, says Bryan Perrie, Managing Director of The Concrete Institute. 30
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CEMENT & CONCRETE
errie says considering mainly the initial costs of new suburban or national roads omits an important factor: the ultimate useful lifetime and maintenance required for such roads. “It is important to employ mathematical and probabilistic models that can assist decision-makers taking strategic long-term decisions of this kind in the context of budgetary restrictions,” he comments. The ‘Life-Cycle Cost Analysis’ (LCCA) assesses the longterm return of alternative investment options by taking into account of the total and final costs to both the road owner/manager and the road user. From the LCCA , an option can be sourced that has the lowest long-term cost – but still achieves the desired performance.
PERRIE SAYS TO ASSESS THE WHOLE-LIFE COSTS OF NEW ROADS, THE FOLLOWING FACTORS NEED TO BE TAKEN INTO ACCOUNT: • Construction costs, including agency costs for administering the project, consultants’ fees for design and supervision, and the contractor’s total costs; • Maintenance costs, including annual routine maintenance, periodic treatment, such as joint resealing and overlays; • Residual value: “One approach is to value the contribution the new road would make at the end of the analysis period to the next life cycle of the road,” Perrie explains; • Vehicle operating costs and normal travel time costs. These costs tend to increase as road condition deteriorates prior to major rehabilitation. The rate of increase will differ for different road types and strategies;
• Accident costs. “These should be taken into account where there are differences based on the type of road and maintenance strategies which may result in road deficiencies causing accidents,” he adds.
Perrie says one of the main problems with a deterministic approach to LCCA is that it uses single values for the inputs and calculates a single value for the output. “The American Federal Highway Administration’s new approach is to use a probabilistic-based risk analysis in road design, which incorporates the variability of each input by combining the variability of the individual inputs to generate a more probable LCC cost. The results then are not just one value, but a whole distribution on what possible values could be.” A similar approach has been used in formulating The Concrete Institute’s award-winning ‘cncPave’ mechanistic design procedure for concrete pavements, developed by the Cement & Concrete Institute. “The importance of using accurate maintenance costs in an LCC is illustrated in a rehabilitation contract on the N3 outside Pietermaritzburg for which an analysis of costs using concrete and asphalt alternatives as building material was made in 1984. The initial costs were based on the average of the three lowest tenders. In this analysis, the concrete road option was 18% more expensive than asphalt. Despite this, concrete was the selected option. Fifteen years later, a Present Worth of Costs (PWOC) analysis – incorporating the actual maintenance costs incurred on the road over the 15 years – showed that concrete was then only 1.3% more expensive. “This clearly illustrates the importance of employing accurate maintenance data when using life-cycle cost analyses to assess various road-building material options,” Perrie emphasises.
• Road-user delay costs caused by unavailability of the road; • Road construction delay costs. “Where the road is to be placed on an existing operational road alignment, there is usually some traffic disruption. If the road type chosen will affect the duration of the work, the increase in vehicle operating and travel time costs for each alternative should be estimated.”; • Road maintenance delay costs. Deciding on road alternatives that require frequent major maintenance, the road-user costs associated with this work may be significant; and
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WINDOWS & DOORS
Affordable, strong and eco-friendly Swartland’s new Kayo pre-sealed and pre-glazed hardwood windows offer consumers an unbeatable combination of quality and value for money. Cobus Lourens from leading wooden window and door manufacturer, Swartland, offers an overview on the latest addition to the company’s Kayo range.
ust because you are building within a tight budget, does not necessarily mean that you have to compromise on quality, beauty or being able to do your bit for the environment. Cobus Lourens from leading wooden window and door manufacturer, Swartland, says, “The new Kayo pre-sealed and pre-glazed hardwood windows from Swartland are really breaking new ground. Not only are these windows really affordable compared to other hardwood windows, but since Swartland manufactures them to world-class standards, they also offer supreme quality, durability and good looks that last. What’s more is that they are manufactured from timber, in a sustainable manner, which makes them an excellent choice for green building practices.”
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WHAT MAKES THEM SO SPECIAL? The Kayo pre-sealed and pre-glazed range of hardwood windows is incredibly affordable. The windows are presealed with Swartland’s Maxicare water-based sealant, and pre-glazed with 3mm glass before they leave the factory. As a result, when they arrive on site, they are immediately ready to be installed, with no further work required after installation. Cobus explains that with this new range, affordability does not necessarily mean substandard quality: “This range offers the construction industry a unique proposition that has been designed to increase the overall build quality of budget builds, as well as save construction companies time and money on installation and finishing.”
WINDOWS & DOORS
OFFERING SUPREME DURABILITY The new Kayo pre-sealed and pre-glazed hardwood windows have been manufactured with superior hardwood that has been specially kiln-dried in Swartland’s computer-operated kilns, so that it has a moisture content of 8%. “The 8% moisture content of our hardwood helps to minimise any natural movement and it ensures that the wood is able to withstand our unique African weather conditions,” explains Cobus. He says that this new range boasts thicker mullions to provide added strength and stability. The 3mm glazing and the new polyethylene weather seals help to better insulate the windows – keeping heat in and dust and drafts out. Improved fixing lugs have been added to make installation easier. The range is also pre-sealed with German-engineered Maxicare water-based sealant – which means that you don’t need to prime or paint the windows once they are installed, and it ensures that they will be protected from the elements when they arrive on site. Swartland is so confident about the quality and durability of the Kayo presealed and pre-glazed windows that it offers a full three-year manufacturer’s guarantee on all of the windows from this range. “Decades of experience, constant innovation and Swartland’s three-year Manufacturer’s Guarantee, ensures that your purchase will stand the test of time, and offer you peace of mind that you are investing in a quality product,” says Cobus.
A LOW MAINTENANCE SOLUTION The Maxicare sealant with which the windows are pre-sealed makes ongoing maintenance as simple and effortless as wash and wipe. Cobus explains, “Gone are the days when you need to laboriously sand wooden windows down in order to maintain them. Maxicare water-based sealant offers a unique Wash ‘n Wipe maintenance programme that requires no sanding at all. This unique concentrate maintenance kit allows you to restore and enhance your timber windows to their original state – simply wash down with water, apply the Cleaning Agent and remove, and then apply the Protective Emulsion to seal any fine cracks or blemishes. It’s as easy as 1-2-3.”
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WINDOWS & DOORS
A GREEN BUILDING SOLUTION Swartland’s Kayo pre-sealed and pre-glazed windows are made from superior hardwood that is harvested from sustainably managed forests – making this material a green and renewable resource. Wood also boasts a number of other benefits that make it an environmentally sustainable choice – compared to alternative building materials, the manufacturing of wooden building products produces less air and water pollution, the product requires less energy across its lifecycle, and generates less CO2 emissions. Cobus says, “Wood is a fantastically green building material – it is a sustainable material that boasts low embodied energy and low carbon impact, it is durable and long-lasting, with great insulating qualities, and it is aesthetically beautiful to boot.” This range of windows is fully compliant with all the necessary National Building Regulations, as well as the Consumer Protection Act – which is a great benefit to the architect, the builder and the homeowner. Cobus explains, “Swartland continuously tests its products to ensure that they are compliant with all the required National Building Regulations. The Kayo pre-sealed and pre-glazed range of hardwood windows is SANS 613 compliant. The range has been tested for deflection, structural strength, waterresistance, air-tightness, operating forces, and energy efficiency. As a result, The Kayo range of pre-sealed and pre-glazed hardwood windows has A1 mechanical property values assigned to it.”
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Global value and sustainability by using wood The FOURTH WOOD-CONFERENCE present unique opportunity for exchange of ideas, information and inspiration on the topic of wood, in its various states and applications, as a viable and natural building material.
Get inspired - join the FOURTH WOOD-CONFERENCE Please diarise our upcoming activity. It will take place on the 11th February 2014 at the Cape Town International Convention Centre (CTICC). The conference would focus on sustainability and its global process. For more information and applications, please contact: +27 (0) 76 401 91 20 email@example.com RSVP by 24 January 2014
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Incledon range of polymer resin
manhole covers reduces the risk of theft Municipalities in South Africa can significantly reduce the everpresent threat of manhole cover theft by adopting a range of innovative NMC polymer resin manhole covers - distributed nationwide by leading fluid conveyance solutions provider, Incledon.
ncledon national product manager for civils, Kelly Wilson points out that the company is a distributor of the polymer resin products, which have been manufactured locally since 1992 by Cape Town-based National Manhole Covers (NMC). “NMC manhole covers are manufactured from a composite material that is bound together by resin and fibreglass, which has no scrap value whatsoever. This material can prove to be invaluable for local municipalities, as the biggest challenge with traditional cast iron manhole covers is the fact that they can be sold for up to R500 at local scrap dealers,” he explains.
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According to Wilson, this problem is further aggravated by a steady rise in steel prices, which results in an increasing number of thieves in South Africa being tempted into stealing cast iron manhole covers in large cities and small towns – resulting in thousands of units going missing annually. “An increase in cast iron manhole cover theft results in unnecessary claims and lawsuits being lodged against municipalities as a result of loss to property and injuries caused by open manholes," he continues. "What’s more, cars are damaged when driving into open manholes and, in the worst case scenarios, people are seriously injured from falling into manholes."
PRODUCT PROFILE In addition to its profitless scrap value, Wilson highlights the fact that NMC polymer resin manhole covers are compliant with SANS 1882 2003 specifications, which were established to recognise the need for an alternative material to cast iron and concrete, and to provide municipalities with a better choice in product to cater for their individual needs. “According to the minimum criteria set by the SABS, a polymer concrete manhole cover should be able to withstand a load of up to 13 500kg. This minimum weight surpasses the maximum wheel load required and enforced by the National Department of Transport,” he continues. Wilson reveals that a polymer resin manhole cover costs around 40% less than a similar manhole made form cast iron, thereby enabling the buyer to swiftly and economically address a backlog of open manholes. "Polymer resin manholes can also be custom made to fit open frames, as opposed to the cast iron option – where the entire frame has to be removed and replaced.” Wilson states that NMC polymer resin manhole covers are also ideally suited to telecommunications companies, due to the fact that they come standard with an interchangeable locking device, which ensures that valuable cables beneath the cover are also protected from theft. He notes that the NMC range has proven to be particularly popular among municipalities. “As more infrastructural development takes place nationwide, municipalities and civil engineering contractors are beginning to identify the need for a cost-effective solution to cast iron. As a result, Incledon has seen an increase in demand for the NMC range over the past few years.” Looking to the future, Wilson is confident of gaining significant market share with the NMC range. “NMC manhole covers can be custom-built to individual specifications and, due to the fact that specifications vary between individual municipalities, I anticipate demand to steadily rise into the foreseeable future,” he concludes.
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Corobrik builds on a steady recovery Corobrik’s performance last year was pleasing, notwithstanding the setbacks caused by the Marikana incident and civil unrest in the building industry.
espite these destabilising factors and the constrained macro-economic fundamentals, the building industry is bouncing up off its low base, albeit at fairly low levels. Overall we see prospects improving, buoyed by government spending on infrastructure raising expectations that 2014 will be a better year than 2013. This is the view of Dirk Meyer, Managing Director of Corobrik. “Architects are reportedly busier than previously and the qualitative and quantitative indicators show a general recovery in the building industry. The number of commercial building plans being passed appears on a gradual upward trend and government spending on lowcost housing and new or extended schools is also picking up.” Meyer went on to say that the middle and upper end of the residential market was also on a slight upward trend with property prices recovering. “The middle end of the residential market is slowly coming back off its low base and there has been small growth in home improvements.” Demand for Corobrik’s products is increasing in Eastern, Central and Western Africa, spurred by infrastructural development in these regions. “These are all positive factors which bode well for Corobrik in 2014,” Meyer said. Dirk Meyer, Managing Director of Corobrik.
PRODUCING AFFORDABLE AND SUSTAINABLE BUILDING PRODUCTS Demand for Corobrik’s new CoroJem bricks is growing apace in the affordable low-cost housing sector, being a product well-placed to help meet the demand for better quality low-cost housing while supporting of the government’s objective to create sustainable human settlements. “This large, single skin face brick has been a runaway success in this segment,” said Meyer.
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“Nothing in the market can compete with its combination of aesthetic appeal and good value. We have dedicated more capacity for its manufacture and are moving to near full employment of our manufacturing resources,” Meyer said. Corobrik’s recently launched PB Pavers have also proved an enormous success, with the Springs factory operating at full capacity to meet demand for this attractive clay paver product.
“This paver, with earthy colour tones has all the physical attributes of the PA Paver but is cheaper and is proving a popular alternative in the price sensitive concrete paver segment,” Meyer said. With the new PB paver and CoroJem bricks added to Corobrik’s considerable basket of products, Corobrik assesses that its product range will enable the company to compete and meet the diverse needs of the different markets.
INVESTING IN AUTOMATION AND RESEARCH “After three years of intensive product development with impressive market share gains, our focus will be on consolidation and re-investment in the business during 2014. Capital has been committed to a number of planned projects to upgrade facilities, drive efficiencies and introduce robotics to automate brick handling systems.” “Corobrik will also invest in further research to understand the comparative value of our clay products as produced and in application, towards minimising environmental impacts and energy usage of buildings. Importantly, through our involvement with the Clay Brick Association, we will be involved with the full Lifecycle Assessment commissioned with the University of Pretoria,” Meyer said. “Our research to date, supported by eight years of empirical studies of building modules under real world conditions at the University of Newcastle, provides clear evidence that we are in good space and that double skin cavity clay face brick walls with appropriate resistance in compliance with SANS 204 Energy Standards offer superior thermal performance with lowest life cycle costs here in South Africa,” he said.
SUSTAINABLE MANUFACTURING AND ENVIRONMENTAL IMPACT Corobrik is eager to continue converting more factories from coal-fired to gas-fired operations – in addition to its more recent Lawley and Driefontein factory conversions – and there are several other viable options for conversion, but there is no gas available. “We have engaged Sasol on a number of occasions to request additional gas supplies but it appears they are using all the gas for their own operations,” Meyer said. “This is a setback, but has not slowed our determination to reduce our carbon footprint. Our focus next year will be to dematerialise our products and processes further while achieving the same high quality products with improved functionality.”
QUALITY ACCREDITATION GAINS MOMENTUM Two more of Corobrik’s 15 factories were awarded ISO 9001:2008 quality management systems accreditation in 2013, bringing the total number to eight. It is expected that five more factories will receive accreditation in 2014 with the balance reaching this standard in early 2015. The roll-out to attain SANS 14 001 Environmental Management System accreditation at all operations continues. To date, five factories have reached this goal, with a further two expected next year.
DRIVING INTERNAL DEVELOPMENT This company has reaped significant benefits from its employee stock ownership plan (ESOP) introduced in 2008. A total of 26% of the business is now owned by employees. “We have been led to believe it is one of the more successful ESOP schemes around,” Meyer said. “Most notable has been the change in the attitude and behaviour of staff towards the business – from the shop floor to director level – which is a huge advantage both for internal productivity and growth.”
MEETING THE NATIONAL NEED FOR ARTISAN TRAINING Meyer believes that lack of artisan training is a national issue which needs serious attention. “Everyone thinks it is someone else’s responsibility, but we need to train more artisans.” Corobrik offers internships at all of its factories for members of the local community, as well as traditional artisan apprenticeships for fitters, turners, millwrights and electricians. At a product level, we operate two CETAaccredited Building Training Schools to train bricklayers and paver layers.
LOOKING FORWARD “We have proven the Corobrik offering upon which we need to build further,” Meyer said. “We have, in the last three years, won three consecutive PMR Diamond Arrow awards rating us as the best in our industry. Internally we have the right people in place and the right facilities to drive growth. We produce superior products with great consistency, and pride ourselves on our logistics capabilities to consistently get the right products to the right places at the right times. Expert technical ability is driving the process, so we are able to offer sustainable value and are confident that we are well-positioned to keep growing our share in the different segments where we focus.”
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MBA North members more confident about construction sector’s future Members of Master Builders Association North agree that there is now renewed confidence about the future of the Gauteng construction sector.
ohau Mphomela, executive director of MBA North, says input received from the association’s members seems to endorse the findings of the FNB/Bureau for Economic Research Construction Confidence Index which increased by six points in a 100-point index scale to 51 in the third quarter, compared with 45 in the previous quarter of 2013. “It is clear that our members generally believe that the future now looks more promising than in mid-2013, but it is also clear that they still do not believe the industry is on a sustained path of growth. Several factors beyond the construction industry’s control will determine that,” Mphomela stated. MBA North member, Tiber Bonvec Construction, is generally confident that the increased confidence of the last few months will continue into 2014. The company’s MD, Jose Correia, says Tiber Bonvec can only comment on the private sector activity in the Johannesburg area’s industrial and commercial development market, but there seems to be a lot of activity in these sectors at present, although profit margins are still under pressure. “This situation is likely to remain – specifically because of some of the wage agreements concluded in the building industry which we believe to be on the higher end of the market.” Correia adds that the increased activity noted could be the result of businesses relocating and positioning themselves better geographically for the future in more prominent nodes, and not necessarily an indication of real growth. Charl Venter, director of Pretoria contractors, J.C. van der Linde & Venter Projects, says his company has been busy this year and is fairly confident about the future. “But contractors working in more rural areas, such as North West Province and Limpopo, still seem to be struggling to maintain momentum and secure work. Many tenders seem to get shelved because of budget constraints, which shows that clients/investors do not have faith in the current economic conditions and are still unsure about the future.” Venter, who is vice-president of MBA North, says profit margins are still very low, but it is hoped that the government will start spending its budgets on infrastructural development early next year. “This would represent a huge boost for the industry,” he adds.
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Mohau Mphomela, executive director of MBA North, says input received from the association’s members seems to point to more confidence in the future of the building industry.
Hennie Bester, MD of Gauteng Piling and past president of MBA North, says the rising number of shopping centres being built in Gauteng at present seems to reflect confidence in the future in the commercial development sector. “Government spending also seems to be increasing slowly but surely and, with elections looming in 2014, is likely to continue next year. Government also seems determined to combat corruption, which will substantially benefit the construction sector.” Bester feels that, with the negative publicity and damage to the industry’s image inflicted by the recent collusion incidents now a thing of the past, MBA North and the rest of South Africa’s Master Builders associations have a major role to play in boosting and preserving the image of the construction industry in this country.
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