Property developer Balwin has announced its new Mooikloof Mega-City development which is set to be built in the east of Pretoria.
Balwin said it plans to build an initial 16,000 apartments at a present value of approximately R9.6 billion in phases over the next few years in what it describes as the one of the world’s largest sectional title development.
This may be extended to up to 50,000 apartments with a total development value of approximately R44 billion in today’s terms, the group said. Apartment prices will range from R499,000 to R799,000.
Balwin said that the project will provide a much needed economic injection in a post-Covid-19 environment, creating approximately 115,000 direct and indirect job opportunities throughout its lifecycle.
Mooikloof Mega City is located off Garsfontein Drive and is approximately six kilometres from the junction with De Ville Bois Mareuil Drive where Woodlands Boulevard Mall is located and eight kilometres from Solomon Mahlangu Drive which gives access to the N4 and other main arterial routes.
The surrounding townships include Woodhill Golf Estate, Mooikloof Equestrian Estate, Mooikloof Heights, Mooikloof Ridge, The Hills Golf Estate, Grootfontein Country Estate and Mooikloof Glen.
In terms of the transaction, Balwin said it will acquire two tracts of land with a combined area of 210 hectares for an aggregate purchase consideration of R332.5 million.
The land will be combined into a single property post the transactions and will consist of a residential component, two educational facilities and a commercial node.
Balwin said it will undertake the residential developments and will sell approximately 20 hectares for the development of the educational facilities and the commercial node.
In a shareholder statement on Monday (31 August), Balwin said that the project has also been designated as a strategic integrated project by the Presidential Infrastructure Coordinating Commission Council.
This means that the Department of Public Works and Infrastructure will pay for all external bulk services installations such as water, sewer, electricity, roads and stormwater in respect of the megacity.
“This is in an effort by the government to boost the economy post Covid-19 and to create employment through infrastructure development,” it said.
“National Treasury has also recently signed a Memorandum of Agreement with the Development Bank of South Africa in terms of which a R100 billion infrastructure fund will be available to facilitate infrastructure development in South Africa.”
Steve Brookes, founder, and chief executive of Balwin, said that the Mooikloof Mega City has been designed specifically for the GAP housing market which can be defined as housing opportunities for people earning a combined monthly income between R3,501 and R18,000.
“These are the income earners who earn too much to get a free house from the government and earn too little to get a bank bond.
“Accordingly, first time home buyers and qualifying individuals will have assistance through the Finance Linked Individual Subsidy Programme (FLISP). The FLISP subsidy grants first time home buyers a subsidy towards the purchase of a home of between R27,960 up to a maximum of R121,626.”
New infrastructure projects
In July, Minister of Public Works and Infrastructure, Patricia de Lille said that government plans to build more than 50 special infrastructure projects to boost jobs in the country.
De Lille said that infrastructure-led economic growth is the most effective and significant parts of government’s economic growth strategy to grow our economy while at the same time respond to the Socio-Economic needs of our people.
In the Human Settlement sector, projects worth R138 billion worth of investment have been gazetted, the projects have the potential to create an estimated at 190,000 direct jobs, said De Lille.
“The Mooikloof Mega Residential City Project is one of our few projects coming straight from the private sector and demonstrates the strength of the SIDS process and methodology to deal with projects from the private and the public sector,” she said.
De Lille said that the development of megacities will bring together South Africans from varying races and income groups via the construction of different topologies of housing in the tens of thousands.
“The developments are further enhanced by the inclusion of schools, health facilities and places of worship – thus reducing the costs of transportation which many South Africans can ill-afford,” she said.
“Places of employments are also close by, again, bringing disadvantaged people closer to the economic hubs.
Also in the arsenal is rental housing stock, an attractive asset class which facilitated by the likes of SHRA inter alia has also attracted asset funds – both listed and unlisted, due to the low market risk and attractive investment rates of return.
De Lille said that student housing is estimated at having a bed deficit of 300,000 – 500,000 according to the 2011 ‘Report on the Ministerial Committee for the Review of the Provision of Student Housing at South African Universities’.
“The number of higher education students have increased since 2011, and we can assume so has the critical shortage of housing,” she said.