OVERVIEW Construction
OVERVIEW Construction and property Student accommodation is a growing sector. SECTOR INSIGHT A R1-billion green bond has been raised by a REIT. One of the greatest differences between the society that existed under apartheid South Africa and the post-democratic dispensation is in the expansion of educational opportunities. Several companies came into being to provide this new student population with accommodation at tertiary institutions. Stag African, which has built a substantial student housing project at the University of Fort Hare in the Eastern Cape, pictured, is active in three provinces. South Point has created a 1 195-bed complex in Braamfontein to go with no fewer than 15 other sites in Johannesburg and it is active in five other cities. Respublica offers rooms in six cities and there are several other companies. The boom in building and developing student accommodation has been supported by the fact that many students are funded by the National Student Financial Aid Scheme (NSFAS), providing some security for investors in the sector. Controversies related to NSFAS have recently caused some concern, but demand remains strong. TUHF is among the financing companies that provide funding for housing projects. In TUHF’s case, inner city property investors are the focus of the company’s commercial property financing operations. This includes student accommodation and a township backyard rental finance product called uMaStandi which has recently been expanded. Another aspect unique to post-apartheid South Africa is the awareness of environmental issues. A third green bond for the real estate investment trust (REIT) of Redefine Properties was oversubscribed when it went to market in August 2023. An amount of R1-billion has been allocated across three, five and seven years. ONLINE RESOURCES Afrimat Construction Index: www.afrimat.co.za Construction Industry Development Board: www.cidb.org.za SA Reit Association: www.sareit.co.za South African Property Owners Association: www.sapoa.org.za Green buildings are now considered mainstream in the construction industry, and star ratings from Green Building Council South Africa (GBCSA) are expected in commercial, industrial and residential projects. The bond was listed on the JSE in the Sustainability Segment, a further sign that every sector is responding to the climate crisis. Covid-19 provided a sharp shock for many business sectors, but with the move towards working from home accelerated by the pandemic, none is going to have to look harder at its models for sustainability than the office rental sector. Logistics, often taken for granted in normal times, became an even more important component of the supply chain during the global lockdown and in the months that followed. FNB, which publishes a regular property barometer, has done an in-depth analysis of previous crises to help understand what may occur in the post-Covid property market. According to John Loos, a property strategist at FNB Commercial Property Finance, the most vulnerable sector is likely to be Retail Property. Smaller neighbourhood centres, with more essential items and greater convenience, will be less vulnerable. ■ SOUTH AFRICAN BUSINESS 2024 44 PHOTO: Stag African
Water Solar power is a water solution. OVERVIEW An off-grid, solar-powered groundwater harvesting system has been developed by Coca-Cola Beverages South Africa (CCBSA). The Coke Ville Project, pictured, was launched in 2020 and not only harvests groundwater but treats it as well. Over time, the project has expanded to several provinces and is proving of great benefit to communities, especially in times when power outages are experienced. Water wheelbarrows are distributed as part of the project to enable residents to transport water easily. In KwaZulu-Natal an amount of R30-million has been set aside for 28 solar-powered boreholes with elevated tankstands to be constructed in the Harry Gwala District Municipality. Phase 1 of the Vaal Gamagara Water Supply Scheme (VGWSS) has been completed in the Northern Cape, bringing much-needed water to several communities and mining companies. Some R10- billion will be spent in completing phase 2, an extension of pipelines from the Vaal River to the town of Hotazel, including reticulation to communities living along the path of the pipeline. The private sector and national government are partners in the project. One of the small towns that will benefit from phase 2 is Danielskuil, a town that in 2022 was briefly in the news spotlight. The town ran out of water because it had rained too much. Massive thunderstorms overwhelmed the town’s systems, already under pressure because of electrical outages and theft. Places like the normally dry Northern Cape will increasingly be the focus of attention as the earth warms and extreme events become more common. Municipalities in the Northern Cape (as in many other provinces) have consistently struggled to supply good services to citizens. With the declaration of the entire province as a Priority Human Settlements Development Area by the National Department of Human Settlements, this situation could improve. Another partnership between the public and private sectors will see the Vaalharts Irrigation Scheme revitalised, leading to greater certainty for fresh produce producers, assistance for local municipalities in providing water to residents and a doubling of ONLINE RESOURCES National Cleaner Production Centre South Africa: www.ncpc.co.za National Department of Water and Sanitation: www.dws.gov.za South African Water Research Commission: www.wrc.org.za Water Institute of South Africa: www.wisa.org.za SECTOR INSIGHT Phase one of the Vaal Gamagara Bulk Water Scheme has been completed. the amount of land available to emerging farmers. The three entities involved are the National Department of Water and Sanitation, the Vaalharts Water User Association and the Infrastructure Fund. The project was gazetted as one of the Strategic Integrated Projects (SIPs) in 2020 and falls under the Presidential Infrastructure Coordinating Commission (PICC). The existing scheme is one of the largest irrigation schemes in the world, covering 39 000ha under irrigation and extending it to Taung in the North West will give it even greater reach. The scheme currently has 1 000km of concrete-lined canals and more than 300km of concrete drainage. ■ PHOTO: CCBSA 45 SOUTH AFRICAN BUSINESS 2024
