In South Africa, one housing development group is adapting to the challenging market by taking on new and unique challenges.
From its base in the country’s most populous province, The Central Developments and Cosmopolitan Projects Property Group alliance has been active in property development since 1992.
Registered with the National Home Builders Registration Council (NHBRC) since 1996, the group has six offices spread across its home province of Gauteng and the surrounding area, and consists of two main companies: Cosmopolitan Projects and Central Developments.
Cosmopolitan focuses on the lower end of the middle-class market while Central Developments focuses on security developments with lifestyle elements for the middle income group.
“We have grown into what we are today because we have taken a holistic view of development,” explains Central Developments marketing manager Carel Wentzel.
“We do everything ourselves from procuring the land, to the design, project management, construction and marketing of a development, which is why we have come so far already.
“We employ close to 1000 people across both sides of the business and we also work with many subcontractors and agents.”
Since first entering the market in 1992, the group has continued to grow and in the last financial year delivered 2,700 units. Today it is one of the biggest residential developers of its kind based in the province of Gauteng.
According to Wentzel, the company began as a marketing company, focused on the construction and marketing of a development.
“We saw the gap in the market between where we would build something and attract investors to our projects,” he says.
“These investors would expect a certain return and that is why we take the hands on approach to make sure that they get that.”
As a result of taking on further responsibilities the company is now also involved in the property management, rental and security aspects of its developments.
“We just want to ensure that what we promise people is what they get,” remarks Wentzel. “Even if it’s not an investment-based development, we soon realised that the property management aspects is just as important as rental management and after sale service, so we acted on that.
“We do subcontract, but we use subcontractors with whom we have a long standing relationship on our projects, which allows us to offer a very competitive price and products of high standards,” he adds. “You know who you are working with on each and every project, and you know that they can deliver, which helps to minimise the risk attached to the project.”
Settling in Waterberg
One of Central Developments’ landmark projects in recent years is Waterberg Security Village. Currently under construction, when completed the development will consist of 255 two bedroom, one bathroom units on an estate featuring a swimming pool, a clubhouse with barbequing amenities and playing facilities for children.
Each residential unit will feature air conditioning as standard and the complex will boast 24-hour security, CCTV and electric fencing. The group is offering the project to investors as a turn-key solution from the design and development of a project, to the property management and investor support upon delivery.
“We have been very fortunate with this project as it is in a booming town with a very high demand for residential properties and very low supply, that is why our investors can look forward to a return on investment of up to 27 per cent per annum and guaranteed rental,” says Wentzel.
Close to a coal producing area, the Waterberg development benefits from the strength of the local resources market.
Wentzel explains: “The whole world is after resources and that’s what this area has, more than 50% of the remaining coal reserves in SA are in the Lephalale area.”
As with many of the company’s projects, it has looked to work with members of the community from local government to businesses and individuals.
“When you start a new development the local municipality will often impose a few terms and conditions, such as building roads or upgrading water and waste infrastructure, and we are always willing to do that,” says Wentzel. “But when we go to a town like Waterberg, which is quite far from our home base, we look at getting local companies involved and giving them work on the project; we always look to support the local community in that respect.
“Where we especially get involved with the local people is on the sales and rentals side,” he continues. “That’s obviously when we work with all local estate agents in the area, businesses and the business chambers — we try to get as many people involved as possible.”
Taking on new challenges
With projects such as Waterberg Security Village providing affordable housing to meet the growing demand from the South African population, the company is also looking to move into other markets that aid in community development.
“Something that really defines what we are capable of is that while we have always worked within the residential properties market we have now started working on retirement villages as well, which is a very specialised type of housing development,” says Wentzel. “We have already successfully delivered one and have already begun selling on a second one, which is going very well.
“We also have a shopping centre under our belts and there is more to come.
“We are able to change quickly so we easily adapt to the market’s changing demands,” he notes. “Cosmopolitan first started out as an affordable housing developer, but when we saw a gap in more up-market residential properties we took it. Now we are able to specialise in security village lifestyle estates.
“With the recession the residential market quietened down a bit, but we saw that there was a huge market for retirement villages in South Africa, so we changed, adapted and started working in that market. When we see there is an opportunity for more shopping centres or offices we will also be able to do that.”
The company has lofty ambitions and is, according to Wentzel, looking to move beyond its traditional base in and around the Gauteng province.
“We are one of the main developers in Gauteng, so the next aim for us is to become one of the main developers in South Africa,” Wentzel says. “We have projects that will change the face of property investment in the future, but we cannot reveal too much about this at the moment.
“We have identified a big gap, something that no one else has thought of yet, and we have already started on one or two of those projects.”
For the future
The group is looking towards new markets and is not afraid to change in spite of tough economic circumstances thanks to its eager attitude towards business development.
“We never stop thinking about new possibilities, new opportunities and new ways to take our company further and to give the people who invest with us premium investment opportunities,” comments Wentzel. “At the end of the day it’s about the people who are looking to buy either primary or investment housing and we are here to provide them with quality turnkey solutions.”