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F E A T U R E
Developing A Positive Reputation
www.raubex.co.za
Developing A Positive Reputation
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As the newest division of construction giant Raubex Group, Raudev Property Developers is already making a name for itself in the affordable housing sector. Essential Business spoke to Managing Director Francois Grobler about Raudev's current projects and what they mean for the community.
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he discussions started in 2011, when I approached the Raubex group to tender with me in my previous capacity on the Lufhereng housing project,” says Grobler. Launched in 2008, Lufhereng is a multi-billion rand mixed housing development designed to address the shortage of affordable housing in Johannesburg. When complete, the development will extend the urban edge of Soweto around 5km westward.
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“I used to work for my own consulting company called PD Solutions, which is today owned by Raudev. The Council of the City of Johannesburg issued a tender for a large-scale integrated affordable housing project, and some of the requirements made me realise that really, only the large construction companies would be able to submit tenders that would be compliant,” he continues. “We then tendered in a joint venture, and subsequent
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to that the relationship grew into what it is today.” The shortage of affordable housing in Johannesburg — and also in other urban centres such as Cape Town and Durban — makes subsidised and low-end housing a particularly sustainable market. “We work closely with local governments,” explains Grobler. “Below a certain income level, housing is simply not affordable. So governments need to extend some sort of subsidy to the individual to ensure he can afford the product, even if it's not in the form of a housing subsidy — even if it's in the form of purchasing land, facilitating the creation of engineering infrastructure, or putting priority areas together where water, sewers, roads, and electricity are prioritised in terms of government agenda.” The Council of the City of Johannesburg awarded the Lufhereng project to a consortium in January 2014. As a shareholder, Raudev is part of the project's 21,000 unit rollout. The consortium is responsible for the construction of the engineering infrastructure, as well as the construction of all fully subsidised housing — around fifty percent of the total number of units. “This really establishes Raudev as a major player in the affordable housing sector,” says Grobler. “ The focus there is really to do both fully subsidised housing as well as affordable housing.” On the higher end of affordable housing, Raudev is also developing the Woodwind Estates housing project between Centurion and Midrand. Woodwind Estates consists of 750 units, to be priced between R599 000 and R1,3 million. 3
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Below a certain income level, housing is simply not affordable. So governments need to extend some sort of subsidy to the individual to ensure he can afford the product, even if it's not in the form of a housing subsidy — even if it's in the form of purchasing land, facilitating the creation of engineering infrastructure, or putting priority areas together where water, sewers, roads, and electricity are prioritised in terms of government agenda.”
“We identified the land through private initiatives,” explains Grobler. “It came to my attention three years ago. I was negotiating with the then-land-owner, and discovered his neighbour was a member of the Raubex Group. And indeed, there was a sand mine being operated on that piece of land at the time, and the operator of that sand mine was also a member of the Raubex group,” he continues. “So it was pure chance that we were able to unlock a certain amount of value from that relationship, and end up being in a position to buy the land from the previous owner, which we did in 2012. We took over of the land in 2013, and we're going to hit the ground running very soon. We're looking to proclaim the township in the next few weeks, and we then want to start
with construction immediately before the middle of the year.” Raudev plans to have the first complex occupied by January 2016. “It's a quick turnaround, but we can do it,” says Grobler. “We're going to fast track a few processes — so we're going to simultaneously construct the services and the building works, instead of the normal process whereby you first service a township and then start the construction. Thanks to an old piece of legislation under which this particular township has been proclaimed, we can do these processes concurrently.” Looking forward, Raudev's plans for the future are as large and impressive as its developments. “Our small management team allows us to be flexible and adapt to
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market situations quickly. We are surrounded by sister companies within the group, and that gives us a very strong delivery capacity, so Raudev really sees itself becoming a delivery partner of choice for big projects and big institutional investors in large housing portfolios,” he continues. “Being able to do both infrastructure engineering and construction work inhouse really positions us well to both add value to our strategic partners and add value to the shareholders in Raubex .”
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We're going to fast track a few processes -so we're going to simultaneously construct the services and the building works, instead of the normal process whereby you first service a township and then start the construction. Thanks to an old piece of legislation under which this particular township has been proclaimed, we can do these processes concurrently.”
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