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TUHF Stories

Leroy-Slava

@Fourteenth brings colourful affordable accommodation to Boksburg CBD

Intuthuko Equity Fund and purchase plus construction finance.
Location

Boksburg, Johannesburg

February 2020 – A project funded by TUHF, @Fourteenth is a bright new residential complex that offers affordable accommodation within the Boksburg CBD.

Situated opposite the Boksburg Municipality Customer Care Centre on Trichardts Road, the building was originally a mixed-use structure containing retail facilities on the ground floor and residential units on the first and second floors. However, the building had not seen successful retail undertakings for some time and was rundown. When the building was put on the market for sale, local resident and property entrepreneur, Leroy Slava, recognised an opportunity and set upon a project to not only give the building a facelift, but a new purpose.

“I own property not far from @Fourteenth that I rent out and for years, when I had been near that part of town to oversee my other property, I had driven past the original building and noticed the rapid turnover of retail tenants. I often wondered if the building would have been better suited to a different use,” says Slava. “So, when the building came up for sale in 2018 I saw this as an investment opportunity; to buy the building and convert it to a full residential rental building. I contacted TUHF for property finance as I knew this was exactly the kind of inner-city property project that TUHF has the appetite to invest in.”

“We had spoken to Leroy before about similar opportunities and were thrilled when this project met our criteria so that we could move forward,” says Khumbulani Chikomo from TUHF. “Leroy knows the Boksburg inner city, has demonstrated his property management skills and has a good track record of providing good customer service and maintaining his properties well.”

TUHF provided financing to the value of R 8.3 million for purchase of the property as well as construction, refurbishment and professional fees to complete the conversion in full. The retail floor had to be converted to create residential units, and the original residential units had to be reconfigured from large 100 m2 units to smaller units of various sizes in order to increase capacity and ensure maximum impact.

“The experience of working with TUHF has been great,” says Slava. “I rent out and manage a few smaller properties, but this was my first conversion development project and property of this scale, so it was a real learning opportunity for me too, and the team from TUHF was very supportive and helpful.”

“They went above and beyond, not just in terms of helping to establish financial feasibility but also in terms of advising on risk management. In particular, the service providers that TUHF recommended –– were a pleasure to work with.”

The building not only showed promise to be economically sustainable but fully meets TUHF’s vision of achieving ‘impact through scale’. Besides the Municipality’s Customer Care Centre, the building is situated close to the Boksburg Public Library, two schools, retail facilities, several local businesses and one of Colgate Palmolive’s satellite offices. This makes it ideally located to have a positive impact on the area and provide good quality residential space with access to all the necessary amenities.

The newly renovated @Fourteenth consists of 31 residential units, ranging from bachelor studios to 2-bedroom apartments. The refurbishment was completed recently and opened for tenanting in the first week of February 2020 – and Slava as the owner and landlord is confident that the new @Fourteenth will offer a good return on investment.

“I’m especially proud of the fact that I received an invitation to enter the 2019 Investor of the Year Awards from the SA Property Investors Network for this project – and had made it to being named a finalist for the Award. And the support and guidance I received from the team at TUHF went a long way to making that possible too. I expect @Fourteenth to be fully tenanted in the coming months – and I’m already looking forward to my next project with TUHF,” concludes Slava.

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Pressage-Nyoni

Spotting the hidden potential in Nelson Mandela Bay

North End, Port Elizabeth
Intuthuko Equity Fund and purchase plus construction finance.
Location

North End, Port Elizabeth

A mere stone’s throw away from the Nelson Mandela Bay Stadium and the Transnet Port, sits Trafalgar Square, the newly renovated two-storey apartment block providing affordable housing to Port Elizabeth’s North End suburb. Striking in bright green and yellow, the property stands as a symbol of rejuvenation for Port Elizabeth’s inner city. Spotting the opportunity to bolster their property business, while simultaneously helping to clean up the city and providing accommodation for city residents, Musa waShe Nyasha and Paballo Shai leapt at the chance to redevelop the building, despite the challenges present.

 

Although Musa and Paballo had some of their own capital to invest input into the project, they needed further equity funding support. TUHF supported them with the senior debt for the property but more importantly

TUHF’s Intuthuko Equity Fund made the project feasible through complementing their equity to make up the 20% required. This is their second property financed by TUHF, but the first with this scale of redevelopment. For many years, the building sat in a state of complete disrepair and informal dumping site across the road. The site, a mixture of broken furniture, old mattresses and building rubble, compounded the eyesore that was the dilapidated Trafalgar Square building.

Today, however, the building stands proud as a testimony to entrepreneurial accomplishment. All 16 units in the building have been renovated from one-bedroom to two-bedroom apartments. The original wooden floors have been restored to their former glory, and the high ceilings and open-plan living areas provide comfortable accommodation for tenants. Members of the community have relished the new life that

Trafalgar Square has breathed into the area and have noticed a drop in crime since its completion.

Trafalgar Square has a steady stream of enquiries from potential tenants and the owner has had to provide minimal advertising as existing tenants recruit their friends and colleagues to move into this well-run building.

Original configuration: 16 one-bedroom units of 57m² each
Configuration upon completion: 16 two-bedroom units of 57m² each

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