GAUTENG - JSE listed Balwin Properties Limited and Transcend Residential Property Fund announced on Monday, an alliance with the aim of bringing 8 900 quality and affordable rental apartments across five developments in Gauteng nodes over the next six years.
Each development and sectional title apartment will be designed and constructed by Balwin. The marketing and securing of lease agreements for the apartments with prospective tenants will also be administered by Balwin.
Transcend will subsequently be given the opportunity to purchase fully tenanted apartments in phases from Balwin. Although all five developments will be treated and reviewed independently, Transcend intends to participate in all developments.
“Today’s announcement is fantastic news for the rental housing market in South Africa. The planned developments worth an estimated R6.4 billion will see us deliver up to 8,900 premium apartments expertly designed to offer quality finishes not yet seen in the affordable rental market.
“Furthermore, Transcend’s focus on predominantly walk-up apartments strategically located in desirable neighbourhoods and often equipped with lifestyle-enhancing facilities is perfectly in line with Balwin’s proven development model and popular design.
“This new rental product supplements our existing build-to-sell business and we have put in place capacity to support the additional volumes over and above the approximately 3 000 apartments which we already deliver every year", said Steve Brookes, CEO of Balwin Properties.
Transcend is a Real Estate Investment Trust (REIT) created by the private equity group, International Housing Solutions (IHS) and listed on the JSE in 2016.
“This alliance is perfectly in line with our strategy to focus on a defensive asset class, that delivers affordable housing rentals to a heavily under serviced portion of the real estate market outside of conventional inner-city residential rental housing. Rentals will be aligned with Transcend’s portfolio and are expected to range from R4 000 to R8 000 which is currently the sweet spot for a growing middle class in South Africa’s urban centres", said Rob Wesselo, CEO of Transcend.
The strategic alliance between Transcend and Balwin is detailed in a signed memorandum of understanding as at 18 August 2017.
However, the alliance remains subject to the fulfillment of certain conditions including various regulatory, shareholder and other approvals to the extent required.
Notably, the information in this announcement has not been reviewed or audited by the mentioned companies.