Local construction company Basil Read has received permits from the National Home Builders Registration Council (NHBRC) to start building top structures at its housing developments, such as its Savanna City Estate mixed-use development, near Orange Farm, in Gauteng.
The top structures will be built under a new unit, Basil Read Homes, which was established at the end of last year and falls under its Developments division. Forty-four two-bedroom units at Savanna City have been allocated to start with this year under the new programme.
These build programmes were normally outsourced to project and construction management companies, while Basil Read was mainly focused on bulk infrastructure.
“As a construction company, we have the capability to carry this out,” CEO Khathutshelo Mapasa said, adding that this was an area that the company could focus on to create value.
Mapasa explained that the company chose 44 units to start with to enable it to start building on this capability slowly. Basil Read would also focus on using emerging black construction companies to assist in the building of these units.
When complete, the 1 462 ha Savanna City development will provide 18 399 integrated housing units, 16 educational facilities, 32 institutional sites, clinics, crèches, churches and nine retail and commercial sites. The estate will also comprise an urban agriculture area.
Savanna City is being built at an estimated cost of over R24-billion.
Basil Read’s newly appointed CFO, Pieter van Buuren, added that the developments side of the business was an attractive area of growth for the company, as cash flow would have greater predictability. “It’s almost akin to being an annuity-type cash, which is what our business really needs,” he noted.
“The ad hoc nature of construction, the feast or famine, creates uncertainty,” he added.
Mapasa added that, as government expenditure had declined in real terms, private-sector spending was set to increase again, as uncertainty faded and confidence grew.
“There is cautious optimism, even in commodity prices,” he stated.