Rawson developers gear up for increased activity in 2010

As has been widely publicised, South Africa’s residential property developers have for 24 months been through a period in which almost no new schemes were launched.

One of the main reasons for this, says Bill Rawson, Chairman of Rawson Properties, is that these schemes have traditionally attracted as many investors as buyer-occupiers but the banks now look askance at this type of bond applicant – some overextended in the boom years and have since reneged on their bond payments.

As a result, said Rawson, developers have been forced to try and develop projects where the vast majority of buyers will be owner occupiers – and have had to be able to show the banks that the scheme offers exceptional value in relation to other properties in the area.

They have also, in some cases, had to achieve a 100% sell-out before they qualify for a development loan.

“In these circumstances,” said Rawson, “it is not surprising that very few schemes have gone ahead.”

That is the bad news: the good news is that Rawson Developers, despite these difficulties, have five new projects in the pipeline – with a sell-out value of around R500 million– and have a further three or four projects awaiting consideration.

“Apart from our own projects,” said Rawson, “we could be involved with other developers too because since announcing that we are available either as co-developers or purely as contractors and marketers we have been approached by many developers who have lacked the expertise, the resources or the land to go ahead in joint ventures. It appears that joint ventures will become a very important part of our business in 2010.”

Article by: www.rawsonproperties.com