For Jade Barkhuysen, his journey into property development began ten years ago, when he purchased his first property in his hometown of Gqeberha and began building his property portfolio.
Bayside Lodge, located at 59 Green Street, North End in Gqeberha, is another first for him: it is the first project he has undertaken with the aid of TUHF.
Until now, Jade has learned the ins and outs of property investing primarily through self-study, through books, seminars, and coaches who showed him how to find good deals that he could renovate and sell for a profit or keep as an income generating asset. But Bayside Lodge is different, he explains, as it speaks to his passion for providing clean, affordable accommodation in the inner-city of Gqeberha.
Bayside Lodge also stands out as Jade’s first redevelopment of a property of this size, which is why he turned to TUHF for assistance.
Jade and his team took on the challenge of refurbishing this brownfields project and converted the old commune with 19 bedrooms into 17 efficient studio apartments (which range from 14 to 25 square metres), each with its own bathroom (with shower, basin and toilet) and kitchenette.
“The most important thing for property investors in Nelson Mandela Bay is to be able to efficiently manage their electricity and water expenditures, in lieu of ongoing loadshedding in the country and the persistent water shortages in the Nelson Mandela Bay area. The pricing for water in particular has skyrocketed, which has derailed many a property investor who didn’t account for it in their plans,” he explains.
The solution for Bayside Lodge was to ensure tenants had their own prepaid electricity and water meters and could be individually accountable for the utilities they use.
The property includes a communal laundry facility which is open to all the residents – who are primarily young professionals between the ages of 21 and 35. Providing fibre connectivity was more of a challenge, as fibre isn’t yet available in the area. However, Jade is currently looking at how connectivity can be offered through another option.
What Bayside Lodge does have is its own borehole, which is particularly important given the water shortages in the area. “If there’s ever a problem with either the municipal or borehole supply, we can always switch between the two. I think that does give this property an important advantage because the tenants know that they’re always going to have water,” he notes.
While the water from the borehole is regularly tested at a lab, and approved as being safe for cooking and washing, and even consumption, it is further safeguarded by a comprehensive filtration system as well. Additionally, in response to the critically low water levels in the area, all the taps and showerheads in the bathrooms have low-flow fittings. Solar power is also on the cards for the development within the next six to 12-months once it is fully leased and generating the requisite cash flow.
Almost every commercial project has some challenges, and according to Jade, Bayside Lodge had to face a significant one. Even though the land already had approved blueprints from the 1920s, it took three rejections for the new building plans to be accepted. The approvals procedure caused two-week delays between each resubmission, which had an influence on acquiring finance.
“That was quite a nerve-wracking stage, because I needed the building plans to be approved before I could actually get the financing,” he explains.
Those delays ultimately lead to Jade having to take a leap of faith, buying the property himself for cash to prevent it from being relisted on the market and then refinancing it with TUHF.
“A key takeaway from this development is that it really is a collaborative team effort. As a developer, while you need to bring everything together, you don’t have the individual skills to do everything yourself, and it is essential to have the support of a competent team of professionals and an organisation like TUHF,” he stresses.
For other aspiring new-fledged property developers, Jade advises finding the right deals in areas in in-city and inner-city areas where TUHF finances, and then approaching them to work together.
“Personally, I intend to continue following my passion for investing in the inner-city, because there’s a unique fulfilment that comes from creating an environment where people can feel safe and live well,” Jade concludes.