Apartment building 743 on HM, named after its street address – 743 Herby Mdingi Street, Orlando East, Soweto – is a highly in demand two storey block of 12 micro apartments for young professionals. It only became so due to a synchronistic meeting with uMaStandi and project owners, Mthandeni and Kgomotso Khumalo.
For Kgomotso, becoming an entrepreneur was a path that she seemed destined to follow. It began with selling chocolates at school and helping her mother do promotions at large retail stores when she was a child. The journey progressed with an establishment of her first business, a café within the corporate headquarters where she worked, having identified a gap, whereby employees did not have an appropriate place to have lunch within the complex.
In 2015, with an eye on the future, the husband-and-wife team purchased a three-room property in Orlando with the aim of converting it into student accommodation. However, they subsequently found it difficult to secure funding from traditional banks and investors, who hesitated at supporting township developments due to the risks associated with typically lower rentals.
After struggling to find funding to help realise their dream, the solution to their challenge was brought to their attention in 2017, when Kgomotso was introduced to uMaStandi – a member of the TUHF21 Group that specifically funds rental property entrepreneurs in townships.
While providing funding enabled the couple to demolish the existing structures on the site and build a new development from scratch, uMaStandi provided something equally as essential – guidance. Because Mthandeni is employed full-time, Kgomotso took the lead on developing this project and dedicated time to attend property development courses through uMaStandi to gain an understanding into what was permissible from a development point of view, as well as the intricacies involved in being a landlord.
Along with offering guidance to Kgomotso in assembling her ‘power team’ of contractors, uMaStandi provided her with insight into the area and what she should charge for rental once the development was complete. “They advised me on what other developers are charging, and the market rate for the area where the property is located,” she explains.
The pandemic and subsequent lockdowns posed a challenge, pushing the project deadline out with a month, the development therefore, being completed in September 2020. From the beginning, it became clear that there was high demand for the compact and self-contained apartments.
“By the time we completed the building, we already had 50% of tenants secured. Even before we finished our first floor, we had people interested and wanting to live in the ground floor apartments. It was overwhelming to realise that there’s significant need for these kinds of rental micro-apartments,” she adds.
Each unit has a bathroom with a shower and toilet, and a kitchenette with space for a fridge and microwave. Stoves are provided as part of the unit. The rental for the open plan bachelor units ranges from R3000 to R5650 per month.
Two critical features to the tenants of the property are Wi-Fi and parking. Since most of those living in the apartments are young professionals, many of whom are working from home, stable Wi-Fi and Internet access being part of the rental is a major selling point. No less important is a place to securely park their cars. The property has five dedicated parking bays, and additional space on the grounds for another seven cars within the secure boundary wall.
Additionally, a Caretaker who lives close by attends to any property-related issues that may arise. Water is included in the rental amount but electricity supply is available on a prepaid meter basis in each unit.
Kgomotso’s key learnings from the development journey include the need to plan properly and coordinate one’s project team, ensuring that their services, whilst interdependent, do not clash. Another learning was management of cash flow, that is, the ability to smooth it out and timeous submission of invoices to avoid delay in contractor payments upon completion of work.
While 743 on HM was the couple’s first development, it is not their last. They already have another one in the pipeline, in the same area, and will be working with uMaStandi to renovate a residential home into another 12-unit micro-apartment property.
“We’ve been so blessed with working with uMaStandi because they didn’t just provide the funding, they worked with us on the property development journey, from the beginning to the end of the project, even during the time when we were in lockdown,” she concludes.
FACTS
Project Name: 743 on HM
- Location: 743 Herby Mdingi St Orlando East, Soweto
- TUHF21 Product: uMaStandi, a TUHF21 financial product
- Original configuration: Three room house
Configuration upon completion: 12 residential bachelor micro apartments