Christie Swartz, managing director of JLK Construction, said that plans are now with the municipality for a new project which will have some 70 apartments varying in size from 30m2 (for a bachelor unit) to 60m2 (for a two bedroom unit). These - when completed in 2017 - are likely to rent from R4,000 to R7,000 per month.
“We are confident that a new development of this sort will be highly acceptable in Paarl because we know that there is a huge shortage for accommodation priced at these levels and because our two previous projects targeted at this specific market were highly successful,” Swartz said.
The two JLK projects on which Swartz believes the company gained invaluable experience are the Zanddrift development in Northern Paarl and the Louw’s Avenue development in Southern Paarl.
At Zanddrift, completed in 2000, JLK sold 20 of the units and held onto the remaining 30. The initial price of a two bedroom unit was only R179,000, while a three bedroom unit was sold at R200,000. Today the same units are selling for R990,000 to R1.7m.
At Louw’s Avenue initially bachelor units were renting at R3,200 per month, a one bedroom unit at R3,500 and a one bedroom unit with a mezzanine floor at R4,000, while a three bedroom unit attracted a rental of R7,000.
“We like to think that in both cases we got the 'formula’ exactly right,” said Swartz. “We charged as low as possible to attract tenants and buyers at the start, but since then have generally been able to raise rents by 10% year-on-year and almost invariably we have been able to retain good tenants, many of whom have been with us for between four and 15 years.”
Swartz said that JLK, while continuing to focus on construction work, will be on the lookout for new residential development possibilities and, if so wished, can do this in partnership with the landowner or other developers.
