interesting article

Power station powers property demand
Company announcement
03 December 2008

Rentals soaring thanks to Eskom projects in Limpopo - estate agent.

House prices in the Lephalale (Ellisras) area in Limpopo have risen by approximately 50 percent over the past four years said Pam Golding Properties (PGP).

Assis Pontes, principal of Lephalale PGP said the residential property market demand is fuelled by Eskom which recently acquired 50 homes. Eskom has a budgeted R1bn for 3000 housing units for staff accommodation over the next five years said Pontes.

"This growing demand for homes is due to the new power station, Medupi, which is to be built approximately 10km from the existing one which is situated about 20km from Ellisras," said Pontes. Medupi is an eight year project which will peak in 2012.

Exxaro will invest R9bn to expand its existing coal mine in the area in order to provide some 14 million tons of coal to Medupi. Sasol is undertaking a pre-feasibility on a cold to liquids plant in the area known as Project Mafutha, Firestone Energy - an Australian listed company - is conducting an EIA to explore coal prospects while Eskom has commissioned an EIA for another power station.

Pontes said there is also a huge demand for rental stock which is in limited supply. Over the past two years three bedroom rental rates have increased from about R4000 to R7500 per month. With the anticipated construction of major projects in the Lephalale area, rental demand will continue to grow till 2013. We recently concluded a record rental rate of R12 000 per month for a four bedroom house said Pontes.

Lephalale has seen a strong demand for guest house accommodation with homes being converted for this purpose. He added that there is increased activity in the industrial sector with new buildings coming onto the market which are suitable for owner occupiers or for rental.

http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page196?oid=27746&sn=Detail