RBA said on Tuesday that it had previously secured certain rights to acquire and develop Kirkney extension 40‚ a property in Tshwane‚ representing about 1‚300 residential housing opportunities.
It has entered a financing and land allocation agreement under which these rights have been transferred to a third party. RBA will be entitled to an origination fee of R10.5m (excluding VAT)‚ and the third party will purchase the property and provide the full funding for the acquisition and services installation.
RBA will be responsible for the management of the land-development process and the sale of affordable housing opportunities generated by the project‚ and will receive a success-based management fee amounting to approximately 35% of the land-development profit. It will also be entitled to all the profits generated through the construction of the houses.
The group expects the R10.5m origination fee to be received in November and these proceeds will be used to further reduce debt and to meet ongoing operational requirements.
The installation of services on Kirkney extension 40 is expected to start in early 2014.