South Africa Real Estate Development Business Plan

Are you looking to start a property development company in South Africa?  here is an example of a complete feasibility study of a real estate development business plan template that you can use for FREE  .

Ok, so we’ve covered all the requirements for starting a real estate development company. We also took it a step further by analyzing and writing a sample real estate marketing plan template backed by actionable guerrilla marketing ideas for real estate development companies. So let’s move on to the business planning section.

Why start a development company in South Africa?

When you talk about real estate development, many entrepreneurs back off because they know it’s a business that requires huge start-up capital.

Without a reasonable doubt, one of the most lucrative, creative and exciting aspects of the real estate industry in South Africa is real estate development. While this type of business can be risky, on the other hand, to be successful in the industry as a real estate developer, you just need to take the calculated risk.

Rising costs due to inflation, currency devaluation and economic problems are among the main factors of concern in the real estate industry. Unexpected government delays, litigation and contractor delays can lead to significant cost increases, especially if the project is heavily reliant on bank loans.

If it is possible that during this period there will be a change in the dynamics of supply and demand in the real estate sector, the project could be negatively affected.

If you are truly convinced that starting a property development company is what you need, you need to write your own business plan. The essence of writing a business plan before you start a business is that you have a plan of action to set up, manage and grow your business.

Below is a sample real estate development company business plan template to help you write successfully with little to no stress.

Example of a South Africa real estate business plan template

  • Industry overview

In 2016, real estate investment in South Africa grew by 55.2%, despite economic turmoil, a weak currency and political uncertainties. In the first nine months of this year, South Africa’s listed real estate sector jumped almost 9%, with stocks nearly doubling to 4.82%. The South African real estate market, which accounts for 7%, continues to show its continued maturity and resilience.

South Africa’s real estate sector is valued at R 5.8 trillion, according to the latest report from the Real Estate Sector Charter Council (PSCC). A new study shows that 75% of global real estate investments are made in highly transparent markets, with South Africa ranking 25th out of 109 markets.

The real estate divisions in the Pretoria region recorded growth of 49% in turnover and 42% in terms of sales. Foreign buyers represent only around 5% of new owners in South Africa.

As with all investment vehicles, there are potential drawbacks that you should consider as a developer. One of the main risks of real estate development is a sudden downturn in the economy. Development of a facility can take two to three years from concept to completion, depending on the size of the project and cash flow.

In fact, some projects can even take much longer. With the time it takes to develop a property from start to finish, a lot of unexpected things can happen unexpectedly.

Real estate development in real estate is highly regulated in South Africa and anyone looking to start a real estate development company. must apply and obtain a license before they can legally work in the industry.

Finally, as a real estate developer it is very important to be creative so that you can use your ideas to meet the rapidly changing needs of society for properties.

Summary of real estate development business plan

Lucas Polokwane® Property Development Company is a South African development company. Our head office will be located at our head office in the heart of Cape Town – Western Cape. We chose the Western Cape because reports show the Western Cape will continue to outperform all other regions of the country, remaining South Africa’s most efficient metro housing market. House price inflation in the region has risen by over 10.35% and there is no indication that it will slow down.

Although our head office is located in Cape Town, we will be opening our branches in major cities in Southern Africa within our first five years. Lucas Polokwane® Property Development will manage real estate development projects for a wide range of clients. We will work to become one of the largest real estate development companies in South Africa.

We are well aware that real estate development requires a huge capital base, so we have big plans for a constant cash flow from private investors. who wants to work with us. We can confidently say that we have a stable financial situation and are ready to take advantage of any opportunity that presents itself in the real estate market.

As part of our plans to make our clients the number one priority and become one of the leading real estate companies in South Africa, we have refined our plans to introduce international best practices. Lucas Polokwane® Property Development has developed plans to help us become the specialist in transforming slums into beautiful cities and turning dilapidated buildings into masterpieces, and we hope this will be our brand and signature.

Lucas Polokwane® A real estate development company will always demonstrate its commitment to sustainability both individually and as a business by actively participating in our communities and incorporating sustainable business practices where possible. We will deliver on our responsibility to the highest standards by accurately and completely meeting the needs of our customers.

Lucas Polokwane® property development company is owned by Lucas Polokwane and his immediate family. Lucas Polauquane graduated in Civil Engineering from the University of Cape Town and successfully gained over a decade of experience before starting his own business.

Other investors with the same investment ideology, whose names cannot be mentioned here for obvious reasons, will be part of the company, especially in terms of pooling funds for acquisition, renovation and improvement. of real estate.

  • Our service offerings

Lucas Polokwane® Property Development Company will provide different types of services for the development of the real estate industry in South Africa. We intend to set up our development company to profitably compete with the major real estate players in the Western Cape and throughout South Africa.

Our business proposals are listed below;

  • Residential development, modifications and renovations
  • Construction management for residential renovation
  • Fire recovery
  • Home improvement
  • Porch construction
  • Solarium supplements
  • Renovation of the kitchen and bathroom
  • Emergency repairs
  • Property and equipment management for clients
  • Real estate conversion services
  • Real estate advisory and consultancy services

Our vision statement

Our vision is to become one of the top 10 development companies in South Africa within the first 10 years of the founding of Lucas Polokwane® Property Development Company.

  • Our mission statement

Our Miss Ion is dedicated to helping people, businesses, owners and clients in Cape Western Cape and across South Africa develop and renovate their homes, offices and properties to fit in. in the ideal image they have.

  • Our corporate structure

The structure of our company does not differ from the structure available in the real estate sector. In fact, we’ve created a structure that will allow easy growth for all of our employees, and we’ve created platforms that will allow us to attract the best hands in the industry.

We are fully aware that the success of any business is the foundation on which the business is built, so we decided to build our development company on the right business foundation. We will ensure that we only hire people who are qualified, honest, hardworking, customer-focused and willing to work to help us build a successful business that benefits all stakeholders.

In fact, the earnings consideration will be available to all of our senior executives and will be based on their performance over five years or more, depending on how quickly we reach our goal.

Lucas Polokwane® Property Development Company is fully aware of how to operate in real estate development, so that adequate conditions and competitive offers have been prepared for independent sales agents. Our marketing department will be responsible for managing this aspect of our sales structure.

Here is the commercial structure on which we will build the Lucas Polokwane® real estate development company;

  • General manager
  • Project Manager
  • Lawyer / company secretary
  • administrator and HR manager
  • head of the construction and repair department
  • business developer / sales and marketing specialist
  • accounting
  • Customer Service Manager / Front Desk Agent

Roles and responsibilities

Managing Director – CEO (Chairman):

  • Improves management efficiency by recruiting, selecting, orienting, training, mentoring, consulting and disciplining managers; transfer values, strategies and goals; distribution of responsibilities; planning, monitoring and evaluation of work results; develop incentives; create a climate conducive to the dissemination of information and opinions.
  • Creates, communicates and implements the vision, mission and general direction of the organization, that is, leads the development and implementation of the overall strategy of the organization.
  • Responsible for setting prices and signing commercial transactions
  • Responsible for business management
  • Responsible for signing checks and documents on behalf of the company
  • Measures the success of the organization

Project Manager

  • Responsible for the planning, management and coordination of all projects on behalf of
  • Supervises renovation projects
  • Ensures compliance during project execution
  • Provides advice on project management
  • Responsible for implementing the risk assessment
  • uses computer systems and software to track people and the progress of ongoing projects
  • ensures that the desired result of the project is achieved, that the most efficient resources are used and the participation of various stakeholders is satisfied.

Lawyer / company secretary

  • Responsible for drafting contracts and other legal documents for the company
  • Consult and manage all legal processes of the company
  • Develops company policy and position on legal issues
  • Studies, forecasts and protects the company from legal risks
  • Represent the company in litigation. (administrative advice, lawsuits, etc.)
  • participates in negotiations on commercial transactions and writes meeting minutes
  • Responsible for analyzing legal documents on behalf of the company
  • Prepare an annual report for the company

Administrator and HR manager

  • Responsible for supervising staff work and administrative tasks. organize
  • Develops job descriptions using performance management KPIs for clients
  • Meet regularly with key stakeholders to review the effectiveness of HR policies, procedures and processes
  • Support office supplies by checking inventory; place and expedite orders; evaluation of new products.
  • Identifies the jobs to be recruited and manages the interview process
  • Carry out the inductions of new team members
  • Responsible for training, evaluation and evaluation of employees
  • Responsible for organizing trips, meetings and appointments
  • Monitors the proper functioning of the office

Civil engineers

  • Responsible for providing real estate development services
  • Establishes and enforces company design and construction standards
  • Ensures repair / construction work meets or exceeds standards in designated geographic area.
  • Provide general advice on assigned construction projects; reviews and makes recommendations on project planning and design; negotiates contracts or participates in contract negotiations; monitors the work and activities in progress on the project construction sites.

Marketing and Sales Manager / Business Developer

  • identifies, prioritizes and reaches new partners as well as business opportunities, etc.
  • Identifies development opportunities; monitors development and contacts; participates in the structuring and financing of projects; ensures the realization of development projects.
  • Responsible for overseeing implementation, advocating for client needs and communicating with clients
  • Finds and qualifies building land according to the company’s land needs; maintains a land research database; initiates discussions with the owners on the possible sale of a property
  • Develops, implements and evaluates new plans to grow sales
  • Documents all contacts and customer information
  • Represent the company at strategic meetings
  • Helps increase sales and business growth

Accounting

  • Responsible for the preparation of the financial statements, budgets and financial statements of the organization
  • Provides managers with financial analyzes, accounting reports; analyzes the financial feasibility of the most complex proposed projects; conducts marketing research to predict business trends and conditions.
  • Responsible for financial forecasts and risk analysis.
  • Maintains treasury, general ledger, and financial reports for one or more objects.
  • Responsible for the development and management of financial systems and policies
  • Payroll manager
  • Ensures compliance with tax laws
  • Manages all the financial transactions of the company
  • Serves as the company’s internal auditor

Registration and customer service

  • Receives visitors / customers on behalf of the organization
  • Receives packages / documents for the company
  • Handles email and phone requests for the organization
  • Distributes mail to the organization
  • ensures that all customer contacts (email, integrated hub, SMS or phone) provide the customer with a personalized customer service experience of the highest level
  • Through interaction with customers over the phone, he uses every opportunity to generate customer interest in the company’s products and services.
  • Handles administrative tasks assigned by the mana line. Manage efficiently and in a timely manner
  • Keep an eye out for any new information regarding the company’s real estate for sale, advertising campaigns, etc. to ensure that accurate information is provided to customers when they request it.

SWOT analysis of the real estate business plan

Just because property development is a very rewarding business in South Africa doesn’t mean that there aren’t problems in the industry. Starting a property development business in South Africa has its own challenges as you will have to comply with the law and compete with entrepreneurs in the property business value chain.

To be competitive in real estate development, we were successful in hiring HR consultants to help us conduct critical SWOT analysis for us. Here is a summary of the results of a SWOT analysis carried out on behalf of Lucas Polokwane® Property Development Company.

One of the strengths we will harness in this sector is our strong relationship with landowners and property investment tycoons across South Africa; our access to financing and our team of experts who have cut their teeth in business development; our commission structure and relationships with independent real estate agents in Cape Town – Western Cape and other provinces of South Africa will also be considered to our advantage.

As a newcomer to real estate development, we may have competition issues with the big developers in South Africa; this is perhaps part of our weakness.

The development opportunities, particularly in Cape Town – Western Cape, are enormous as reports show the Western Cape will continue to outperform all other regions of the country, remaining Africa’s most efficient metro housing market. from South. We are ready to take any opportunity we have.

Some of the threats we are likely to face as a property development company operating in South Africa are unfavorable government policies and the global economic recession; the global economic downturn generally affects purchasing power, and real estate experiences declining sales and profits during this period. There is virtually nothing we can do about these threats except to hope that everything will work to our advantage.

Business plan for real estate development MARKET ANALYSIS

  • Market trends

A notable trend in real estate development in South Africa shows that the largest group of home buyers are millennials; In fact, buyers aged 36 and under continue to purchase homes at a higher price than other age groups.

The market trend in the real estate development sector is that of participation in a real estate development transaction.

How much profit you get depends on many factors, including your attention to detail, your ability to turn a slum into a building, and knowing exactly when to make a development deal. If you, as a property development company, can use all of the above factors correctly, your profit will always be far greater than your loss.

Another clear trend for property development companies in South Africa is that there is also an increased demand for luxury homes in areas such as Hyde Park, Atoll and Morningside. In Gauteng, luxury homes have become popular as they move away from noise and traffic jams. High-end buyers also choose homes that are still wealthy, while providing more security and convenience.

This explains some of their significant sales, including the $ 33 million French-style house in Constance Upper Cape Town and the $ 35 million property in Zimbali.

Every real estate development company has one thing for sure; If they are hardworking, creative and proactive, they will always generate enough income to cover all of their general and operating expenses, keep the business hassle-free, and make a reasonable profit on all the business transactions they engage in.

  • Our target market

As a target company, our target audience reaches all types of owners and people from all walks of life, we enter the real estate development industry with a business concept that will allow us to work with people with different financial capabilities.

In fact, our target market is all of South Africa and we have plans to hire independent agents to represent our business interests wherever they are in South Africa. Below is a list of the people and organizations for whom we have specifically designed our services;

  • Families who want to buy a decent, well-renovated house
  • Corporate organizations wishing to acquire their own property
  • Homeowners who wish to develop / renovate and sell their home
  • Homeowners who want to renovate and sell their property
  • Foreign investors interested in owning and redeveloping a property in South Africa
  • Government of South Africa (public procurement)
  • Government leaders wishing to attract development companies to help them develop / remodel real estate under their supervision

Our competitive advantage

The development industry is a highly competitive industry. Customers will only hire your services if they know you can help them renovate their home to match the ideal home they have in mind.

We understand very well that being very competitive in real estate development means that you must be able to provide development jobs of consistent quality and that you must always meet the expectations of your clients.

Lucas Polokwane® Property Development Company may be a new development company, but the business owner is an industry guru who has everything it takes to grow a business from scratch and become a brand. top notch in no time. time is possible.

In addition to our rich experience and that of our team, we have a very strong online presence which will allow us to attract clients from all over South Africa.

Finally, our employees will be well taken care of and their benefits will be one of the best in our class in the industry. This will allow them to be more than ready to start a business with us, help them achieve their goals and meet all of our business goals. We will also engage independent commission-level marketing agents to help us market our services.

Business plan for real estate development SALES AND MARKETING STRATEGY

We are aware that in the South African property development market, we have been able to hire the best developers to handle our sales and marketing.

Our sales and marketing team will be recruited on the basis of their extensive experience in the sector and will receive regular training to be able to align with their goals and the overall objective of the organization. Training is not only limited to our full-time employees, but also extends to our independent brokers.

Our aim is to become one of the leading property development companies in South Africa, so we have devised strategies that will help us take advantage of the market and become a major force in the industry.

Lucas Polokwane® Property Development Company intends to use the following marketing and sales strategies:

  • Introduce our company by sending cover letters along with our brochure to actual stakeholders. The real estate sector
  • Efficiency of filing applications for real estate, which are exposed for reconstruction and development
  • Advertise our business in magazines and on real estate / real estate websites
  • List our company on the yellow pages (local directories)
  • Participation in real estate fairs, seminars and trade shows, etc.
  • Create different packages for different categories of clients in order to successfully renovate or develop their homes / properties
  • Use on the Internet (on social media platforms) and on our official website to promote our business
  • Encourage word of mouth marketing, especially when we have a home for sale

Source of income

Lucas Polokwane® Property Development The company was founded with the aim of maximizing profits in real estate development. Although we are a real estate development company, part of our staff are also licensed real estate agents, so we intend to generate additional income from various funds of the real estate agency.

We have successfully built a dynamic real estate network spanning all of South Africa to help us build a profitable business Here are the sources we will explore to generate income for the Lucas Polokwane® real estate development company;

  • Residential buildings, changes and renovations
  • Construction management for residential renovation
  • Fire and flood recovery
  • Home improvement
  • Entrance construction
  • Solarium supplements
  • Renovation of the kitchen and bathroom
  • Emergency repairs
  • Property and equipment management for clients
  • Real estate conversion services
  • Real estate advisory and consultancy services

Sales forecasts

It is known that as long as there are landowners in South Africa, they will still need to remodel their properties from time to time to keep up with trends in the surrounding area or in the city.

We are well positioned to meet the challenges that are synonymous with the property development business in South Africa, and we are very optimistic that we will achieve our goal of making enough profit in the first few months of operation and develop activity outside Cape Town in record time. to other provinces of South Africa.

We were able to critically examine the line of development of the real estate business, we analyzed our chances in the industry and we were able to establish the following sales forecasts.The sales forecasts are based on information gathered in the field and on certain assumptions inherent in similar startups in South Africa.

  • First financial year:  500,000 rubles
  • Second financial year:
      1.2 million rubles
  • Third financial year:  1.7 million rubles

Note

  . This projection has been made based on what is available in the industry and assuming that there will be no major economic downturn and no major competitor offering the same services as us in places where we have a strong commercial presence. Please note that the above forecasts may be lower and at the same time higher as some factors are beyond our control.

  • Our pricing strategy

Part of our business strategy is to ensure that we are working within the budget of our potential clients to help them develop or renovate their properties according to their expectations. In most countries of the world, real estate appraisal by professionals is practiced depending on the region in which the object is located, the type of object and other factors.

As we do not directly control the prices of the Real Estate System, we can only comply with what is available when it comes to setting the price of a development contract. But one thing’s for sure, we’ll make sure to do a great job when we get a contract to do it.

Finally, we will ensure that our fees are below the market average for all of our clients, keeping our overhead costs low and collecting payments in advance. In addition, we will also offer special discounts to our customers from time to time, especially when they refer customers to us.

  • Payment options

At Lucas Polokwane® Property Development our payment policy is entirely based on our full understanding that different people prefer different payment options as they wish, but at the same time we do not accept cash payments due to the amount money that will be involved in most of our transactions. Real estate transactions usually involve huge sums of money.

Here are the payment options that Lucas Polokwane® Property Development will offer to its clients;

  • Payment by bank transfer
  • Online bank transfer payment
  • Payment by check
  • Payment by bank transfer

In view of the above, we have chosen banking platforms that will help us achieve our goals without any difficulty, and we will also pay our independent agents (real estate brokers) with the same platforms. Our bank account numbers will be made available on our website and in promotional materials to customers who wish to deposit money or make an online transfer for our services.

Any agent intending to pay in cash will be asked to deposit money into our corporate account and then present their cash register to us.

Real estate development business plan Advertising and advertising strategy

We were able to partner with our consultants to help us define advertising and promotional strategies that will help us enter the heart of our target market. We intend to take the development industry by storm, so we have taken steps to effectively promote and publicize our company.

Below are the platforms we intend to use to promote and publicize our development activity. ;

  • Place ads on print and electronic media platforms
  • Place our flexi banners with our company logo and contacts on every item we put on sale
  • Sponsor relevant TV shows so you can communicate about our brand and what we do
  • Maximize our company website to promote our business
  • Use on the Internet and social media such as Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms (online real estate forums) to promote our business and list our properties for sale and rent.
  • Install our billboards in strategic locations in the Western Cape
  • Distribute our leaflets and flyers from time to time in targeted areas
  • Attend homeowner and resident association meetings to network and represent our business.
  • Make sure all of our employees wear our branded t-shirts and that all of our vehicles carry our company logo

Real estate development company Planning of financial projections and costs

From our market and feasibility studies we were able to establish a detailed budget to achieve our goal of establishing a standard and highly competitive property development company in Cape Town – South Africa and these are the key areas where we spend our start-up capital;

  • General costs for registering a business in South Africa. R50 name reservation request   and R125
     company registration  fee
  • Budget for permits and license  R2,000
  • The cost of hiring a business consultant is  R2,500.
  • Cost of application software (accounting software, payroll software, CRM software, Microsoft Office, QuickBooks Pro, project management software)  R 7000
  • Insurance budget (civil liability, industrial accidents and property damage) amounting to   RUB 5,400
  • The cost of paying rent for a suitable office space with a large space in Cape Town – Western Cape for 12 months at a total of  1.76
      per square foot quantity  85,600 rub.
  • Expenses for the reconstruction of the office (construction of racks and shelves)  20,000 rubles.
  • Expenses for office equipment (computers, printers, fax machines, furniture, telephones, filing cabinets, security gadgets, electronics, etc.)  15,000 rubles.
  • Other start-up expenses, including office supplies ($ 500) and telephone deposits and utilities (  R2 500
      ).
  • Operating expenses for the first 3 months (employee salaries, payment of invoices, etc.)  R 100,000
  • Working capital (investment fund):  2,000,000 rand
      (2 million  rand  )
  • Cost of launching our official R600
     website
  • additional costs (business cards, signs, advertisements and promotions, etc.) (al)  5,000 rubles.

Based on our research and feasibility studies, we will need around 2,200,000 rubles. (  2.2 million rand

  ). create a development company in Cape Town – Western Cape.

In the field of real estate development, the more your capital is important, the more you will have access opportunities and the more you will benefit from. Although we have a working capital of  3 million Rand  , we were able to easily establish relationships to receive loans when needed.

Creation of start-up capital for the  

real estate development company Lucas Polokwana®

Lucas Polokwane® Real Estate Development Company is a business that will be owned and operated by Lucas Polokwane, his immediate family and other business partners. They decided to limit their start-up capital to just three main sources.

  • Generate part of the start-up capital from personal savings and the sale of shares
  • Build seed money from friends and other extended family
  • Create more of the bank’s start-up capital

NB: 

 We have managed to secure about  200,000 rubles  (  personal savings of 150,000 rubles and a concessional loan from family members of 50,000 rubles  ), and we are in the final stages of obtaining a loan of  R 2 million
  from the bank. All documents and documents have been duly signed and submitted, the loan has been approved and at all times it will be credited to our account.

BUSINESS DEVELOPMENT REAL ESTATE DEVELOPMENT: a strategy of sustainable development and expansion

The future of a business lies in the number of loyal customers it has, the capacity and competence of its employees, their investment strategy and their business structure. If all of these factors are missing from the business, the business will close the store shortly thereafter.

One of our main goals in creating Lucas Polokwane® Property Development is to create a business that will survive on its own cash flow, without resorting to external funding once the business is officially launched.

We know that one way to get approval and attract clients is to offer our designed properties and services a little cheaper than what can be found on the market, and we are prepared to survive with that. lower profit margins for a while.

Lucas Polokwane® property development company will ensure that the proper foundations, structures and processes are in place. in place to ensure that the welfare of our staff is well received. Our corporate culture aims to take our business to higher levels, and the training and retraining of our workforce is at the top.

We know that if this is done we can be successful in recruiting and keeping the best hands we can get in the industry; they will be more committed to helping us build our dream business.

Checklist / Milestone

  • Company name availability check:  complete
  • Business registration:  complete
  • Opening of corporate bank accounts with various banks in South Africa:  completed
  • Opening of online payment platforms:  completed
  • Application and obtaining of the tax identification number:  in progress
  • Business license and permit application:  Completed
  • Purchasing business insurance:  complete
  • Office rental and renovation of facilities in Cape Town – Western Cape:  Completed
  • Feasibility studies:  completed
  • Capital raising from CEO / President and business partners:  completed
  • Loan requests from our bankers:  in progress
  • Preparation of the business plan:  Completed
  • Compilation of Employee Handbook:  Completed
  • Drafting of contractual documents and other relevant legal documents: under  development
  • Creation of the company logo:  finished
  • Advertising printing:  finished
  • Recruitment:  in progress
  • Purchase of furniture, office equipment, electronics and facial repair products:  in progress
  • Creation of an official website for the company:  In progress
  • Creation of information for companies:  ongoing
  • Hygiene, safety and fire safety conditions:  in progress
  • Establishment of business relationships with major industry players:  ongoing

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