Alley Roads, a leading affordable housing developer, has announced that it has recently achieved the milestone of delivering more than 1 000 affordable housing apartments that are completely off the national power grid. Ivan Pretorius, founder and COO of Alley Roads comments.
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“To date, most South Africans could not afford alternative energy solutions, such as solar-and-battery systems,” says Pretorius.
“Alley Roads’ innovative partnerships are unique in the sense that they bring off-grid power solutions to affordable housing tenants, a market very often overlooked when it comes to the roll-out of alternative power options.
“Our main objective over the past 12 months was to implement a funding and technical model that allows a standard two-bedroom unit to be completely off-grid, whilst costing the tenant less than R1 000 per month, with escalations at below 10% per annum.”
Seven developments
Tenants across seven of Alley Roads’ developments benefit from more predictable, low annual escalations, protecting them against grid-related increases and several stages of loadshedding, based on consumption.
The 1 072 apartments are located at the Group’s Inkanyezi Village development in Katlehong South (378 units), Chiawelo-Wisani Heights in Soweto (132 units), Lahoff Mews in Klerksdorp (102 units), Ikamvalethu Gardens in Midvaal (60 units), Kayalane located in Lebowagoma (256 units) and Sandy Lane in Grobler Park, Gauteng (144 units).
In addition, Alley Roads is currently developing an integrated mixed-use development in Meyerton. The two-phased development will ultimately comprise 338 units that will also be completely off the national power grid. This development is adjacent to the first shopping mall in Meyerton, the 20,000m2 Riverstone Mall currently being developed by Alley Roads, which will also be partially off-grid.
“Our tenant base is sensitive to unexpected utility or rental increases and places a high premium on the ability to accurately budget expenses. Alley Roads’ off-grid energy solutions provide a predictable annual escalation of around 10%, linked to the offtake agreement,” explains Pretorius.
Existing rental portfolio
All Alley Roads’ apartments are developed according to the International Finance Corporation’s EDGE (Excellence in Design for Greater Efficiency) green building standards. As “zero carbon ready” developments, they achieve more than a 40% reduction in on-site energy consumption.
These substantial energy savings translate into multiple benefits, including lower energy bills, a significant reduction in carbon emissions, and a decreased dependence on the national power grid, contributing to the long-term financial sustainability of tenants.
For Alley Roads, the incorporation of cutting-edge on-site energy saving technologies elevates the intrinsic value of the property.
Alley Roads’ offtake agreement follows the conclusion of a long-term funding arrangement to retrofit the Group’s existing rental portfolio, including rental apartments and student accommodation, recently onboarded as part of the R1.2 billion Pulse Property Group acquisition.
Alley Roads’ portfolio comprises over 7 500 affordable apartments and student accommodation. Rental prices range from R4 000 to R6 500 per month, catering to lower-to-middle income households with an average annual salary of about R238 000.
“Where feasible, we have earmarked the full Alley Roads portfolio, including properties in Cape Town, East London and KwaZulu-Natal’s South Coast to be fitted with either grid-tied solar or full off-grid solutions.
“The funding enables us to retrofit our newly acquired and existing portfolios to reduce energy consumption in buildings, save tenants money on energy bills, and reduce the Group’s greenhouse gas emissions,” Pretorius said.
Retrofitting refers to a significant energy upgrade on a building to make it more energy efficient. This includes the installation of solar panels, upgrading insulation and smart energy management systems, resulting in reduced energy costs for tenants or building occupiers.
