Founded in 2019, Bitprop's first flats in Site B, Khayelitsha went live in May. By December, we had flats in iLitha Park and Makhaza too. This year was about testing our model, establishing a standard, cost-effective building design and learning how best to introduce our offering to the homeowners and tenants who needed it.
“An exciting time when we were trying to figure out what Bitprop was all about.”
- Dylan Walls, COO
COVID brought significant challenges to the construction industry, but rental management continued as usual and the year gave us a good opportunity to focus on our systems and service delivery to our homeowners and tenants.
“COVID lockdown put the brakes on growth, but we focused on developing our design, systems, and relationships with our homeowners and tenants.”
- Jonathan Fisher, CFO
2021 was about improving the design of our flats. This was the year we took our lessons from previous iterations and established a standard design to use across our properties. It was also the year we started incorporating environmentally sustainable materials where possible.
“2021 was a turning point. The introduction of a construction manager and an increase in quality control and systems through all parts of the business made all the difference.”
- Tashriq Abrahams, Architect
2022 was a big year for Bitprop. Our team doubled in size, we expanded to 2 new areas and we tripled the number of homeowners we were in partnership with. We grew from 50 flats to 184 flats, and also standardised the use of plastic-recycled materials in all foundations, slabs and brickwork on our properties.
“The organisation grew in leaps and bounds. This was one of the most amazing years, as our team grew and we operated in an integrated manner.”
- Zandile Nkompela, Homeowner Relationship Manager
Another big portfolio increase - 102% growth - with a particular focus on quality, both in terms of the flats we built and the ongoing rental management services provided to homeowners and tenants. We also moved into Cape Town's oldest township, Langa.
“A very busy year with lots of excitement and many successful stories. Bitprop is slowly closing the housing gap in the Western Cape.”
- Nolitha Vanda, Homeowner Relationship Manager
To date, we have built 372 rental flats and are on track for a 15,4% annual return over 10 years on a ZAR 68,3 million (USD 3,6 million) investment, which demonstrates that our impact model works. This fundamentally commercial model with impact ambitions challenges conventional corporate beliefs about the value of township business and showcases a transformative approach to investment.
Township rental rates are steadily increasing due to strong demand, a trend that has been consistent over the last 5 years. Despite the formal rental market experiencing default rates of over 40% during the pandemic, our properties saw only a 7-8% downturn in payments and maintained a low vacancy rate throughout, with occupancy averaging 92% from April 2020 to March 2021. In 2023, our average occupancy was 96.4%.
Despite initial concerns from financial advisors about tenants not paying rent, we have achieved a 96.4% average occupancy rate and an almost 100% on-time rent payment rate. In fact, our tenants pay 2 days before the due date on average (1st of the month). Much of this is due to strong homeowner-tenant relationships influenced by township social dynamics, the homeowner's constant presence on the property, and our comprehensive management support.
Much of our success can be attributed to strong social relationships among homeowners, tenants and the community. Strong homeowner-tenant relationships are influenced by township social dynamics and the homeowner’s constant presence living on the property, which fosters close connections and social accountability.
We’ve exclusively employed local contractors for construction, upskilling where needed and forging long-term partnerships. This approach supports local builders, challenges stereotypes about township talent, and proves that impactful flats can be built affordably to required specifications. The approach has a positive multiplier effect.
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