Exclusive: A look at FWJK's co-development at cost methodology
FWJK is disrupting the property development market with a revitalised approach to real estate that’s been dubbed co-development at cost
“Think about buying a brand-new car. Often, you’d have to purchase it from a plush showroom, where 25 percent premiums are added to pay for the salesmen’s wages, commission, and the other costs associated with running such an outlet.
“Now imagine that you could buy directly from the factory and save on paying these premiums by stripping away these additional costs. This is essentially what we’re offering in the property segment.”
David Williams-Jones, the Chief Executive Officer of FWJK, had something of a eureka moment back in 2008, realising the potential in building a property development business through direct collaboration with investors and end users alike. By acquiring property at cost, the 30 or 40 percent premiums generally added onto projects and reaped by profit-driven developers could be removed.
“The site which a company that I was working with was double the size that they needed, so I agreed to take up the other half, sold it off for a profit, and didn’t think anything more of it until they approached me again in 2008,” Williams-Jones explains.
“In this second instance, the engineering company needed to double its footprint, so I called a property broker to find out whether there was any office space selling off plan in the specific precinct which they were looking at, to which the broker answered in the affirmative. I asked how much it was, and they said it was virtually sold out at a price of R20,500 ($1,400) per square metre.
“As a quantity surveyor, I knew that the actual cost was about R14,000 ($958), including the land. And that’s when the lightbulb moment occurred – I knew I was onto something.”
To find out how this cost methodology has taken to the market like a wildfire in the decade or so since, check out our exclusive cover story on FWJK at: www.africaoutlookmag.com/outlook-features/fwjk