Tenants in good standing with their rental payments will have first option to buy the Eastern Cape Development Corporation (ECDC) residential units they live in.

ECDC head of properties Luyanda Tsipa says this is part of the corporation's broader strategy to sell assets that don't generate revenue, including residential properties.

"This is also a way of incentivizing those tenants who have paid their rentals regularly while giving them an opportunity to own houses. Already ECDC has signed 100 deeds of sale worth an estimated R10 million between April and July this year.

"The residential units have been sold at market prices ranging from R200 000 to R700 000 and we will be able to use these revenues to fund other development projects," says Tsipa.

ECDC has a substantial property portfolio worth an estimated R500 million and the residential portfolio accounts for R225 million of this amount.

The corporation's 900 residential units are located in Queenstown, King William's Town with the bulk in Butterworth (574) and Mthatha (365).

ECDC is also negotiating with municipalities to include, those tenants who cannot afford to buy the houses, in their RDP housing schemes.

"We have already started to engage Mnquma Municipality in Butterworth, where the majority of our residential properties are located," adds Tsipa.

Tsipa says they are aware of the challenges that make it difficult for people to afford houses.

"We understand that high interest rates and the implementation of the National Credit Act coupled with a tenant base with a bad credit record makes it difficult for people to afford houses, or get housing loans from the banks" says Tsipa.

Tsipa says the favourable situation is where the bulk of ECDC's balance sheet is made up of loans. "However, we are mindful of the fact that 50% of our revenue comes from properties so we will embark on this process in a responsible manner."

Tsipa says the 15% improvement in monthly debt recovery also looks like it will be met. This will translate into debt recovery stabilizing at about R1 million a month.

The corporation plans to have offloaded all residential units by 2009/10 financial year.

For more information contact:

Lucky Tshayivithi

ECDC Tourism Sector specialist

Tel 043 704 5618

Email ltshayivithi@ecdc.co.za

For ECDC media relations:

Lunga Mtshizana

SMG Africa

Tel 043 726 8833

Cell 083 618 7557

Email lunga@smgafrica.com