Overseas private investors’ boost funding for affordable housing

The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s Development Finance Institution, has approved $80 million in financing for International Housing Solutions Fund II, the private equity fund that provides high quality, affordable housing units to families across sub-Saharan Africa.
IHS Fund II follows the success of the fund manager’s first fund, the SA Workforce Housing Fund, which has enabled the development of more than 28 000 housing units with a combined value of more than R8.6 billion ($803 million).
Soula Proxenos, Managing Partner at IHS says “It is encouraging that there is such strong interest in the region and this asset class from both local and international investors.
“IHS is particularly pleased that the second fund’s strategy will incorporate a strong ‘green’ component especially as this was previously regarded as beyond the scope of affordable developments.
“We believe we are breaking new ground and hope our approach will become a model of how to effectively use green building technology in the gap housing sector without the financially prohibitive aspects. Affordability is always one of the deciding factors with regards to new developments.
“Our goal is to use our capital, expertise, and influence to help eliminate poverty and promote shared prosperity. We believe the inclusion of the incubation of green tech in future developments will lead to a new approach to affordable housing construction on a global scale.
“Our first fund, the SA Workforce Housing Fund, proved that we could make affordable residential real-estate attractive to global institutional investors by delivering good returns. We aim to do this again in our second fund. For IHS, good business has always meant doing well financially while making a positive social impact,” she said.
She said the second fund which has a target capitalisation of approximately R3-billion ($280 million) will invest in multi-unit and stand-alone housing developments in South Africa, Ghana, Botswana, Namibia and Mauritius.
“Across these countries, significant numbers of existing housing are in need of replacement or modernization. Demand for housing in these markets far outpace supply particularly for the middle of the affordable housing segment.
“Government programs often focus on the poorest segments of the population while most private-sector builders are drawn to the luxury end of the market, creating what’s known as a “missing middle”. Fund II places a specific focus on this overlooked segment in the Sub-Saharan Africa housing market.”
Brooks Preston, OPIC’s Vice President for Investment Funds says “Sub-Saharan Africa has been a priority region for OPIC.
“Our goal is to find investment managers with good commercial acumen that can deliver development impact and profits in tandem.  IHS is an excellent case of a private equity manager that is achieving both goals by building and selling affordable housing for the rising middle class. IHS delivers near term economic growth, community development, and attractive returns.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us