Billions in new affordable housing fund available to developers

Global private equity investor, International Housing Solutions, is set to pump more than R1.6 billion into funding the development of affordable homes in sub-Saharan Africa, following major inflows from both local and international investors into its second fund.
The success in raising funding for IHS Fund II, follows the unprecedented achievement by the first IHS fund, the SA Workforce Housing Fund, both in enabling the large-scale development of affordable housing in SA and showing strong returns in this new sector.
Rob Wesselo, Managing Partner of IHS, says the new tranche of investment has allowed it to again invite developers with whom the company will partner, to create the next generation single- and rental developments and student housing.
“The new inflow of funds guarantees a solid pipeline for ongoing investment and we look forward to making a positive contribution in the enablement of developments and the provision of new homes,” he says.
“Our first fund was very successful and financed the development of more than 28 000 units with a combined total value of more than R8.6 billion. It also achieved good risk-adjusted returns for investors. The SA Workforce Housing Fund was established six years ago and pioneered the development of large-scale stock to meet the high demand in the affordable housing sector in SA.”
Wesselo notes that more than 80% of SAWHF investments complied with the requirements of the Financial Sector Charter, which identifies lower income households as targets for funding—these households historically did not receive as much funding from the financial sector as needed.
“We were also able to track the major positive social impact this has had on the lives of many in terms of raising living standards and improving social cohesion,” he says.
“The construction industry remains one of the biggest employers and this provides a double impact for our investments - job creation as well as the creation of homes for families who would not otherwise be able to get a start on the property ladder.”
Wesselo says that one of the fund’s flagship projects, which illustrates the good partnership I H S has forged with developers, was its stake in the Fleurhof development in the Western Johannesburg area, between Soweto in the South and Roodepoort in the north.
The project is one of the largest housing projects of its kind in the country and has become a model of integrated development. When completed it will comprise 10 193 free standing and sectional title, low-and middle-income housing units, 8 nursery and pre-schools, 5 schools, 38 community gardens and play areas, churches, shops, 5 business centres and an industrial park.
The project offers both rental and homeownership options.
Wesselo says the development has transformed the area and is a good example of how I H S’s partnership with developers goes beyond just providing homes to create thriving communities. Fleurhof is already nearly half completed and around 5000 residents currently live there, many of whom have already made further improvements to their homes.
“Our investment focus continues to be primarily in the form of equity in these types of developments. The new tranche of funding allows us to form additional partnerships with developers and gives us the ability to further extend our investment footprint and provide homes to thousands of other families.”
Wesselo says a portion of Fund II will be invested in partnership with developers further afield in sub-Saharan African Countries like Ghana, Mauritius, Botswana and Namibia, where demand hugely outstrips supply and the provision of affordable housing was causing a property boom.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us