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
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us