International Housing Solutions Fund in South Africa

An example of how accessing capital markets can speed up the development issue of affordable housing:

http://www.intlhousingsolutions.com/about/Sponsor%20Information.html

International Housing Solutions successfully launched a 10-year equity fund and have raised approximately R1.8 billion from investors around the world to invest in South African residential real estate for the low and moderate income households (up to 10% of the fund may be invested in select countries in Africa). The predominance of equity investors are North American (including Canada) with DBSA and Citibank SA as local South African investors. OPIC has contributed about 38% of the fund as debt.

IHS marketed the concept to international investors on the basis that South Africa is an attractive market for housing related investments due to the rapid growth of housing demand; acute housing needs at the lower to middle end of the income spectrum; and strong evidence of economic and political stability. The demand for housing, particularly in the moderately-priced segment of the market, far outstrips supply. In the opinion of IHS, the Fund Sponsor, this greatly lowers sales risk and supports profitable returns to equity providers.


Cheryl Gladstone
Columbia Business School | MBA 2010
CGladstone10@gsb.columbia.edu