US to Invest in SA Housing

US to Invest in SA Housing

An article in a property portal magazine in the UK has reported that International Housing Solutions (IHS), an affiliate of Mortgage & Equity, LLC (‘MuniMae’) and Howard Eurocape Limited has announced that it has disclosed US$175 million of capital commitments and participating debt to its South Africa Workforce Housing Fund.

The Fund invests in middle and low-income housing for sale and for rent in South Africa. There are several additional investors who are expected to commit capital to the Fund over the next few months. Overall, IHS anticipates the Fund to total US$240 million, creating an estimated 30 000 homes to meet the increasing demand for housing in South Africa. Once fully funded, an investment of up to US$1 billion will be invested in workforce housing in the country.

Of the US$175 million, US$95 million is from a North American pension fund and a US foundation endowment. Also included is US$80 million in participating debt from the US Overseas Private Investment Corporation (OPIC), which will assist in leveraging returns for fund investors, while spurring on economic and housing development in South Africa. OPIC is a US government sponsored agency that supports private investment in emerging markets. It aims to assist US businesses invest overseas, fosters economic development in new and emerging markets, helps the private sector manage risks associated with direct foreign investment and supports US foreign policy.

IHS is a joint venture formed by MuniMae in 2005, which is a widely recognized leader in affordable housing finance in the US, with over US$20 billion of assets under management. The company is affiliated with Howard Eurocape Limited, which is a prominent property investment and development company based in Dublin, Ireland.

According to country manager for IHS UK, Elizabeth Austerberry, “[They] are very proud to have launched [their] first fund outside the USA and look forward to doing the same in the UK. IHS is dedicated to providing financing for affordable and mid-market housing projects in countries throughout the world”.

The information in this article is courtesy of People Property Portal (“American Investment for South African Housing”, 7 May 2008).

If you would like to buy or sell property in South Africa, please visit www.sahometraders.co.za.