IFC provides funding to South African housing developer
The IFC announced an investment to support South African residential property developer, Alleyroads, to build over 1,000 rental apartment units in the Johannesburg area.
IFC’s R325 million (about $20.2 million) loan to Alleyroads will help the company finance construction of the apartments, which are aimed at lower-to-middle income households with an average annual salary of about ZAR238,000 ($15,000 equivalent). The apartments will consist of two bedrooms with an average size of 62m², and will be built near hospitals, schools, markets, and will provide green spaces and play areas for children.
The apartments will help reduce the housing gap in Johannesburg’s affordable housing market, which faces a significant shortage, particularly in the R4,000 to 6,000 per month rental segment. Project completion is scheduled for 2023.
”The group is extremely thankful to IFC for having the confidence in our ability to deliver these much needed housing units to this sector of the residential market. The team is ready to roll up their sleeves and ensure the timely delivery of excellent quality units,” said Ivan Pretorius, managing director of the Alleyroads Group.
”Affordable rental housing is essential for improving quality of life in South Africa, particularly for younger people and those that do not qualify for or cannot afford a mortgage. IFC’s investment in Alleyroads will improve access to good-quality, affordable residential housing in South Africa, which is positively linked to social benefits like better education and health outcomes,” said Adamou Labara, IFC country manager for South Africa.
The apartments will be designed to meet IFC’s EDGE Advanced green building standards, which makes them zero carbon ready and among the first residential units to achieve such a high resource efficiency in sub-Saharan Africa. Alleyroads will install on-site solar panels to supply about 30% of the development’s energy needs.
Since its establishment in 2009, Alleyroads has grown to become a leading affordable housing developer in the build-to-rent and green building spaces.
”The transaction represents a significant milestone in the evolution of the Alleyroads Group and signals the intention of the company to be one of the pre-eminent leaders in the affordable residential housing market. We look forward to a continued partnership with Alleyroads and IFC,” said Mesh Pillay, chief executive of YW Capital, exclusive advisor to Alleyroads.
Get the most from the Africa Private Equity News app by registering a free account. Go to the app home screen and tap the round orange icon in the top-right of your screen.