UK development finance institution, CDC Group has announced a R500 million commitment to Divercity Urban Property Fund – an affordable housing platform focused on the regeneration of cities in South Africa.<\/p>\n
This investment will fund the construction and management of more than 2,500 new residential units over the next five years, predominantly in Johannesburg.<\/p>\n
According to the group, the projects will provide quality, affordable and environmentally sustainable housing for low and middle-income households in well-located but underinvested neighbourhoods in major cities in the country.<\/p>\n
This transaction was also funded by South African impact investor Futuregrowth and existing Divercity shareholders.<\/p>\n
“South Africa faces a housing shortage of approximately 2.3 million units. A significant majority of its lower-cost housing is built on the urban periphery. This limits residential options for low and middle-income households to predominantly informal, congested and low-quality housing on the outskirts of cities,” the group said.<\/p>\n
“It also impedes access to essential services including schools, healthcare facilities, public transport networks and employment hubs needed for improved social inclusion and living standards.”<\/p>\n
CDC said that up to 4,000 construction and permanent operational jobs are expected to be created through the investment.<\/p>\n
Divercity is the main driver behind the Jewel City – the R2 billion-plus redevelopment of Johannesburg\u2019s inner-city district.<\/p>\n
Other projects being handled by Divercity in the inner city include the R400 million Absa Tower refurbishment, as well as new builds in the Maboneng precinct.<\/p>\n
In 2020, as part of president Cyril Ramaphosa’s push for infrastructure projects to help combat the effects of the Covid-19 pandemic and lockdown, Divercity pledged R1.2 billion in a mixed use property development in Gauteng.<\/p>\n
Its existing portfolio of R3 billion comprises 6,500 units and 90,000 square metres of commercial and retail lettable area. Pipeline developments comprise a further 4,000 apartments, and supportive commercial and retail uses of approximately 10,000 square metres.<\/p>\n
Divercity has also acquired its residential property and asset manager, Ithemba Property, which has a 20-year track record in managing affordable rental housing.<\/p>\n
“Through the creative design and structure of this platform by investors CDC, Ithemba and Atterbury \u2013 Divercity will be underpinned by market-leading property development and asset management expertise in rental housing which will be a competitive differentiator,” CDC said.<\/p>\n