22 January 2007
International Housing Solutions, a joint venture between MuniMae of the US and Irish property group Howard Eurocape, has opened its head office for Africa in Rosebank, Johannesburg and plans to invest in affordable housing development across South Africa.
With extensive experience in financing affordable housing around the world, International Housing Solutions (IHS) “aims to bring foreign capital and expertise to South Africa to boost the supply of urgently needed quality, yet affordable, housing for low- and moderate-income households,” the company said in a statement this month.
Elize Stroebel, who will head up IHS’s operations in SA, said IHS had conducted extensive research into the South African market.
“Figures from the SA Banking Association show a growing demand for housing which local financial institutions and developers are unable to meet, causing the current housing deficit to grow by about 180 000 units each year,” Stroebel said in the statement.
“Although the government has subsidised the construction of some 2.2-million homes in SA since 1994, a further 2.4-million homes are needed, an October 2006 report from the National Treasury revealed.
“Short-term finance has proved to be a major stumbling block in the construction of more of these houses. Initially, IHS aims to help finance homes for households earning between R3 500 and R8 200 per month.”
Soula Proxenos, IHS managing director Africa and UK, said IHS would draw on capital from different sources worldwide to help make home ownership and formal rental more affordable in SA.
“We believe in public-private partnerships, and our experience in the US and other markets is that government and the private sector can be much more effective in partnership than alone. We also believe in partnering with local and international financial institutions.
“We are in the process of establishing many of these relationships in South Africa,” Proxenos said. “IHS will fund the development of both rental and for-sale affordable housing communities by organising international debt and equity financing.
According to Proxenos, IHS’s two parent companies bring with them “a wealth of experience in affordable housing finance and regeneration development … Howard Eurocape has property holdings under management and development worth over €2-billion in Ireland, the UK, Europe and South Africa, including the well known Mandela Rhodes Place in downtown Cape Town.”
MuniMae, she said, was one of the largest sponsors of affordable housing investments in the US, with a portfolio of more than US$18-billion of assets under management.