Investment Fund boosts economic development in South Africa, finds latest HIFSA report


Paul Boynton, Chief Executive Officer of Old Mutual Alternative Investments (OMAI)

The Housing Impact Fund South Africa (HIFSA), managed by Old Mutual Alternative Investments, contributed R6.4bn in new business sales which equates to R2.5bn in GDP to the South Africa economy in 2016 and constructed a total of 3684 units (houses and serviced stands) for lower and middle income earners.

That’s according to the latest report from the Fund which has invested R9.15bn into local housing and is now making a real difference to the lives of South Africans. From its inception to 31 December 2016, a total of 7646 units have been transferred to new owners.

HIFSA finances the acquisition and construction of affordable homes for sale and rent to South Africans on lower incomes. It also provides housing loans and rental accommodation for families and students.

In 2016 HIFSA provided funding for 23 affordable housing developments, one of which was the Buh Rein project in Kraaifontein in Western Cape Province where 417 houses were constructed. Another HIFSA project is the Fourleaf Estate in Port Elizabeth, recently awarded the IFC’s highly respected ‘EDGE’ green building certification from the Green Building Council of South Africa – the first residential development in South Africa to achieve this.  The fund’s eight conversion site projects involved the refurbishment conversion of existing buildings into rental properties for student, residential, retail or commercial use.

In addition, the fund provided finance for mortgages and loans for home improvements. A total of 1,562 unsecured housing loans were granted in 2016, the total value of which equated to R19.9m. A total of 622 mortgage loans were made in 2016, with a total value of R277.9m.

Paul Boynton, Chief Executive Officer of Old Mutual Alternative Investments (OMAI), commented:

“This fund targets lower income households earning less than R22,000 ($1,700) a year in 2017, enabling people, often for the first time, to gain access to housing and funding for homes. We’re proud to have contributed to the positive social and developmental change that helps boost economic development in South Africa, while providing investors with sustainable commercial returns.”

As a result of this investment nearly 9,000 high quality jobs have been created in the construction industry and among local suppliers.

The investors into the HIFSA fund are: Old Mutual Life Assurance Company South Africa (54.64%), Development Bank of South Africa (32.79%), Government Employees Pension Fund (10.93%) and Eskom Pension Fund (1.64%).

The fund was launched in October 2010 and of the committed funds of R9.15bn ($0.7bn), approximately R8.2bn ($0.63bn) has so far been invested.