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Panel discussion: A New Landscape for Housing Investors. Rob Wesselo, International Housing Solutions. With more than 46 cities in Africa swelling to populations of a million people or more — and 17 of the world's 100 fastest-growing cities located in Africa — there is an acute need to develop housing solutions for so many urban residents. But raising the capital to meet that growing demand for housing remains a significant challenge. In 2013, the African Union for Housing Finance (AUHF) will host a conference under the theme "Raising Capital for Housing Finance.” The Africa-China Urban Initiative will organize a conference panel discussion on "Understanding (and harnessing) Chinese investment interest." Chinese investment in residential development in Africa is increasingly having an impact and demonstrating a track record of opportunity and experience. Panelists invited include Chinese investors setting out their experiences and expectations for the market and an African corporation that has received Chinese financing. http://urban-africa-china.angonet.org/content/29th-annual-conference-mobilising-capital-housing-finance
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A New Landscape for Housing Investors
Mobilizing Capital For Housing Finance ConferenceSeptember 2013
By: Rob Wesselo, Managing Partner International Housing Solutions
IndexBackground.Residential – the missing sector.Opportunities in African Housing.Case study -SA workforce Housing fund.Fund raising “ISSUES”Institutionalisation of the Residential market.How to encourage more institutional investors.
BackgroundIndustrial, commercial and Retail sectors in the SA property market and now in many other African markets are well supported by institutional investors.Industry has out performed both locally and internationally.SA property has been one of the IPD world wide star performers.Institutional appetite has been a big part of the success story of the sector.
Residential – The missing sector.Little or no institutional support for the residential Market.Handful of attempts to do residential listings in SA have failed – why ?IPD measures residential investment sector in most other Geographies but not Africa.Common perception is that this is a risky investment and can’t be managed.
Opportunities in African Housing Market for institutional Investors
The supply/Demand Gap makes this sector a viable development option for institutional investors.Some Private Equity investors are starting to take advantage of this opportunity(IHS Fund/Old mutual fund/Pan African Housing Fund).
Case study-SA Workforce Housing Fund
6 Large institutional Investors (1st close 100% non SA LP’s)Raised R1,87 Billion for investment in the SA workforce Housing market (affordable)Have invested in 35 transactions country wide (spread of developments vs. Rentals).Fund and partners delivering 27 000 housing units.(2000 student beds)Currently fund raising on 2nd fund.
Fund Raising issues
Developing the African market.Understanding the residential opportunity.Investors taking much longer to commit in current fundraising environment.New opportunities in developed markets.Understanding of risks in African market.
Institutionalisation of the residential market
The expectation is that the supply/demand gap will continue to grow.This is caused by rapid Urbanisation ,above average economic growth and slow supply.Institutional capital could help to bridge this gap as it did in the non residential market.What is seen as “risky” in our market is defensive in developed markets.
How to Encourage more institutional Investment
Local investors and DFI’s should lead the way.(starting to happen)Government backed institutions should be seen to be seeding large PE funds.(starting to happen)Residential/Student listings.Prudent governance and reporting of existing fundsDeveloping a thicker mortgage market.
