CDC Group, one of the largest impact investors in Africa, has announced a USD36 million (ZAR500 million) commitment to Divercity Urban Property Fund (Divercity), an affordable housing platform focused on the regeneration of South African cities.
This investment will fund the construction and management of more than 2,500 new residential units over the next five years predominantly in Johannesburg. It will provide quality, affordable and environmentally sustainable housing for low and middle-income households in well-located but underinvested neighbourhoods in major South African cities. This transaction was also funded by South African impact investor Futuregrowth and existing Divercity shareholders.
CDC’s capital will enable Divercity to grow its rental housing platform that provides low and middle-income households with safe, inclusive and affordable housing options. Construction of the new residential units will help address the growing housing deficit and issues of spatial segregation in South Africa, meeting the needs of people with limited other housing options available, including women, single parents and young families. Up to 4,000 construction and permanent operational jobs are expected to be created, resulting in new economic opportunities, and boosting employment.
The new units will be constructed to green building standards, demonstrating both CDC and Divercity’s commitment to minimising greenhouse gas emissions and supporting climate change mitigation, in alignment with CDC’s commitment to invest from a climate lens.
Ilaria Benucci, Head of Construction and Real Estate, CDC Group, says: “Urban population growth and a challenging macroeconomic environment necessitates patient and long-term investments that will help close the gap between demand and supply in South Africa’s housing market. We are delighted that our investment in Divercity will support the developer to deliver rental housing that will meet the housing needs of groups within the low- and middle- income bracket. We are confident CDC’s investment will have a demonstration effect on commercial investors, ushering in greater investment into the housing sector.”