A company owned by the UK govt is pumping R500m into lower-end housing, mostly in Johannesburg
- A UK development finance company, the CDC Group, is investing R500 million in lower-end housing units, mostly in Johannesburg.
- The company announced its investment in the Divercity Urban Property Fund this week.
- Divercity is best known for Jewel City in Johannesburg.
- CDC says its money will build some 2,500 housing units over the next five years.
- The investor is wholly owned by the UK government, and says the money will contribute to the UN’s Sustainable Development Goals – but it also has a mandate to make money.
- For more stories go to www.BusinessInsider.co.za.
A development finance company wholly owned by the government of the United Kingdom is pumping R500 million into lower-end housing, mostly in Johannesburg, as it seeks to support jobs and growth, and make money.
The CDC Group on Monday announced the investment into the Divercity Urban Property Fund, which is best known for Jewel City in Johannesburg, a multi-billion-rand redevelopment on the seedier side of the city.
Its money will fund 2,500 new residential units over five years, "predominantly" in Johannesburg, said CDC in a statement.
The CDC Group's only shareholder is the UK's Foreign, Commonwealth & Development Office (FCDO), which describes its purpose as pursuing that country's national interests and to "project the UK as a force for good in the world". The company has a dual mandate, both seeking to support jobs and growth, and turn a profit for reinvestment.
Investing in South African real estate will help contribute to the United Nations' Sustainable Development Goals (SDGs) on economic growth, sustainable cities, and climate change, said CDC.
In February, Divercity CEO Carel Kleynhans told Business Insider South Africa that his fund was attempting to raise money from a range of foreign development institutions, the CDC Group among them. With the Jewel City development settling in nicely, the fund intended to "rinse and repeat", he said – and the pandemic would not hinder those ambitions.
"Affordable residential rentals have been very, very resilient in the face of economic shocks"," said Kleynhans, while there was interest from capital managers "while people are not building new office blocks or shopping centres.
(Compiled by Phillip de Wet)
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