CDC Group, the UK’s development finance institution (DFI), on Monday (July 5th) announced that it has invested 500 million rand (36 million USD) in Divercity Urban Property Fund (Divercity), an affordable housing platform focused on the regeneration of South African cities. This investment will finance the construction and management of more than 2,500 new residential units over the next 5 years, mainly in Johannesburg.
It will also need to provide quality, affordable and environmentally friendly housing to low- and middle-income households in well-located but under-invested neighborhoods in major South African cities. CDC’s capital will allow Divercity to develop its rental housing platform that provides low- and middle-income households with safe, inclusive and affordable housing options.
“The growth of the urban population requires much larger investments in the long term. This will help close the gap between demand and supply in the housing market in South Africa, ”said Ilaria Benucci, Head of Construction and Real Estate, CDC Group
For his part, Carel Kleynhans, CEO of Divercity, said this investment will add significant value to the fund’s goal of changing the face of affordable rental housing in South Africa and establishing it as an asset class of superior quality “.
As a reminder, South Africa faces a housing shortage of around 2.3 million units. A large majority of its social housing is built on the urban outskirts.