The International Finance Corporation is raising a $10m equity investment to boost housing accommodation, especially for low-income students in South Africa.
The IFC, a member of the World Bank Group, stated this on Tuesday while announcing financing for a new investment platform to be managed by South Africa’s Eris Property Group.
According to IFC, the equity investment in ‘Eris’s South African Student Accommodation Impact Investments Proprietary Limited platform’ will help Eris develop and operate accommodation for up to 15,000 students over the next five years.
It would also help to meet soaring demand of the students.
Eris, a property developer and real estate fund manager, will raise additional funds for student accommodation from other parties, the corporation added.
According to IFC’s Country Manager for South Africa, Adamou Labara, “By helping to address the acute shortage of affordable student accommodation in South Africa this investment will improve student proximity to universities and colleges, improve student safety, and provide a more conducive learning environment.”
The Executive Head of Student Accommodation at Eris, Johan Vuuren, said, “We are excited to welcome IFC as a core investor in our student accommodation platform. Eris has developed a high-quality product at an affordable rental level and we look forward to executing on our substantial pipeline.”
The Executive Head of Fund Management at Eris, Vuyani Bekwa, added, “The business case for the investor is clear – a market related return on capital with a measurable positive impact on South Africa’s education needs. IFC’s support has advanced our aspirations to fully subscribe to our target R2bn capital raise, which is now within reach.”
The IFC Student Housing Landscape in South Africa assessment estimates a shortage of about 500,000 beds for students at universities and vocational training schools in the country.
With the support, Eris plans to develop a portfolio of student accommodation in South Africa of between 10,000 to 15,000 beds over the next five years.
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