International Housing Solutions (IHS), an international joint venture between MuniMae of the United States and top Irish property group Howard Eurocape, has expanded its operations to the African continent, with its head office for Africa to be situated in Johannesburg.
With extensive experience financing affordable housing around the world, IHS aims to bring foreign capital and expertise to South Africa to boost the supply of quality, yet affordable, housing for low- and moderate-income households. It also favours taking a joint-venture approach with local partners in the sector.
The chairperson of IHS and Howard Eurocape, Frank Gormley, has a strong affinity for South Africa and has already committed billions to help rejuvenate the historical and cultural heart of Cape Town.
Elize Stroebel, who will head the South African operations, says IHS has conducted extensive research into the South African market.
“Figures from the South African Banking Association show a growing demand for housing which local financial institutions and developers are unable to meet, causing the current housing deficit to grow by about 180 000 units each year. Although the government has subsidised the construction of some 2,2-million homes in South Africa since 1994, a further 2,4-million homes are needed, an October 2006 report from the National Treasury revealed.
“Short-term finance has proved to be a major stumbling block in the construction of more of these houses. Initially, IHS aims to help finance homes for households earning between R3 500 and R8 200 per month. We will also be pursuing partnerships with local financial institutions to further expand our scope.”
According to Soula Proxenos, IHS MD for Africa and the United Kingdom, IHS will be drawing on capital from different sources worldwide to help make home ownership and formal rental more affordable.
“We believe in public-private partnership, and our experience in the US and other markets is that government and the private sector can be much more effective in partnership than alone. We also believe in partnering with local and international financial institutions.
“We are in the process of establishing many of these relationships in South Africa. IHS will fund the development of both rental and for-sale affordable housing communities by organising international debt and equity financing.” — I-Net Bridge