Government-Supported Housing in South Africa

Many, South Africa


Asking Price: Annual Revenue:
$6,000,000 Not Disclosed

Commercial Real Estate: Multi-Family


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RE: Government-Supported Housing in South Africa Broker: Marina Golden
License #: 01056034

Quick Facts

Asking Price: $6,000,000
Annual Revenue: Not Disclosed
Net Profit: Not Disclosed
Cash Flow: Not Disclosed
Total Debt: Not Disclosed
FF&E: Not Disclosed
Real Estate: Not Disclosed
Year Established: Not Disclosed
Employees: Not Disclosed
BBN Listing #: 262450949
Broker Reference #: Not Disclosed

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Business Overview:

South Africa

Invest in low to middle income housing,
with rooftop solar power generation and solar water heating,
investing R280-1,230 million ($20-88 million) over four years,
earning returns of over 15% IRR and 2× MOI
South Africa lacks formal housing for about ten million people (out of a population of 55 million), which requires over two million additional modern lower-income housing units with electricity and hot running water. The Government is addressing this shortage through the Social Housing Regulatory Authority (“SHRA”), with a program (the “Program”) of a million new one or two bedroom rental units for low-income tenants (the “Housing”) over 5-7 years. President Ramaphosa personally mandated the delivery of these one million housing units and the Government has funded SHRA accordingly.
The SHRA qualifies private companies as Other Delivery Agents (“ODAs”) to construct, own, maintain and rent out Housing to qualifying tenants. The SHRA has established criteria and monitoring mechanisms for ODAs, the Housing, and the income levels of qualifying tenants. Over 50,000 such SHRA units have already been constructed and occupied, with effectively no rent payment arrears.
The SHRA provides grant funding of R271,867 ($19,419 ) per unit, about 70% of the cost of project development and construction. The developer funds the remaining cost, owns the project outright and can pledge it as security to raise funding.
The development partner for this proposal is The Housing Hub (“THH”), an experienced builder of low-income homes in South Africa. THH has built over 50,000 housing units over its 30 years of operation, and is accredited by the SHRA as an ODA, allowed to unlock or liquidate its investment in order to attract new funding. THH has thirteen Projects at various stages of development, totalling over 10,000 units, with an aggregate cost of about $296 million (R4.2 billion).
THH requires about $ 88 million to fund its share of the cost of its Projects (about 30%), to unlock the grant funding (about 70%). It seeks $20 million (R280 million) over two years for its next five projects of about 2,600 homes, then the remaining $68 million over two years at the option of the investor.

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Additional Details:

  • The property is owned.
  • The owner is willing to train/assist the new owner.
  • This is not a homebased business opportunity.
  • This may become a franchise resale opportunity.

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