IFC has invested R325m to support South African residential property developer, Alleyroads build more than 1 000 rental apartment units in Johannesburg. IFC’s loan will help the company to finance the construction of the apartments, which are aimed at lower-to-middle income households with an average annual salary of R238 000.
The apartments will consist of two bedrooms with an average size of 62m², and will be built near hospitals, schools, markets, and will provide green spaces, amenities and play areas for children. The apartments are intended to reduce the housing gap in Johannesburg’s affordable housing market, which faces a significant shortage, particularly in the R4 000 to R6 000 per month rental segment.
The project will support economic activity by creating 860 jobs during the construction phase, and 45 jobs during the operating phase. The project is set to be completed by 2023.
“The group is extremely thankful to IFC for having the confidence in our ability to deliver these much-needed housing units to this sector of the residential market. The team is ready to roll up their sleeves and ensure the timely delivery of excellent quality units,” said Ivan Pretorius, MD of the Alleyroads Group.
“Affordable rental housing is essential for improving quality of life in South Africa, particularly for younger people and those that do not qualify for or cannot afford a mortgage. IFC’s investment in Alleyroads will improve access to good-quality, affordable residential housing in South Africa, which is positively linked to social benefits like better education and health outcomes,” said Adamou Labara, IFC Country Manager for SA.
The apartments will be designed to meet IFC’s EDGE green building standards, which makes them zero carbon ready and among the first residential units to achieve such a high resource efficiency in sub-Saharan Africa, according to Alleyroads. The company will install on-site solar panels to supply about 30% of the development’s energy needs.
“The transaction represents a significant milestone in the evolution of the Alleyroads Group and signals the intention of the company to be one of the pre-eminent leaders in the affordable residential housing market. We look forward to a continued partnership with Alleyroads and IFC”, said Mesh Pillay, CE of YW Capital, an advisor to Alleyroads.
Alleyroads is a locally owned level two black economic empowerment (BEE) company.