3 July 2019

South Africa: New Funds Aims for 108 160 Serviced Stands in 3 Years to Reduce Housing Shortfall

Land owners are running scared, offloading land in fear of the expropriation of land without compensation, according to property mogul and CEO of the South African Housing and Infrastructure Fund (Sahif), Rali Mampeule.

Mampeule and CFO Kameel Keshav launched the fund, which aims to produce 108 160 serviced stands within three years to reduce the housing shortfall.

Mampeule said the fund, which is black owned, will accelerate the delivery of serviced land.

"Our intention is ultimately and primarily to focus on trying to create affordable housing in the country. We are not developers. Our idea is to create a fund that is focused and specialised. The idea is to acquire land from anybody. There is no limitation. However, very importantly, it must be part of the spatial planning that is being performed as a government initiative," Keshav said.

Keshav said the fund was not seeking to buy agricultural land or land set out for expropriation without compensation.

'Conduit in the development process'

He said Sahif would acquire land, establish bulk services and zoning and then sell it to the government or to developers.

"Our idea is to be the conduit in the development process to provide land that is fully serviced."

The fund currently has R1.7bn of land and R15.3bn is in the pipeline in the next three years, Keshav said.

The fund will also create 11 000 jobs with a target of yielding 108 160 serviced stands for delivery within three years, he said. The fund has identified land in five provinces.

Mampeule said they realised that there was a gap in the market as a result of land expropriation.

"We are getting a lot of fire sales that are happening. A lot of people that are owning land are scared because they think they are going to be stuck in court cases. Their first option to do is to offload the land. They are offloading at a good price and the land is at a strategic place for us as a fund. We do have an appetite to buy."

He said the fund would provide an opportunity for the poor and working class to be afforded land while the debate around land expropriation continues.

"This is a big space and it needs more and more companies especially in the private sector to deliver on housing. Government on its own cannot deliver on this. We are coming up with an algorithm to make sure that we accelerate the delivery of houses. Sahif is not only speaking to government.

He referred to a group of people - which he called the "missing middle" - who don't qualify for RDP housing, but can't get bonds.

"One of the people we have identified is that missing middle, where the people are saying we want land to build our homes.

"So, if government does buy that land, they can give [that] to [the] missing middle to build their own homes but also, they can address the poorest of the poorest who are looking for an RDP house. We don't build RDP houses, but government will come in because they have ready serviced land. They can build more speedily."

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