IHS has built 33,000 homes and raised R25bn, and it says rentals now beat inflation

Affordable rental housing has become the asset class South Africa’s institutional investors can no longer ignore, and the numbers behind it were put on the table in Johannesburg this month.

International Housing Solutions has delivered more than 33,000 homes across South Africa, Namibia, Botswana and Kenya since 2005, raised over R25 billion in institutional capital from local and international investors, and now manages a portfolio of more than R7 billion in assets. Those figures were presented at the annual IHS Affordable Housing Conference 2026, held in Johannesburg on 10 September and sponsored by Nedbank Corporate and Investment Banking.

As BusinessTech reported on 16 September, the conference’s central argument was that the investment case for affordable housing now rests on professionally managed rental portfolios rather than on the promise of social impact alone.

The data is what changed

Khayise Mashifane, Executive for Residential Finance at Nedbank CIB, told the conference that better information has shifted how funders see the sector.

“The availability of data builds confidence in terms of the risk profile of the asset class, so many more investors are now comfortable to play in this space,” Mashifane said.

That confidence rests on a simple set of numbers. Gregory Coe, who heads the FSC Fund at Old Mutual Alternative Investments, pointed to high occupancy levels, high rental recoveries, and the asset’s defensive character. Rental property is tangible, and its yield is relatively predictable.

Modise Mongane, an investment analyst in alternative investments at Alexander Forbes, put the point from the tenant’s side. Rent goes up every year and beats inflation. For a household paying it, that is a squeeze. For a fund receiving it, it is inflation protection.

Rob Wesselo, Group Managing Director at IHS, said the pandemic settled the argument. Shopping centres could not trade. Residential rentals kept collecting.

What this means for a South African renter

The conference’s framing is about returns, and it is worth being plain about what that means on the ground. The case for institutional money in affordable housing is a case for more stock, professionally managed, in a market where the shortage is documented and the waiting lists are long.

It is also a case for annual above-inflation increases for the households living in those units. Both things are true at once, and the conference did not pretend otherwise.

The money is there, the developers are the bottleneck

The panel was clear that capital is available and interested. The constraint sits on the other side of the table.

Vanessa Murray, Divisional Executive for Property Finance at Nedbank CIB, said the biggest obstacle when assessing a project is the developer itself.

“Skill, technical capability, and the track record of the developer are probably the biggest stumbling blocks we face when assessing a project,” Murray said.

Thato Dikgale, Executive Head of Investment Consulting Services at NBC Holdings, made the related point that the sector’s own language is costing it money. Over-complicated terms and concepts distract investors from the value that is there.

“Unless we remove the opaqueness of the sector, we are effectively robbing this asset class of cash flow and money flowing in its direction,” Dikgale said.

Heleen Goussard, Head of Alternative Investment Services at RisCura, added that developers need to understand what kind of impact a particular pool of institutional money is chasing. Some funds prioritise housing. Others are focused on environmental sustainability. Matching the project to the mandate is part of the work.

Tshepo Radebe, a private markets analyst at the EPPF, said the opportunity is marketable precisely because it targets the missing middle, the households who earn too much for a state-subsidised unit and too little for a bond.

Where the costs are won and lost

The conference also turned to cost control, and the consensus was that the damage is usually done before a shovel goes into the ground. Project development, the planning phase and assembling the right professional team carry the largest risks. Procurement matters too, because the wrong materials create costs later. Importing from markets such as China came up as an option, applicable case by case.

The programme also included panels on female representation in the housing sector and on the adoption of property technology and artificial intelligence by developers, managers and funders.

Source: BusinessTech, The strong investment case for residential property in South Africa