IFC and Eris Partner to Support Affordable Student Housing in South Africa
Johannesburg, South Africa, May 11, 2021-To boost the development of affordable, quality, and resource-efficient student accommodation in South Africa, especially for low-income students, IFC today announced financing for a new investment platform managed by South Africa's Eris Property Group.
IFC's 150 million rand ($10 million) equity investment in Eris's South African Student Accommodation Impact Investments Proprietary Limited platform will help Eris develop and operate accommodation for up to 15,000 students over the next five years, helping meet soaring demand.
IFC has also committed to helping Eris, a leading property developer and real estate fund manager, raise additional funds for student accommodation from other parties.
"We are excited to welcome IFC as a core investor in our student accommodation platform. Eris has developed a high-quality product at an affordable rental level and we look forward to executing on our substantial pipeline," said Johan van Vuuren, Executive Head: Student Accommodation at Eris.
"The business case for the investor is clear - a market related return on capital with a measurable positive impact on South Africa's education needs. IFC's support has advanced our aspirations to fully subscribe our target 2 billion rand capital raise, which is now within reach," said Vuyani Bekwa, Executive Head: Fund Management at Eris.
"By helping to address the acute shortage of affordable student accommodation in South Africa this investment will improve student proximity to universities and colleges, improve student safety, and provide a more conducive learning environment," said Adamou Labara, IFC's Country Manager for South Arica.
Since 1994, South Africa's tertiary student enrollment has more than doubled, far outpacing the supply of affordable and high-quality student accommodation. IFC's Student Housing Landscape in South Africa assessment estimates a shortage of about 500,000 beds for students at universities and vocational training schools in the country.
With IFC's support, Eris plans to develop a portfolio of student accommodation in South Africa of between 10,000 to 15,000 beds over the next five years. Eris's entire portfolio will be certified as "green" under EDGE, an IFC innovation that makes it easy to design and certify resource-efficient and zero carbon buildings.
Despite COVID-19, which has led some schools to adopt a hybrid of online and in-person learning, it is expected that demand for affordable accommodation will remain high.
About IFC
IFC-a member of the World Bank Group-is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
