Commercial property financier TUHF, which specialises in affordable rental housing in South Africa’s inner cities, has announced that it has received a substantial capital injection of R125-million, increasing the company’s net asset value to R200-million.
The investment, received as equity from the National Housing Finance Corporation (NHFC), Futuregrowth Asset Management and the Public Investment Corpor-ation (PIC), follows successes achieved by TUHF in the affordable rental housing finance niche market.
TUHF drives inner-city invest- ment by assisting potential investors in becoming property entrepreneurs through the provision of loans to buy or improve residential property in South Africa’s inner-city areas.
Specialising in reasonably priced housing projects in areas of urban decline, the financier’s strategy is to concentrate on small areas and create buoyant residential property markets in the inner cities.
The NHFC believes this most recent fund injection will act as a catalyst in facilitating investment from other public- and private- sector investors.
Combined with its previous equity investments in TUHF, the NHFC’s current investment is a debt equity conversion of R75-million, with R40-million converted into 20% of B shares and R35-million into preference shares in TUHF.
The NHFC was one of the founding members of the TUHF and has supported it through equity and debt funding.
“This facilitative role has culminated in TUHF’s ability to now raise capital from large investment institutions, which include the PIC and Futuregrowth. We are satisfied with the TUHF business model, which contributes to the creation of entrepreneurs in the inner city who were historically disadvantaged,” explains TUHF chairperson Samson Moraba.
Futuregrowth, a long-standing debt investor, has, through this most recent investment, become a shareholder in TUHF along with the PIC, having made a collective equity investment of R50-million for a 25% share in the financier.
TUHF’s established R1.4-billion investment in the inner city, combined with these equity investments, positions the company well to leverage substantial debt facilities in financing the targeted growth.
“The organisation plays a critical role in the affordable rental market and much-needed inner-city regeneration, and we will continue to play an active role in ensuring that its delivery model is replicated in other parts of the country,” Moraba points out.