IFC, Eris Property partner to support affordable student housing in South Africa
To boost the development of affordable, quality, and resource-efficient student accommodation in South Africa for low-income students, IFC announced financing for a new investment platform managed by South Africa's Eris Property Group.
IFC's $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.