Public Investment Corporation (PIC) has invested in Diversity Urban Property Group, one of the developers of Barlow Park in Sandton.
PIC said its landmark investment in Diversity, which is focused on the affordable rental housing market, is its first foray into the multifamily rental sector.
This investment will enable further growth in affordable housing and support Diversity’s ambition to develop a further 2,500 retail units.
The partnership also aims to address South Africa’s severe housing shortage by providing high quality, well-located and affordable housing.
Apartment complexes refer to residential buildings such as apartments that are owned and managed by facility landlords.
The study, sponsored by Diversity, ABSA and the South African Multifamily Rental Association (SAMRRA), showed there is potential for growth in the sector.
The study, conducted by global real estate research firm MSCI, showed that the sector offers consistent performance, low volatility and predictable returns.
“South Africa faces a serious need for housing, so a well-located, well-managed, affordable rental portfolio provides immense value to both investors and society.”
“This investment represents growth in the multifamily asset class,” said Karel Klinghans, CEO of Diversity Urban Property Group.
PIC chief investment officer Kabelo Lihotso said South Africa was facing a severe housing shortage.
Mr Likotso added that PIC is looking for investments that not only deliver consistent returns, but also drive impactful change.
“Our partnership with Diversity aligns with our mission to create accessible, high-quality, affordable housing in strategic locations across the city, supporting economic transformation and upliftment,” Lihotso said.
“By investing in the multifamily rental sector, we are contributing to a resilient and inclusive housing market that delivers real value to South Africa’s communities and stakeholders.”
Diversity’s portfolio includes Barlow Park, which is being developed in collaboration with Atterbury Group, Moolman Group and Twin City Development.
The development is located next to the M1 motorway in Sandton and will be highly visible to those who regularly use this route.
Located at 180 Catherine Street in Sandton, we are just minutes from Sandton City. This suburb is widely known as Africa’s richest square mile.
The project was announced in 2017 and was valued at R3 billion.
However, due to the coronavirus pandemic and changes in the real estate market, construction did not begin until 2022.
The development plans to provide 4,100 affordable housing units across 11 multifamily blocks.
The large-scale development also includes a 5,500 square meter retail center that will house Checkers, Clicks, MR Price, PnP Clothing and Nando’s.
There is also Curro High School, which supports development.
Another similar development recently completed by Diversity is the Jewel City precinct in the heart of Johannesburg CBD.
Jewel City has six city blocks, 17,000 square meters of office space, 10,000 square meters of retail space, schools, day clinics and sports facilities.
Diversity also owns Absa Tower in the Johannesburg CBD.
