News/Insights

TUHF has backed the complete conversion of Remington House on Nugget Street in the Johannesburg CBD into an EDGE-certified mixed-use building – delivering affordable, well-located rental stock while demonstrating a replicable model for green inner-city redevelopment. The project is TUHF’s first pilot to earn EDGE certification under its new collaboration with the International Finance Corporation (IFC).

Originally an abandoned and later hijacked office block, Remington House has been transformed through a brownfields refurbishment that retained the frame, lift shafts, and much of the existing structure, reducing embodied carbon and construction waste. The building now comprises five ground-floor retail units, 14 secure parking bays, and 133 self-contained bachelor-type residential units across the podium and tower levels, with shared amenities including a study centre and gym. A solar installation on the podium roof complements power needs, while a borehole and filtration system supplements the water supply.

“When Abiyot Kassa Ferede approached us, the building had been vacated, and he was seeking funding for the conversion of the building from office to residential use. We had worked with Abiyot on a similar high-rise conversion project before, so we knew he had the entrepreneurial capability we look for in our clients,” says Khumbulani Chikomo, Portfolio Manager at TUHF. “Remington House proves what focused densification and reuse of existing assets can achieve in the inner city. Our role was to structure the finance and assemble an experienced professional team so the building could be delivered to a high standard and meet EDGE requirements.”

Key green interventions include centralised heat pumps that replace individual geysers, low-glazing to reduce heat gain and loss, LED lighting, low-flow showers and taps, dual-flush toilets, and a solar back-up system. On certification, the project achieved 27.81% energy savings, 22.40% water savings, and a 51.00% reduction in embodied carbon in materials, relative to baseline.

The building’s location and design support urban densification near jobs, universities, transport hubs, and amenities. While initially designed as a multi-family rental, market demand has led Remington House to operate as student accommodation without changing its residential use, alongside two adjacent TUHF-supported properties that together form a growing student precinct with close to 1,000 students.

Remington House also showcases TUHF’s green finance pathway with IFC. As part of the programme, successful EDGE certification entitles the borrower to a performance-based incentive of $1,080 per unit (approximately R18,500), paid directly toward settling the borrower’s loan, covering EDGE consulting costs, and accelerating amortisation. This sits within a broader TUHF–IFC initiative to scale affordable, green housing, including advisory support and access to performance-based incentives under IFC’s Market Accelerator for Green Construction (MAGC).

“The ‘greening’ is not cosmetic,” Chikomo adds. “It stabilises running costs for entrepreneurs and shields tenants from service failures, which improves affordability and quality of life. Remington House shows that certified green outcomes are viable in affordable rental and bankable when structured correctly.”

Project facts

• Address and context: Nugget Street, Johannesburg CBD; brownfields conversion of a vacant, hijacked office building (7191.00m² gross building area)
• Programme: 5 retail units; 14 parking bays; 133 bachelor-type units; study centre and gym.
• Resource systems: Centralised heat pumps; solar installation; borehole and filtration; LED lighting; low-flow fixtures; dual-flush toilets; optimised façade glazing.
• EDGE results: Energy 27.81%; Water 22.40%; Materials (embodied carbon) 51.00%.

IFC green incentives: $1,080 per EDGE-certified unit paid toward loan settlement; advisory and PBI support via IFC/MAGC.

By Nqobi Malinga, uMaStandi Portfolio Manager

Even though townships have historically been perceived as areas with limited resources and opportunities, with the right approach, they can be transformed into vibrant, functional, and attractive communities. Making a township property attractive doesn’t only uplift the area, it can also translate into greater profitability for property entrepreneurs.

As someone who has spent years working in urban development, I have seen firsthand the potential that lies within our townships. By developing properties with care and with their tenants’ needs top of mind, property entrepreneurs developing in the townships can reap the benefit of offering quality real estate. For instance, while rentals for affordable housing are often around R2 500, high quality township properties can earn between R3 500 to R4 500 for an apartment. In fact, within the affordable accommodation sector, uMaStandi has observed that tenants are prepared to pay an additional R1 000 to R2 000 for properties offering sought-after features.

It is extremely important that property entrepreneurs bear in mind that their tenants are people first and cater to them accordingly. There is some psychology behind creating a property that is not just four walls and a ceiling, but is an attractive, livable space. Tenants, as all people do, want a haven from the world and a place that they can feel safe and happy in. Having a home that is of higher quality can fill tenants with a sense of achievement and pride. Offering tenants a place that goes beyond meeting their basic needs for survival and security, but their emotional needs as well, makes it more likely that they will stay in their residence for a longer term, thus ensuring greater retention and less tenant churn.

With this in mind, there are several key factors in properties that command higher rentals.

For starters, in these properties, size matters – it seems that unit sizes of 25 square meters is the sweet spot for bachelor or one-bedroom units, allowing renters to enjoy a larger queen-sized bed and entertainment area, as well as a desk. And be sure to use the space well.

An effective way to make any unit more attractive is by using natural lighting. Build with large windows in the right places, particularly in bedrooms and lounge areas, helps bring in ventilation and light, thus elevating the living space. Additionally, high quality properties must be kept clean and well maintained.

Secondly, having one’s own facilities and an independent kitchenette, rather than having to share a bathroom and kitchen, are significant drawcards and features that people are willing to pay a little more for.

Thirdly, think in terms of tenant convenience for utilities and facilities. Reliable water and electricity services, along with fast Wi-Fi, are similarly essential for tenant satisfaction. Safe and adequate parking is also important, especially for young professionals or those for their car is a part and parcel of their work. Furthermore, ensuring that your township property is safe and secure will make it more attractive to potential tenants. This can be achieved through well-lit streets and secure fencing.

Finally, I would encourage property entrepreneurs to invest in energy saving measures, to offset the rising costs of electricity. One way to do this is to use energy saving lightbulbs throughout the property and implement prepaid meters for electricity and water. And if geysers are shared, include a timer switch to manage the electrical demand for heating of water.

While it is certainly possible to achieve slightly higher rentals in the affordable housing space, it does come with a considerable amount of effort and intention; from planning to design, building and finishes. However, it is well worth it, not only because it makes for a higher level of profitability, but also because it uplifts the whole area, contributes to urban regeneration and enables people to enjoy a higher standard of living.

TUHF, a leading South African financier of affordable residential property development, is proud to announce its partnership with the International Finance Corporation (IFC), a member of the World Bank Group, to expand access to affordable housing while championing green construction practices.

IFC’s up to R960 million (equivalent to $54 million) loan to TUHF will drive inclusive, sustainable urban development by supporting the company to finance mostly small and medium enterprises (SMEs) to develop affordable green-certified rental buildings in South Africa’s inner cities and townships.

This partnership marks an important milestone for TUHF, extending TUHF’s impact agenda by taking its green finance initiatives to new heights. The collaboration positions TUHF as one of South Africa’s leading impact financiers, delivering both social and environmental outcomes through its investments.

IFC’s investment will be channeled through an up to R1.2 billion special purpose vehicle, with additional funding to be contributed by TUHF and third-party lenders. The local currency loan protects South African borrowers from the negative effects of exchange rate fluctuations, and its long-term nature ensures financial sustainability while maximising impact. This initiative further cements TUHF’s objective of building a Sustainable Impact Bond approach – one that delivers on both social and environmental impact while ensuring financial inclusion and long-term resilience.

“Our partnership with IFC underscores TUHF’s dedication to delivering sustainable, affordable housing solutions that address socio-economic and environmental challenges – in other words, sustainable impact — in South Africa’s urban landscape,” said Paul Jackson, CEO of TUHF. “Together, we aim to empower property entrepreneurs, improve livelihoods, and set new benchmarks for sustainable impact investing in the housing sector.”

“IFC’s partnership with TUHF represents IFC’s commitment to innovative finance, job creation, and sustainable and climate friendly economic growth,” said Ethiopis Tafara, IFC Vice President for Africa. “Together, we will provide SMEs with opportunities for growth and create much-needed job opportunities, contribute to inner city rejuvenation and affordable rentals for low-income communities, and help set green standards for housing in South Africa.”  

Additionally, IFC will provide advisory services to enhance TUHF’s capacity to originate and manage loans for certified green buildings. The introduction of an ESG System, developed with support from the IFC and Proparco, will further strengthen TUHF’s ability to monitor and report on ESG outcomes.

Supporting green and inclusive growth

This partnership will be supported by the Market Accelerator for Green Construction (MAGC) program, a collaboration between IFC and the UK government to promote green construction in emerging markets. TUHF’s projects will align with the program’s objectives by prioritising retrofitting and converting existing buildings, reducing embodied carbon, and constructing new developments that meet stringent green building standards. Retrofits and conversions will qualify for a performance-based incentive (PBI) funded by MAGC.

The MAGC provided PBIs, totaling $7.8 million, are designed to support TUHF’s end borrowers, who often operate in high-risk or underserved areas. These incentives will directly reduce loan amounts, making sustainable development more accessible to South Africa’s SME property entrepreneurs.

Driving impact with ESG excellence

The IFC partnership also complements TUHF’s focus on Environment, Social, and Governance (ESG) principles, reinforcing its broader commitment to transformation and impact investing. By incorporating green finance into its core operations, TUHF facilitates urban densification and combats sprawl, enabling tenants to access affordable rental housing near economic hubs and amenities.

In its 2024 financial year, TUHF delivered around 3,043 affordable housing units, creating homes for more than 9,130 people and bringing its total delivery since inception in 2003 to over 50,000 units. This collaboration with the IFC is expected to significantly increase these numbers, creating job opportunities and stimulating local economies, while supporting objectives to reduce carbon emissions within South Africa’s inner cities and suburban areas.

“As TUHF operationalises the partnership, we remain focused on our mission to foster financial inclusion, urban regeneration, and sustainable impact. With the IFC’s backing, TUHF is uniquely positioned to showcase its leadership as a South African impact investor, combining both social and environmental outcomes to build thriving, inclusive cities,” concludes Jackson.

By Khumbulani Chikomo, Senior Portfolio Manager

Financial literacy is critical for property developers. It can mean the difference between smoother success and having to learn some tough lessons through bitter experience.

Crucially, property entrepreneurs need to understand two key aspects of their investment journey: managing interest rate fluctuations and meeting lending requirements. Property prices tend to rise when interest rates fall and drop when rates go up – it’s a common inverse relationship. While stable rates support steady property values, investors should also look for interest rate levels that make properties affordable to sustain and easy to resell, if ever necessary.

For the sake of context and to position where South African entrepreneurs currently stand with regards to interest rates, let’s briefly look back five years. Interest rates (using the prime rate as a proxy) fell to their lowest in 2020 (7%) when there was a need to stimulate business activity following the Covid-19 pandemic. They were subsequently hiked to a peak of 11.75 % in 2023 as a measure to curb inflation. Since then, inflation has largely been under control, and there were, and still are, pressures to kick-start growth. Thus, there has been a fall in rates almost every quarter by 25 basis points.

The most recent falls in the interest rate have seen a resurgence of business activity in the property market. Since 2024, we have been seeing more and bigger transactions happening. While interest rates will undoubtedly fluctuate over a loan’s lifespan, being forewarned enables entrepreneurs to respond accordingly. Managing interest rates wisely begins at the point of acquisition, by buying well.

Optimally, the acquisition cost should be low and the yield high, ideally substantially higher than the cost of funding the property. That way, if a property entrepreneur leverages, they can benefit from a positive multiplier effect of borrowing on their return on equity. The converse is true for low yield and high cost of funding, where property entrepreneurs end up carrying the project with a lot of equity to make the project work.

It’s important to note that buying well doesn’t mean entrepreneurs can turn a blind eye to their level of debt and debt service or interest cover. I recommend acting conservatively and aiming for a good debt service cover, which is at least 1.3 times the instalment.

Furthermore, the loan-to-value should also be conservative, below 80%. This helps property entrepreneurs in the event of distress, enabling them some headroom to cover their liabilities and weather the effects of interest rate fluctuations.

As mentioned, interest rates inevitably rise and fall, but there are several strategies to manage cash flows when interest rates are high. These include asking to service interest only during high-interest rate periods; asking to reset the loan and pay over a longer period in smaller instalments, and thirdly, injecting capital by selling lower-yielding investments and settling expensive debt, provided you don’t have early settlement penalties. It’s not prudent to have idle cash while servicing expensive debt.

Another strategy is to review rentals to improve income. Doing so could help increase net operating income and debt service cover ratio. A final way to weather high interest rates is by reducing one’s running costs through greening and other cost management measures, which increases the net operating income and debt service cover ratio.

It is equally important to understand lending criteria and what has changed in response to the current economic climate.

As TUHF, we have generally been conservative in our lending criteria, due to our higher appetite for risk lending in inner cities, taking on construction risk and engaging with smaller start-up clients. This has meant justifying higher interest rates, higher debt service cover ratios and lower loan-to-value ratios along with longer loan terms. Lately, however, we have expanded our capital markets reach and are also spreading our footprint into in-city and suburban areas and funding new builds as compared to our traditional brownfields. These changes mean that more competitive funding is currently available for clients to undertake larger in-city or suburban deals.

Even as availability is there, there are three pitfalls that can lead to being denied lending. The first is failing to invest time in understanding the market or the complexity of the property projects, and presenting assumptions that are not viable. Secondly, if a property entrepreneur’s credit profile and background do not reflect their capacity and the required good commitment and integrity to honour their commitments, they will likely be denied. And finally, lack of compliance with the required personal financial management, tax compliance and FICA documents will lead to TUHF being unable to offer a contract.

Understanding the dynamics of interest rates and lending criteria is crucial for property investors. By staying informed and adopting strategic approaches, property entrepreneurs can demonstrate they are prepared for property investment and management and their ability to navigate the complexities of the market.

Student accommodation, or the lack thereof, has been grabbing news headlines regularly in the past. The shortfall is estimated at up to 500 000 beds. Student protests at the University of Johannesburg, the University of the Witwatersrand, the University of Cape Town and the Cape Peninsula University of Technology – to name just a few – have taken place to highlight the student housing crisis.

Clearly, there is a strong need for more decent, affordable accommodation near South Africa’s Higher Education Institutions – from Universities to TVET Colleges. But property entrepreneurs keen to take advantage of this opportunity will need to strike a careful balance if they are to succeed.

“The financial considerations for a student accommodation project are very similar to those of any other affordable housing development,” says Siya Jele, Portfolio Manager at TUHF. “However, understanding all the ancillary costs involved in providing housing for students, that meets all the criteria outlined by universities and preferred by students, is crucial as these can be quite different.”

Utilities and Wi-Fi, for example, must be built into the rate per bed. Landlords can’t recover these costs from students individually, as they normally would with typical tenants. Depending on where the facility is located – the distance from the facility to campus – landlords may also be required to provide transport services to and from campus. “You can’t just charge a bus fair,” Jele explains. “The cost of the shuttle and running the service must be included in your rate per bed.”

Students are fickle with high expectations. “Students prefer to not have to share facilities like bathrooms or kitchens en masse, so the old dormitory-style approach doesn’t work in this space anymore,” Jele says. “Properties must be designed with private bathrooms and kitchenettes included in each unit. These units can be shared by a limited number of students. Wi-Fi, too, is a deal-breaker for students – if it’s unreliable or slow they will move, the word will spread, and you’ll find it difficult to fill your units next year.”

“A multi-residential block of flats, for example, can command a cost-to-income ratio of around 30-35%, while for student accommodation its closer to 50% if you’re running a decent facility,” Jele says. “So being mindful of these unique costs is very important for a successful business in student housing.” Student Housing provision is actually closer to Hospitality than normal residential accommodation.

Even so, the profit margins on student accommodation are good, as long as entrepreneurs provide the right product – one that meets the demands of students and universities. “It’s just a matter of balancing the increase you’re getting in terms of rental income against the commensurate increase in your operating costs,” Jele explains. “You have to put a lot more in to get a lot more out.”

Jele shares some key examples of how TUHF clients manage their operating costs effectively. “We’ve seen clients achieve good results by implementing Building Management Technology geared towards sustainable energy and water use to minimise utility costs. Placing motion-sensing light fittings in common areas to turn lights on and off – depending on whether students are using the space or not – can significantly decrease energy costs.

“One client has even linked the lights and plugs in each unit to students’ building access cards, so that they work much like a hotel key card. When students enter their rooms, they slot their card into a slot on the wall that activates the lights and plugs. When they leave, they take the card with them – turning everything off except the fridge.”

Other examples include using heat pumps instead of traditional geysers and low-flow water fittings.

“Well managed, well-appointed student accommodation facilities can give a higher return than standard affordable rental housing businesses, but the risks are also higher,” Jele says. One such risk lies in cash flow management, as student accommodation providers can only expect rent payments 10-months of the year and are often heavily dependent on NSFAS for payment.

NSFAS’s poor handling of private student accommodation payments has also been making headlines for well many a year. Late payments from NSFAS directly, or from universities who channel NSFAS payments to accommodation providers, can put property entrepreneurs in a very challenging position in terms of meeting their loan obligations.

“NSFAS is such a massive lever. It poses the biggest risk to successful student accommodation projects at the moment,” Jele says. “People can go for months without receiving payment, all the while having to maintain the standard of facilities they provide, with the result that a disproportionate volume of TUHF’s impaired loans are for student accommodation projects. Following on from this, as a responsible lender, it becomes increasingly more difficult to lend to new entrants due to the associated payment risk.”

That being sad, NSFAS could also drive the opportunities in student accommodation. “The focus from investors has been on developing student accommodation facilities close to traditional universities,” Jele explains, “But eventually this market will become saturated. At the same time there is very little focus on providing decent accommodation for students at TVET colleges. These institutions face the same dire shortages. If NSFAS resolved its funding mechanism challenges and drove funding towards supporting students in vocational training as well, there is huge potential in this largely untapped market.”

For TUHF, the challenge lies in balancing the opportunity to drive meaningful impact, against the substantial risks involved. First among these risks is NSFAS’ ability to execute on its mandate. The second is universities’ ability to administer student housing. Whilst some are very good at it, and others less so. Yet savvy property entrepreneurs can do well in providing this much-needed service.

This new development in the heart of Ferndale is an unusual addition to TUHF’s stable in many ways. The project’s outcome was not rental housing, but townhouses for resale. The finishes are decidedly high-end. Yet 300 on York is also a beautiful demonstration of how TUHF’s expansion to offer finance outside the inner-city supports its mission to create massive change in South Africa’s urban and suburban landscapes, one project at a time.

Urban densification with the family in mind

Designed with young professionals and young families in mind – people looking for homes that meet their changing needs while reducing their commute – 300 on York stands on the site of a large family house in the heart of the tree-lined suburb of Ferndale in Randburg.

The project’s developer, Manoj Mathew, explains: “The inspiration behind 300 on York came from a desire to use available urban space in a smarter way, to create homes that add real value to both the people who live in them and the communities around them. I saw a growing need for safe, secure, and affordable housing, especially for young professionals and new families who want to live closer to where they work and spend their time.”

This thinking aligns perfectly with TUHF’s decision to offer finance in suburban areas outside the inner cities. Smarter use of large, suburban erfs that are well located near schools, workplaces, transport corridors and diverse conveniences stimulates urban densification, economic activity and inclusivity – bringing people into the cities from the peripheries.

For Manoj, and for TUHF, Ferndale was a natural choice. The suburb is centrally located, with easy access to major business hubs like the Sandton and Randburg CBDs, as well as transport routes. “What really stood out to me was the area’s potential,” Manoj says. “There is clear movement toward growth and renewal, with many local businesses upgrading and modernising. That gave me confidence to invest here.”

The suburb consists largely of older, free-standing homes on sizeable plots of land, making 300 on York a prime opportunity aligned with TUHF’s expansion strategy. Siya Jele, Portfolio Manager at TUHF, says: “Principally, there were three things that gave us the confidence to invest in this project. We were impressed with Manoj as an investor and entrepreneur, with his vision for 300 on York and with the location he had selected for this project. The project was extremely well designed and well proportioned, with awesome finishes.”

Ferndale is also part of Johannesburg’s long-term development strategy. “Through 300 on York, we wanted to be part of that progress by offering homes that are not only well-designed and secure, but also help uplift the neighbourhood,” says Manoj. “We wanted these homes to be more than just a place to live. We wanted them to be comfortable, low-maintenance spaces that strike that balance between work and home, and to make everyday life easier and more enjoyable.”

The homes that now stand at 300 on York deliver this vision through smart design, quality materials, and a team that shared the same heart for the project. Walking through the show unit, it is clear that every choice – from the layout to the finishes – was made with care and a deep understanding of how people live. Thoughtful features like gas stove tops and dedicated office nooks align with the modern ways people live and work.

TUHF’s unique investment in its clients’ success – not only financially but through personal, hands-on support – remains the cornerstone of its approach. “TUHF believed in me and my vision from the start,” Manoj says. “They offered guidance, encouragement, and the kind of support that feels more like a partnership than a transaction. What stood out most was their flexibility and willingness to adapt as the project evolved.”

This holds true to TUHF’s commitment to ensuring clients can grow their property portfolios and sustainable businesses. Though 300 on York isn’t intended to become a rental housing business, it meets all the criteria for a TUHF project under its expansion strategy.

Manoj says: “Their support isn’t just about business; it’s about shared growth. They invest in you through training, advice, and trust, which builds lasting loyalty and the foundation for future success.”

Siya describes Manoj as an extremely knowledgeable person. “He is very meticulous in his understanding of property development processes, and his house was in order when he came to us for funding. These are some of the traits we look for in TUHF entrepreneurs.”

At the time of writing, 80% of the townhouses that make up 300 on York had been sold. There has been strong interest from buyers and great retention of tenants, indicating that the densification of this erf has led to a property development the community truly values.

“I’m most proud that we stayed true to our vision and delivered something meaningful, a quality development that people are proud to call home,” Manoj says. “The journey had its challenges, but with faith guiding my steps and a clear purpose, we made it happen. It’s a blessing to be able to create something that truly adds value to our community.”

To aspiring property entrepreneurs, Manoj offers this advice: “Ultimately, success in property development is about being proactive, disciplined, and committed to continuous improvement. With the right mindset and support, your project has every chance of being both profitable and high-quality.”

To find out more about how you can partner with us for growth, click here.

By Siya Jele, Portfolio Manager

Building a successful property portfolio, like launching any successful entrepreneurial business, is a bold and complex undertaking. It is not a shortcut to instant wealth, but with the right approach, sound planning, and patience, it can be rewarding and ultimately lead one to long-term success.

Two property development strategies tend to yield the most consistent success: new builds and refurbishments. New builds, while offering fresh potential, are intricate by nature. They involve land acquisition, managing construction timelines and costs, and navigating regulatory requirements. Refurbishment projects, on the other hand, are becoming increasingly common—not just in inner cities but also across broader metropolitan areas, where offices are being repurposed into residential housing.

Regardless of approach, the first critical key to success in the property sector is doing one’s due diligence. Whether it is new (Greenfield) developments, or refurbishment (Brownfield) projects, property entrepreneurs must have a thorough understanding of the market, client demographics, and property specifics.

Understanding your target market is absolutely crucial. Who are your tenants? Who lives in the immediate area? Are they retirees, young professionals, or families? These questions play a central role in shaping your investment strategy. The demographics and lifestyle needs of the surrounding community should directly influence the type of property you develop or refurbish—ensuring it meets real demand and stands a better chance of long-term success. There is no point in pouring money and time into building an ambitious property development that may be a passion project only to discover that is not what is needed in the area, or that there isn’t enough sustainable demand for it. 

Due diligence goes beyond demographics. It includes thorough property inspections, a clear understanding of legal responsibilities, identifying risks or liabilities, and assessing both current market demand and future growth potential.

Financing is another pillar of successful development. Property is capital-intensive, and securing the right financial backing is essential. Whether working with TUHF or a bank, entrepreneurs must understand the terms of the loan and ensure the financing structure supports their long-term goals. Acting swiftly to close transactions is also important, as delays can result in lost deals or expiring financial terms, all of which are costly and may derail an investment

Because TUHF focuses on long-term property investment with fifteen-year loan terms, we are seeking developers with a long-term vision rather than those chasing quick profits. Therefore, entrepreneurs working with us must have strong property management skills to ensure long-term profitability.

Beyond financing and due diligence, success also hinges on the skills of the entrepreneur. A balanced mix of hard and soft skills is vital. The hard skills include financial literacy – the ability to analyse financing structures and assess financial feasibility – along with the business savvy to evaluate property market trends, negotiate favourable contracts, and manage operational logistics efficiently.

For entrepreneurs looking to strengthen these capabilities, TUHF offers a dedicated training programme to help build the necessary expertise. The TUHF Programme for Property Entrepreneurship (TPPE) is a comprehensive property training programme, delivered in Partnership with the University of Cape Town, designed to empower property entrepreneurs to succeed. TPPE is open to TUHF’s clients, as well as non-clients interested in property and how to run a property business.

Equally important are soft skills. Three stand out: patience, meticulous attention to detail, and thirdly, adaptability.

Patience allows developers to wait for the right opportunities and make decisions strategically, rather than reactively. A major red flag is rushing into a deal without proper preparation.

Attention to detail is non-negotiable. Every aspect—financing structures, inspections, feasibility studies, and contractual terms—must be examined carefully. A meticulous approach prevents unwelcome surprises and ensures that all aspects of the deal are solid and well thought through.

Adaptability is the final key. Entrepreneurs who ask questions, seek clarity, and strive to expand their understanding are well-positioned to navigate the complexities of the industry. Continuous learning and adaptability in the face of market shifts are key drivers of resilience and ultimately success.

It’s also essential to recognise and prepare for common pitfalls. Acting too quickly, failing to ask the right questions, or ignoring red flags—like a seller unwilling to disclose reasons for the sale—can lead to trouble. Poor financial management is a major cause of failed projects, even when all other elements seem sound. Overcapitalising or mismanaging cash flow can quickly derail an otherwise promising development.

Ultimately, success in property investment comes from a blend of knowledge, discipline, adaptability, and the willingness to learn and plan. With due diligence, the right financing partners, and the development of critical skills, entrepreneurs can confidently build a sustainable and thriving property portfolio.

To find out more about how we can assist you in your property investment venture, click here.

By Lusanda Netshitenzhe, CEO, TUHF21

Affordable housing remains an important need and continues to be one of the most pertinent topics of our time. As urbanisation continues and population growth expands, the need to sustainably provide affordable housing opportunities to more people has become urgent.

Lusanda Netshitenzhe, CEO of TUHF21 believes that “while making a profit through investing in affordable housing, is essential; it needs to be complemented with deliberate actions to create a positive impact on communities and society. This is especially so in recent times, because funders are beginning to consider how effectively companies align with Environmental Social and Governance (ESG) goals before funding a project.”

Additionally, in South Africa, over the past year water scarcity has become a contentious and critical topic to address. This, along with the recent return of load shedding shining a light again on the need for sustainable power supply, is making environmental concerns a priority. Housing and development projects, for example, are increasingly incorporating greening solutions – including solar power, more efficient water heating alternatives and more efficient ways to use both electricity and water.

“We are no stranger to impact investing and the role it must play in inculcating positive, lasting social change. We have been committed to fostering urban regeneration and densification through affordable rental housing for more than 21-years and continue to remain so. What we are seeing now is the importance of impact investing being brought even more to the fore,” says Netshitenzhe.

Affordable and decent housing is crucial to fostering the dignity of all citizens, as well as enabling people to build their prosperity. It is also an integral part of addressing spatial exclusion and historical inequalities.

For these reasons, the government has committed to provide more housing in the country’s city centres, and the new Expropriation Act, if applied appropriately, lays the groundwork to take a firm aim at addressing the problems of abandoned and hijacked buildings and to use such buildings to create new affordable housing opportunities.

“However, neither government nor legislation can address the challenge of creating affordable housing on its own,” says Netshitenzhe. “Fostering urban and economic development requires partnerships between government, private companies and entrepreneurs who are empowered to succeed, so that together we can generate sustainable, inclusive growth in our cities and the country. For that to be a reality, we must attend to urban regeneration, urban densification, and urban management.”

In context, for the past 30 years, government has responded to the challenge of providing affordable housing in many commendable ways and their programmes have accommodated many people in decent homes.

While this approach had value, it also meant that many such housing developments were built on the periphery of cities, where building costs could be kept low, and land was less expensive. Unfortunately, this also resulted in urban sprawl, fragmented city structures, and people having to travel long distances into the city where many worked.

The recent pandemic and the lockdowns it demanded magnified the social inequalities that have long been of concern. Lack of access to well-located affordable housing and lack of access to funding for entrepreneurs has reached a point where critical intervention is needed. 

“We have aimed to address these challenges with uMaStandi, which focuses on reinvigorating townships and helping bring decent and affordable housing into traditionally underserved areas,” says Netshitenzhe. “Our approach is to curate products that solve urban development challenges and there is still more to be done. The next product we are considering bringing to market is a rent-to-own model. The idea would be to offer property entrepreneurs a funding vehicle that allows them to provide housing on a rent-to-own basis rather than a rental-only basis.”

Once adopted, the product will mean tenants can ultimately buy their units – making it easier for first-time homeowners to enter the market, creating a sense of ownership of the unit, the building and the surrounding precinct.

“We believe that this will inculcate more active involvement from tenants in our areas of finance, leading to better urban management and preserving the quality of building stock. We further believe that tenants who own part of the buildings in which they live are more likely to feel invested in building upkeep and maintenance of the surrounding precinct,” says Netshitenzhe.

“Our aim is to create real development impact and value in areas where we invest and this, we do to improve people’s lives – enabling them to live in dignity, earn a sustainable livelihood, succeed and contribute to healthy communities. This is the kind of positive and sustainable socioeconomic change that we are committed to,” concludes Netshitenzhe.

By Nqobi Malinga, uMaStandi Portfolio Manager

Developing profitable properties is a journey, and like all journeys, it begins with a first important step. For many entrepreneurs looking at building their first, or their next, development in the township that first step frequently entails financing the project. The good news is that we have been catering to this with uMaStandi for ten years and so we are seasoned in helping entrepreneurs take their idea from a plan to a profitable reality.

All profitable businesses start with an investment – of time, money and commitment – and property development is no different. For entrepreneurs embarking on this path and who may be interested in the support offered by uMaStandi, there are some key foundational things to know.

While uMaStandi can finance up to 80% of the investment needed, entrepreneurs are required to fund a portion of their project with their own equity. Additionally, uMaStandi currently provide loan facilities up to R15 million at the top end. Also, it is important to know that we provide financing for long-term rental developments, rather than Airbnb’s or guesthouses.

In helping customers develop profitable properties and build their wealth, our aim is also to promote good and affordable long-term accommodation, as we remain committed to helping revitalise and rejuvenate townships areas so that they can grow healthy communities.

Another step towards developing profitable properties is ensuring that your property is a good investment. Ideally, the overall value of the asset you develop should exceed the money you need to spend to purchase or develop it and it should appreciate with time.

Additionally, being fully compliant with municipal regulations is essential. This means having approved building plans and an occupancy certificate, whether you finance your development via uMaStandi or not. If you don’t have approved building plans, it is going to be exceedingly difficult to secure refinancing for the property should you need it. Circumventing the city and failing to obtain approval of your building plans would impede your ability to sell the property if you wished to down the line. That means you will be stuck with dead equity, which is undesirable.

To develop profitable property in the townships, you must understand what people want, know how much they are willing to pay, and then build for the market for which you are catering.

For example, while shared living spaces – like a shared bathroom and kitchen – may have been a popular design in years past, it isn’t anymore. The trend now is towards self-contained bachelor units, which are increasingly in demand. Developers should therefore build a unit that can accommodate some room for entertainment, such as a couch and a TV, along with a bed and its own toilet, shower and small kitchenette.

Having on-site parking on the property is not just attractive – it can be a dealbreaker if unavailable. Beyond that, having Wi-Fi and Internet connectivity has become a standard amenity. If you can afford to implement some renewable energy options, such as solar, on the property that is an advantage. One market that can be quite lucrative, even though it is a niche, is student accommodation. As a landlord in this market, you need to treat your investment as a hotel, in which your tenants have most things covered or catered for by you as the landlord, so this will increase your operational costs significantly.

It is important to factor in a reserve fund or budgeted savings to ensure you are able to still keep up with the bond instalments and other financial obligations the property has, due to the shorter cashflow period of 8-10 months, rather than the usual 12-month collection period.

There are two key factors that we see making the difference between failed ventures and building a profitable, successful one. The first is to work with a trusted team, who can support you, advise you and assist you on your journey. This is particularly important for first time property entrepreneurs, who often make common mistakes that could otherwise be avoided.

Finally, the biggest catalyst to ensuring that your venture is profitable and successful, is investing in yourself and continuously strengthening your knowledge of property development. To that end, TUHF and uMaStandi offer a short course with the University of Cape Town called the TUHF Programme for Property Entrepreneurship (TPPE). While it is free to our clients, it is also available to anyone interested, for a fee. The programme also gives you access to a seasoned mentor for six-months who has several decades of experience in property development and can help you avoid the pitfalls and propel yourself to a more successful outcome.

In his State of the Nation address on 6 February 2025, President Cyril Ramaphosa outlined Government’s intentions to provide more housing in South Africa’s city centres, reclaim hijacked buildings and transform our cities into economic hubs. As a leader in impact investment with an affordable housing outcome, TUHF has been a vocal advocate for investing in affordable housing that promotes urban densification.

“Well-located housing in urban areas stimulates local economic growth, resulting in opportunities for businesses and ultimately creating jobs. Housing, as part of the real economy, is crucial to transforming our cities and stimulating the growth President Ramaphosa wants to achieve,” says Paul Jackson, CEO of TUHF

Housing as the foundation for economic growth

The Harvard plan to fix South Africa – released in November 2023 – points to tackling persistent spatial exclusion of the country’s most vulnerable as one of two key areas that can make a positive impact on South Africa’s persistent growth and equality challenges.

Affordable housing development in South Africa – the crucial component of addressing spacial exclusion – has followed a simple principle since 1994: build as many houses as possible, as affordably as possible, to accommodate as many people as possible in decent homes. This well-intentioned approach has led to housing developments being built on the periphery of cities, where land is cheap and building costs can be kept low.

However, it has also inadvertently resulted in uniquely extreme patterns of low density and fragmented city structures – or urban sprawl. “Cities are built the way they’re financed,” Jackson quotes Bertrand Renaud. “So, when housing investment focuses on achieving the lowest possible upfront cost in the annual budget without accounting for fiscal and economic impacts in the longer-term, urban sprawl is inevitable.”

“It is ultimately the most expensive way to provide housing, and exacerbates social, economic and spatial exclusion of the poor, with negative impacts both on the economy overall, and on the fiscus,” Jackson explains. “TUHF’s own research and 21 years’ on-the-ground experience supports this view. Housing is part of the real economy. Spacial inclusion through properly located, affordable housing leads to local economic growth. And economic inclusion results from this economic growth as people start businesses or find jobs.”

While housing policy has long supported urban densification, housing development practice has not followed suit. This is what TUHF believes needs to change. Investing in broad-based research to understand what kind of housing is needed, where, and what the longer-term impacts of housing development will be – both on the economy and on the fiscus – is necessary to adapt public and public investment effectively.

Understanding fiscal impact 

Reducing upfront spending on land and building costs may deliver excellent housing delivery results within the constraints of an annual budget but does not account for the additional investment required after the fact. For a housing development to be built on the outskirts of a city, new infrastructure – physical, social, and administrative – must follow, increasing the real costs that are not accounted for in the financial accounting model.

Furthermore, people living on the outskirts remain impoverished. They have little access to employment – whether formal or informal – and cannot pay for utilities consumption. This negative drain on Local Government coffers is a drain on the fiscus.

An economic cost/benefit analysis is needed

“Government cannot collect income from spatially excluded households, simply because of indigence. This means these costs must be carried by other parts of the tax base. Taking medium-term view, investing in the delivery of housing on the periphery is the most expensive and unsustainable housing development. This public finance impact i.e. Local Government’s fiscal sustainability should be motivation enough to reconsider the approach to housing development,” Jackson points out. “But the overall role of housing in the real economy adds fuel to the fire.”  

Jackson continues: “A certain level of densification is necessary to stimulate social and economic action. Distant, low-density residential areas simply cannot support social and small business opportunities that generate growth. In contrast, TUHF’s in-fill project approach to affordable housing development stimulates both social and economic activity around our buildings. Inclusive growth is a micro-economic concept that can only be achieved one building, one block and one community at a time.”  

Government needs to invest in research into what affordable housing needs to look like and where it needs to be located to stimulate economic growth. As Jackson says: “If you don’t know where you’re going, any road will get you there.”  

He advocates for a thorough economic analysis, an economic cost/benefit analysis together with a comprehensive medium-term fiscal analysis, to understand the role of urban densification in stimulating real economic growth, local Government and fiscal sustainability and a more inclusive South African society.

The research must include a demand analysis i.e. what people want and need. For example, public and private sector developers assume that larger housing is preferred even if it is located far from economic hubs. But TUHFs experience suggests that people will happily live in smaller, quality accommodation if it provides access to economic opportunities – whether business opportunities, formal jobs, or self-employment. The continued growth of informal settlements – despite being unsafe and lacking access to services – also suggests that what people want and what is being provided may not align. 

Without government-led research, it is very difficult to fund housing developments in a way that stimulates positive fiscal outcomes and inclusive social and economic impacts. The research needs to examine the impact of different types of housing to inform city funding decisions and enable public and private investments that turn our cities into engines of growth. 

TUHF’s urban densification drive 

TUHF has long been a champion of urban densification and its ability to uplift individuals and communities. This is why the company has expanded its areas of finance beyond the inner cities to include any urban area that can benefit from densification.

“We support entrepreneurs who want to invest in areas with multi-sector local or micro-economies, and where affordable housing would stimulate increased economic and social action,” Jackson explains. “We favour infill projects where existing land and buildings can be developed to densify existing urban areas. A National objective of ten thousand average 20-unit developments per annum for ten years. These projects are also better aligned with environmental, social and governance guidelines because they reuse existing materials and leverage existing infrastructure.” 

“We welcome President Ramaphosa’s commitment to refocusing housing developments in urban areas along key development corridors. This commitment must be supported by directing funds not only towards building projects but also towards government research to guide public investment,” Jackson concludes. “Affordable housing developments must support urban densification and spatial inclusion if they are to support inclusive economic growth.”