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“We built a business on a number of founding principles,” says Jackson, when asked what TUHF stands for. “Those principles are:

1.We are going to be entrepreneurs. This means that, if a good deal walks through our doors, we can’t resist doing it. We’re very deal oriented, and we want to take smart risks, because we see potential and opportunities where others don’t.

2. We are going to give our clients and potential clients a quick response. We are street-smart enough, and know our areas of finance well enough, to be able look at a building and state ‘yes we can’ or ‘no we can’t’ quickly. We know the inner- and in-city property market better than anyone else and this gives us the confidence to make those calls.

3. We fund transactions, not wishes. We like to work with clients who are committed to their property journey, have done their homework and are serious about taking on projects. We also like our loan officers to be entrepreneurial – meaning they are thorough in evaluating risk and potential – and we underwrite projects that we are confident will show good returns for our clients and for us.

4. Nimbleness is key. We respond to markets and opportunities quickly and with agility. We realise that getting bigger has slowed us a bit, but the principle still stands as we balance legal and compliance requirements, and risk management with the need to be nimble.”

A critical difference between TUHF and other mortgage financiers, is that TUHF is less traditional in the ways in which it determines investment potential. “We’re agnostic about the ‘usual things’ that people use to judge a person’s potential,” Jackson explains. “Some of our most successful and longest standing clients have limited formal education, for example, and certainly didn’t have much by way of financial means when they first approached us. TUHF is able to see potential where others don’t, looking more at the entrepreneur’s character and commitment, their street smarts and understanding of their investment neighbourhood than we do at their qualifications on paper or their bank balance.”

TUHF believes that the power of local knowledge is a strong indicator of potential. “When we engage with potential clients, we have to comply with regulations for lending,” Jackson explains. “But we also ask ourselves: Does this entrepreneur know the service providers in the area that can help make their project a reality? Do they know the area itself and understand the needs of the community living there? Do they demonstrate a commitment to hard work and show common sense? Do they have an entrepreneurial spirit and awareness of risk and how to mitigate it?”

Besides this unique view of client and project potential, TUHF’s commitment to its market niche is distinctive. “Banks come and go in this market,” Jackson says, reflecting on the almost 20-years that TUHF has been in operation. “We used to compete heavily with traditional banks in our areas of expertise, but they are not entrenched. TUHF is committed and has remained active in our sector for almost 20 years. We don’t disinvest or seek opportunity elsewhere when there’s a crisis in the inner- or in-city property market. Instead, we work with our clients to get through the difficult times – from xenophobia flaring up to the COVID-19 pandemic to challenges with local municipal service delivery. We’re consistently ready to work with and support clients, and to invest.”

This commitment stems from TUHF’s unwavering belief in making massive impact through scale. “If you’re serious about inclusiveness, you understand that it’s about microeconomic effects,” Jackson says. “This means making a difference one neighbourhood, one city block, one community at a time. We do this not only by investing in projects that create affordable rental housing where it’s most needed, but by using local service providers in that neighbourhood, creating work and growing micro markets for goods and services.”

TUHF’s people really want to make a difference. “We’re not hard-nosed about the commercial benefits to ourselves personally,” Jackson explains. “We have to tick certain boxes, such as zoning and FICA requirements, just like any other investment financiers do. What we try to do is differentiate ourselves on our ability to assist and flex with our clients to get those boxes ticked. Because if the deal is worth the effort, we will help to get everything done.”

Because TUHF is about impactful investment, its people are as invested in getting a deal done as its clients are. “We will spend time on potential clients that are committed,” Jackson says, “because it’s as personal for us as it is for them. The converse is that we’re probably less likely to invest time and effort in those who are uncertain or not serious. It takes away from the time we could be spending with an entrepreneur that is truly passionate and committed.”

“Entrepreneurs are cautious and thoughtful, not rash and reckless,” Jackson says, “but we do want to do the deal.”

“We’re an invested stakeholder. We worry about what’s going on downtown – we’ve invested R2.5 billion in Johannesburg city centre alone. Because we have ‘skin in the game’ we are very committed to addressing concerns in the areas in which we operate. We firmly believe that we have to offer financial services to the individuals and communities that others may overlook, as the backer of choice for Mzansi property entrepreneurs.” concludes Jackson.

For Da Costa, his journey to property development success has spanned fifteen years and culminated in successfully refurbishing two buildings in one of the most densely crowded suburbs in Gauteng – Hillbrow.

Originally a mechanical engineer, Augy Da Costa, with the aid of TUHF, found success through refurbishing previously run-down spaces into vibrant hubs for retail and residential tenants.

The transformation of the first of his ventures, Hollywood Heights, on the corner of Pretoria and Claim Street, began when he purchased the ramshackle building in 2005.

The first addition was a bakery, spanning 850 square metres, which performed well. From 2009 to 2012 Hollywood Heights received a new lease on life, when Augy, with a loan from TUHF, refurbished the building, converting its existing office space into 196 residential apartments.

Today, there are 14 studio apartments, 56 bachelor apartments, 84 one-bedroom and 42 two-bedroom apartments. Each are affordable, with rentals ranging from R2 800 to R5 800.  

Hollywood Heights also caters to a variety of retail tenants, including McDonald’s, African Bank, Capitec, Nedbank, Western Union/Travelex, Hollywood Bets, a barber shop, Cyber Café and a coin operated laundromat.  

‘’The laundromat is particularly popular with both tenants and foot traffic alike,” he notes.  

Hollywood Heights has a unique feature that lends itself further to building a new family – a school of its own. ‘’The school has eight classrooms and caters to Grade 00 to Grade R, with its own secured playground that the children of tenants can use with supervision,” he explains. 

Five years later, Augy followed Hollywood Heights with another building that he and TUHF revitalised, Cumberland Court, on the corner of Pretorius and Klein Street. This is a residential complex that underwent a significant refurbishment, involving some apartments being converted into two bedrooms, and the construction of an eight-story tower that could accommodate eight additional one-bedroom apartments. Cumberland Court now contains 54 one-bedroom apartments and six two bedrooms, along with one bachelor’s apartment, with rentals costing between R4750 for a one bedroom and R5900 for a two-bedroom.

As refurbishing the buildings was capital intensive, Augy credits his partnership with TUHF for making it possible. ‘’The big five banks’ loan period was eight years, whereas TUHF offered a 15-year loan, which certainly helped with my cash flow,” he explains.

Contributing to the success of both properties is their close proximity to public transport, the city centre, and accessible Wi-Fi for a flat monthly fee. Residents can also bring their own DSTV decoder and use the existing infrastructure. Both buildings are served by comprehensive security, with Hollywood Heights watched by ten security guards and 160 surveillance cameras, and Cumberland Court served by three security guards and 50 cameras. Additionally, all units have intercoms, and the buildings feature biometric access.

Augy has one strict rule to ensure that the accommodation is kept safe for its residents, and that is that no alcohol can be sold on site. Additionally, the properties allow visitors up until 21h00. 

Both Hollywood Heights and Cumberland Court cater to a wide range of tenants, from students and single young professionals to new families, with many of the tenants working in the food and restaurant industry. Easy access to restaurants and a Super Spar also makes it an attractive place for families and single people to call home.

As with all projects, there have been challenges to overcome. ‘’Up until April of 2020 when the pandemic began, I hadn’t known the meaning of the word vacant. I had never had a vacancy whatsoever for all those years,” he says.

While Covid-19 changed that for a while, today both buildings have largely recovered, with Hollywood Heights and Cumberland Court currently having a 96% and 98% occupancy rate respectively. That is a notable achievement, as one of the major challenges property owners have faced – which was amplified during the peak of the pandemic – has been the devastating impact of high unemployment and the knock-on effect this has on occupancy rates, as people struggle to make ends meet. For

Augy, the difficult economy has meant that he has put his plans for his next developments on hold until the economy improves. 

He next plans – with the aid of TUHF – are to continue refurbishing properties in Hillbrow – a market he now understands very well.

Sheldon Johnsen and his business partner, Jacques Nagel, are two of TUHF’s most dynamic clients in KwaZulu Natal. With a large property strong portfolio, they’re demonstrating exactly what impact through scale looks like.

Located in Glenwood, Durban, 139 Lena Ahrens is one such property that has made a real impact in its area. Originally it was a maisonette that was being rented out by the room and wasn’t well managed. Neighbours were extremely unhappy and had been complaining about the building for some time.

Sheldon and Jacques saw the potential in the property and developed two maisonettes and a three-storey walk-up apartment block on the stand. “The neighbours were not happy with the way the property was being run before we acquired it, and they were worried we were going to turn it into student accommodation,” Sheldon recalls. “But they’ve approached us since completion to tell us how much happier they are to be living near the property now.”

Built five years ago, 139 Lena Ahrens was one of Sheldon and Jacques’ first projects with TUHF. Sheldon recalls the property came with some big challenges, including a considerably large outstanding rates bill, three-phase power issues and some interesting building challenges.

“This is one of my favourite projects because we learned so much from it,” he says. “No build is ever exactly the same as the last, and on this one we had to install 38 pilings to provide the building with extra support in the soft sand it was standing on.”

Across their portfolio, Sheldon and Jacques focus on providing safe, affordable housing to people who are just starting out. “Our tenants tend to be young people in entry level jobs who have just moved to Durban,” Sheldon says. “So, all our units are bachelor units that can accommodate two people to cater for what this type of tenant needs. We include a kitchenette, shower and toilet, and always use porcelain tiles and granite tops. We also keep a close eye on utilities, as this is important to our tenants and can get out of hand easily if you aren’t careful. Energy-saving geysers and individually billed water and electricity metres are just some of the ways we help our tenants to manage their utilities.”

Sheldon and Jacques believe their success as property entrepreneurs is due to their hands-on approach. “You can’t run it by remote control,” Jacques says. “When you’re investing R7 or 8 million in a property it doesn’t make sense to us to hand that investment over to someone else to run, or to treat it as a side hustle. It’s important to be there and to be involved from the very beginning to make sure the build goes well.

“Once you’ve got tenants moving in, being involved in the running of the property daily means you can address any unforeseen concerns there and then, before they become a problem, and make sure that the property is well maintained and safe,” he continues.

One example of just such an unforeseen concern on Lena Ahrens was the quality of the mobile signal in the area. “When people started working from home at the beginning of the first COVID lockdown, we suddenly had a lot of tenants complaining about the signal being bad,” Sheldon recalls. “We’ve since installed a fibre connection so that our tenants can work from home with good quality internet connections, and it’s certainly helped us to retain tenants.”

Sheldon and Jacques started working with TUHF when the KwaZulu Natal office was very small, and Lusanda Netshitenzhe was still the area manager. “Lusanda came out to have a look at our first-ever property, and we’ve grown our business quite quickly since then.”

They have done several projects with TUHF and learned a lot. “When you build,” Sheldon says, “you should always expect the unexpected. One of the things we’ve found most helpful working with TUHF is that they have a lot of experience so they can help to identify potential challenges early on. They have extensive checklists to help you evaluate all the possible issues with a project, and even though it can seem like a lot of paperwork upfront, you see the value when you start the work.”

“TUHF has also always been good about not letting us overstretch ourselves,” he continues. “They provide an amazing support structure and pre-empt things that we wouldn’t have thought of. They’re great to work with, especially if you’re just starting out in the affordable housing space. They hold your hand the whole way through and help you ensure that you have good governance in place throughout the project.”

“One of the reasons that Sheldon and Jacques have been so successful in their property journey is that they not only have skin in the game; they also have heart,” says Sabir Yusuf, portfolio manager at TUHF. “They are extremely hands on and they do a lot of walking, literally, along the streets of the areas they are interested in to find properties with good potential.”

Sheldon and Jacques can boast 98-99% occupancy rates in their buildings. Sabir believes this is because of the heart they put into their business.

“We have full time cleaners and gardeners at each property,” Sheldon says. “We make sure that, if one of our tenants reports an issue, we’re there within an hour to attend to it. We do other little things as well, like making all our bathrooms wet rooms. This makes it easier for tenants to clean, which they love. And we make sure to provide good security, with burglar bars and gates even on third-floor units, which is important to ensure people feel safe in their homes.”

“Putting this extra care into the properties helps to build good relationships with tenants,” Jacques agrees. “It lets them know you’re invested, that you care about their living standards, and creates loyalty between you.”

Asked for their advice for aspiring property entrepreneurs, Sheldon says: “It’s a full-time position. Don’t go into it as a side hustle or a hobby. And it’s not for everyone, so think carefully before you commit. You will be dealing with sticky situations and doing a lot of problem solving, so speak to someone who is already in the game – like TUHF – to make sure it’s really for you. If you decide it is, stay hands on every day.”

Solly Ramalamula first made contact with ICHUT (which would become TUHF two years later) in 2001 when he was a Director at African Housing Company (AFHCO). In the 21 years since, Solly has grown a successful company – Take Shape Property Management – and developed 11 affordable residential rental properties in the inner cities of Johannesburg. Seven of these have been funded by TUHF, and Solly says he’s not done yet!

A former policeman, Solly was the liaison between TUHF and AFHCO in the early 2000’s, reporting on the performance and condition of TUHF-funded buildings in AFHCO’s portfolio. Solly’s relationship with TUHF, and his knack for building management, led to his first TUHF-funded property refurbishment in 2009. Boland Court in Turffontein was a “small project” according to Solly, in which he converted and refurbished six units into 13 good quality rentals.

He sold Boland Court in 2015 for a R600 000 profit, which he used to put down equity on another project in Primrose. “Working with TUHF has been a big help in growing my property portfolio,” Solly says. “I used my pension from the SAPS as the equity deposit on my first property, but it wasn’t enough to qualify for the loan with TUHF. Fortunately, they offered to fund the rest of the equity through the Inthuthuko Equity Fund [IEF], and without that extra support I don’t think I would have been able to start my property journey.”

Solly’s first three properties were purchased with the help of the IEF, and TUHF has funded seven of his properties in total. Currently working with Kea Nkotswe, Solly says his account managers at TUHF have been more than just financiers to him.

“Kea has been so dependable and involved in helping me succeed. TUHF has  helped me with feasibility studies on the properties I’ve wanted to buy, offered advice on how to manage my properties when I’ve needed it, and stepped in to help me during challenging times like the COVID pandemic.”

Hollywood Centre, Solly’s biggest refurbishment project with TUHF, is an example of how this relationship has helped him weather difficult times. “Hollywood was a massive project – R 33 million in 2014 – and TUHF worked with me every step of the way to ensure it was a feasible investment,” he says. “We converted a 7-storey factory in the Johannesburg CBD to 101 1- and 2-bed units, with a car dealership on the ground floor. TUHF helped me get hold of the building’s original plans, put me in touch with an architect to help with the conversion design, and introduced me to a quantity surveyor to assist with cost estimates. Both of them were willing to do the work on risk.”

TUHF also helped Solly reach out to the Gauteng Partnership Fund (GPF) to access the R 8 million he needed to put down in equity for Hollywood Centre, while TUHF funded the remainder of the costs. “Kea was very involved, coming onto site to check on progress and making sure we weren’t overpaying contractors. There was even a time that we had to recoup some costs from a contractor that had delayed the project,” Solly recalls. “TUHF ensured we paid our draw-downs on time, and that we were able to finish the refurbishment on time and in budget.”

The COVID-19 pandemic struck about half-way through Solly’s repayment period. “We emptied about 35 units during the pandemic,” Solly says. “And this was a time when my relationship with TUHF and my good track record of servicing my loans made a real difference to how we coped through lockdown.

The vacancies at Hollywood Centre have recovered well since lockdown ended, with only 19 units currently unoccupied. “And those are all under renovation,” Solly points out. “I renovate five empty units every month as part of my business model, because it’s important to keep the units up to date.”

Solly’s most recent project with TUHF – Pearl House – was ready for occupancy in 2020, just as the first hard lockdown was announced. “We had 11 empty units out of 32 during COVID, which was really worrying on such a new project. But TUHF was supportive on this project, too, and we are almost 100% occupied now.”

Solly manages all his properties himself through Take Shape Property Management. His company focuses on managing residential and commercial units, ensuring the provision of safe, clean and well-maintained locations to the emerging lower to middle income group. He remains confident in the inner-city as an investment destination and has recently started looking into the opportunities in social housing in townships as well.

“My business is a legacy I want to leave to my son and family,” he says. “And without TUHF’s help and support over the years I don’t think I would be able to leave something like this behind for him. He’s just started his first project with TUHF as well. Though I have been training him within my business, he’ll be working with his own loan officer and managing this project by himself. It’s important that he also learns to stand on his own feet.”

Following the unrest in July 2021, the flooding earlier this year, and the continued threat of the ‘construction mafia’ in the province, the Durban CBD has been slow to recover. But this doesn’t mean property investors have lost their appetite for inner-city investing, according to Sershin Moodley, TUHF Regional Manager for KZN and Free State.

The human, social and economic impact of the July 2021 unrest have been significant in Kwa-Zulu Natal (KZN). Adding to the complexity of the situation has been the April 2022 floodings in the province which only exacerbated the challenges of repairing infrastructure and getting KZN fully operational. And then there has been the rise of the so-called ‘construction mafia’ that has seen a criminal element holding construction sites to ransom and demanding builders use only their people to cover a portion of the local procurement requirement.

It hardly comes as a surprise then that recovery has been slow, with individuals, local companies and multinationals opting not to rebuild their damaged properties within Durban. Furthermore, it has become more expensive over the past 12-months to put up new buildings in the province. This can be attributed to the shortage of materials and the continually increasing steel prices. For instance, between this time last year and now, builders can pay substantially more for a ton of steel resulting in a significant knock-on effect. TUHF customers must now invest even more from their own pocket, leaving them with precious little wiggle room to cover any unforeseen costs.

On the upside, however, TUHF is seeing new investors take up the opportunity to establish themselves in the industrial area surrounding the CBD. This speaks volumes to the resilience of the inner-city property market.

“Three major trends, and the fact that new companies are establishing themselves in the Durban CBD, could see KZN experience increased investment despite the perceived risk,” says Moodley. “Firstly, micro-units are still popular, as people are downsizing because of the economic impacts of the COVID-19 pandemic. Secondly, many are looking for more communal living areas with their families instead of staying at the outskirts of the city. And finally, there is a short supply of quality student residential offerings in and around Durban. With the city becoming a hotspot for tertiary education, there will be a growing need to house out-of-towners around the universities.”

“The regrettable events of the past 12-months have certainly given some investors reason to pause, but these three trends have not subsided and the demand for affordable inner-city housing remains on the rise,” he continues.

Tying these three trends together is the fact that the urbanisation of the CBD is expanding beyond Durban property. “Urban densification is a national imperative for South Africa. It has been for some time, and KwaZulu Natal is no exception,” Moodley says. “This is why TUHF has been expanding our offering in the province. We’ve recently extended our financing footprint in the Durban South Basin to include Seaview, Clairwood, Wentworth, and the industrial area of Jacobs, as well as additional parts of Durban North, Phoenix, the Bluff, and Montclair.”

TUHF21, though separate from TUHF, shares TUHF’s views regarding investment in KZN. TUHF21’s uMaStandi programme – which offers commercial property finance in targeted township areas based on freehold title – recently launched a pilot project in partnership with NOVAYA Labs in Kwa Zulu Natal. It’s using OneCity technology to map the infrastructure, activity, and land rights in Umlazi and KwaMashu, two of the largest townships in KwaZulu-Natal, and in so doing target its efforts to fund affordable housing projects.

“These communities were selected based on the potentially high demand for affordable housing investment,” Moodley says. “So, while we are not blind to the challenges that concern investors at this time, we are confident in the potential KZN offers investors, and are willing to put our money where our mouth is to back our clients and upcoming property entrepreneurs.”

Moodley acknowledges that post-pandemic and post-unrest economic impacts are not the only risks that need to be discussed when it comes to inner-city property investment. “Some investors are cautious about the commercial property industry in the CBD due to subdued performance in recent years,” he says. “Sadly, lack of service delivery in the inner cities has also become a deterrent. Though some municipalities are performing better than others, we’re seeing some degree of lack of delivery in all our funding areas. This means that investors are increasingly cautious about investing in urban densification or regeneration projects because, without reliable basic services, it’s harder to attract tenants and retain them.”

In many instances, especially in KZN, the communities have taken matters into their own hands, coming together, and using their own funds to repair infrastructure like roads. People are bouncing back despite government’s inability to effectively manage recovery in the province.

Even so, as the country seeks to rebuild communities and recover economically following the major political and health events of the last two years, collaboration on urban densification is key to ensuring inclusivity and sustainability.

“We are committed to engaging with local government to resolve the challenges around service delivery,” Moodley says. “We believe it’s part of our responsibility to our clients to put our weight behind these discussions.”

Moodley believes it is essential to take a long-term view of the opportunities. Entrepreneurs can capitalise on the new normal trends spurred on by the pandemic. “For example, provisioning units with work-from-home capability has become much more important. Good, reliable Wi-Fi is becoming a non-negotiable in development right now. Good lighting, good ventilation, cost-saving approaches to utilities and other facilities that are conducive to productivity are also important for property entrepreneurs who want to attract reliable tenants.”

“When you invest in a local economy, like TUHF does, you stimulate local economic development in a neighbourhood sense. As we invest in inner cities, we are more likely to create employment, stimulate spending, contribute support for small businesses and in so doing grow local micro-economies in an inclusive and sustainable way. Rebuilding in KZN must be done to protect the people and inspire confidence in the possibilities that still exist in our local economies and the country,” concludes Moodley.

Standard Bank has increased the capacity of TUHF’s loan origination facility from an initial R700 million to R1 billion – a further testament of the bank’s confidence in TUHF. As a commercial property financier specialising in inner-city areas, the increase in the facility enables TUHF to further expand its lending activities in inner- and in-city areas across South Africa.

The loan facility provided by Standard Bank is designed to be repaid by securitising the underlying loans after which the facility can be renewed. Since the facility was launched in February 2020, it has been successfully renewed twice. First in March last year through the securitisation and sale of the loan assets to Urban Ubomi 1, which is TUHF’s second securitisation listed under the JSE’s sustainability segment in March 2021. Then in February this year the warehouse was once again revolved through a Tap issue from Urban Ubomi 1, making the Standard Bank warehouse facility available for a further period.

“TUHF’s ability to raise over R1 billion through Urban Ubomi 1 using the Standard Bank warehouse demonstrates the strength and resilience of the organisation’s brand, making it an attractive platform for investors to select as their chosen vehicle to invest their funds and demonstrate social impact under the TUHF Social Bond Framework,” says Ilona Roodt, CFO at TUHF.

From the perspective of the entrepreneurs who borrow finance from TUHF, the larger warehouse facility from Standard Bank further reinforces TUHF’s mission of growing in- and inner-city areas across South Africa and empowering those entrepreneurs who might not have access to traditional funding mechanisms.

“The timing of the increase by Standard Bank coincides with increased deal activity in the rental property market that TUHF services. This is further evidenced by the recent increase in our deal flow. Having the support of Standard Bank bodes well for TUHF’s ability to maintain healthy liquidity levels, respond to market demand, and grow the business in a challenging economy,” says Paul Jackson, CEO of TUHF.

The partnership between TUHF and Standard Bank continues to enable the revitalisation of South Africa’s in- and inner-city areas, and township areas. Previously and for 19 years, TUHF had only financed according to a list of specified areas. However, as the surrounding areas of inner cities continue to present growing demand for affordable housing and thereby investment opportunities, TUHF is actively responding to the market by expanding its list of preapproved areas and backing local and emerging property entrepreneurs in new target areas. Having Standard Bank’s support over the past two years has enabled TUHF to deliver on its strategic objectives and make a significant and sustainable impact on social empowerment in the country.

“TUHF has demonstrated their skill and experience in the market and have provided a compelling environment to grow inner-city development and renewal. We are looking forward to seeing more of the positive social and economic impacts our collaboration with TUHF is making”, says Nicholas Gunning, Head Securitisation Debt Capital Markets at Standard Bank.

Opportunities for regeneration and densification in South Africa’s inner-cities and townships remain central to sustainable urbanisation and economic inclusion. With this in mind and to coincide with Youth Month, TUHF and uMaStandi sponsored the South African Property Investors Network (SAPIN) Youth event, aimed at engaging with young people to provide them with an introductory framework on becoming property investors and entrepreneurs.

The event, held at the Soweto Theatre on 11 June, was aimed at breaking the cycle of township poverty. Daniel Kazadi, property entrepreneur, SAPIN Youth Leader and event host, believes property and rental accommodation hold the potential to create employment and income for many young people who are struggling to carve out career paths in the formal sector.

“The mission of this event was to demonstrate to young people that there is hope for them in real estate. By taking control of the course of their lives and building the skills they need to become property owners, young people can grow sustainable income streams and their own property/investment businesses,” says Kazadi.

To lay the foundation, a broad line-up of industry experts took attendees through the basics of financial literacy, entrepreneurship and business administration, property law and contracts, opportunities as both investors and letting agents, as well as the characteristics of a high-performing property portfolio.

Simnikiwe Ntyantya, Credit Analyst at TUHF21 says most young people think the idea of becoming property owners or landlords is out of their reach, but it is possible to start small.

“The key is to be innovative. There are opportunities created through urban regeneration and densification. TUHF21 is focused on developing new solutions based on relevant and practical research to help young investors get a foothold in the property market. Through uMaStandi our aim is to attract new investors in township markets to take advantage of these dynamics and build sustainable wealth,” says Ntyantya.

uMaStandi is a lending programme that aims to deliver inclusive impact and change young people’s lives. “These are not easy markets to understand at first, but as we spread skills and knowledge through events like these, we will be able to scale up across South Africa and ensure that urban management and regeneration is driven through collaboration with communities and local government,” adds Ntyantya.

uMaStandi’s target market is entrepreneurs who provide accommodation in townships – a niche of the property market neglected by traditional commercial finance sector players. “uMaStandi uses the power of commercial mortgage finance to assist property entrepreneurs to increase the value of the properties and earn an income uses the property as equity to fund a rental enterprise, with the construction then being professional designed and built to meet all required planning permissions. We guide entrepreneurs in building multi let rental units within the regulatory requirements and provide quality affordable rental units. Our goal is to grow this product rapidly in all major townships across South Africa, sustainably,” explains Ntyantya.

The Youth event in Soweto was designed to share basic knowledge to spur greater interest in property as an investment, while also outlining resources for specialised skills that can step in as necessary while young people build a property portfolio. “We don’t just want to show that there are ways to make money from property as a young South African. We need to show how young investors can extract maximum value from their portfolio so that their business is sustainable and can build inter-generational wealth,” says Kazadi.

Other SAPIN corporate partners and sponsors to this event included Absa, Bolt, Ooba Home Loans, and Tile Africa.

What do you foresee happening if this crisis is not addressed timeously?

Sadly, lack of service delivery in the inner cities has become a major contributor to urban sprawl in South Africa. Though some municipalities are performing better than others, we’re seeing some degree of lack of delivery in all our funding areas. This means that investors are increasingly cautious about investing in urban densification or regeneration projects because, without reliable basic services, it’s harder to attract tenants and retain them. While TUHF and a few other large investors continue to invest in urban regeneration, our collective impact on curbing urban sprawl and uplifting communities in the inner cities could be much more significant. For example, if local municipalities were doing more to maintain roads and pavements or ensure rubble from their maintenance work is removed more timeously, the inner cities would be more attractive to developers. Slow delivery of planning approvals, occupation certificates and other municipal services are also a deterrent. We’re finding that our investors are starting to look outside of the inner cities for development opportunities to diversify their risk.

I worry that a lot of the more seasoned investors, and even new investors, just get put off by all the red tape. With the lack of service delivery, some feel it’s just not worth the effort and it’s too risky.

How can TUHF help alleviate this problem?

TUHF is dedicated to urban regeneration and inner cities. We have a near 20-year investment record in the inner city, and we’re not going anywhere. We believe we’re operating in the right market – we have a R4 billion loan book that demonstrates our commitment to the inner city.

In recent years we have expanded our investment capacity, for example into townships through TUHF21’s uMaStandi product, and we’re continuously expanding our funding footprint into other areas. This is driven by the fact that we see potential in people and property that others may not see, rather than a loss of appetite for the risk associated with inner city investment.

We also remain committed to engaging with local government to resolve the challenges around service delivery. We know we’re going to ruffle some feathers, but we believe it is part of our responsibility to our clients to put our weight behind these discussions.

How has the pandemic, and the workfrom-home model impacted the demand for commercial property?

TUHF’s focus is on affordable rental housing rather than on office space or other types of commercial property.

Though our market fared much better than most property sectors during the pandemic, it wasn’t immune to all the impacts. We saw an upsurge in vacancies during the hard lockdown, but we also saw good recovery as soon as it was lifted.

In fact, some of the metros we operate in are seeing much lower vacancy rates now than they had before the pandemic. Johannesburg, for example, had an oversupply of rental housing before the onset of the pandemic hit. Because the pandemic put a stop to a lot of building activity and new units coming online, that oversupply issue has corrected itself and we’re seeing vacancy rates reducing.

Providing units with work-from-home capability has become much more important in our market. Good, reliable WiFi is becoming essential when planning a development or refurbishment, for example. Good lighting and ventilation as well as cost-saving approaches to utilities, and other facilities are conducive to productivity in a workfrom-home scenario.

Is there a larger focus now on the residential sector?

I think there’s certainly been an increase in conversions of non-traditional buildings into housing. I’m certainly engaging in more discussions with commercial property owners about converting mothballed office buildings into rental accommodation.

What role does TUHF play in enabling the development of student accommodation? 

About 15% of our book is student accommodation, though this is also our limit for investing in this space. It is a market that must be approached carefully, because it’s susceptible to things like student protests or cash-flow challenges at the National Student Financial Aid Scheme (NSFAS), which can prevent the universities from honouring their contracts timeously.

Student accommodation can also displace more traditional inner-city tenants, and we feel strongly about keeping a balance here.

However, there is a strong need in some metros, and we work with our clients on identifying opportunities that lead to developing and providing good quality student accommodation.

Our approach is to future-proof the product by strongly advising our clients to focus on traditional family apartments rather than dormitory type accommodation. We can structure repayments to accommodate the 10-month academic year. We also work with them to ensure their property property is configured in such a way that it can be easily adapted to changing demands. 

For our student accommodation clients to have more security we need a relationship with NSFAS directly, and this is something we’re hoping to actively pursue for our next financial year.

What is TUHF’s Sustainable Bond Framework?

We launched our Sustainable Bond Framework and South Africa’s first social bonds, Urban Ubomi 1, in March 2021. Each of our social bonds issuance to date has been oversubscribed, so I believe there is an appetite for impact investing in South Africa.

When you invest in a local economy, like TUHF does, you stimulate local economic development in a neighbourhood sense. As we invest in inner cities, we are more likely to create employment, stimulate spending, contribute support for small businesses and in so doing grow local micro-economies in an inclusive way.

The Sustainable Bond Framework allows TUHF and its associated structured finance vehicles to issue Green and Social bonds that support lending to qualifying projects. This ensures that the relevant impact that we have, such as providing funding in the affordable housing space and providing access to finance for small scale property entrepreneurs, is recognised.

Of course, it’s not just about the impact for us, or our investors. It’s important for us to show good returns on these investments along with the social impact.

We are well placed to take advantage of the opportunities in our niche. Our brand presence and reach, and our commercial resilience, all indicate a positive outlook for the organisation.

We’re happy that we’ve implemented what we had committed to in terms of our robust platform for growth, and the balance between bilateral loans and our securitisation structures are properly aligned to fund our R1 billion+ per annum growth goal. We now need to chart a way forward for growth. 

Balancing quality and affordability lies at the heart of TUHF’s pragmatic optimism

Govender believes affordable housing should also be quality housing. His pragmatic approach to helping clients achieve this balance stems from his vast experience in property development and management, and a down-to-earth view of the positive impact TUHF can make in the areas that the impact focused organisation supports.

“In my role as a national operations executive, I have found that I have to be able to change hats for each node we operate in. Understanding the uniqueness of each market TUHF operates in around the country is what enables us to help our clients build successful businesses,” he says. And this has always been critical to TUHF’s success.

“Our specialist and unparalleled knowledge of the city is core to our ability to advise clients about the practicalities of their projects, so that they can make sound investment decisions.

“It also allows us to make pragmatic lending decisions even as we seek to create impact through scale, and ultimately run a successful business. It also lies at the heart of our ability to spot potential – to be optimistic about the potential of an investment, project or a client. “

As a property guy first, and a financier second, I consider it my duty to provide insight into the practicalities of building a successful project. If you know property, and the node you want to invest in, making informed, financial decisions follow naturally.

Govender’s 5 property fundamentals for newcomers to property entrepreneurship:

1.Understand the node and the rentals, and what drives the needs of the community

These details can vary vastly from city to city, and even from node to node within a city. We always strive to share our knowledge of these variances with our clients, even before we agree to finance a project.

2. Quality of the asset is critical Property is a long-term game

Often, we help our clients buy an existing asset and refurbish it, and this is the start of a 15-year relationship between us and them. The asset must be of a quality that it can service the loan and generate some profit for the client as soon as possible.

3. Finishes are key

When it comes to finishes, it is significantly important to be practical. The finishes chosen must be attractive, of good quality and have some longevity but they do not need to cost a fortune.

As an advisor to our clients, I consider it imperative not only to advise about the financial aspects of the project, but about the quality of the finished product and how to achieve this balance between quality, aesthetically pleasing spaces and affordability for the target market. This includes considerations around sustainable and green interventions that may be incorporated into the refurbishment and finishes. Heat pumps, for example, make a lot more sense in terms of affordability, reliability and longevity than solar geysers while also ensuring a positive impact on the tenants’ utility costs.

4. Hands-on property management

It’s vital for property entrepreneurs to stay on top of basic services such as security, cleaning, maintenance and so on. Simple things like damaged fences or unkempt common areas can be off-putting to tenants and it’s important to address them as they occur.

5. Good financial management

Whether property entrepreneurs manage these themselves or make use of an agency, good hygiene around rent collection and the overall management of the property’s finances can make or break a business. “If you follow these five simple concepts, it’s difficult to go wrong, and I bring this practical approach when advising and supporting clients,” Govender concludes.

Effective 1 April 2022, Cas Coovadia will fulfil the role as Chairman of TUHF Holdings’ Limited Board. Cas is a longstanding member of the board and will take over from Samson Moraba, who has ably led the board since inception.

“It has been an honour to serve on the board under Mr Moraba’s leadership,” Cas says. “We have cemented our position as a leading impact investor during his tenure, and I look forward to working with the board and management team at TUHF to build on this foundation.”

“I am pleased that Samson will remain a member of the Board,” he continues. “His reputation in the industry is impeccable and we value his continued contribution to TUHF.”

Cas is the CEO of Business Unity South Africa, former MD of Banking Association of South Africa, chairman of the National Business Initiative, and chairman of Finmark Trust. He also serves on the boards of the Centre for Development and Enterprise, Nepad Business Foundation, Wits Business School, Youth Employment Services (YES) and on the Board of Governors of the International Organisation of Employers (IOE). “Cas’s longstanding relationship with TUHF, and his wealth of knowledge and experience in the financial services sector, has always been valuable to us,” says Paul Jackson, CEO of TUHF. “He is a prominent member of the business community and as chairman, he brings further continuity to our leadership as we continue on our path for growth.”

Despite the disruption caused by COVID-19 over the last two years, TUHF has maintained its position as a leader in several inner-cities and surrounds for affordable housing finance. TUHF adopted new ways of doing business during a very challenging time and demonstrated its ability to be responsive, sensitive, caring, and inclusive in its solutions. TUHF’s board remains confident that its market niche, especially affordable housing as an asset class, has shown resilience and is likely to show significant growth.

“We remain optimistic about the future,” Cas says. “The team at TUHF have done phenomenal work through the pandemic, and their resilience and commitment to make the transition to the new normal has been immense. Now, we need to build on the success of this effort to continue making an impact in our inner cities.”

Located in Westdene, Bloemfontein, Steven Modise has refurbished and converted a badly vandalised guest house into quality accommodation for students attending the University of the Free State.

Steven acquired the building in late 2019. Located less than 2 km from the UFS campus, it was ideal for student accommodation. The refurbishment had to be completed within three months to ensure it would be available for students to move in when campus opened in February 2020. Transfer went through in mid-December 2019 and by mid-January Urban Lofts was ready to open its doors.

“The place was in really bad shape when I bought it,” Steven says. “We put in new windows and new geysers, repaired the badly damaged plumbing and electricals, retiled and painted the roof, put up new blinds and installed the necessary appliances in the kitchen.”

Urban Lofts now boasts 18 sharing units of 26 m² each, all with ensuite bathrooms. The building includes a common area of 65 m² that holds a kitchen for students to prepare meals, and offers space to eat together, watch TV, do laundry and get to know each other. “It’s also a comfortable space for entertaining family and friends,” Steven says, “but doesn’t include pool tables or anything that could turn it into a hang-out for students that aren’t tenants. It’s about offering a safe and comfortable environment to relax and build friendships, but also to learn and do well at university.”

Steven takes real pride in Urban Lofts and the safe, well-equipped environment it creates for students to study and have a great student experience. “I want to be proud of what I do,” he says. “If I offer a product I want it to be of good quality. My clients are the most important and I make sure to give them a good quality product at an affordable price.”

The building was fully tenanted for the 2020 academic year. Not long after, the first COVID-19 lockdown was announced in March. “Though some of our students did go back home when lockdown was announced, most opted to come back in June,” Steven says. “Urban lofts offers Wi-Fi, as well as safe, quiet space to study and attend virtual lectures. Many of our students couldn’t access these things at home, so it made sense for them to return. Also, most of our students were first years, so they wanted to preserve some of the university experience if they could, and even with lockdown regulations and social distancing we were able to provide that through the pandemic.”

Steven manages his site himself, and says he’s been able to build relationships with the students. “I’ve never had any trouble with my tenants,” he says. “The university has a stringent accreditation process for private accommodation for their students, so having decent personal space, their own bathrooms, access to Wi-Fi and a fridge was critical to being approved as a provider. When the pandemic hit, having these things in place helped our students a lot.”

Safety was also a possible concern when the pandemic began, as many rental properties were vacated and suffered vandalisation because they were empty. Because Steven remained hands-on, maintained his property well and has a caretaker on site looking after the students’ wellbeing, his building was always occupied and protected from this kind of safety risk.

“One student actually stayed on the property the whole year, only going home when his exams were finished, because the facilities were better suited to studying than what he had access to at home,” Steven says. “He helped keep an eye on things when everyone else was away just because he cared about the space. He’s passing with distinction and is still living at Urban lofts. That makes me feel really good about what we’ve done with this building.”

This is Steven’s first foray into property entrepreneurship on this scale. “I’ve always wanted to get into it but never had the capital available,” he says. “I believe in the power of refurbishing abandoned, vandalised buildings to uplift communities. The first property I ever bought was just such a property, and was being used for illegal activities. It was unsafe for the community and I went to great lengths to acquire it and fix it up. It wasn’t a big site, but it did give me an opportunity to build reliable contacts that do good quality work and that contributed to the success of Urban Lofts”

Steven came across the property that would become Urban Lofts when he was helping a friend look for an opportunity in property. “My friend didn’t go for it, but I decided I would,” he says. “I wasn’t sure I’d qualify for financing, but then another friend put me onto contact with TUHF. The moment I walked into their offices I was greeted with a huge smile and such a willingness to help me. I told them which property I was interested in, and it turned out that they had recently done a valuation and looked at the rental income potential on it. They shared that information with me, and between July when we started the discussion and December when transfer went through they were extremely supportive.”

The configuration design of the property were all Steven’s ideas. He looked at other well-known, privately-run student accommodation in Bloemfontein and Cape Town for inspiration. “I wanted to understand what made them sought after and popular with students,” he says. “Safety, connectivity, and appropriate pricing were some of the key elements.”

“I want to create something that I can leave to my children, and that will allow me to retire earlier than 65, so I do want to build my property business,” Steven says. “But I want to remain focussed as well, and I think there’s a lot of potential in student accommodation.

“There’s always going to be a new intake every year, and so you might have regular turnover but you’re never going to run out of new tenants. It’s also profitable, even though your property is unoccupied for 2 months and your leases are only 10 months, not 12. Because so many students come from rural areas and haven’t experienced cities before, good accommodation with access to important amenities like the police station, youth centres, groceries and hospitals will always be in demand,” he says.

Keeping the buildings small means Steven has the ability to build relationships with his tenants and keep an eye on how their doing, offering support when it’s needed as they adjust to student life.

His advice to aspiring property entrepreneurs is, “Always be hands-on. A caretaker isn’t going to run your business, they’re just there to look after the building. Secondly, make sure you pick the right property so that you can align to the university’s accreditation requirements – a building that’s too far away means you have to provide transport, for example, and that can eat into your profits very quickly. Doing the right conversion on the right kind of property is key.”