News/Insights

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.” 

At a graduation ceremony held on Friday, 7 February 2025, TUHF celebrated the achievements of 44 property entrepreneurs who completed the TUHF Programme for Property Entrepreneurship (TPPE) in 2024. The class of 2024 represents the 9^th cohort of aspiring and experienced property entrepreneurs to complete this unique course.

The TPPE is one of only a handful of privately run courses to enjoy accreditation from the University of Cape Town (UCT). It stands alone as a certificate course, and can contribute Continued Professional Development (CPD) points to a number of professional registrations, including SAICA accreditation. Launched in 2015 to provide learning and mentorship opportunities for TUHF’s clients, the TPPE has gained a reputation in the market for its unique approach and quality learning experience.

“This graduating class consisted of 50% TUHF and uMaStandi clients, and 50% members of the public with an interest in property entrepreneurship,” says Lusanda Netshitenzhe, CEO, TUHF21 – pointing out that while clients can attend the TPPE for free as a value-added service, non-clients pay for the course. “The fact that people are willing to invest their own funds to participate in this learning opportunity demonstrates the broad appeal of our TPPE. We are extremely proud of the programme’s reputation, and its ability to attract candidates from South Africa as well as neighbouring countries.”

As the TPPE prepares to host its 10^th cohort in July 2025, 452 participants have completed the course successfully. “There are those who say that you can’t teach entrepreneurship,” says Prof. Francois Viruly from UCT, “but the success of this programme indicates otherwise. Property entrepreneurship has its own unique challenges. What makes the TPPE so successful is the way it has adapted to share an understanding of the market as it changes. The quality and consistency of the facilitators – and the commitment of Mr Henry Chitsulo as Programme Manager – has been key.”

Given President Cyril Ramaphosa’s comments on the importance of urban densification to meet South Africa’s housing demands during his State of the Nation address, Prof. Viruly had this to say to the TPPE’s graduates: “The opportunity for property entrepreneurs – and first-generation property entrepreneurs in particular – to deliver affordable rental housing, is now. For this market to grow, we need a strong network of practitioners like you.”

Netshitenzhe echoed this sentiment when she told the graduates: “We encourage you to keep this network of classmates strong, and to support each other in growing your property portfolios. We want your businesses to work for you, not only to service your loans.”

In closing, Henry Chitsulo told the class: “Investment in knowledge pays the best returns. You must put into practice what you have learned to grow your property portfolios successfully.”

To find out more about the 2025 TPPE programme, click here

By Lusanda Netshitenzhe, CEO of TUHF21

When I consider the vast sprawl and low densities in most townships across South Africa, the first thing that becomes apparent is that there are abundant opportunities. Notably, there are significant opportunities for densification and to integrate mixed-use developments within these areas. This I believe will invigorate township economies, which is an exciting source of future economic growth for the country.

However, realising these opportunities needs to be done the right way, as the journey of building new, inclusive and affordable housing in townships is a multifaceted one.

Property entrepreneurs need to understand how to secure financing from the likes of uMaStandi, and they need to find the right project team, vet tenants and ensure compliance with municipal regulations, to name a few. Equally as crucial and not as frequently discussed is the importance of ensuring one has the “rights to build” in terms of the applicable town planning and land-use regulations; and this is usually where most roadblocks are met by property entrepreneurs.

At its heart, town planning is the management of how land is developed and it ensures that development happens in an orderly fashion. Historically, there were reasons why most of our high-rise buildings were in the CBDs and low-density residential properties in suburbs and townships. But times have changed, and regulations need to consider systematically allowing medium-density developments in townships because building activity happens daily and mostly without formal approvals. These uncontrolled densities are putting strain on the already burdened bulk infrastructure and municipalities need to proactively manage this to avoid total infrastructure collapse.

Property entrepreneurs need to be cognisant that town planning takes place at the very beginning of the development process. At this stage, they must obtain all the required permissions from the relevant municipality to ensure the necessary services, such as water, electricity and sewage are taken into account for their developments.

Secondly, property entrepreneurs must factor in the length of time applications can take to be approved. This can take from between six months, to a year, depending on the municipality. Rezoning approvals can take between eight months to two years in some municipalities and this has serious cost implications for developers. This is where collaboration between property entrepreneurs, financiers such as uMaStandi and municipalities is needed. Costs and time associated with these processes need to be reviewed and necessary changes to streamline these processes must be considered, otherwise, we run the risk of continued uncontrolled densities and potentially disinvestment by capital providers who are currently committed to the economic development of townships. The simple truth is that capital will move elsewhere where it is easier to do business, leaving townships entrepreneurs with no long-term and competitive financing options for their projects.

Property entrepreneurs and those in need of quality affordable housing in townships cannot afford to have providers of capital moving out; and municipalities need the increased rate base to invest in the maintenance of existing and to build new infrastructure. Intentional collaboration between all stakeholders is the only way forward.

TUHF has been operating as a commercial property financier for 21-years, providing mortgage loans to property entrepreneurs who are in the business of providing affordable rental housing in metropolitan areas across South Africa. As an active advocate for urban regeneration and densification, TUHF has made significant strides in fostering economic growth in South African cities and it now aims to address the growing demand for affordable housing in other countries on the African continent.

A Legacy of Transformation

Since its inception, TUHF has championed the principle of making a difference one neighbourhood, one city block, and one community at a time. This high-touch approach has driven substantial social and economic benefits, nurtured micro-economies and promoted mixed-use and mixed-income communities.

Our approach goes beyond providing access to finance for property SMEs, it’s about empowering entrepreneurs to provide decent and quality affordable housing which in turns creates engines of economic growth and social well-being. By fostering inclusive micro-economies, we create business opportunities that stimulate local economies.

Expanding Beyond Inner Cities

TUHF began its journey with a focus on urban regeneration within the inner-city of Johannesburg. Over time, TUHF’s strategy evolved to meet shifting market demands, extending services beyond traditional inner-city areas to in-city neighbourhoods adjacent to key urban nodes, including townships. Today, TUHF offers financing across select areas that meet urban densification and affordable housing requirements in most of South Africa’s major metros including Gauteng, Western Cape, Eastern Cape, KwaZulu Natal, Free State, and Northern Cape.

Supporting Township Development

Through our uMaStandi township offering, launched in 2015, we have also addressed the demand for well-located and affordable housing in South African townships. uMaStandi has attracted significant interest from property entrepreneurs, filling a niche market where commercial property finance is often overlooked.

Empowering Property Entrepreneurs

TUHF’s streetwise approach goes beyond financing, it nurtures a collaborative ecosystem for property entrepreneurs. We encourage property entrepreneurs to engage deeply with their target neighbourhoods, leveraging TUHF’s extensive market knowledge and support network.

A Vision for the Future

As TUHF embarks on its next chapter, its vision is clear: to create impact through scale, enhance market reach, and continue driving urban revitalisation through strategic regeneration and densification. With a track record of financing over 50,000 units and a loan book of over R3.9 billion, TUHF is poised to extend its impact further across South Africa and beyond.

By Paul Jackson, CEO, TUHF

Having been part of TUHF’s leadership for more than two decades, I feel compelled to address the critical issue of affordable housing investment, and particularly how it relates to urban sprawl. Our simple thesis is this: investing in affordable housing within cities is key to stimulating economic growth and producing positive fiscal outcomes.

Our research shows a staggering backlog of 3.7 million affordable housing units across cities and townships. This challenge is exacerbated by urban sprawl, which hinders economic growth and strains fiscal resources.

Urban densification, especially through residential investment, drives local economies, enhances access to business opportunities, and facilitates job creation by leveraging existing physical, social, and administrative infrastructure. This leads to an increase in property values and civil discipline in making service payments, which ultimately strengthens the local and national fiscus over time. With a medium-term perspective, the state benefits from a stronger fiscal foundation, which enables further investment in infrastructure and housing development.

Investing in Affordable Housing in Cities: A Strategic Imperative

Some municipalities may argue that constructing new developments on the outskirts is cost-effective, but in truth this only exacerbates urban sprawl and perpetuates cycles of economic exclusion and poverty. Research consistently shows that individuals residing on the periphery are more likely to remain marginalised, unemployed, and economically disadvantaged. Low-density housing far from city centres stifles opportunities for business development and job creation. Those who do find work often face exorbitant commuting costs, which limits their ability to pay essential expenses such as rates, taxes, and utility bills.

TUHF, therefore, stands by our conviction that affordable housing investment should not be relegated to the periphery of cities. While it may require higher upfront costs, the long-term benefits – such as stimulating local economic growth and positive fiscal impact – far outweigh the initial expense.

The Disconnect Between Policy and Practice

Urban densification is a stated policy priority at all levels of government. However, the gap between policy and practice remains wide.

“Cities are built the way they are financed”, Philip Bertrand aptly stated. Unfortunately, public finance practices remain a significant barrier to well-located affordable housing. Government budget allocations often operate in isolation, resulting in affordable housing developments – especially RDP housing – being pushed to the outskirts due to lower land costs. This perpetuates economic exclusion and places a long-term burden on the fiscus.

Public sector budgets must be realigned to prioritise infill and well-located housing projects. Though these investments may require higher initial allocations, the alternative exacerbates urban sprawl which necessitates new infrastructure and services. These are often not paid for due to indigence, adding to an already considerable fiscal burden.

By contrast, in-city housing developments yield long-term benefits, including increased property values, enhanced service payments, and broader economic growth. The cost of in-city development is more than justified when considering the medium-term fiscal and economic impacts.

The Role of Private Investment

The challenge of affordable housing is not one that government can tackle alone. Private investment, particularly from micro- and medium-scale property developers, is essential. TUHF, with its 21-year track record, has demonstrated that it is possible to achieve significant scale in affordable rental housing. We provide inclusive development finance to property entrepreneurs in cities and townships, supporting urban densification and the economic benefits that come with it.

TUHF and its subsidiaries stand out as one of the few institutions willing to provide inclusive development finance to property entrepreneurs in inner-cities, in-cities and townships, achieving significant scale in affordable rental housing. Our model – if taken seriously as a national investment strategy aiming for 10,000 small-scale (average 20-unit) projects per year – is not only achievable but also crucial for addressing the affordable housing backlog.

We recognise that addressing urban sprawl requires tailored approaches, as each region presents distinct opportunities and challenges. Our ‘feet-on-the-ground’ strategy allows us to leverage local insights, ensuring our developments meet the unique needs of the communities we serve. In-depth, local market knowledge is a critical factor we consider when assessing potential financing partners and enhances our specialised approach to risk. We have found that local market knowledge and lived experience are often more reliable indicators of success for the entrepreneurs we finance, compared to traditional metrics. This hands-on approach increases our ability to make sound, well-informed business decisions.

Equally importantly, our focus on impact investment enables ordinary South Africans to enter the property market and stimulates inclusive, local economic growth. Job creation, small enterprise creation and access to opportunity are some of the micro-economic impacts we measure over and above our affordable housing outcomes.

Challenges in Affordable Housing Investment

However, accessing finance for affordable rental housing is only the first hurdle. Rising operational costs – including rising property taxes and service charges which have outpaced inflation – create additional challenges for developers.

Corruption in many areas of local government, including the national and metro police services, issues surrounding cross-border trade and bribery, and the rise of “construction mafias”, complicate the investment landscape. Some municipalities are beginning to address these challenges, but the problem persists.

Additionally, non-payment in certain areas further complicates the fiscal landscape, as demonstrated by the way inner-city revenues are used to subsidise less financially stable regions. All these factors combine to have a negative impact on property investment and are leading to disinvestment.

A Net Positive for Inclusive Growth

Despite these obstacles, well-located affordable housing remains a fiscally prudent and economically inclusive investment. By refurbishing existing buildings in inner cities, developers can capitalise on existing infrastructure, reducing the costs associated with outlying developments. Quality, affordable housing boosts property values and stimulates economic activity, making urban densification a financially sound strategy.

Inclusive economic growth is fundamentally a micro-economic issue. The creation of small and medium enterprises and job opportunities happens at the neighbourhood level. When safe, decent affordable housing is available in a neighbourhood, economic activity is stimulated by virtue of the fact that tenants can pay their rent, access goods and services from local small businesses and engage in the amenities available. Access to affordable housing is crucial for unlocking wealth-generating opportunities and fostering livelihoods.

TUHF’s partnership with The Jobs Fund is a testament to our commitment. Together, we have successfully delivered 125 affordable housing projects, creating nearly 3,000 units and over 1,900 jobs. This collaboration demonstrates the transformative potential of well-located affordable housing for local economic development. Local economic development, in turn, stimulates the fiscus as people pay their rates, taxes (including VAT) and utilities.

In conclusion, addressing urban sprawl requires a strategic, long-term approach that prioritises in-city affordable housing. By leveraging existing infrastructure and focusing on urban densification, we can create a scalable, replicable, and sustainable environment for inclusive economic growth. And the net effect is fiscally positive. Affordable housing is not just a social need; it is an investment in the future of our cities and our country.

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TUHF Limited is proud to announce the launch of a major initiative in collaboration with the PROPARCO Crisis Emergency Response Technical Assistance Facility (CERTAF), funded by the European Union, aimed at further enhancing our ability to incorporate sustainability into our operations. As a financial institution with a long-standing commitment to empowering small property entrepreneurs and supporting the development of affordable housing, we are excited to take this step toward integrating a comprehensive Environmental and Social Management System (ESMS) into our business practices.

TUHF: A UNIQUE PLAYER IN SOUTH AFRICA’S AFFORDABLE HOUSING MARKET

For over 21 years, TUHF has been at the forefront of financing small property entrepreneurs in the acquisition, construction, and renovation of affordable rental housing in South Africa’s central urban areas. Our work is driven by the need to address the growing demand for housing among low- and middle-income communities, contributing to the development of sustainable and inclusive urban environments. To date, TUHF has helped finance over 50 000 housing units, 95% of which are considered affordable.

This focus on affordable housing aligns with South Africa’s national strategy, established in 1996, to provide greater access to housing for all, particularly in the democratic era. Our ability to fund these projects not only improves living conditions but also stimulates economic growth and revitalizes city centers across the country.

TECHNICAL ASSISTANCE FROM CERTAF: A KEY MILESTONE FOR TUHF’S FUTURE

In 2023, we signed a loan agreement with PROPARCO that included a commitment to integrate environmental and social considerations into our operations. With CERTAF’s support, we are now taking decisive steps to fulfill this commitment through the development and implementation of a tailored ESMS.

“We are extremely satisfied with the technical assistance provided by CERTAF. This collaboration is a crucial step in strengthening our commitment to environmental and social responsibility, ensuring that we can continue to provide affordable housing solutions while adhering to the highest standards of sustainability. The support we’ve received is not only helping us meet regulatory requirements but also enhances our ability to manage risks and serve our communities more effectively,” underlines Katherine Cox, Research & Development Impact Manager). 

A COMPREHENSIVE APPROACH TO ENVIRONMENTAL AND SOCIAL RESPONSIBILITY

The CERTAF technical assistance includes the design of an ESMS that will help us better identify, assess, and manage environmental and social risks. The ESMS framework covers a wide range of areas, including E&S policy, risk management procedures, due diligence tools, governance structures, and a grievance redress mechanism. TUHF considers women, vulnerable and disadvantaged groups as both end users and beneficiaries of our investments whether directly or indirectly, as such, the ESMS includes consideration to safeguard these groups in the communities in which we serve. CERTAF also provides capacity-building support to our team, ensuring that our staff is well-equipped to implement these systems and incorporate sustainability into their daily operations.

Mitigating Risks and Ensuring Long-term Sustainability

The CERTAF technical assistance (TA) initiative included a thorough gap analysis of TUHF’s existing governance frameworks, followed by the development of an action plan to close any gaps identified. The TA sought to address compliance risks, project delays, and challenges related to incorporating the ESMS into TUHF’s operations. Owing to CERTAF support, TUHF will be better positioned to mitigate environmental and social risks while continuing to provide critical financing to South Africa’s property entrepreneurs. More widely, it will help TUHF to become a more attractive longer term investment partner for PROPARCO and wider international financial institutions.

“We are confident that the ESMS framework will enhance TUHF’s operational sustainability, mitigating potential environmental and social risks, and will help them to become an even more attractive investment partner, while crucially creating a positive impact in the affordable housing sector in South Africa,” highlighted Alex Ingleson, CERTAF Senior Facility Manager.

Corroborating this, Kaidi Eddie-Obiakor, Senior ESG & Gender Expert under the CERTAF Facility, added that “Not only does TUHF’s unique business model set a standard for creating access to affordable housing, but by implementing ESG-aligned risk management mechanisms, TUHF adopts a more balanced approach to mainstreaming sustainability that moves beyond social impact to also effectively managing risks associated with its financing activities. This is an effective way for the company to establish long term relevance in the market”

LOOKING AHEAD

With CERTAF’s ongoing support, we look forward to continuing our mission of supporting property entrepreneurs while advancing our environmental and social impact. This partnership allows us to build a more resilient and sustainable business model that will benefit not only our institution but also the communities we serve.

For more information about:

• TUHF’s commitment to ESMS , please contact : lusandan@tuhf21.co.za; katherinec@tuhf21.co.za
• CERTAF, please contact: aing@niras.com; julie.carcaly@niras.fi
• PROPARCO: casalp@proparco.fr