TUHF Stories

As TUHF marks its 20-year milestone of fostering urban regeneration, the company has announced an ambitious expansion strategy aimed at addressing the evolving demands for affordable housing across South Africa – and plans to expand into the rest of the continent.

Under the stewardship of CEO Paul Jackson, TUHF champions the ethos of ‘making a difference one neighbourhood, one city block, one community at a time’. This principle has driven significant social and economic impacts in the urban landscapes across the country.

“The essence of properly located housing goes beyond shelter. It is an engine of economic growth and social wellbeing for the communities in those precincts. Our approach has always been about nurturing micro-economies within city blocks and neighbourhoods, thereby creating a ripple effect of inclusivity and wealth mobility,” explains Jackson. “This high-touch approach, distinguishing TUHF as an in-city financier, has been instrumental in stimulating business and employment opportunities, fostering mixed-use economies, and promoting mixed-income communities.”

Expanding demand in inner city and in-city areas

Originating as an inner-city financier in Johannesburg, TUHF has progressively broadened its geographical footprint to align with the shifting demands for affordable housing.

“Our journey began with urban regeneration within Johannesburg, focusing on affordable housing and black economic empowerment. As the landscape evolved, so did our strategy, leading us to extend our services beyond traditional inner-city areas to include in-city areas,” shares Jackson. “The expansion follows a well-defined in-city strategy. These areas, adjacent to the inner-city and near key urban nodes, align with our market expansion strategy. For instance, in Johannesburg it would be to move with the market to areas like Linden, Randburg, Buccleuch, and Kew, among others.”

The nationwide expansion has seen TUHF establishing a presence in 11 of South Africa’s metros, with a vision to extend its reach across the Southern African Development Community (SADC) in the next two years. The strategic growth is backed by an extensive branch network, ensuring a local presence to better understand and meet the market demands.

An example of this is through its uMaStandi township programme it launched in 2015.

“There is enormous demand in South Africa for people to live in well located townships – and we are delighted to have found significant interest from property entrepreneurs looking to develop in those communities,” Jackson says.

As a specialised commercial property financier, TUHF has found that there is large market niche in townships where it is difficult to get commercial property finance at the scale (up to R5 million) in those communities.

Working with clients

“We are not a long-distance financier. Our branches across the nation not only symbolise our growing footprint but also underline our commitment to being hands-on with our clients, ensuring the success of each project we finance,” says Jackson.

Going beyond financing, TUHF actively nurtures a collaborative and supportive ecosystem for budding property entrepreneurs.

“We encourage interested parties to immerse themselves in the neighbourhood they wish to invest in, to walk the streets, absorb the atmosphere, and identify potential investment buildings. Before developing a business plan, we invite entrepreneurs to engage with us, to share their thoughts and price points, and to benefit from our intimate knowledge of the areas and the lessons we have learnt over the years,” Jackson explains.

He emphasises the importance of leveraging TUHF’s experiential knowledge and the willingness of its community of property entrepreneurs to share their journeys with newcomers. “Our approval process, though thorough, can be quick, and completed within 21 days or less once all information is received. We walk with our clients throughout the entire process, ensuring a robust, sustainable, and commercially viable solution that forms a solid foundation for future growth,” Jackson adds.

As TUHF embarks on its next chapter, the focus is to consolidate its brand, enhance market reach, and continue being a catalyst for urban transformation.

“With a track record spanning 20-years of financing over 50,000 units and injecting over R8.3 billion into urban housing, we are keen on extending our impact further across South Africa and, beyond the country’s borders by partnering with property entrepreneurs across the SADC region,” concludes Jackson.

The legacy of TUHF over the last two decades sets a solid foundation for its ambitious journey ahead, reaffirming its commitment to shaping vibrant urban communities in every city and town it invests in.

Global impact investment has surged over the past five years, and emerging markets like South Africa are expected to lead the way as the trend continues in years to come. Green and social bonds, in particular, have seen astronomical growth globally, though the Middle East and Africa combined account for only USD 10 Billion of the USD 1.024 Trillion total issuance in 2021.

Even so, investors are regularly challenged by the new structures, processes and performance indicators that accompany impact investment, and one of the biggest concerns is ‘greenwashing’ of business activities and possible trade-offs between financial returns and environmental, social and governance (ESG) impacts. However, as the Johannesburg Stock Exchange (JSE) Sustainability Index matures and impact measurement strategies improve, South Africa is leading the charge as the largest impact investing market on the continent. 

In the Impact Investing South Africa (IISA)’s recent case study, TUHF is examined as one of the most promising examples of profitable and impactful businesses rising to the challenge. Download the case study to find out how we are filling the finance gap for non-traditional entrepreneurs to develop affordable housing projects in declining urban centres and informal townships.

Johannesburg, Wednesday, 06 September 2023 – The recent spate of serious events in Johannesburg CBD – including the tragic fire in Marshalltown that has claimed 77 lives and the devastating gas leaks in De Korte and Bree Streets – continue to raise concerns over poor urban management, lack of by-law enforcement and inadequate governance within the CBD.

Paul Jackson, CEO of TUHF, says: “Though the media coverage of these devastating events draws a much-needed spotlight towards the challenges faced in the inner city of downtown Johannesburg, these events are regrettably not isolated and in fact are a consequence of a much longer-standing issue. One that must be addressed as a matter of urgency.”

As an invested stakeholder in the inner city for the last 20 years with more than R5 billion invested in the Johannesburg CBD, TUHF continues to actively engage with local government regarding the prevailing and underlying issues that have preceded these most recent headline events. “From the lack of service delivery, the increased scourge of hijacked buildings, damage to properties caused by the 2021 riots, xenophobic attacks and dangerously insufficient maintenance of infrastructure; we have relentlessly voiced our concerns and engaged with the local government to find solutions,” Jackson says. “There is an urgent need for improved management and intervention in the CBD to ensure the safety of the people who live here and the imperative growth of this vital economic hub, which is not achievable without local government action.”

TUHF is a leading impact investor in South Africa’s inner cities, and for 20 years has promoted the inner city of Johannesburg as an investment destination, particularly for ordinary South Africans.

“Regeneration in the inner city has seen ordinary people, with street smarts and knowledge, turn rundown buildings into successful affordable rental housing businesses,” Jackson points out. “TUHF has empowered aspiring property entrepreneurs to create safe homes and jobs within the inner city and to make an impact on communities that live, work and play here. We remain committed to the property investors we support, and as such, we must call for urgent change in the way the Johannesburg CBD is being managed.”

TUHF is deeply saddened by the recent events in the Johannesburg CBD. Such incidents reflect a critical systemic issue which affects the capital markets, the insurance sector, rental housing suppliers and the tenants they serve. TUHF strongly advocates that this is an issue of lack of execution by City management. Urban management, compliance and administration must be improved as a matter of urgency to prevent further incidents from occurring.

“The well-being of the residents and businesses in the CBD should be a top priority for the City,” Lusanda Netshitenzhe, CEO of TUHF21 says. “TUHF urges the City of Johannesburg to prioritise improved management and better governance of the inner city and to take concrete steps to address its deterioration. TUHF believes in the investment case of inner cities as essential to inclusive and transformative economic growth. Inner cities have the potential to drive real growth at a local level, provide economic opportunities to SMMEs and low to moderate income households.”

With the lives and livelihoods of so many people under threat in the CBD, TUHF calls on the City of Johannesburg’s leadership to take immediate action to address these urban management and investment infrastructure concerns.

“We maintain that collaboration is essential to address the challenges that are apparent in Johannesburg,” says Netshitenzhe. “A coordinated and comprehensive approach is needed to restore confidence in the CBD for all the City’s stakeholders. This reality cannot be ignored any longer, and TUHF joins all invested stakeholders of the inner city in calling for urgent action and changes to the way the City is managed.  We are committed to collaborating with the City and other stakeholders to find sustainable solutions to the issues facing the CBD and believe that a united effort is essential to create a more prosperous City.”

Impact-driven property finance company TUHF21 has announced the finalisation of uMaStandi Fund, its first funding vehicle aimed at financing rental properties in townships. uMaStandi has attracted R125m from new sources in its first year of operations. The facility will be used to continue backing property developers providing affordable rental accommodation.

Funders include Nedbank, the Nedbank Black Business Partners Legacy Trust, (which includes Old Mutual’s participation), the SA SME Fund, Novo Impact Fund NPC, Apex-Hi Charitable Trust and Oppenheimer Generations Foundation.

“We are proud that we were able to attract a mixture of funding partners, including a commercial bank and some innovative impact funders. It is especially important to acknowledge that we secured this support because of the catalytic funding provided by Oppenheimer Generations Foundation,” says Lusanda Netshitenzhe, CEO of TUHF21.

“These partnerships will be key to building on the momentum we have created during the past year as we move forward in 2023. For a developing country like South Africa, uMaStandi provides an innovative way for township developers to grow and deliver compelling value for property owners to diversify their portfolios while offering quality, affordable housing.”

The uMaStandi facility uses ownership of property as equity to gear a rental enterprise where owners can build quality affordable rental units on their land. It also ensures that construction is properly managed and has all the necessary planning permissions in place.

High-quality investors

“When we approached funders to support our vision for township developments, we were initially apprehensive – but then pleasantly surprised by the high quality of investors who took the opportunity, their level of interest and their willingness to commit to township funding,” says Netshitenzhe.

Because of the sprawl and low densities in townships – a result of the ineffective use of space in the past – there are many opportunities for densification and bringing in mixed-use developments. This kind of development could stimulate township economies, create places of employment, and offer people access to economic opportunity.

Soweto strongest development market

“Our first draw has resulted in the acquisition of R40m worth of assets spread across 36 loans. By the end of 2023, we aim to achieve R100m worth of loans issued by uMaStandi. The demand is there, and we are seeing the need to mature beyond small-scale developers to mid-size developers,” says Netshitenzhe.

“Our observation has been that Soweto is still the strongest market for development, however, our new operation in Durban is picking up far quicker than expected, with Cape Town and East London also remaining key growth markets,” she concludes.

Some people seem to be destined to find solutions to common problems. That was certainly the case for Bulali Mdontsane, whose path led him to becoming the developer, aided by uMaStandi, of Singleton Heights, located at 17 Casper Street in Protea Glen.

Originally from the Eastern Cape, Bulali began his career obtaining a degree in engineering with a focus on chemical engineering. He then obtained a Pr-Tech Engineer designation with the Engineering Council of South Africa and secured a master’s in engineering management at UJ. His forays in academia continued yet again, more recently, by earning an MBA from Wits University.

However, instead of ending up in engineering, Bulali’s passion led him to expanding his passions into becoming a property entrepreneur. “I consider myself an African child, and I saw all these various problems, one of which was the issue of human settlements,” he explains. Together with uMaStandi, Bulali is now doing his part to address the need for safe, comfortable accommodation in the townships.

”The Singleton Heights project is particularly significant to me. The building is a tribute to my uncle, who was a migrant worker working in the mines and had to endure living in hot, unpleasant conditions,” he continues.

The main aim of the Singleton Heights development is to provide clean, comfortable accommodation for people who are working in Johannesburg but who originally hail from far away.

“It is for people who move out of the homes they grew up in and they don’t want the back-room type of space; they want a safe space where they can park their cars, but they also like the communal lifestyle of the township,” he explains.

The double story property consists of 30 bachelor apartments that are 25 square metres in size, and each have their own dedicated parking bay. They are designed to be lock-up-and-go accommodation, 29 of the thirty are let, and the remaining one is for a live-in caretaker.

On the cards for the near future is a laundromat, and Bulali is also considering adding a space out of which precooked and hot food could be sold. Both would create entrepreneurial opportunities for other small businesses in the community.

“Ï was brought up with the philosophy of Ubuntu, which I still believe in, and with these plans, I believe there would be shared value. Lift as You rise, I would garner greater value as the landlord, my tenants would have greater convenience, and the entrepreneurs involved would be able to share the market. The aim is to uplift the community together,” he enthuses.

Bulali explains that for the most part the development of the apartment block proceeded smoothly, with construction beginning in February 2022, and finishing in July. After final inspections were completed in August, the apartments were ready to be let. A notable achievement of the project is that it was completed two months ahead of schedule.

Singleton Heights is not Bulali’s first foray into property development and ownership, but it is his most ambitious to date, which is why he turned to uMaStandi. Previously, he acted as the project manager on his first two developments, sourcing the required contractors on his own. Those developments were smaller in scope involving the conversion and extension of existing structures, and consisting of six units in Durban and in Soweto, respectively.

Bulali’s comprehensive academic background served him well, with his engineering experience helping him manage the various puzzle pieces that go into successful development, while the MBA helped him with the management and financial aspects. But, he explains, working with uMaStandi has helped him manage his property portfolio in a more professional manner as well as avoid some of the major traps and pitfalls involved in an owner-run development.

No project is without its challenges, and Bulali had to contend with two major ones. The first was dealing with the inefficiencies of the municipality and utilities, which he acknowledges he underestimated. This slowed the process at times.

The second was the ‘construction mafia’ – third parties who demanded 30% stake in the project. This challenge he had accounted for, he relates, having ensured that his construction team was locally sourced. Bulali also ensured that he communicated extensively with the local councillor and with the local community ahead of time, which forestalled individuals’ attempts to hijack the project for their own gain.

“I learnt that rule number one is to always obtain community involvement before bringing development into the area,” he relates.

His advice for anyone who wanted to get into property development is to bear in mind that every phase of this business is about people; from aligning with the neighbours, ensuring you have buy-in from political leaders and the community, being able to connect with people is essential. Bulali also stresses the importance of looking beyond one’s own financial gain, a value which aligns him with uMaStandi’s purpose.

“I think as developers we have a role to play in changing the face of the spaces that we walk across and addressing the housing problem in South Africa. And for me, my chosen space is the township and I do believe that my mission and what TUHF does through uMaStandi, is linked. No one is coming to save us. People need safe living spaces and I think we can be the solution we are waiting for,” says Bulali.

For Jade Barkhuysen, his journey into property development began ten years ago, when he purchased his first property in his hometown of Gqeberha and began building his property portfolio .

Bayside Lodge, located at 59- Green Street, North End in Gqeberha, is another first for him: it is the  first project he has undertaken with the aid of TUHF.

Until now, Jade has learned the ins and outs of property investing brokering primarily through self-study, through books, seminars, and coaches who showed him how to find good deals that he could renovate and sell for a profit or keep as an income generating asset.  But Bayside Lodge is different, he explains, as it speaks to his passion for providing clean, affordable accommodation in the inner city of Gqeberha.

Bayside Lodge also stands out as Jade’s first redevelopment of a property of this size, which is why he turned to TUHF for assistance.

Jade and his team took on the challenge of refurbishing this brownfields project and converted   the old commune with 19 bedrooms into 17 efficient studio apartments (which range from 14 to 25 square metres), each with its own bathroom (with shower, basin and toilet) and kitchenette.

‘’The most important thing for property investors in Nelson Mandela Bay is to be able to efficiently manage their electricity and water expenditures, in lieu of ongoing loadshedding in the country and the persistent water shortages in the Nelson Mandela Bay area. The pricing for water in particular has skyrocketed, which has derailed many a property investor who didn’t account for it in their plans,” he explains.

The solution for Bayside Lodge was to ensure tenants had their own prepaid electricity and water meters and could be individually accountable for the utilities they use.

The property includes a communal laundry facility which is open to all the residents – who are primarily young professionals between the ages of 21 and 35. Providing fibre connectivity was more of a challenge, as fibre isn’t yet available in the area. However, Jade is currently looking at how connectivity can be offered through another option.

What Bayside Lodge does have is its own borehole, which is particularly important given the water shortages in the area. “‘If there’s ever a problem with either the municipal or borehole supply, we can always switch between the two. I think that does give this property an important advantage because the tenants know that they’re always going to have water,” he notes.

While the water from the borehole is regularly tested at a lab, and approved as being safe for cooking and washing, and even consumption, it is further safeguarded by a comprehensive filtration system as well. Additionally, in response to the critically low water levels in the area, all the taps and showerheads in the bathrooms have low-flow fittings. Solar power is also on the cards for the development within the next six to 12-months once it is fully leased and generating the requisite cash flow.

Almost every commercial project has some challenges, and according to Jade, Bayside Lodge had to face a significant one. Even though the land already had approved blueprints from the 1920s, it took three rejections for the new building plans to be accepted. The approvals procedure caused two-week delays between each resubmission, which had an influence on acquiring finance.

“That was quite a nerve-wracking stage, because I needed the building plans to be approved before I could actually get the financing,” he explains.

Those delays ultimately lead to Jade having to take a leap of faith, buying the property himself for cash to prevent it from being relisted on the market and then refinancing it with TUHF.

‘’A key takeaway from this development is that it really is a collaborative team effort. As a developer, while you need to bring everything together, you don’t have the individual skills to do everything yourself. ,  It is essential to have the support of a competent team of professionals and an organization like TUHF,’’ he stresses.

For other aspiring new-fledged property developers, Jade advises finding the right deals in areas in in-city and inner city areas where TUHF finances, and then approaching them to work together.

“Personally, I intend to continue following my passion for investing in the inner-city, because there’s a unique fulfilment that comes from creating an environment where people can feel safe and live well,’’ Jade concludes.

“I’m very happy that TUHF is a part of my team. They are unlike your normal banks – they see the potential.” Lazola Kubukeli talks about his second project with TUHF to refurbish Grace Villas in East London.

“TUHF epitomises the development finance principles, because they have a unique understanding for this market.” Ayanda Gqoboka talks about his journey with TUHF to refurbish 3 Dunrobyn Court into a mixed-use property offering affordable rental housing to young professionals in East London.

“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.