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PIC commits to $720mln for affordable housing

Public Investment Corporation, the investment manager for South Africa’s Government Employees Pension Fund, is committing R10.5 billion or approximately $720 million to SA Home Loans in a bid to provide housing financing to government employees and other qualifying members of the public. The investment fulfills part of a development investment mandate being carried out by PIC on behalf of the pension fund.

Commenting on the investment commitment, Abel Sithole, GEPF’s Principal Executive Officer, said “We believe there are many GEPF members who often do not qualify for bank-issued housing loans and housing subsidies offered by the government. We are, therefore, excited about this investment as it will enable many government employees to own their own houses at a much more affordable rate. Most importantly, we believe home ownership can restore people’s dignity.”

Government employees will be able to access funding to acquire residential property through the Government Employees Housing Scheme, an agency of South Africa’s Department of Public Services and Administration. A lack of access to housing has been identified by the country’s National Development Plan as a major challenge, noting that “…the growth of property value has led to an overall average house price that has made housing unaffordable to many South Africans, and has further excluded participation in the property market by historically excluded groups.”

“The PIC is intentionally implementing a developmental investment mandate, which primarily seeks to achieve two types of returns, namely: financial and social returns,” said Claudia Manning, a Member of the PIC board.”…Our view is that members of the GEPF should benefit during their active working years and during retirement – and this is a social return. Investing in affordable housing finance schemes such as this provides these members with a real benefit.”

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