South African Housing Developer Receives IFC Funding
Alleyroads is constructing 1,061 affordable housing units in Johannesburg.
South African property developer Alleyroads has received ZAR175 million (US$9 million) from the International Finance Corporation (IFC) to support the construction of affordable rental housing units in Johannesburg.
This is the second tranche of funding from the World Bank Group subsidiary, following the disbursement of ZAR130 million (US6.8 million) in 2022.
The financing will help Alleyroads complete the construction of low-cost housing developments at Inkanyezi village in the Katlehong South township, John Dube village phase 1 in Springs city and Meyerton Ridge in Meyerton town.
The projects will provide 1,061 units for up to 4,244 residents. The construction work is due to be completed this year.
Construction of the Inkanyezi Village complex, comprising 378 affordable housing units for 1,100 residents, was launched in April. It aims to cater to lower-to-middle-income households with an average monthly salary of ZAR9,000-ZAR25,000 ((US$471-US$1,309), with a rental range of ZAR4,500-ZAR6,500 (US$236-340).
In July 2022, the IFC announced the signing of a ZAR325 million (US$20.2 million) loan agreement with Alleyroads to help the company finance the construction of 1,000 affordable rental apartments in Johannesburg. It said the apartments would have two bedrooms with an average size of 62 square metres.
The overall project cost was estimated at ZAR620 million (US$42.1 million), with the balance to be provided by the company's shareholders in the form of equity.
"Affordable rental housing is essential for improving quality of life in South Africa, particularly for younger people and those that do not qualify for or cannot afford a mortgage,” said Adamou Labara, IFC country manager for South Africa, at the July 2022 agreement signing.
Alleyroads was established in 2009. As of April 2023, it had built more than 4,000 affordable housing units across South Africa.
Photo: Alleyroads construction (Source: Alleyroads)