SA Affordable Housing January / February 2018 // Issue: 68 | Page 27

FEATURES
IHS walks the talk
The road to creating and providing sustainable affordable housing
is long; we speak to Rob Wesselo, MD of International Housing
Solutions (IHS) to discover how they get it done.
By Ntsako Khosa | All images courtesy IHS
The Village in Centurion, a typical popular product which IHS develops.
A
t the helm of IHS for eight years, Rob Wesselo is
excited about the direction the afffordable housing
sector is taking. “I’ve always believed that the
affordable housing industry, especially the rental market,
would become an institutional asset. I’ve been saying this
for a while and many people laughed at me. Now it’s
happening, it’s quite exciting,” he says.
IHS
IHS is, simply, a private equity asset manager focused on
the affordable housing market.
“That means we raise capital from all over the world and
invest it in affordable housing, currently mostly in South
Africa,” he explains. IHS has about 8 000 units that they
own and manage. They also manage three private equity
funds and one Real Estate Investment Trust (REIT) that is a
pure rental portfolio, called Transcend Property Fund.
The African-based company is US owned by MMA Capital
Management. “About 10 years ago they decided to
diversify outside of the US. They were going to set up
affordable housing managers worldwide but after the
global financial crisis South Africa is the only business that
got up and running,” he says. Despite this the company has
slowly branched into other parts of Africa. “We’re starting
to expand, we have a fund in Namibia and Botswana. We
also have investors interested in Kenya,” he says.
As the MD of the company his focus is on South Africa
and he believes there is a lot of opportunity. “We have a
broad set of objectives and we have very good people that
take frontline responsibility. We create a business case
which we then sell to investors,” he shares.
IHS‘s business case in South Africa is a shortage of
affordable housing. Initially matching this to investors was
difficult as the company didn’t have a track record. “It’s
difficult to get investors’ trust, 10 years later we’ve built
many houses and we have a strong team. Now it’s much
easier for us to attract capital,” he says.
IHS deals with two main transaction types and invests
differently in each. The first involves developments where
IHS partners with developers, they capitalise the
developments and then sell them off. All this depends on
the environment and opportunities available to sell units
in the open market.
The second transaction involves buying turnkey units
(apartment blocks, complexes and townhouses) and
renting them out to tenants. “This operates mostly from
AFFORDABLE
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