On 10 September 2026 the International Housing Solutions (IHS) Affordable Housing Conference gathered a dozen senior voices in Johannesburg to discuss why affordable rental homes are becoming a favourite of large-scale investors. The event, hosted by IHS, a developer that has built more than 33 000 homes across South Africa, Namibia, Botswana and Kenya since 2005, was framed around the question of risk versus return for institutional investors, the kind of organisations that manage pension funds, insurance money and sovereign wealth.
“The availability of data builds confidence in terms of the risk profile of the asset class, so many more investors are now comfortable to play in this space,” said Khayise Mashifane, Executive of Residential Finance at Nedbank Corporate and Investment Banking. Here, “risk profile” refers to the statistical picture of how likely an investment is to lose value, while “asset class” simply means a category of investment, in this case, affordable rental housing.
Why rental portfolios are seen as defensive
Panel moderator Solly Mboweni, Managing Director of IHS South Africa, argued that the strongest case for affordable housing now lies in professionally managed, investable rental portfolios. He noted that residential rentals have a track record that can be quantified, occupancy rates, rental recoveries and cash flow, making them easy to present to capital holders.
Gregory Coe, head of the FSC Fund at Old Mutual Alternative Investments, added that the tangible nature of rental property provides a “relatively predictable yield”. A yield is the annual return expressed as a percentage of the investment amount. “Rent goes up every year, and it beats inflation,” said Modise Mongane, Investment Analyst at Alexander Forbes. Inflation protection means that as the cost of living rises, rental income also rises, preserving the real purchasing power of the investment.
Rob Wesselo, Group Managing Director at IHS, recalled how the rental market performed during the COVID-19 pandemic: while shopping centres were closed, rental income continued, proving the sector’s defensive character. A defensive asset is one that tends to retain value when other markets falter.
These observations matter for developers who need to convince large investors that their projects are not just socially beneficial but also financially sound. Vanessa Murray, Divisional Executive of Property Finance at Nedbank CIB, warned that “skill, technical capability, and the track record of the developer” are the biggest hurdles when investors assess a project. In other words, a developer’s past performance and operational expertise are as important as the physical asset itself.
Heleen Goussard of RisCura highlighted another layer: investors increasingly look for impact, the social or environmental benefit of their money. She explained that impact preferences are often localised, meaning that an investor may fund a project that directly improves housing in a specific community. Tshepo Radebe, Private Markets Analyst at the Emerging Markets Private Fund (EPPF), described the affordable-housing niche as targeting the “missing middle”, households that earn too much for social housing but not enough to buy market-rate homes.
For developers, the message is clear: keep the investment case simple and transparent. Thato Dikgale of NBC Holdings warned that overly complex structures “rob this asset class of cash flow”. Simplicity helps investors see the true value without getting lost in jargon.
Beyond the conference, the broader South African economy stands to gain. The country faces a chronic housing shortage that hampers productivity and consumer spending. By channeling institutional capital into affordable rentals, developers can accelerate construction, create jobs and generate a steady stream of income that supports broader economic activity.
Developers seeking funding can explore tools such as the commercial funding suite to structure proposals that meet investor expectations. For a deeper dive into the sector’s regulatory environment, see our Retail & Consumer coverage.
In short, the conference underscored that affordable rental housing is no longer a niche charitable endeavour; it is an asset class with measurable returns, defensive qualities and a built-in hedge against inflation, all factors that make it attractive to the kind of investors who move billions of rand each year.
