Sanlam Investments launches R4bn Property Impact Fund

Sanlam Investments this week launched the Property Impact Fund, an innovative equity investment vehicle that integrates sustainability and inclusion to meet South Africa’s critical infrastructure needs.

The fund focuses on delivering property facilities in the form affordable housing, student accommodation, rural and township retail, education and healthcare: sectors vital to the country’s “missing middle,” including teachers, nurses, police officers and entry-level professionals who make up 23-30% of the population.

Kamogelo Leeuw, a portfolio manager at Sanlam Investments, said the fund targets an investable opportunity set of over R2.9 trillion in impact-driven property assets. “Investing in infrastructure is a way to nurture a community’s potential. These infrastructure projects attract businesses, create jobs and fuels growth.”

“For example, there is a dire shortage of student accommodation, which is affordable, safe and in close proximity to tertiary institutions. This impacts how future generations receive education, upskill and ultimately grow our economy. Similarly in healthcare, the “missing middle” should be able to receive quality medical care close to where they live, which also impacts productivity and quality of life. By investing in infrastructure, you plant a seed that lets the entire community flourish,” said Leeuw.

Seeded with R1.4 billion by the Sanlam Group, the fund has a target size of R4 billion worth of assets under management, aiming for returns of CPI + 9% per annum. It is structured as an open-ended fund with a minimum investment in the investment-linked policy vehicle being  R50 million.

The fund will target five high-growth sectors that present significant investment opportunities:

• Education: 1.2 million learners, with a growth forecast of 2.5% per annum linked to GDP growth, representing an opportunity of R129 billion.
• Affordable housing: 3.7 million homes, with a growth forecast of 2.5% price growth, representing an opportunity of R1.5 trillion.
• Rural and township retail: 248 SMMEs in the Fast-Moving Consumer Goods sector, with a growth forecast of 10% annual growth in trading density, representing an opportunity of R900 billion.
• Student housing: more than 600 000 beds, with a growth forecast of 4.9% compounded annual growth rate, representing an opportunity of R150 billion.
• Healthcare: 9.8 million medical scheme beneficiaries, with a growth forecast of 2.2% compounded annual growth rate, representing an opportunity of R200 billion.

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