South Africa working hard to solve a major apartheid legacy - growing Affordable Housing deficit of 2.5 million homes
03 December 2010

We have secured a great opportunity for self-certified sophisticated investors (see article 23A of the PCIS Order) and certified high net worth investors (see article 21 of the PCIS Order) to make an ethical investment in the housing infrastructure of one of the more important emerging economies, with an affordable minimum.

Investing in overseas property development with a known high demand from local end users and strong corresponding support from the banks and Government means a high return can be achieved, especially when considering that returns are captured in the planning gain and construction phases rather than being reliant solely on house price inflation, which is a secondary benefit.

Property Development is a very complex and highly resource intensive process when undertaken on an individual basis, this is why managed funds are an attractive alternative, removing the need for individual investors to get involved in local idiosyncrasies and also offering portfolio diversification.

PLEASE NOTE - this is only directed at self-certified sophisticated investors or certified high net worth investors.

If interested in further details, please contact Ross Lindsay (details at end of message) or Property Secrets back attaching your respective form (self-certified sophisticated investor or certified high net worth individual) - or get in touch requesting either form and we will reply attaching it for your attn.

Once we have received the signed form we will provide you the detail of the opportunity.

Only serious applicants who fit within the FSA requirements described should get in touch.

Herewith follows an article about the opportunity...

SA

South Africa working hard to solve a major apartheid legacy - growing Affordable Housing deficit of 2.5 million homes

In a country such as South Africa the problem of adequate housing for the population is one of their main priorities.

Following the welcome eradication of apartheid, the consequent integration of society and rapid urbanization there is a growing shortage of affordable housing in South Africa. The Ministry of Human Settlements and, Association of Bankers, estimates the existing significant gap is at least 2.5 million units with this figure increasing by near to 200,000 units per year.

The Government and local banks are committed to significantly reduce the deficit by 2016 and there are a range of initiatives in place, project and end user finance from local banks, the releasing of large quantities of land for development into affordable housing, accelerating the granting of planning permission and supporting the provision of power and other utilities. The Government also runs a social housing subsidy program, covering the cost of units for the local under-privileged and they have committed ZAR 250BN to enable this. Sources: Ministry of Human Settlements, Association of Bankers.

One of the main reasons the local developers do not take on the size and number of projects required to address this issue properly is the absence of equity due to a weak local private equity market. This means developers are forced to use expensive subordinated debt to plug finance gaps and this impacts deal profitability, makes them vulnerable to delays and precludes them from taking on projects with longer pre-revenue periods.

To help these developers with their fund raising constraints Private Equity Funds such as the Shared Growth AM Property Fund are raising private capital in order to address the issue in an innovative way in order to help deliver critically needed housing to the people of South Africa.

Solving the equity problem faced by these developers / contractors presents a number of investment opportunities for private finance for years to come. The returns to Funds investors taking part in this Development Model are estimated to be in the region of 20% per annum over a five year period, in developments supported by the South African Government. This is a proven model with a $350 million private equity fund backed by OPIC and a number of other institutions being investing successfully since 2006.

This innovative model gives both the South African Government and Private Equity Funds the opportunity to achieve their ambitious Housing Programme and develop the Private Sector of the economy in a positive way.

As South Africa is the foremost developing economy in Southern Africa the opportunity for investors to achieve returns on their capital similar to investments in the Far East for the foreseeable future are high. And with Legal and Parliamentary systems based on the UK model it gives future investors more assurance than the Political Dictatorships of a number of the Asian countries.

Consistent ratings as an investment market as well as a strong ranking against emerging markets - specifically the BRIC nations of Brazil, Russia, India and China - underpin South Africa's performance in the World Bank's latest Ease of Doing Business Index.

Announced by the World Bank in Washington on 4 November, the Ease of Doing Business Index is created by the international financial institution, using empirical research to show the effect of improving regulations on economic growth.

Higher rankings indicate better, usually simpler, regulations for businesses and stronger protection of property rights.

All investments are made directly into project special purpose vehicles (SPV's) and not into the developers themselves. Only the best developers and contractors are used.

International standards of transparency and corporate governance are adhered to.

Further details of this investment opportunity can be obtained from: Ross Lindsay on 01698 275 083 or email Ross at ross.lindsay@wfplanners.co.uk.

OFT

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