South Africa's housing crisis has moved into the middle

South Africa’s Gini Coefficient currently stands at 63, the highest in the world, highlighting the country’s extreme income inequality and the urgent need for economic renewal and structural reform.

Addressing this imbalance is imperative. The government has intentionally intensified its efforts to close these gaps, reinforced by the 2026 National Budget’s focus on expanding access to affordable housing and improving infrastructure. To support these efforts, it has also committed over a trillion rand to infrastructure, established blended-finance vehicles and reformed public-private partnership frameworks.  

However, achieving national development targets requires more than fiscal allocations: it requires institutional capital that is intentional, patient, commercially disciplined and intent on achieving:

• Social and financial returns: Focused on servicing underserved segments of the population, with a deliberate emphasis on both social impact and commercial returns as integral to investment decisions
• Risk diversification: Investing in a diverse range of infrastructure sectors with varying risk profiles, ultimately reducing overall exposure
• Scale: Economies of scale driven by leveraging synergies across infrastructure and impact investments.

By placing a clear emphasis on housing, the 2026 National Budget has sounded a call to arms for funding in this sector, opening the door for South Africa’s pension funds and other institutional investors to step forward and answer this urgent call. 

Unveiling an opportunity hidden in plain sight

The Sanlam Investments Property Impact Fund is built for this moment, as it sits at the intersection of national needs and investor opportunities. Investors seeking both financial returns and social impact will find that the case for inclusion is no longer merely emerging. It has arrived. 

The broader conversation, however, must address how we ought to grow the economy for the benefit of the majority. 

Our fund is answering the government’s call for private sector participation by tackling South Africa’s most pressing challenges. Its focus is on financing property and social infrastructure for the underserved segment known as the “missing middle”.  This includes civil servants –nurses, teachers, police officers – as well as security guards, builders, young professionals, small business owners – individuals who are essential to sustaining our economy as they represent nearly 30% of households and contribute over 60% of individual taxpayers.

This group, the backbone of our economy, urgently needs quality social infrastructure designed around their affordability and access requirements.  

To start, the affordable housing market faces a backlog of 3,7 million units. In cities grappling with densification, affordability pressure makes demand both deep and durable, offering investors predictable occupancy and indexed rental growth.

Through targeted investment in the sector, the property impact fund also strives to stimulate local economies and create jobs. In doing so, it not only supports the government’s vision but also empowers the missing middle, ensuring that those who carry the weight of our economy are no longer left behind. 

Sustainable growth for all involved 

The fund’s collaborations are anchored in shared values, with a clear commitment to delivering affordable, high-quality solutions for the missing middle. It carefully selects partners with proven expertise and strong track records. These partners benefit from value creation streams designed to unlock sustainable growth opportunities:

• As one of South Africa’s oldest landlords, Sanlam Group leverages its commercial property expertise and networks to access broader opportunities.
• Using the IOOT model (Invest–Own–Operate–Transfer) the fund acquires, develops, and maintains properties for underserved markets. This approach ensures long-term viability and enables partner or tenant pathways to ownership through pre-emptive purchase rights in investable projects.

By partnering with providers of affordable housing, affordable private education, affordable private healthcare, and rural/township retail, our fund aims to deliver essential services that are both accessible and sustainable, with government and partners.  

Our partners’ scalable business models enable expansion and consolidation in fragmented markets. This positions the fund as a catalyst for targeted investment and sustainable economic growth and a tool to address current structural imbalances. 

Collectively, these five sectors represent an investable universe of over R2.9 trillion in potential projects. Through targeted investment, we can expand access to essential services, stimulate local economies, and create jobs. In doing so, business and allocators can support the government’s vision and empower the missing middle, ensuring they are no longer left behind.