Investment
Case

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In addition to the well understood reasons why asset managers might diversify their portfolios with real estate allocations, the following aspects of Divercity’s business model further differentiates it among other property investment opportunities:

Precinct focus, national
diversification:

Divercity’s precinct-focus enables it to create pockets of urban excellence – setting its assets apart from their surroundings in terms of desirability to the consumer and, as a result, overall investment performance. By developing precincts in major metropolitan nodes across South Africa, Divercity’s strategy ensures diversification from city-specific risks.

Inflation hedge:

Well-located affordable housing has been shown to be a basic essential good – thus creating a natural inflation hedge as households forego other expenditure before giving up a living arrangement that provides ease of access to economic opportunity and essential amenities.

Defensive NOI:

During economic downturns, demand for Divercity’s affordable yet high-quality and centrally located living environments increases due to down-sizing and economising by households living in higher-tier accommodation (such as 4 story walk-ups on the urban periphery) towards a more efficient, economical mode of living.

Track record and
experience:

Divercity was founded by a partnership of some of South Africa’s foremost property professionals and investors who possess decades of sector-leading expertise among them. See Partners for more.

INTERNALLY MANAGED,
OWNER-OPERATOR MODEL:

Divercity’s residential property and asset management is done internally within the fund through its wholly owned subsidiary Ithemba Property Management. Commercial and retail asset management is done by Atterbury Property, which is a significant shareholder in the fund. Furthermore, Divercity’s senior management is significantly invested in the fund, thereby ensuring excellence and a long-term focus across the property investment life-cycle.

Emerging asset-class:

Divercity’s precincts typically comprise of between 60% and 80% affordable rental housing, with the remaining GLA reserved for commercial uses and neighbourhood- enhancing amenity offerings. Multi-family rental housing is globally recognized as an emerging asset class within real estate, with the South African property sector being under-weighted towards residential when compared to other markets.

Triple bottom line:

While Divercity is first and foremost a for-profit business which aims to delivery above-market commercial returns, the funds business model also has significant positive socio-economic and environmental impact. See Impact for more.