The Public Investment Corporation (PIC) invested in the Divercity housing development in central Cape Town to demonstrate its commitment to investing in projects that bring people closer to economic opportunities.
“This is about more than buildings. It is about making cities work better for people, so that living closer to work is not a privilege, but a possibility for more South Africans,” PIC Chairperson Dr David Masondo said on Tuesday after conducting a site visit at the development.
This investment marks the PIC’s entry into the multi-family rental housing sector and forms part of a broader strategy to diversify its portfolio while supporting developments that deliver both strong long-term returns and real social impact.
Divercity’s model is to build affordable, well-located rental housing in city centres, close to jobs, transport, and essential services.
In doing so, it directly addresses one of South Africa’s most persistent historical challenges – apartheid spatial planning, which placed Black people far from employment opportunities.
“For many South Africans, it is not only what they need do to earn an income or make a living that matters; where they live also continues to determine how they live. Developments like Divercity are beginning to change this by reducing travel time, lowering transport costs, and improving access to work and economic opportunities. This is a key priority for the PIC,” Masondo said.
Divercity also plays a critical role in closing a long-standing gap in the housing market.
It provides an option for households that do not qualify for government-subsidised housing but are also unable to access mortgage financing from commercial banks.
By offering affordable rental housing in well-located urban areas, the model creates a practical pathway into the city for a broader range of South Africans.
The investment is already supporting over 1 100 jobs, with that number expected to grow to 2 800, as the platform expands toward its target of 15 000 units.
South Africa’s housing market continues to face a structural shortage of between 2.3 and 2.6 million units, with a significant portion of demand concentrated in the affordable housing segment.
The demand for affordable rental housing is estimated at over 250 000 to 300 000 units per year, while delivery remains significantly constrained, reinforcing the need for scalable, institutional solutions.
The PIC has committed 24% shareholding, as part of a long-term investment strategy focused on stable income, inflation-linked rental growth, and capital appreciation.
The project also shows what is possible when public capital partners effectively with private capital and developers.
It offers a scalable model for addressing South Africa’s urban housing shortage within a framework of strong commercial returns for investors, including pension funds.
The PIC invests on behalf of the Government Employees Pension Fund (GEPF) and remains focused on opportunities that deliver sustainable financial returns and contribute to inclusive economic growth.
“Today’s visit provided an opportunity to see, on the ground, how these investments are improving lives while building a more integrated and economically active urban future, whilst generating financial returns for the workers' pensions,” Masondo said. -SAnews.gov.za
