Exit Strategy

The typical duration of individual projects is expected to be between 5 and 7 years, with all projects fully paid at the maturation of the Fund after 10 years. The current environment for exiting investments in South Africa and the region is quite strong, and driven by several factors including:

• Robust M&A activity driven by both South African and global acquirers;
• Well-established debt and equity capital markets, including BESA and JSE;
• Significant demand for housing; and
• A palpable shift of investors to emerging markets because of high potential returns, as well as the growing cost and complexity of regulation in other markets.

IHS’s exit strategy:

• Is primarily expected to be through the sale of developed homes, the sale or listing of the IHS rental portfolio and the private sale or listing of IHS's shares in operating companies;
• Addresses hold period, exit-cap rate vs going in-cap rate, gross sales price and sales price per unit vs total development costs; and a rationale for the timing and pricing;
• Considers the profile of likely prospective buyers; and
• Addresses what portion of the funds return is in the residual and what portion is in the annual projected cash flow.