27 January 2021

Why and how we invest in construction and real estate

We invest across many sectors but prioritise those that help further development. Our seven priority sectors have the strongest potential to create the most jobs for the capital invested and contribute towards many of the UN’s Sustainable Development Goals. These sectors are infrastructure, financial institutions, food and agriculture, health, manufacturing, construction and real estate, and education.

In the fifth of our sector strategies, we set out why the construction and real estate sector matters to us and what our investment priorities are.

A flourishing Construction and Real Estate (CRE) sector is vital for economic development. Activities in the sector not only create social and business real estate infrastructure, they can also enhance economic opportunities, support inclusive urbanisation and promote environmental sustainability.

The combined effect of economic growth and demographic shifts continues to drive demand for quality real estate and underpins growth in the sector. Investments in the CRE sector play a significant role in determining whether cities become centres of sustainable growth, or whether they continue to follow a path of resource-intensive, unplanned and inequitable expansion. Opportunities arising in the sector have been constrained by its present fragile development landscape. Overcoming these obstacles to achieve economic, inclusive and sustainable development in Africa and South Asia requires significant investment in the CRE sector.

To pursue our impact objectives in the sector, our investment strategy is built on six key themes that support market-based mechanisms which narrow the gap between supply and demand. Our engagement brings international best practice to our markets in the areas of development and commercial operations, as well as climate sustainability and environmental, social and governance (ESG) standards. And we also endeavour to mobilise capital from market stakeholders, with a view to building a commercially sustainable CRE sector.

CDC investment intervention in the sector is relatively recent, yet diverse. However, as an impact investor we have a greater risk-return flexibility and patient capital approach. This means we are well placed to support long-term partnerships with relevant market stakeholders, to augment the required development in the CRE sector across Africa and South Asia.

To find out more about our approach, read our sector strategy.

To read insights from evidence and our experiences investing in the sector, read our Insight report, What’s the impact of investing in construction and real estate?.

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