September 2013 Property is a fast growing sector in emerging market countries due to rapid urbanization and demographic changes that pose social challenges and call for more essential urban infrastructure. As of June 2013, IFC has committed approximately US$1.5 billion in Property in over65 projects in 25 countries since 2007. IFC's investments in the sector include affordable housing, offices, shopping centers, warehouses and industrial developments, and mixed-use complexes.
Property provides an opportunity for inclusive business models that allow the lower-income segment to participate as owners, workers, suppliers, and clients. There is a significant funding gap for property in the emerging markets; this hinders further downstream progress, such as, finance for housing and rental activities. Property development also has an indirect impact on infrastructure and environmental upgrades (roads, power, water, transportation) which attract new investors and capital investment.
Given that buildings account for 25 percent of human-made CO₂ emissions (expected to double by 2030), buildings can play a key role in climate change mitigation and represent one of the most important areas for making deep emission cuts. IFC therefore promotes green building technologies and integrated sustainable developments.
Residential Property (Affordable Housing)
Affordable housing developments are often the first opportunity for the creation of wealth within the Base of the Pyramid (BOP) segment. Affordable housing is also a key driver of direct job creation (construction) and indirect job creation (financial and real estate services, consumer product manufacturing, etc.).
In most emerging markets, there is a shortage of housing units (for example, in Mexico, there is a shortage of nine million homes). IFC projects are focusing on increasing the supply of affordable, quality housing, enabling more low-income citizens to become homeowners for the first time.
Since July 1, 2007, IFC has committed approximately US$549 million to commercial property development projects which provide places of employment and are centers of commerce. In addition, small shops and businesses in office buildings and shopping centers provide a stable place of business for SME development.