Property developers get major boost
The demand for housing in urban areas is currently estimated to be 150,000 units annually
18/01/2010 – Property developers with projects exceeding Sh1 billion will now get easy access to loans after Shelter Afrique and Housing signed an agreement to co-finance such mega projects.
The agreement also allows the two institutions to participate in other new ventures in housing as well as expertise sharing.
Speaking during the signing of the agreement, Shelter Afrique Managing Director Alassane Ba said the institution seeks partnership arrangements with financial institutions as part of its mandate to mobilise additional resources for housing development in Africa.
“Shelter Afrique provides financing for projects relating to housing estates, infrastructure provision through site and services schemes, neighbourhood and housing improvements; commercial projects and construction of student hostels,” Mr Ba said.
On his part, Housing Finance Managing Director Frank Ireri said the demand for houses in Kenya is increasingly rising thus creating an opportunity for financial institutions to bridge the demand supply gap in the real estate sector.
“The future is very positive as there is a robust demand for housing that requires additional funding sources,” Mr Ireri said, adding that the economy is set for substantial growth in 2010 and this will see huge demand in home loans.
Shelter-Afrique, a regional housing finance and development institution, has projects in about 25 African countries with a capacity to finance large projects directly from its own resources or through syndication with its strategic partners. The institution is a major player in the capital market and has implemented more than 80 projects, whose combined value is over Sh20 billion, most designed to provide affordable middle-income housing.
Together with its partners, Shelter Afrique will – over the next few years – commit more than Sh20 billion in new projects that will benefit low and middle-income earners in Kenya. On the other hand, Housing Finance – under a fully fledged project finance department- is spearheading concept origination, financial and technical structuring and financing of property acquisition, development and improvement across wide sectors of residential, commercial and industrial use.
Housing Finance has successfully positioned itself as the main player in the property value chain under an ambitious Property Supply Strategy. The strategy targeting land owners, developers, professional service providers and building materials has led to creation of new business in a backward integration of the main mortgage business influencing property development to support the company’s core business of mortgage financing.
The demand for housing in urban areas is currently estimated to be 150,000 units annually yet only about 35,000 are built every year. On the other hand, an estimated 300,000 housing units are required annually to cater for housing demand in rural areas.
