Mortgage banks, developers collaborate on affordable housing OCTOBER 13, 2014 BY MAUREEN IHUA- MADUENYI Leave a Comment In one of the first of its kind collaboration in the country’s housing sector, some mortgage banks and real estate firms have concluded arrangements to develop 93 hectares of land into an affordable housing project. The project is aimed at building a residential community to be known as Grand Lake along the Lekki-Ajah corridor in Lagos, with mortgage banks like Imperial Homes, Abbey Mortgage Bank and TrustBond as financiers, while Gran Imperio Group, Ocean Springs Estates Limited, Vestril Limited and White Oak Real Estate Limited are the developers. According to the stakeholders in the project, the arrangement, which includes a developers’ plot scheme, will make significant impact on the nation’s housing market for the emerging middle class and other prospective homeowners. About 554 housing units are expected in the first phase of the scheme, which is expected to be delivered between 18 and 24 months from now. The Chief Executive Officer, Mortgage Banking Association of Nigeria, Mr. Kayode Omotosho, said the association had anticipated such syndication as a strong point in housing development. He said, “Mortgages will be strong when the bond among members is strong and we will deliver on our mandate to provide housing for the citizens, and the housing deficit will be reduced. “The staying power of the mortgage sector in the 1980s was syndication and a lot of work was done. Almost all the roads linking the North to the South were done through syndication. This will be the beginning of an iconic project.” The partners posited that the coming of the project underscored the need for the newly established Nigerian Mortgage Refinance Company to provide housing stock very fast in order to meet the demand for quality, yet affordable homes by making very cheap mortgages available for the middle class. Under the arrangement, Imperial Homes Mortgage Bank will lead the syndicating banks to bankroll the project, while Gran Imperio Group will be the lead developer. The financiers are open to work with and finance other developers, who wish to come on board for various kinds of concepts and designs to fit into the entire Grand Lake concept. The other developers coming on board are expected to handle a minimum capacity of 10,000 square metres upgradable to 20,000 square metres as the scheme progresses. The scheme, described by the stakeholders as ambitious but realisable, will be an affordable residential community that will have a man- made lake with one, two, three and four- bedroom terraced bungalows as well as other housing types that suit the overall design of the emerging city in the Lekki corridor. The Managing Director, Gran Imperio Group, Mr. Adeyeye Ogunwusi, said the choice of the peninsular was in line with its status as one of the fastest growing regions of the world. According to him, real estate has yet to contribute meaningfully to the Gross Domestic Product of the country at less than five per cent, and this is evident in the wide gap between housing demand and supply. Ogunwusi said, “We don’t have a formidable housing stock for the emerging middle class and if the link of financing is missing, development cannot be done. A lot of our commercial banks do not understand the mortgage banking system, hence the need for this collaboration. “This is tagged ‘developers’ scheme’, and it will have many developers coming on board in different phases.” The Chief Executive Officer, Imperial Homes, Mr. Ben Akaneme, stated that the country was plagued by housing and infrastructure problems, and that the solution to the problems could be found internally. According to Akaneme, the mortgage banks took the first step by recapitalising to make them stronger to provide mortgages. “If we make mortgages available, people will buy houses and then become more interested in what happens in the country economically and politically, this will in turn develop the country very fast. It is based on this that we at MBAN decided to look inwards to solve the housing problems,” he added. The Managing Director, TrustBond, Mr. Adeniyi Akinlusi, stated that the project was novel and enjoined stakeholders in the building construction as well as the mortgage finance sector to work together towards reducing the housing deficit in the country. Akinlusi said that even with the establishment of the NMRC, there must be housing stocks to be refinanced. “We cannot overemphasise the need for housing stocks for refinance to take place. This synergy effect will achieve what has not been achieved before,” he said. The Head of Business Development and representative of the Managing Director of Vestril Limited, Mr. Kehinde Asumah, said the scheme would focus mainly on first time homeowners.
Posted on: Mon, 13 Oct 2014 03:45:57 +0000
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