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Wednesday, February 1, 2023

Shelter Afrique Lists Categories of Developers To Benefit From N46bn Bond

In line with its strategy of developing and deepening local capital markets to access local currency, Shelter Afrique has issued ₦46 billion (US$110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance in the Nigeria’s capital market under a ₦200 billion (US$481.3 million) bond issuance programme.

Speaking to Africa Housing News on the bond, the Acting Managing Director of Shelter Afrique, Mr Kinglsey Muwowo said funds had been made available to eligible developers, Tier 1 and Tier 2 banks and primary mortgage lenders.

When pressed on the categories of developers viable for the bond, he said, “The bond issuance attracted participation from a diverse range of institutional investors, including pension funds, banks, and insurance companies, supported by an AA rating from GCR Ratings and an A+ rating from Agusto& Co.”

He noted that Shelter Afrique prides in its ability to identify partners who share a common goal and purpose adding that before the bond was issued, the housing finance institution had built a strong pipeline of counterparties who not only share in its vision but have the capacity to deliver large-scale housing.   

On the Pan Africa housing financier’s condition for funding in real estate, Mr Muwowo said, “Our current strategy prioritises scale and development impact, so we are currently considering projects which will deliver 1000 units at the minimum, although we appreciate this can be phased over a period.

“We are keen on projects that actively demonstrate alternative, sustainable and green building technology as well as those that adopt a community-living approach to building.”

The acting MD also discussed the difficulty and negative impacts high cost of building materials is having on the development of affordable housing.

Affordable Housing Hall of Fame Award

He said, “The increase in building materials is as much a matter of policy as it is a matter of macroeconomic factors. The last two shocks to the international economy have revealed the dire need for self-sufficiency on the African continent.

“The realisation is that there will be no development or growth without addressing the need for industrialisation and manufacturing in Africa. Africa is the only continent that continues to urbanise rapidly without industrialising.

“The Coronavirus pandemic and the subsequent Russia-Ukraine war have revealed the gap in the supply and value chain for housing which have a direct impact on the availability but also the prices of building materials.”

Stating the role the African Continental Free Trade Area (AfCFTA) can play in alleviating the burden of building collapse, he added, “However, there are inroads made with policy recommendations which will trigger economic action.

“The African Continental Free Trade Area (AfCFTA) once it becomes fully operational, will dramatically increase access to markets and boost manufacturing and industrialisation. We can expect countries with comparative advantage in the industries of the built environment to be encouraged to trade and others to develop these competencies.”

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