Pan-African private equity fund Actis is set to dig in to the affordable housing arena with a KSh. 12 bn fund; the proceeds of a recent deal signed between Actis and one of India’s largest developer, Shapoorji Palonji.
According to David Morley, Actis’ head of global real estate, the firm will construct a fleet of 600 houses tailored towards the middle-income earners in its premier Kenyan Development, Garden City mall complex at a cost of US$119 million.
“There is a huge demand for affordable and middle-income homes and the goal of the joint-venture platform will be to bridge the gap in this market. There is a notable lack of institutional quality home builders with the expertise, capital and consumer trust to truly address the opportunity at scale in Kenya,” said Mr David.
The move is timely, coming at a time when many real estate developers and service providers are debating mechanisms to curb the housing deficit in Kenya and other parts of the continent. A report by the UN-Habitat recently revealed that Africa as a whole needs to build 4 million houses to deal with its growing housing needs.
Commenting on the affordable housing crisis during the launch of an affordable housing project undertaken by a joint venture between Karibu homes and Shelter Afrique, Shelter Afrique Managing Director & CEO Andrew Chimphondah said several countries in the continent are facing huge housing backlog.
“It doesn’t matter which country you are referring to any more. Uganda is facing an annual deficit of 1.6 million housing units, Kenya 2 million housing units, Tanzania 3 million housing units, South Africa 3 million housing units, and Nigeria 17 million housing units – wherever you go, it’s a crisis and it is incumbent upon us to heed the call to action,” said Mr. Chimphondah.
Actis as well as Shapoorji Pallonji already have significant history in Sub-Saharan Africa real estate developments. Shapoorji Pallonji has undertaken a number of projects in Africa including the Seat of Governance and Presidential Palace at Accra, Ghana, and several mass housing projects in Algeria.