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Shelter Afrique, Commercial Bank of Africa in Sh1.5b deal

REAL ESTATE
By - SHEILA KIMANI | Jul 11th 2013 | 3 min read
By - SHEILA KIMANI | July 11th 2013
REAL ESTATE

By SHEILA KIMANI

The Commercial Bank of Africa (CBA) has signed Sh1.5 billion finance deal with Shelter Afrique in a move that reinforces the optimism of the real estate market.

The deal came after Shelter Afrique’s board approved the issuance of an up to Sh8 billion corporate bond, expected to be raised over the next two years for funding projects.

CBA’s Group Managing Director, Isaac Awuondo, hailed the bond’s success, which he believes came at a time when there is need for affordable housing in Africa. At the moment, poor planning, lack of adequate finances, high infrastructural development cost and that of building materials remain major challenges to the provision of decent housing within the country. “With this financial support from CBA, Shelter Afrique will supply affordable houses and this also means that we shall be able to mobilise resources on a larger scale and optimise costs,” Said Alassane Bâ the managing director of Shelter Afrique.

Alassane Bâ also noted that Shelter Afrique had recently adopted a new capital increase as a first step in positioning the company to raise more funds to meet the ever-growing housing demand in Africa. 

Increased capital

During Shelter Afrique’s annual general meeting held in N’Djamena Chad last month, shareholders resolved to increase the authorised share capital from $300 million (Sh25.8 billion) to $1 billion (about Sh86 billion) and also to reinstate callable capital at $500 million (Sh43 billion). Shelter Afrique is a pan-African finance institution dedicated to financing affordable housing across the continent.

Still on the same note, Garden City, a project set on 32 acres of land on Nairobi’s Thika Highway has been granted the Vision 2030 Private Sector partnership project status, which elevates the status of the project to become the biggest and most innovative in regards to real estate. 

The partner status is an endorsement by Vision 2030 Delivery Secretariat Board. Garden City has the capacity to house a 500,000 square foot shopping complex, as well as the largest shopping mall in East Africa, in line with Vision 2030 objectives.

The scheme is being financed by Actis — the pan-emerging markets private equity firm — while Aspire Group and Mentor Management are the project’s international and local property, construction, project and development management consultants.

The two parties will implement mutually beneficial objectives that promote not only Vision 2030 and Garden City, but that will also market Kenya as the most favourable investment destination in sub-Sahara and Africa’s emerging markets.

“Garden City is an unique infrastructural scheme that will help meet the growing demand for housing, ensure the provision of decent and sustainable housing and play a big role in building an increasingly sophisticated retail culture in Kenya.” said Michael Turner, the Actis Managing Director for East Africa.

Energy efficient

The cutting edge factor is that all the structures at the complex will be cost effective and energy efficient with the retail mall being the first Leed (Leadership in Energy and Environmental Design) certified retail mall in East Africa.

“Besides all the positive attributes that Garden City prides itself in, phase one of the project will result in creation of approximately 600 permanent jobs mainly targeting local Kenyans. This shows that the project is an example of the holistic initiatives that contribute towards our social, economic and political pillars and thus is fully welcome,” said Mugo Kibati Vision 2030 Delivery Secretariat Director General.

The MoU signing comes at a time when Actis has just commenced the construction of phase one, which comprises more than 330,000 square metres of retail space and around 80 residential units.  The retail centre is expected to be completed for opening by November next year.

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