Kenya-based urban development financier Shelter Afrique plans to invest $80 million in east Africa this year, looking past immediate concerns about inflation and high interest rates to long-term demand for housing from middle-income buyers.<\/p>\n
Managing director Alassane Ba said on Friday his firm will sign a loan agreement worth $40 million with Tanzania\u2019s state-run National Housing Corp in March to build homes in that country.<\/p>\n
Shelter Afrique also plans to invest $10 million in low-cost housing in Rwanda and $30 million in equity stakes with property developers in Kenya, the region\u2019s biggest economy.<\/p>\n
The company is also searching for investment opportunities in Uganda, but had not allocated any specific amount for the land-locked coffee producing country.<\/p>\n
\u201cInflation and high interest rates are short-term concerns, but we\u2019re still looking for investment opportunities in the housing market in this region,\u201d Ba told Reuters.<\/p>\n
\u201cThese challenges are temporary. The housing market is just under a small adjustment and it\u2019s the best time to invest.\u201d<\/p>\n
Year-on-year inflation rates in the east African nations of Kenya, Tanzania and Uganda rose sharply last year to double-digits driven by high oil prices on the global market and weak local currencies.<\/p>\n
An aggressive tightening of monetary policy in Kenya and Uganda have helped ease inflation in those two countries, but has left mortgage holders grappling with extremely high interest rates.<\/p>\n
Commercial banks in Kenyan have raised lending rates to about 25 percent from 15 percent since October, prompting lawmakers to propose a new law to cap the rates.<\/p>\n
In Uganda, traders closed their businesses in January in a three-day strike to force banks to stop raising rates which had soared to 29 percent from 19 percent in a few months.<\/p>\n
Shelter Afrique, which raised 2.5 billion shillings through a medium-term loan in August, said it intends to lend the funds to developers at a base rate of 13 percent, nearly half what commercial banks are offering at the moment.<\/p>\n
\u201cThe target market for the funds will be the middle income segment where demand for housing is insatiable,\u201d Ba said.<\/p>\n
The regional lender, which is jointly owned by 42 African governments, the African Development Bank and African Re-Insurance Corporation, raises most of its hard currencies from the international capital market.<\/p>\n
It has extended about $124 million in credit to private developers in Kenya\u2019s real estate market since inception in 1995 and is in negotiations that could see the Chinese government buy a stake in the company.<\/p>\n
\u201cWith the (economic) slowdown we are witnessing in the rest of the world, all money is coming to Africa. It\u2019s the best time for Africa,\u201d Ba said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kenya-based urban development financier Shelter Afrique plans to invest $80 million in east Africa this year, looking past immediate concerns about inflation and high interest rates to long-term demand for housing from middle-income buyers. Managing director Alassane Ba said on Friday his firm will sign a loan agreement worth $40 million with Tanzania\u2019s state-run National … <\/p>\n