NMRC and Kohath Seal $500 Million Deal for Sustainable City Development
April 25, 2018, 11:30am, Abuja, Federal Capital Territory, Nigeria
The Nigeria Mortgage Refinance Company Plc (NMRC), Nigeria’s leading mortgage underwriter has penned a collaboration agreement with Kohath Housing Corporation (Kohath), promoters and developers of the “Land of Honey” City Development (LoH). Kohath is a leading player in the municipality development space in Sub-Saharan Africa. LoH City is proposed as an innovative and sustainable city solution focused on the live, work and play concept.
The partnership agreement, which was executed on the 25th of April 2018 will see NMRC and Kohath collaborate towards the provision of project structuring and mortgage advisory for the delivery of a first of its kind city development (located in the Gude district of Abuja). LoH has the capacity to deliver between 15,000 and 20,000 housing units in different phases over a 5-year period. Kohath’s transaction structure also includes offtake arrangements for up to 10,000 affordable housing units with the Federal Integrated Staff Housing Scheme (FISH) through the Office of the Head of Service of the Federation and Federal Government Staff Housing Loans Board.
According to the acting CEO of NMRC, Mr Kehinde Ogundimu, the collaboration between Kohath and NMRC presents a huge opportunity to make a difference in home ownership in the Nation’s capital due to challenges that the LoH development will help to resolve. These challenges include but are not limited to proliferation of dead assets due to titling constraints, access to mortgage loans and the delivery of sustainable, planned, qualitative and affordable housing.
The Executive Chairman Kohath Housing Corporation, Mr Teni Eleoramo on his part noted that the LoH development and Kohath’s partnership with NMRC can best be described as a value innovation that has been in incubation since 2011. Mr Eleoramo in his statement noted that the project had successfully weathered the storm of title and legal challenges, survived the arduous business environment of Nigeria and is now ready to deliver its mandate of providing qualitative and affordable housing to Nigerians. Mr Eleoramo further stated that While LoH’s building types include a handful of single-family homes, and a large majority of affordable housing development portfolios, LoH also features multifamily apartment homes for mid-income families with supportive services that caters to lifestyle, transform lives and strengthen communities.
The LoH development currently has an asset portfolio of over 900 hectares covered by a bankable certificate of occupancy that is conservatively valued at $180 million, making Kohath one of Nigeria’s largest developers of quality affordable housing. Also, Kohath’s proposed portfolio of over $650 million development pipeline reflects the company’s approach towards value creation. Kohath’s development strategy will in the long run involve the deployment of the World Bank and International Finance Corporation’s sponsored Excellence in Design for Greater Efficiencies Certification process in building innovative, sustainable, “green” communities as part of Kohath’s Green Development Strategy for improved health, long-term economic and environmental benefits for residents.
The LoH design is incorporated around a proposed district light rail that required the LoH design to take into consideration the significance of access to requisite services and public transportation in building new communities and as such the design provides access to an array of retail outlets, schools, and other services within walking distance, as research shows that living in well-designed, walkable, transit-oriented communities near public transportation can result in a range of significant commercial and health benefits.
The acting CEO of NMRC, Mr Kehinde Ogundimu in his closing statement noted that the Federal Capital Territory Abuja is one of the most expensive housing markets in the country. He further noted that according to available statistics, the minimum annual salary required to purchase a median priced home is more than $30,000 and this price range excludes many hard-working people – from Doctors, Teachers and Public servants – from being able to rent or even own a two-bedroom apartment for their families.
Mr Ogundimu further noted that the partnership with Kohath presents a huge opportunity for NMRC to support the Federal Government’s housing programmes in providing affordable housing backed by affordable mortgages. This he said is in consideration of the fact that, of all the challenges currently facing our nation today, very few are more urgent than the deficit of decent housing.
Housing and economic analyst have all noted that without a stable and affordable home, low-income families in Nigeria have little hope of a better livelihood as the availability of housing plays a key role in determining whether they can find well-paying jobs, send their children to school, get quality health services, and access to reliable utilities