Insurance brokerage firm Liaison Group plans to build 10,000 affordable housing units along Nairobi’s Northern Bypass which will see the firm also set up a Real Estate Investment Trust (Reit).
The project will be developed through the firm’s subsidiary Patch Africa Housing on 124 acres of land, consisting of one, two, three and four-bedroom units.
The construction of the houses will be financed through a joint venture by the developer –Patch Africa Housing— and a tenant purchase scheme.
Some of the units to be built include townhouses with domestic servant quarters and three and four-bedroom maisonettes.
The project will contain social amenities including a mall, mosque and church and school.
“We will securitise the tenant purchase scheme into a Reit. We can put the rent into an umbrella vehicle and sell them to investors. The housing units will be paying rent let’s say, for example, for 15 years, which can be sold to investors who buy the receivables at the net present value, to enable us to exit the project,” said Liaison Group managing director Tom Mulwa.
A Reit is a regulated collective investment vehicle that enables investors to contribute funds for buying units (shares) in a fund developing or holding real estate assets.
Patch Africa Housing is a special-purpose vehicle that the insurance broker set up to help it invest in the affordable housing market and set up a Reit for fundraising.
“We wanted to take part in affordable housing, and as a business, we created a company called Patch Africa, which is our aggregation tool,” said Mr Mulwa. – Business Daily
