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Nairobi- based pan-African housing development financier Shelter Afrique announced on Tuesday that it is working on an affordable housing partnership deal with a global private equity investment firm Actis and Indian real estate giant Shapoorji Pallonji.
Shelter Afrique Managing Director and CEO Thierno-Habib Hann said: “There is huge housing demand across Africa which requires well-thought-out partnerships to tackle, and India’s experience in real estate development has provided us with a great learning on how to approach affordable housing in Africa.”
“We are looking forward to the partnership with Shapoorji Pallonji – one of India’s top real estate companies; the global private equity firm, Actis, and their local joint venture Mi Vida Homes - to see how we can scale up and replicate their model across our member States.”
Shapoorji-Pallonji Real Estate Business Head Sumit Sapru said there were many similarities between Indian and African markets that Shelter Afrique could build on while Actis Director Koome Gikunda added that the firm hopes to replicate the success of its Mi Vida Homes JV with Shelter Afrique across Africa.
The JV delivered its first project at Garden City in Nairobi, Kenya, and is planning to launch three more projects in Nairobi.
Hann said the partnership with Shapoorji Pallonji would be crucial in building Africa’s mortgage market, adding that many countries do not have well-developed mortgage markets, which has become a huge constraint and gap in the provision of affordable housing.
“For instance, Kenya, one of the most developed markets in Africa and with a population of 50 million people, has only 30,000 mortgage subscribers and the story is the same across Africa. India on the other hand, has a well-developed mortgage sector - boasting over $20 billion mortgage market - that’s why such a partnership would be important to help us draw fundamental lessons.”
According to Statista, most African countries have a very low mortgage-to-GDP ratio. In 2021. Cabo Verde was ranked first at 23.4 percent, South Africa came second at 23.3 percent, and Kenya at 2.1 percent. Nigeria, Mali and Uganda stood at 0.5 percent, while Algeria recorded the lowest ratio at 0.0 percent.
(Writing by SA Kader; Editing by Anoop Menon)
