ARM’s acquisition of Mixta Africa raises fresh hope for low-income housing

Acquisition of Mixta Africa by Asset Resources Management (ARM), an investment fund management firm in Nigeria, has brought excitement into the real estate sector, raising fresh hope for low income and affordable housing.

Mixta Africa, a Spain-based company with subsidiaries in Tunisia, Morocco, Senegal, Cote D’voire and now Nigeria, has over the years been able to deliver over 6,000 housing units and will be bringing that expertise into Nigeria to be able to deliver more homes to the Nigerian market.

It is an Africa-focused real estate development company whose distinguishing features, looking at its operations in different African countries, is its specialisation across the income groups, though at the core of its business are affordable homes. The company had, in the past, developed projects in Algeria, Egypt and Mauritania.

By this acquisition, ARM Properties, the real estate investment and development subsidiary of ARM, has assumed the name Mixta Nigeria and at the launch of the Mixta Africa brand and unveiling of Mixta Nigeria in Lagos recently, Kola Ashiru-Balogun, Mixta Nigeria’s managing director/CEO, said part of the reasons for the acquisition was to enable them access foreign funding for housing development.

“For us, the key interest is affordable homes; we like this to constitute about 60 percent of our business, portfolio and investment in various countries where we operate,” Deji Alli, Mixta Africa’s chairman/CEO, said at the event, disclosing that in countries like Senegal and Morocco, the company had been able to successfully deliver homes to buyers at an equivalent of N5 million.

On how his company would be able to deliver low-cost or affordable housing, he explained that “if you are tapping into the fund or debt market overseas, the interest rate is usually low and with this, you are left with one risk which is the exchange rate.

“In a place like Tunisia, what we have done is to make sure that we don’t take that exchange rate risk; we retain our money in dollars and borrow locally and, because it is cash-backed, you are able to get a more competitive foreign exchange from that environment.”

Historically, he recalled, most of the homes they had done in Nigeria had been within the upper N25 million range, “but with this combination we see an incredible opportunity to come down the ladder to sub-N10 million homes and to do that means we have to go to areas where the price of land is not exorbitant and where there is a critical max of buyers.”

Furthermore, Alli disclosed “in line with what we see about how African economies are evolving, we see significant opportunities in the hospitality sector such as hotels and retail malls.”

According to him, “in Nigeria, for instance, hotel development is one of our projects. And when we talk about retail malls, we are not just looking at the western-styled retail malls, but the kind of thing we did in Oluwole Market in Lagos Island, where we took traders from the informal market into a more organised setting.”