NMRC, Kohath and sustainable city development

In pursuit of its mandate to not only increase access to housing, but also make it affordable to a good number of low income and seeking Nigerians, the Nigeria Mortgage Refinance Company (NMRC) Plc, Nigeria’s secondary mortgage market institution and leading mortgage underwriter, has sealed pact with Kohath Housing Corporation for a sustainable development.

NMRC is not new to partnerships and has, in the last four years of its operation, entered into quite a number of strategic and collaborative agreements and partnerships with both public and private sector operators in the nation’s housing industry, as part of its efforts at raising accessibility and affordability.

Kohath Housing Corporation, a member of the Kohath Investment Group, are the promoters and developers of the ‘Land of Honey’ (LoH) City’ in Abuja. It is a leading player in the municipality development space in Sub-Saharan Africa.

The group is a wholly owned Nigerian company with business activities in real estate development, mining, agriculture, energy and trading, with the aim of positively contributing to the gross domestic product of the countries where it carries out its business and derives maximum value for shareholders.

The multi-billion naira LoH is a joint venture development the company is doing with the Federal Capital Territory Administration (FCTA) to deliver a city that will provide for commerce and community living. On completion, LoH will deliver between 15,000 and 20,000 housing units in different phases over a 5-year period.

The new partnership agreement, which was executed on April 25, 2018, will see NMRC and Kohath collaborate for the provision of project structuring and mortgage advisory for the delivery of a first of its kind city in the Gude District of Abuja.

Kohath’s transaction structuring include off-take 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.

The collaboration between these two major stakeholders in the housing sector (Kohath and NMRC) presents a huge opportunity which Kehinde Ogundimu, the acting CEO of NMRC, hopes will make a difference in home ownership in Abuja due to challenges that the LoH development will help to resolve.

Abuja as Nigeria’s federal capital city has enormous housing challenges, especially in the low income segment of the market. These challenges include proliferation of houses that are ‘dead assets’ due to titling constraints, low access to mortgage loans and lack of sustainable, planned, qualitative and affordable housing.

The LoH development and Kohath’s partnership with NMRC can best be described as a value-adding innovation that has been in incubation since 2011. Teni Eleoramo, the executive chairman of Kohath Housing Corporation, disclosed that the project had successfully weathered the storm of title and legal challenges and has also survived the hash business environment in Nigeria.

“We are now ready to deliver its mandate of providing qualitative and affordable housing to Nigerians”, he assured, saying that LoH will deliver such house types as a few single-family homes and a large majority of affordable housing development portfolios. The development will also features multi-family apartment homes for mid-income families with support services that will cater 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 $180million, making Kohath one of Nigeria’s largest developers of quality and affordable housing.

It is expected that 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 design of the city incorporates a proposed district light rail that takes 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.

Ogundimum affirmed that Abuja is one of the most expensive housing markets in the country, quoting available statistics which says that the minimum annual salary required to purchase a medium-priced home is over $30,000 which excludes many hard-working people including doctors, teachers and public servants, from owning even two-bedroom apartments for their families.

He also affirmed further that the partnership with Kohath presented a huge opportunity for NMRC to support the Federal Government’s housing programmes aimed at providing affordable housing backed by affordable mortgages. “This is in consideration of the fact that, of all the challenges currently facing our nation today, just a few are more urgent than the deficit of decent housing”, he noted.

Analyst are of the view that without affordable homes, 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, or access to reliable utilities.

Chuka Uroko