Old Mutual Launches Affordable Housing Fund

On 28 August 2024, Old Mutual Namibia proudly launched its Affordable Housing Fund. This groundbreaking initiative is set to provide critical financial support for affordable housing projects, aimed at addressing the growing demand for accessible and affordable housing in the country.

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The Old Mutual Namibia Housing Fund builds upon the foundation laid by the MIDINA Fund, established in 2004, which significantly contributed to Namibia’s infrastructure and housing development. The new fund has been created in response to regulatory changes and the increasing need for targeted investment in the affordable housing sector. With an initial capital of N$50 million, the fund is poised to support the development of affordable housing by focusing on land servicing and top structure development.

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Lionel Kannemeyer, Managing Director of Old Mutual Investment Group, emphasised the broader mission of the fund, “The Old Mutual Namibia Housing Fund is not just an investment vehicle; it is a catalyst for change. As we embark on this journey, we are driven by a clear objective: to deliver sustainable returns while addressing the critical housing needs of our nation. We believe that by investing in the future of our communities, we are investing in the future of Namibia. The fund embodies our commitment to addressing one of the most critical issues facing our society, affordable housing.”

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The Affordable Housing Fund is designed to tackle Namibia’s housing shortage through diverse project funding and a focus on previously marginalised communities to promote inclusive development. It will improve property sector efficiency, particularly in rural areas, by investing in balanced mix of equity, debt, quasi-equity, and structured equity across both greenfield and brownfield opportunities. The fund aims for a return of NCPI+4% over rolling 3-year periods, offering half-yearly distributions and a stable returns profile.

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In his principal address, Salomo Hei, Managing Director of High Economic Intelligence, highlighted several critical risks that could impact this market. He pointed out that high household indebtedness poses a significant challenge to affordability, while limited land availability constrains new development. Additionally, economic uncertainty, elevated unemployment rates, and fluctuating interest rates contribute to an uncertain market environment. Rising inflation and increasing building costs further aggravates these issues. Despite these challenges, Hei remained optimistic about the future, emphasising that strategic policy measures and innovative solutions can mitigate these risks and pave the way for a more stable and accessible housing market.

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Minister of Urban and Rural Development, Erastus Uutoni, expressed his support: “As a ministry, we are proud to associate with and feel fortunate to have Old Mutual as part of this transformative journey. Your investment in affordable housing is not merely a financial decision; it is a commitment to a more robust economy. Together, we can make a lasting impact and pave the way for a brighter future for all.”

Old Mutual is committed to making a meaningful difference in the communities we serve. The launch of the Affordable Housing Fund marks a pivotal step in our journey towards fostering inclusive growth and addressing critical housing needs. We look forward to working with our partners and stakeholders to drive positive change and build a more equitable future for Namibia.