Old Mutual Namibia has launched a new Affordable Housing Fund with an initial investment of N$50 million to address the country’s housing shortage.
The Fund aims to provide affordable housing options to low-income individuals and families.
Old Mutual Group’s Head of Business Development, Rex Mutelo, said the Fund will invest in both Greenfield and Brownfield developments across Namibia focusing on regions with high demand for affordable housing.
Projects will include new construction as well as renovations and upgrades to existing properties.
“The sign-off of the Fund happened several months ago. We’ve got our first seed capital of N$50 million… but we are being very optimistic. I have said potentially the Fund could grow to N$200 million, depending on how well we execute on the current mandate,” he said.
He further explained that the Fund is open to investors seeking both financial returns and a positive social impact. Old Mutual aims to attract additional investment to grow the Fund and expand its reach.
Mutelo also said while it targets a return of inflation plus four per cent, affordability is the primary objective.
A commitment fee of one per cent is charged on capital, and a two per cent fee is levied on successful projects.
“Now, regarding return on investment, achieving inflation plus four per cent is important, and we’ll strive for that. But let me emphasise, the primary goal of this Fund is to provide affordable housing. We’re committed to closing the housing gap in Namibia,” he explained.
The launch of the Affordable Housing Fund comes at a time when Namibia is facing a significant housing crisis.
Approximately 400,000 people are living in informal settlements or overcrowded conditions and a 300,000 housing unit backlog that would require the construction of 30,000 houses annually.
Mutelo said the Fund is expected to play a crucial role in addressing this challenge and providing more Namibians with access to affordable housing.
“We’re aiming for a broad reach across Namibia. New developments in all regions are on the table. In fact, there’s almost nothing in the residential property market that we wouldn’t consider. We want to keep the Fund’s scope as open as possible,” he said.
Mutelo also said the Fund will not only be building upon its decades of experience in the financial sector, but also its indirect involvement in affordable housing through its Medina Fund, which has invested in land servicing and infrastructure for thousands of homes.
“This Fund has addressed land servicing and infrastructure needs across the country, enabling the construction of over a thousand houses. In fact, we’ve invested close to N$1.5 to N$1.6 billion in infrastructure development over the past 20 years,” Mutelo said.
