First Capital nears N$1.2b housing deal

By Hilary Mare

First Capital Namibia is on the verge of securing a funding deal amounting to N$1.2 billion to set up a second fund that will be used to construct affordable housing and provide home loans to government employees, Confidente has unearthed.

The deal, which will be a timely boost to Namibia’s depressed housing market, follows First Capital’s successful delivery and management of Government Institutions Pension Fund (GIPF)’s mortgage loan portfolio for government employees.

A source, who has declined to be named, has reliably told Confidente that Standard Bank, Development Bank of Namibia (DBN), International Finance Corporation (IFC) and Botswana Development Corporation (BDC) will be part of the envisaged funding model for the deal.

“The deal appears to have government support as both the Prime Minister’s Office and the Ministry of Finance are supportive of the First Capital fund raising initiative and senior officials in the two government agencies have met the potential investors to discuss the deal,” the source revealed. 

First Capital has been in the market for the last two years to fund raise for the construction of houses and mortgage financing. 

Although declining to comment on the status of the deal, First Capital’s Chief Operations Officer, Lizah Bezuidenhout confirmed that the demand for First Capital affordable housing has grown significantly and First Capital requires additional capital from the market to meet the demand. 

“Presently, First Capital has approximately 3500 pre-approved applications from the GIPF members waiting for home loans. In this regard, First Capital is in the market to source funding for housing financing and also construction of affordable housing. 

“We have engaged several potential funders and yes, due diligence has been finalized, and we are now working on some legal and technical details regarding some funding deals,” she said. 

The new Fund will target to construct more than 2000 affordable houses throughout the country, the source further said.

“This will be a game changer as the pricing will be in line with First Capital’s housing construction index which point out that a decent one bedroom house with all amenities such as tiles, geyser, ceiling, kitchen cupboards can still be sold at around N$190 000 including the plot and a three bedroom house can still be sold below N$550 000 including a plot,” the source explained. 

Confidente understands that First Capital is already engaging Local Authorities to acquire land either serviced, partially serviced or virgin land for the purpose of constructing affordable houses. The firm is also engaging government employees with allocated plots that they want to develop in order to provide housing construction finance as well as payment of the respective plots to the municipality. 

Following the successful launch and full investment of N$1 billion under the First Capital Housing Fund I (FCHF I) that was rolled out in May 2014, more than 2000 mortgages loans have been originated.

Established in July 2009, First Capital today manages an over N$1.2 billion mortgage loan portfolio and its vision is to eventually establish a mortgage securitization market in Namibia.