GIPF bridges Namibia’s housing gap
“GIPF understood from the outset that Namibia has a housing shortage, and this was confirmed by research we conducted. We also understood that we are uniquely positioned to make a meaningful impact on the Namibian housing landscape, at terms that also assist us in delivering on our mandate in terms of returns.
We follow a liability-driven approach in deciding the strategic asset allocation of the fund.
“Our investments in housing also meet the requirements around income generation as well as capital growth. The fund awarded mandates in this area following the approval of our Unlisted Investment Policy as far back as 2010. The fund also invested in housing to meet the Harambee Prosperity Plan (HPP) goals with respect to residential land servicing, housing and sanitation.
The HPP goal is to construct 20 000 new houses nationwide and to service 26 000 new residential plots countrywide,” Nuyoma said.
In terms of land servicing and housing development, Confidente understands that GIPF has committed funds to Old Mutual’s Tunga Real Estate Fund, Old Mutual Expanded Infrastructure Fund (for land servicing only), Preferred Management Services’Preferred Investment Property Fund, Konigstein Capital’s Affordable Housing Fund, International Housing Solutions, Ino Harrith Capital (land servicing only) and Ariya Bridge Capital (land servicing only). First Capital received funds for mortgage financing.
Nuyoma added that investments in housing are critical to national development because an investment in housing not only helps meet basic rights of shelter but over time creates wealth through equity for home owners.
“Furthermore, investments in housing have a solid multiplier effect contributing to job creation, collection of rates and taxes for municipalities and security of tenure. Our Alternative Investment Policy is aligned to the National Development Objectives.”
On the fund’s relationship with First Capital, Nuyoma explained that First Capital is the manager that oversees the financing element of GIPF’s housing investments and they have a good working relationship.
“The investments into this area have not been without its challenges such as processing of bonds. Through First Capital the fund was able to assist the civil servants, who either due to colossal debts, or ITC records, could not afford to get a loan at the banks to get a decent shelter for their families.
To date, the fund has invested a total of N$1.5 billion towards providing housing for its members,” he said.
CHALLENGES
Indeed like any other investment portfolio, GIPF has faced challenges while implementing investments in the housing market. These include lack of serviced land from municipalities, poor capacity of bulk infrastructure in certain nodes, bureaucratic auction process at municipalities which prolongs the sales process thus delaying developments with results in lower returns, high prices for land, high building material costs, outdate building regulations and long lead times in the housing value chain.
However, Nuyoma noted that they are encouraged to continue investing in the housing market when all role players in the sector speed up their efficiencies and willingness to coordinate efforts.
LOOKING
AHEAD
Nuyoma said that there are additional housing developments in the pipeline to add to the investments already made, across the country which include Thorn Valley, a township on the municipal plots at farm 37, Nubuamis Hill, Brakwater situated in the Municipality of Windhoek that will have a combination of residential and business erven.
Other projects are Otweya Land Developer to develop 273 municipal erven in Rocky Crest extension 4 on a PPP basis with the City of Windhoek, Champacs – a PPP land servicing transaction with city of Windhoek to develop plots in Kleine Kuppe, Khomas Region, Kaisoisi Land and Housing Development, a township development of 327 houses in phases with a development agreement with Rundu Town Council, Kavango East Region and Eenhana, a phased PPP arrangement with the Eenhana Town Council, Ohangwena Region to service and build houses totalling 101.
Further GIPF will look to Omuthiya land development (93 plots) and Duma Tau Property Developer (50 houses), a PPP arrangement with the Omuthiya Town Council in the Oshikoto Region, Orwetoveni Ext 12 (332 plots) and 13 (315 plots), a PPP agreement with the Municipality of Otjiwarongo to service 332 plots to be known as Orwetoveni Extension 12 and Nkwankomo Housing Development, development of apartment 180 units in Walvis Bay.
Nuyoma also highlighted Mariental Land and Housing Development, a PPP land servicing transaction (211 plots) at Mariental Extension 6 township extension, Block 24 for 214 top structures in Swakopmund, Mondesa Heights 2 for 130 top structures, Pelikan View 2 for 130 top structure units in Walvisbay, 427 top structures in Omuthiya extension and Windhoek Abigail 2, land servicing of 3 000 units and 350 units for top structures as other housing projects in the pipeline.
“Good investment returns ensure that the fund can pay benefits well into the future in excess of inflation. The GIPF provides lifelong pension and related benefits to its members and their families,” concluded Nuyoma.
As a largest investor in the Namibian landscape, GIPF is not just investing in the local bond- and stock market, but also invests in facilitating the growth and development of emerging entrepreneurs, providing funding for infrastructural services in the renewable energy sector, supporting the development of bulk municipal infrastructure, food security and import substitution in the agricultural sector and manufacturing to curb import substitution of inputs.