Housing Finance to set up fund for property

Housing Finance is planning a property fund, which it expects will be a key driver of its business in the coming years.

The fund, according to the managing director Mr Frank Ireri will be structured in away that it will bring all key players in the housing industry to help them meet supply challenges.

“We have now made supply a key driver in our strategy and the property fund fits well within it,” Mr Ireri told the Nation in Nairobi on Wednesday.

The housing market in Kenya has over the years faced a huge supply challenge for both government and private sector players.

With availability of only about 35,000 housing units in urban areas, the deficit remains huge from a growing demand of 150, 000 units every year.

Cost of land

Other main challenges for the sector especially in urban areas have been the cost of land and adequate infrastructure that will encourage development.

They are such impediments that the fund would be seeking to go round in increasing industry supply of units.

Hugely affected by this is the provision of low cost housing to an increasing lower and middle income classes in the country.

“The fund is still at its conception stages and we are looking at bringing all the players in the real estate together to take part in it,” noted Mr Ireri.

Although the amount of the fund is yet to be agreed upon, it will be based on a projects need to ensure that it is not stretched.

The listed firm is also working on utilising private partnership arrangements to feed the supply end of the chain.

Mr Ireri spoke when he announced a 56 per cent increase in the mortgage financier’s half year pre-tax profit for the period ending June 30, 2010.

The firm realised Sh206 million for the six months compared to Sh131 million it posted in a similar period last year.

The income is attributed to an increase in demand for mortgages and government incentives to the sector.