Middle class set to gain from Sh12bn Actis homes plan
The Sh12 billion ($120 million) joint venture between the two firms will see them develop affordable and middle-income housing in the sub-Saharan Africa region, starting with Kenya.
“Residential remains the largest real estate asset class globally. In a number of African markets, however, delivery is highly fragmented.
There is a notable lack of institutional quality home builders with the expertise, capital and consumer trust to truly address the opportunity at scale. Actis’ joint venture with Shapoorji Pallonji seeks to remedy this in partnership with our local stakeholders,” said Koome Gikunda, director at Actis.
According to David Morley, global head of real estate at Actis, the two firms have worked together in India delivering thousands of high quality, aspirational homes at affordable prices.
They will be leveraging Actis’ investment experience in Africa and Shapoorji Pallonji’s 153 years of experience in construction and real estate development to set up the multibillion shilling project.
The Kenya National Bureau of Statistics defines the middle class as consisting of households, which spend between Sh24,000 and Sh120,000 per month.
The upper class comprises of those who spend more than Sh200,000 a month.
The demand on the upper spectrum of the middle class as well as the high-end has seen a glut over the years while the lower-end market lags behind as limited affordable units are set up.
The private equity firm is the developer of the 47-acre Garden City Mall, a mixed-use development that features retail, residential and office space.
The developer last year began construction of a Sh54 billion business park that will house the head offices of beer maker East African Breweries Limited.
The commercial complex adjacent to its Garden City Mall will offer more than 25,000 square metres of office space, with a healthcare facility, two hotels and more than 400 mid-market residential units.