HARARE – FBC Holdings Limited (FBCH)’s mortgage subsidiary is targeting $5 million-plus from its international financiers to expand its housing projects next year as it seeks to continue impacting on Zimbabwe’s housing backlog.
In a joint interview with his FBC Building Society (FBCBS) managing director Felix Gwandekwande, group chief executive John Mushayavanhu told businessdaily that they were confident the PTA Bank (PTA), among other traditional backers, would avail more cash for onward lending in the country.
“After accessing two facilities worth $10 million from the PTA and Shelter Afrique, we will be negotiating for more funds from the former to undertake bigger projects,” he said, adding the group was hoping to deliver another 500 residential units in 2014 alone.
Mushayavanhu, who says FBCH has delivered well over 11 000 housing units since taking over the former Zimbabwe Building Society nearly 10 years ago, stressed that the negotiation process would start soon after paying off the Burundi-based institution.
With Zimbabwe’s housing backlog at 1,5 million-plus, Gwandekwande said they had taken a deliberate position to “provide new housing units as opposed to funding existing ones” as a move to improve the country’s housing needs.
Even, though, Zimbabwe’s sovereign risk has seen FBCBS accessing loans at 12 percent — whereas its regional competitors were tapping funds on a single digit rate — it was lending at 15 percent.
And as things stand, the mortgage lender has a sold-out mixture of high-end and middle-income properties in Harare, Gweru and Kwekwe.
Apart from Mushayavanhu’s group, Old Mutual-backed Central African Building Society is the only other lender engaged in this delivery strategy.
While there has been a hue of cries over FBCBS’ pricing model, Gwandekwande said this was largely determined by the cost of land and other key inputs, but the group did not put a mark-up of no more than 20 percent on finished units.
“In Harare, for instance, it is very difficult and expensive to secure land as most of it is no longer municipal. On average, land costs between $50 to $60 per square metre and yet we are trying to keep costs very low, and reasonable,” he said.
In the circumstances, it was virtually impossible and unviable to undertake low-cost projects, as land prices were simply exorbitant.
“So, despite our modest efforts to try and develop the country by reducing the housing backlog, we have also created numerous opportunities for downstream industries through independent contractors at our various sites countrywide,” Gwandekwande said, adding they were hoping more players would come on board to help the situation.