By Bassey Udo
Ministry of Finance Incorporated (MOFI) says its Real Estate Investment Fund (MREIF) has successfully concluded a N250bn pilot fundraising aimed at providing long-term financing investment in housing projects in the country.
MREIF is a fund approved and regulated by the Securities and Exchange Commission (SEC) to finance housing projects to expand homeownership and strengthen Nigeria’s housing sector.
The fund brings together public and private sector capital to ensure the provision of housing in the country becomes more affordable and accessible to Nigerians, while supporting the overall economic growth.
“With an Aaa rating from Agusto and an AA rating from GCR, MREIF, which has already attracted strong private sector participation under a N100 billion issuance tranche, has established itself as a highly credible, market-driven investment platform to address Nigeria’s housing finance gap,” MOFI said in a statement in Abuja on Wednesday.
The N100billion Series 2 issuance, the investment custodian agency said, was fully subscribed, with strong demand across a broad base of institutional investors, depicting high investor confidence in the fund’s structure and long-term potential.
MOFI, which is the sole investment in the N150 billion Series 1 offer, said private sector participation in Series 2 tranche was resounding, positioning MREIF as a leading platform for mobilising capital into Nigeria’s real estate sector.
“The fund is structured to deliver competitive returns, while enabling affordable homeownership through long-term, low-cost mortgage financing at scale.
“The successful closure of the pilot phase marks the beginning of a long-overdue transformation of Nigeria’s housing sector,” Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said.
“The full subscription of Series 2 offer demonstrates the pent-up demand for a structured, long-term housing finance solution, and affirms the private sector’s confidence in MREIF as a sustainable investment vehicle,” the Minister added.
Designed to address both housing supply and demand constraints, MREIF offers affordable mortgage financing with up to 20-year repayment tenors at interest rates as low as 12%, significantly below applicable commercial rates.
Also, the fund provides off-take guarantees for developers, thereby unlocking financing for large-scale housing projects.
The Managing Director/Chief Executive Officer of MOFI,
Dr. Armstrong Takang, said
MREIF is unlocking new investment frontiers in Nigeria’s housing sector.
“This fully subscribed series demonstrates investor confidence in the Fund structure and long-term potential, which MOFI fully supports,” Takang said.
With MREIF’s N1 trillion multi-tranche programme now underway, Takang said future rounds of fundraisings would
focus on broadening investor participation and accelerating housing development.
The fund, he explained, was structured to integrate seamlessly with commercial and mortgage banks, developers and financial institutions to scale long-term housing finance.
Besides, he said with MREIF investors engagement opportunities were now open, while institutional partners were encouraged to explore participation in upcoming rounds of fundraisings.