Bridging Nigeria’s Housing Deficit

A Significant Step

Jan 18, 2019

The real estate sector has continued to contribute significantly to the nation’s GDP, accounting for at least 6.88% of GDP as at Q3, 2018. Key to this are the activities of developers, at the forefront of which is Mixta Real Estate Plc (“Mixta Nigeria”), the leading developer in affordable housing and urban infrastructure.

Following the steps of its parent company – Mixta Africa, S.A.’s success in delivery of over 6,100 affordable housing units across countries in sub-Saharan Africa and North Africa, Mixta Nigeria is determined to consistently maintain its position at the forefront providing Nigerians with affordable housing. In realising its ambitions, Mixta Nigeria approached the Nigerian capital market in 2017 by establishing a Bond programme under which certain bonds of a nominal aggregate amount not exceeding N30Billion (the “Programme Bonds”) may be issued by way of an offer for subscription or private placement.

In the same year, Mixta issued a portion of the Programme Bonds (“Series I Issue”), raising N4.5Billion via an offer for subscription by way of a book building process at a fixed rate of 17% due 2021. The bonds in the Series I Issue were secured by a guarantee from GuarantCo Ltd, a development finance institution operating from the UK and facilitates infrastructure development in low income countries though the provision of credit guarantees. GuarantCo guaranteed the principal and one coupon payment relating to the bonds. The bonds issued under the Series I Issue are listed on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange. The Series I Issue has been successful in the secondary market, the high demand for it demonstrates the capital market’s growing confidence in the real estate sector.

Following its successes in 2017 and its entrance to a new market - Edo State in early 2018, the need to increase the momentum in delivery of quality affordable housing units necessitated another approach to the Nigerian capital market. In 2018, Mixta Nigeria issued a further portion of the Programme Bonds (“Series II Issue”) also via an offer for subscription by way of a book building process in two tranches. In the first tranche: Tranche A, Mixta Nigeria raised N2.9 Billion at a fixed rate of 16.50% due in 2023. The principal and one coupon payment was guaranteed by GuarantCo. In Tranche B, Mixta Nigeria raised N2.3Billion at 17.75% due 2023 and secured by a third-party legal mortgage. The Series II Issue – being more successful than the Series I Issue is a clear vote of confidence by investors of Mixta Nigeria’s strategy to focus on affordable housing and an indication of significant future growth in the real estate sector. GuarantCo’s assistance in Series I and Series II Tranche A bonds was key to securing reasonable coupon rates for the bonds.

Notwithstanding the foregoing, Mixta Nigeria is not resting on its oars in its bid to bridge Nigeria’s housing deficit. A goal which requires the collaborative effort of developers and the Government (at all levels), through innovative technical solutions and effective long term financing mechanisms.

Media Contact for Mixta Nigeria

Funmi Akinwolemiwa
Marketing and Corporate Communications
E: o.akinwolemiwa@mixtafrica.com


About Mixta Nigeria

Mixta Nigeria is a leading real estate development company in Nigeria. The company has a strong track record and a diverse real estate portfolio with operations spanning the residential, commercial, retail and leisure sectors in the Nigerian Real Estate Industry.

Nigerian Stock Exchange Mixta Nigeria