OM in US$100m property projects

OLD MUTUAL 2Martin Kadzere Senior Business Reporter
OLD Mutual Zimbabwe will spend about US$100 million on property development in the next three years, group chief executive Mr Jonas Mushosho said last week. Some of the projects being implemented by the country’s largest insurance company include an office park in Harare next to the Borrowdale Race Course and two low-income housing projects in Harare’s high-density suburbs of Budiriro and Hatcliffe, which are expected to add about 4 000 housing units to the national housing pool.

“The total investment of all our active construction projects scheduled for the next three years is close to US$100 million,” said Mr Mushosho. In an economy facing challenges, the property sector is one of the safest investments in value preservation.

It also has potential to attract long-term lucrative returns. The National Social Security Authority is establishing a micro-finance institution responsible for housing schemes and is targeting an initial investment of between US$30 million and US$50 million.
Several other financial institutions have earmarked funding for property development, mainly housing, and these include FBC Building Society, Fidelity and ZB in what is demonstrably a vote of confidence about the prudence of property investments.

Mr Mushosho added that Old Mutual has also committed close to US$20 million for private equity investments.

“Private equity provides an opportunity for us to diversify our asset classes,” said Mr Mushosho.

“In doing so, we provide an avenue to raise capital for companies that are not listed on the stock exchange. In this regard, we have committed US$20 million to private equity investments and we continue looking for suitable businesses that we can partner with.”

Mr Mushosho said Old Mutual was committed to participate in the economic revival of this country and has so far come up with three funds – the Distressed and Marginalised Areas Fund, the Kurera/Ukondla Youth Fund and the Housing Fund.

“To drive our participation, we have created investment vehicles in the form of funds,” said Mr Mushosho.

“These funds drive Old Mutual’s involvement in sectors that we believe are key in the revival of the economy.”

DiMAF, which was launched in partnership with the Government, provides funding to companies through CABS. To date, DiMAF has disbursed loans amounting to US$23 million, with a further US$9 million pending approval.

Kurera/Ukondla was set up to provide funds to viable projects run by the youth of this country. To date, the fund has disbursed just over US$5 million to 4 000 projects run by the youth.

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