Kigali City residents living in informal dwellings could soon acquire decent homes under a new initiative by the authorities, the real estate sector players and other key stakeholders.
This follows the release of a new study on the development of social Real Estate Investment Trusts (REITS) in the City of Kigali, confirming that development of the social REITS system can help transform Kigali’s informal settlements into planned and modern estates.
The study was conducted by Dr Darin Gunesekera, a realtor consultant.
“Social REITs can help convert unplanned settlements into regenerated planned parts of cities like was done in Sri Lanka and in the Philippines,” Dr Gunesekera, who set up the Real Estate Exchange (REEL) in Sri Lanka, said.
He was yesterday speaking during a meeting to discuss how existing settlements could be turned into decent and sustainable facilities in accordance with the city master plan in Kigali.
The conference was attended by key stakeholders, including bankers, architects, real estate developers, engineers, as well as city and capital markets officials. According to the study, 70 per cent of the city residents stay in informal dwellings despite the fact that the real estate industry has expanded 10 times in less than 20 years.
Speaking at the meeting, Eng Fred Mugisha, director of urban planning and construction in the City of Kigali, said availing affordable homes to residents is number one priority for city authorities, adding this will help reduce slums in the city.
Mugisha said the city is engaging stakeholders to find ways on how the under serviced settlements can be developed in a sustainable manner.
He explained that under the REITS scheme, landowners who lack the necessary funds to build modern homes will provide land as collateral and get decent homes at the completion of the projects.
“With this scheme, landowners who don’t have money to invest in decent housing can give us guarantee of their own land as collateral. Investors will then develop these properties wherein the landowners will get decent houses,” he explained.
Kigali has a population of about 1.2 million people, projected to reach 3.8 million by 2040. The City of Kigali requires over 30,000 housing units per year to meet demand for decent homes, and will require 344,068 housing units by 2022 for all categories, including affordable housing, mid-range housing, and premium housing.
Robert Mathu, the Capital Markets Authority executive director, said real estate developers under the scheme will raise more capital through capital market to fund these projects.
Mathu explained that the REITS are commercial instruments that are meant to finance real estate development, while ‘social’ REITS aim at low-cost housing in unplanned settlements.
Initiated about a year ago by the City of Kigali and promoted by the Capital Markets Authority REITS seek to ease access to funding for construction of decent affordable homes for city residents living in informal and inhabitable dwellings.