Hi, @jaiye, so here we go…
First, I envision that the 500 Towers Early Beginners Project (office & residential editions) will cost approximately N500bn over the next 10 years. Here are the 6 funding sources I envision the Yaba Cluster Initiative can explore to raise this amount for the project.
N150bn - 30% of total costs: The Yaba Cluster Initiative can work closely with a mortgage bank and a visionary developer to raise N150bn from the Nigerian Stock exchange. SEC requires companies raising funds via public offers to disclose purpose of each raise and I’m sure a viable infrastructure development project for onward sale to end users would pass the SEC test - all other things being equal.
N50bn - 10% of total costs: The National Housing Fund typically gives out housing loans to cooperatives for property development and the loan is payable over a period of 25years. If the Yaba Cluster Initiative can metamorphose into a membership organization/cooperative, up to N50bn from the NHF can be accessed by Yaba Cluster Members over a period of 10 years. NHF requires cooperative members to be contributors to the NHF scheme (I think N450 per month), and the NHF application form can be bundled with the Yaba Cluster Membership Package for techies.
N150bn - 30% of total costs: Can be raised from a consortium of (1.) Venture Capitalists experienced in real estate development - locally & globally; (2.) International Infrastructure development funds like IFC’s InfraVentures (funds max of $8m per project), IFC’s Global Infrastructure Fund (3.) Global Infrastructure Facility and the likes of Qatar Infrastructure Fund etc.
N50bn - 10% of total costs: I’m thinking that with high-level lobbying, a portion of this project can be funded by the Lagos State Government to the tune of about N5bn per year through LASG’s annual budget document for 10years; this will be a housing loan to the cluster not a free lunch - so the government is incentivized because the money eventually comes back to the Lagos State Government as soon as monthly repayments start.
N100bn - 20% of total costs: This would come from a consortium of commercial banks and Regional Development Banks like; ADB, China’s Development Bank etc. Again, a plan this ambitious rises and falls largely on the quality of our Board of Trustees and quality of our execution strategy.
These sources should raise up to N500bn.
I think for early professionals (especially if unmarried), once you own the 2bedroom flat under the scheme and are unable to afford the full monthly payment, you can sublet one of the self-contained rooms for say 40k and pay the balance 40k. Hopefully, as a professional grows, so should his earning power in the industry and thus his disposable income to afford his/her house.
I think local co-working space companies could fall under ‘local tech startups’ category and as such will still benefit from the project; the emphasis on global co-working brands made in my initial post was to to give global exposure to the entire Yaba cluster as most of these global co-working space brands have developed extensive contacts in the media and investment communities over the years; a helpful add-on for the cluster.
For Startups who get CofO for an office floor and are unable to make the repayment amount, they can sublet their office space with other companies and meet up with the costs, but they’d still own the C/O.
Again, I should point out again that most of the costs used in the initial posts are just for illustration, this entire project will need a feasibility study to determine appropriate price points for monthly purchase (which may be higher or lower than the ones I’ve quoted for the monthly payments).
@Jaiye and everyone else, sorry for the delay in responding…