Actis, Shapoorji Pallonji Launch US$120m Real Estate Joint Venture In Africa

Actis, a leading growth markets investor and Shapoorji Pallonji Real Estate (SPRE), the real estate arm of one of India’s largest conglomerates, are set to launch a new real estate joint-venture platform to meet the demand for affordable and middle-income housing in the sub-Saharan African region, starting with Kenya.

The residential development platform has been established to capitalize on the demand for quality homes at affordable and competitive price points.

Actis manages the largest real estate private equity fund focused on sub-Saharan Africa.

David Morley, Global Head of Real Estate at Actis stated: “This joint venture builds on an ongoing and highly successful partnership between Actis and Shapoorji Pallonji in India where we have delivered thousands of high quality, aspirational homes at affordable prices.

We are confident that Actis’ investment experience in Africa coupled with Shapoorji Pallonji’s 153 years of experience in construction and real estate development will unlock the significant opportunity.”

Commenting on the launch of the new platform, Venkatesh Gopalkrishnan, CEO, Shapoorji Pallonji Real Estate, said: “We are delighted to partner with Actis in the African residential market.

This venture marks the continuation of a journey for Shapoorji Pallonji Real Estate in the sub-Saharan African Region. There is a huge demand for affordable and middle-income homes and the goal of the joint-venture platform will be to bridge the gap in this market and to exceed customers’ expectations.”

Koome Gikunda, Director at Actis said: “Residential remains the largest real estate asset class globally. In a number of African markets, however, delivery is highly fragmented.

There is a notable lack of institutional quality home builders with the expertise, capital and consumer trust to truly address the opportunity at scale. Actis’ joint venture with Shapoorji Pallonji seeks to remedy this in partnership with our local stakeholders.”

Source: Ghananewhomes

New housing bill threatens Nigeria’s financial sector, economy

Ten percent of the profit before tax of Nigerian banks, insurance companies and pension fund administrators could go into a National Housing Fund promoted by lawmakers, according to an exclusive document seen by BusinessDay.

The so-called National Housing Fund (Establishment) Act, 2018 was secretly passed by the Senate on November 6, 2018, following its passage by the House of Representatives on July 17, 2018.

An approval by the presidency is all that stands in the way of the secret Act, which managed to elude private sector lobby groups, from becoming law, after it quietly made it through the National Assembly in 2018.

“When you put such a financial strain on private companies, they are forced to cut costs by sacking staff and freezing new investments,” a senior business person who did not want to be named said.

“This regulation will be poorly timed as it is happening when other countries are lowering corporate tax rates to incentivise investments,” the person said.

The levy will probably see some of the companies pass on the cost to consumers, thereby triggering a surge in inflation.

A race to cut spiralling operation costs created by the new levy could also force companies to lay off staff while barricading new investments in the economy.

That would be a tough blow to take on an economy still recovering from a contraction in 2016.

“Buhari has a chance to be the hero here if he refuses to assent to the Bill, but given his welfarist ideology, that may not happen,” a company CEO said on condition of anonymity.

The Act repeals the National Housing Fund Act Cap. N45, Laws of the Federal Republic of Nigeria, 2004 to provide for additional sources of funding for effective financing of housing development in Nigeria and was sponsored by Ahmad Kaita (APC, Katsina North).

The Act provides among others for every commercial or merchant bank, insurance company, and Pension Fund Administrator (PFA) to invest 10 percent of its profit before tax (PBT) into the Fund at an interest rate of 1 percent above the interest rate payable on current accounts of banks.

The Fund will also forcibly collect contributions from Nigerians, both in the public and private sectors, manufacturers and importers.

The Federal Government is to contribute to the Fund at its discretion.

Employees and self-employed Nigerians, who earn above the minimum wage, must contribute 2.5 percent of their monthly salaries to the Fund. Manufacturers and importers are also to contribute 2.5 percent to the Fund.

There’s also a levy on locally-produced and imported cement, which will be 2.5 percent ex-factory price before transportation cost for each bag of 50 kilogramme or its equivalent in bulk.

In the end, this levy may not be restricted to cement alone, as the Act provides that the President, by an executive order, could add, delete, amend or substitute consumer goods, services or products and approve rates for the levy as and when he thinks fit in the circumstance.

The Federal Mortgage Bank will manage the pooled funds, Section 15 (1) of the Act provides.
“The proceeds from the fund will be used to finance the housing sector of the economy through wholesale mortgage lending to primary mortgage banks,” section 15 (2) of the Act reads.

The failings of the former National Housing Fund and the track record of similar funds managed by government cast a cloud over how efficiently the new Fund will be managed and the chances that it achieves the primary objective for which it was created.

Industry players, who are worried that the provisions of the Bill overrule carefully-crafted regulatory guidelines that guarantee the safety of depositors’ funds sitting in the banks and pension funds, were critical of the Act and warned it would have dire consequences on the economy and investor confidence.

Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria (PSAN), calls the Act a “fraud”.

“How can we be talking about extorting companies to fund something without seeking their consent,” Okezie said.

“This is unacceptable. Companies should not comply; rather they should rely on the provision of the Companies and Allied Matters Act (CAMA),” Okezie added. There are severe punishments for defaulters.

In the event that a company fails to pay the levy 60 days after it was due, it warrants a demand notice to be accompanied by a penalty of an additional 2 percent levy on the 10 percent that should have been paid.

If payment drags for another 60 days after the demand notice, the company pays a flat rate of N100 million and the CEO of the company risks spending three years in jail in addition to a personal fine, separate from the company fine, of N10 million.

In the case of importers, a two-month delay is all that is required before the importer is slammed with a N100 million fine, which the Bill says is the minimum.

A fine of N10 million could be slapped on individuals who fail to make their contributions as and when due.

The banks are expected to pay the levy to the Central Bank while the insurance companies and pension funds will pay to the National Insurance Commission and National Pension Commission, respectively.

For manufacturers and importers, the levy will be collected by the tax authority, the Federal Inland Revenue Service.

Sources say some private sector interest groups are planning to engage the Presidency with a view to stopping the implementation of the Bill which, they say, is inimical to the private sector and the economy at large.

The equities market would be directly affected if this Bill becomes law as investors worried about the impact the levy could have on company profitability may dump stocks at a frantic pace.

The document obtained by BusinessDay was signed February 19 by Mohammed Ataba Sani-Omolori, a clerk at the National Assembly.
Shareholders of companies, particularly the banks, insurance companies and PFAs, have kicked back.

Issues ranging from accountability to accessibility were raised and they advised their companies’ Boards of Directors not to approve any form of contribution into the Fund.

“The Act does not make sense because the contributors won’t have control over the Fund. Why do we scare investors? I don’t think it is good idea as it will scare away investors, so it must be jettisoned,” Sunny Nwosu, national coordinator emeritus, Independent Shareholders Association of Nigeria (ISAN), told BusinessDay on phone.

Moses Igbrude, publicity secretary, ISAN, said, “You can’t make companies to contribute to the NHF without letting them have access to it. President Buhari should not sign it.

The shareholders own the companies and we need to ask the companies whether they were represented at the public hearing on the Bill before its passage at the National Assembly.

If they were represented, they will need to explain to shareholders the benefits and who manages the funds.”

Attempts to reach the chairman, Senate Committee on Housing and Urban Development, Barnabas Gemade (APC, Benue), proved abortive as he did not pick his calls.

However, a member of the committee, Matthew Uroghide (PDP, Edo), told BusinessDay on Tuesday that he would check on the Bill before commenting on it.

“When I am in the office, I will go through the Bill before commenting on it. I will be in the office by next week,” he said in a telephone interview.

Source: BusinessDayNg

This Is How China Was Able to Build the World’s First Subterranean Hotel

The quarry was one of a handful in the Songjiang suburb of Shanghai that operated through the 1950s but has been abandoned ever since.

“The site was really a scar on the surface of the earth,” said Martin Jochman of JADE+QA architects at a press conference.

“We showed how to take a difficult and unusual site that nobody knew what to do with and make it useful again, revitalizing it with a new life.” Jochman and his firm designed the $300 million project, which is InterContinental Hotels Group’s 200th property globally.

“Originally we were given absolutely no limitations on how to approach the design. The brief was really about producing a resort which used the quarry as best as it could,” said Jochman. “

The inspiration for all this was the natural environment itself. It was the quarry, the cliffs, the green hills around it, the lake—despite it being an industrial site surrounded by industrial buildings, it was very pretty.”

He decided to distill these natural elements into the basis of his design: The cliff became the body of the hotel, where the guest rooms are located, the water became the faux waterfall down the center of the building that houses the elevators, and the hills are represented by the green roof of the structure, which was designed not only to blend into the landscape but also to provide energy-efficient temperature regulation.

“Sustainability was an important part of the whole design process—using passive sustainability that was built into the building by design,” noted Jochman, who worked within the microclimate of the quarry to maximize efficiency.

The location of the hotel within the site, for instance, was chosen to provide the most sunlight, not only for guest rooms but also for the hotel’s solar panels.

The hotel also uses the natural air shaft between its structure and the cliff wall for insulation in the winter and cooling in the summer.

While the architect was given no design restrictions from hotel owner Shimao Group, Mother Nature had other plans in mind.

The engineering team had to face a number of challenges presented with a subterranean project: When concrete was sent down into the quarry via standard construction chutes, for instance, the materials separated and were unusable.

The team ended up patenting more 41 different engineering methods over the course of the build. As a result, it took more than 12 years for the hotel to be constructed, with its doors officially opening in November 2018.

While the hotel is now open to guests, new features, like a rock-climbing wall on the face of the quarry and a zip line over the lake, will be added in the months to come.

There’s a nightly light and water show projected onto the fountains in the lake that rivals anything you would see in Las Vegas.

“This building has become a landmark,” said Jochman. “Yet the landmark here is not something that sticks out, but something that fits in.”

Source: architectural digest

Ethiopia’s Oromia hit by protests over Addis Ababa housing project

Hundreds in some cases thousands of people in Ethiopia’s Oromia region took to the streets today (March 7) in major towns to protest the manner in which the Addis Ababa city administration alloted condominium buildings.

Reports indicate that over a dozen locations across Oromia – the largest and most populous region – were hit by the protests. Among other places Jimma, Ambo, Awaday, Bale and Adama were all affected by the action.

The city administration led by the deputy city mayor, Takele Uma Banti, on Wednesday (March 6), made allocations of residential space built in an area called Koye Feche located in the Oromia Regional State’s special zone.

Addis Ababa which serves as the national capital is located in the Oromia region but is one of two chartered cities in the country. The other one is Dire Dawa.

Oromos have long claimed the capital which is referred to in local parlance as Finfeene.

The city administration gave over 5,100 people 3 bedroom apartments on condominium sites mostly in the capital. While 7,100 people got a studio or one and two bedroom apartments in Koye Feche 1 & 2 sites.

The deputy mayor said farmers who were displaced from the sites were included in the transfer without lottery. The issue of uprooting local farmers to make way for the housing project has long been a divisive issue.

The project which dates back to 2016 forms part of plans to deal with rapid population growth and an acute shortage of affordable housing.

A authorities in Addis Ababa and in smaller cities across the country have been building condominium units targeting low and middle-income groups, financed entirely with public money.

Although Ethiopia is one of the least urbanized countries in the world, Addis Ababa’s population as at 2016 was thought to be close to four million, and growing at a rate of nearly four percent per year.



The housing complexes are typically four storeys high, with the aim of promoting densification and containing the city’s urban sprawl.

Poor residents who do not own property and are instead reliant on insecure tenancies, were encouraged to register for a lottery system which allocates the units as they become available.

Those who can afford the deposit and the scheme’s generous mortgage repayment terms are then granted ownership of their units, although all land in Ethiopia is still formally owned by the government.

The aim is to transform a housing sector historically characterized by rental occupation into one based on private home ownership.

Under the previous communist regime, known as the Derg, approximately 60 percent of housing in Addis Ababa was rental accommodation and government-owned housing in the Kebele municipal divisions accounted for 93 percent of the sector.

Kebele housing today is of typically poor quality, with homes made of wood and mud and without proper sanitation and infrastructure.

According to a report produced for the World Bank in 2016, the Integrated Housing Development Programme, IHDP, marks a “radical departure” from previous approaches to housing in Ethiopia.

The government aims to regenerate the inner city by replacing Kebele slums with condominiums.

Source:African News

Even the resilient luxury housing segment is not immune to Sweden’s property downturn

Residential skyscrapers are rare in Stockholm, a city permeated by five-storey, classic stone buildings built at the turn of the last century.

That’s now changing. The most spectacular addition to the skyline is nearing completion: A 125-metre, brutalist structure that could be mistaken for a tower of Lego blocks.

Innovationen offers panorama windows and balconies overlooking the red, yellow and orange facades of the Vasastan neighbourhood. The apartments cost a hefty 100,000 kronor (US$11,000) a square metre and residents get access to a private cinema and a gym with a sauna and yoga room, raising eyebrows in egalitarian Sweden.

“It’s the first time anyone has dared to do anything like this in Sweden,” said Herman Persson, head of design at Oscar Properties, the tower’s developer.

And that’s just half of it. Across the street, Oscar Properties is erecting a twin skyscraper named Helix.

The Swedish developer Oscar Properties is constructing the Innovationen tower in Stockholm, where apartments cost 100,000 kronor a square metre.

But that’s where the trouble starts. Oscar Properties still has one-third of the apartments left unsold with only a year left until Helix is completed. The housing market has been struggling since a major slump at the end of 2017 and prices for new homes have continued falling.

With many property developers struggling, buyers are even questioning if they are going to get anything at all. Bankruptcies are up 24 per cent so far this year in Stockholm, of which a fifth are in companies linked to the housing market.

Oscar Properties issued a profit warning last month, shaving off a quarter of the company’s market value.

The troubles in Sweden’s housing market are also raising warning flags for the broader economy. Above, a view from Gotgartan looking north in Stockholm.

The company has dropped some residential projects, turned others into office buildings and also intends to diversify its portfolio with rental projects and more affordable housing in fast growing cities around Sweden.

The business model of selling apartments under construction and booking profits along the way before a project is finished is now grinding to halt. Both the stock exchange and the financial watchdog are now scrutinising developers over their calculations.

But the plunge in prices has killed the speculative end of the market, which has opened up for some buyers.

Andra Farhad, chief executive officer of stock trading platform Borshajen, in 2018 bought a flat on the 12th floor in Innovationen, but only after waiting for a year to see if the project would actually be completed. Farhad bought her apartment from someone who was selling at a loss before it was completed.

“I knew I wanted to live in this building, I love it, but I was a bit cautious,” she said. “The housing market has become tougher and things are looking a bit shaky for Oscar Properties.”

The go-go days when the company was handing out snacks to people lining up for apartment showings are now over. Still, it has no doubt that it will complete Helix, according to spokeswoman Monica Nygren. “But considering what the housing market looks like now, the sale of apartments takes longer,” she said.

Sandra Miller Kinge, CEO of Eklund Stockholm New York, a high-end broker, agrees, but is also cautious.

“We have no major problems selling new production compared to other apartments, but are also very careful to work closely with the builders to ensure that they have a safe and good offer,” she said.

The troubles are also raising warning flags for the broader economy. The booming housing market has been a key component of the fast growth in recent years, but is now emerging as one of its greatest risk. Some economists see construction dropping 30 per cent from 2017 to the end of this year, taking a significant bite out of economic growth.

One way to salvage projects that are foundering could be to offer more rental housing. Fast population growth and record immigration over the past years mean that there are housing shortages in many areas. A recent political deal is also freeing up rent-setting for new housing.

Skanska, the international construction giant, last month cut its outlook for the Swedish housing market and is refocusing more on rental housing and lower-priced apartments.

“I don’t believe in a dramatic downturn, but I don’t believe in a recovery either,” Anders Danielsson, its CEO, said by phone. “Too much has been built in the most expensive price segments, especially in Stockholm and the big cities.”

Michael Grahn, chief economist in Stockholm at Danske Bank, predicts home prices have further to fall, which will kill more projects and may possible mean the end of some of the smaller developers.

“Producers have been building too expensive homes during a number of years when people were willing to pay no matter what,” he said. “That time is over, they will struggle to sell those expensive homes.”

New ECOWAS Abuja headquarter’s project throws up consultancy jobs

Following the signing of a Memorandum of Understanding (MoU) for a $31.6 million grant with the Government of China for the development of the proposed new Commission of the Economic Community of West African States (ECOWAS) headquarters building, the search for critical consultants in the project have begun in earnest.

To pave way for the project, the President of the ECOWAS Commission, Mr. Jean-Claude Brou and the Ambassador of China to Nigeria and ECOWAS, Mr. Zhou Pingjian had recently signed for both parties in a bilateral meeting held at the ECOWAS Commission headquarters, Abuja.Under the MoU, China’s will maintain the building three years after completion. The need for a new building for ECOWAS was necessitated by increasing number of staff, which led to the Commission to presently operate from three buildings distance apart from each other.

The agreement, which comes into force with immediate effect will cater for offices and conference complex building, as well as road facilities, electrical equipment, parking lots and security posts within the proposed site of the project.An ECOWAS designated authority and the China Development Bank Corporation will work together to verify records of account payments at regular intervals.

Essentially, the hiring of consultancy firms to validate the design, assist in the construction of a new ultramodern headquarters and to carry out environmental as well as social impact studies have commenced. One of the firms will assist in the review of architectural and engineering designs for the building and undertake quality assurance/supervisory work of the construction works process to ensure value for money.

The headquarter building is being constructed by a contractor recruited by the Government of China, financiers of the project. Specifically, the consultant firm will monitor the execution of the works according to the technical specification, design drawings and conditions of contract as well as represent the project owner – ECOWAS on site.

The consultant will also coordinate the clearing of the site in coordination with the Chinese project management firm as agreed in the implementation agreement; coordinate and monitor all work for which ECOWAS is responsible for like connecting road, water and fiber to main networks and electrical transformer substation installation.

Similarly, the firm will also monitor daily, on a task by task basis, all activities planned by the Chinese contractor, in conjunction with the Chinese project management firm, to ascertain delays and inconsistencies that may be observed on the schedule.The other consultant firm handling environmental and social impact studies will establish baseline information on both natural and built environment including the socio-economic activities within and without the site relative to the project.

The firm will also identify, evaluate and possibly quantify the direct and indirect positive and negative aspects of the construction project on the biophysical, human and socio-economic environment according to the different phases (preparatory, construction and operation).

Meanwhile, Ministers for Infrastructure, Works and Housing from Member States have adopted a design scheme for the development of a new Headquarters complex.The meeting of the ad-hoc Ministerial Committee on the construction of Community institutions, which held in Abuja, Nigeria, saw their representatives adopt a design scheme in order to commence the development of the final design, which will be produced with the input of the Commission and Member States.

The ECOWAS Commission’s commissioner for General Administration and Conferences Vafolay Tulay, who presented three design schemes to the Ministers, stated that criteria such as site optimization, functionality, safety and security and the requirements of the Commission were taken into account while adopting the design scheme.

The Ministers recommended that the final design of the new Headquarters Complex should not only integrate elements of West African culture but must also comply with international and Nigeria’s standards and specifications of construction.

Furthermore, the Ministers also recommended that the design for the new Headquarters complex should have the expansion of the Commission in view while being developed. ‘The design should take into consideration functionalities and coordination consistent with the needs of the Community’, they said.

The Commissioner for Infrastructure, Pathe Gueye, in his remarks stressed the need for a good coordination between ECOWAS, Nigeria and the Chinese government in order for the project to be executed smoothly.The Chairman of the meeting of the ad-hoc Ministerial Committee Mr. Musa Nuhu, head of the ECOWAS National Unit, Nigeria, assured the Commission of the full support of the Nigerian government in the implementation of the project.

The Ministerial Committee also approved the design for the second and third phase of the development of the ECOWAS Standby Force (ESF) logistics depot in Lungi, Sierra Leone.The meeting of the ad-hoc Ministerial Committee was preceded by a meeting of experts which held on in Abuja.

Also in attendance, Madam Finda Koroma, the Vice President of the ECOWAS Commission reiterated the commitment of the Commission towards the implementation of these two projects as she described them as being of great importance to the Community. The Commission of the Economic Community of West African States (ECOWAS) on Wednesday, 14th March, 2018, signed a Memorandum of Understanding (MoU) for a 31.6 Million Dollars grant with the Government of China in view of the proposed ECOWAS Headquarters building project.

The President of the ECOWAS Commission, Mr. Jean-Claude Brou and the Ambassador of China to Nigeria and ECOWAS, Mr. Zhou Pingjian signed for both parties in a bilateral meeting held at the ECOWAS Commission headquarters, Abuja.Mr. Brou expressed gratitude to the Chinese government for the grant saying it is a mark of goodwill from the Asian country to ECOWAS and then further expressed the region’s Commitment to foster the ECOWAS-China cooperation.

According to Mr. Brou, the need for a new building for ECOWAS was necessitated by increasing number of staff which led to the Commission to presently operate from three buildings distance apart from each other.Mr. Brou urged the design team to ensure that the building has an architectural that reflect the culture and Africaness of ECOWAS Member States.He was also thankful for China’s readiness to maintain the building 3 years after completion.

Ambassador Pingjian on his part, reaffirmed China’s commitment to continue to promote the China-ECOWAS friendly cooperation through similar economic and technical cooperation saying that China values the cooperation and stands “ready to nurture this relationship” by the construction of the ECOWAS Headquarters.Mr. Pingjian assured ECOWAS that the construction will be of high quality that will take into considerations the cultural biases of the region.

The agreement which comes into force with immediate effect will cater for offices and conference complex building, as well as road facilities, electrical equipment, parking lots and security posts within the proposed site of the project.The design team will start work immediately for the project which was initiated in 2012 in line with the aspirations Member countries.An ECOWAS designated authority and the China Development Bank Corporation will work together to verify records of account payments at regular intervals.

The Vice President of the ECOWAS Commission, Mrs. Finda Koroma, some Commissioners of the ECOWAS Commission as well as the Counselor of the Chinese Embassy in Nigeria, Mr. Zhao Linxiang were also in attendance at the signing ceremony of the MoU for ECOWAS and China respectively

The Economic Community of West African States (ECOWAS) and China have signed a memorandum of understanding in which Beijing will fund and build a new ECOWAS headquarters building in Abuja, Nigeria. The cost of the building is 31.6 million U.S. dollars. The new building will consolidate ECOWAS operations in one building from the three it now uses. China has also agreed to maintain the new building for three years following its completion.

China has agreed to build numerous public facilities in sub-Saharan Africa: parliament buildings in Zimbabwe, Congo, Malawi, Guinea-Bissau, and Lesotho. China is also rebuilding burnt parliament buildings in Gabon, and is renovating the parliament building in Sierra Leone. China also built and funded the headquarters of the African Union in Addis Ababa in 2012 at a cost of 200 million U.S. dollars.

Deliberations at ECOWAS are bound to be of great interest to Beijing. Given the growth of the Chinese economic and political presence in Africa, it is credible to assume that the new ECOWAS building will be bugged, as apparently was the AU headquarters. Chinese-built parliamentary facilities around the continent share a similar risk.

African passivity over the apparent Chinese compromise of AU data is discouraging, and their growing relationship likely will not help those promoting democracy and good governance. It is also unclear why the AU and ECOWAS headquarters could not be built and paid for by Africans themselves.

source: Guardian

4BN Maitama market inaugurated in abuja

The Federal Capital Territory Administration has inaugurated the remodelled Maitama ultra-modern market in Kubwa, a satellite town in FCT, two years after the project took off.

The N4bn market which was constructed by H & I Construction Limited, consisted of 1,467 shops, warehouses and cold rooms of various sizes.

Speaking during the ceremony, the Chairman, Bwari Area Council, Mr Musa Dikko, explained that the idea of building the market was conceived about 10 years ago.

He commended the contractor for delivering the project within two years.

Director of H & I Construction Limited, Mr Rabiu Sa’id, said that facilities in the new market include generous parking space, a police station, bank, and 50 toilets located at strategic locations in the market.

He disclosed that his firm would soon commence the remodelling of Mpape Market in conjunction with Bwari Area Council, adding that the modernisation of the Utako /Jabi Motor Park and Utako Market would take-off in two weeks.

Sa’id said, “We will also commission the first phase of the modernisation of Utako Market in FCT in about two weeks from now, while on the same day, we will perform the ground-breaking ceremony of the modernisation of the Utako/Jabi Motor Park, Abuja.

“The second phase of Garki Market modernisation will also be done in conjunction with Abuja Market Management Ltd before the second quarter of this year.”

Sai’d further said the company had built a new palace for the district head of Kubwa, noting that work had also commenced on the construction of a new town hall for the community.

Source: Adelani Adepegegba

Fire-resistant homes the next line of defense against climate change

It is impossible to build a fully fireproof home, but researchers are now focused on making homes at least fire resistant.

They have to, because climate change is increasing the intensity of wildfires around the world, putting billions of dollars’ worth of real estate literally in the line of fire.

Wildfires destroyed more U.S. homes and buildings last year than at any other point in recorded history, and the eight most destructive years for wildfires ever have been in the last 13 years.

“There is no reason to think they are going to get better,” said Roy Wright, CEO of the Insurance Institute for Business and Home Safety. “You look at this kind of impact — the variations in the climate we have had, we are far more susceptible to the size and intensity of fires.”

Roughly 14,000 homes burned to the ground in just two of the enormous California wildfires last year. Wildfire damage to residential and commercial property in California alone last year totaled nearly $19 billion, according to CoreLogic.

The rainy season in California is getting shorter and the droughts more prolonged, meaning there is simply more combustible material and a greater chance of wildfires.

CNBC: Test house on fire
Test house at the Insurance Institute for Business and Home Safety.

But it is not just California. Wright points to increasingly intense wildfires recently in Colorado, Texas, Florida, Tennessee and South Carolina. All of those states have huge homebuilding industries.

“There are steps that we can take so that the impact of that fire is narrowed, it doesn’t spread as far, and it impacts far fewer structures,” said Wright.

Wright’s insurance institute built two test homes at its facility in Richburg, South Carolina, one a typical structure, the other using fire-resistant materials and landscaping.

Using large fans and ember generators, it showed how quickly one house erupted in flames, while the other did not. Though a wildfire’s wall of flame might look most destructive, 90 percent of fires are ignited by flying embers, some the size of a human hand.

“Fire resistance means you’ve incorporated building materials and design features that will get the ember exposure, will get the fire exposure, but would resist it,” said Daniel Gorham, research engineer with the institute.

Landscaping is key

The siding on the fire-resistant home was a fiber cement composite, rather than typical wood shingles or planks. This composite is offered in different colors and designs that look just like wood.

Landscaping was also key. The typical home had mulch, the fire-resistant home, rocks. The fire resistant home also had all its plantings at least 5 feet from the siding and the siding was raised 6 inches off the ground.

“We have noncombustible landscaping. In this case, we have rock mulch from zero to 5 feet away from the building. We also have the ornamental vegetation outside of that 5-foot zone, and spaced strategically,” said Gorham.

Satellites have captured embers flying up to 7 miles from a wildfire. These start secondary fires. The embers can land in gutters and siding and smolder for up to 12 hours before they ignite.

Using metal instead of vinyl gutters mitigates fire risk: vinyl can melt and drop fire onto the side of the house — metal will not.

CNBC: Test house at the Insurance Institute for Business and Home Safety
Test house at the Insurance Institute for Business and Home Safety.

Windows and doors also need fortification in the line of fire.

“We have a dual-paned, tempered glass window, and we have a fiberglass door. Dual-paned is important because if we do get a fire here, single-paned glass would break, and then we have a window break, we now have a breach in the opening and that’s when flames and embers can get into the home,” said Gorham.

While the cost to real estate from wildfires is rising, the cost to build and landscape a fireproof home is actually the same or slightly less than the cost of a typical home. The savings is in the cement siding, cheaper than wood materials. That offsets cost increases in gutters and vents.

In the institute’s experiment, with equal amounts of embers blowing on them, the fire-resistant home did not burn at all, while the typical home, which was connected to it, was fully engulfed.

“This work that we do here in the lab, this is real. I think all too often, we can watch something on TV, we can listen to it and go, ‘That’s interesting, but it won’t happen to me.’ But it does. It invades a family’s life,” said Wright.

Wright is a former FEMA official and native Californian. His parents lost their home in California’s Camp fire last year, the worst in the state’s history.

“I’ve always led my team saying, ‘Make sure we know the names of those people,’ but when that fire came through Paradise — and you get the text message from your mom that says, ‘Our home is gone. Where do I start?’ … the nature of how destructive it is hits home,” said Wright.

Source: CNBC

NIQS makes fresh case for CIDB to supervise projects

Worried by the incessant collapse of buildings in Nigeria and the attendant blame game in the system, the Nigerian Institute of Quantity Surveyors (NIQS), has called on the government to establish Construction Industry Development Board (CIDB).

The need for the establishment of the board has become imperative as most construction engineers now seem not to take the rules regulating construction seriously.

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An independent developer in the eastern part of Nigeria, Mr. Reuben Okeke, has stated that most of the causes of building collapse noticed in the country are due to avoidable issues and lack of supervision.

According to him, maintenance culture should be re-introduced as a way of giving our infrastructure a new lease of life. “If nothing is done in that regards, the country will continue to engage in white elephant projects. These are reasons, Nigeria infrastructure do not last,”he said.

Earlier the Nigerian Institute of Quantity Surveyors, (NIQS), renewed the clamour for the urgent formation of a Construction Industry Development Board, (CIDB) following the seemingly no direction and supervision in the construction industry.

President of the Institute, Mr. Obafemi Onashille explained that CIDB or Construction Industry Development Council, (CIDC) will be responsible for the formulation, implementation and regulation of policies that will galvanize and breathe life into the ailing sector which is regarded as the barometer for measuring the economic health of a country.

Onashile who briefed newsmen at the Institute’s liaison office in Victoria Island, Lagos, canvassed a partnership between the government, built environment professional bodies and contractors to midwife the birth of the Board which is expected to play a leadership role in the construction industry.

He listed the challenges impeding the growth and development of industry to include housing deficiency, degradation of the urban environment, over-stretched infrastructure, high construction costs, government’s non-patronage of local experts and non-payment of contractors and consultants for completed jobs.

The NIQS President who decried the gradual but persistent lowering of standards and quality of construction materials, called on the government and industry stakeholders to collaborate with a view to forming  a Construction Industry Training Board, (CITB). The Training Board, according to Onashile will promote and manage technical/vocational training of skills for the industry.

Reeling out the panacea to the festering challenges confronting the industry, Onashile also canvassed the creation of  what he called “purpose-fit judicial systems for the industry”.

Source: The Sun

States’ economies sees improvement as Fund’s intervention targets 500,000 home and 1.5m jobs

The intervention by the Family Home Fund (FHF) in the Nigerian housing sector to deliver affordable housing to low-income earners in the country will significantly improve the GDP and economy of the states where the intervention is already yielding fruits, people familiar with the Fund have said.

EchoStone is a property development firm that deploys an innovative technology which allows rapid and scalable construction of houses. It is currently building 2,000 housing units beginning with 250 units of two-bedroom detached bungalows in Idale Badagry, Lagos. FHF is to build 20,000 housing units in Lagos.

So far, about six state governments including the FCT have donated land for the development of various numbers of housing units, including Ebonyi State which has donated land for developing 1,200 homes.

Kaduna State has also donated land for its millennium city which promises about 650 homes; the ancient city of Kano has 757 homes; Asaba, Delta State, about 620 homes; Ogun State, about 1, 074 homes; FCT, about 580 homes, while Akwa Ibom has donated land and signed MoU with the fund for the construction of 5,000 low-income houses.

There is an expectation that through a combination of these housing development activities, 1.5 million jobs will be created for both skilled and unskilled labour that will be working at the construction sites.

Analysts say the creation of 1.5 million jobs will have significant impact on the economies of the states, more so with the multiplier effect of job creation.

“When you give job to one person, you shall have impacted the lives of about four or five more persons,” noted Johnson Chukwuma, a civil engineer.

He explained that, one way or another, part of the income earned by these workers goes to the state government by way of paying taxes or other levies, stressing that a state with healthy citizens is, by implication, a wealthy state.

FHF, which is arguably the largest affordable housing-focused fund in sub-Saharan Africa, was in Lagos recently and, according to Femi Adewole, its managing director, its mission to Lagos was to explore a potential partnership for a large-scale affordable housing scheme with a specific focus on Lagosians on low income.

“Alongside good quality homes, the programme will be looking to create jobs for Lagosians. Other aspects of the scheme include a commitment that we are not just to build housing units; we also need to look into the environment and climate change issues which now stare us in the face,” Adewole said.

He assured of the fund’s commitment to the provision of affordable housing, disclosing that they had invested over N20 billion in housing projects to support Nigerians who are earning below N100,000.

“We are also providing financing for developers who will build homes ranging between N2.5 million to N5 million,” he said.

Besides providing funding for the product suppliers, the Fund also aids the demand side by assisting house buyers, giving them a deferred loan for up to 40 percent cost of the houses.
The Fund supports local content in the house-building process and Adewole disclosed that their long-term objective was to ensure that up to 80 percent of manufactured inputs were locally produced.


Source: Chuka Uroko

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