Determined to deepen monthly rent, which is a rare privilege in Nigeria, Alpha Mead has raised a fixed-rate series one $1million private placement bond for its rental scheme called Rent4Less. The scheme is designed to support individuals and small businesses with flexible, monthly pay-as-you-use rent for homes and offices.
The SeniorSecured Private bond issue is another milestone in the series of the company’s expansion strat egies to increase access to shelter and establish the culture of monthly rent payment across Nigeria and Africa’s housing and office markets.
The $1million bond issue or funding is coming as a result of an outstanding early growth of the product and the trust that the investment community reposes in Alpha Mead,” explained Damola Akindolire, managing director of Alpha Mead Development Company (AMDC), a subsidiary of Alpha Mead Group that oversees Rent4Less.
Akindolire explained further that Rent4Less has proven, over the last 12 months, that it is a product designed as a response to the economic challenges that came with the pandemic. “Because we are a member of a large real estate group, we have the opportunity of drawing insights from the experiences of other businesses within our group,” he said.
One of those insights, according to him, is that the pandemic has reduced the pocket size of most people and businesses and everyone has to reprioritize, disclosing that they thought about how they could show to the market that their “We Care…” brand essence is not just a platitude.
“At one of our strategy sessions, we had a eureka moment: shelter is one of the basic needs of man; so, if we can take the stress of the lump sum annual payment away from people and businesses at a time like this, we would have been solving a major problem,” he reasoned.
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Continuing, he said, “over 80 percent of our growing population live in rented accommodation and we are happy that we have not just solved a major problem with Rent4Less, we have even proved, within a very short time, that we can accelerate growth and replicate this success across Africa. We thank Cardinalstone for getting on this journey with us”, the managing director enthused.
Rent4Less has had its impact on developers and investors and Akindolire noted that as a company with deep interest in real estate development, AMDC was conscious that the product must also be beneficial to landlords and real estate investors.
Under the company’s Guaranteed Rental Income Programme (GRIP), Akindolire assured that Rent4Less would ensure landlords enjoyed early and consistent economic benefits on their assets, increase occupancy levels, and also leverage its group’s expertise in facilities management to ensure that assets remained in valuable condition.
Olusesan Ogunyooye, the Group’s Head of Marketing & Corporate Communication, explained that the company’s goal was to demonstrate that monthly rent was possible in Africa. He added that safe, secure and comfortable homes or offices should not be the exclusive preserve of those who have huge funds to either buy or pay annual rent.
“As basic as shelter should be, and despite its immense impact on our social architecture, not everyone in Nigeria, and indeed, a significant part of Africa, can afford a safe, comfortable and secure accommodation.
This is not because developers have stopped building. In fact, a drive around some of our cities will reveal an interesting paradox of scarcity amidst plenty, with low occupancy rates on the one side and unmet demands for housing and offices on the other,” he noted.
“This funding will help us close this gap between the scarcity and plenty. It will help us bring more buildings to the market in Nigeria, and help us expand our footprint in Ghana where we just launched last month”.
“Our premise is very simple: if people earn wages monthly, and attend to their other basic needs such as clothing and food periodically; why should they pay rent annually? Money locked with landlords for 12 to 24 months could be invested in other ventures that will be of benefit to the investor, the businesses where they are invested, and by extension, our economy”. With Rent4Less, people can now pay rent monthly, quarterly, and bi-annually”.
Speaking on the product offerings, Nelson Nlemuzor, Business Manager, Rent4Less commented: “Our product is not just about the rent payment cycle; it is also about space utilization. We all know that real estate is a location-driven investment asset class, and that makes it difficult for an average income earner to stay in prime locations close to Central Business Districts (CBDs), primarily because of the rent structure in these locations.
“Rent4Less is coming to address this with its shared living or working system that allows people of like minds to share the same living or working space and pay for just what they use monthly”, he concluded.
Recall that in June 2020, AMDC fully redeemed a Series 1, tranche A 19.76% fixed rate $3.5m (N1.45bn) bond. The bond, issued in partnership with DLM Trust Company and UTL Trust Management Services, was utilised for the construction of 100 family units in Lekki, Lagos.
The company possesses a track record of world-class service delivery and remains the first and only indigenous development company certified to international standards (UKAS ISO 9001:2015). Furthermore, its triple bottom-line approach to business culminated in its bagging of the World Bank Group’s green building EDGE Advanced certification for its Lekki Pearl Estate – a first of its kind in Sub-Saharan Africa.
