A fast surge in the population of Kenya’s rural towns following the introduction of county administrations has turned out to be a stroke of luck for real estate developers. Decentralized units have pulled people away from major towns into the counties leading to the rise as people seek opportunities away from Nairobi. Similarly, the seats of county governments are overflowing with masses who have created opportunities for real estate developers. Today, we look at the counties to watch in 2018 and available opportunities for investors.
Kirinyaga plans to revolutionize its property sector through the transformation of its major town centers including Kirinyaga Central, Ndia, Gichugu, and Mwea, into mini counties. Among its major projects include the Kenya Medical Research Institute (KEMRI) which is set to be developed at the cost of Ksh 12 billion at Wang’uru Village, Mwea. On completion, the project will contain 7 structural components including a modern research center, a teaching & referral hospital, and a graduate school for health disciplines. The project is expected to be fully functional in 2024. According to Kirinyaga County Governor, Anne Waiguru, the detailing strategies for upgrading the Kirinyaga sub-counties will be divided based on their economic strengths. For example, Gichugu constituency will be the county’s tourist center guided by the fact that the area has natural sites ideal for the construction of a resort. Other projects include Industrial parks in Sagana over 254 acres of land, a series of housing projects around the Ksh 19 billion Thiba dam currently under construction, green hubs in Mwea, wellness centers in Kerugoya, and farmers’ markets in Ndia. Most of the projects are said to have willing investors and will be supported by the county government of Kirinyaga. Real estate Investment opportunities for investors cut across all real estate property developments including residential homes, commercial buildings, and service based real estate. By committing to its sessional paper dubbed Mountain Cities Blue Print, the county will transform together with providing opportunities for real estate players.
While most counties have been growing rapidly, thanks in large part to devolution, Bomet has been termed as a sleeping giant and a county caught in the warp. The county headquarters, Bomet town, has no recognizable supermarket retail brand. However, it is home to the Fair Hills Hotel located 6 km out of the CBD along the Bomet-Narok highway. The investment was prompted by the strategic position between Kericho and Massai Mara and the scenic view of the rolling hills of Bomet and remains the only notable real estate investment. According to local investors, improvement of social amenities facilitated by devolution has not stimulated much property development. However, with the setting up of higher education centers such as the University of Bomet and Moi University Bomet Campus, the best of the county could soon be realized. The SGR is also expected to transverse the county from Naivasha to Western Kenya through the county.
With devolution, there has been a dramatic change in the town’s dynamics with the arrival of more than 4000 employees from the government, the Kenya Red Cross Society, banks, Insurance and betting companies among other organizations moving into the county. However, the influx of the professional cadre was not met with sufficient housing prompting most workers to buy land east of the town which consequently led to the increase of land prices in the area. Currently, a 50*100 plot in the CBD goes for Ksh 4 – 7 million. With the arrival of the SGR, the county is set to construct at least 2 railway stations, with the main station planned at Kyogong and a passenger station at Sachangwan/Soimet. The latter will be a few meters from Kapwen center where the county government is upgrading an airstrip. The news has sent land prices skyrocketing with one-tenth of an acre going for Ksh 400000 up from Ksh 200000 within the areas.
Major infrastructural projects in Mombasa West have sparked a rush for property leading to a remarkable rise in land prices in bordering counties including Kilifi. An example is the recently completed Sultan Palace Beach resort, a 5 billion suburban complex, in the Kikambala area of the county. The resort is set to host visiting billionaires and some of Kenya’s wealthiest characters. The project, which is set on a 43-acre beachfront, 25 km from Mombasa is set to be home for super-rich Kenyan investors seeking to acquire a vacation property. The complex comprises of 200 housing units’ with Ksh 80,000,000 villas fronting the Indian Ocean, Ksh 36 million detached houses, and 1 – 3 bedroomed apartments priced between Ksh 10 and 20 million. On completion, the Sultan Palace will feature a residential club, a beach bar, café, a health club, gourmet restaurants and a 5-star hotel that will be built on the remaining 23 acres of land. The development joins a host of other high-end properties in Kilifi including Bofa Beach Resort, Kilifi Creek Villas, Kilifi Bay Beach Resort, and Baobab Sea Lodge. The project is in line with Kenya’s Vision 2030 whose flagship ventures include the establishment of resort cities in towns such as Kilifi, Diani, among others with the goal of optimizing the tourist potential in these areas. With bourgeoning projects, there is a need for the provision of amenities such as commercial spaces and entertainment spots or which provide real estate investment opportunities to local real estate investors.
Kakamega has in the recent past made headlines among the western counties becoming real estate hotspots in the wake of Kenya’s devolution. While the county government takes on the reigns to promote development through the establishment of level four hospitals in each constituency, private investors are also realizing the rural potential in the County.
However, despite the increasing population and immense input from the government, the western county lacks adequate housing. The rising preference for apartment buildings has called for the demolition of bungalows as investors try to reach maximum returns. Some investors are investing in student accommodation to boost the supply of student facilities to Masinde Muliro Univesity of Science and Technology, Mt. Kenya University, Univesity of Nairobi, Kenyatta University, and Jomo Kenyatta University of science and Agriculture satellite campuses. However, development in Kakamega is not only in small scale.
Some property developers are going for huge real estate projects similar to those in Nairobi. One such project is in Butere where a developer is putting up the Ksh 2 billion Mwale Medical & Technology city. The project constitutes a shopping complex with 1500 rooms, a residential area with 4800 houses, and a 36 Hole golf resort. The shopping complex is set to have a supermarket, shops, and a medical complex that will host dozens of healthcare experts. On completion, the development will be the first in rural Kenya and real estate investors in the region may stand to gain by investing in residential property, leisure & entertainment, as well as commercial property.
According to recent market analysis, Kenya’s real estate development continues to grow across the county sustained by high returns that stand above 20 percent. Also contributing to the growth is the high rate of Kenya’s urbanization, which currently stands at 4.3 percent, and a fast-rising demographic. As more investments flow into counties, devolution in real estate may just be the goose that lays golden eggs.
This article is written by Buildafrique Consulting Group; a Kenya Real Estate Consultant and Development Solutions provider that offers End-to-End Financial, Development Management, and Investments Solutions in Real Estate, to allow Developer, Investors, and prospective Home Owners manage risks and realize value for their investments in a fast-evolving Real Estate market.
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