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Real Estate

Kenyan Real Estate Sector Continues to Attract International Players

BY Soko Directory Team · August 28, 2017 08:08 am

The master planned community concept in Kenya continues to take shape with key master plans attracting international players in the various precincts such as residential, industrial parks, commercial office, and education zones, among others.

According to the Cytonn weekly report, this was witnessed last week with Johannesburg Stock Exchange (JSE)-listed ADvTECH Ltd, an education, training, and placement company based in South Africa, announcing the purchase of a land parcel in Tatu City.

The parcel will be used to set up a THRASS education system Crawford schools brand, in line with the company’s expansion strategy to various countries in Africa. ADvTECH Ltd becomes the second education institution to invest in Tatu City’s education precinct after Nova Academies took up land and set up Nova Pioneer Tatu City.

These institutions are attracted to the city by the live, work, play lifestyle, quality infrastructure provided, and the over 4,500 residents expected to occupy the residential zone in Tatu City creating a steady supply.

Tatu City has attracted several multinationals in the master plan, including Dorman’s Coffee, Bidco oil Refinery Limited, Unilever and Kim Fay, all of whom have taken up space in the industrial park, which is currently 65.6 percent occupied. Lifestyle Properties and Karibu Homes developers have taken up land parcels in the residential precinct, and Tatu’s self-build plots zone dubbed Kijani Ridge is over 60.0 percent sold.

The report further noted that master planned communities have various advantages to the country including de-congesting the central business districts, communal lifestyle and increasing the standards of living,  decentralization of industries, and provision of trunk infrastructure in remote areas, hence opening up such areas for development. Ruiru, an area where Tatu City is located in Kiambu County, has recorded a capital appreciation of 23.9 percent p.a. over the last 5 years.

Master plans have however previously failed to kick off due to tedious land acquisition processes, inadequate infrastructure as most master plans have located some distance from the main cities, high financing costs, and inadequate skills to organize and bring it all together, with Tatu City finally kicking off and recording high uptake levels.

Cytonn says that the country is likely to witness a change of mindset among developers, financiers, and buyers, hence the development of more master planned communities in addition to current cities under development such as Konza City by the Kenyan Government, Newtown by Cytonn Real Estate and Northland City by the Triad Architects, among others.

The market outlook points to increased housing supply as the local and international firms and financial institutions support housing projects with a focus on student housing. In addition, there is an increase in the supply and demand of retail space outside Nairobi County due to heavy population influx in Nairobi satellite towns and county headquarters.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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