Kenyan Auctioneers Stuck With Properties In Billions With No Buyers

Auctioning is proving to be a tough task in Kenya as properties worth billions are not getting buyers even with price cuts.

A recent survey conducted by Home and away revealed that hundreds of properties are not getting buyers since they go at high prices while Kenyans continue to complain of a tough economy.

Through its analysis of properties on auction, Home and Away found out that only a handful of properties have been sold with high-end ones are yet to find buyers.

Most properties being auctioned include residential and commercial buildings where auctioneers are willing to sell them but due to their high costs, buyers are ceasing from them.

An example is a property at Nyali Beach resort Mombasa. The property on the white sandy beach is worth 6 billion shillings and has been on auction for almost three years.

Efforts to sell the Nyali beach resort at 6 billion shillings have proven futile despite auctioneers trying to lure international investors into buying it. Now, the price of the resort has dropped by half and it is being sold at 3 billion shillings, but still no sign of an interested buyer.

The Nyali beach auctioneers are not alone, banking institutions are among the auctioneers staring at properties worth billions that have not gotten a suitable bidder.

Banks have been taking properties from loan defaulters as a way of compensation and have been putting the properties up for auction but the sale of these properties has been adamant.

Some of the properties which have been put on auction but have not found a suitable buyer include; The Nairobi Upper Hill Hotel, Nextgen Mall along Mombasa Road, Thika Business Centre, The Great Rift Valley Lodge and the Mirage in Westlands.

These properties are worth millions or billions of shillings but convincing bidders to spend their ‘little’ money is proving to be very hectic.

It is quite true to say that even though these properties are high-end properties they are already used and buyers would prefer going for new properties and especially at a lower cost.

Experts also reveal that the sale of properties requires patience. An auctioneer should only expect to get one buyer out of ten prospective buyers.

Joseph Gikonyo, Garam Investments Managing Director says his firm has put hundreds of properties on auction this year, but the expectation is low as the economy continues to experience a slow.

“Selling will take longer. We have to keep trying. Out of 10, we’re only managing to sell one whereas in the past we used to sell seven.”

“The overall economy is doing badly. The county governments are not paying suppliers, and this has to have an impact,” said.

“KRA is another issue; it’s going hard on Small and Medium Enterprises with tax demands. Businesses are closing rather than struggling. It’s hard to auction in such an economy.”

Mr. Gikonyo opines that electronic items and household equipment are easier to auction as compared to houses since they require low capital.

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