A number of studies have shown that Kenya real estate has experienced a boom in the last few years. This growth is said to be driven by the Kenyan elite in addition to the effect of foreign investors who are attracted to the tourism opportunities in the country. Kenya earns about US$1 billion annual from 1 to 2 million tourists that it receives annually. This industry has experienced great growth more especially as from 2002.
Growth Hot Spots in Kenya real estate
There are many reasons as to why an individual could get involved in real estate. Some people plan to stay in a property while others do it as a form of investment. Kenyan real estate market has many choices from which you can benefit.
The main growth areas in Kenya are situated in Nairobi as well as the beautiful coastal region. This is actually an area stretching 500 kilometers of white sand beaches. The majority of properties developed in Kenya real estate are made up of homes or second homes for the middle class in the country. There are also a number of foreign national who own property in Kenya. There are rich people and even celebrities who plan to retire in the country. Some tycoons have built lodges in the national parks for the tourists.
How to Find Real Estate in Kenya
There are many online databases and search engines which can help you in finding a suitable property in the Kenyan real estate market. This is very similar with what happens in the developed parts of the world such as Europe and North America. They display the available properties in Kenya and other important information that any investor would want.
There are some smaller search engines which are very important in case you are interested in finding a property in a particular area.
The databases with a national outlook are the best when it comes to finding a property in Kenya.
Some examples of places where you can start can be in order at this point: the KenyaProperty.com and Property.co.ke. These two are the leading search engines which make it possible for you to find real estate properties in Kenya. Through these websites you get access to thousands of apartments, underdeveloped and apartments which are listed for sale in various towns, Municipal councils and cities. The listings are accompanied by high quality photos to help you see what you are going to buy.
Leasehold is Common
There are specific rules involved when buying property in a foreign country. In case land is either leasehold or freehold. But a large part of the land is leasehold. What does it mean by the term leasehold? This is the situation where the government actually owns the land. Your house only sits on that land. The duration for you to lease the property is a minimum of 50 years and a maximum of 99 years. When you have a leasehold property for a minimum of 50 years, it becomes easier to seek financing.
How to get a lawyer
All foreign investors are advised to contact the Kenyan consulate in their home countries. The consulate officials will advise you on the most reputable lawyers who deal with property. It is a good idea to give your lawyers the power of the attorney so that all the aspects of the transactions can be handled without you being there personally. This is very important when you want to buy real estate property without having to travel to Kenya.
The lawyer can also be directed to carry out a complete search on the title of the property. This is to avoid getting into trouble when you buy land parcels which are unregistered. The issues make it impossible to establish the true owner of the property in question. Never be involved in real estate transaction if it’s unclear on who owns the ownership title.
Property Market Trends in Nairobi
Real estate decisions take time to be made. This is because it requires large outlays of capital. That explains why the real estate market does not pick up immediately after a political storm as in the case of post-election violence in 2008. Alternatively, there is a lag period involved when the economic factors are altered before witnessing any tangible fruits from real estate. Real estate managers can bear witness that there is plenty of office space for renting out in Nairobi but there is very few new tenants who have occupied them.
The office spaces on the out skirts of Central Business District (CBD) are being more attractive than the ones on the CBD area because of the ample parking space that is available. The office owners also like those office outside the CBD because they easily avoid the traffic jams.
Many property owners are banking their hopes on the fact that the international development agencies have a gain resumed their services. The good government policies are also being implemented. These two factors are expected to generate plenty of economic activities in Kenya. These activities are also expected to increase the demand for office space in Kenya.
There is an extremely high demand for low income residential housing in Kenyan towns and cities. In specific cases such as in Nairobi, the demand outstrips supply. This is the area with a great potential for new business. This is a serious issue to an extent that the slums are attracting rent. The coalition government had promised to provide up to 150,000 new housing units to urban dwellers every year. Despite these efforts, it will take numerous years for the housing deficit to be cleared. The main cause of that predicament is the unprecedented rate of rural-urban migration.
In Kenya, the Middle income market is very active in real estate. Many people who are in the middle class are attracted to this area of the economy. The problem is that real estate in Kenya still faces a heavy tax burden. That explains why real estate is the hardest hit part of the economy during the economic recession. The finance minister is required to address the issue of unfavorable taxation policies witnessed in the country. A good taxation system can help in releasing enough money to be used in other investments. The mortgage companies are also supposed to make credit cheaper in order to encourage activities in the real estate market.
The situation is quite different is the high income residential market in Kenya. There are many vacant houses in addition to the fact that there are no people seeking to buy or rent those high end properties. This is why it is the buyers who dictate the price in the market place. There is need for foreign investors to stimulate this market place.
Kenyan real estate is a very attractive to foreign investors.
The great Indian business tycoon, Mukesh Ambani has his presence in Kenya’s real estate market through his company Delta East Africa. The company has ongoing projects worth USD 34 million. This is a sure sign that the Indian tycoon has a great interest in the Kenyan real estate. He is building many office and residential property developments.
The Kenyan Property market is attracting investors from the international arena. The Delta East Africa is a local subsidiary of Reliance Industries- a great Indian Conglomerate owned by Ambani. Some examples of properties will be in order at this point. They are building the multimillion shilling office tower in Upper Hill (the home of office buildings in Kenya). In Westland, they are engaging in real estate and lastly, they are engaged in another piece of real estate in Athi River.
The Teams Management Services (TMS) is another Reliance Industries subsidiary that has its presence felt in Kenya’s capital Nairobi. The company is involved in construction and design of multiple development projects in Nairobi’s real estate.
Real estate boom creates new crop of Kenya property barons
The Tatu city is the most ambitious real estate project in the history of Kenya that was established by Nahashon Nyaga and Vimal Shah of Bidco Oil refineries. Mr. Nyaga is the former governor of Central Bank of Kenya. The third founder of the project is Steve Mwagiru who is a coffee dealer and little known as compared to the other two founders. The planned real estate will cost some Sh. 240 billion.
The three founders hold a 50 per cent stake in the project and the rest is held by a Moscow registered investment bank called Renaissance Capital.
Mr. Steve Mwagiru is said to own coffee farms in Ruiru district. He also has a considerable stake in Waguthu Farmers which is a major coffee dealer. Nahashon Nyaga is a reserved but well connected person. H e knows many people in the business and political cycles. He is therefore an important power broker in this real estate project. He is expected to play a great role when it comes to selling the project to the locals.
Ruiru Real Estate
Ruiru is a Kenyan town found in Kiambu County. The town is located within three kilometers of the city’s boundary. The town is connected by road and rail. The area is surrounded by a large number of coffee plantations and it covers an area of 292 KM square.
By the year 1999, Ruiru had a population of 100,000 people. Since then the population has grown tremendously. In 2005 the population had reached 220,000. The local residents have strive to adapt the influx of people. This is a big industrial town with major factories in such as Spinners & Spinners Garment Factory, Devki Steel Mills, Ruiru Feeds. There are a number of banks and Shopping places. The place is currently harvesting from a housing boom since there are many coffee estates which are being converted into residential areas. A good example is the proposed Tatu city. There are also some ICT hotspots which are developing fast. The SmartEdge PASHA is a great digital village established by KICT board. At this place, the community members buy computers and get free ICT training.
This area is known majorly for coffee and sisal growing. This is a housing region in central province. Some of the buildings in Ruiru are very old. The East African Power & Lighting was built in the 1960s.
Ruiru real estate will gain a lot from the construction of Thika Super Highway. Inside the town, there is a main street that divides the town into two. There are a number of stalls on both sides of that street. When you visit the town for the first time, you are likely to dismiss it as a small town center. This is not the case considering that there are a number of large banks with their branches in the town. Cooperative bank, Equity bank, Family Bank and National Bank are some of the banking institutions that give the town a commercial reputation as a town. The old buildings on which the banks are situated were formally owned by Indian Traders.
Ruiru real estate is located 30 kilometers from the capital city, Nairobi. It is just 15 kilometers to Ruiru town. This is one of the satellite centers of the capital city. This is a dormitory town which houses a large number of people who community to work in the city. The construction of a super highway has made commuting an ease job. This town has created alternative options in solving the housing problems for the city.
Ruiru is set to benefit a lot from the Northern by-pass which under construction. This is a suitable geographic location plays a role in attracting plenty of commercial activities. Thika road has real been influential in the real estate development in Ruiru. Now investors can access the $2.5 billion Tatu City. This proposed real estate will be the first city in the whole of Africa to be privately managed and administered.
In the Northern land City there is a pipeline. The PCEA church in Ruiru owns some land in excess of 200 acres on which it plans to build houses. When this is combined with the efforts made by the Ruiru town council, some master plan is underway to catch up with the increase in demand for real estate. The council is majorly concerned with the work of regulating real estate growth.
As part of the effort to effectively manage the real estate, they have prohibited the subdivision of land below 1/8 of an acre. In addition to that regulation, it is compulsory for all building plans to be approved by the council. The land to be used for real estate development is priced depending on the soil type. In some areas the purchase price starts from Sh. 17 million.
The Municipality engineer is responsible for approving the building plans. Currently, they are approving 1,500 plans annually. The only that they have is that farmland will disappear soon if something is not done quickly. The Ruiru real estate may soon clear out the coffee farms that are in existence these days. This might take about three years in case the coffee farm owners are not informed on the economic value of the farming land.
There are many attractions in Ruiru such as the beautiful coffee farms among other scenarios. There is also a number of higher education learning institutions such as Kenyatta University Main Campus as well as the Kenyatta University Ruiru Campus.