Tailor-made housing key to growing market

Sultan Palace Beach Retreat General Manager Liu Tiancai taken on 11th April 2015. [PHOTO:WILBERFORCE OKWIRI/STANDARD]

Kenya: How did Sultan Palace Development Limited come to be in Kenya?

Sultan Palace Development Limited is a Kenyan real estate development company owned by Jiangxi Xinyu Real Estate Development Co Ltd, which is part of Jiangxan International Developers.

The company was seeking to expand its business in Africa and we therefore sought out several countries, based on their GDP growth, how the property market had progressed over the past 10 years and the enthusiasm with which people were buying property.

We then decided to invest in Kenya in 2011. We hold the view that Africa is the next frontier for investment and Kenya is the gateway to East Africa.

How much has been invested in Sultan Palace Beach Retreat?

We have so far pumped Sh5 billion into the project. We expect it to be completed by December 2016. Sultan Palace Beach Retreat is an ongoing project that occupies 43 acres in Kikambala, Kilifi.

What impact have travel advisories and terrorist attacks in Kenya had on your business?

Terrorism is a global challenge and it is something we have to live with. Before one undertakes a project such as the one we are doing, all risks must be taken into account.

I am confident that Mombasa will bounce back. We have seen these challenges before and we saw the market get back on its feet after the attack on Paradise Hotel.

It is true these are not the best times for the tourism industry. But savvy investors buy and sell when no one else is doing it. This is how the real estate industry works.

One thing about the Kenyan market and most markets in Africa is that property prices go up when there is a crisis and end users are the ones affected because they look at factors such as security.

What do you think is the future of the hotel industry in Kenya?

We believe Kenya’s hotel industry has a bright future. I know the state of security in Kenya and the  European economic recession has brought a sharp drop in hotel business in Kenya, but the country will soon recover.

The country should focus not only on attracting tourists from the traditional markets like the United Kingdom, United States, Germany and Italy.

 

There is a need for a shift to new markets such as India, Japan and China. We should also try to promote local hotels to the growing Kenyan middle-class.

How has life in Kenya been for you?

I enjoy life in Kenya. I love the perfect climate, vast options of foods from all over the word. I also love Kenyan beef stew and samosas.

I cannot imagine how I lived for so long in China without enjoying these foods. I am not even sure I will survive without these when I return to China.

I also like the business environment in Kenya; it gives everybody a chance to do the business and achieve their goals.

What opportunities in real estate do you feel are not exploited by Kenyans?

There should be more investments targeting the middle and lower class in Kenya. This is the biggest opportunity there is.

This group has completely been forgotten by investors who only focus on the needs of high-end users.

What are you doing to help solve this problem?

We are planning to come up with a project in Nairobi to cater for the needs of this group of people. We will build bed-sitter apartments, with conference halls and a cafe, which are targeted at young professionals and small companies. We want to provide quality yet affordable apartments for Kenyans.

What do investors need to think about before investing in real estate?

Developers need to think about what the market wants and understand that they have to do a lot of research. There should be no copy-pasting of projects.