Cases of people living abroad channelling their development funds through relatives only to come home to be astounded are abound. But as Geoffrey Korio found out there are alternatives
When the Mi Casa (Kenya) Limited project; an initiative under Manyatta Real Estate, was established last year, its mission was quite different from those of other real estate players.
Its main objective was to meet the property needs of Kenyans living in the Diaspora. This market niche, as Francis Kihanya, the Mi Casa Project Director, explains, have encountered problems when purchasing land in Kenya and fulfilling the land transaction processes.
In addition to these problems, the busy nature of people and uncertainty of dealing with close relatives has also been the driving force towards the formation of this project. These, among others are the litany of problems that Caesar Mwangi, a director at Mi Casa Kenya Limited, highlights.
“The reception from Kenyans in the Diaspora has been encouraging,” states Kihanya. But he still maintains that a lot needs to be done.
Through his professional team, the project uses various marketing and advertising techniques to reach out to the foreign-based Kenyans. Through road shows in major cities including Boston, Washington, California, Minnesota and Chicago, people have been informed and educated about the services of the organisation.
The use of Google Ads, referrals (word of mouth), through their website and credible media channels have also been utilized to reach out to the target market.
“We don’t look at the diaspora like most big companies do, we view those abroad in 3D — Diaspora, Dollars and Development” states Kihanya.
This approach, Kihanya continues, has the ability to transform the Kenyan as well as African real estate market.
Simplified Procedure
Kihanya, who has lived in the US for years, understands the issues of those in diaspora and was a licensed realtor in California so he believes he understands the Diaspora needs well.
The procedure, thanks to the courier services, has been easy and flexible. For starters, the investors and potential land buyers are informed about the overall land transaction processes and documentation requirements such as providing Identification Cards and various documents that need to be signed.
The land is bought through a Property Syndication process whereby Manyatta pools together a number of investors who buy shares into the project. This is done through a Special Purpose Vehicle (SPV) — a limited liability legal entity— that has specific mandate to buy land, sub-divide it and sells the plots. The investors’ interest is captured in a number of legal documents namely share purchase, shareholders agreement and project management agreement.
Being a unique real estate service that is offered by the project, clients tend to cast doubts on the process especially cash related transactions.
However, there is an assurance to this as land buyers are heavily advised to hold their money in escrow. This means a third party preferably their lawyers, holds the money until the final documents (the title deeds) are processed in their name. And subsequently this eliminates any instances of fraud or breach of contract. “The payment procedures and terms are also flexible,” he adds.
Payments mode
There are two methods of payment: cash pricing or instalment option that has some finance charges. However, this depends on the time frame of the land transaction process. Due to the fixed rates charged by money transfer companies, the money is wired to accounts in local banks.
However, the biggest challenge encountered is the lack of co-operation from close relatives and the obvious feeling of being sidelined. This has been evident in numerous instances and creates a tumultuous working environment as a result. “Most of the times some them (the relatives) feel side-lined about the land acquisition process. But what they should know is that everyone stands to benefit” he adds. The relatives, as Francis states, still have a role to play; confirming authenticity of the professionals, the documents and the location of the land but he beseeches them to leave the professional work to the professionals.
The pioneer recipients of this project were awarded title deeds to the Juja Farm lands, located 15-kilometres away from the Thika superhighway. “We chose Juja Farm in particular because the whole area has title deeds and this is courtesy of the past inhabitants who made proper and legitimate land acquisition processes,” comments Kihanya.
In addition, most places that are now regarded as posh will have nothing to show for in ten to 20 years. However, Juja Farm on the other hand, as our research indicates, will register major transformation in the next ten years. For instance a major bypass criss-crosses through the area and landowners will take advantage of the fact that land here has title deeds and roads —that are 15 metres wide—are well planned throughout the whole development.
“If we had all the resources, this is the sort of investments we would like to hold for five to ten years” adds Kihanya.
In addition to this, the land also attracts potential standards for city planning and a feasibility study reveals great future for the land. Furthermore, land surveyors have been consulted to search for parcels of land within the country. This will aid in giving investors diversity and wide variety in land and property selection.
During the completion of the project, the investors had a reason to smile after receiving their much-anticipated title deeds. Albeit some encountered setbacks along the way, the recipients were largely impressed by the promptness of the project’s management in giving information on a regular basis.
An aspect that is almost non-existent in many real estate companies. Some of the investors in the Diaspora are still receiving their title deeds via international courier services. Various similar projects will be established to continue catering for those living in the Diaspora and in Kenya as well.
