Speculators anxious over Machakos land

By Harold Ayodo

He spent his lifetime savings to purchase land in Machakos when the Government proposed to construct a technology city there. Paul Mutua, 52, says his plot was adjacent to the 5,000-acre plot in Malili where the Sh780 billion technopolis would sit.

For starters, a technopolis is a city built for technology firms and it was aimed to transform the economy using information technology by 2030.

But six months down the line, Mutua is a troubled man after the Government indicated it would relocate the project to Thika over alleged wrangles.

"I bought an acre of land at Sh800,000 about six months ago hoping to sell at nearly Sh3-4 million before December," Mutua says.

Mutua is one of the many land speculators who buy raw or undeveloped land and wait to sell it at a higher value for development.

According to Brilliant Ventures Director Kenyan Macharia, the plots sold at Sh300,000 before the end of last year. Ironically, the plots were never in demand given that they were bare and unfit for agricultural use.

The rush

Macharia says prospective investors in real estate were never interested in the land that was earlier sold at throwaway prices when buyers did not show interest. However, the bare land turned into a fruitful vine overnight after the State made its intentions public on the development akin to California’s Silicon Valley.

"I later learnt that most investors in real estate were rushing to the area to secure vantage positions ahead of the technopolis" {lucas kang’oli, Property Lawyer}

"Many speculators rushed for the plots after the Government proposed to set up a multi-billion technology city in the area," Macharia says.

Macharia, a seasoned real estate agent, says the demand of plots in the area made prices skyrocket faster than experienced in any other part of the country.

"People who bought an acre at Sh300,000 and less five months ago sold it at Sh800,000 within a month," Macharia says.

Property lawyers concur that there was an influx of clients purchasing property in Malili, Machakos, from January. Lucas Kang’oli , a property lawyer, says an influx of property transfers in the area began to be realised from the beginning of last year.

"I later learnt that most investors in real estate were rushing to the area to secure vantage positions ahead of the technopolis," Kang’oli says.

Prospective investors

According to Kang’oli, instructions to act for clients purchasing property increases on specific occasions. For instance, property transactions were on the increase along Mombasa and Thika Roads after the Government embarked on an ambitious expansion of the highways.

"I handled several transactions over the past two years on property along the two highways before Malili emerged this year," Kang’oli says.

Macharia says prospective investors had varied intentions for rushing for the plots, including for speculation purposes.

"Some buyers wanted to hold the property and sell it at a profit while others resolved to invest in either residential or commercial real estate," Macharia says.

However, the dreams of several investors are turning into nightmares after the Government recently announced it was considering relocating the technopolis to Thika.

"I do not know what I will do with the bare land should the project be transferred to Thika," says Lydia Wanjiku, an investor. She says she had earlier considered the alternatives of either investing along Thika or Mombasa Road but opted for Machakos.

"Malili had potential… it will still be lucrative should the Government proceed with its plan to construct the ultra-modern IT centre," Wanjiku says.

Nonetheless, plans to build the technopolis on a 5,000-acre piece of land recently ran into claims of graft and unfair dealings.

"The land originally belonged to farmers who had 7.8 acres each before some resolved to sell," Macharia says. Some farmers complained that brokers bought their plots at throwaway prices and then sold them to the Government at inflated prices. Shareholders of Malili Ranch Limited say the Government should have dealt with them individually instead of their directors.

"People who bought an acre at Sh300,000 and less five months ago sold it at Sh800,000 within a month" {kenyan macharia, Director Brilliant Ventures}

Legally, property owners cannot cry wolf after selling their land at agreed prices with prospective buyers. Furthermore, legal procedures to purchase property entail conducting official searches at the Ministry of Lands to ascertain the registered owners. The parties to the transaction are at liberty to involve a registered valuer to ascertain the market price of the property.

"Property transactions are usually pegged on a willing buyer and seller… they agree on a price and lawyers draw the sale agreement," Kang’oli says.

Alternatives

Information Permanent Secretary Dr Bitange Ndemo recently said the Government would opt for a 3,000-acre offer by Thika Municipal Council for the project.

"The project will relocate to Thika if wrangles surrounding the purchase of the land in Malili, Machakos, continues," Dr Ndemo said.

The PS defended the ministry against impropriety in the purchase of the Sh1 billion land and accused politicians of interfering with the project.

"The ministry did not deal with the firm that is claiming Sh110 million for sourcing the buyer," Dr Ndemo says.

Row over payment of the purchased land started after disgruntled farmers wrote to Prime Minister Raila Odinga alleging political interference and harassment in the deal. At the centre of the row was a company that moved in to lay claim for Sh50,000 an acre as commission fees for arranging the transaction between the farmers and the Government.

MPs from the region who were shareholders in the ranch have been caught up in the saga. Leaders have called for an investigation to determine the faces behind the firm that demanded Sh50,000 for each acre sold.

The landowners were to be paid Sh200,000 an acre but were later allegedly swindled after the agreement was changed. While the Government paid Sh200,000 an acre from the ranch, former shareholders were allegedly being paid Sh150,000, hence the public outcry.

Sucked into the saga is the Treasury in whose name the new title deed was issued after the Sh1 billion transaction was sealed two days before Christmas last year. Documents indicate the Government, through the Ministry of Information, entered an agreement on June 17, last year to purchase the LR No 9918/3.

The Malili Ranch directors signed the agreement on behalf of the landowners while PSs Joseph Kinyua (Treasury) and Ndemo (Information) signed on behalf of the Government. While waiting for the construction of the city expected to commence next month the ministry rented Sameer Business Park to serve as a temporary ICT park.

They last met as a company in 2006 where members voted to sub-divide the land and the process was completed in 2008. Each shareholder had an allotment letter for his or her 7.8 acres by the time the Government moved in last year.

"I cautioned some clients against purchasing the plots until the Government made public its intention to go ahead with the project," Macharia says.

According to Macharia, the investors who bought plots in the area will laugh all the way to the bank should the project kick off in Malili as scheduled.

"Some investors want to erect modern houses to accommodate families of employees at the ICT city," Macharia says.

The buyers cannot sue the sellers for selling them bare land at exorbitant prices, should the Government relocate this project to Thika.