Firm entices land buyers with discounts

Real estate developer Alex Muema. (Photo: David Gichuru/Standard)

The year was 1995 and at the time, a precocious real estate developer Alex Muema, who was burning with the ambitions of youth, decided to plunge into a then nascent sector.

Mr Muema formed Ndatiani Enterprises Limited, an outfit that 21 years later, is bestriding the difficult terrains of Kenya’s established real estate sector like Shakespeare’s colossus.

Ndatiani Enterprises now trades in plots and most significantly, housing, where it targets the low-end clientele as well as high-end buyers with a big chunk coming from the diaspora. “I am a certified public accountant and for me, investment in land came naturally,” Muema says with a big grin that assuages the fact that he is a hard-nosed real estate developer.

“I was driven by the need to bring the cost of housing down. At Ndatiani, we buy land in big tracts and sub-divide it into small parcels which are affordable. We fence this land, provide services such as water and electricity and then sell it. The buyers eventually put up houses which they can comfortably move into, without necessarily waiting for construction to end, since the necessary amenities are ready,” he continues.

The idea is that since water, electricity and fencing is provided, a land buyer can put up a house and move in when it is like 50 per cent complete, and polish as well as refurbish it slowly.

Apart from the parcels that he sells, Muema’s company also builds houses. The low-end houses go between Sh3 million and Sh7 million, while the high-end houses go for Sh10 million and above.

But things have not been all rosy for Muema. The law capping interest rates has pushed banks to cease extending unsecured credit to most land buyers, and this has taken a toll on land-buying companies like Ndatiani Enterprises.

Through installments

“I must say this year has been a particularly hard one for us. Ever since the law capping interest rates came into effect, business has been slow. Now we mostly attract buyers from the diaspora. I am happy that 13 per cent of our buyers come from the diaspora. You know I hear Trump wants to chase Kenyans from America. They are welcome to buy land and houses here, “ Muema says with a tinge of humour.

The challenging business climate has pushed Muema to offer a very tantalizing discount this festive month of December. Ndatiani Enterprises from today till December 31, 2016 will be offering a 20 per cent discount on all land buyers who will finalise a cash transaction within 30 days.

For those who will finalise the transaction in 60 days, will get a discount of 10 per cent while those who will complete in 90 days will get a final discount of 5 per cent.

Ordinarily, Muema’s company accommodates for purchases to be made through installments. “Buyers usually make as little deposits as Sh10,000 and pay in 40-monthly installments,” Muema explains.

Ndatiani’s land for sale is perched in such promising areas as Kitengela, Rongai, Utawala, Kenanie, Athi River, Isinya and Bamburi in Mombasa.

Apart from housing, Muema is encouraging buyers to buy land as an investment and also for speculation. “The average appreciation rate for land in Kenya annually is 25 per cent. That is a good deal for any would-be land investor,” Muema says. The real estate developer says in current trends, demand for housing for high-end houses (Sh10 million and above) is low. This contrasts with demand for low end housing which is high.

Muema explains that this is because many people, from Saccos to Chamas have gone into real estate business and a glut has been created. Also the lack of credit from banks again has significantly cut down the demand.