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Kenya's property market going South East
As developers rush to meet the swelling demand for afforadble housing, Athi River is turning out to one of the most attractive areas for developers.
There is a growing appetite for residential development land in areas surrounding the city spanning as far as Ruiru, Ongata Rongai and Limuru.
“There’s high demand for low middle-income housing in far-flung Nairobi’s metropolis as tenants opt for cheaper units in the wake of the prevailing high cost of living and uncertainty in the economic environment,” said realtor HassConsult in its third quarter report for 2019.
As a result, many residents have been pushed to live outside the city for cheaper rents.
Of key interest in these satellite towns is Athi River, a burgeoning industrial town about 25 kilometres south of Nairobi.
According to Cytonn Investments, the town has grown rapidly due to a number of factors including its administrative role as the headquarters of Mavoko Division in Machakos County.
The town is also just an hour’s drive on average to the Nairobi’s Central Business District, making it an attractive for the city’s working population.
Its expanding industrial and manufacturing base attracts low-skilled workers from all over Kenya and has become one of the fastest-growing municipalities in the country.
“The land is also relatively affordable with a price per acre of on average Sh4.1 million compared to other satellite towns such as Juja, Ruiru and Ruaka,” said Cytonn in its Nairobi Metropolitan Area Land Report 2018.
Increased budget allocation towards affordable housing under the Big Four agenda - raised to Sh10.5 billion from Sh6.5 billion the previous financial year - is also expected to boost the residential sector in Mavoko.
Continued provision of infrastructure in satellite towns has boosted their property prices as well as the growing demand for affordable units, leading to a relatively high price appreciation.
Cytonn’s real estate annual markets review for last year indicated that Athi River was one of the best performing areas with high total returns for investors.
“Runda Mumwe and Athi River were the best performing nodes overall with average total returns to investors of 7.6 per cent and 7.1 per cent, respectively, evidenced by the relatively high uptake of 22.7 per cent and 20.7 per cent in comparison to the market average of 19.3 per cent,” the report said.
The town has in the past three years attracted a lot of developers, despite the gloom in the property sector.
One of the latest is a joint venture between a Singaporean real estate firm, Singapura Developers, and Habitat Housing Cooperative Society that is building 8,888-units on a mixed-use development.
The project, known as Habitat Heights, will host residential units ranging from studios to one, two and three bedroom units. It will also have retail shops.
“We see Kenya as a big market based on the growing middle class and also a high number of expatriates,” said Habitat Heights Chairman Maheshwaran Kumar.
In March last year, housing financier Shelter Afrique and Karibu Homes launched a Sh355 million residential development in Athi River comprising of 288 units.
Other real estate projects in the town include Gateway Garden, Safaricom Staff Pension Scheme’s Sh4.4 billion Crystal Rivers Mall and Gated Community that sits on 25 acres and the Athi River Green Park Estate by developer Superior Homes.
Erdemann Properties, a Chinese firm, has the Greatwall Gardens project that is now in its third phase.