For nearly a year now, the infamous hammer has not landed on the majority of hotels put on sale.
This has left auctioneers stuck with scores of prime properties that now dot newspaper advertisements every week.
And as the Covid-19 economic fallout rages, auctioneers are only getting busier as banks fight to recover defaulted property loans.
In February, Garam Investments Auctioneers, one of the country’s top auction firms, announced the sale of the six-storey Roof Garden Hotel in Machakos, which is linked to Kanu-era minister Gideon Ndambuki.
Ten months later, the hotel, which was being sold to recover a Sh80 million loan owed to Housing Finance, is yet to find a buyer.
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The struggle to sell it has now changed hands with another auctioneer appointed to cash in on the facility sitting on 0.04 hectares.
Garam Investments had said the hotel could return a Sh1 million monthly income.
Legacy Auctioneers - the new seller - is projecting that the hotel is set to return a monthly income of Sh980,000, a reduction of Sh20,000.
In the conditions of sale, Legacy Auctioneers says the bank “is willing” to finance the highest bidder if they meet the conditions of credit facility.
Efforts by Home & Away to reach Garam Investments were unsuccessful.
Back in early March, Garam Investments Managing Director Joseph Gikonyo told Home & Away that selling property was proving hard.
This was on the back of an economic slump spilling over from 2019. The Covid-19 impact was just around the corner and even before then, the auctioneer admitted that disposing of the property was challenging.
“Selling will take longer. We have to keep trying,” said Mr Gikonyo.
He said household goods such as cookers and fridges were the only fast-moving items at auctions since they do not require much capital.
A limiting factor for the auctions, however, could also be a recent law that seeks to protect property owners, dictating that assets sold at auctions cannot be sold at under 75 per cent of the market price.
Hotels have been the biggest casualties of the coronavirus pandemic with their mainstay – tourism, events and conferences – drying up owing to restrictions in travel and other measures meant to curb the spread of the disease.
“We lost 50 per cent of our revenue of Sh160 billion with the second half of the year being as good as zero,” said Tourism Cabinet Secretary Najib Balala in August.
The industry has recorded millions of job losses, shut down and auctions.
The Nairobi Upperhill Hotel, valued at Sh500 million in 2015, has also been in the market since February.
Garam Investments put it on sale in a bid to recover a debt owed to the National Bank of Kenya (NBK). It said the hotel has a Sh5 million gross monthly income.
In August, two three-star hotels in Nairobi were put on auction, indicating the severity of the Covid-19 pandemic on the hospitality industry.
Banks hired auctioneers to dispose of the Laibon Hotel in South B and the Hotel Grace Villa and Guest House in Ngara.
Garam is seeking Sh112.5 million for Hotel Grace Villa and Guest House that is located near Jamhuri High School along Limuru Road
Grace Villa is estimated to return a monthly rent of Sh1.2 million. It has shops at the front, butchery, bar, restaurant, meeting room, 11 guest rooms, servants’ quarters and a proposed club fitted with sound-proof walls on the stage.
Kenya Shield Auctioneers sought between Sh175 million and Sh190 million for the six-storey Laibon consisting of 56 rooms, a bar, restaurant and offices sitting on 0.115 acres.
Legacy Auctioneers have also put on auction a commercial property that houses the Kisiwa Boutique Hotel in Mombasa. It has an estimated monthly rental income of Sh499,500 or Sh5.9 million annually.
Another hotel in the market for long and proving a hard sell for Valley Auctioneers is the Northgate in Makuyu that sits on 0.456 hectares.
Guesthouses have also not been spared, such as the Wilcah Resort Bar and Restaurant in Njabini, Kinangop 0.047. The facility is a three-storey commercial block with shops and accommodation rooms and was put under the hammer by Antique Auctioneers.
This year has seen more properties going under the hammer with even the six pages in the local dailies on Mondays and Tuesdays filling up with bidding announcements by auctioneers.
Prime residential properties and apartment blocks in areas such as Ruaka, Kilimani and Mombasa are some of the assets being auctioned.
But auctioneers have also been struggling to sell other prime assets including beach properties, a three-bedroom villa at the prestigious Great Rift Valley Lodge, a penthouse at The Mirage in Westlands and a section at the NextGen Mall.
Official data shows that defaults on mortgage loans advanced by banks have been on the rise.
Default on mortgages increased 41 per cent in the year to December 2018 to Sh41 billion from Sh27.3 billion in 2017, according to the Central Bank of Kenya data.
The rate of defaults on mortgages is higher compared to other loans by banks, which stood at 12.3 per cent in 2018.
Distress for rent is also featuring prominently in the auctions.