Furnished apartments compete with pricey big hotels

By Harold Ayodo

Modern furnished apartments are the in thing in the multi-billion residential real estate sub-sector. Private developers are fast embracing the constructions, which earn them more monthly returns compared to rental units.

Kabarnet furnished apartments off Ngong Road in Nairobi.

The modern apartments do not only target upmarket areas like Westlands, Riverside Drive, Kileleshwa but a number of them are coming up in middle income areas too such as along Mombasa Road. Experts in real estate say the furnished apartments, though expensive at the beginning, are more profitable in the long run.

A home in an upmarket neighbourhood that would ordinarily rent at Sh60,000 per month, for example, fetches Sh120,000 over the same period, if furnished.

The concept of furnished apartments is not only catching on in the city but other major towns including Mombasa and Kisumu are also setting up low cost furnished apartments.

Competition

The new developments are set to create a showdown in the hospitality industry, as they compete with hotels over clients.

King George Apartments in Mamboleo in Kisumu, for instance, charges a paltry Sh3,000 per night for a two-bedroom unit. The furnished apartments also target expatriates, tourists and families on holiday.

On realising that they can convert their rental units to furnished apartments, some landlords hurriedly serve notices to tenants to vacate their premises.

A sitting room in one of the apartments.

King George Apartments’ Manager Seth Midigo says they served tenants with notices to vacate before refurbishing their property in the leafy suburb. "We had problems with tenants who never paid as per the lease agreement leading to unending court cases over defaulting," Midigo says.

According to him the furnished apartments generate more profits than their earlier rental units.

"Tenants paid Sh8,000 per month for our two bedrooms and Sh13,000 for three bedrooms," Midigo says. The furnished apartments now fetch Sh3,000 per night, which translates to Sh90,000 per month for one unit only, if they are occupied every night. Their offers are luring clients from classy hotels in the area which charge at least Sh3,500 per person for bed and breakfast.

Some apartments even give a package of Sh10,500 for visitors who stay for seven days, which is far below what hotels charge. Proprietors of the apartments, however, have to put in structures to ensure the maintenance of the property.

Complete privacy

Dining area in a furnished apartment. PHOTOs: Jeniffer wachie and titus munala/STANDARD

"Visitors pay a deposit which, is refunded after we establish that there is no damage or missing property," Midigo says. The growing clientele for the furnished apartments give a number of reasons for their shift from five-star hotels.

Take the case of Natasha Kimani who spent the December holidays with her family at a furnished apartment in Kilimani, Nairobi.

"There is the feeling of family in staying in an apartment where I still prepare meals the way I do in our home in Nyali, Mombasa," Kimani says.

"The apartments are a good break from hotels where the service may be good but with no privacy since meals are served in a common dinning area," Kimani says.

She says playgrounds in the apartments are good for children who make new friends with peers from other families on holiday. "A furnished apartment is just like your own home…it is only different in that you leave the furniture behind for the next guest," Kimani says.

Henry Swan, an Australian tourist says that the low cost has made him book a furnished apartment.

"A tour firm I called from Australia gave me the option of the apartment in Westlands and I resolved to give it a try…No regrets yet," Swan says. He argues that he would otherwise have hired three hotel

A bedroom in one of the houses in Kabarnet apartments

rooms for his family.

"We are staying in a three-bedroom apartment for two weeks and my calculations show it’s far cheaper than a five-star hotel by over three times," Swan says.

Local and foreign tourists end up saving a lot given that most hotels and lodges charge an average of Sh20,000 full board for two and half of that full board for single occupancy. Property agents say an increasing number of clients are booking the apartments from abroad either by telephone or online.

Short stay

Mentor Group marketing executive Louis Agili says expatriates who cherish privacy adore the apartments because they are spacious. "Most of the apartments in high-end areas are spacious and have modern architectural designs which, include full size windows," Agili says.

King George Apartments in Mamboleo, Kisumu.

He says tourists and expatriates who want to stay for shorter periods and do not want the hustles of rental units opt for furnished apartments.

"The expatriates do not want the hustles of shopping for furniture that will give them a headache to dispose off after their short stay of say six months," Agili says.

Tysons Limited Marketing Assistant Dan Arum says their clients prefer the apartments for what he terms community living.

"Furnished apartments concept is borrowed from the West where families book them on vacations to maintain their unity," Arum says.

Arum says tourists book the furnished apartments two to three months in advance before high season.

"Some of the apartments are serviced meaning the occupants have helpers who cook and wash for them during their stay," Arum says.

Brooks Estate Agents Limited partner Edwin Tubei says the increasing cost of land has also encouraged private developers to buy old property, pull them down for apartments. More of the high-rise buildings are coming up along Lower Kabete Road where Garden Apartments and Nuriana Park are under construction.

Other such developments in Nairobi are along Brookside Grove, Muguga Green, Chiromo Road, Ring Road Westlands, Matundu Lane, School Lane and Brookside Drive.

According to Tubei, investors must go an extra mile to furnish their apartments to convince clients to part with the high charges.