City’s tallest apartments to dwarf KICC, Times Tower
HOME & AWAY
By Peter Muiruri | February 18th 2016
Q: What is a civil engineer doing in a bank?
A: Our recent restructuring has created subsidiaries that are in a position to access unrestricted capital and also enable investment in new ventures outside our core banking operations. One of the areas is the fast growing real estate sector where we want to tap into leveraging on our vast experience in funding the segment. I am here to work with a team that oversees this drive.
Q: You have placed a bid with Nairobi County to redevelop three sites in Nairobi. What does the deal entail?
A: Nairobi has been grappling with the issue of housing its ballooning population. There is no idle land in the city for development. However, the city sits on old estates within a walking distance of the CBD with a very low density. The county has been looking for partners in redeveloping these estates.
We bid for three sites, namely Old Ngara, New Ngara and Jevanjee estates. In New Ngara, we propose to erect high rise flats comprising 1,213 units, 926 units in Old Ngara and 1,672 units in Jeevanjee – all at a cost of Sh25 billion. However, these are proposals at this stage. If given the opportunity, we shall be sitting with all relevant partners and stakeholders to configure the final projects scope and details before implementation.
Q: The designs in your bid documents show that the redevelopment will consist of 40-storey residential apartments, or the tallest structures in East Africa. Why this height?
A: Well, this is the way to go in many parts of the world. Those who travel know that this is how people live in New York or Dubai. There is no reason why you cannot have your home on the 35th floor of a building. Remember too that land is a scarce commodity in the city. If we erect units similar in size to the current ones that will soon be demolished, we will not be solving the housing problem.
The only way to go is up. In line with our support for sustainable architecture, we are designing the buildings with a view to installing solar panels on the walls and not just on the rooftop. That way we will harness solar energy from all angles. The proposed project will be made as green as possible.
Q: That is a big project with an equally huge cost. Will KCB go it alone as far as financing is concerned?
A: No, we too will need financial partners. Money is generally expensive locally and hence the need to look outside the country for partners and cheaper funds. One of the countries we will be considering is Brazil. The South American country has had good success in financing the development of social housing.
Besides sourcing for funds, the tour to Brazil together with KCB Developers Club members will enable local developers visit an expo on building materials to be held at the end of this month and beginning of March.
Q: Why did KCB decide to get into property development and management?
A: As you are aware, Kenya continues to suffer an acute shortage of houses for the expanding population. We do not just want to finance developers but also partner with other entities such as county governments, individuals with reasonably sized and well located pieces of land and Saccos in supplying units.
I want to be clear that we shall not be competing with the same developers we finance as we shall be undertaking large scale projects and thus closing a gap that has existed for long in supplying housing units. Such a move will not only provide access to home ownership but also grow our mortgage portfolio.
Q: Which segment of that market will you be focusing on?
A: We are in a position to supply homes in all levels. However, more focus will be on the middle and lower segments since that is where the biggest deficit lies. We are also guided by our customers’ banking trends. We evaluate their saving styles and determine how much they are able to pay in terms of mortgages. So it is right to say that it is our customers who are leading us in identifying the niche market to exploit.
Q: Social housing has faltered in the past as undeserving individuals were irregularly allocated such houses. How will this project be different?
A: Together with the county government we will be involving current residents in every decision making process before any construction can begin. The residents have been involved at this early stage of project scoping and this will be a continuous process. At the end of the project, such residents will get the first priority when it comes to allocation. As for affordability – and this is for this and all other projects we will be involved in – we will ensure that we maintain the same price from beginning to the end of the project since fluctuating prices is a key factor in locking many out of home ownership.
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