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Secret behind Cytonn’s rise

REAL ESTATE
By Mkala Mwaghesha | April 28th 2016
Elizabeth Nkukuu, Chief Investment Officer, Cytonn Investment Management. (PHOTO: COURTESY)

In just two years, Cytonn has gained traction in the money market with its weekly market report, quarterly property index and business cocktail meet-ups. What is the secret that keeps the team on its feet?

First and most importantly, the partners are people that have worked together for more than five years, at our previous employer. We have brought that trust and skill set to Cytonn. We also make everyone here feel like they are part of a family by making sure they own shares of the company. Cytonn has an entrepreneurial culture that resonates from the top to bottom.

The Alma in Ruaka, Kiambu is the second mega housing project Cytonn has launched after Amara Ridge, Karen. How much do these projects cost and what other housing projects does Cytonn intend to introduce to the market?

Alma is a Sh3 billion project that will be completed in two years’ time. Amara was our flagship project, located in serene Karen and will cost Sh1 billion. There is an upcoming Sh4.5 billion, 30-acre Situ Village, also in Karen, that will be launched in June and put up in phases. There are other projects that are under review at the moment, and we expect to launch at least five other developments before the end of the year. We will put up projects in Kitale, Kisumu, Mombasa, Nanyuki and apartments in Westlands and Upper Hill. We are also looking at franchising; that is working with interested investors in the counties.

What gap does Cytonn seek to fill with these housing projects?

We have been looking at the market and the one thing that stands out is the home owners’ aspiration to live in a place that is more than brick and mortar. They want a house that is an expression of themselves. They want their children to go to a school that is close by, they want a club house and they also want a shopping center to be metres from their door step. One lesson we have learnt is that the real estate market is huge and opportunities are there. Gated communities are the real deal and we are out to capitalise on that.

What informed the decision to start Cytonn Real Estate as an arm of Cytonn Investment?

Cytonn Real Estate (CRE) was launched as the development wing almost the same time that Cytonn Investment came into the market-about two years now. It is just recent that is seems the wing is catching up, but it has been operational with about Sh50 billion of investment. We started CRE because we saw there was a need for market institutionalisation. Instead of partnering with developers like we used to do, we have now started working with developers we can control. The funds we have are investments from clients who expect yield, so we need to be more controlling with the investments.

There are claims that off-shore accounts have been replaced by real estate as the best option for money laundering. Do you have measures to deal with money laundering?

Through bank details and due diligence, we make efforts to know our clients and their financial history. But we have very little control when it comes to determining the source of one’s wealth. From what we have discovered, many buyers are people who do not buy houses by just one cheque but through monthly or periodic instalments. There are people who want to own a house but cannot do it in just one buyout. Eyebrows will only be raised when one person buys a whole block, but otherwise we have very little control.

So, who is Elizabeth Nkukuu, and how do you spend your time outside the office?

Liz is a career investment manager. I have done this for about 15 years now... since 2006. I did Actuarial Science at the University of Nairobi’s Chiromo campus, then proceeded to do my Masters in Finance, still at the University of Nairobi. I have a seven-year-old daughter, and my extra time is mostly spent with her. Right now, Cytonn is about work...work...work, so I have to fix her mummy time in between my work.

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