The Kenyan property market is steady

Ian Henderson: The future of the property market looks bright because of the huge housing deficit. (PHOTO: COURTESY)

You have announced plans to put up a lodge in Elementaita. What informed this move?

Every business would want to diversify its products to increase revenue streams. We also want to take advantage of Kenya’s tax regime that currently gives some incentives to developers venturing into the hospitality industry.

What is the scope of the new project?

Elementaita Mountain Lodge will consist of 50 rooms on 12 acres overlooking the scenic Lake Elementaita in the Rift Valley. There will be a bar and a restaurant and a conference facility for at least 40 people. The project will start on June 13 and take one year.

There are just too many lodges in Kenya, more so in the Rift Valley. Does adding one make economic sense?

The more the merrier. Experience has shown that Kenyans are willing to pay for a quality product which is what we want to provide. In fact, our main targets are locals considering the fluctuation in the global tourism market. It will be a high end facility but affordable to Kenyans.

Away from the new lodge, what is the progress at Superior Homes in Athi River?

Greenpark is a 163-acre housing development launched in 2004. We have since completed 450 houses in five clusters. This is about 70 per cent of the venture and we expect the remaining 200 units to be complete by 2020. We now have two schools and a Sh150-million recreational centre known as Sundowner. It is open both to residents and all Mombasa Road users and beyond. A modern, all-inclusive shopping complex is set to be completed by 2017.

Prospective buyers were skeptical when you began the project 12 years ago. Has this changed?

You just need to look at price appreciation over the period. The four-bedroom bungalows were released into the market in 2006 at Sh3.98 million each. That is now Sh18.4 million. The larger four-bedroom villas were released into the market mid 2015 at Sh31.9 million. Within one year, they have appreciated to Sh36.7 million.

That means the mythical bubble is not about to burst yet...

What bubble? Kenya’s property market is steady and on an upward trajectory. The industry is driven by Kenya’s growing middle-class, with demand for value. The future of the property market looks bright because of the huge housing deficit.

But you had launched Greenpark as residences for the middle-class yet the current prices are way beyond this segment...

Yes, our target was the middle-class, but with the steady increase in prices and value over the years, we do recognise the need to now launch a new development with housing prices of between Sh6 and Sh10 million targeting the growing middle-class and hoping the price of land and materials does not escalate.

Will you be moving to the counties any time soon?

Why not? Superior Homes can tap into the positive brand and spread its footprint in other counties.