‘Nairobi home buyers have no space to jog’

Sultan Palace General Manager Liu Tiancai. PHOTO: WILBERFORCE OKWIRI

What is your impression of the various African societies?

Many say Chinese are fast and hardworking, but I find Kenya’s workforce just as fast and eager to learn. I worked in Namibia as a site manager for two years. I have also worked in Mozambique, Tanzania, Rwanda and Uganda. Namibia, where I stayed for long, is a very cultured society with a keen eye on detail. And with a population of about two million, it is like a small European town.

From the clients you have interacted with, what would you say about Kenyans’ buying habits?

Kenya is full of investment-oriented people. The big businessmen and professionals put their savings into listed properties while the working class buys small plots back in their hometowns and emerging areas. That is the one thing I love about the Kenyan society and the reason we invested in Kenya. Kenyans’ investment culture sets the country apart

Your company is investing in real estate in the country despite reports of a slow-down in the high-end segment of the market. What opportunities are you seeing beyond the current situation?

We are in the very initial stages of setting up a 7.5-acre project in Nairobi. Before we came into the market, we did a lot of research. From our findings, and mostly Hass Consult reports, there were reports of slowing down of the apartments’ market because of oversupply. But we are seeing a huge opportunity. Indeed, there are a lot of apartment projects, but most of them are not that advanced. To be honest, they are not that good.

What do you mean by “good” in this case?

Apartment blocks in upmarket areas of Nairobi rarely have recreational spaces. The developers need to do more. Most apartment developments I have seen are on no more than half-acre or one acre. Apart from the building and the parking lot, there is really not much left - no space for jogging or playground for the children.

Isn’t that also a challenge back in China given its big population?

In China, all car parks are in the basement and no car is allowed to park on the ground floor. The ground floor is reserved for recreational facilities such as basketball, playground. All the projects I have come across in China with these concepts, especially in suburbs, are doing very well. They are meeting market needs. Home buyers just don’t want a place to sleep, they want a living space where they can relax or do some little jogging and socialise. That is the same concept we are hoping to achieve with our Nairobi project.

Nairobi has had its fair share of land problems from speculation, disputes and illegal transfers. What has been your personal experience?

Land prices are awfully high. The average price per acre is Sh500 million within the Westlands and Kilimani suburbs. Land prices in these areas account for about 40 per cent of the total cost of construction. Developers are therefore forced to maximise the use of space to recoup their investment.

There are two kinds of “China” in the Kenyan narrative. The first kind is associated with “sub-standard” products, while the second narrative acknowledges the existence of the former but with a hopeful “it depends on where you are buying”. Is it always easy to differentiate between the two back home?

Trust me, we are having the same problem in our Kikambala site of Sultan Palace. Quality of materials in the exterior and interior of units remains quite a challenge. However, we do insist that our clients visit the site before making a purchase. When it comes to customer satisfaction, it is rarely about the Chinese factor; the same problem exists in India. The real problem is the ability of the developer to deliver on time and picking the right partners to accomplish the project.

Most of developers’ woes revolve around local authorities and the huge investments they have to make in infrastructure at their own costs. How has it been for you?

The County Government of Kilifi has been very helpful in the introduction to the locals and solving various disputes that have arisen along the way. There have, however, been delays caused by public officials who want kickbacks, especially in the approval processes.

Where have you experienced corruption personally?

I do not mean to tie this to any of our projects, but getting documentation and approval of building plans in some local government offices is proving to be quite a challenge. Many foreign investors I know have moved to either Ethiopia or Tanzania, which have shown political commitment to zero tolerance against corruption.