This archive report was first published on 15 August 2019.
Developers in Kenya are defying market sentiments with new and bigger projects breaking ground almost daily. The latest developments include Centum Real Estate's Riverbank Apartments, a 160-unit project within the Two Rivers development complex near Nairobi's Blue Zone.
Construction of the first phase of the project, comprising 80 units, commenced in late July 2019 and is expected to be completed within 24 months. The project aims to capitalize on the buzz created by Two Rivers, the region's largest mall.
Another notable project is Erdemann Properties' Phase Three of the Greatwall Gardens in Athi River, which will feature 288 units priced at Sh2.9 million. The project is touted as a flagship Affordable Housing project in Athi River.
Actis, a leading growth markets investor, and Shapoorji Pallonji Real Estate from India have also launched a Sh12 billion joint venture to deliver over 2,000 residential units. The first segment of the project is set to commence construction in the third quarter of 2019.
Accor Hotels has also announced the entry of the first M Gallery Hotel Chain Collection in Gigiri, Nairobi, which is expected to be opened by the first quarter of 2021. The hotel will be developed in partnership with Jit Group, a local investment firm.
Despite the optimism, the real estate sector in Kenya continues to face challenges, including skyrocketing construction costs and shrinking bottom lines. The sector has accumulated the highest stack of non-performing loans, with financial institutions giving it a wide berth.
According to the Central Bank of Kenya's Quarterly Economic Review, the bad loans book had increased by 15.8 per cent by the end of 2018.
However, some developers remain optimistic about the sector's prospects. Samuel Kariuki, Managing Director of Centum Real Estate, believes that their new Two Rivers housing project has all the parameters of a profitable venture.
