Wednesday, 16 January 2013

Kajiado county basking in real estate boom

Kajiado county has emerged a huge real estate beneficiary owing to numerous proposed and existing universities, the unveiling of the planned Konza Technocity and a devolved governance system now taking shape.

Speculators are buying and holding huge chunks of land in the hope of making a kill out of increased demand for property developments.

Kitengela, in Kajiado North, and Isinya District have in particular gained from their proximity to the Konza City site whose economic benefits are expected to trickle down to these areas.

The county is host to established universities such as Africa Nazarene. Kampala International University is partnering with East African University to operate a campus in Kitengela while KAG EAST University is now up. Hindu University is expected to be built in the vast plains of Kitengela.

Land buyers around these institutions are betting on expected increase in demand for rental accommodation for staff and students. The huge demand has seen a number of ranches sold to land dealers who subdivide them into smaller parcels for onward sale.

“Most of the land transactions in Kajiado are through companies that acquire huge tracts and then subdivide into plots for sale,” said Charles Angira, the director of planning at Ol Kejuado County Council.

Huge residential estates have also taken shape notably with Jamii Bora Makao’s Kisaju View estate targeting first-time buyers jumping on to the property ladder. CIC Insurance Group has announced plans to acquire 417 acres in Isinya at a cost of Sh723 million on which it will put up a mixed-use development.

But as relatively cheaper prices for land attract speculators and developers in droves, Kajiado county is now struggling with a physical planning nightmare as investors leave inadequate space for development of basic infrastructure.

The local authority suspended subdivision of land late last year to tame uncontrolled development in hotspots such as Kitengela, Ngong, Ongata Rongai, Kajiado, Isinya and Kiserian, which are top preferred dormitory estates for Nairobi’s working class.

The council wants to map the areas for physical planning purposes, a process expected to take several months.

A high interest regime since October 2011 has however slowed down land transactions as potential buyers shunned bank loans.

“This has in essence stabilised land prices because many buyers in these areas depend on bank financing and have retracted to wait for cheaper credit before investing,” said Michael Kiarie, the managing director of Premier Realty.

“There is also the factor of the general elections which has seen some investors hold on to their money. As soon as the elections are over without a hitch, the prices are likely to sky-rocket,” he said.

According to Ol Kejuado County Council, the rapid development in the county has been occasioned by a population spill-over from Nairobi. It has however warned that haphazard development would affect property values on the long-run due to lack of trunk services such as sewer lines and roads.

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