An artist’s impression of the proposed Sh7 billion housing estate in Nairobi.
Nairobi’s property market has attracted a fresh Sh7 billion investment that is also expected to change the way Kenyans have traditionally built residential houses.
The development, to be located along Thika Highway near the Kasarani sports complex, will give Kenya its tallest residential apartments of up to 18 floors, setting it up to be among the most densely populated sections of the city.
The 41-acre estate will consist of 2,500 units with the capacity to accommodate 8,000 people and is mainly targeted at the lower segment of the middle class.
Commercial outlets
Residents will also enjoy the services of commercial outlets and shared social services such as recreation centres.
Its sponsors, the Kasarani Hills consortium, said work on the project that is expected to significantly bring down the cost of residential apartments in the south western part of Nairobi will begin as soon as the group gets the necessary approvals from environmental authorities.
Mairura Omwenga, a planner and lead expert in environment impact assessment, told the Business Daily that tall buildings are necessary if Nairobi’s housing market is to keep up with rapid population growth now estimated at 3.3 million. Mr Omwenga said high rise apartments have proved to be the most efficient way of maximising land use in densely populated cities around the world. “Nairobi is merely catching up with other cities where land price inflation has forced planners to opt for vertical expansion,” he said.
Key backers of the project include Shelter Afrique – the pan African real estate financier that has invested Sh600 million in the development in the form of a loan.
It was not immediately possible to ascertain the pricing of the homes but real estate dealers estimate that the land is worth Sh1 billion, meaning that the cost of land attributable to every unit stands at below Sh400,000.
It is the savings on land prices that is expected to give the developers headroom to sell the homes at a discount.
Developers say land accounts for up to 35 per cent of the total costs of homes in Nairobi.
More recently, exorbitant land prices have pushed developers to the peripheries of Kenyan towns where there is room to build single unit homes, commonly known as gated communities.
So far Nairobi’s Pangani estate has the highest residential apartments – the 12-storey Metro Fairview developed by Erdermann Properties.
The firm has announced plans to build a 25-storey residential complex in the city’s Kilimani area that will also house a Chinese Cultural Centre.
David Yang, a director at the Chinese-owned real estate company, said Nairobi, like most cities in the developing world, needs the highrise apartments to deal with the rapid rate of urbanisation to avoid a housing crisis.
“Land has become too expensive, making it difficult for developers to continue supplying low density housing,” said Mr Yang.
It is estimated that rapid population and incomes growth will remain key drivers of demand for housing in most Kenyan cities in the next couple of decades, making high-density apartments part of the solution.
“There will always be people who enjoy living close to the city for the convenience and would not mind living in highrise apartments,” said Mr Yang.
The Kasarani and Kilimani projects will feature one-bedroomed units, indicating that developers will be targeting entry level home buyers or young adults without families.
High demand for housing in recent years has continued to pile pressure on property prices, forcing the Nairobi City Council to remove restrictions on the building of highrise apartments in some up-market estates.
An acre of land in some parts of Nairobi is now priced at Sh100 million, making it the single most expensive input cost in property development.
Last week, City Hall announced that it was allowing developers to double the number of floors for residential houses in areas previously restricted to four floors to curb land price inflation.
Developers say increasing the number of floors should ease the total cost of building homes and make them affordable to more families. Nairobi has an accumulated housing deficit of two million units, according to government estimates.
A bigger concern for the city has been unplanned development in the recent past which has seen land under agriculture plantations claimed by real estate developers as the construction industry has since 2000 become lucrative.
The most notable real estate projects include the Sh240 billion Tatu City project, and slightly smaller Thika Greens and Migaa estates, which are jointly expected to sit on over 1,200 hectares of coffee farms.
This has sent a fresh wave of fears to urban planners who say that at the current rate of expansion, Nairobi is fast losing its food basket in the agriculturally rich Kiambu and Kikuyu areas while development in the inner city estates remained controlled.
Mr Omwenga said City Hall should take a proactive role in encouraging the development of high density residential estates to ease pressure on fertile agricultural land in the proximity of city centre.
Building restrictions
His views were echoed by Raphael Kazungu, a physical planner at City Hall who said that future reviews on building restrictions in Nairobi would be focused on gaining maximum utility from the available land to protect the agriculturally viable areas lying to the North and West.
“Future building reviews will seek to protect the agricultural lands which supply the city with milk and vegetables, otherwise Nairobi would have nowhere to turn to for fresh supplies of foodstuffs,” said Mr Kazungu. “I am sure the City Council will encourage better utility of the available land by raising the maximum heights allowed to more estates.”
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