Real estate firm eyes first-time home buyers with Sh1m units

What you need to know:

Sh400 million apartment block in Mlolongo, Machakos, would be ready in January next year and its Sh1.1 billion project on Ngong Road by November 2015.
The two projects’ combined 670 units will be built on a six-and-a-half acre piece of land.
Real estate developers have mostly been targeting the high-end of the market but there is a gradual shift to the mid and lower market which is starved of affordable units that still offer high quality features.

Peninsula Development Company is preparing to roll out apartment blocks worth Sh1.5 billion over the next year targeting first-time home buyers with units costing as low as Sh1 million.

The real-estate firm said its Sh400 million apartment block in Mlolongo, Machakos, would be ready in January next year and its Sh1.1 billion project on Ngong Road by November 2015.

The project is the brainchild of architectural firm Adventis Inhouse Africa which was project adviser on the Jomo Kenyatta International Airport greenfield terminal and Jacaranda Gardens on Kamiti Road. It also designed factories for Kwale International Sugar and Savannah Cement.

Muchiri Waititu, a director, said the firm is targeting first-time home buyers by putting up, one and two-bedroom apartments priced at between Sh1 million and Sh8 million.

“We want you to be paying the same amount on a mortgage as you would pay in rent,” Mr Waititu told the Business Daily in an interview.

Joint ventures

The two projects’ combined 670 units will be built on a six-and-a-half acre piece of land. The company is developing the properties through joint ventures with landowners and the financier Co-operative Bank.

Real estate developers have mostly been targeting the high-end of the market but there is a gradual shift to the mid and lower market which is starved of affordable units that still offer high quality features.

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Ample parking, a swimming pool and CCTV surveillance are some features Mr Waititu said the projects plan to have.

Home Afrika, which is raising Sh900 million through a corporate bond, projects that the mid- and low-income market segment would contribute the lion’s share of new houses market over the next two decades.

“With increased investment from private sector and different incentives put in place by the government, it is estimated that a total of 4.3 million housing units will be produced between 2008 and 2030. Of these, 2.2 million units representing 52 per cent of the total will be for low-income urban households,” says Home Afrika information memorandum on its bond issue.