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Economy

Property developers scramble for land away from congested Mombasa Island

A restaurant on Vipingo Ridge golf course. Analysts say investor flight will diminish the role of the congested island town in driving the region’s economy. Photo/LABAN WALLOGA
A restaurant on Vipingo Ridge golf course. Analysts say investor flight will diminish the role of the congested island town in driving the region’s economy. Photo/LABAN WALLOGA 

Shortage of land on Mombasa Island is turning off property developers and opening up opportunities for the investors in other regions of the Coast — a move market analysts say will diminish the role of the congested island town in driving the region’s economy.

The value of land in neighbouring Mtwapa and Kilifi has doubled in the past two years as both high and low end property developers scramble for land in the area. Most investors buy huge tracts of land which they subdivide into small plots for sale.

“This is the only area where affordable land is available for various uses, attracting those interested in property development including agricultural and manufacturing companies,” said Mr Mwenda Thuranira, the Kenya Property Developers Association Coast branch chairman and managing director of Myspace Properties Ltd.

An acre of land near Mtwapa, on the way to Malindi, costs Sh1 million, said Mr Thuranira. The same parcel of land was valued at Sh600,000 about two years ago.

A recent UN report says Mtwapa is the fastest growing town in East and Central Africa.

The fact that manufacturers are setting up plants at the coast has played a hand in the rising price of land in Mtwapa and its neighbourhood.

Mr Paul Kinoti of Coral Property Consultants said that investors were increasingly buying land in the area to put up factories.

Coca Cola’s Coast Bottlers Limited recently shifted operations from Mombasa Island to Mtwapa.

Tororo Cement and Export Processing Zone based companies such as Umoja Rubber have also set up factories in Mtwapa in the recent past.

Milly Fruits, makers of Picana Juice, have also put up a processing plant in the town.

Also, Mtwapa town is cosmopolitan and has attracted many migrants due to its relative tranquillity, Mr Thuranira said.

For instance, the town’s residents were not affected by the 1997 to 1998 Likoni violence.

Other than upcountry people, the town boasts of multinational residents especially Germans.

It also boasts of a 24-hour economy based mainly on entertainment, which continues to attract both locals and foreigners.

Cutting costs

The low cost of putting up houses in the area, according to Mr Thuranira, has played a hand in attracting hordes of investments.

Building stones and ballast are acquired from nearby Kilifi, while sand is harvested in Malindi making Mtwapa the most ideal location for investors keen on cutting construction costs.

One of the high-end estates coming up in the area is Vipingo Ridge, which is about five kilometres from Mtwapa town.

Vipingo Ridge investors acquired 2,500 acres of land and subdivided it into one acre plots which were sold at between Sh15 million and Sh20 million each, depending on location. A good number of the buyers have already built maisonettes on the parcels of land.

“This project has brought about clients that Mombasa needs to move forward,” Mr Thuranira said.

Vipingo Ridge investors, he said, have since 2006 invested over Sh800 million on roads, electricity, and an air strip, among other infrastructure.

The estate hosts one of the best golf courses in Africa.

Nyali Estate, one of the most affluent in Mombasa, is also going through fast-paced growth, with high-rise apartments coming up.

The trend has unsettle a section of residents who see it as a threat to their privacy.

Older residents prefer their detached villas and maisonettes, with landscaped gardens, to the emerging high-rise apartments.

Nyali, which has for many years been a hot cake for investors keen on building homes, is attracting a new breed of entrepreneurs who are more focused on commercial activities.

Property developers, architects, doctors, information technology companies, shipping lines, construction firms and hardware dealers have already established bases in Nyali.

Last May, Housing Finance launched its first commercial property venture in Mombasa — a Sh180 million office complex in Nyali.

HFCK managing director Frank Ireri said the construction of the six-storey block, Links Plaza, was aimed at reducing pressure on Mombasa Island and providing convenient office space.

“Due to population growth, Mombasa Island has become crowded and there is need to move out of town so that services are not stretched further. This is happening in Nairobi where offices are moving out of the central business district,” he said.

Another high-end residential housing project in Mtwapa is funded by Mtwapa Height, a pension fund which Mr Thuranira said was putting up over 166 maisonettes and apartments valued at Sh1 billion.

Property development in and around Mtwapa has transformed the town into a major commercial hub.

Financial institutions such as Equity Bank, Co-operative Bank, Kenya Commercial Bank, and K-Rep have, in the past few years, opened branches in the town.

Major supermarkets such as Tuskys have also opened branches in the town, which has also attracted other service providers.

International money transfer firms MoneyGram and Western Union have also set up shop in Mtwapa, boosting the flow of foreign currency into the town.

As a result of the scramble for Mtwapa, the value of land has grown in leaps and bounds.

Location

Depending on the location of plots, a quarter acre of land costs Sh3.5 million, up from Sh1.5 million two years ago, while a 50×100 feet plot costs Sh2 million, from Sh850,000 two year ago, according to Mr Genson Kamau, a land agent.

Rent has risen by more than 40 per cent in the last one year, currently ranging between Sh10,000 and Sh12,000 for a one bedroom house and Sh15,000 to Sh20,000 for a two bedroom house.

However, the town’s biggest undoing is unplanned growth. Until four years ago, social services in the town were virtually nonexistent because Kilifi Town Council has little control over the town’s growth. The council does not own any property in the town that it administers.

The Local Government ministry, together with the council, has developed the Digital Mapping Strategic Urban Development Plan for Mtwapa town which was launched last year.

One of the options the council might explore includes demolishing houses that do not conform to the town’s plan, some of which stand on access roads.

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