Accountants Sacco in Sh2.3bn Runda housing project

Mhasibu Savings and Credit Society, a membership organisation for professional accountants, is set to break ground on a Sh2.3 billion real estate project in Runda that will make it one of the biggest developments by a Sacco.

The Sacco has plans to construct 226 housing units in Runda, according to regulatory filings seen by the Business Daily.

Isaac Kiragu, chairman of Mhasibu Housing Company and a director of Mhasibu Investments Company (MICL), both subsidiaries of the Sacco,estimated that each of the units will cost between Sh10 million and Sh12 million.

This means that the entire project could be valued at between Sh2.26 billion and Sh2.71 billion.

“We are almost done with the designs, after which the cost will be clear,” he said, adding that the houses will be taken up by the organisation’s members.

Mhasibu expects to break ground either at the end of this year or the beginning of next year.

The Sacco, has already made an application to the National Environment Management Authority (Nema) for approval to construct a road network, storm drains and a perimeter wall around a 70 acre piece of land purchased almost three years ago for Sh350 million.

According to the regulatory filing seen by the Business Daily, the Sacco has applied for change of use of the land from agricultural to residential and has registered Mhasibu Runda Holdings Limited, which is owned by its members, as a holding company for the land.

The regulatory filing shows the budget for the road network, storm drains and a perimeter wall which is the first phase of the housing project is estimated to cost Sh65 million and is expected to last a total of nine months while the second phase will be the actual building of the housing units.

“The units will comprise of residential buildings with a minimum of four to five bedrooms in each unit.

The residential areas will each have their own parking spaces aligned with the different units,” notes the regulatory filing.

The 70-acre piece of land borders Runda Estate to the south east, Tamarind Estate and Lost Paradise Retreat to the east and south east respectively and Kiambu to the north.

Other developments around the area include Fourways Junction, Runda Evergreen and Gigiri Estate.

Apart from the Runda development, the Sacco has also mobilised its members who have purchased two tracts of land of 120 and 102 acres near Ruiru for Sh228 million and Sh215 million respectively among others through its subsidiaries.

Deposits for the Ruiru land have been booked under assets in MICL annual reports for the periods ended December 2009 through 2011, while other assets have been booked under Mhasibu Housing Company.

MICL’s annual report shows that the investment company had assets worth Sh197.27 million compared to Sh69.34 million as at the end of December 2010 and raised its investments in land to Sh53 million from Sh5 million over the same period of time.

Investments
In August last year, the investments company facilitated the purchase and subdivision of 304 acres of land in Nyeri of which the sale of plots was expected to end this year and booked a commission of Sh13 million from the transaction.

The subsidiary’s accounts are not consolidated with the Sacco’s because the Sacco is governed under the Cooperative Societies Act, while the subsidiaries are registered and regulated under the Kenya Companies Act.

As at the end of last year, the Sacco had a total of 9,235 members, total assets worth Sh1.397 billion with member deposits totalling Sh1.158 billion.

The Sacco, which is, however, not under the supervision of the Sacco Societies Regulatory Authority (Sasra) because it does not offer front office services activities, had advanced loans to members amounting to Sh1.138 billion and had made investments worth Sh54.9 million.
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