Kisumu city is experiencing a property boom that has seen land prices triple in value in some areas.
Investors in commercial and residential property have been trooping to the lakeside city in droves in a move that has seen an unprecedented rise in the value of land and housing units in and around the town.
Some of the biggest beneficiaries of the boom have been property agents and developers who have had to deal with rising numbers of clients looking for property to rent, buy, or develop.
Over the last three years, the number of registered property agents has risen from less than 10 to over 25.
Nickson Opande, MD of Opande Africa Investments, is a household name in Kisumu’s growing property business. The Business Daily met Mr Opande at his Kisumu town office where he shared his experiences of working in an increasingly competitive market.
“Kisumu is a growing market in terms of real estate and returns are very good,” he said. One can buy a plot today for Sh1 million and sell it after three months for Sh1.2 million or more, he added.
Mr Opande, who has been in the real estate business for 20 years, said he started off as a hawker before a friend introduced him to the real estate trade. “I started with rentals. I would walk around estates, door to door, and ask if there was a vacant house.
I then made a deal with the landlord to allow me find tenants for the house, at a small commission.” Mr Opande’s tenacity and reputation for honesty and hard work led to landlords seeking for his services. His main challenge was how to bring professionalism to the then informal practice.
“Then, I didn’t have an office. I used to meet clients at their premises or in restaurants,” he said.
“Many of my clients told me to open an office, but I thought it would mean a lot of expenses and limit my movements.” However, it soon became clear to Mr Opande that if he were to go professional, an office was mandatory.
He needed an office in order to make his practice more appealing to his growing list of clients who now included corporates.
“Since there are a lot of brokers coming up almost on a daily basis, investors are becoming more wary and want to ensure that they are not being duped,” he said. “The problem with working in this type of business is that there are a lot of crooks.
On several occasions I have had to terminate my agents’ contracts because they made deals using my company’s name then pocketed the entire commission.”
Ms Nishma Sedani, the proprietor of Lake Estate Agency Ltd, is one of the new kids on the block.
According to Ms Sedani, the Kisumu market has matured and buyers are now looking for modern houses.
“The recent interest in Kisumu’s property market can be attributed to the fact that many people now understand and accept the apartment concept. People know that they do not have to own a shamba in order to be home owners.
You can own space in an apartment put up on someone’s land,” she said. “This is evident from the number of apartment complexes currently under construction. Translakes Ltd, Kogelo Estates, and Diana Apartments are some of the multi-million shilling apartment complexes being developed within Kisumu region,” she said.
Ms Sedani said that the upgrading of Kisumu Airport to international status has led to increased investor interest.
“The upcoming airport has caused a lot of expectation among local business people and there are high hopes that it will open up the city to the international market,” she said.
To obtain a competitive edge over a crowded field, players in the property market are resorting to aggressive marketing practices.
Since July, the city has played host to two housing and property expos where different stakeholders are invited to meet the public and pitch attractive offers on both commercial and residential property.
Mr Opande, whose current project involves putting up gated homes in the up-market Tom Mboya estate, has taken his business online to net more clients.
“Real estate is very competitive and to break even you have to be strategic in your business model. For example, when I was starting out most agents in the market used to wait for landlords to approach them with property lists, but I went knocking on doors and ensured that I secured the property.
“It was tedious, but the strategy paid off in the long run and other agents started imitating me. I also created a website where my clients could see my work, which gave them some degree of confidence in dealing with me,” said Mr Opande.
Real estate agents are in agreement that demand for housing in Kisumu far outstrips available units. Aba Eban, a property agent, attributes this to cultural perceptions.
“Many people prefer to build permanent homes for sale or to settle in personally and not rental houses,” Mr Eban said. “It is difficult for young people moving out of their homes to get bed-sitters or one bed-roomed units to rent.
There is, however, some change as more developers set up rentals though the number of units still falls way below demand.”