Kiambu project stalls after Shelter Afrique freezes Sh550m loan

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Shelter Afrique said this week Kingspride Properties, the project developer, did not comply with the lender’s financing standards.
The suspension of financing has left the project’s completion in limbo, and homebuyers who had committed deposits in off-plan purchase agreements staring at losses.

Pan-African housing financier Shelter Afrique has halted a Sh550 million loan to a Nairobi-based developer for a 240-apartment residential development in Ruaka, Kiambu County, leaving home buyers fretting over the future of the project.

Shelter Afrique said this week Kingspride Properties, the project developer, did not comply with the lender’s financing standards.

The suspension of financing has left the project’s completion in limbo, and homebuyers who had committed deposits in off-plan purchase agreements staring at losses.

“Shelter-Afrique as a responsible lender only grants loans under very stringent terms and conditions and if any of such conditions are not satisfactorily addressed or met, loans are denied,” said Shelter Afrique in response to the Business Daily queries.

“This is in line with the international lending standards that we strictly adhere to as an institution.”

The planned development, dubbed Glenwood Gardens, features a mix of two and three-bedroom units with the cost of the units starting from Sh5.5 million. It was initially due for completion in July 2017, having broken ground in early 2016.

Kingspride Properties chairman and chief executive David Karau linked the project’s delay to the cancellation of the debt financing deal.

“We got a challenge with Shelter Afrique, but we have identified and agreed with another financier and are in the process of formalising the same,” he told the Business Daily, without divulging additional details of the new financier.

Shelter Afrique had said the project would support affordable housing plans in the partnership with Kings Pride totalling Sh2.6 billion in projects in Ruaka and Kiambu for 440 units.

Among these projects was the Glenwood Gardens project, which was to account for 240 units.

The property market has, however, been struggling in the past few years due to difficulties by developers in disposing of new units amid an oversupply of both commercial and residential spaces.

These struggles have been worsened in the past year by the Covid-19 pandemic, which has caused job losses, loan defaults and reduced income, thus bringing lower demand in the property sale market.