Real estate developer Mi Vida Homes has sold 200 units to an unnamed institutional investor at its affordable housing project dubbed 237 Garden City in a deal estimated at Sh1 billion.
Mi Vida did not disclose the value of the transaction but the buyer signed an agreement to buy 100 units of one-bedroom apartments that are selling at Sh4.2 million each.
The investor is also acquiring 100 units of two-bedroom apartments priced at Sh6.4 million each.
“This transaction underscores the investment potential for institutional-grade affordable housing in the Kenyan market and the opportunity to scale up such developments through structured offtake mechanisms that address market risk for developers,” Samuel Kariuki, Mi Vida Home’s chief executive, said in a statement.
Mi Vida’s 237 Garden City is in the groundbreaking stage, with the block purchase representing the sale of a third of the total 600 units on offer.
The buyer of the 200 units will hold the units for rental income targeting middle-class tenants in the project located off Thika Road in Nairobi.
More than 85 per cent of middle-income families in Nairobi live in rented houses, pointing to the opportunity for homeowners.
A survey by real estate and investment firm JLL Africa shows that 439,051 households out of 513,755 lived in rented units by the end of 2021.
The high number highlights the financial difficulties facing middle-income Kenyans in a bid to buy land and build homes or buy completed units.
Rental charges in Nairobi vary widely based on location, size of house and number of bedrooms as well as additional amenities offered such as swimming pools and gyms.
Westlands has the highest monthly rents for apartments in Nairobi amid high demand from middle-income Kenyans and expatriates, offering property developers lucrative returns.
The JLL Africa report shows the monthly rent for one and two-bedroom apartments in the suburb range between Sh65,000 and Sh110,000.
Three-bedroom apartments in the area rent for between Sh70,000 and Sh140,000.
Mr Kariuki said the block sale at 237 Garden City demonstrates the opportunity to attract global capital to play a dual role in the demand and supply of affordable housing in Kenya, which is grappling with an estimated shortage of two million units.