Pan-African housing financier Shelter Afrique is eyeing millions of shillings from a repeat auction targeting 112 residential units spread in five counties after developers defaulted on payments, pointing to economic difficulties in the real estate sector.Â
Shelter Afrique has invited bids for a private auction set for September 19 as it seeks to dispose 10 units in Pine city, Athi River, 27 units under Kenya Medical Association (KMA) Housing in Mombasa, 15 in Serene Valley in Rironi, Kiambu, 11 in Eden Beach Mombasa and 49 under Translakes Estate in Kisumu.
The private auction presents a fresh attempt by Shelter Afrique to dispose of the residential properties, having tried to fetch Sh1.35 billion through the auction held in February last year.
The housing financer is, however, returning to the auction market that is struggling to find buyers. Auctioneers have had to carry out repeat auctions as the glut in supply and the tight liquidity conditions in the economy slow down sales.
Shelter Afrique latest annual report shows it opened last year with repossessed land and buildings worth $8.86 million (Sh1.14 billion) and added new repossessions amounting to $1.47 million (Sh189.7 million) to take the figure to $10.33 million (Sh1.33 billion). Â
The $1.47 million related to 15 repossessed houses in Serene Valley. The firm says this arose from foreclosure of a loan with the developer.
However, last year it only managed to sell land and buildings worth $158,604 (Sh20.46 million) and suffered a revelation loss of $1.94 million (Sh250.6 million), pointing to the impact of stalled sales amid push for outsized discounts among potential buyers.
The defaults are despite the average effective interest rate on Shelter Afrique loans having averaged 12.41 percent last year—relatively unchanged from 12.14 percent a year earlier, even as rates for commercial loans shot above 20 percent.
Shelter Afrique has not disclosed the asking prices for the upcoming auction. However, the auction for February last year shows a three-bedroom unit at Athi Rivers Pine City, located about 30 kilometres from Nairobi central business district (CBD), had an asking price of Sh8.5 million.
The asking price for KMA’s two-bedroom apartments, located about 16 kilometres from Mombasa CBD, was Sh7 million. Maisonettes in Translakes Estate, about five kilometres from Kisumu city centre were being auctioned for Sh7.5 million as three-bedroom and two-bedroom apartments in the same estate demanded Sh6.5 million and Sh5.5 million respectively.
One bedroom apartments in Eden Beach, located in Shanzu Beach line in Mombasa were going for Sh16.5 million while two-bedrooms ranged from Sh18 million and Sh20.25 million.
For the Serene Valley properties, located in the Rironi area, about 28km from Nairobi CBD, Shelter Afrique was asking for Sh16.5 million for a four-bedroom master en-suite maisonette that comes with a study room and a servants quarter measuring 240 square metres.Â
