HF Group set to put up Sh5bn apartments on Thika highway

HF Group has embarked on a Sh5 billion project to put up 1,520 two and three-bedroom apartments along Thika Road as the mortgage company ramps up its development portfolio.

The apartments will be built in a joint venture with Clay Works Ltd that owns the land.

The project will sit on 24.5 acres and will be in three phases. Phase one will be set on 8.6 acres, phase two on 10.5 acres and phase three on 5.4 acres.

James Karanja, the executive director of HFDI, the property development and investment subsidiary of HF Group, said two-bedroom units will be priced from Sh6.5 million while the three bedroom units will start from Sh7.5 million.

“The first phase will see the construction of 560 units, the second phase 480 units and the third phase 480,” Mr Karanja said.

Phase one is expected to be complete by the end of 2019, adding to the growing variety of apartments around Nairobi. The houses on the busy Thika Superhighway target the growing middle class market and other investors who may want to let out the units.

The Nairobi Securities Exchange (NSE) listed firm has been pursuing the joint venture model where it partners with land owners and provides financing to develop residential and commercial buildings.

The model seeks to mitigate the high cost of land in the city with the land owner contributing land for a stake.

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Real estate developers have been enjoying double-digit returns from the sale of houses and serviced land parcels in major towns.

In 2012, HF revived its housing development arm, then named Kenya Building Society — which developed phases of Buru Buru and Komarock estates — to develop homes for the fast-growing middle class, diversify its operations and take advantage of generous returns in real estate development.

The Clay Works development was initially announced in February together with another project involving parcelling of 183-acre serviced plots in Ruiru.

Other HFDI projects include Komarock 5A and Komarock 5B (maisonettes), Komarock Heights (apartments), Richland (apartments) along Kamiti Road, Precious Gardens (apartments) in Riruta and K Mall.

The real estate projects are part of HF Group’s strategy to grow and diversify its business, which has previously relied on financing purchase and construction of houses and commercial buildings.

The Clay Works project will have extra amenities to help it compete with similar ventures around the city.

“The project as a whole will offer a serene neighbourhood with lots of park-like greenery, secure play grounds for children, ample parking and lifts that will give the residence a homely feel,” Mr Karanja said.

A shopping centre and a kindergarten will also be built during the last phase of the project.

Developers are putting up more apartments in Nairobi and its satellite towns as the high cost of land makes it less viable to build stand-alone units targeting the middle class.