A bank has put up for auction Sh384 million luxury residential houses in the upmarket Lavington suburb after the developers, Peter and Susan Muraya (Suraya), failed to settle a loan.
The development, Tiara Villas, is part of the vast Suraya real estate empire that is valued at billions of shillings.
The auction notice published Monday by Garam Auctioneers invited potential buyers of the estate to attend a fire sale Tuesday, signalling distress for off-plan buyers who were to pay Sh48 million for each town house.
The estate sits on a 0.809-acre parcel of land in the wider Lavington Estate in Nairobi and features more than eight town houses.
The Business Daily had not established how many buyers have so far paid for their houses by the time of going to press.
Both Peter and Susan Muraya had not responded to our queries by the time of filing this story.
“Under instructions from the chargee’s advocates, we shall sell by public auction the properties together with buildings and improvements erected therein,” said the auctioneer’s notice.
“Each town house has five bedrooms, all en suite. The title is freehold interest.”
Sh48m per unit
The real estate developers had set the price of each off plan development at Sh48 million, putting the minimum possible value of the development at Sh384 million.
House prices ordinarily go up on completion of construction, which means the town houses are now probably worth much more than they were before completion.
“These properties have been designed by reputable architects. They will be complemented by exemplary detailing and tasteful specifications,” says Tiara on its website.
“Arranged on three levels, with five bedrooms all ensuite, the property also has staff quarters, parking for three cars, individual garden, a pool, club house and entertainment area.”
A dip in house prices and the slow uptake of newly-built units have heightened fears of renewed pressure on developers who borrowed to fund for-sale projects as obligations mature.
In March last year, the Murayas were dragged into a legal battle after a contractor filed a high-profile petition in court seeking to wind up two real estate companies associated with the couple over non-payment of debt.
Eternal Foundation Construction then wanted the Murayas’ two companies, one of which holds a vast real estate property valued at more than Sh1 billion, liquidated.
Sucasa and Encasa West Limited, the two companies that were at the centre of the liquidation suit, are owned by the Murayas.
The dispute joined a series of high-profile real estate disputes to go to court in what was being seen as reflecting the difficulty property developers are facing on the sales front.
The number of properties put up for auction rose last year compared with 2017, but auctioneers struggled to sell them.
Auctioneers said they were holding more auctions last year compared to 2017 following a growing pool of distressed borrowers, whose assets were seized by aggressive lenders.
In February last year, Nairobi auctioneers put on sale a Sh1.19 billion residential estate in upmarket Kitisuru estate belonging to Homex Developers, citing the developers’ failure to repay a bank loan.