Exclusive homes

Thursday March 29 2012

Forget simple gated communities, exclusivity is the new housing fad. Photo/DN2

Forget simple gated communities, exclusivity is the new housing fad. Photo/DN2 

By JACOB NG’ETICH [email protected]

Two weeks ago Tatu City, a multi-billion city within a city earmarked for Ruiru, about 20 kilometres east of Nairobi, received a number of environmental, regulatory and local government approvals that ushered the project to the take-off phase.

Now, after years of planning, bulldozers and earth movers are expected to roar into the site within this quarter.

“We have secured approvals from the National Environment Management Authority (Nema) for our master plan after a rigorous vetting process,” wrote Mr Arnold Meyer on the company’s website, adding that the Strategic Environmental Assessment (SEA), which is among the most comprehensive ever submitted to the regulator and the first by a private company, received positive feedback from the regulators and may serve as a yard stick for other similar projects in future.

“Tatu City is positioned to radically change the face of the Nairobi Metropolis by shifting development away from the familiar congested model around a single urban node to a decentralised urban environment,” said Mr Meyer.

But the ambitious development, which comprises mixed-use residential units and is designed to accommodate 62,000 residents when complete, and which has been the subject of a drawn out legal battle over ownership, is not the only one in a property market that has defied market dynamics.

The classy trend of healthy living within a gated community, which premiered in the American suburbs and was made popular by the hit TV series Desperate Housewives, has finally found acceptance within Kenya’s middle-upper and upper classes.

In the last couple of years, Kenya has seen various efforts by private investors in the real estate sector to put up well-planned mega-housing projects which are setting the pace in urban management.

Last year, for instance, Migaa and Sergoit Golf and Wildlife cities broke ground, offering yet another example of upcoming self-sustaining housing projects with a strong emphasis on proper planning, which includes development of adequate and well-laid-out infrastructure.

Whereas Migaa describes itself as a green estate sitting proudly on 775 acres in Kiambu, Sergoit is a prime property consisting of more than 3,000 acres of pristine land 15 kilometres away from Eldoret town.

Real estate analysts and economists see this trend of putting up exclusive housing estates tens of kilometres away from cities as the next frontier for investors with enough money because the rising middle class and the shortage of land in major towns is likely to push many people to the outer suburbs.

Mr Gerishon Ikiara, a development and policy economist and lecturer at the University of Nairobi’s Institute of International Relations, brings in the economic angle of the whole story, saying the last decade has seen the doubling of the country’s GDP from $15 billion to $35 billion, thereby creating a bubbling middle income group with a veritable itch to invest.

“The per capita income has also doubled from $400 to $800 and, given the Vision 2030 and part of its implementation, like the new Thika highway, there is a lot of expectation,” says Mr Ikiara. “This growth is causing a lot of euphoria, and this is what is triggering all these projects.”

Mr Ikiara says the growth of the middle class in Kenya is one of the most exponential in Africa, and that this has led to a huge demand for creative housing.

“The country is in a ‘bash mood’ for investment,” he says. “There is an expectant mood whichever way you turn, and with ongoing infrastructure developments across the country, investors know they are putting their money in a safe basket.”

The growth of cities is usually demand-driven. Two hundred years ago, there was only one city in the world — London — with a population of one million, reports the United Nations Cyberschoolbus.

At the beginning of this century, almost a hundred years ago, there were three cities with a population of 1 million or more. Today, there are 281 cities with a population of over 1 million!

Since the 1950s, rapid urban growth has become a global phenomenon, says the UN. Given that cities are in different parts of the world, each with its own geography and history, it is difficult to draw universal conclusions about the reasons for city growth.

But we can make a few general observations. For the most part, cities have grown as a result of three things: economic growth, natural increase and rural-urban migration.

There are exceptions to this general rule. Some cities, for example, are “created” by governments that want to take the burden off the large cities. Sometimes, such cities are made the capitals of the country, as in the case of Yamoussoukrou which has replaced Abidjan as the capital city of Côte d’Ivoire.

Assigning a new capital usually means transferring government offices, foreign embassies and businesses to a smaller city in order to attract people away from over-crowded and over-burdened sites.

Ms Rakhee Mediratta, a property consultant with Home Africa, says the value proposition for Migaa is unique in that it provides opportunities for a wide array of markets, including the residential buyer, the corporate market and private developers within and outside the country.

“Migaa has over the last 18 months appreciated in value by 1,000 per cent,” she says. “Given the demand, we anticipate that by December 2016 we will oversee the final handover of all the residences.”

Prof Joseph Kieyah of the Kenya Institute for Public Policy Research and Analysis (Kippra) says another major factor in the rise in these ‘cities’ is the scarcity of land for development in the traditional housing estates in major towns like Nairobi.

As a result, most developers are opting to put up new houses on the towns’ outskirts where land is still available at relatively cheaper prices.

“There is a biting scarcity of land in Nairobi and the few available plots are very expensive,” says Prof Kieyah. “In Kilimani, for instance, some plots are fetching over Sh100 million, which does not make a lot of economic sense for the middle-level investor.”

A study released late last year by the Architectural Association of Kenya on development control frameworks in Kenya established that about 70 per cent of urban developments are occurring in peri-urban areas such as the Thika Road corridor and Mombasa Road.

Sadly, some of these projects are beyond the jurisdiction of the relevant municipalities and come up without any control guidelines.According to the United Nations Human Settlements Programme, the bulk of new growth in rapidly urbanising developing world cities is taking place on the urban edges.

Both at national and local levels, Kenya’s urban areas are expanding without being guided by planning regulations, and, for a country that remains one of the most rapidly urbanising in the developing world, this is a worrying trend.

The World Bank estimates that about 200,000 Kenyans move to cities every year and the surge has created a situation whereby what used to be rural areas are increasingly becoming urban.

Prof Kieyah says the coming up of the gated estates complete with well laid down infrastructure comes in hardy to help the situation.