Apartments give tourism lifeline but at great cost to beach hotels

English Point Marina apartments in Nyali, Mombasa. The government has been urged to waive the Sh4,685 ($50) visa fee to save the tourism industry from collapse. PHOTO | KEVIN ODIT |

What you need to know:

  • Some developers are even putting in place plans to replace beach resorts with high-rise flats
  • Coral Property is developing a six-floor apartment block near the Jomo Kenyatta public beach.
  • Kenya Coast Tourist Association (KCTA) chairman Mohamed says the new units provide a wider choice for visitors.

If ever there were a terrible spell for Kenya’s tourism sector, it is now. Dozens of hotels along the Indian Ocean coast have closed due to the slump in the industry, with more than 30,000 people losing their jobs. Many more could be sent home in the coming months.

Hotels built over 30 years ago are wasting away, most in dire need of refurbishment, but there is no money to do so. in an industry that not so long ago––2011––accounted for Sh97 billion.

But behind this grim backdrop, something good is happening: investors in the real estate sector are coming up with multi-billion luxury developments, billed as the game changer for the fledging sector.

From the English Point Marina to the Vipingo Ridge lifestyle golf course and the dozens of up-market apartments under construction in Mombasa, the future, according to industry players, looks luxurious.

“What we are witnessing is a shift from hotel accommodation to high-end apartments. Guests, especially local visitors, prefer them to hotels because, besides privacy and comfort, families find them cheaper,” said Mr Paul Kinoti, an agent at Coral Property Consultants Ltd.

While beach hotels charge up to Sh20,000 a night per person during peak season, a three-bedroom apartment goes for Sh40,000 a night and can accommodate a family of five.

“Most people who travel in groups don’t like the rigid hotel schedule and prefer to cook for themselves or take their meals outside, the reason for the booming apartments business whose uptake is projected to grow.

“But, of course, this does not spell doom for the hotel industry, which will continue to attract individual travellers,” he said.

The Kenya Association of Hotelkeepers and Caterers (KAHC) executive officer Mr Sam Ikwaye says tourism is already gaining from this segment since it is popular with the middle class. He predicts that the tourism sector will stabilise when this segment begins to boom in the coming years.

MORE FAVOURABLE

“The new model has helped in product diversification. In fact, some beach hotels are also developing apartments in their premises since they are turning out to be more favourable to middle class Kenyans,” he says.

Some developers are even putting in place plans to replace beach hotels with high-rise apartments, as is the case with Ocean Seven which is being put up at Sun N Sand resort.

Information posted on its website indicates the development is being promoted as the height of luxury living at the beach. It adds that swimming pools for families, with separate areas for young children and an Olympic length 50m pool, “have been worked into the 17-acre park-scape.”

“The development comprises seven towers, going to 17 floors, with a total of 325 three and four bedroom apartments. Right now we are on the 12th floor of the first tower and there will also be a convention centre,” Sun N Sand resident manager Daudi Nyambu said. The project is projected to be complete in five years.

More than 10 years ago, the craze for apartments took Mombasa by storm. In Nyali estate, for instance, owners of bungalows and maisonettes sitting on huge chunks of land struck good deals with developers and sold them off. They then built their homes at Vipingo, Kilifi County.

Half an acre of land in Nyali goes for up to Sh50 million and can accommodate 20 three-bedroom units, each selling at an average of Sh25 million. Investors buying an apartment earn up to Sh30,000 a day from visitors during the peak season.

However, the trend has now turned into luxury and lifestyle living, which seems to have excited buyers and investors. High rise apartments, going even to 10 floors, are sprouting on the beach in what developers describe as a crave for sea breeze.

Mr Kinoti categorises the market for luxury apartments into three: buyers who want to own a piece of Mombasa’s beach frontage; investors interested in purchasing a unit to rent out, and blue-chip firms in the corporate world with a penchant for spoiling their executives with a treat while on business trips at the coast.

NEW DEVELOPMENT

Coral Property is developing a six-floor apartment block near the Jomo Kenyatta public beach. Joining a couple of other such establishments on the beachfront, Xanado, which will cost Sh500 million, comprises 25 three bedroom units and five penthouses. It is undergoing final touches.

Even with an apartment going for up to Sh40 million and Sh55 million for the penthouse, most of the units have sold, Mr Kinoti said.

The other development that has excited the industry is English Point Marina located at Mkomani overlooking Fort Jesus. Four years ago, Mr Alnoor Kanji acquired the four-acre waterfront plot near Fort Jesus.

“Virtually every developer was putting up apartments for sale. But a modern monument, like the 400-year-old Fort Jesus across, is what befitted this property.”

English Point Marina, the Sh5 billion luxury waterfront development that Mr Kanji conceived, is now complete and open to the public as it awaits commissioning in June. The project incorporates a hotel, apartments, restaurant, casinos, a public boardwalk and a marina where luxury boats will be moored.

English Point Marina has 96 three bedroom apartments going for between Sh43 million and Sh85 million and a penthouse with a price tag of Sh180 million ($2 million). Mr Kanji owns the property jointly with his London-based brother Amyn.

Next to English Point Marina are the Sh1.7 billion Royal Beach Apartments, developed on property where the Four Seasons hotel stood. MySpace Properties says there is high demand for the 48 three-bedroom units.

“Many people want to live on the waterfront because of the conducive atmosphere and serenity,” executive officer Mwenda Thuranira said.

Kenya Coast Tourist Association (KCTA) chairman Mohamed says the new units provide a wider choice for visitors. But he says some apartments being developed do not qualify to be categorised as “luxury”.

“If one is to put up 50 apartments on a half-acre plot, this is not luxury since the limited space compromises security and movement,” he said.

Meanwhile, owners of old apartments are injecting new life into them by introducing conference facilities and restaurants. The shift is informed by the fact that most people now prefer private locations for their holidays and meetings.