Malls send land, property prices through the roof

With Nairobi experiencing a surge in construction of shopping malls, the concentration of residential units in close proximity is increasing as people scramble to live nearby.

The key attraction is easy access to goods and services.

And with the Nairobi County government unable to satisfy the growing demand for social amenities, living near a mall is fast becoming a route to better infrastructure and social services the malls offer through easy access and aesthetic appeal.

Hence the rush by property developers to stake a claim near these mini-cities, pushing up property prices near malls.

On Thika Road, residents of Gumba estate and its environs have for the past five months been using a tarmacked road to access their houses after developers of Garden City Shopping Mall upgraded what was previously a murram road.

BEAUTIFY THE ROAD

The road is supposed to allow motorised shoppers to access the mall’s main gate from Exit Seven of the superhighway. Although the entrance is just 50 metres from the superhighway, the developers upgraded the entire two kilometres into Gumba estate.

And with a month to opening, Actis, the mall developers, are building another road through Willmary Estate to spare shoppers from town the hassle of having to go as far as Kasarani and turn back to get into the mall.

The new road will enable shoppers coming from the city centre to use the Garden Estate interchange.

“One of the issues which we anticipate may possibly have an impact on timing is the setting up of efficient road access to and from Garden City,” Actis managing director Michael Turner said. “We are working with the City Council to expedite the necessary infrastructure.”

Thika Road Mall (TRM) also had to modify a section of the road by constructing an extra roundabout to ease access.

In addition to landscaping the roundabout, it built a tarmacked road running parallel to its premises to one of its car parks and beyond.

As a result, New Roysambu Estate came up along the road.  Area residents say blocs of flats started coming up at almost the same time construction of the mall began in 2012. Due to easy accessibility and proximity to the mall, rents in the new estate are higher than the older Roysambu estate that is accessed by a murram road.

A one-bedroom apartment in New Roysambu rents for Sh20,000 a month, while the same in Roysambu goes for Sh13,000.

SHUJAA MALL

In Kayole, developers of Shujaa Mall which opened its doors last October installed streetlights on Kayole Spine Road from Manyanja Road roundabout and past its premises. They also landscaped the road reserve.

Property developers in the area say the presence of the mall in the low-cost neighbourhood has led to an increased demand for land and housing.

“Prices are really going up. A 26-by 66-foot piece of land at Nasra Estate is now Sh3 million, up from Sh1.8 million at the beginning of last year,” said land agent Philip Mwangi. “Plots within the estate but near Shujaa are more expensive than those touching Kangundo Road because of security.”

Mr Mwangi says construction and occupation of houses in Nasra, a controlled development estate where owners buy land but the estate’s committee approves the type of house that can be constructed, accelerated last year.

“Some houses had been constructed but were vacant as owners were afraid of occupying them. Since last year, however, this has accelerated. Right now it’s very costly to buy land here,” he says.

A study by Standard Chartered Bank last September said seven in every 10 middle class Kenyans plan to buy or move into a better neighbourhood in the next two years, with a large number looking at estates with access to malls and other social amenities.

“Shopping centres have also become social hangout places with hundreds of people thronging to the malls any time they think of buying items. Kenyans’ love for shopping is second only to South Africa’s on the continent,” said the Consumer Aspiration study.

“Land users, be they retail or residential, all compete for the most accessible land and are willing to pay bid rent for it which will be higher,” said Mr Anthony Kinja of Wealth Link Realtors. 

“People will pay more for land and real estate that is closest to a commercial centre. As Nairobi grows outwards, services have also been decentralised from the city centre by the malls. So it’s logical that people concentrate around them.”