Sh200bn real estate plan to be launched in Nairobi

Kenya is witnessing an explosive boom in the real estate, instigated by an increasing middle class and diaspora cash flow into the country.

President Mwai Kibaki is expected on Tuesday to launch a mega real estate project estimated to be worth more than Sh200 billion, financed by Renaissance Capital and a mixture of local and foreign investors.

Known as Tatu City, the project will be constructed on a 1,000 hectare piece of land in Kiambu County.

According to a statement sent prior to the launch, the estate will house an estimated 62,000 residents, who according to the investors will be able to live, work and play within their community, and accommodate over 23,000 daily visitors.

Tatu City joins a growing list mega-housing projects coming up, among them are, Thika Greens, Greenspan Investments, and Diamond Park.

The major victim for these projects is the coffee plantations being cleared.

Coffee was once Kenya’s top source of foreign exchange, but many estates are now blanketed with properties.

The increased activity of the property developers is reflecting in the loan book of bankers as real estate loan growth has outpaced that of credit to businesses and households in the year to June.

Data from Central Bank of Kenya (CBK) indicates that net lending to real estate grew from Sh43.3 billion to Sh81.7 billion in the year to June.

Although there is growing activity in the high end segment, the lower and middle-class segments of the market from which investors have shied away have faced a shortage.

Annual demand for houses is currently estimated at 150,000 units whereas the market can only supply 30,000 units.