Apartments attract better returns

Limited space for conferencing facilities at the coast and depressed sales of housing units have spawned a new niche for investors in Mombasa and Diani.

Most investors have in the past few years invested in apartments wioth hopes of selling but sales have not been robust, this has been blamed on security concerns. Consequently,some investors have converted use of the units into rentals for conference facilities. Most conference organisers  rely on facilities offered by hotels due to the lack of convention centers in the city.  

The new niche has become so lucrative that more investors are showing an interest in emerging apartment for rent and conferencing. Mr Kariuki Mburu, a director at Diani Place Apartments, is among those who have decided not to sell but offer conferencing services.

Mr Mburu has put up 21 fully furnished apartments at the serene Diani environment at a cost of Sh150 million, which he says are not for sale, but target corporates, holiday makers and honeymooners.

There is a lounge that offers guests a place to relax as well as internet and satellite television access. The boardroom has a digitised conference room that can accommodate 20 people with facilities for team building.

If the apartments were to be sold, each unit would fetch between Sh8 milllion to Sh14 million. But with daily, weekly and monthly conference rates depending on the season, the apartments rake in more money than they would if sold. The hotel also has a business centre  that offers services such as Internet browsing, printing, photocopying, telephone, binding, messenger services and courier services.

INCREASING VALUE

He explains that  the changing tastes among clients, with majority of them preferring more privacy than was offered in hotels forced him to switch to renting.

“The apartments have a living room, a bedroom and a fully equipped kitchen that includes a fridge, microwave, coffee maker and hot water kettle. A hotel room does not give you freedom but the apartments make someone feel at home,” he says. Diani Place targets not only international tourists, but also the domestic market including those from the region, he adds.

Developers in Mombasa are now keen on building conferencing facilities to go with apartment buildings, as this adds value to the establishments.

“Buyers of these units will always seek higher returns from their investments and the new model aims at increasing value for the apartment,” Mr Paul Kinoti, an agent at Coral Properties Limited said in an earlier interview.

According to Mr Brian Mwakesi, general manager at Sunset Paradise Apartments, investors are worried about the drop in rent, despite the increase in property prices. This is the reason they have invested heavily and provided for conferencing facilities in a move they expect will give a higher value to the apartments.

He notes that they have merged the concepts of holiday apartments, boutique hotels and conferencing facilities. “We studied the market and realised that if we are to attract buyers to invest in our project, we had to be innovative,” says Mr Mwakesi.

“Within the development we have constructed a four-star restaurant and several conference facilities. This was motivated by the need to make the holiday-rental a perennial business unlike the holiday apartments in the market that rely on seasonal business,” he adds.

Sunset Paradise has a large swimming pool and features agym and clubhouse, basketball and volleyball pitches within a secure gated community. Located off Serena road, Shanzu, the complex comprises two, three and four bedroom apartments.

“It is not enough to provide all amenities in a development and this innovation ensures investors get good returns they are guaranteed a more steady appreciation of their investment,” he says.