Booming business? That’s good news for Eldoret developers

Recently, one of Kenya’s elite athletes sold prime business property along Oloo Street in Eldoret’s “entertainment district” for Sh80 million.

This was just four years after she purchased the same property for “just” Sh40 million.

The 100 per cent profit, at a mouth-watering Sh10 million a year, speaks volumes of the demand for prime business property in Eldoret, demand that is driving many investors to look for alternative land further afield on what was once prime agricultural land.

Prices of commercial plots within the Uasin Gishu capital have risen steeply in the past five years, inspiring owners of old premises to sell them to prospective investors at exorbitant prices.

Most of the old premises have been knocked down and highrise buildings erected to create more business space and meet the ever-increasing demand.

BEYOND REACH

“The land prices in the town are beyond the reach of most individuals. The land race has been boosted by Eldoret’s strategic location in the North Rift region and its links to neighbouring counties and the Great Lakes region,” says Mr Hancox Tum of Lloyd Enterprises in the annual North Rift Property Dealers Survey.

According to the study, a 50m-by-100m plot within Eldoret’s central business district is selling at Sh100 million, compared to Sh20 million almost five years ago, owing to limited availability of space.

Mr Felix Komen of Dovour Commercial Enterprises says the Uasin Gishu capital is experiencing unprecedented growth in real estate development. Chain stores, learning institutions, financial and the hospitality industries have made a bad (or good, depending on where you stand) situation worse (0r better).

“As investors look for alternative plots outside the CBD, the land prices keep on escalating in line with increasing demand,” explains Mr Komen. As a result, prime agricultural land on the outskirts of Eldoret town is being upgraded for commercial or residential purposes.

“Sub-division of land into commercial plots has proved profitable as compared to crop production or dairy farming,” said Mr Julius Kipchirchir of Roadblock area on the Eldoret-Uganda highway during a recent interview with DN2. The number of highrise apartments and commercial buildings coming up in the upmarket Elgon View, Pioneer, Roadblock, Kimumu and Maili Nne areas are testament to this.

Uasin Gishu County Minister for Trade, Tourism and Industrialisation, Mr Philip Melly, says measures have been put in place to provide suitable land for investors to set up more businesses to propel economic growth and development of the town.

He explained that investors need adequate plots to create space for expansion, parking bays and gardens for their customers.

AMPLE SPACE

Among areas considered to be most expensive in Eldoret include Lower Elgon View, where, according to Mr Komen, half an acre of land is selling at Sh14 million. A quarter acre plot touching the tarmac at Roadblock area is going for Sh7 million.

Accessibility to suitable infrastructure, roads, reliable electricity and water supply, adequate security and space for expansion are some of the factors driving land prices up in Eldoret.

“Agriculture is currently not as profitable compared to investment in real estate that attracts better returns,” says Mr Jackson Kosgei of Kipkenyo. The demand for decent housing as a result of devolution has led to mushrooming of bungalows and maisonettes to accommodate the senior officials from neighboring areas.  Consequently, limited space and rising land prices has pushed private investors to move several kilometers away from town.

Mr Ashock Khetia, the Managing Director of Khetia Drapers Limited, said that they had to set up another branch of their supermarket business at Roadblock as the location offered them “ample shopping space”, which brings services closer to the customers tired of the hassles of the CBD.

Mr Khetia suggests that the county government should lower land rates and business permits to woo investors in real estate to erect more premises outside the town.

This, he says, will attract more investors and help bring down the land prices, resulting in expansion of the town and creation of jobs.

Apart from Eldoret, the retail chain of stores has set up branches in Kitale, Mumias, Kakamega and Bungoma owing to availability of space and affordable land rates.

GOOD INFRASTRUCTURE

According to Mr Khetia, Eldoret enjoys good transport infrastructure such as the Eldoret International Airport, Eldoret airstrip, the railway system and the Northern Corridor that links Kenya and the great lakes region, making the North Rift, and Eldoret particularly, a suitable place for investment.

Mr Jackson Mandago, the Uasin Gishu Governor, says his administration is finding it hard to attract investors due to lack of land to set up business premises.

“We are working closely with the National Land Commission to repossess public utilities and allocate them to investors as one way wooing them to the area,” he says.